Scott P. Anderson - Chief Executive Officer, President and Director R. Stephen Armstrong - Chief Financial Officer, Executive Vice President, Principal Accounting Officer and Treasurer

Ross Taylor - CL King & Associates, Inc. S. Brandon Couillard - Jefferies & Company, Inc., Research Division Michael A. Hamilton - RBC Wealth Management, Inc., Research Division Scott Green Jeffrey D. Johnson - Robert W. Baird & Co. Incorporated, Research Division Steven Valiquette - UBS Investment Bank, Research Division John Kreger - William Blair & Company L.L.C., Research Division Lawrence C. Marsh - Barclays Capital, Research Division Glen J. Santangelo - Crédit Suisse AG, Research Division Lisa C Gill - JP Morgan Chase & Co, Research Division

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Patterson Companies Second Quarter 2012 Conference Call. [Operator Instructions] This conference is being recorded today, Tuesday, November 22, 2011. I would now like to turn the conference over to Mr. Scott Anderson, President and Chief Executive Officer. Please, go ahead. Scott P. Anderson: Thank you, Alicia. Good morning, and thanks for participating in our second quarter earnings conference call. Joining me today is Steve Armstrong, our Executive Vice President and Chief Financial Officer. At the conclusion of our formal remarks, Steve and I will be pleased to take your questions. Since Regulation FD prohibits us from providing investors with any earnings guidance unless we release that information simultaneously, we've provided financial guidance for fiscal 2012 in our press release earlier this morning. This guidance is subject to a number of risks and uncertainties that could cause Patterson's actual results to vary from our forecast. These risks and uncertainties are discussed in detail in our annual report on Form 10-K and our other SEC filings, and we urge you to review this material. Turning to our second quarter results. Consolidated sales of $856.9 million were virtually unchanged from the year-earlier period. Net income of $49 million, or $0.43 per diluted share, included incremental expense of $0.03 per diluted share related to Patterson's Employee Stock Ownership Plan, or ESOP. Excluding this ESOP-related expense, second quarter earnings were $0.46 per diluted share, and as we've reported previously, the incremental ESOP expense will affect our fiscal 2012 earnings by an estimated $0.12 per share. We reported earnings of $53.4 million, or $0.45 per diluted share, in the second quarter of fiscal 2011. As we indicated in this morning's release, our second quarter sales and earnings were adversely affected by reduced sales of CEREC products and to a lesser degree, by the soft equipment sales posted by our rehabilitation and veterinary businesses. This situation masked the good performance of the ongoing consumables business at our 3 units, which we believe indicates the fundamental stability of our markets and that patient traffic is continuing to increase at a modest rate. Now for the next few minutes, I will provide some operational highlights of our 3 businesses. Sales of Patterson Dental, our largest business, declined 2% from last year's second quarter to $550.6 million. Sales of dental consumable supplies rose 2.4%, a 70 basis point improvement from our first quarter after adjusting for the extra week impact of that quarter. Demand for routine dental work appears to be continuing on a consistent basis, if not improving slightly. Sales of dental equipment and software increased 3.8% from the year-earlier level after excluding CEREC revenues. Improved sales of basic dental equipment, software and digital radiography products were offset by the lower CEREC revenues. Our CEREC results reflect a difficult year-over-year sales comparison related to the highly successful trade-up program that ran during last year's second quarter. We are continuing to focus Patterson Dental's marketing initiatives on boosting demand for capital equipment as we approach the seasonal peak for equipment purchasing decisions. These initiatives include our annual calendar year-end equipment and financing program and a new marketing program dedicated to CEREC products. Although economic headwinds will likely continue affecting our equipment business, we see attractive growth opportunities led by new technology equipment since improvements in dental office productivity will remain a pressing need for quite some time. Second quarter sales of Patterson Medical, our rehabilitation supply and equipment unit, rose 1% to $133.6 million. Sales of consumable supplies increased a very healthy 5%, but equipment sales, which constitute approximately 25% of Patterson Medical's revenue stream, fell by 12.6%. We believe 2 factors are affecting this unit's equipment business. First, we continue to believe that regulatory uncertainty related to the nation's new healthcare legislation is adversely affecting Patterson Medical's sales to domestic dealers. And second, what I previously said about the impact of the economy on dental equipment sales is also at play in our rehabilitation business. Despite these short-term factors, we believe Patterson Medical is well positioned domestically and internationally as a long-term growth driver of our overall performance. Sales of Webster Veterinary unit increased 7% from the year-earlier period to $172.7 million. The previously announced August 2011 acquisition of American Veterinary Supply Corporation, a full-service veterinary distributor located on Long Island that serves approximately 2,000 companion pet veterinary practices and clinics, accounted for 2.5 (sic) [2.6] percentage points of Webster's sales growth for this period. This tuck-in acquisition was fully integrated into Webster's operations by the end of the second quarter. Webster's second quarter growth was driven primarily by a 7% increase in consumable sales, while sales of equipment and software were virtually unchanged from the year-earlier period. We plan to continue investing in Webster's relatively new equipment and service business since it further strengthens the unit's full-service platform. At the same time, Webster is investing in an expanding range of technology offerings aimed at strengthening the profitability of veterinary practices and forging stronger relationships between pet owners and their veterinarians. In a broader sense, we're continuing to make strategic investments, and our business is exemplified by the opening of the new Patterson Technology Center facility during the second quarter. This new facility, which replaces an existing one, makes a strong statement to our current and future customers that we have established the infrastructure necessary to support them as they successively convert their practices to the digital age. The Patterson Technology Center houses nearly 400 people dedicated to designing, testing, integrating, supporting and servicing industry-leading products from digital radiography to CAD/CAM and software for our dental, veterinary and rehabilitation customers. We believe that PTC's capabilities are a significant differentiating factor between Patterson and our competition. Finally, as reported in this morning's release, we used internally generated cash and bank lines to repurchase approximately 5.6 million shares during the second quarter under our 25 million share, 5-year buyback authorization that expires in 2016. Approximately 15.5 million shares remain available for repurchase under this authorization. And as we stated in this morning's release, we revised our fiscal 2012 financial guidance to $1.90 to $1.97 per diluted share, which includes an estimated $0.12 per share impact from the ESOP expense. In closing, I want to emphasize that Patterson's businesses are well positioned to capitalize upon their market opportunities. We're generating strong operating cash flows, providing us with ample resources for supporting our various growth initiatives. We are aggressively marketing our products and services, and we are fully committed to delivering strong value to our shareholders. For these and other reasons, we are optimistic about Patterson's long-term future. Thank you. Now Steve Armstrong will review some financial highlights from our second quarter results. R. Stephen Armstrong: Thank you, Scott. I have just one additional point on our sales performance for the quarter. On a consolidated basis, currency exchange had a favorable 40-basis-point impact on sales growth. Moving on to our consolidated gross margin. We saw an increase of 20 basis points from the prior year. This primarily was the result of mix, with the Dental and Medical segments having higher percentages of consumable sales in the period, which carry slightly higher margins in the sales of equipment. Year-over-year, our operating expense ratio increased by 110 basis points, due to an incremental $6 million of ESOP expense, as well as the transactional and integration expenses related to the acquisition of American Veterinary Supply, or AVSC. Excluding the incremental ESOP expense and the impact of AVSC acquisition, our operating expense ratio would have been flat for the quarter. In addition, we absorbed the startup cost of the new Patterson Technology Center and the incremental expenses associated with the ramp-up of operations at the new South Bend distribution center. By segment, our second quarter operating margins were 10.2% for Dental, 14.1% for Medical and 4.7% for Veterinary. On a comparable basis, the Dental segment margin would have been 11.3% after giving effect to the incremental ESOP expense that has become part of the company's expense structure beginning in fiscal 2012. The Veterinary segment margin, which reflects the impact of the acquisition and integration of AVSC, would have been flat with the prior year, absent those costs. Our balance sheet shows that inventory levels increased by approximately $11 million from the start of the fiscal year. The growth in inventories resulted from the normal seasonal fluctuations, the ramp-up of the dental stock in the new South Bend DC and the acquisition of AVSC during the quarter. Our DSO stands at 45 days in the current period, consistent with the prior year, while inventory turns are 6.6 compared to 7.0 a year ago. The decline in turns reflects the relatively low level of CEREC inventory at the close of the prior-year quarter, following the successful trade-up program Scott mentioned in his comment. We generated cash from operations of approximately $52 million in the second quarter compared to $86 million in the year-earlier period. The year-over-year decrease is the result of our decision to fund the current year contribution to the ESOP by purchasing shares of the company in the open market during the second quarter. We transferred $23 million to the ESOP, which then purchased 844,000 shares. Effectively, we converted the planned noncash ESOP expense for the fiscal year to a cash expense. And the impact of that decision in operating cash flow occurred in this quarter. The market conditions allowed us to fund the current year contribution for approximately $4 per share less than if we allocated shares from the tranche acquired in 2006. The economic benefit to the shareholders of this decision was approximately $3.5 million. The cash flow amount for the second quarter of last year that I provided adjusts for the impact of the gross up of our customer financing operations that occurred in that quarter. You may recall that at this time last year, we were amending our funding agreements to comply with the change in accounting standards. Until the funding agreements were amended, which occurred in the third quarter of last year, the cash that we did receive on the transfer of finance contract was required to be reported as a financing activity and not as an operating cash flow. Our CapEx for the first half of the year includes the final payments on the new Patterson Technology Center, and we continue to estimate our CapEx for the fiscal year to be approximately $30 million. With that, I'll turn it back to the conference operator, who will poll you for your questions. Alicia?

[Operator Instructions] Our first question is from the line of Glen Santangelo with Crédit Suisse. Glen J. Santangelo - Crédit Suisse AG, Research Division: I just had 2 quick questions. I'm just trying to understand the ramp in terms of what you're expecting in the back half of the year. Because if I look through the first 2 fiscal quarters, you basically earned about $0.85. And in order to make the bottom end of your guidance, you need to earn an additional $0.20 in the back half of the year. And I'm just trying to get a better sense for maybe where that comes from. And Scott, I think you touched on that a little bit, in that you're coming into the seasonal peak in terms of equipment sales. And I guess, I'm curious, are you referring to just the year-end tax incentives potentially? Or is there something related to the shows coming up or year-end equipment financing or any special programs that we should be aware of that could help drive potentially better-than-expected equipment sales from what we may be looking for? Scott P. Anderson: Sure, Glen, I'll start in, and I'll ask Steve to give some color as well. When we look at our year, the earnings are back-end loaded just because of the volumes that happen on our third and fourth quarter. So what we're looking at over the remainder of the year would be revenues in the mid-single-digits and flat operating margins. And so as we go into our third quarter, which is the calendar fourth quarter for our customers, we think there's opportunity based on our low comparable of the third last year, as well as programs we have in place. Obviously, the tax incentives in place for the customer are similar to last year, and our sales force is out there currently sitting down with customers and their financial advisors to make the right decisions for the customer. Steve, you want to give any color on that? R. Stephen Armstrong: Yes, the only other item that you may want to keep in mind, Glen, is the purchase of the shares that was made through the first half of the year, which totaled about 8 million shares, will be reflected in the EPS computation in the second half of the year. Glen J. Santangelo - Crédit Suisse AG, Research Division: And so Steve, just along those lines, I think if I heard you correctly, you said you've been funding the ESOP by purchasing some of the shares. As I think about as you fully fund the ESOP, should I think you'll continue to purchase shares until the ESOP's fully funded? Or how should I think about the rate of share repurchase kind of going forward? Because you still have, I think 15 million shares left on your authorization, and you probably bought back more this quarter than I would've thought. R. Stephen Armstrong: Well, as we said last quarter, we are going to continue to take advantage of the market situation as we see it with regard to our stock, our cash positions and what else is developing in the business with regard to acquisition. We did buy back 8 million shares, approximately, in the first half of the year. As you probably know from public filings, we still have a 10b5-1 plan that's effective through next Monday. So we will purchase some shares in the month of November. Whether we continue to do that or not, again, will be dependent upon the opportunities in the marketplace, as well as what develops in the business. But I would tell you that there's probably between 8 and 10 million shares that are going to come out of the count up through the end of this month. Glen J. Santangelo - Crédit Suisse AG, Research Division: Okay. You said 8 million to 10 million coming out of the count up to the end of this month? R. Stephen Armstrong: Correct. Glen J. Santangelo - Crédit Suisse AG, Research Division: And that's versus the beginning of the year? R. Stephen Armstrong: That is correct. The other thing to keep in mind, you mentioned the ESOP, The ESOP really has no effect other than the cash utilization because those shares are being purchased in the open market and they're just changing hands effectively between shareholders. They're just going from the outside world to the ESOP world and really don't change the share count. It's just strictly the utilization of cash.

The next question is from the line of Larry Marsh with Barclays Capital. Lawrence C. Marsh - Barclays Capital, Research Division: So a couple of questions. First, for Scott, it seems like there's a bit of a mixed message you're sending here. Really, consumables you're saying a little bit better than you expected. I know you talked a little bit about that last quarter, and you set the stage at Analyst Day to kind of levels set to a pretty conservative point. You're saying you're seeing a little bit of an improvement on the volume side. And on the other hand, you're saying equipment is worse. And I know you said don't -- be careful about trying to model CEREC on not only the increments. But I know one of your -- well, I know your supplier Sirona talked a little bit about lengthening of the sales cycle that you and others suggested to them here in the last couple of weeks. Can you reconcile the 2 points to kind of give us a better sense of overall market dynamics? Scott P. Anderson: Yes, I think it's a great question, Larry. And we feel quite confident in the stability of our markets. And I think if you look at the sequential improvement in our consumables business, you look at our equipment business x CEREC, which shows some nice, modest growth. I think there can be an infusion in this quarter over the comparability of the CEREC upgrade program. And I think it's important to frame up the totality of that program, which really happened in 3 different chunks, and this was the last trade-up program. And when we look at the program in totality, we look at it as very successful. Nearly 40% of eligible CEREC users moved into the Bluecam technology, and the remainder who didn't are extremely satisfied with the technology they have. So moving forward, you will not see a trade-up program. We're very focused on new users. And we see some opportunities still in the equipment business, given the fairly weak quarter last year for the entire industry. And we have plenty of programs out there to help our customers invest in new equipment. So I think it's the cautious optimism of stable markets and all 3 markets still battling some consumer confidence and customer confidence on the capital side. Lawrence C. Marsh - Barclays Capital, Research Division: So I'll just maybe then ask you kind of something [indiscernible] asked you last week, which was -- I know you said in the past that you still see CAD/CAM as a double-digit grower for your organization over a longer period of time. You're saying, I guess, the trade-up program this year put in totality of a 3-year program was successful. But obviously, a very difficult comp. I mean, do you think you can get to double-digits this year for CEREC in that context? And are you still as bullish on the out-year views? Scott P. Anderson: Well, I think it will be difficult for this year, but when you look at the long-term, absolutely bullish. We look at CEREC as a transformational technology. We see ourselves as a leader in this transformation from film to digital and also, the integration in those modalities into CEREC. You look at the investment we made that I mentioned in our technology center and really being the backbone of support for the modern dental office. As we take the long view look at this, we see technology being a big piece of the future of dentistry and us in a market leading position. Lawrence C. Marsh - Barclays Capital, Research Division: And just wanted a clarification then, if I could, before I ask Steve a question, which is last year, you talked about some of the uncertainty around the tax rates that impacted your calendar year-end results. Today, you're suggesting that may not be as big of an issue. But as you go into here, the most important part of your year, are there things you're hearing from your sales people that are causing any sort of confusion from the customer in terms of their buying decisions, say, for this December? Scott P. Anderson: Well, I think the customer over the last 3 years has become accustomed to uncertainty. But at the end of the day, the practices, particularly in the veterinary practice and the dental practice, the practices are very stable. Cash flows are strong. And it's really a matter of us helping the dentists invest in their future. So have the uncertainties gone away? Absolutely not. But we think we can address them, help our customers address them in a much more productive way this quarter than we did last quarter. Lawrence C. Marsh - Barclays Capital, Research Division: And then Steve, you called out a cost for the innovation center, as well as the new distribution center. Can you quantify what that cost you this quarter and how we think about that for the rest of this year? R. Stephen Armstrong: Yes, probably, the incremental expenses, Larry, obviously, as the center opens up, you're going to have some depreciation. But that's not going to -- it will be offset by other aging facilities that are diminishing as far as depreciation expense. But the incremental out-of-pocket is probably somewhere between $0.25 million and $0.5 million for the quarter. So not a huge amount, but it did have some impact. Lawrence C. Marsh - Barclays Capital, Research Division: Okay. And then finally on that, based on your numbers, it sounds like you were down a couple percent operating profit year-over-year with a reasonably good top line, obviously, boosted by the acquisition. When do we start to see comps get turned positive with George and his business given some of the pretty constructive trends you're talking about there? Scott P. Anderson: Well, I think they're generally increasing over time, if you take out some of the other issues that they've had to deal with. And probably the largest one affecting them this year, Larry, was the decision by one of the manufacturers to reprice their product at the beginning of the calendar year. So we have to get through this third quarter effectively to grandfather that in. But that took about 4.5 percentage points away from that product line. So that's probably the biggest single factor that's affecting their operating results right now. Lawrence C. Marsh - Barclays Capital, Research Division: So that starts to anniversary, what, this quarter? R. Stephen Armstrong: End of this third quarter, right.

The next question is from the line of Lisa Gill with JPMorgan. Lisa C Gill - JP Morgan Chase & Co, Research Division: Just a couple quick follow-ups here. First off, Steve, can you just remind us if you have a specific number in this guidance for the back half of the year around share repurchase? R. Stephen Armstrong: No, we don't have a specific number we've given any guidance on. As I stated earlier, it's strictly based on the circumstances and the opportunities that present themselves. Lisa C Gill - JP Morgan Chase & Co, Research Division: And then secondly, if we look at the first half of the year and look at margins, year-over-year they're down 70 to 80 basis points. And yet I think your guidance for the back half of the year for margins to be flat year-over-year. Can you help me just to bridge that gap to understand what are going to be key drivers in the back half of the year around margins? R. Stephen Armstrong: Well, again, I think when Scott made that comment, he was looking on a comparative basis. So you've got to take that ESOP expense out, Lisa. So if you take that annualized ESOP expense out, we're expecting margins to be somewhat flat for the year. Lisa C Gill - JP Morgan Chase & Co, Research Division: Okay, great. And then just lastly, on the equipment programs that you talked about for customers, are you planning to offer any level of financing this year around any of those programs? R. Stephen Armstrong: Yes, we traditionally, Lisa, in the calendar, our third quarter calendar, fourth quarter run finance programs aimed at purchases from 5,000 on up. And we've done this for probably the last decade. So have a program like that in place. We also have a finance program around CEREC of 4.95 in addition to a $10,000 rebate. Lisa C Gill - JP Morgan Chase & Co, Research Division: Okay, great. And then I guess, just a bigger picture kind of question. I'm just wondering what you're seeing right now from an acquisition standpoint. Just given the overall environment, are you seeing more willing sellers? What are you seeing out there? Scott P. Anderson: Well, we have a lot of conversations and, I think, a nice acquisition runway opportunity for us. Every situation is different when you're looking at companies that are owned by financial backing private equity versus multigenerational family businesses. So I would say not much has changed in the last 12 months in terms of their willingness to sell, but we certainly have a lot of conversations going on.

The next question is from the line of John Kreger with William Blair. John Kreger - William Blair & Company L.L.C., Research Division: Just following up on Larry's question about the vet business. It seems like the organic growth rate over the past couple quarters has slowed a little bit. Can you just talk about what's driving that? Is that the benefit around the flea/tick class starting to wane? And as you think about the next couple of quarters, do you expect that growth rate to stabilize or continue to slow? Scott P. Anderson: And I think you still have a lot of movie pieces, John, to get to those growth numbers compared to our competition. And I think you'll get a clearer picture of our growth versus industry, going forward. When we look at things like dosages from our large pharmaceutical partners, we're confident that we're maintaining, in fact, gaining some share. So we would see the growth in our vet business to be very competitive going forward. John Kreger - William Blair & Company L.L.C., Research Division: And what's your take about where that -- how quickly that market is growing at this point? A couple of percent maybe? Scott P. Anderson: Yes, I would say the 3 businesses, it's got the strongest underlying growth of probably 2% market growth. John Kreger - William Blair & Company L.L.C., Research Division: Great. And you talked about a little bit of improvement in patient traffic across your businesses. Do you have any color on what the higher-end procedure volumes have been like in Dental lately? Scott P. Anderson: The mix of our consumables is pretty consistent across product lines. So when we're looking at things like crown and bridge and endodontic procedures, it's fairly consistent across the board. So we still believe there is pent-up demand at our customer level in terms of open treatment cases our dentists have. So we would look at that as a long-term growth driver. But the good thing about the dental practices is pretty stable patient flow through the practices throughout the last 3 years. John Kreger - William Blair & Company L.L.C., Research Division: Great. And then lastly, what's your latest thinking about the typical year-end buying of dental equipment? And how does your pipeline look? I know last year, it didn't really materialize given some of the confusion around tax rates. Scott P. Anderson: Yes, it's tough to measure the pipeline because a lot of decisions are made really in this time period, in the first week of December. So we feel confident that we're going to show growth both in our third and fourth quarter but at the same time are cautious to make any predictions about how large that growth is going to be.

The next question is from the line of Brandon Couillard with Jefferies & Company. S. Brandon Couillard - Jefferies & Company, Inc., Research Division: Scott or Steve, did you notice any discernible variability in eye of the dental consumables or equipment demand trends through the quarter? Scott P. Anderson: No, I think it's been, like I said, we had sequential improvement in this quarter from last quarter. We did, as we've talked about at the end of our first quarter, have a soft patch in our consumable business in mid-June to July. As we said, that abated in August, and we had fairly consistent growth throughout the quarter. The equipment business tends to be a bit lumpier. But outside of CEREC, the growth rates throughout the 90 days were fairly consistent. R. Stephen Armstrong: And I say, it's almost a [indiscernible] item, but you could measure -- if you look at the quarter, you probably saw some volatility in consumables just due to the hurricane that hit the East Coast. There was some impact in that. But I mean, there's usually weather some place in the country all the time, so yes, it's a little hard to call it out as an issue. S. Brandon Couillard - Jefferies & Company, Inc., Research Division: Okay, that's helpful. And then any chance you could give some more detail on the dental equipment revenue, growth trends in the period, perhaps, between basic and in digital radiography? And then any chance you could give us sense of how Intraoral fared versus stand-alone imaging systems in the period? Scott P. Anderson: Yes, our imaging in our Schick product line did very nicely in the quarter against a really tough comparable. We had a nice product launch at the ADA meeting, which was very well received. So our Intraoral business did well, and our just basic chair unit-like [ph] business saw some nice growth as well. So we were fairly pleased with the growth out of that side of our business, given the trends over the last couple years. S. Brandon Couillard - Jefferies & Company, Inc., Research Division: And then, lastly, Steve, any chance you could give us the FX impact, break it down between Dental and Medical for us in the period? R. Stephen Armstrong: Yes, I can. The Dental impact was about 310, 30 basis points, and the Medical impact was 110 basis points, both positive. It comes out as a net of the 40 basis point I mentioned in my comment.

The next question is from the line of Steven Valiquette with UBS Securities. Steven Valiquette - UBS Investment Bank, Research Division: So just hoping to get a little more color around the reduced EPS guidance range and just kind of your thoughts around it. So I guess, in your mind, is the majority of the revision due to the CEREC sales trends, or is it due more to sort of everything else in your business lines? When you think about it in those 2 components, just trying to get a sense of which has more weighting on the reduction. Scott P. Anderson: Steve, I think there's more weighting to the overall equipment business and the uncertainty around that versus the macro overall look at our entire business. As I mentioned, I think it's a real positive, the underlying thunderish [ph] growth of all 3 of our businesses through the first half of the year. But the first 6 months in terms of equipment did not turn out as we had planned, and that's why we've made the revision down on the top side. Steven Valiquette - UBS Investment Bank, Research Division: Okay. And then you mentioned there's a 3.8% growth in dental equipment, excluding CEREC. And just to confirm, is it your view that, that number did outpace the overall market for the period? Scott P. Anderson: Yes, I think it did, but not by much. It was from all we've seen from our competitors and industry contacts, it was probably a flattish equipment market over the summer months and early fall months. So we outpaced it, but not by much.

The next question is from the line of Jeff Johnson with Robert W. Baird & Company. Jeffrey D. Johnson - Robert W. Baird & Co. Incorporated, Research Division: Scott, a couple questions for you on upgrades, and then Steve, maybe a couple accounting clarifiers, if I could. So Scott, just on upgrades. A good number of 2D systems out there and obviously, a number of 2D/3D hybrid units that you're selling at this point, any sense if over the next 6 to 12 months, you'd expect to see any kind of upgrade programs going, taking those 2Ds to 3D systems? Scott P. Anderson: Yes, we have one going on right now, Jeff, and we'll continually look at that as an opportunity as more practitioners want to move into a 3D digital environment. So we definitely look at that as opportunity, and we'll put marketing programs with our partners to tap into that opportunity. Jeffrey D. Johnson - Robert W. Baird & Co. Incorporated, Research Division: Yes, and this program you have going on right now, Scott, is that just a special on buying a hybrid system, or is it upgrading a 2D system to a 3D? Scott P. Anderson: Well, I don't want to go into specific marketing programs for competitive reasons. Jeffrey D. Johnson - Robert W. Baird & Co. Incorporated, Research Division: Sure. Okay, fair enough. And just on CEREC, you and Sirona now have both mentioned not to expect any kind of formalized upgrade programs on CEREC going forward. And I know you talk about still being very confident in that double-digit long-term outlook for CEREC. Over the next 12 months, do we need to take into account maybe some upgrade revenue then coming out of the model over the next 12 months that you had in the past 12 months because of upgrades? So there might be a hole to fill over the next 12 months and then get back onto more of a normalized path? Scott P. Anderson: Well, potentially, because we'll have some upgrade revenue in our first quarter and second quarter of next year. But we feel confident in the underlying demand, Jeff, for the CEREC system in total, and we'll have our team very focused. The other thing of note is while we want to have a formalized trade-up program that our marketing efforts and sales efforts are focused on, there is always an upgrade path for the current customer. So those customers that have not upgraded to date still have the opportunity to upgrade, just not in as lucrative a fashion as we offered in the program that just ended. Jeffrey D. Johnson - Robert W. Baird & Co. Incorporated, Research Division: All right, that makes sense. And Steve, just a couple accounting clarifications here, if I could. So it sounds like you would expect at the end of November maybe to be at a share count of around 106 to 108 million. Is that a fair number? R. Stephen Armstrong: Yes. Jeffrey D. Johnson - Robert W. Baird & Co. Incorporated, Research Division: Okay. And I guess, going back to your Analyst Meeting, the comment was don't expect share count to change a whole lot. The 10 million shares sounds like a pretty sizable number. With that, you just didn't want to tip your hand on what might be going on, on some of the repurchases? Or just trying to figure out if something's changed since October 31 till today? R. Stephen Armstrong: Yes. We had the 10b5-1 plan in place, and it was a graduated plan. So we can't really predict. It's really more dependent on what the market performance does as far as how many shares are acquired. So it's very difficult for us to predict it, Jeff. Jeffrey D. Johnson - Robert W. Baird & Co. Incorporated, Research Division: Yes, that makes sense. And then the last question, just on ESOP accounting. I know you said you were able to buy some of those shares and put back into the ESOP at about $4 below where you might have if you had allocated out of the '06 repurchase. Does that at all -- and maybe we could walk through this accounting off-line. Does that at all change the ESOP P&L expense you'll be recognizing in the back 6 months of this quarter or as we get into fiscal '13 and beyond? R. Stephen Armstrong: It does slightly, Jeff, but not of anything of any consequence. I mean, obviously, we've got the 3 moving parts in the ESOP today because it's effectively 2 tranches that are in there and then our opportunity if we see another circumstance like we did in this quarter to go out and buy shares at a lesser market price. So it gives us some flexibility in there. But it's not going to change the -- I wouldn't, at this point, guide you to change your overall thinking with regard to the total ESOP expense on an annual basis.

The next question is from the line of Ross Taylor with CL King & Associates. Ross Taylor - CL King & Associates, Inc.: Most of my questions have been answered. And I think my first question maybe is a variant that's been answered, but I'll try anyway. But I'm just trying to think through some of the quarterly volatility related to CEREC, and just wondered if you can give us any indication as to what your CEREC expectations might be for the January quarter, or if you don't really want to address that, whether you could kind of give any comments about the full year and whether you think it could get to those double-digit growth expectations that you typically laid out for that product. Scott P. Anderson: Yes, Ross, I don't want to give specific targets. But maybe on the question about volatility. CEREC is a very exciting game-changing technology. And historically, if you look at our history with it, as we've grown it from basically no users in North America to now almost 12,000, you've had peaks and valleys in terms of the product driven by, one, innovation; and two, upgrade; and three, promotional activity. So we are absolutely committed to the technology and think it's probably the biggest game changer in terms of dentistry over the next decade. And if that comes with a little volatility, we're up to the task on that. In a perfect world, it would just grow at 10-plus percent in a straight line, but that's not reality. But when we look at the future, CEREC is a big piece of our future and our customer's future. Ross Taylor - CL King & Associates, Inc.: Okay. And my last question is, I haven't been able to think through all the logic of the comments you made about the share count at the end of November. But does it basically imply you've been buying back shares here since the end of the quarter as well? R. Stephen Armstrong: Yes, the 10b5-1 plan is in place, and the instructions are out there. So if we were buying through the quarter based on the market prices, I think it's a pretty safe guess that we're buying through the month of November as well.

The next question is from the line of Scott Green with Bank of America Merrill Lynch.

First, could you elaborate on how new CEREC sales performed versus trade-ups relative to your expectations in the period? Scott P. Anderson: Sure. New CEREC sales were up sequentially from the first quarter to the second quarter but down slightly to prior year, and so I would say below my expectation. But we've got our sales force very focused again now that we're through the trade-up program on new user sales, and as you know, have a very enticing promotion in place for our customers during the calendar year-end.

Okay. And were there any promotions running in the current period for new CEREC sales? R. Stephen Armstrong: The program kicked off beginning -- middle of the quarter. Scott P. Anderson: Yes, middle of the quarter is when the program started.

And then your rebate program you're referring to? Scott P. Anderson: Yes, but as you've got to remember, Scott, most of the decisions around large capital purchases at this time of year tend to happen in the November, December time period.

Okay, okay, all right. That's helpful. And then any initial feedback on if you think CEREC 4.0 is a driver of new placement sales, or is it more an attractive software upgrade for the current users? Scott P. Anderson: Yes, Scott, I talked about this last quarter as well. We see it as both, and the initial feedback we've gotten from our user base has been fantastic about the 4.0 software. So it makes -- it just adds modalities and productivity tools to the user base. And when that happens, those users tell their friends. And then the other big part is the part with our new users; it just makes the product easier to use out of the gate. So we see it, one, making our current users more productive and two, make it easier for new users, so we're very excited about Sirona's innovation on the software side.

Okay. And lastly, I know you're not exclusive with Sirona, obviously, on all of these categories. But I'm curious, are you still growing in the non-upgradable 2D pins and GALILEOS? Or are the upgradable pins and the 2D, 3D hybrid systems cannibalizing most of those segments now? Scott P. Anderson: No, we don't look at it as cannibalization. We look at it as a market, that having a variety of products help us grow the total market over time. So we do not look at 2D/3D as the cannibalization of the top end. Really, just making the pie bigger in terms of potential customers looking at the technology.

Okay. So you're still growing in those other imaging segments? Scott P. Anderson: Yes.

[Operator Instructions] The next question is from the line of Mike Hamilton with RBC Capital Markets. Michael A. Hamilton - RBC Wealth Management, Inc., Research Division: Wondering on the dental equipment, if you can make any comments on trends within the chair market. Scott P. Anderson: Sure, Mike. The chair market, we see continuing to grow modestly. One of the biggest things that has impacted that market over the last, really, 36 months has been that the larger projects, the new offices, the big remodels, slowed down dramatically. We see from our customer base that customers really are taking their time and very attracted to high quality products. So we have not seen customers looking to trade down to cheaper dental equipment. And we feel our position with A-dec as the leading manufacturer of dental chairs and units puts us in a very good spot as that market continues to strengthen over time.

There are no further questions at this time. I will turn it back over to management for any closing remarks. Scott P. Anderson: Alicia, thank you. I'd like to thank everyone for taking time on our call today and your interest in the company. And I'd like to, on behalf of Steven and I, wish everyone a safe and happy Thanksgiving.

Ladies and gentlemen, this does conclude the conference call. You may now disconnect, and thank you for your participation.