Michael J. Watts - Vice President of Investor Relations and Corporate Communications Stephen P. MacMillan - Chief Executive Officer, President and Director Robert W. McMahon - Chief Financial Officer

Vijay Kumar - Evercore ISI, Research Division Isaac Ro - Goldman Sachs Group Inc., Research Division William R. Quirk - Piper Jaffray Companies, Research Division Douglas Schenkel - Cowen and Company, LLC, Research Division David R. Lewis - Morgan Stanley, Research Division Anthony Petrone - Jefferies LLC, Research Division Jack Meehan - Barclays Capital, Research Division Tycho W. Peterson - JP Morgan Chase & Co, Research Division Jonathan P. Groberg - UBS Investment Bank, Research Division William Bishop Bonello - Craig-Hallum Capital Group LLC, Research Division Ravi Misra - Leerink Swann LLC, Research Division Brian Weinstein - William Blair & Company L.L.C., Research Division Jayson T. Bedford - Raymond James & Associates, Inc., Research Division

Good afternoon, and welcome to the Hologic, Inc. Second Quarter Fiscal 2015 Earnings Conference Call. My name is Holly, and I am your operator for today's conference. Please note, today's call is being recorded. [Operator Instructions] I would now like to introduce Mike Watts, Vice President, Investor Relations and Corporate Communications, to begin the call. Mike, you may ago ahead. Michael J. Watts: Thank you very much, Holly. Good afternoon, and thank you for joining us for Hologic's Second Quarter Fiscal 2015 Earnings Call. With me today are Steve MacMillan, the company's President and Chief Executive Officer; and Bob McMahon, our Chief Financial Officer. Steve and Bob both have some prepared remarks today, then we'll have a question-and-answer session. If you didn't already see our second quarter press release, a copy is available in the Investor section of our website along with a supplemental financial presentation for today's call. We will also post our prepared remarks to our website shortly after we deliver them. And finally, a replay of the call will be archived on our website until May 29. Before we begin, I'd like to inform you that certain statements we make during this call may 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'll be discussing certain non-GAAP financial measures. A reconciliation to GAAP can be found in our second quarter earnings release or in the supplemental presentation. With that, I will turn the call over to Steve MacMillan, Hologic's CEO. Stephen P. MacMillan: Thank you, Mike, and good afternoon, everyone. We're very pleased to discuss Hologic's financial results for the second quarter of fiscal 2015. We posted another strong quarter of top line growth with faster growth on the bottom line. As a company, we've come a long way in a short period of time, but we believe the transformation of Hologic is still in its early stages and that we can continue to improve many aspects of our performance. Now let's dive into the quarter. Compared to the prior year period, revenues of $655 million grew 4.9% on a reported basis and 7.2% on a constant-currency basis. Our growth was, once again, broad based in the quarter. For those of you who have seen the green red dashboard that we use internally, we're happy to report that all 4 of our businesses were comfortably in the green on the constant-currency basis as our commercial execution continues to improve. In addition to a stronger revenue story, we are generating gross and operating margin improvements, leading to good earnings leverage in the second quarter. Based on mid-single digit revenue growth, non-GAAP net income increased by 15.3%, and non-GAAP earnings per share grew by 10.8%. We generated this operating leverage while increasing our investments in future organic growth, especially in Diagnostics R&D and Breast Health marketing. We believe these kinds of intelligent, targeted investments are crucial to the long-term vibrancy of the company and are more productive use of capital than large-scale M&A transactions. Based on our results in the second quarter, we are again raising our financial guidance for the year. Bob will give you those details in a moment. But first, let me provide some strategic perspective on 3 areas that contributed to growth in the quarter: Genius 3D Mammography, cervical cancer diagnostics and our Surgical business. First, total Breast Health sales growth accelerated to 9.4% in the quarter on a constant-currency basis, a very good performance. Underpinning this, global sales of our breast imaging products, like Genius 3D Mammography systems, grew an even stronger 13.8%. We had a robust quarter of 3D placements and have now installed roughly 1,800 systems in the key U.S. market. While this is excellent progress, we are equally encouraged that we are still less than 25% penetrated into our existing customer base and less than 15% penetrated into the domestic market as a whole, providing significant opportunity for additional growth. There are many reasons for our recent success with 3D in the U.S., including the JAMA study, CMS reimbursement and a competitor entering the market with an inferior product profile. But another factor is the success of our Genius marketing campaign. More than a branding project, our comprehensive marketing efforts reflect Hologic's overall commitment to the space and to our customers. Radiologists know that by partnering with Hologic, they get a better product with better clinical outcomes. But they also get an online presence with patients, a sales force that educates OB/GYNs, reimbursement support and health economic analysis. All of these benefits help radiologist centers attract patients and build their businesses. This is the kind of customer alignment we were looking for when we revamped our commercial team in Breast Health, and it's gratifying to see their efforts paying off. We believe these efforts have clearly accelerated our performance. Before I leave Breast Health, let me mention that we are neither surprised nor concerned about the recent draft guidance issued by the U.S. preventive services task force. By focusing on older data, the task force underestimated the benefits that newer technologies, like 3D mammography, offer women. The good news is that our customers understand these benefits clearly, as evidenced by the immediate reaction of various medical societies and patient groups. Hologic will continue to have a key voice in these discussions, but we do not believe that any potential guidance changes will have a material effect on our business. Second, I want to highlight the progress we've made in cervical cancer Diagnostics. As you know, this is a highly competitive market, and we still face headwinds from the extension of Pap screening intervals. But despite these factors, our global cytology sales were basically flat this quarter on a constant-currency basis as domestic market share gains and international growth offset lengthening intervals. We have long been the #1 domestic player in liquid Pap testing, and we believe we are now #1 in U.S. HPV testing as well. Our leadership is based mainly on a strong combination and differentiated benefits of the Aptima HPV assay and automated instruments like Panther and TIGRIS. It's important to note that even as we have gained share in the HPV market, our pricing has remained relatively stable over the last several quarters. Before I move on, let me say that we were happy to see the publication a few weeks ago of Quest cervical cancer screening data. Quest study was probably the largest retrospective study ever in this field, encompassing roughly 8.6 million women and more than 500 confirmed cancer cases. The Quest study proved what Hologic has always believed, that co-testing with both Pap and HPV tests provides the best care for women. Specifically, the study showed that approximately 19% of women with confirmed cervical cancer received a negative test result from an HPV assay, and that co-testing provided a threefold improvement in the cancer detection rate compared to screening with HPV only. It's clear from the Quest study that both our main cervical cancer products can offer significant benefits for women's health as well as benefits to our shareholders. The third point I'd like to make relates to our Surgical business. As recently as a year ago, this business was declining at a consistent low single-digit rate, in part because of high turnover in our sales force. Today, we have a full motivated sales team and are even adding clinical resources to support them. As a result, global sales of our NovaSure product, which had been in steady decline, increased slightly in the second quarter on a constant-currency basis. Domestically, NovaSure even grew for the first time since the fourth quarter of fiscal 2012, and sales growth of our newer MyoSure system accelerated to more than 30%, leading to overall surgical growth of nearly 12% on a constant-currency basis. Although this growth rate benefited from an easy prior year comparable, we're still immensely proud of the turnaround that our commercial team has engineered. So in summary, Hologic has come a long way in a short period of time. Our financial performance has improved more quickly than I ever imagined possible, and we're deeply grateful to our employees for that. In particular, a lot of credit goes to our commercial teams, especially in the United States, who have quickly stabilized declining franchises and begun to optimize our growth drivers. But as I said at the beginning of my remarks, we believe that the transformation of Hologic is still in its early stages, and that we can continue to improve many aspects of our performance. Our longer-term priorities remain the same as those we outlined at the JPMorgan conference earlier this year. We are defining organic innovation strategies for each of our businesses and identifying the resources needed to achieve our goals. We are building a high-performance organization, one where talented engaged employees, achieved what others believe is impossible. We are developing a long-term international growth and tax strategy, and we continue to pay down debt, both to improve our operational flexibility and to boost our earnings over the long term. In some of these areas, we haven't even begun to put points on the board yet. So while we've made good progress on the commercial front thus far, we have a lot to look forward to in the future as well. Now I will hand the call over to Bob to discuss the second quarter financials in more detail. Robert W. McMahon: Thank you, Steve, and good afternoon, everyone. I'm going to discuss our second quarter results and then provide our updated financial guidance. Unless otherwise noted, all of my commentary will focus on non-GAAP results and percentage changes will be on a year-over-year basis. Let me begin by reiterating that we are very pleased with the commercial execution we are seeing across the business. This is the second quarter in a row when we've grown revenues faster than the 7% on a constant-currency basis, and this growth was again diversified across all 4 of our business lines. Based on a strong top line and despite the continued effects of currency, we grew EPS at a double-digit rate. Steve already commented on some of our revenue highlights, so I will discuss the other divisional sales drivers. Starting in Diagnostics. Sales were $296.7 million in the second quarter, up 2% as reported or 4.1% on a constant-currency basis. Like last quarter, blood screening revenues grew strongly, up 8.3% globally based on the new business our partner, Grifols, won with the Japanese Red Cross. As a reminder, this new contract will boost our third quarter results as well, but the growth benefit will annualize in our fourth quarter. Steve highlighted our strong performance in HPV testing, which contributed to overall molecular diagnostics sales of $119.7 million in the quarter, up 6.4% as reported and 7.9% on a constant-currency basis. Domestic molecular sales were particularly strong as use of our Aptima women's health assays continues to grow on our fully automated Panther system. We had a good quarter of Panther placements and are easily within reach of our year-end goal of 1,000 aggregate placements in diagnostics and blood screening combined. And equally important, we have a tremendous opportunity to increase pull through on these instruments with greater utilization and a growing menu of tests. Although revenue from cytology and perinatal declined by 5.2% on a reported basis, we're only down 1.5% in constant currency as declines in ThinPrep sales continue to moderate. Our assessment of the cytology market has not changed. While we still expect structural headwinds from lengthening cervical cancer screening intervals, we believe the year-over-year declines can largely be mitigated by domestic market share gains and international growth. Moving over to our Breast Health division. Sales were $255.5 million, up 7% as reported or 9.4% on a constant-currency basis. We are very pleased with the increase in breast imaging revenue, which was up a reported 11.4% and 13.8% in constant currency. Demand for Hologic 3D mammography continues to strengthen, in part due to our marketing efforts, as Steve noted. I won't repeat the details on our GYN surgical division, but I will say that Skeletal Health sales were $24.2 million, up 3.3% as reported or 8.1% on a constant-currency basis as growth was driven primarily by our new Horizon bone densitometry scanner. Now shifting over to expenses and profitability. We demonstrate a strong operating leverage in the quarter. On the bottom line, non-GAAP earnings per share of $0.41 were ahead of our last guidance and up 10.8% versus the prior year. This increase was more than double our reported revenue growth despite increased share dilution as well as headwinds from a stronger dollar that reduced EPS by about $0.02 compared to the prior year. Non-GAAP gross margin was up 90 basis points in the second quarter at 63.4%. Benefits from strong domestic sales, product mix and operational efficiencies more than offset the stronger dollar. Non-GAAP total operating expenses of $195.9 million increased by 4.3%, slightly less than revenue growth. I want to make a further point here on the components of our study. As you have heard us say many times in the past, we are focused on creating sustainable organic growth for the long term. As a result, non-GAAP research and development expenses increased by 9.1% in the quarter, driven mainly by an increase in Diagnostics product development. Non-GAAP sales and marketing expenses increased 5.7%, mainly due to increased promotional activities in Breast Health around 3D mammography. Given our recent success in that area, we plan to increase our future investments in order to widen the competitive moat around our business. In contrast to these strategic investments, non-GAAP G&A expenses declined by 2.8% in the quarter. These savings helped fund increases in R&D in the commercial areas and help deliver operating leverage at the same time. Specifically, non-GAAP operating margin increased by 110 basis points to 33.5%. To round out the income statement, interest expense declined by 10.4% due to our continued progress in paying down debt. Our tax rate of 33.8% in the quarter was a little better than expected. And finally, our diluted share count increased by 4%, mainly because our share price exceeded the strike price on some of our convertible notes. Before I turn to our updated guidance, I want to highlight ROIC and a few items from our cash flow statement and balance sheet that illustrates how our operational and finance teams are working together to improve financial efficiency. During the quarter, we generated operating cash flow of $158 million and have generated $311 million in the first half of the year. EBITDA was $239 million in the second quarter, up 7.3%, and $941 million for the last 12 months. This combination of strong cash flow and EBITDA improvement has allowed us to improve our net debt-to-EBITDA ratio. This ratio now stands at 3.6, and we remain focused on reducing it further. In addition, ROIC was 10% in the quarter on a trailing 12-month basis, an increase of 170 basis points from the same period a year ago. In addition, accounts receivable decreased 3.8% and inventory declined by 9.8%. So good behind-the-scenes progress on multiple fronts. Now I'd like to turn to our updated financial guidance for the full fiscal year and the third quarter. Based on our strong performance in the second quarter, we are raising our guidance. This guidance is based on recent foreign exchange rates with the understanding that currency remains a significant headwind for us and other multinational companies. I'm going to cover a lot of numbers in this discussions, so I would encourage you to refer to our press release for clarity. For the 2015 fiscal year and on a reported basis, we now expect total revenues of $2.60 billion to $2.62 billion. Compared to the prior year, this equates to reported revenue growth of between 3.6% and 4.4%, and constant-currency growth of between 5.8% and 6.6%. We expect non-GAAP earnings per share for the full year of between $1.57 and $1.59. This translates to reported EPS growth between 7.5% and 8.9% or 11.6% to 13% on a constant-currency basis. Our increased EPS guidance incorporates some incremental investments both to accelerate and extend our growth prospects, especially in Breast Health and Diagnostics. It assumes a slightly lower tax rate of 34.25% for the full year, but a higher diluted share count of 289 million for the year due mainly to a higher share price making some of our convertible notes in the money. In addition, we are increasing guidance despite continued currency headwinds. Even since we provided guidance in January, the U.S. dollars has strengthened. So the full year guidance we are providing today incorporates an incremental revenue headwind of approximately $9 million due to foreign exchange and an EPS headwind of roughly $0.01 over our last guidance. Put another way, if foreign exchange rates did not move since January, the updated guidance we are providing today would have been about $9 million higher in revenue and $0.01 higher in EPS. Now let's focus on guidance for the third quarter of fiscal 2015. We expect revenue between $645 million and $655 million for the quarter compared to the prior year period. This guidance reflects reported revenue growth of 2% to 3.5% and constant currency growth of 4.7% to 6.3%. So despite the fact that our comps are getting tougher, we are still projecting solid mid-single-digit growth on the top line for the third quarter. We anticipate that this revenue performance will drive diluted non-GAAP earnings per share of $0.38 to $0.39 in the third quarter. Non-GAAP EPS is expected to grow 2.7% to 5.4% on a reported basis or roughly 8.1% to 10.8% on a constant-currency basis. Before we open the call for questions, let me conclude by saying we are very pleased with our financial performance in the second quarter of our fiscal 2015. Our top line grew more than 7% on a constant-currency basis, and we showed significant leverage on the bottom line, aided by our ongoing efforts to boost efficiency and control cost. As a result, we are raising our financial guidance for the year with top line expected growth in the mid-single digits and bottom line growth comfortably in the double digits. As Steve said, the company had come a long way in a short period of time, but we're even more excited about the opportunities ahead of us. With that, I will ask the operator to open up the call for questions. [Operator Instructions] Operator, we are ready for the first question.

[Operator Instructions] Our first question will come from Vijay Kumar with Evercore ISI. Vijay Kumar - Evercore ISI, Research Division: Maybe my first one is for Steve. Since you've been here, a pretty remarkable turnaround. And if you look at the various moving elements, obviously, 3D is off in a terrific start. It looks like the NovaSure turnaround was particularly impressive. As we look at this company sort of on a medium-term basis, right, how should we think about Hologic from a medium-term perspective? Because clearly, I think on the tomo side, you have the opportunity, it's pretty much greenfield, and I think that 85% opportunity, that leaves you room for growth. I'm more wondering within Diagnostics, HPV just said your #1. Like you said, NovaSure and ThinPrep, it has taken time to turn around. So how should we think about the rest of the portfolio? And what else can you do to sort of firmly put the company on path to mid-single digit growth? Stephen P. MacMillan: Sure, thanks, Vijay. We are very encouraged. Obviously, as you pointed out, I think, especially that 3D growth driver here now, our degree of confidence is higher than it's been in terms of really looking good for probably the next few years. We've got a superior product in that driving it. I think we are very encouraged, however, on some of the other piece of the business, you look, we said at the start, a little over a year ago, we wanted to stop the declines or slow the declines of the big franchises that were going down, which were especially ThinPrep and NovaSure. I feel very good that our sales focus in the United States, and then starting to look at opportunities outside the U.S. which will ultimately play out more over time, are seeing a visible change in the trajectory of ThinPrep. NovaSure as well, that one bouncing back to positive this quarter, feeling very good. I think what we're seeing is the sales team is really energized, reengaged. And we have leading products in markets that have probably a little bit more potential, still have some headwinds, but I think feeling better about all of the businesses. And the piece I throw in on HPV and really it's probably a broader comment on our molecular business is, I think, everybody was concerned, probably myself included, that once that Quest deal had rolled off and anniversary-ed, that molecular was going to be in for a rougher time period. I think what we've really seen is the incredible success of especially our U.S. molecular sales force that, while we were reaping the benefits of the Quest deal in '14, they were placing a lot of Panther's systems in the mid-sized labs and other labs, and that started to come through now for us, and I think really providing a little bit more of a positive growth engine for us. So I think we're feeling, especially short, medium term, feeling pretty good about the trajectory. Are we going to continue double-digit growth in Surgical? I don't think any of us could count on that, but mid-single-digit growth, I think we're feeling really good about. Vijay Kumar - Evercore ISI, Research Division: Great, and maybe one for Bob. Bob, it looks like gross margin came in really strong, and part of this is mix. But as we think about sort of -- how should we think about the various moving parts, right, you have the mix, which is going in the positive direction, but I think what some people have point out was whether pricing pressure is within the Diagnostics piece, whether that could offset some of the gross margin benefit on the mix front. So could you just give us some color on how gross margin could play out? Robert W. McMahon: Yes. So obviously, with our performance on the top line, that's helping us with the factory pulling more products through that and continue to look at efficiencies there. To your point, though, around continued pressures, we do see that as well as we look longer term for international business to grow, we will see some downward pressure there. So I think the best way to look at that is we've been pleasantly surprised around our gross margin's better performance than last year. I don't see any reason that it will dramatically change from where it is first couple of quarters here for the rest of the year. And I think that we're going to continue to look for ways to drive efficiencies to offset some of those things that you're talking about. So I wouldn't project significant improvement there, but certainly, look for continued kind of that 63.5-ish range kind of flattish GP as we go through -- go forward.

Our next question will come from Isaac Ro with Goldman Sachs. Isaac Ro - Goldman Sachs Group Inc., Research Division: So on ThinPrep, you guys mentioned, I think, constant currency down about 1% globally. I was hoping maybe you could talk a little bit about the dispersion for that growth rate between the U.S. and ex-U.S., just given that you obviously still early days in growing the ex-U.S. business. I just want to get a sense of how it's doing. Stephen P. MacMillan: Sure, Isaac. Basically, we were down very low single digits in the U.S. So a much better trajectory than it was a year ago and very modest growth o-U.S. Yes, still the bulk of that business is still U.S. As we start to build that internationally over time we would hope that, that number will get a little bit better. Isaac Ro - Goldman Sachs Group Inc., Research Division: Sure, okay. And then as part of that, maybe thinking longer term, if you could help us get a sense of your action plan, I would say over the next 12 or 18 months to expand the ex-U.S. business just across all the portfolio items there. What kind of infrastructure do you think you need to add? I'm just trying to get a sense of your priorities operationally to get the ex-U.S. business going. Stephen P. MacMillan: Sure, it's a great question, Isaac. Because I would tell you we probably have more -- I'm not going to say rebuilding but actual building to do outside the U.S., particularly as you look at areas like molecular diagnostics and even our ThinPrep business in some of the growth markets that we've identified as well as our Surgical business. So there's a little more building, and I would say really as we're thinking about the business right now, is probably recognizing in the shorter term, we're probably going to get more growth out of the U.S. than we imagined. While the international piece is still going to be, as you talked 12, 18 months, this is still going to be a building process. We're making the investments. Claus Egstrand, our Head of International, has been revamping the team. We still have some muscle building to do on the international front, and I think we'll be continuing to do that over the next year to really set ourselves up for growth. We'll be growing in the meantime, but I think getting to a healthier growth rate probably in '17 and beyond, so I think we've got great carriers in that -- the short term in the U.S. and then international carrying us much more beyond that.

Next, we'll go to Bill Quirk with Piper Jaffray. William R. Quirk - Piper Jaffray Companies, Research Division: So Steve, it doesn't come up very often but I think there's a pretty good opportunity for 2D in Europe. And maybe can you speak to that and kind of how you guys are trying to help monetize that business? And maybe kind of somewhat piggybacking off of Isaac's second question. Stephen P. MacMillan: Sure. Good one, Bill. Frankly, we'd probably say we think there's an opportunity for 2D, not only in Europe but frankly, most markets outside the U.S., and it's been one of the first things that Claus and the team have identified as more of a growth opportunity. And ideally, we could get 2D systems in, it would be upgradable down the road. Again, a lot of those are tenders. There's a lot of even looking at our dealer network and getting in place to be able to even better compete. I'd say we compete really well in certain markets, but don't have the full global footprint and strength that we would like. And that will be a nice opportunity for us. There's still a lot of the world that's going from film to -- to try to get them to go from film all the way to 3D tomo is probably a step too far and it's part of what Claus has looked at and said, we got an opportunity to go stepwise, just as you've pointed out. So it is an area of greater focus for us. Robert W. McMahon: Let me just add, just to give you some perspective. Claus and team have really looked at, call it -- I'll call it top 10 focus markets. In those top 10 focus markets, there's approximately almost double the number of gantries that -- than there are in the U.S. So it talks about the opportunity. Now many of those gantries are still analog. And so Steve's point, transitioning from analog to 2D is the logical step with an upgradable feature that ultimately get to 3D as opposed to trying to leapfrog to a 3D. And so that's what Claus and his team are really focused on working to dealers. William R. Quirk - Piper Jaffray Companies, Research Division: Very good. And then just thinking, you're shifting a little bit to Diagnostics. Taking a look at the fusion system over the weekend, it looks like it could be very impactful in the clinical space certainly with the combination of TMA plus PCR. Candidly, Steve, it looked to us like a lot of the instrument development costs weren't even spent, so maybe you can speak to a little bit the investment and the timetable around the assay side of that. Stephen P. MacMillan: Sure. We are very excited about what that would bring in terms of the instrumentation. On the assay side, we are early stages in terms of really starting to do the PCR work because, as you know, we've been a TMA shop and our team out in San Diego was really refocusing in building that up. I think we're still at least a few years away in terms of having a legitimate assay menu. We would be thinking '17 and beyond. So again, we're kind of viewing it as we think about longer term. We got some great growth drivers near term, and then started to think about things like that to be providing the medium longer-term growth. I wish we were sooner, by the way, but that's one of those things that had been -- the instrumentation work was well done, and we just haven't followed through on the assay work as much. Robert W. McMahon: And that's one of the areas, not necessarily just fusion, but when we talk about kind of the investment that we're making in the near term to fortify some of the longer-term activities. Our R&D investment, overall, grew 9% this year -- this quarter, and we would continue to expect to make investments, not only in fusion, but in the assay development portfolio, so that there would be a complement of not only TMA assays that we've talked about in the past, continuing in our virals, but then ultimately having a PCR complement as well.

And our next question will come from Doug Schenkel with Cowen and Company. Douglas Schenkel - Cowen and Company, LLC, Research Division: So interesting commentary on HPV. Share shifts in that area continue to be a pretty notable, pretty material. You guys are clearly doing well, and there are some successes with some other companies out there as well. Kind of prompts the question, keeping in mind we've seen a lot of progress made in decentralization of molecular, even down to much smaller labs than you guys typically target, and keeping in mind that even Roche has made some investment in areas like lab in a tube systems. Just wondering if you have any updated thoughts on the need to further decentralize within your portfolio? And more specifically, any active efforts to develop anything lower volume in molecular testing? Stephen P. MacMillan: We really don't have much going on there, to be brutally candid, right now. We think there's still a lot of runway for Panther, but clearly that is one of the key questions we are asking ourselves now. But we don't -- we have not had an active program there. Douglas Schenkel - Cowen and Company, LLC, Research Division: Okay. And then, I guess, this is topical for me because we attended a DxMA meeting earlier today here in Boston. There's a lot of focus on the outlook for increased adoption of nucleic acid testing in China. And some industry experts asserted that they expect adoption to be fairly quick, and again, relatively decentralized in key areas, including HPV, if not especially HPV. There's been a lot of focus on this call about your efforts to improve your positioning o-U.S. I was just wondering if you'd be willing to provide some color on how you feel you're positioned to capitalize on this opportunity in China and what additional investment, strategic collaborations or, I guess, what role bolt-ons might fit in the context of assessing the outlook for that market? Stephen P. MacMillan: Sure, I think we feel reasonably good about our position in China, particularly as it relates to ThinPrep. We've been doing a pretty nice job there. On the rest of the businesses, we have opportunities. Grifols, our partner, obviously as it relates to the NAT testing and the blood piece, we feel good about Grifols presence and our partnership with them. I would say that I think that piece is going to continue to roll out slower rather than faster. We'd rather be pleasantly surprised if the market develops, so I'd say we're positioned there pretty well. But probably not ready to count on explosive market growth. It's a very decentralized decision-making process. It's not like in Japan, where we got the Japan Red Cross and you get the whole country overnight. China is going to be region by region. So I think we feel good about our position there. On any of the markets outside the U.S., I'd put it as best as good, not great, but with a trajectory of getting better. We feel really good. We brought in a new leader of our China business a little over a year ago, a very experienced leader, doing a great job there and very well tapped into the market.

Next, we'll hear from David Lewis with Morgan Stanley. David R. Lewis - Morgan Stanley, Research Division: Bob, Steve, came from a company where the ROIC was much more elevated than Hologic's. And I appreciate you talking about ROIC here and your commitment to it. So I guess the question is, what's an appropriate ROIC for this business? How long does it take to get there? And what is the intermediate target you aspire to? And I have a quick follow-up. Robert W. McMahon: Yes, thanks, Dave. What I would say is, we're not in a position to project a specific target. But I would say is, we're aiming for higher than it is. But to your point, I mean, I think one of the things that we are benefiting from is a very strong cash flow. And this actually is a pretty efficient -- when the assets are utilized, I think more appropriately, a pretty efficient engine. And to the effect that we can actually drive 170 basis points of ROIC in a year, it speaks pretty well to kind of what we're trying to do going forward. Not to say that it's going to be 170 basis points every quarter -- or every year, excuse me, but we need to improve our return on our capital. David R. Lewis - Morgan Stanley, Research Division: Okay, very clear and fair. And then Steve, obviously, last quarter, we didn't see a dramatic amount of tomo upside versus consensus. This quarter, the highlights obviously is tomo upside. Backlog last quarter was very strong. Can you just comment qualitatively on the backlog you saw sequentially from last quarter to this quarter? Stephen P. MacMillan: Yes, it's continuing to get even better, David. It's part of what gives us a lot of confidence in the shorter term going forward. The orders really for the last few quarters really looking strong in the U.S.

Our next question will come from Anthony Petrone with Jefferies. Anthony Petrone - Jefferies LLC, Research Division: Maybe one on ThinPrep. Can you maybe give us a sense of what the tailwind could be from the Quest study? And how long that will take to resonate among OB\GYNs? And then a follow-up there would just be on ThinPrep pricing. The company still has a dominant share position there. Do you envision at all potentially a price reset on ThinPrep down the road? Stephen P. MacMillan: Sure, why don't I start. On the Quest data, we're obviously seeing that getting out into the press. I think what we're going to see in the world of HPV and cervical cancer screening, I think, over the next few years, is you're going to have a lot of different data points and a lot of different messaging out there between HPV primary, co-testing, various messages and probably some ebbs and flows in the data. I do think where we feel very good about is when you really start to peel down, we think the science, the long-term science is on our side. As it relates to co-testing is, by far, going to be the superior outcome. We love the way we're positioned there. And by the way, at the end of the day, it's pretty inexpensive testing to test -- co-test versus single test in this space. On your second part of the question. The AUP for ThinPrep is really been flattening and our goal is to try to keep that as flat as we can. Bob? Robert W. McMahon: Yes, I'll just say if it goes up, we will be pleasantly surprised.

Our next question will come from Jack Meehan with Barclays. Jack Meehan - Barclays Capital, Research Division: I just wanted to ask about 3D in other way and maybe just any color commentary on the pacing of the placements throughout the quarter? And then just with the investments you're making in marketing and the higher outlook, what should our expectations be sort of on the ramp through the end of the year? Stephen P. MacMillan: Yes. I think we just feel good about the trajectory, Jack. And like what we're seeing in orders, like what we're seeing in placements, and think we've seen a little bit of an uptick this quarter that's probably likely to continue here. Jack Meehan - Barclays Capital, Research Division: Okay, got it... Stephen P. MacMillan: I wouldn't expect it accelerating beyond where we are. This is pretty big move up, and we're going to start going to go into much tougher comps and all of that. But I think we feel -- it's a pretty robust business. Robert W. McMahon: And I think -- yes, the one thing, Jack, on the phasing during the quarter because of the strength that Steve just talked about, we're seeing that in each one of the quarter -- each one of the months continue build working with our -- with the radiologists centers, the hospitals, our customers to place things. And so we're not seeing this huge hockey stick over in the last 2 or 3 weeks of the month -- or of the quarter. We're feeling really good about that business throughout the quarter. Jack Meehan - Barclays Capital, Research Division: Got it. Yes, that makes sense. And then, is there a way just to frame just the margin improvement in the quarter, how much -- and I know you mentioned Breast Health was favorable within that? Just how much of a contribution that was to the overall total? Robert W. McMahon: Can you repeat the question, Jack? Jack Meehan - Barclays Capital, Research Division: Just looking at the improvement in gross margin for the overall company in the quarter, just breaking out within that, how Breast Health is? Robert W. McMahon: Yes, well, I'm not going to get into all the components of detail. What I would say is our Breast Health business gross margin didn't improve appreciably as we are moving to more 3D as you would expect. Our 3D instrumentation has a better gross margin than our 2D. And as we shift principally in the U.S., we're enjoying the benefits of that. We're also driving some cost efficiencies on the actuals service side, which is also helping the breast business have the large piece. So our service business continues to grow at a nice clip, and we're able to manage some of the cost side as well that's helping our gross margin.

Our next question will come from Tycho Peterson with JPMorgan. Tycho W. Peterson - JP Morgan Chase & Co, Research Division: I want to go back to kind of some of the question earlier just about the sustainability of the momentum of the business. And I guess on the R&D spending, can you talk to the degree to which maybe you're pulling forward some incremental R&D? And it sounds like we should assume maybe a similar run rate to what we saw this quarter going forward? And then secondarily to that, you haven't commented on M&A last quarter, Steve, you did say, maybe you'll be looking at deals before the end of this year. So I'm just wondering, if you could comment on the opportunity set, gaps in the portfolio, any ROIC hurdles, things like that as you're looking at potential tuck-ins? Stephen P. MacMillan: Sure, Tycho. I'll start, and Bob's want to build on that. I think on the R&D front, I wouldn't say we're pulling stuff forward. What we are doing is really revamping the pipeline. If you think about what we had become a little bit as a company, was one that was driven a little bit more by inorganic growth. And so a lot of what we're doing is going back to what really made us great in the early 2000s, and frankly, what have made our legacy companies really great, which was more organic innovation. And I would say we're really rebuilding that DNA in the organization. So we're ramping up the spend and ramping up the capabilities, much of which really won't come through for another few years. So I think at the highest level, the way we're thinking about the company right now is we probably got a short-term pipeline gap. The positive is we got so much opportunity, some great products in the short term to carry us while we get the R&D piece put together. As it does relates to M&A, that will be another way to kind of continue to grow. Our teams candidly because we've got so many new folks, and we've been so focused on executing, I think we're probably still a little further out on the M&A front. And I probably almost would not expect much, if anything, this year. And when we do look at it, it's going to be about looking at things that can help us grow organically once they're brought in to the organization. And probably more what we have said will be tuck-ins. We will be looking at ROIC as well as accretion dilution, but very much focus on ROIC and on growth drivers to supplement what we, frankly, are building with incredibly strong commercial teams. Robert W. McMahon: Yes, just to build on that. I think -- just to build on that for the R&D question, I think we're probably looking at the third quarter as being one of the biggest R&D spending for the year. We're taking the opportunity as we are probably a little ahead of where we initially had thought on the top line to take some of those investments, not only in R&D but in some marketing. I would say longer term, I wouldn't expect the continued 9% multiple years out, but certainly, we're taking the opportunity to do that. I still think and we've talked about improving R&D productivity, and that's still a core attribute that we're working through right now and actually getting more out with the dollars that we spend. But given that we have some opportunities in the short term, we certainly are building some of those capabilities that Steve talked about. Tycho W. Peterson - JP Morgan Chase & Co, Research Division: And Steve, one of the earlier things you highlighted when you first came on was potentially the opportunity to take price increases. Can you maybe just talk about the pricing environment? Where are you in the process of potential repricing the portfolio? And maybe also specifically talk about mammography now that you got GE and Siemens coming in the 3D market, what are the pricing dynamics like? Stephen P. MacMillan: Sure. I'm not sure if I ever really said we'd be taking price increases, but that just we are going to be much more focused on being able to pay attention to pricing. And I think it's probably more not doing deep discounting, which, by definition, is helping us on the realized ASP. And frankly, I give both Bob McMahon and then Eric Compton, our COO, and Claus Egstrand, our Head of International, a lot of credit for starting to put much more rigor and discipline into what effectively and largely been a lot of deep discounting at end of quarters that we're getting rid off. And having said that, on the positive side, we have been able to put through a little bit of a modest price increase in our Surgical business, and we're looking at it kind of the both ways. We're looking at how do we minimize the erosion of discounting and where there are opportunities to take a little price starting to do that. Also, we keep nibbling on the edges here and fundamentally changing the trajectory. As it relates specifically to last piece of your question, Tycho, on mammography, we are seeing certainly our competitors being more aggressive on pricing. We're doing pretty good job in trying to hold the line. We think we got a superior product and don't want to get caught into a deep discount game with a competitor. Robert W. McMahon: Yes, just to build on that, I mean, just to give you kind of frame or reference with the way you look at some of our major projects. Steve talked about it in his prepared remarks, HPV has been -- that pricing has been steady for several quarters. Same with CT/GC, and we talked about ThinPrep as well. And so we're seeing that moderation of that the pricing decline, which we have seen in the past. And I think that's through a lot of the hard efforts and really focusing on price realization and value realization in the market. And to the point around 3D, our pricing per gantry is flat year-over-year, despite the entrance of a new competitor.

And next from UBS, we'll hear from Jon Groberg. Jonathan P. Groberg - UBS Investment Bank, Research Division: So obviously you don't give the exact numbers, but it looks like you're close to a quarterly record in tomo. And I'm just curious, you mentioned you're pretty confident despite the U.S. USPSTF recommendations, you didn't really expect a slowdown there. Can you maybe expand on that just a little bit. We've got a lot of questions once those recommendations came out. Stephen P. MacMillan: Yes, as it relates to the USPSTF, first and foremost, they've used a lot of old data. We would also remind you that they're putting it out for guidance. It's still to -- it's in the question basically the public comment period. But at the end of the day, I think we have so many radiologists, so much of the medical community. If you look at ACOG, the America Society of Radiologist, AMA, everybody is looking at, frankly, the more recent data and things like the JAMA study and everything else as well as their own clinical experience. And I think we all know, frankly, women who, if they had waited and followed those guidelines, would not be with us today, people in our own families. And I think those guidelines are pretty far out in terms of what is doing the right thing for human health, and frankly, very small cost to the total system. So I think the users of our equipment, and frankly, if you look at so many in the patient advocate groups and everything else, again, we feel pretty good that they're ultimately all on the same side of better science and a better product, and we happen to be in that space. And for those of you who know me for a long time, no, I'm not one to be dismissive of any potential hurdle on the horizon, and take these any hurdle as very serious. But again, I think we feel really good about our ability to work through this one. Jonathan P. Groberg - UBS Investment Bank, Research Division: Just to be clear, it was view that regardless of -- I just want to be clear. It is your view that kind of regardless of what the ultimate final recommendation is that you don't think your business will be impacted? Or is it your view that when the final recommendations come in, the 3D will have kind of rightful place in those guidelines? Stephen P. MacMillan: Regardless of how they come in, we feel fine.

Our next question will come from Bill Bonello with Craig-Hallum. William Bishop Bonello - Craig-Hallum Capital Group LLC, Research Division: I just wanted to follow up a little bit on your response to Bill Quirk's question about the molecular business, and you talked about some of the longer-term things, the PCR opportunities being off a few years, but you feel very good that the near-term growth prospects, nonetheless. Can you just maybe elaborate a bit more on what those drivers are? If it's more of the customers using more of the assays? Maybe if everybody was using all of the tests that are out there today, how much of a growth opportunities is that just across your installed base? Just something to frame the opportunity within the existing assay base. Stephen P. MacMillan: Sure, Bill. I probably won't give you the numerics that you would like from a modeling standpoint but I'll give you just at a high level. The Panther placements, each time we're placing a Panther, what we love is that's going in today, it starts to come up to speed, there's usually a ramp to that, just as they -- they don't even necessarily go with our full menu upfront, some do, some don't. But oftentimes, they'll go in using just a few of our assays, and then our ability to keep expanding just our existing -- from the existing menu that we have. And then as we add menu over time, so that the utilization of those will continue to build out. But I'd say the core right now is really continued Panther placements. So each of one of these we place today is an annuity down the road and an annuity that will grow as the menu grows. William Bishop Bonello - Craig-Hallum Capital Group LLC, Research Division: So the growth opportunity right now is still more just getting more hospitals to have to have labs, to have a Panther than it is that you've got a bunch of systems out there that are maybe just doing CT/NG or just doing HPV but not necessarily doing everything? Stephen P. MacMillan: It's really a bit of both. We have opportunity to improve the utilization of the ones we have placed, and we see additional opportunities for more placements. And to get more granular than that, if I've learned anything from our own forecasting, I know it's always hard for you guys to do models, is no matter what we forecast, the numbers always come out a little differently. And so to stress one over the other, at this point, I think we'd really see opportunities in both.

Our next question will come from Richard Newitter with Leerink Partners. Ravi Misra - Leerink Swann LLC, Research Division: This is Ravi in for Rich. I had one question on the backlog comments that you had made on tomo. In terms of the backlog getting even better in the U.S., are you still sort of winning on existing accounts or do we take that commentary to mean that you're making sort of competitive inroads? And then I have a follow-up. Stephen P. MacMillan: Sure. Most of it is still on our existing accounts. As the market leader, we have the most on the existing accounts, and those are the ones, but we are getting the certain wins here and there competitively. The way I think about this market overall is it's probably fairly sticky at all directions, which is beneficial certainly to us, but we are definitely getting some competitive wins in there as well. Ravi Misra - Leerink Swann LLC, Research Division: And then maybe on MyoSure, that put up another pretty fantastic quarter. Could you may be tease out some of the impacts that you're seeing in the market, if any, from the morcellator warning, the black box issue? Stephen P. MacMillan: I don't think we really see any impact there, given that that's much more of a laparoscopic morcellation issue and really does not affect our business. We're not indicated to win from that. We're also not hurt by the negatives, nor is anybody that's doing laparoscopic morcellation going to shift over to hysteroscopic morcellation. So they're really 2 independent events. I think really what we're seeing driving our business is we've added some clinical specialist, our sales teams fired up, and we've got a lot of good things going out there.

Our next question will come from Brian Weinstein with William Blair. Brian Weinstein - William Blair & Company L.L.C., Research Division: Just a question on your comment about Breast Health marketing programs and increasing the investment there. You talked a little bit on the prepared remarks. But can you talk about examples where you're going to be increasing the spending? And some of the examples where you've seen some good success? Stephen P. MacMillan: Sure. On a high level, Brian, effectively what Pete Valenti, the President of our Breast Health business, as he came in, we've really ramped up the marketing programs, which is really co-marketing with hospitals. And the analogy I draw a little bit is, I think, a lot of the great work intuitive surgical did over the years. We're now both helping hospitals market the procedure, and I think they are feeling in markets, as hospitals start to advertise, it's creating demand from the other hospitals, not in the market. We also are doing a lot of kind of [indiscernible] over the web kind of stuff and using hospital locators and just a lot of I think very smart marketing that our team has developed. It's a competency we did not have in this company 12 months ago, and the team has really put it together and put a great program behind the Genius campaign. Brian Weinstein - William Blair & Company L.L.C., Research Division: Okay. And then I might have missed it. But did you guys give what the CT/GC growth was in the quarter? And if not, is it something that you can please provide? Stephen P. MacMillan: Yes, we did not. It's low single-digits global. Robert W. McMahon: Brian, molecular, as a whole, was about -- was up about 8% on a constant-currency basis. Stephen P. MacMillan: With the U.S. growing faster.

Our final question will come from Jayson Bedford with Raymond James. Jayson T. Bedford - Raymond James & Associates, Inc., Research Division: Just a quick one and then a follow-up. You mentioned a little earlier, I think it was in reference to Breast Health, that you don't expect to see an acceleration from current levels. Just to get a little context, were you referring to the 9.5% Breast Health growth you saw in the quarter? Or was it more related to 3D specifically? Stephen P. MacMillan: I'd say the overall number. Yes, we're going to be starting to go up against bigger comps. We feel really good about the basic trajectory of that business, but it's going to be a very solid grower. Demand is very strong, but we probably don't want to get too far ahead of ourselves either. Jayson T. Bedford - Raymond James & Associates, Inc., Research Division: Okay. And just as a follow-up on the Breast Health. Obviously, it's tough to poke holes in this quarter, but I guess the one area of softness looked to be international Breast Health, down 2% year-over-year. Can you just give us a little bit more detail as to why that was down? Whether it will be -- it didn't sound like pricing, was it just sluggish capital? Robert W. McMahon: You can bet, we've poked a lot more than you will on that internal. I would actually say it's 2 things. One is our International business is actually disproportionately affected by the AG high-tech some of the discontinued items from a year ago that are actually still in there. And if you actually take that out, but we don't allow our businesses to do that, it actually grew very modestly in the quarter. The other piece I'd say just in a higher level is there is some lumpiness that happened with the distributors. And I think any quarter-to-quarter variations, we'll probably still see a little bit more of that internationally. And if one quarter pops up really good, and then the next one is down, neither one is yet a trend. It's going to be watching it over time. So I think we feel good about where we're headed, but that is probably the -- actually on our red green charts, that was our only red out of 15 data points that we track. So you found it, good job.

Thank you. And ladies and gentlemen, that is all the time we have for questions today. This now does conclude Hologic's First Quarter Fiscal 2015 Earnings Call. Have a great evening.