Good afternoon and welcome to the Hologic Inc. Third Quarter Fiscal 2018 Earnings Conference Call. My name is Jessica and I am your operator for today's call. Today's conference call is being recorded. All lines have been placed on mute. I would now like to introduce Mike Watts, Vice President, Investor Relations and Corporate Communications, to begin the call.

Thank you, Jessica. Good afternoon and thanks for joining us for Hologic's third quarter fiscal 2018 earnings call. With me today are Steve MacMillan, the company's Chairman, President and Chief Executive Officer; and Bob McMahon, our Chief Financial Officer. We're also joined by our new CFO, Karleen Oberton. Karleen was formerly our chief accounting officer, and we just announced that she's replacing Bob this week. Steve and Bob both have some prepared remarks, then we'll have a question and answer session. Our third quarter press release is available now on the Investors section of our website. We also will post our prepared remarks to our website shortly after we deliver them. Finally, a replay of this call will be archived for 30 days. Before we begin, I would like to inform you that certain statements we make during this call will be forward-looking. These statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied. Such factors include those referenced in the Safe Harbor statement that's included in our earnings release, and in our filings with the SEC. Also during this call, we will be discussing certain non-GAAP financial measures. A reconciliation to GAAP can be found in our earnings release. Finally, any percentage changes that we discuss will be on a year-over-year basis, and revenue growth rates will be expressed in constant currency, unless otherwise noted. Now I'd like to turn the call over to Steve MacMillan, Hologic's CEO.

Thank you Mike, and good afternoon everyone. We're pleased to discuss Hologic's financial results for the third quarter of fiscal 2018. We posted strong results overall, with both total revenue and earnings per share finishing above our guidance ranges. Breast Health outperformed, our core international franchises continued to grow at a robust pace, and our molecular diagnostics franchise accelerated from last quarter. In addition, both our Surgical and Medical Aesthetics divisions, which had struggled recently, showed solid sequential improvement, in line with our expectations. And just today, we closed a tuck-in acquisition that will further strengthen and expand our Breast Health franchise. We'll discuss that more in a moment, but first, let me provide an overview of our top-line results. In the third quarter, revenue of $824 million grew 2.2% on a reported basis, or 1.1% in constant currency. Although we're not satisfied with this growth rate, we believe we are making encouraging progress in several areas of the company. Before we discuss that progress, let me point out that like many others, we had a tailwind from the weaker dollar compared to the prior year period. This benefit, however, was less than we forecast three months ago, since the dollar has strengthened since then. In addition, please note that we have now annualized the effects of the Cynosure acquisition and the blood screening divestiture, both of which occurred in the second quarter of last year. Now let's get into the details. Breast Health, our biggest business, led the way in the third quarter, as U.S. revenue accelerated while international sales remained strong. Diagnostics improved from a soft second quarter, with upside from the divested blood screening business. Surgical was basically flat on a global basis, and as we predicted, is showing steady improvement over the last three quarters. Cynosure…

Thanks Steve, and good afternoon everyone. Before I begin, let me just say thank you, Steve, our Board of Directors, and the entire Hologic team, for the honor and privilege of working with you over the last four years. I am immensely proud of what we've achieved, not just from a financial perspective, but also in terms of building a sustainable growth business and making a huge difference for Women's Health. I will miss many things about Hologic, but I leave optimistic about the company's future, and confident that Karleen will take the finance team and the organization to even greater heights. I also look forward to staying in touch with many of the investors and analysts on this call in my new role. Now let's get to our third-quarter results. In my remarks today, I'm going to walk through our income statement, touch on a few other key financial metrics, then finish with our updated financial guidance for 2018. Unless otherwise noted, my remarks will focus on non-GAAP results, and percentage changes will be on a year-over-year basis. As Steve mentioned, we posted strong results in the third quarter that exceeded both our revenue and EPS guidance. Breast Health and international drove our growth, while Cynosure and Surgical improved sequentially as well. This top-line performance, combined with solid expense control, a lower effective tax rate, and our share repurchase program, enabled us to post non-GAAP earnings per share of $0.58, 16% higher than a year ago. Moving down the P&L, gross margin of 62.6% decreased 50 basis points compared to the prior year. This was primarily due to product and geographic mix, as our international sales carry a lower gross margin percentage than sales in the United States. Total operating expenses of $279 million were up 1.5%, as we…

Thank you. [Operator Instructions]. And we'll go now to Doug Schenkel with Cowen.

Good afternoon and thank you for taking my questions. I'll just ask the two of them and then I'll listen to your answers, both are on Molecular Diagnostics. So first you've recently launched a number of new molecular diagnostic assays, including but not limited to virology. In your prepared remarks, you've talked about strong virology growth while acknowledging it was off of a small base. Do you expect these assays to have an impact on system placements and overall Molecular revenue growth in a more meaningful broader way in fiscal 2019? And then the second question is really on the pricing environment for U.S. molecular products. I'm wondering if pricing erosion has accelerated as your new reagent rental contracts. And related to that your contract with a large reference lab has now passed the five year mark, I'm wondering if you could provide an update on where you are on renewing that contract. So I guess that was actually three questions instead of two. Sorry about that. Thank you.

I was going to say Doug that was very clever of the way you – two questions and it was clearly three. Let's, we will try to take them all. I think in terms of the Molecular Diagnostics piece, we are seeing continued growth in Panther placements, driven both by just our sales activities but the enhanced menu is definitely helping on that. And, so again, I think it's all incrementally strengthening that will pay off and continue. We expect continued Panther placements into 2019. We're probably seeing a little bit more of an uptick in some of our international Panther placements in the last couple of quarters, which we think also bodes well to continue that growth going forward. In terms of pricing pressures, nothing significantly different in the quarter, pretty flattish. And the final piece in terms of discussions about any particular contracts, as we said in the past, we're not going to comment on any specific customer negotiations, but we'll share more of that as we go into next year's guidance and everything else that will be factored in.

We'll now take our next question from Vijay Kumar with Evercore ISI.

Hey, guys. Thanks for taking my question. So maybe I'll start the first one on that...

Just when you thought Vijay that we hit you with all the news we could in the last few days.

Yes, you did Steve. It's certainly been a lot to digest, and maybe, and maybe I'll start with the management transition here. Bob, congrats on the move. But I'm just curious because just from a Hologic perspective, a lot of us who've looked at the story for a number of years we've thought the business was on its path to being a sustainable top line grower. I'm just curious on the timing and maybe some -- if you could provide some background on the transition I think that would be helpful?

Yes. Thanks, Vijay. And what I would say is in many ways I'm very sad to leave Hologic. I couldn't be more proud of what we've accomplished and of the talented team that we have here in place, and quite honestly the opportunities the business has ahead of it. My experience here was a big stepping stone in kind of my professional career that actually gave me the opportunity to have the opportunity at Agilent which is a more global company or slightly bigger. And what I would say is I leave knowing that the company is in better shape than certainly when I got here. And I leave it in very capable hands with Karleen. I know she will be a great partner to Steve and the rest of the leadership team here and will continue the great work that we've been doing.

We'll now take our next question from Isaac Ro with Goldman Sachs. Isaac Ro - Goldman Sachs & Co. LLC: Good afternoon and thank you. Congrats to Bob. But just maybe on the Faxitron acquisition. Could you just give us a little bit of detail on the nature of the business? And in particular just curious about the impact it will have to gross margins. I took a quick look at the website and it seems like there's a combination of equipment and disposables. So just interested in sort of the profitability contribution that business will have at the gross margin level.

Yeah, hey, Isaac, it's Bob. This business generated roughly $27 million in its last fiscal year. So it's not going to have a material impact on the total company. We do believe that there's opportunities to improve gross margins over time, obviously leveraging the scale that we have. They're slightly lower than where we are today but we do see that that has an opportunity to improve. As we think about the business probably not going to have any impact in 2018 and it will be EPS neutral in 2019 but then accretive thereafter.

We'll take our next question from Bill Quirk with Piper Jaffray. William R. Quirk - Piper Jaffray & Co.: Great. Thanks. Good afternoon. Congrats to both Bob as well as Karleen. Let's see, staying at Faxitron for a second, if I may. I guess just a couple of follow-up questions off of Isaac's. So I guess tell us how quickly can you get the Breast Health team trained in on the product line? And then U.S., OUS revenue split? And then lastly looks like we probably should have about $4.5 million dialed in for the fourth quarter? Thanks.

Yeah, hey, Bill this is Bob. We're probably not going to give you the international OUS split right now. What I would say is it's – although I would say the majority of the revenue is in the U.S. as we think about it they do have a strong distribution channel already, so what we are going to be able to do is leverage that as well as then bring our what I'll call discipline to it and improve. So we bring a channel. We bring some expertise and that actually expands our offerings within the radiology and then the breast biopsy suite. So we think about it as an adjacency that they already have a strong – they have a leading position in the products that they provide. I think we'll be able to utilize our resources and expertise to actually grow that business even beyond what they were able to do.

We'll go now to Brian Weinstein with William Blair. Brian David Weinstein - William Blair & Co. LLC: Hey, guys. Thanks for taking...

Brian, before you jump in, operator if I could just ask. Make sure you allow a follow-up question too. That would be great. Brian David Weinstein - William Blair & Co. LLC: Thanks for taking the question. So Steve, throw one out to see how you react to it.

(35:47). Brian David Weinstein - William Blair & Co. LLC: Yeah. So you talked about not being satisfied with 1.1% growth this quarter. I'm just curious what do you think is the satisfying level of growth for the company at this point, given the makeup of the business is? Longer term, how do you think about where you want to be there on growth? 1.1%, clearly not where you want to be. Q4, maybe more in that 4% range, but how do you think about what is satisfying here?

Yeah. Clearly, given the nature of the businesses, Brian, we want to be in the mid single digit business. And I think, obviously, our goal is to get back there. As you well know, we've got a couple of large businesses that are going to be below that and then it's getting the rest to be going above it. So I think as we transition into next year and certainly we're going to avoid giving 2019 guidance at this point in time, but certainly want to be accelerating as we come out of the year. Brian David Weinstein - William Blair & Co. LLC: Got it. And then for follow-up, you talked about the recurring revenues within Cyno and the customer service and disposables piece there. I think you said, was up 10% and more than 25% of total sales. Can you talk specifically how you're doing that at this point and any other kind of targets that you would have for where you think that that should be in the near term?

Yeah. The simple goal is, we're starting to see some very nice uptick in the PAC key revenue. So still not enormous, but it's moving very nicely in the directions, as the SculpSure machines that are out there are starting to get more usage. And so I think it's all part of the broader play of getting our marketing efforts, driving people in to get SculpSure treatments, getting the PAC keys going. And certainly, over time, as we've talked about, new products that will bring more of a disposable element in addition to just a pure capital sale. We think over time that's going to become a much bigger part of the business, but that's going to be a multi-year journey, certainly.

We'll now take a question from Tycho Peterson with JPMorgan.

Hey. Thanks. Congrats to Bob. I look forward to working with him at Agilent. Maybe just starting out on Cyno. I want to understand the range of outcomes here for MonaLisa. I know it's only 10% of Cyno sales, but it looked like the FDA only really had kind of two requests in their letter. So can you talk about maybe timelines to get back to them and how you see this playing out?

Sure. You know what, our timeline will be get back to them within the 30-day window that they've requested. And let me give you a much bigger picture perspective on this as to why I think this is going to be a huge net positive for us over time. And this quarter, does it put a little damper on things we'll see, may very well be. But over time this is going to be very good. And Tycho, I think, you were around long enough to know my early days at Stryker, when the DOJ and Chris Christie came in and looked at the orthopedic industry practices and I will tell you, I remember standing in front of my first sales meeting as CEO at Stryker, where people thought I had my head in the sand, because a lot of our competitors were pursuing sales practices that we were not going to go down that path. And at the end of the day when the DOJ came and looked into the orthopedic industry and while it was painful to go through that, if you remember, the five major companies were looked at, and early on Stryker was losing market share when I took over. When we got a level playing field and the regulations got clearer and the scrutiny got better, in a level playing field, the best teams with the best products are going to win. And when Chris Christie settled that and you may recall the other four companies all got fined and all got deferred prosecution agreements and Stryker did not. And that started for the next 10 years, Stryker gaining market share. And that's exactly what we think will happen in this industry. So frankly, having a little scrutiny, while it can be a little bit of short term pain, we absolutely welcome it because I believe it will allow the cream to rise to the top, and that's fully where we expect to be. We are investing in the clinical trials. We're investing in the right people. We're building the right teams and really think it'll play well to us over time.

We'll go to our next question from Jonathan Block with Stifel. Jonathan David Block - Stifel, Nicolaus & Co., Inc.: Great. Thanks, guys. Good afternoon. Two, probably, relatively quick questions. So the first one Bob maybe for you, looks like constant currency came up by roughly 100 bps or $30 million. So, fair to say is that approximately half attributable to blood screening and maybe the remaining Breast Health, I'm just curious on how you guys are viewing the upside guidance today versus three months ago? And then I've got a follow-up.

Yes. I think you're thinking about it the right way, Jon. Jonathan David Block - Stifel, Nicolaus & Co., Inc.: Okay. And then Steve maybe this one for you. It sounds like both Surgical and Medical Aesthetics are set to return to growth, I believe you said starting next quarter. You're adding some products to the bag in Medical Aesthetics. Can you talk about a rough growth profile that you expect these divisions to recapture and I just ask that because at one point these were both hyper growth assets, they've fallen on hard times. It seems like you got them back on track. So maybe you can talk about what you should expect, what we should expect near term and then maybe longer term? Thanks guys.

Sure. I think let's take Surgical, which by the way if you recall, 4.5 years ago Surgical was a declining business. And then it got into some good solid mid-single digit growth, became hyper growth frankly when we had a competitive withdrawal in the category. I think that inflated it. The longer term growth rate for those categories, if you play it out, endometrial ablation is probably a flattish category truthfully, and then fibroid removal is probably a high singles. So the blended average of our Surgical business is probably a mid singles. And we ought to be every bit, as you know, we expect ourselves to grow faster than the categories we compete in. So I think Surgical getting back into the mid singles is where we feel good. We'd love it to be even better than that. And I think you'll see in the U.S., certainly in this coming quarter it will be a return to growth. We returned globally to growth or call it flattish this quarter. The U.S. has been sequentially getting stronger each over the last few quarters but it still declined less. We don't want to be talking about declining less. So we feel fully confident that team will return to growth. And then we look at Medical Aesthetics, we do believe we're on the verge of starting to turn that business into a market to better than market grower at what is probably right around the 10%-ish number. So we're not going to be satisfied unless we're going for a double digit growth on that as we come out of the year.

We'll go to our next questioner who is Richard Newitter with Leerink Partners.

Hi. This is Jaime Morgan on for Rich. A quick question just to kind of follow-up on the Medical Aesthetics business. Where are you guys in terms of the sales organization? I know you said reps are in the midst of getting settling in and gaining confidence. So just looking for an update on the hiring progress, and any sort of commentary you can kind of give around what we should be expecting for total rep head count and the rep productivity and kind of the cadence of increases there?

Sure, Jaime. Yeah, I'd say for the first time we are probably at about a normal level since over a year ago. So we've got a couple of openings here and there but it's now kind of in that standard range where you've always got a few openings and a little bit. And I think it's really the first time that we've been at that level. Now we still have people coming up to speed because the average tenure of many of the reps are still pretty junior in a lot of cases. But I think we feel really good about the progress we've made. And I think the part that's very encouraging is a lot of our legacy team, the folks who've been here, they are just not going to cover off the ball. So we have people really, really putting up very strong growth rates while they've been offset by some of the vacancies and everything else. So I think as we come into the fourth quarter, starting to feel better and better. Are we operating at 100% effectiveness yet? No. But do we have most of the positions filled with good people? Yes.

Okay, that's helpful. And then just one quick follow-up on the TempSure product. I think you've indicated in the past that you guys are looking into expanded indications in both Surgical and Women's Health. I was wondering kind of if you could give us an update on your progress on either of those indications and potentially how much this could expand your market opportunity with this product? Thanks.

Sure. I think what we continue to be excited about is TempSure is probably one of the first, what I'll call, real platform technologies that we have gotten into. And we basically have a Surgical offshoot of that product that should be coming next year. So very excited by the initial sales of TempSure and then we have stuff coming behind it as we'll go into next year.

Yeah, Jaime, we just launched the Women's Health product literally in the last several weeks.

We'll now go to a question from David Lewis with Morgan Stanley. David Ryan Lewis - Morgan Stanley & Co. LLC: Good afternoon. Congrats again Bob on the move. Steve, just want to think about Cynosure and into the fourth quarter there. Three different things kind of going on here. You've got traditional seasonality in the core Cynosure business. You've got improving momentum as you talked about on this call and you've got some MonaLisa headwind. But if you think about that business down quarter-over-quarter, can you just walk us through sort of the three components. How should we be thinking about sort of fourth quarter down sequentially in light of the sort of three interlocking dynamics going on?

Yeah, I think David, the way I would think about it is July and August typically in this industry are pretty light. So you do have a clear step down. I think our hope would be that the improved sales force and everything else could almost offset that. But you've also got the international component of that which will also be a little softer. And candidly MonaLisa is probably a slight little curveball. I think what it will probably do is put a pause on potentially some sales here in the short term and that might be the difference between deep down wanting to actually see it go up in the quarter or not. But I think being cautious while we are still getting out from – getting this business back on track I would assume that that's probably a slight more of a headwind this quarter that will play out well over the long term for us. David Ryan Lewis - Morgan Stanley & Co. LLC: Okay. And Steve just two small quick ones, kind of, follow up. First is MonaLisa from a data perspective. There are a couple of studies ongoing for MonaLisa. I think one was suspended last year. I'm not sure what the other one is. But where are you on the clinical data front on MonaLisa? And then you mentioned Fuji in your prepared remarks. I wonder any thoughts on sort of expectations for 3D Performance in the low end of the market to the extent that they are in some way enjoined? Thanks so much.

Sure. Another magical ability to get three questions into two, David. On the Fuji piece, I think, we feel good that competitively, frankly, even without the legal win our teams are being very aggressive and we continue to get a lot of wins. Certainly, they were going incredibly deep on pricing and does that create some opportunities for us? Frankly, there were some of the accounts that we're just not going to go that low. So it may allow us to pick up some additional business in that arena here as we go forward. And there's – the first one is really momentum in Breast Health. There's a lot of momentum in our Breast Health business right now that we really like what's going on there.

Steve, can I add just something to that. David, to that point, the two newest gantries that we launched just recently, the 3Dimensions and 3D Performance is just at the lower end, represented roughly 50% of all the 3D gantries that we launched or that we sold in the quarter. And we still continue to have a very high capture rate of new opportunities. So when we look at the U.S. we believe that when we look at new placements, we're still getting in excess of eight out of every ten of those. And so, we feel very good, to Steve's point, around the competitive nature and really not beyond by price, but it's the clinical benefits and the features that these products provide. And I think that that's what's been a hallmark of that team and it will continue to do so, and I think we feel very good about what they are doing as they expand their offering beyond just gantries.

And to the other question on MonaLisa. We're actually fairly deep in discussions with FDA about deeper studies for MonaLisa Touch, things that we haven't discussed exactly but very deep into the discussions. And frankly, it's why we extended the partnership. As we announced, I think, on the last quarterly call, we see this being a great product over time, but we have that more modest expectations because we have been limited, as you know, in terms of where we've been selling it. And we wanted to generate additional clinical data for the product to strengthen the claim structure around it. So we're actually been deep in discussions with them on that.

We'll now take a question from Jack Meehan with Barclays.

Hi. Good afternoon. Steve and Bob I was hoping you could give us some color on operating margins as we look into 2019, and what are some of the puts and takes that we should be thinking about heading into the new year?

Yeah. Jack, I think we want to be careful not to get into 2019 guidance, but I think on a high level, you know what, gross margins probably not going to move dramatically, because of the international business continues to grow at a lower gross margin, probably not going to be seeing the huge wins that we had in the previous years. They're also – depending on what happens with the tariffs that could be a slight headwind to gross margin that we would seek to try to make up as much as we can, but dealing with that. I think we'll get a little bit of OpEx leverage. So whereas – that as we grow that's got to be the ability to start to drive a little bit more operating margin expansion.

Yes, thank you. And I was hoping you could just elaborate on your commentary around some of the increased deal activity you're seeing in the space. Does that stand across all of your businesses? And related to that, how does the Faxitron acquisition fit into how you think you can broaden the Breast Health segment over time?

Yes, great question. We are seeing much -- many more deals that I'd say have the profile of a Faxitron. And I think as you know we made an organizational change really at the end of last calendar year where we eliminated the Chief Operating Officer. Me having direct access to the Presidents now of the divisions they're really starting to ramp up the activity and just our whole corporate team supporting that it's just, it's a very different outlook. And I think they're starting to see some things and we're looking at a lot more things in the flow that are what I'd call much more the true tuck-ins that supplement our existing businesses. As it relates to Breast Health we've been looking at the continuum of patient care and how we continue to build out from the strength we have in mammography. And we've been seeing the growth of the breast conserving surgery area and it's such an adjacency. It's right for us to be able to go in and have a bigger play. We have a very small product in that space today, so we've got the knowledge, we've got the presence. But this will allow us to build out. And that -- these are the kind of tuck-ins that we really want to be doing. And I would say frankly in each division right now we're starting to see some of them and we've got them coming forth. So I'm not going to say we're going to have one ready to go every quarter or whatever else. It's never that linear or clean. But I can tell you the teams are really starting to surface some good things. And two years ago or even a year ago we just want to bring many good ideas forth.

We'll now take a question from Raj Denhoy with Jefferies.

Hi. Anthony for Raj. Hello, sorry I was on mute. Anthony for Raj. Thanks for taking the question. Maybe just back to MonaLisa a bit. There's a little bit of revenue mix in there. I'm just wondering expectations into the second half and then maybe a little bit more detail on maybe the contents of the FDA inquiries, I mean it looks like they were certainly, there's a focus on marketing practices but is there a chance that this actually bifurcates going forward in favor of Cynosure? That will be my first question. And then just on Breast Health, it looks like there was a patent suit win specifically against Fuji. So just an update on sort of share shifts within Breast Health and maybe how that particular situation with Fuji plays out. Is that a tailwind as you go forward here in the second half? Thanks.

Sure. I think on the MonaLisa piece, it's really very early to know how it will play out for the other companies and everything else. We're just going to focus on ourselves. I think we continue to feel good about MonaLisa. We are very willing to invest in the clinical studies. And by the way none of us are perfect. I'm sure between legacy stuff (54:50) have you slightly over promoted here or there. We'll clean anything like that up just as I did earlier in my Stryker days, and then we'll move forward. And again feel really good about the product and our commitment to the clinical expertise. As it relates to Fuji, frankly they haven't been that big of a competitor. Most of what we're competing with day-to-day is really GE and Siemens institutions. And I think we continue to feel really good about the wins we're continuing to get. You don't grow our Breast Health business the way we have been doing now for a number of years, post all the concerns about the cliff without continuing to take market share. So I think, Fuji, I put in the nuisance category. And they are certainly there and we hope to have them permanently withdrawn from the products that are infringing our patents and that'll certainly help. But day-in day-out we're also still competing against some very formidable competitors in GE and Siemens. But we like our chances.

We'll now take our next question from Derik de Bruin with Bank of America.

Hello and good afternoon.

Hey, Derik.

Hey, Derik.

Great. Hey. So I'm going to see if I can sneak in three like Doug. Number one, can you – how fast was Faxitron growing? And did you bless Quirk's (56:19) $4.5 million number for Q4? Number two, are you still comfortable with sort of the mid-teens growth in the legacy business OUS? And I'm just curious, have you seen any sort of like buying ahead of the tariffs in China? Just wondering if you've seen any unusual dynamics in the market ahead of that. And, yeah, I'll just leave it there.

Great. Hey. I don't think we're going to necessarily disclose the Faxitron growth rates but solid. And we kind of ignored Bill's...

And faster than the current company.

Yeah, yeah. It's accretive to our growth rate. Bill's number was probably slightly high, I would guess, just where we are in the quarter and where they are in terms of, as we take it over. But I think feel good about a full year number. In terms of the base business growth rates, I would not endorse mid-teens international growth for our base business going forward. I think we've had seven straight quarters of big stuff. But now we're really starting to get against big comps and especially stacked comps. We still expect our international business clearly to be growth accretive. We also picked up, as you know, a couple of distributor acquisitions. So I think that'll come – certainly slow down as we've annualized all of that, but continue to feel really good about the growth rate of our international business being accretive to the company. And finally, I don't – we have not seen any buying in or stocking in from China. I wish our business was bigger for us to realize that kind of an impact in China. But I think nothing noticeable at this point.

We'll go now to Mark Massaro with Canaccord Genuity.

Hey, guys. Thanks for the questions and congratulations, Bob. Wanted to start with the international Diagnostics business. Steve, you indicated not to expect mid-teens growth next year. Certainly you had a significant benefit from currency in the international business. But I guess just broadly or high level, can you speak about the penetration rates and how you think you're competing across Europe and how much growth you see there, just from a market share perspective?

Sure, Mark. Let me be clear. My comment to Derik, unless I misunderstood his question, was about our total international business growing at mid teens. I think we would expect our Molecular Diagnostics business to continue to be a very healthy grower internationally. And again not ready to give guidance but my comment was more about our total business. I think we feel good about what's going on in Europe. We continue to place Panthers. Our team has gotten a lot stronger there at selling. And as the menu builds out feeling really good about additional opportunities in Europe. And again even though we are going against some very formidable competitors in that part of the world, we are getting some very nice wins and expect that to continue.

Got it.

So, Mark, to that point I mean when we look at our market shares there, we have a lot of opportunity to gain market share over time in Europe and in Asia as our menus expand.

Got it. And just a two parter follow-up. The Breast Health gantries, would you say that that number of placements is roughly stable or maybe flat sequentially, or are you seeing an uptake there? And then secondly on annuity per analyzer on Panther, I think you guys were looking for maybe high single digit growth there, any update there?

Yes. So Mark on the Breast Health gantries, we were up sequentially but it's still within the range that we've had been – we've been saying between 250 and 300 (01:00:30) per quarter, and it was in that range. For the annuity on the Diagnostics Panther system that continues to increase. That's one of the things that's real strong growth driver for that business going forward. We saw a nice rebound this quarter as we expected. With the additional menu that's coming on we would expect that opportunity to continue to grow.

We'll now take questions from Vijay Kumar with Evercore ISI.

Hey, thanks for squeezing me back in. And I just want to go through the fourth quarter maintenance (01:01:10) guidance assumptions. Just Bob, high level, so, what is the FX that's baked into that number for Q4? And if I understood all the different numbers, it's about $9.5 million headwind from the Diagnostics royalty roll-off, which is not going to repeat. There's some contribution, let's call it, $3 million to $5 million from Faxitron. And blood is going to be about $8 million to $9 million in Q4. Is that correct all those numbers I had?

Yes. You're in the ballpark, Vijay. And what I would say is when we think about where we were from last guide, the FX is hurting us by roughly $8 million.

And that's all going to be in Q4 right, that $8 million headwind in Q4?

That's the Q4 number. That's correct. We had roughly about $3 million in Q3 relative to when we gave guidance and that guidance comprehended – was impacted roughly by about $8 million in Q4. And we've included that into the latest guidance.

And got you. And blood is coming much better than expected, right now. Obviously that's been a headwind to margins. I mean if I understood Steve's comments, it looks like maybe very slight margin expansion for 2019. Is that sort of – it looks like maybe the Street is a little aggressive on margins, op margins for 2019? Thank you.

Yeah. Again, we're probably not going to get into all the details. I think what Steve was talking about was as we look at our business, look the gross margin line is probably not going to see a whole lot of new expansion as we look at our international business growing faster. The impact of tariffs as they come to pass. That being said, we do believe that we have the levers necessary to drive operating margin improvement and we'll give more guidance on the fourth quarter call.

We will now go to Jayson Bedford with Raymond James. Jayson T. Bedford - Raymond James & Associates, Inc.: Good afternoon. Thanks for taking the questions. And I'll keep it to one and bring the average down. So...

Thank you, Jayson. Jayson T. Bedford - Raymond James & Associates, Inc.: You're welcome. Just a bigger picture margin question, specifically on the R&D spend. It's trended lower as a percent of sales over the last few years. In the quarter it was frankly lower than it's been in some time. Steve, is there a point in the life cycle of this business where you have to ramp the R&D spend to fund the organic growth profile, or should we think of 6.5% to 7% of sales as the right level going forward?

Sure. I think, it came down a bit largely because the heavy investment in the virology programs and Diagnostics, which was a huge clinical program came down. I would not expect that to leverage much more. I think it's kind of – it's almost like the business development stuff. Now that we're getting – we've got better people in place and everything else starting to see some other projects that we can work on. And I think that will be an area of probably less leverage going forward, because we don't want to – we want to make sure we're investing for the future. And it could even tick up ever sort of slightly probably as we go forward. But again hopefully we're able to keep it at that level and invest for the future, grow the top line, grow the R&D budget, and good things keep happening. Jayson T. Bedford - Raymond James & Associates, Inc.: Thank you.

Operator, I think we have time for maybe two more questions.

We'll now go to Tycho Peterson with JPMorgan.

Hey, thanks for letting me get a follow-up in. Steve, I want to...

Yeah, sorry, thought you got cut off earlier.

That's okay. The whole notion of getting back to mid single digit growth, I know you don't want to necessarily comment too much on next year. But really the question is, how much is contingent on new product driving the recovery back to mid single digit growth next year?

They'll certainly play a role. And again we'll talk much more on the next call when we give guidance for next year.

Yeah, Tycho I think to Steve's point, I mean without speaking to 2019, I mean one of the things that we talked about and I think it's being shown is the improvement of our R&D pipeline. We launched several new products in the quarter, but when you think about across our product portfolio, the expansion of our R&D, our menu in the Diagnostics business really helping drive growth there, obviously, with what we've been able to do on the Breast Health business with the new gantries but also increasingly some additional products in surround and then even in the Surgical and the Medical Aesthetics area where we're doing some nice distribution deals, and then on Surgical some nice tuck ins. That is the way I would expect the cadence to continue going forward, those things continue to be a bigger and more important piece, and actually creates vibrancy in our product portfolio. And I would expect you to see that going forward.

Okay. Thanks.

We will take our final question from Dan Leonard with Deutsche Bank.

Thank you. So I was hoping you could elaborate on the emerging market program you have for your Molecular business. I mean, your competitors in molecular actually do quite a bit of business in emerging markets. And so can you talk about how you'd size that opportunity and what you expect timing would be and when we can start to see some contribution from those efforts? Thank you.

Sure, Dan as you well said, a lot of our competitors are much more entrenched there. We're in the early stages. And I'd probably put it as it's going to be not significant probably even as we go into 2019. But we're putting our foot in the door. We're building the relationships. Obviously in the announcement last week with the Clinton Health Care, Health Access Initiative, I think it's going to go a long way to putting us on the map there. It's probably going to yield bigger benefits in call it 2020 and beyond. But I think we feel good about the initial start that we're getting in there. And we finally have the menu and the system in terms of Panthers that we can make a difference there. It'll be probably lower price and lower margin as we also try to do good but overall feel like that will be a very good place for us to be as well.

I think the other thing it underscores is the strength of our leadership there. I would tell you two years ago, this was not something that would have been possible within Hologic. So our EMEA leadership team being able to really work with that in conjunction with our Diagnostics partners hereon in the U.S. I just speak to what Steve has said a long – a lot and truly believe that leadership makes a difference. And I think that is as much of a symbol as anything else.

I think a very fitting and final comment for Bob as he signs off. And again a huge thanks to Bob and welcome to Karleen. Many of you will get to know her in the years ahead. We wish Bob, all the best as he moves forth and thank you everybody for listening to our call. And keep watching as we keep making this company better and better. Thank you.

Thank you. That is all the time we have for questions today. This now concludes Hologic's third quarter fiscal 2018 earnings call. Have a good evening.