Good day, everyone. And welcome to the DENTSPLY International Third Quarter 2013 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Derek Leckow, Vice President of Investor Relations. Sir, you may begin.

Thank you, Allen. Good morning, everyone. Thank you for joining us to discuss DENTSPLY's third quarter 2013 results. I'm here today with Bret Wise, Chairman and CEO; Chris Clark, President and CFO; and Jim Mosch, Executive Vice President and COO. I hope you had a chance to review our press release issued this morning. A copy of the release and a set of slides to accompany this call are available for download on our website, www.dentsply.com under the financial information Quarterly Results tab. I'd like to remind everyone that the Safe Harbor language and U.S. GAAP reconciliation contained in today's press release also pertain to this conference call. We may make forward-looking statements involving risks and uncertainties. These should be considered in conjunction with the risk factors and uncertainties that are described in our SEC filings. The company undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this call. As you can see in the release, our results quarter include a few non-recurring items and other non-GAAP adjustments. Our comments on this call will focus on results, excluding certain adjustments that provide operational insight, excluding these items. These items are noted on the non-GAAP reconciliation tables contained in the release. You will note that our earnings guidance is also presented on adjusted basis. A recording of this call and its entirety will be available on our website. With that, I'd now like to turn the call over to Bret Wise. Bret?

Thank you, Derek. Good morning, everyone. Thanks again for joining us on our call this morning. I had a few overview comments on both the market conditions and then our overall results, and then I'll turn the call over to Jim and Chris for a more in-depth discussion of the results. First on the market. We continue to see the overall market is relatively stable versus what we saw late last year and then also early in 2013. The U.S. continues to be a growth market. Europe is flat at best as we've seen for some time now. And the Rest of World varies with the developing regions growing nicely and the developed regions in a low growth stage. So overall, market conditions are generally consistent with what we've reported on our second quarter call. With respect to our results, we reported sales growth of 3.4%, x precious metals this quarter. Internal growth and at constant currency growth were both 2.7% and that is the same that we've reported for Q2. And currency in the third quarter was slightly positive, up 70 basis points. Our internal growth was strongest in the U.S. and Rest of World. U.S. was up 4.3% and Rest of World was up 6%. And growth continued to be slow in Europe where we grew 0.3% in the quarter. In the U.S. several of our new product launches this year are doing quite well, and we have some interesting projects that will to the market in the next couple of quarters. Jim is going to comment further on this in his remarks. In Europe, this quarter, marks the 15th straight quarter of positive internal growth for us in the region, which is quite remarkable given the economic climate there. Like the U.S., we're getting some help from…

Thank you, Bret. I'd first like to review our implant business. In Q3, our global implants sales were flat on a constant-currency basis. U.S. was up mid-single digits, Europe was negative, and the Rest of World showed sequential improvement, up mid-single digits. As discussed in our second quarter call, we went live with the consolidated DENTSPLY Friadent and Astra Tech German organizations in Q1 of this year. To date, good process has been made on training, customer transition, as well as consolidation of operating systems, which are now complete. Based on trends, we observed other major markets following integration. We are now at a point where the organization is returning to a normal level of competency and effectiveness, and we expect to return to growth in this important market in 2014. From a marketing perspective, in October, DENTSPLY implants Germany held an implant congress in which 400 plus clinicians attended. We're very pleased with the response and results and in particular, the strong interest in our technology-base. It's important to note that we have continued our integration efforts with the implant business as we worked to realize identified synergies. Consistent with our integration plan, we took a small restructuring charge in Q3, and we'll take a second charge in Q4 as part of our ongoing efforts to improve operating performance of the implant business. Turning to new products. 2013 has been a good year for launching new innovative brands. Thus far, this year, we have launched a new composite system, TPH Spectra, 2 new fluoride varnish brands, NUPRO varnish and Durashield CV and a new endodontics system ProTaper NEXT, as well as numerous other innovations discussed on previous calls this year. In addition, we have recently launched several additional new products that we believe would be very impactful to the…

Thank you, Jim, good morning, everyone. I'd like to provide some detail on our third quarter results by reviewing key elements of our income statement, and also provide some additional color on our balance sheet and cash flow for the quarter. Our sales growth, excluding precious metals of 3.4%, and our non-GAAP earnings per share growth of 12% for the period reflects some volume improvements in both our U.S. and Rest of World geographic regions, increased leverage in our operating model, and also the impact of synergy benefits. Our growth was largely organic with 2.7% internal growth and currency translation impact of a positive 70 basis points compared to the prior-year quarter. Gross profit, on an adjusted basis in the third quarter, was 56.6% of sales excluding precious metals, which was down 30 basis points from the prior year comparison of 56.9%. This was entirely due to the headwinds in the medical device excise tax in the United States and the gross profit rate on an adjusted basis would have been up slightly compared to prior year without this impact. SG&A expenses on an adjusted basis were $259 million in the quarter were 38.7% of sales excluding precious metals. That's sort of 100-basis-point improvement from last year's 39.7% SG&A rate. On a year-to-date basis, [indiscernible] [indiscernible] are down 90 basis points as a percentage of sales, excluding precious metals. And we're pleased with the improved leverage and synergies across our businesses, including the impact of our cost saving efforts in integration activities. Operating margin for the quarter improved 60 basis points to 17.9% of sales, excluding precious metals on an adjusted basis, compared to 17.3% in the third quarter last year, reflecting the SG&A and the gross margin impacts that I just described. On a year-to-date basis, operating margin has…

[Operator Instructions] And we'll take our first question from Jeff Johnson with Robert Baird. Jeffrey D. Johnson - Robert W. Baird & Co. Incorporated, Research Division: Bret, I wonder if you can just start on the dental implant side of the of the business? Wondering, it sounds like some declines there again this quarter. Maybe you could flush out -- and that's common in Europe, obviously. I'm wondering if you could flush out the European market especially what you're seeing in Germany now that the sales force integration is complete there. And Jim, would like to hear maybe what gives you the confidence that dental implant growth turns positive again in 2014 as you talked about in your prepared remarks.

Jim, why don't Jim Mosch take all that? You're kind of prepared than I am.

Absolutely. Thanks, Jeff. I think, obviously, we've continued to see challenges in the European market overall. From the standpoint, the issues in Southern Europe may be while improving slightly, are still negative. And I think we've just seen a general slowness in Europe overall so we've not seen a real change in the European implant market. All indications are that the German implant market is negative. And we think that this to some degree is undermining some of our recovery and our growth. But from the standpoint of our German implant business, the situation that we've seen in the major markets where we've gone through integration, there is this 6- to 9-month period as you go through really -- you're now educating 2 salesforces on each other's implant systems. You have customer transition getting to know new customers, building relationships, familiarity with operating systems. It was just a series of general things that you go through in a transition process. And obviously, we like that to be quicker, but we're also realistic about how much time that takes. And certainly the magnitude in our larger markets. I can say we experienced similar trend in the U.S. market when we went live there. My confidence is that we're really seeing those operating transition issues really come to a close. We held the implant conference in Germany, which was very well attended. We had our organization present as well and we just saw a lot of positive come out of that. So we really see our organization focusing more on customers and the business. We really expect that, that improvement will take through the fourth quarter. And next year, we have certainly have higher expectations. Jeffrey D. Johnson - Robert W. Baird & Co. Incorporated, Research Division: Okay, great. And just maybe a follow-up on that, Jim. It sounds like U.S. was up mid-single digits, Rest of World up mid-single digits on the implant side. Europe down as you said. Was that -- would that have been down mid-single digits? And maybe sequentially if you could compare last quarter to this quarter? Was it better or worse? And then my only other question would be, in Germany, especially, on the dental implant side, how much of it do you think at this point is macro versus the generics and in clones and those kind of products that are coming into the markets? I guess I'm still trying to figure out Europe, if Europe for the premium guys [ph] can get back to growth anytime soon given the generics in the clones or if that market for the premium players like yourself is just going to stay negative for some time to come?

Well, I think the issues with the generics and the clones. I think we have to recognize that when you look at the overall size revenue of the implant market, particularly the premium implant market, that's really still the dominant portion of that marketplace. There's no question that the value segment is getting a lot of play right now. This is an area that we continue to watch very closely. And quite frankly, assess, work to assess what impact it is having. But I would say that I think the trends are really going to be predominantly driven by the growth in those markets and by the premium players. And I think we saw some positive signs in Q2, overall. Although I think what causes you to pause is that Q1 was very negative. So as we go into this third quarter, I think it will be very interesting to see, as all the implant companies report, to get a better understanding as to do we actually have a positive trend up? Or is it really kind of continuing? The reality is, through the first half of the year, the market is still negative. So I think this quarter, will be kind of an important indicator to give us an idea of how that market is trending.

Yes. The other thing I'd add to that, Jeff, is just qualitatively, what we see today is that in an economy that's growing, the premium implant group does pretty well. We see that in the U.S., we see it in a lot of the Rest of World markets and in an economy that's still flat on its back, or not growing [ph], or maybe only growing slightly, it's a tougher challenge because there's no economic expansion, no discretionary income growth, et cetera.

And so we'll go to Brandon Couillard with Jefferies.

Bret, could you just elaborate on kind of what we saw in the U.S. in the period? Was there any pre-buying ahead of the price increase this year and can you give us a sense of the magnitude of that price hike?

Sure. The pre-buy -- we do have -- an October 1 price increase every year and the products that go through distribution and dealers predictably buy ahead of that price increase to protect their margins as they then liquidate that inventory. I'd say the activity we saw this year ahead of the price increase was comparable to what we've seen in prior years. No major change there. So the change that we called out this morning was that last year, because we had yet another price increase coming January 1, dealers kept their inventories higher, even grew their inventories in the fourth quarter where this year, we think they'll follow the more natural progression of liquidating inventories. Price increases, in total, were comparable to what we've seen in the past. Maybe 1.5%, 2%.

Pretty much in the traditional range, 1.5% to 2%, Brandon.

And then, Chris, or, Bret, could you just elaborate kind of on where we are from a capital deployment perspective? And what's your priorities kind of are moving forward here? And perhaps, give us an update on how you view the acquisition pipeline.

Sure. As we said since the acquisition, we were very much in a debt reduction mode. We've kind of worked our debt to cap down from kind of 50%-ish to maybe 35%-ish year over the last 2 years and the leverage ratio has come down comparably. Such that both are very close now or maybe even in our normal ranges. So as Chris mentioned on the call, and Chris may have something to add to this, our capital deployment now is going to be we think a more balanced approach spread between some still some debt reduction probably, particularly the extent we have excess cash flow and you saw that this quarter we brought that down by over $100 million. Balance with share repurchases, we bought 100 -- 1.7 million shares this year, and then also acquisitions. We don't have anything to report today on acquisitions, but we view ourselves in a fragmented industry and we're a traditional consolidator and we expect to continue to participate in that.

Next we'll go to Jonathan Beake with Citi.

Just 2. Firstly, just if you give us a quick update on the ortho business where you are in terms of market share and where you're hoping to get there. And second, on the implant business just a follow-up to the earlier question. We've seen some of your European competitors or pay for this one sort of ramp up there interest in pursuing a sort of jewel brand strategy. I wondered, I know you guys are already half there, and already have the Phase III DIO, but whether there's any interest in further increasing your exposure to the discount segment?

Thanks very much. In regards to the ortho business, that business has continued to improve. Obviously, we were very much a recovery mode last year as we exited the market and then came back into the market. Our supplier has done a good job of recovering from a volume perspective. And I believe when we came back into the market, we did see a sizable recovery of customers that occurred immediately. You know those customers that we have strong relationships, we're able to maintain relationships and business through the supply outage. As we've gotten into the market place, obviously, our competitors have been very aggressive. And we've been fighting to recover that next set of customers. We think we've made good progress. We look at it kind of as a third, a third, a third. We recovered probably a third immediately. We continue to fight for the second and third. And obviously, we've got more that we don't[ph] have to go after. We've seen good growth in U.S. As we look at the Rest of World, there is some element of baseline issue in that we are depending on how we rolled out the recovery. We had a lot of stock up with our customers and obviously, some of our dealers in the prior year. So now we're kind of running up against that comparison. But regardless, we are happy with the recovery that we've seen in that business. And we think we could make good progress across several initiatives.

I might add to that, that I do think the market conditions in ortho remain incredibly competitive. I mean, probably as competitive as we've ever seen as the competition that took our customers. So obviously, when we couldn't supply them, we're doing everything we can obviously, to retain those customers as we're now back in the market. So I think we've categorized this thing as a street fight, and I think that, that's very much where we are at this stage.

Jonathan, I'll take the value implant question. With respect to value implant and dual branding, I'd say DENTSPLY is probably the king of dual branding in the dental markets. Although and usually in these high-end businesses or the very technique-sensitive businesses, if you're going to do a brand, you need to do it through a separate channel. And so we're watching very closely what's being done in this market and we have a few concerns about what the profitability of some of these companies are. We've seen a few come up for sale and they weren't real positive. So the question is, can you do a brand, a value impact without the customer support that the premium [indiscernible] companies offer? And I would say our customers are increasingly demanding on new innovation and customer support, including a direct salesforce, including the symposiums, opinion leaders, support, et cetera. So there are still some questions about that business model. Now about 3 years ago at this time, we made an investment in our value implant company in South Korea, so we're participating in the market through that investment. Today, it's not entirely clear how the market's going to shake out, but we're prepared to participate depending upon what the ending dynamics of this -- of the markets are value versus premium. And typically, those will bifurcate in dental markets and we've seen that in other dental markets around the world.

And next, we'll go to Erin Wilson of Bank of America Merrill Lynch.

Can you give us an update on the impact of the exclusion of the gray market distributor in Rest of the World? And have you been able to recover some of those sales?

Yes, absolutely. As mentioned in our last call, we identified some gray market activity in our kind of Central, Eastern Europe, Middle East to Africa area. We did take some action, and obviously, that did have an impact on our Rest of World sales, primarily due to that market. We've engaged in a very diligent process as it relates to how we evaluate new distributors. We put that process in place. It is rigorous. I think it really helps us to identify the quality capabilities over those dealers and also, as well as business practices. And so we've continued to add dealers and we saw a nice improvement in that area in the third quarter. Those new dealer additions have had an impact. I think they've added quality to our business. And we feel that, that business is recovering to a more normal conditions.

Okay, great. And can you speak to the underlying demand trends in the U.S. from a volume perspective? I know you kind of touched on this earlier, but also, just given the changes in the dealer inventory, how should we think about kind of the quarterly progression of our organic growth trends?

Erin it's Chris. Relative to volume, I think that as we look at look forwards in terms of internal growth in the U.S., there is some volume in that based on our analysis. And I think that's encouraging, certainly from our perspective. As Bret mentioned, in terms of inventories, inventories again, with the price increase October 1, so dealers bought in an advanced to that. Pretty typical in terms of levels, I would say. And I think that the factor that we've really got as we look to Q4, is that we're going against the base period where not only did they buy in advance in Q4 last year, but they kept inventories high, and in some cases, added to that in advance of the January 1st price increase, which again, based on really kind of the unfavorable comparison we're going to be running up against. So we're -- we've got a period come up here in Q4 that we're going to -- we anticipate dealer inventories in U.S. to liquidate. And going up against the period in the prior year, where they were high and actually increased.

Okay. And just one quick one, and broadly speaking here from a capital deployment standpoint, if you are truly in a more of an acquisition mode 5 years down the road, what businesses really make sense for you? What do you expect as far as businesses or geographies? Do you expect to emphasize or deemphasize going forward?

Erin this is a Bret. That's a really tough question, particularly looking that far out because there's -- we're such a fragmented industry, and sometimes acquisitions are opportunistic. Meaning, you need a willing seller in order to transact. But I'd say that generally speaking, we're looking for technologies first. Meaning, some technology that would supplement our exiting portfolio in one of our 6 verticals. And now 7 verticals, including the medical group that we have. Second of all, we'd be looking for strong brands in markets where we have somewhat weak presence. And third, we'd be looking for distribution or increasing our channel activity. And in priority, it's probably in that order. But it's hard to predict which of the 7 verticals that would be transacting in over the next 5 years. It will be a little bit somewhat opportunistic in that regard.

The next question from Robert Jones of Goldman Sachs.

Just looking at SG&A and trying to get a better sense on how should we be thinking about the spending going forward. Bret you mentioned operating margin expansion being a big focus. And you guys clearly have done a nice job managing spend this year even if sales have started to come back. I'm just wondering if maybe you could walk a little bit more to the pushes and pulls on the SG&A line as we move forward. Specifically, I guess, trying to get a sense of how we should be thinking about synergies from Astra Tech against you mentioned new product launches. Any expenses that we should be considering as we enter into the new product launch cycle?

Sure. Robert, it's Chris, I'll take a shot at that. As we look at the SG&A rate, obviously, we've been -- we're very pleased with the leverage we've gotten here at the last couple of quarters. And year-to-date, obviously, we're down, as I mentioned, 90 basis points as a percentage of sales. And I think that does reflect certainly the focused effort on the integration activities. And we would anticipate that continuing. But it also reflects that on our base businesses, we're really focused on driving cost savings as well. I would say, with respect to new products, we generally focus heavily as you know, on new products and as such, I think there's a fair amount of new product expenses, if you will, that's not only in our current P&L but also from prior year base. But I think that's really pretty steady for us if you look at it really across our portfolio businesses over time. So I wouldn't really anticipate necessarily a significant bubble there. I would say that as we look at -- we've got a headwind, as you know, in this year in 2013 related on the gross profit line related to medical device excise tax. And I would anticipate, as we move forward into 2014 and we annualize that impact, that the balance of the operating margin improvement may be a little bit more balanced, if you will, between gross profit and in SG&A moving forward. So I think right now, obviously, with the headwinds on MD and then medical device tax, we've been really focused on the operating expense side. And again, I think that as we move forward, we'll probably be a little bit more balanced on that.

The only thing I'd add to that, Robert, is that you'll see us take these smaller restructuring charges from time to time, we took 1 here in the third quarter. That's us going after the fixed cost structure to try to improve the efficiency, both within our verticals and then across verticals, as well because sometimes there's synergies there as well.

That makes sense. I know you guys both just mentioned the new product launches and I know, obviously, this is just part of the business model. But I guess I'm just trying to get a gauge as we head into 2014, as far as this launch cycle goes relative to prior years or relative to a typical year, any sense you can give us as far as are there more products coming into the market in this upcoming year and maybe anything around mix is how we should be thinking about the impact in the top line for your new schedule of launches? That would be helpful.

Yes, again, it's Chris. I'll take -- if you look at new products, I mean, we introduced in the north of 30 new products a year. And again, we really focus hard on ensuring that across to our verticals, if you will, that we've got a pretty consistent pipeline, if you will, of new products coming over time. And so for that and again, I guess I would just kind of characterize it as not really a single event or a single bubble, but really more of an ongoing process. So I really don't know that I'd say I see a necessarily significant change either up or down, either in terms of necessarily impact or for that matter, aggregate spend. Relative to mix, our new products do obviously help drive our sales mix. And in general, when we bring differentiated technology to market, that typically can help the gross margin mix. And so from that angle, I think that, that's usually accretive to us, or certainly helpful to us over time. There may be some initial launch cost that may bring that down a little bit, but certainly, our -- the newness of our portfolio helps us to differentiate in the drive price.

Next we'll go to John Kreger with William Blair. John Kreger - William Blair & Company L.L.C., Research Division: Jim, a quick follow-up on the ortho market. On a unit basis, do you think the market is growing at this point? Or flat?

I would anticipate that it's flat. John Kreger - William Blair & Company L.L.C., Research Division: You think it's flat. Okay.

I think it's likely, just to add to that, I think it varies by region. Certainly, U.S. could be a growing market for volume, but Europe is probably not at this point. So on balance, it's probably flat or maybe slightly up. But very, as Chris mentioned earlier and Jim said also, it's a very competitive market at this point.

There's no question, we're an economically driven market. So as we see lack of a robust economy, it is an elective procedure, so we won't see the growth. So I think overall, we have some reasons that are showing a little signs of hope. But overall, I think it still remains pretty flat. John Kreger - William Blair & Company L.L.C., Research Division: Bret, I'm sure you're still in your planning mode for next year. But any initial thoughts do you think you can be up in the double-digit earnings growth mode?

We are early -- as you noted, we're early in the planning stage. I'd rather defer that discussion until we come back on our fourth quarter call as we normally do. We'll give you guidance at that point. So I guess it's too early to send signals on that at this point. John Kreger - William Blair & Company L.L.C., Research Division: And then maybe one last one. Where do you stand on the Astra integration at this point? And what should we assume will be coming up in '14 on that front?

Actually, we -- I would say for all intents and purposes, we are complete. We had our last Go Live in Japan in June. That was our last major market. We did France and Germany at the beginning of the year. So we've really completed that integration for really all of our operating units around the world. However, obviously, we have multi-year integration plan. And as I mentioned in my comments, I mean, we continue to work to realize the identified synergies. And we worked toward that plan. And I think as we are right now, I think that's kind of consistent with what we had expected. So I think the major efforts will our ability to continue to execute that integration plan and realize the synergies. John Kreger - William Blair & Company L.L.C., Research Division: So Jim, is the manufacturing consolidation done?

That was not identified and that's not part of the process. What we have done, to be clear on that, is that we have insourced some products that were outsourced previously. We've insourced in that into our manufacturing operation in Germany. And that was also part of the integration plan.

And this is Chris. I guess I'd add that, that John that's a multi-year effort. And again, I think that, that's we'll be getting some benefits on earlier this year. Benefits in 2014 will be even larger, and 2015 will be even larger than that.

But sales, I think where Jim was going on earlier in his comments were was that the sales and marketing [indiscernible] which to us is the most difficult part is now complete. And just like in all of our businesses, we're focusing on efficiencies across the platforms and cost savings. So that's ongoing.

Next, we'll go to Steve Beuchaw with Morgan Stanley.

One clarification on currency, just a housekeeping question. Would you give us an update on your estimate of the impact of currency changes year-on-year embedded in the earnings outlook for '13?

Yes. I can do that, Steve. As we look at it, we think at this point, based on current rates, we're expecting a negative impact for the year between $0.04 and $0.05. That's about a $0.01 improvement versus what we had coming into the third quarter. By the way, at third quarter, we had negative impact of about a $0.01. And it reflects a positive Euro comparison as the Euro has moved here. But also negative impacts, if you will, in emerging market countries and also developed countries outside of Europe, as well as less favorable impact from our cash flow hedges compared to last year.

And then one on pricing specific to the U.S. I wonder if you could give us a sense for -- as you think back to the pricing strategy that you and the rest of the market took coming into this year. How much of that pricing would you estimate has stuck? How much is that contributing to market growth in the U.S.? And considering that we've probably picked up that there's some price inelasticity in the market, then why not be a little bit more assertive on pricing into '14?

It's Chris. Again, our typical price increase is in the 1.5% to 2% range. We were a bit north of that this year between the October 1 price increase last year, as well as the January 1 price increase this year. We think if I had to put a range to it, probably on average, maybe a point north of historical norms on average. And we think the bulk of that have stuck. We don't think necessarily all that has stuck. And then again, we highlighted a few of the pretty competitive markets, orthodontics being one that obviously becomes a little bit more challenging. That said, I think that for us, we do think price is a important variable along with innovation and a lot of other things that drive our leverage and drive our earnings. And again, that's something that we'll look to be on the reasonable end, but certainly not make sure we're not out of whack compared to market. But where we've got some pricing opportunities, we've historically been pretty up to take them.

And now we go to Steven Valiquette with UBS.

Actually I had the same question on the pricing strategy for '14, so I guess you just covered that. But just for background around the whole topic, I guess my question is, does it make sense from your perspective to telegraph these price increases to distributors overall? Just trying to figure out the strategy around that. I guess my general understanding is that manufacturers are trying to cut down on some of your quarterly sales volatility around this activity and typically you don't want to do anything to exacerbate it. Just kind of a better understanding this kind of just get a better feel for the strategy around that.

This is Bret. The distributors are our business partners here in reaching the market. And we don't like to surprise them and frankly, won't surprise them so we typically tell them about our price increases about 6 weeks in advance. That gives them the time to do a couple of things: 1, develop their own inventory strategy; and 2, get the new pricing in their catalogs so they don't get stuck with in a position where they're buying at a higher price but still selling at an old price in their catalogs. So the discussion with them is balanced and that they're coming and here is what they are and that gives them time to react. What we did to kind of take the volatility out of the quarterly earnings for us was we moved all price increases, they go through the dealer channel to, at least in the United States, the October 1. And thus, we have the same phenomenon every year. Dealers buying ahead of price increase on October 1 and then liquidating inventory in the fourth quarter. That holds true except for 2012 when we had yet another price increase January 1 and thus, they didn't have the incentive to liquidate inventories in the fourth quarter. But generally speaking, we do telegraph the price increases -- well, not generally speaking, we always telegraph the price increases to the dealers so they have time to adapt their own business model.

Okay. And then one other just real quick question here, just on the gross margins. I kind of missed some of the color on that. But again, the key factors that are driving gross margin down a little bit year-over-year how much of that is maybe mixed versus other factors?

Yes. I mean, if you look at the year-on-year, there's a number of impacts here, Steven. The primary -- a lot of the net with the exception of medical device excise tax. So if you look at it, we're down 30 basis points on an adjusted basis in Q3 compared to prior year. The medical device in excise tax has been running us between 40 and 50 basis points negative for the year, so that kind of gives you some color there. As we look at it FX, is a bit of headwind as well to us on the gross profit line just to the way that some of the currencies break. We've had some nice synergies that have helped us on the gross profit line, mixes may be in aggregate a little bit negative. And again, those will swing quarter-to-quarter. So as we look at it, the way to kind of summarize it in aggregate would be everything pretty well netting. Maybe slightly positive with the exception of medical device tax. And that's basically saying, "Hey we've got factors that are offsetting a currency headwind on our gross profit rate as well."

And next, with Jon Block with Stifel. Jonathan D. Block - Stifel, Nicolaus & Co., Inc., Research Division: Most have been answered, but maybe just 1 or 2. I guess, the first one, Bret, on Europe. Your 3Q growth rate was largely in line with the second quarter yet decent size competitor mentioned what they thought was a slightly improving environment, notably in Western Europe. So what do you think is going on out there? Do you think your level of share gains in Europe are being maintained? I think -- do you believe the environment is starting to turn over in Europe or do you still categorize it as largely choppy?

Let me just -- there's couple of points here, I think. One, is we have a hard time drawing any conclusions about Europe in the third quarter because many of those countries basically shut down for a good portion of the third quarter. So we don't put a place -- a lot of reliance on trend changes in that short period of time. Number 2, overall, what we saw in Europe is that the specialties are a little bit weak and the general consumables are stronger. So the dental market is still there, it's just the high-end procedures, the high-end kind of discretionary part of dentistry is not picking up or not growing as fast as general dentistry is, everyday dentistry. So we didn't -- we're not placing -- we had slow growth in the U.S. -- or excuse me, in Europe, 0.3% this quarter. I think the last quarter was like 0.8% or 0.9%. So it slowed just a little bit, Q2 to Q3, but we're talking about few basis points here and we don't place a lot of emphasis on that small change. The other thing I'll add is qualitatively, what we find in Europe, even today, even in a tough environment, when we bring new innovation to market, even at a recently high price point, the dental market there, particularly in the consumable category, the dental market there tends to have an appetite for that and we get some pick up in our sales growth. So we're comfortable that Europe is not changing a whole lot right now. Still kind of in the low or flat mode. And we're hopeful that the general economy can start to now slowly pickup and dentistry will usually follow, although at a 1 to 2-quarter lag. Jonathan D. Block - Stifel, Nicolaus & Co., Inc., Research Division: It's very helpful. And then just quickly on the implant side of the business. I know there was a lot of earlier questions on the European dental implant market, but in the U.S., your growth rate decelerated. I think it was low double-digit last quarter to mid-single-digit this quarter. Again, one of the lower cost implant guys sort noted an acceleration from high-teens to 20%. So can you talk to your thoughts, and I know a couple of big guys are yet to report, but your thoughts on share within the U.S. dental implant business. And then, how is the premium implant market growing versus the value segment?

Yes. From the standpoint of the U.S. dental implant market, I think we are -- we're pleased with our position and our growth in this market. Bret made the comment that with a little bit of underlying economic growth, we've seen some nice growth and in the implant market. That's very encouraging for the implant market overall. The U.S. organization was our first organization to go live. They've [indiscernible] really, I think at the highest level. We believe that we are taking share in that market. Your comment regarding double digits to mid-single digits is accurate. We do believe that there were some things in the prior year base and that in fact, that our Q3 business is probably stronger than what the actually the numbers show, so we are very positive about that. From a standpoint of the value players, I think we have seen less commentary and less discussion about that segment in the U.S. market versus other markets. And it still, we believe, is a very strong premium market. I think the implant companies are recovering well and performing well. And I think we're pretty confident about our position in that market and how we're growing it.

[Operator Instructions] Next, we'll go to Glenn Santangelo with Crédit Suisse. Jeffrey Bailin - Crédit Suisse AG, Research Division: This is_Jeff Bailin in for Glenn. Maybe just one question to switch gears here towards the end of the call. On the medical segment at the top, you guys mentioned that you had some particularly strong results there. Could you comment a little bit about what's been driving the strength? Is it new product launches or market share? Just maybe any color you could offer?

Sure. Actually, Jim, you want to take that?

Yes, absolutely. Jeff, from a standpoint of the medical market, I think we've done well in this segment. A lot of our effort and a lot of our success is been new product related. We launched a female catheter about over a year ago. And we see nice growth from that. Actually, we're really rounding year 2 of that and we continue to see strong growth with that product. And we also launched a male catheter earlier this year, and that has done very well as well and we're seeing nice growth and expansion in both these categorize. These were categories that we needed some updates, we needed some improvements, we've made the investments. And we've seen very nice results in that segment. So overall. So we're pleased with this segment. I think our emphasis has really been on investment and new product development. The North -- the U.S. market continues to expand. Obviously, there's a higher usage of disposable intermittent catheters in this market and we've been benefiting from that as well. Jeffrey Bailin - Crédit Suisse AG, Research Division: And maybe one follow-up on the Rest of World growth up 4.6%. Could you comment a little bit about the trends that you're seeing in the emerging markets and maybe your strategies there to improve product penetration?

Yes. I mean, it's Chris. Real quick on the emerging market growth. I mean, we're up basically high-single digits in terms of emerging markets. We're seeing pretty nice traction in, I guess, I would say in general, relative to our broad strategies. Focused again onto branding, focusing in on sales representation, focused on new products, et cetera. And again, I think that Jim commented on Middle East, Africa, reasonable recovery there. And again, I think that overall, we've continued to view these markets as very accretive to our overall growth rate, both now and moving in the future. So I mean, these continue to be focus areas for us.

This is Bret. The one thing I would add to that is currency risk is pretty high in these markets. Recently, we've seen many currencies devalue slightly against the U.S. dollar or the Euro, which creates some headwind in getting products into these markets at a reasonable price point. But there's still a good appetite in these markets for dental products and growth there has remained kind of high single-digit overall throughout this year, so that's been favorable.

There are no further questions at this time, so I'd like to turn it back to our speakers for any additional remarks.

Thank you for your interest in DENTSPLY with our conference call. I'll be around this afternoon for follow-up questions. Thank you.

And that does conclude today's call. We thank everyone again for their participation.