Welcome to the STERIS Fiscal 2016 First Quarter Conference Call. All lines will remain in listen-only until the question-and-answer session. At that time instructions will be given should you wish to participate. At the request of STERIS, today's call will be recorded for instant replay. I'd now like to introduce today's host, Julie Winter, Director of Investor Relations. Ma'am, you may begin.

Thank you Keno and good morning everyone. I have just a few words of caution before we open for comments from management this morning. This webcast contains time-sensitive information that is accurate only as of today. Any redistribution, retransmission or rebroadcast of this call without the expressed written consent of STERIS is strictly prohibited. Some of the statements made during this review are or may be considered forward-looking statements. Our 10-K for fiscal 2015 and our subsequent filings with the SEC identify certain risk factors that could cause the company's actual results to differ materially from those projected in any forward-looking statements made today. The company does not undertake to update or revise any forward-looking statements as a result of new information or future events or developments. Our SEC filings, including the 10-K, are available through the company and on our website. During the review we will refer to non-GAAP financial measures to provide information pertinent to the underlying performance of our operations. These non-GAAP financial measures should not be considered separately from or as an alternative for, and should be read together with GAAP results. Tables reconciling these measures to the most comparable GAAP measures are available in the schedule accompanying the press release and on the Investor Relations section of our website. One last reminder before we get started, because of our pending offer for Synergy, STERIS is bound by the U.K. Takeover Code, which places restrictions on what may be said by STERIS in this call. In particular, only information and opinions which are already in the public domain may be discussed. With those cautions, I will hand the call over to Mike.

Thank you Julie and good morning everyone. It is once again my pleasure to be with you this morning to review our first quarter financial results. Following my remarks, Walt will provide his commentary on our performance and discuss our outlook for the full fiscal year. We are pleased to report another strong quarter and a solid start to fiscal year 2016. Total company revenue grew 7% in the first quarter, driven by a 4% increase in volume, a 1% increase in price and 4% from acquisitions, offset by a 2% decline from foreign currency. Gross margin as a percent of revenue for the quarter increased 40 basis points to 41.9%. Gross margin was positively impacted by foreign currency and improved productivity, partially offset by unfavorable product mix. EBIT margin increased 30 basis points to 13.9% of revenue due to the improvement in gross margin I just mentioned, somewhat offset by an 11% increase in R&D spending. The increase in R&D spending is primarily related to the development of surgical products and accessories. During the first quarter as part of our plans to fund the Synergy Health acquisition, we issued $350 million in senior notes in a private placement. The notes have 10, 12 and 15-year maturities with an average interest rate of 3.56%. As a result of this issuance, we repaid all of the outstanding debt under our current bank credit facility. We are very pleased to continue to be able to access funds at very reasonable long-term rates. The downside of doing this, at least in the short term, is that we will incur higher interest expense in the fiscal year than we originally planned. The effective tax rate in the quarter was 33.3% compared with 37.8% in the first quarter of last year. Net income for the…

Thank you Walt and Mike for your comments. We're now ready to begin the Q&A session. So Keno, would you please give the instructions and we'll get started.

Thank you Ms. Winter. Our first question is from Mr. Matthew Mishan with KeyBanc. Please, go ahead.

Good morning and thank you for taking my questions. Walter M. Rosebrough - President, Chief Executive Officer & Director: Good morning Matt.

I guess I'm going to start with Healthcare operating margins. Could you give us an update on where you are at as far as your in-sourcing and the closure of SYSTEM 1 manufacturing? I believe you had quantified the SYSTEM 1 is like a $10 million impact annualized and I think you had $8 million to $10 million of cost savings you were expecting to get from the in-sourcing and Lean manufacturing? I was just curious where you guys are at with that now? Walter M. Rosebrough - President, Chief Executive Officer & Director: Yeah Matt. You've described that correctly. Both of those – just as the math happens to work out, both of those were over two-year periods. And roughly half in each of the two-year periods. So you're exactly correct. And so half for both of those which are roughly $10 million would be about $10 million – $10 million each would be about $10 million this year. And we think we're right on our plan there. Clearly the SYSTEM 1 plant closure or the Hopkins plant closure is a later in the year project. So one is more ratable over the course of the year and the other is much more heavily rear-end weighted. But we're dead on our plans.

Okay. And then you mentioned an increase in R&D spending. Could you elaborate on where you're spending and maybe the rationale for doing it now? Walter M. Rosebrough - President, Chief Executive Officer & Director: Well, first of all, R&D spending is often lumpy. And the nature of it as, particularly as you kind of get toward the end of a project, there is a number of expenses that kind of come rushing in. And for example – project expense where you're building prototypes and things like that get pretty expensive. So some of it is, I would call it, just purely timing. But what we have invested significantly in R&D in our operating room business, pretty much across-the-board. We have new tables, new lights. We're doing a lot of work in the integration space. Now it'll even go up with, in both VTS and in Black Diamond. And we believe those investments are good long-term investments for the business. And so it just kind of happens that the quarter was a little higher than we even expected. But we don't see the year being higher than we expected. It's just the timing of the expense.

Okay. And then lastly, on the Life Sciences capital equipment. Obviously it was a tough number in the quarter and I think you mentioned timing, but in reality it's been down for a significant period of time and you're seeing in that end market, biotech, pharma, a lot of strength. And you're seeing some stability on the research in government, academic side. What's the disconnect between your numbers over the last three or four quarters and maybe with some of the other life science tools providers? Walter M. Rosebrough - President, Chief Executive Officer & Director: Yeah. First of all Matt, we've clearly seen pharma consolidation in plants. And it depends on what part of the space that you're in. Now, I'm going to break pharma from research to discuss it first. But on the pharma side, we've seen consolidation and continued consolidation in pharma for quite some time. And we did see kind of a bottoming out of that reduction, I don't know, a year-and-a-half, two years ago, when we talked about it at that point in time. We haven't seen continued significant reductions, there is lumpiness. We're expecting a very strong quarter next quarter so I think you'll see kind of the opposite of this view. And for the year, we're expecting kind of a flat line performance for the year – up a touch, but generally flat. So that's point one. In terms of others, it's very hard to get a handle on that because many – in our types of equipment, many of the competitors are local manufacturers. And you may recall that it was not so many years ago where we were losing a lot of money in that space and we decided to quit chasing after jobs that were not profitable. And so we…

Right. Thank you Walt. That was very helpful.

Thank you. Our next question is from Mr. Chris Cooley with Stephens. Please go ahead.

Good morning everyone. And thanks for taking the questions. Just two quick ones from me here this morning, maybe Walt or Mike. If you look at Isomedix in the quarter, solid mid-single digit growth, but historically we've seen that in kind of the upper single digits. And I realize you've brought on new capacity. We've seen fairly positive commentary from a number of the Healthcare service providers out there, just in regards to procedure volumes during the quarter. Help us think a little bit about lead lag with your end customers relative to what we see on the service side, and kind of maybe reframe our expectations for unit volume growth in that business? And then I have a follow-up. Thanks. Walter M. Rosebrough - President, Chief Executive Officer & Director: Sure Chris. We do see a lead lag and unfortunately it's not uniform. Between what sales are, not so much on the service side of that business, but on the device volume side. So if you watch device volume globally – high-end device volume or devices that have to be sterilized volume globally, we will tend to track that. We lead in lag based on their expectations and how they build inventory and don't build inventory, and how their hospitals build inventory and don't build inventory of these products. And sometimes they get it right and sometimes they get it wrong. Over long stretches, six months, a year, we will tend to track that very closely; over short stretches, it varies. And then the other thing that causes it to be, again, somewhat not as uniform as what you might expect, is our pricing tends to be fairly stable in that business, so we go up kind of with inflation kind of numbers. And so our prices are a little more stable, whereas sometimes they get very strong price increases because they bring in new products, which is typically the way devices get strong price increases. And then sometimes if they have less new products, or they're having GPO pressure or whatever, they may not get the prices. So where volume – if you're talking strict volume, unit volume, as opposed to revenue volume, which has some price effect. And often, new products pricing is buried in revenue volume, because it's a new product so it doesn't have a historic price. If you can kind of work through that, then our volumes or our volume growths tend to be very similar to the global medical device growth. So that's kind of a long answer to a short question but that's how we typically see it.

So just to be clear, I mean, if – just kind of looking at some of the trends that we've seen overall, can we expect that to migrate back towards kind of the mid to upper single-digits over time in terms of just volume growth? Walter M. Rosebrough - President, Chief Executive Officer & Director: Yeah. We think, as we've said before, kind of in general across our business kind of mid-single digits is what we're expecting to see in that business in general. And naturally, we hope to pick up a little bit in price and a little bit in share. And so something in that mid to maybe on the high side of the mid. But I don't think we're expecting anything like double-digit growth in that area.

No. No. Understood. And then, maybe just two quick housekeeping questions. In the quarter, could you maybe break out for us, Mike, what the contribution was from acquisitions? I believe, of the two, you had closed one on the 24th, so I guess technically would have still fallen in the quarter. Was there a revenue or just was there any contribution there in the quarter? And then, could you also maybe just elaborate, again I apologize, I was shuffling a couple of calls here this morning. But what you saw in sales and marketing expenditures during the quarter, maybe how we think about that, that particular line item over the course of the fiscal year? Thanks so much.

Yeah. Certainly Chris. So on the acquisitions, acquisitions added 4% to our revenue growth. The bulk of that was, in part the IMS, what do we have at six or eight weeks or something of that nature. We only had Black Diamond for a short period of time and that added roughly $1 million in total so not much impact there. The bulk was definitely from IMS. On marketing expenses, I don't really see anything unique or different in what we – our expectations are. So I don't know, Walt, do you have any comment? Walter M. Rosebrough - President, Chief Executive Officer & Director: No. I would say that there's nothing material in sales and marketing expenses, other than those that track with new products and will be captured in kind of R&D – the R&D side, the front end of marketing. But from the back-end of marketing and sales expenses, we don't see any significant changes.

Understood. Thanks so much.

Thank you. Our next question is from Mr. Mitra Ramgopal with Sidoti. Please go ahead. Mitra Ramgopal - Sidoti & Co. LLC: Yes. Hi. Good morning. Just a couple of questions. First, Walter, I was wondering if you can give us an update in terms of how the surgical repair business is doing. And is there an opportunity for that outside of the U.S. for you? Walter M. Rosebrough - President, Chief Executive Officer & Director: We are extremely pleased with the business we now call IMS, which is both surgical and scope repair. And as you guys know, we've merged several companies together, five companies over the last three or four years, to build that business. And it's built quite nicely and doing quite nicely there on our profitability improvement targets. Probably the biggest risk we had in our planning or thinking about that business, it was not whether the revenue is there. We believe the revenue is strong and will continue to be strong. The opportunity we believe is strong. But the biggest risk was whether we were able to consolidate the businesses and keep growing the revenue and get the cost reductions we expected. And we absolutely have seen that a little more rapidly actually than we expected. So we're very pleased with the business. The – and we're getting very good comments from customers, particularly customers that – our larger customers that spread across geographies, because this has historically been a local geography business, and now they're seeing consistency across broader geographies. So we think that's been a plus for our customers. In terms of international expansion, there is some opportunity there. It would be a nascent business outside the U.S. So it will be a longer-term investment, longer-term opportunity. But we do think there is…

Yeah. Mitra, on the tax rate, we are still anticipating an effective tax rate of 35% for the fiscal year. We were slightly favorable to that this quarter, but still 35% for the full fiscal year is our anticipation. And then on buybacks, I think as Walt said earlier, with the acquisitions we completed in the quarter, we did not complete any buybacks in Q1. Mitra Ramgopal - Sidoti & Co. LLC: Okay. Thanks.

Thank you. Our next question is from Mr. Larry Keusch with Raymond James. Please go ahead. Larry S. Keusch - Raymond James & Associates, Inc.: Okay. Good morning everyone. So Walt, I wanted to ask you, and hopefully this is within the rules that you set forth for speaking about Synergy, but to the extent that that deal does not get consummated, and your very ample access to capital, which I think has been demonstrated in going after that target, is there a scenario under which we could see an acceleration in M&A activity? I mean, I recognize you did a couple of smaller deals this year, but could we see a pickup in M&A activity? And again, if that deal were not to be consummated, could you give us any thoughts as to perhaps how we should think about size of potential M&A targets? Walter M. Rosebrough - President, Chief Executive Officer & Director: Sure Larry. I mean, I would I guess make a couple of points. First is we fully anticipate consummating the deal. We hope to do that and expect to do that. And we're doing our planning that way. But to your point, if for whatever reason that were not to occur. I'd even go further, and if we do that deal, by definition, there'll be some pause of taking a breath and integrating that deal because that's a very significant deal for us. So there'll be some pause, but both Synergy and we were on a track to do accretive acquisitions that fit into our strategic bailiwick, and we would not – doing that deal, we would not want to stop the kind of acquisitiveness they were interested in and not stop the acquisitiveness we're interested in, which are largely tuck-in kind of deals that…

Thank you. Our next question is from Mr. Chris Cooley with Stephens. Please go ahead.

Thank you very much for the follow-up. Walt, I just was hoping you could remind us procedurally about the upcoming court hearing. I think you're on the docket for the 17th along with several other cases. I think three explicitly for that date. Could you just remind us again in broad strokes about the expected timelines there and when you would hopefully expect to have a ruling from the court? I think that you'd previously stated in mid-September, but I just wanted to walk through the components there. Thanks so much. Walter M. Rosebrough - President, Chief Executive Officer & Director: Sure, Chris. Again, the docket is public. You've hit all the high points very well. It is a hearing in Federal Court and a Federal Judge has wide discretion of what – in this case, it's a he, what he chooses to do with the case and how he hears it. We are scheduled for the 17th. I think there is no indication of anything other than that. So unless something happens in his docket that forces him to move out that, I believe he and we are planning on moving ahead on the 17th. I don't remember exactly. It's a three or four-day hearing time that he has set out for us and I think everyone is anticipating it would be done in that timeframe a few days. And then in terms of ruling, again, this is a Federal judge and he has his time schedule and there is no real time schedule for when he will or will not rule. But generally speaking, our understanding is that inside of a month or so is kind of a normal timeframe. So that's an expectation, but it's not a firm deadline. Again, it is up to the judge's discretion. And largely depending on his docket and what else he has that could cause him to go faster or slower.

Thanks so much. Walter M. Rosebrough - President, Chief Executive Officer & Director: You bet.

Thank you. I show no other questions at this time. I'll turn the call back for any closing remarks.

Great. Thanks everybody for joining us. This wraps up our first quarter conference call, and we'll talk to you all soon.