Good morning, ladies and gentlemen, and welcome to the Henry Schein Third Quarter Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's call, Susan Vassallo, Henry Schein's Vice President of Corporate Communications. Please go ahead, Susan.

Thank you, operator, and my thanks to each of you for joining us to discuss Henry Schein's third quarter results. With me this morning are Stanley Bergman, Chairman and Chief Executive Officer of Henry Schein; and Steven Paladino, Executive Vice President and Chief Financial Officer. Before we begin, I would like to state that certain comments made during this call will include information that is forward-looking. As you know, risks and uncertainties involved in the company’s business may affect the matters referred to in forward-looking statements. As a result, the company's performance may differ from those expressed in or indicated by such forward-looking statements. Also, these forward-looking statements are qualified in their entirety by the cautionary statements contained in Henry Schein's Securities and Exchange Commission filings. The content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, today, November 1, 2011. Henry Schein undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. [Operator Instructions] With that said, I would like to turn the call over to Stanley Bergman.

Thank you very much, Susan, and good morning, everyone, and thank you for joining us on this call. We are very pleased to be reporting sales growth in local currencies in each of our 5 businesses during this third quarter of 2011. And company-wide, sales growth was nearly 12% or approximately 13% when excluding sales of seasonal influenza vaccines for both periods, important to adjust for that to understand how our core business is doing. Third quarter results were impacted by lower sales and profits from these seasonal influenza vaccine sales. During the third quarter, we distributed 9.9 million doses of seasonal influenza vaccine versus 11.2 million doses in last year's third quarter. Now it's important to realize we have substantially sold all of our 11.6 million doses commitment for 2011 as of today -- as of this call. And as we previously announced, we reduced our commitment for influenza vaccine doses by approximately 2 million doses earlier this year. So, excluding sales of influenza vaccine from both periods, net income and diluted earnings per share did increase by double digits. We are also introducing 2012 guidance for diluted earnings per share to be from $4.25 to $4.34 per share, which represents a growth of 8% to 10% compared to the midpoint of our 2011 EPS guidance. We would like to note that 2012 fiscal year includes 1 less week than 2011. So, I think it's important to understand the points I've just made. Steven will elaborate on these and magnify the important areas to focus on. Overall, we're quite happy with the performance of our company. The business is doing very well in each of our business units. We are very focused. We have just completed the strategic planning process, and know exactly where we want to focus for the years 2012 to '14 so that we can continue to generate earnings in a measured and credible way and continue to show the results that we had over the past 16 years as a public company. In a moment, I'll provide some commentary on each of our business units. But first, let Steven provide an overview of our quarterly financial results. Steven, please.

Okay. Thank you, Stan, and good morning to everyone. I'm also pleased to be reporting solid sales growth for the third quarter of 2011. If we turn to our financial performance, our net sales for the quarter ended September 24, 2011, were $2.1 billion, reflecting an increase of 11.5% compared with the third quarter of 2010. This consists of 7.4% growth in local currencies and a 4.1% increase related to foreign currency exchange. In local currencies, internally-generated sales were up 3.3% while acquisition growth contributed an additional 4.1%. As Stanley just mentioned, in order to provide more meaningful commentary about the quarter's results, we will be discussing our results both including and excluding the impact of influenza vaccine sales and their related profits. So excluding sales of seasonal influenza vaccines from both periods, our net sales increase was 12.9%, with 8.6% growth in local currencies including 4.3% internally-generated. You can note the details of our sales growth, which are contained on Exhibit A in our earnings news release, which was issued earlier today. Our operating margin for the third quarter of 2011 was 6.8%, which was a decline of 47 basis points compared with the third quarter of 2010. However, excluding the impact of current year acquisitions as well as sales of influenza vaccine from both periods, our operating margin expanded by approximately 14 basis points compared with the prior year. As we discussed last quarter and in previous quarters, acquisitions sometimes carry a lower margin than our existing core business, and we view that as resetting the base operating margin for the business with opportunities for margin expansion on a go-forward basis. Our effective tax rate for the quarter was 31.5%, which is in line with our guidance, and is down slightly from the 31.7% in the third quarter…

Thank you, Steven. Let me begin my review today of the -- with the North American Dental business. Growth in sales of dental... [Technical Difficulty]

I'd like to turn the call over now again to Stan Bergman.

Let me begin my review of our businesses with a review of the North American business. Growth in sales of Dental consumable merchandise of 2.9% during the third quarter is, we believe, somewhat ahead of our estimate for the market growth, and we believe reflects consistent patient traffic to the dental office. We have just completed attending, few weeks ago, the American Dental Association meeting in Las Vegas, and our sense from the dentists is that patient traffic remains quite consistent. There are parts of the country where we actually think it's gone up a little bit, but not much change in a while, so patient traffic remains consistent. And this represents the ninth consecutive quarter of Dental consumable merchandise sales growth for the company. Our Dental equipment results were impacted by somewhat of a cautionary environment for capital equipment purchases. We -- as Steven mentioned, we entered the fourth quarter with a much stronger order book. We believe that there was some movement in Dental equipment sales from the third quarter into the fourth quarter. We have also seen encouraging Dental equipment sales for the first 4 weeks of the quarter. Key is for us to provide equipment that helps increase the productivity of the practice while consistently providing -- increase in the quality of care. One of the highlights of the third quarter was our 16th Annual Dental National Sales meeting. Each year, we hold 5 national sales meetings in the U.S. and 6 overseas, and each of these meetings strengthen supplier partnerships and ability of our sales team to help customers operate more efficient practices while providing quality of care to patients, as I noted. The largest of these meetings, of course, is our dental meeting. Under the theme Navigate Change, Finish First, this gathering in early…

Here is Stanley Bergman.

So let's -- I think I covered the Medical and Animal Health business. I just want to go quickly through the International business again in case you didn't hear that, I'll abbreviate it because we want to stick more or less to call time and allow for Q&A. We had a solid quarter on the international side. Internal growth was good, complemented by the Provet acquisition -- the largest acquisition -- of the largest New Zealand and Australia Animal Health distribution company, business is doing well. In fact, we're very, very pleased overall with the distribution capability down there, the software business they have, the consulting business. Around -- about 2/3 of our international business is dental. 30% of sales come from dental equipment. And we believe that, generally, in our international businesses, patient traffic is consistent. But there are spots within the environment where I think it would be appropriate for us to point out that capital equipment purchases are a little bit more cautionary -- are being viewed a little bit more cautionary by the customers. So -- but overall, I think our international business is quite stable. Let's just go to the technology side and the value-added services for a little bit. And I will go through this very briefly, and we'll cover more in the Q&A. We had strong internal growth. Indeed, growth in this business has exceeded 20% for well over a year for 5 quarters. As Steven mentioned, the electronic services and the financial services businesses continue to perform very well. If you look at our financial services businesses, I think you will see that we are getting approvals for our customers. I think 90-plus percent of our customers are getting financial approval for their -- approval for their financial deals. So -- and…

Operator, we'll take some questions now.

[Operator Instructions] And your first question comes from A.J. Rice with Susquehanna Financial.

Just a couple of questions if I could ask them. First, with respect to next year's guidance. It sounds like you've sort of taken a -- I guess cautionary or maybe some would say realistic tone toward what the economy is going to do. But it sounds like you're particularly calling out the international market and the Dental equipment market internationally. Can you give us a little more flavor? Are you assuming that it somehow gets a little worse than what we've seen this year or sort of steady state? And also to the extent you can comment on the North American Dental as well.

We have taken the position that -- least let's talk about the domestic for a moment. Growth in dental consumable merchandise for us was 2.9% during the third quarter, which is, we believe, ahead of the estimates of the market growth. And we are free [ph] , we believe, it reflects solid, steady patient traffic to the dental office. So this is the ninth quarter we've had internal growth. We reported a decline in equipment sales, some of that due -- largely due to the BIOLASE switch in strategy, but some of it related to a tad of a cautionary environment that we noticed over at about a 6- or 8-week period. We don't believe it's necessarily a trend, because as Steven noted, we have seen an increase in our backlog. I think as we do our internal projections and budgets, it is important for us to be a little bit more conservative. It doesn't mean we're down on things. It doesn't mean we initially see this as a trend, but I think it is better for us to be conservative, and be more positive when we actually report results in the future than the other way around. So we are taking actions accordingly, and we're running the business in a traditionally -- in a way we've traditionally done it, which is conservative. As it relates to Europe, again, we are taking a little bit more of a cautionary position. But our business, in particular, in Germany, for example, is not 100% reflective of the cautionary position we're taking, but we are tending -- leaning to be more cautionary than optimistic. And again, I think that's the best way for us to plan, and the way we plan is also the way we'd like to relate to the streets. So we want to be transparent. We believe we are well positioned. Our offerings are good. We're really talking about at the margin here rather than the business itself.

Okay. That's helpful. Maybe just one more thing. You've commented on the order book coming into the fourth quarter. It seems ironic to me that people are reporting, and some of the studies have said that dental income seemed to be flat to modestly up, but dentists are cautious. Are you doing anything from a promotional perspective, heading into the fourth quarter to try to unlock this potential demand that sometimes you see at year end? And what is the average on that order book? And will we see most of that flow out in the fourth quarter, do you think? Or does that spill over into early next year?

The caution is, I think, indicative of the mood in the market. Although I think what's actually happening in the dental office is a lot better than what's happening in some parts of the economy. So again, we're talking about at the margin. We're not talking about huge swings. As it relates to the fourth quarter, we always have fourth quarter promotions which are tied into a little bit into financing, although we believe we've had and have a very, very competitive financing options. In fact, I was just in e-mail contact this morning with a fellow, Keith Van [ph], that runs our Henry Schein financial services, and he shows me we are as competitive as we've always been. So the fourth quarter is generally a period when the practitioners sit with their accountants and understand the positive implications an acquisition could have on their tax planning, and potentially what a piece of good equipment can do to the practice profitability and efficiency, and the quality of the care they deliver in the following year. So, of course, our field sales consultants understand that, and of course, provide advice to the customer, so that the customer can mitigate taxes, obviously in a legal way, and at the same time, increase productivity and profitability for the next year, and we support that with good financing options. We're not going out of our way to change things. I don't think it's necessary. What is necessary is to make sure that the practitioners understand that investing in the practice is a lot more sound, and a lot more profitable than investing in the stock market. And we have, in the United States and Canada, about 1300 people taking that message out. I think that's important. The mood is there to buy, but we need to just give that little nudge to get the shipment to take place. And yes, generally, we try to take our orders received and ship them by the end of the fourth quarter, although there's bout of a week there where, from a tax point of view, it's still beneficial for the customer to receive the product and those sales going to the first quarter next year. And of course, in order to recognize a sale, the equipment has to actually be installed. So generally, product has to be ordered by the Greater New York meeting for it to be installed a little bit before that, although there is some plug-and-play product. I don't want to though play that -- that's really a fine point, and generally, we know a little bit ahead of time how we're doing. And right now, we are cautiously optimistic, but feel that we just need to be -- take that optimism and balance it to make sure that at the end of the day we deliver on the right mix of optimism and enthusiasm.

Your next question comes from Glenn Santangelo with Credit Suisse. Glen J. Santangelo - Crédit Suisse AG, Research Division: I just want to follow up on AJ's questions regarding the growth rate and sort of your assumption. Stan, as I look at kind of your European results or your international results, it looked like they were much more consistent with what we saw in 2Q on a sequential basis. Whereas if I look at the North American results, it looked like to me the consumables had stepped down about 200 basis points constant currency. And then as I look at equipment, you had 6 quarters in a row of positive, constant currency equipment growth, and now you've had a negative quarter. So I'm a little bit -- just want to make sure I understand what you're saying because it sounds like you're getting more cautious on Europe. But as I look at the results today it looks like sequentially, you probably did better than I would've thought in Europe and maybe a little bit worse that what I would've thought you did in North America.

Yes, Glenn. We are dealing with basis points here, and we just have to be a little cautious. I mean, we really -- there's no firm data out there. Not like in the pharmaceutical industry where we can get a readouts or in retail, you get a quick readout. If we take Europe for a moment, we need to take into account that this was in fact an IDS year, and there was a lot of new products, so I think we had to ship that, and we get some credit for that. There's still quite a bit of product in the pipeline compared to last year. So it's not that Europe is in trouble by any means. It's just -- we want to be a little bit more cautious there. And as it relates to the U.S., there's a lot of puts and takes there that are going to product mix, and we still believe, and we're hearing this from the practitioner that traffic is stable, so we have relatively stable sales. And on the equipment side, we think we're heading into a good fourth quarter, but I don't want to say that it's going to be the easiest quarter ever, and I'm just trying to balance this. I don't know what words I can say. It's not negative or not pessimistic, but this is certainly not 2007 in terms of the sales of slowing in. Glen J. Santangelo - Crédit Suisse AG, Research Division: If I look at your North American results, I mean, I don't know if you guys would be willing to characterize this, but is it fair to say that the market growth rate in North American market has decelerated on a sequential basis? Because you're sort of suggesting you're still gaining market share, but I look at kind of your consumable growth at 2 plus. Does that assume that the market is somewhat a little bit below that?

I think you're probably correct. I think that's -- we were talking about -- I don't think we're talking about more than 100 basis points. I mean, it's not that precise, but I think we're in positive growth territory in terms of dollar growth. In terms of units, probably flattish. It's not -- it doesn't seem like prices are an issue. It doesn't seem like there's a swing to private brand. I mean, we're still in a pretty solid market, but there are trends occurring. It's clear that the bigger practices are getting bigger at the top end, and the middle practices, there's more of them moving, unfolding from small to medium. There's a lot of trends, and this does impact the mix. So, we're dealing really at the margin right now. But overall, I think the market is stable. There are parts that are more stable than others. I think some specialty areas are challenged. I think there are challenges on the upper end of implants, for example, some of the whitening areas, some of the expensive cosmetics. But overall, I think on balance, it's a relatively stable market, it's growing a little bit in terms of dollars, and we think we're gaining market share. So that's the sense. And against for precise, it's an impressionist painting, not an architectural rendering. Glen J. Santangelo - Crédit Suisse AG, Research Division: Steve, maybe if I could just ask you 1 quick question, then I'll jump off. The 1 x -- or the 1 last week in fiscal '12, could you give us a sense for maybe, how much that cost you from an earnings perspective?

Sure. It's not equivalent to a full week because it is the holiday week, but it's probably equivalent to anywhere from 1/2 of a week to 2/3 of a week depending on the market, and that's a blended for company-wide so it's -- that would be the impact that were estimating it to have. And just while I'm speaking, I just would like to also comment that we are taking a conservative position on the exchange rates that are built into our guidance. We are using a lower conversion rate than where the current dollar to euro is. It's at about $1.36, $1.37. Since there's a lot of uncertainty as to what will happen there, we've elected to be a little bit more conservative in our guidance, so we feel that, that's the right approach, since again the uncertainty is high. So I just wanted to make that comment also.

Your next question comes from Robert Jones with Goldman Sachs.

I just want to go back to equipment once again. Steve, you mentioned BIOLASE having a negative impact in the quarter. Do you have what the equipment growth was x the BIOLASE impact in the quarter?

Yes. Substantially all of the negative impact was related to BIOLASE. Our equipment sales growth was relatively flat, might have been slightly up, slightly down, I don't have the precise number in front of me, but all of the negativity was related to BIOLASE. So equipment sales were flat, x BIOLASE.

That's helpful. And then just to follow-up on that, is there any more detail you can give us around the trend in high-tech versus basic equipment in the quarter, maybe in the U.S. and also what you're seeing in Europe?

It's -- I think, nothing really new there -- the areas of interest for equipment continue to be the high-tech areas because of return on investment and people needing to improve their overall productivity in their office, so that continues to be the areas of interest -- the basic equipment, while it's not doing terribly, is less attractive from a growth perspective.

So when you talk about this cautionary approach from dentists on capital spending, is that really more towards the basic equipment? Or is it equipment across the board?

Well, it's a little bit across-the-board, but it's probably more weighted towards basic. And remember, if we use recent history, the 2009 and 2010 period, we saw dental offices really have no major reduction in their profitability. But yet they had a very cautious tone towards buying equipment. So we don't know if that's going to reoccur or not. We hope that people have learned from that, that what's going on in the general markets is not indicative to what's going on in the dental market. But again, that's in the back of our minds that dentists did hold back on purchases in the 2009 and 2010 period. And it's possible that, that will occur to some extent, we think a lesser extent, but to some extent going forward. So that's built into our guidance also.

Great. And then just 1 quick 1, I'm sorry if I missed this, and I'll hop off. Was there any M&A assumptions built into the fiscal '12 guidance?

No. There's no new M&A activities. It includes all of the completed acquisitions through the date of this call, which really the big ones this year were Provet and the veterinary software companies, and Sogim in France, but no new acquisition activity is contemplated in our guidance.

Your next question comes from Lisa Gill with JPMorgan. Michael R. Minchak - JP Morgan Chase & Co, Research Division: It's actually Mike Minchak, in for Lisa. So couple of questions, the first, on margins. You talked about the impact of acquisitions had on the year-over-year margin comparisons. As Provet is going to cycle in the beginning of the year and that will essentially reset the bar, within your guidance, do you assume returning to that historical target of 30 to 50 basis points of operating margin expansion next year? Or have you adopted a more conservative stance there as well?

No. We still feel like we can get that range of operating margin expansion. Part of it is dependent on overall sales growth, as you know. And our goal really continues to be the operating margin expansion excluding the positive or negative benefit from any acquisition that may occur in the future. But we still feel like we can get margin expansion if sales growth is more robust, we'd be on the high end of the range, and if it's less robust, on the low end of the range. So it's still something that we feel comfortable that we can achieve and we're very focused on it internally. Michael R. Minchak - JP Morgan Chase & Co, Research Division: Great. And then with respect to your comments on the share buyback going forward, is this a change in the terms of the priority for use of excess cash? Or would acquisition still be your first priority for uses of cash? And then maybe if you can give us a sense of what's built into your guidance for next year in terms of share repurchases?

Sure. It's really not a change in deployment of capital because we have the benefit that we feel that we can -- we have a very strong balance sheet. We feel we can do both acquisitions at similar rates to what we've historically done as well as a stock buyback. So it's not really that we're going to do more of one and less of another. We feel like we can do both. Really, we haven't assumed any significant impact other than what we have bought through the third quarter, so again, that's a little bit of conservatism built into guidance on future buybacks, because until we buy it back, we really don't assume a significant impact in our 2012 guidance. But I think the most important thing is, it's not a change in strategy related to acquisitions. We still feel like our markets are fragmented. We can continue to make good, strategic and financially-attractive acquisitions, and that's still the goal for the company to grow the business. But simultaneously, we feel like an attractive investment is to reduce our share count slightly on a year-over-year basis.

We have time for one last question, and that's from John Kreger with William Blair. John Kreger - William Blair & Company L.L.C., Research Division: Kind of coming back to your comments about a stronger order book for Dental equipment, do you think you can show positive growth in the fourth quarter in the U.S. and in your international business for Dental equipment?

I think we believe the answer is yes, that we should be able to -- given the order book growth and barring any unusual new developments that no one's anticipating. So I would say the short answer is yes, we do believe we could show growth in equipment. John Kreger - William Blair & Company L.L.C., Research Division: And I think in the last couple of quarters, I see you guys have spoken more about kind of a more aggressive strategy that taps some of the specialty markets within dental. Can you just give us an update there? Have you had any progress there? Is that contributing to your consumable growth?

Sure. Specialty is still in a development stage -- dental specialties. So while we're seeing good growth in our dental specialties group and it's enhancing the overall growth of our Dental business, it's not today large enough that it moves the needle all that much. We would hope to, over a short period of time, get bigger in the specialty areas, and have it more -- a bigger contributor to growth. But right now, it's still in the development stage, and while we have a lot of good properties and assets there. Now, it's the time to look at those properties and get them to work more synergistically with each other in order to drive enhanced growth going forward. So it's still a good opportunity for us on a go-forward basis. John Kreger - William Blair & Company L.L.C., Research Division: And then just 1 final 1. If you think about your outlook for '12, you're currently delivering very strong growth, well above the market in both the physician office and the vet spaces. Do you think that is sustainable next year? Or as you comp some of the favorable impacts should we assume that'll look more like the broader market trends?

Well, I think we still believe we can gain market share in both of those business units. In the Animal Health, somewhere at almost double digits, I think it was 9.4% this quarter. I think it may in a longer term have to come down, it just can't keep growing at -- I don't know, 2x or 3x what the market is growing for an extended period. But right now, we're feeling very optimistic with both Animal Health and Medical, and we see continued, very strong growth. We just have to be a little bit more realistic on a long-term perspective.

I will now turn the call back over to Mr. Bergman for closing remarks.

Thank you very much, operator. Again, I want to apologize for the technical issues we had. It's actually the first time we've had this kind of an issue in 16 years. So I appreciate your patience. So in conclusion, we do remain optimistic about the business. I think we're trying to just be a little bit realistic in terms of foreign exchange implications of -- the euro is going up and down quite erratically. We think we're heading into a good fourth quarter in the U.S. and abroad from an equipment point of view. But again, we want to make sure that we manage towards a conservative expectation. We think that the consumable business in the U.S. is quite steady, and we see continuous market growth on our Medical business in the U.S. as well as our global Animal Health business. So I think one has to be very careful to x out the impact of flu vaccine, which is quite market in 2011 third quarter. And if one takes that out, I think it was a solid quarter and I'm quite confident that we're heading into a solid fourth quarter, but just want to make sure that we manage expectations quite carefully. So having said that all, if you have a question, please feel free to call Steven at (631) 843-5915 and Susan at the same number except the last 2 digits change to 64 -- sorry, 62. So thank you very much, everyone, and please, again, feel free to call Steven or Susan if you have any questions. We'd be very pleased to answer those and look forward to speaking with you again at the next quarter and seeing you at different conferences, we will be at the JPMorgan conference, and there will be another good chance to see us, and I believe Steven will be at the Credit Suisse. I don't know if I'm going to be there.

No. You're not planning on being there, but we'll be at Credit Suisse in 2 weeks.

Steven will be at the Credit Suisse in 2 weeks. He'll be making a general presentation, will be available for one-on-ones. And likewise, I will be available at -- with Steven in San Francisco for the general presentation, the breakout session and the one-on-ones. Thank you very much, and have a good year -- new year -- holiday season.

Thank you. This concludes Henry Schein Third Quarter Conference Call. You may now disconnect.