Welcome to Pall Corporation's conference call and webcast for the third quarter of fiscal 2012. Today's call is being recorded and simultaneously webcast. [Operator Instructions] We'd like to remind you that the company's third quarter press release is available at www.pall.com. Management's remarks this morning will include forward-looking statements. Please refer to Slide 2 or request a copy of the specific wording of this qualification of the company's remarks. Management also uses certain non-GAAP measures to assess the company's performance. Reconciliations of these measures to their GAAP counterparts are included in the slides at the end of the presentation. At this time, I will turn the call over to Mr. Larry Kingsley, Pall Corporation's President and CEO. Please go ahead, sir. Lawrence D. Kingsley: Good morning. Thank you for joining us. I'm here today with Lisa McDermott, our CFO; Frank Moschella, Corporate Controller; and Brent Jones, our new VP of Finance. As you've seen from our press release last night, it was a difficult third quarter as our results were impacted more than anticipated by the weak economy in the Eurozone and a self-inflicted disruption in our supply chain, which was caused by the previously announced global go-live of our new ERP system. This last phase was the big one, encompassing 2,800 users at 28 locations in the Americas, and it now links our systems worldwide. While the ERP system clearly will have significant long-term benefits for the company and our temporary transition issues are being resolved, the disruption in the quarter meant that shipments of consumables were delayed and we incurred substantial additional costs in what I'll call hyper care actions to mitigate the impact on our customers. While disappointing, we are fortunate that our customers have been understanding and supportive, and I believe we're making very good progress in filling the backorders. We expect to have caught up with the past due backlog by this August, which, as you know, is the beginning of our fiscal year. So most of the revenue we lost in Q3 will be made up in this fourth quarter. Unrelated to our ERP challenges, the macro environment is clearly softening. While the Americas order rate is showing signs of strengthening, we're highly cautious about the situation in Europe. We anticipate that the organic order rates in Europe will be better in Q4 and next year than what was reported in Q3 though. As we'll get into momentarily, we're taking appropriate cost actions that are already underway to mitigate the potential impact on our fiscal year '13 profitability. We'll walk through both the orders and the sales performance by market and by geography, and I'll assume that you'll have a number of questions. There's obviously a fair bit of noise in the Q3 results due to the enterprise system deployments, so it's important that we clearly distinguish the market versus self-inflicted performance to give you a sense as to how we see next year taking shape. And it's not all bad news. We have line of sight to the actions within our control to protect profitability even if the global economy stumbles hard. With that, as an overview, our remarks this morning will be on a continuing operations basis, which exclude the results of the Blood product line that we are divesting. So now to the quarter. We estimate that enterprise system challenges in the quarter cost us about 3 points of organic growth and about $0.10 per share in the quarter, both in terms of delayed sales and increased costs to mitigate the impact on customers. That's all on us, so-called self-inflicted, as I've said, temporary, not the economy or our end markets. Going to move on to Slide 6. Going into the third quarter, as we discussed on our last call, we expect that second half sales growth to slow compared with the strong first half, which we grew sales by 10%. That outlook reflected a number of anticipated headwinds, the softening economy in Europe and slower growth in emerging Asia, including China. We also said that we anticipate a tough mix in our Industrial segment for the remainder of the year, and all of this has proven to be the case. Third quarter sales from continuing operations were $658 million or 2.5% growth over last year in local currency. Again, our conversion cost us almost 3 points of organic growth. Consumables and BioPharm, Food & Bev, Aerospace, in particular, were most impacted. So within the 2.5% growth that we realized, while consumables were flat, system product sales increased 24%. So now I'm going to walk through a breakdown of both sales and orders by region and segment, get into a fair amount of detail. On Slide 7, on a geographic basis, sales in the Americas were down about 1.5%. Again the ERP conversion was centered here. Europe sales grew about 1%, with weakness in several key markets, which I'll cover in a moment. Asia had a good quarter overall, with sales growth of over 9%, with most major markets doing well and despite MicroE, which was down 8% organically. Relative to global segment performance, moving on to Slides 8 and 9, Life Sciences grew 4% while Industrial grew just over 1%. Consumable sales were up 1% in Life Sciences and down about 2% in Industrial. And if you look at Slide 8, in Life Sciences, Pharmaceutical consumable sales were up 9%, but we realized a double-digit decline in Lab instrumentation sales. The 3 issues contributed to the Lab decline: One is, that's where we experienced the slower book and turn activity; two, our largest channel destocked to some degree; and three, we didn't ship what we had the orders for, given the ERP issues. And while Food & Bev had an exceptionally strong systems quarter, $23 million in systems base sales declined 10%. A variety of factors explain this, including big organic comps that included of wine distribution business that we divested at the beginning of the year, reducing Food & Bev sales by about 4%, but the bigger contributor to the decline were the ERP implementation and the European markets slowing. Medical, within the Life Science segment, was down in the quarter 1.5%, reflecting pressure on hospital spending in Western countries. And on Slide 9, within Industrial, Microelectronics sales declined 8% as I said earlier. This is mainly due to continued softness in IC production. However, we're beginning to see signs of recovery with increased capital spending by the chip makers. Aerospace sales were up 1%. Commercial Aerospace sales were down 10%, while Military Aerospace sales increased about 13%. Sales in Process Technologies within Industrial, that's the Energy & Water process markets and Machinery & Equipment and OEM markets, increased almost 5% in the quarter. This was primarily driven by growth in the Energy markets. And Energy sales grew about 16% with good broad-based underlying market drivers. Muni Water sales were down 14% as capital spend for water plants remained weak with deferred spending and delayed project decision-making. So again, in total, strong system sales in the quarter offset by slow consumable sales, of which again, most of it's on us, our execution. And again we would have realized somewhere between 5% and 6% local currency growth had we not been hampered with the conversion challenges. I'm going to move on to orders on Slide 10. The performance in the quarter was a function of our execution to some degree, but it's really more about the macro environment. We also though faced very stiff 2011 orders comps when you look at the organic orders performance in total. Orders were down 9% compared to up almost 11% a year ago. This was driven largely by a 42% decline in systems compared to a 43% increase last year. We attribute some of the systems orders shortfall to timing, and this is not an unusual situation for capital projects. And we've already realized some of the Q3 planned orders in May. Consumable orders were down 2%, and that included a 3.5% growth in Life Sciences, but an 8% drop in Industrial. So now let's look at orders by region. Orders were down 20% in Europe, driven by systems, which were down 60%. Again, some of that’s tough comps, some is project delays. And we've already realized, or will shortly, some of that delayed activity, but most definitely it's macro influence as well. Conversely, orders in the Americas increased about 5%, about the same in consumables as in systems. Within Life Sciences, Medical orders, which are book and turn, increased 13%. BioPharm orders were up 20%. We saw exceptional demand for our new Octet and BLItz products, which came with the ForteBio acquisition. And orders decreased about 6% in Asia. And double-digit growth in Life Sciences was offset by a similar rate of decline in the larger industrial markets in Asia. And Microelectronics remained down, almost 15%. Now I'm going to walk through orders by segments. Within Industrial, Process Technologies was down about 15%, driven by a 46% decline in system orders and Energy & Water, with Machinery & Equipment flat. And as I said earlier Military Aerospace was down given the blanket order tough comps. Commercial Aerospace was up over 22%, with growth accelerating nicely. The MicroE orders were down 10%, reflecting continued weakness experienced over the last 4 quarters. However, we are seeing recovery, as I mentioned earlier. In May, we saw as well Microelectronic orders increased sequentially by 12%, so that's a May comment. Now on to Life Sciences, and we're on Slide 13. Both Medical and BioPharm were flat. Within BioPharm, consumables were up 10% and systems were down 60%. Laboratory instrumentation was down about 14% due to the slowing activity and the destocking of the channel that I just discussed earlier. Food & Bev was down 5% overall, with a little over 20% decline in systems orders and modest growth in consumables. So a lot of volatility in the order performance since the channel and customer base assesses and adjusts to new economic assumptions. I'll address our expectations for what the trend will look like as we exit the year in my summary remarks in a few minutes. And now I'll turn to Slide 14 and talk about the impact of the Blood business divestiture. As we previously stated, we entered into this transaction to sharpen our strategic focus and enable structuring the company for core growth. For fiscal year '12, this business is expected to generate about $230 million of revenue, approximately $60 million of operating profit and $0.38 of EPS without considering the fixed cost associated with operating the business. During the third quarter, generated $57 million in revenue and $0.09 in pro forma EPS, again unburdened. So Pall, on an all-in basis, that's including the Blood product lines, generated pro forma EPS of $0.70 and $0.72 last year. Now we expect to mitigate the earnings dilution associated with this transaction in '13, in fiscal year '13, through structural cost actions that are already underway. And we will also continue to supply Haemonetics, who acquired the business, with core filtration technology, which will offset some of the associated dilution as well. We announced the transaction in April. As you we remember, we expect to receive about $430 million after-tax, subject to transactional adjustments and those are in process. We continue to evaluate various alternatives for the transaction proceeds and for capital deployment in general, with a strong bias toward growth, particularly acquisitive growth. However, as we reflect on the environment we are facing, including the macro outlook, our balance sheet strength and free cash profile, the FX headwinds and asset pricing in the M&A market where sellers are still looking for top-of-market valuations, we are increasingly of a view that share repurchase may be a better alternative. So with that, I'm going to turn this over to Lisa now for her to discuss the financial performance in the quarter, and then I'll come back and we'll wrap up and take a forward-look.

Okay, thanks, Larry. Good morning, everyone. As a reminder, the numbers I'll be discussing below are on a continuing operations basis. And additionally, both the Life Sciences and Industrial results have been restated for all periods to reflect the change in the allocation of certain shared costs on a continuing operations basis. So let's start on Slide 15. I am going to give a high-level overview of the performance of each segment in 3 key areas: Gross margin, SG&A and operating margin. And I'll start with Industrial. Industrial gross margin came in at 45.4%, a 70 basis point decline from last year. And this was driven by unfavorable mix from the decline in MicroE and relative increase in the systems business sales, and this reduced margins by about 150 basis points and similar to what we saw in prior quarters. The decline in MicroE volume and some of the operations challenges in the quarter also resulted in absorption loss of about 100 bps. We did have favorable themes from previously implemented continuous improvement activities in manufacturing, which substantially overcame cost inflation and added about 150 bps to Industrial's gross margin. Price added about 30 basis points to margin as well, but this was offset by some transactional FX headwind, which I'll discuss in a moment. Industrial's SG&A increased by about $4.7 million or 4.5%, and that's 6% in local currency. And this is attributable to the allocation of shared costs primarily related to what Larry called hyper care costs, as well as continued emerging region investment. As Larry mentioned, we incurred considerably more cost than planned related to hyper care, and we expect some continuation of this in our fourth quarter. Segment profit of $39 million generated margin of 11.6%, which was down 220 basis points from last year. And as we've mentioned throughout this year, we are executing several restructuring initiatives that will drive down SG&A to improve the Industrial segment's leverage. Though a small portion of this savings were realized in the third quarter, we expect a considerable ramp-up in the fourth quarter and fiscal year 2013. Moving on to Life Sciences and Slide 16. Life Sciences gross margin increased by 70 basis points to 56.7%. Notable items were: One, favorable year-over-year comparison of some inventory recharges were recorded in last year's Q3, and this was favorable by about approximately 90 bps; the negative impact of transactional FX, most prominent in our Life Sciences business given the British pound euro exposure; and favorable pricing, which added about 40 bps, and this was offset by some mixed headwinds in the quarter. SG&A increased about $7.3 million or 8.7%, and this is 11% in local currency. Again, much of this increase relates to the same factors just discussed in Industrial's results related to the hyper care, as well as incremental SG&A related to the ForteBio acquisition. Segment profit was a little over $75 million, a decrease of 4.4% or 3% from local currency, with segment margins declining 150 basis points to 23.7%. Turning now to Slide 17, where we'll talk further about our euro risk. And on last quarter's call, we briefed you with respect to our FX profile. Our sales into the euro-currency countries comprise about 25% of total Pall sales. About 70% to 80% of those cost of goods are denominated in British pounds or U.S. dollars, mostly in pounds, primarily in Life Sciences. In our forecast at the beginning of the year, we included the U.S. dollar at about $1.35 and the British pound at about GBP 0.89 to the euro. When we provided our updated guidance in our Q2 call with the euro at 1.31 to the dollar and 0.83 to the pound, we estimated a second half gross profit headwind of about $3.5 million to $6.5 million compared to our original outlook, which is about $0.02 to $0.04 of earnings per share. We experienced this impact in the third quarter where we estimate gross margins were negatively impacted by about $3 million against our original forecast, which equates to about $0.02. Now on a year-over-year basis, there was about a $2.5 million headwind to gross profit, also about $0.02. And this is not to be confused with the translational impact to EPS, which was an additional $0.01 negative for a combined year-over-year impact of $0.03, i.e., that's transactional plus translational FX impact to earnings per share. Turning now to the fourth quarter, given the recent continued weakening of the euro versus the pound to about GBP 0.8 and the U.S. dollar to about $1.24, we expect year-over-year transactional headwinds to gross profit of $6 million to $8 million or $0.04 to $0.05 in our fourth quarter. Together with the impact of translation, a headwind of about $0.11 to $0.13 per share year-over-year. Compared to the rates used in our forecast and guidance, this represents a combined headwind of $0.04 to EPS in Q4. So to be clear, for the full year of fiscal year '12, the combined translational and transactional impact of FX is estimated to be $0.08 negative compared to forecast and $0.06 negative compared to fiscal year 2011. We are taking actions to mitigate our long euro exposure, and this includes hedging some forecasted transactions, as well as changing certain transactional flows to enhance natural hedging positions. Looking now at income taxes. The effective rate was 20.5% for the quarter compared to 35.6% last year. Last year's rate reflected a onetime impact or charge related to the tax costs associated with the establishment of the company's Asian headquarters. The effective tax rate in Q3 FY '11 without that was 26.8% and the substantial reduction as a function of our ongoing planning strategies. Wrapping up the discussion about the P&L, net earnings from continuing operations were $70.9 million or $0.60 per share. And this compares to $61.8 million or $0.52 per share last year. Looking at it on a pro forma basis, earnings per share as defined in our Appendix slides were $0.61 compared to $0.64. Bridging this decrease, operating profit decline was about $0.06, again, of which $0.02 is transactional FX and foreign currency translation decreased EPS by about $0.01, and this was partly offset by the improvement in the tax rate, which contributed about $0.04. Looking now at cash flow, and I'm on Slide 19. Operating cash flow on the 9 months was $326 million, which represents a 16% increase and this was primarily driven by inventory reduction. Committed capital has continued to dampen free cash flow generation, and continued progress in capital management is an ongoing priority and post-ERP capital spend will decline materially. And we did not repurchase any shares in the quarter. Our cash position stood at $536 million at the end of the quarter, and our net debt to net debt plus equity was 8.4%, and this compares to 9.1% as of the end of fiscal year '11. And we've used some excess cash to pay down debt. So with that, I will turn this back to Larry. Lawrence D. Kingsley: Okay, thanks, Lisa. As we discussed earlier, we believe we'll recover the Q3 miss related to the ERP implementation. Most importantly, we are entirely focused on serving our customers and flexing to meet their needs. The missed Q3 revenue that pushed Q4, as well as the costs associated with the hyper care that we've talked about, equated to about $0.10 of EPS in the quarter. The slowing macro environment will impact Q4 sales, and it will be difficult for us to achieve the previously stated full year estimate. So the equation is roughly as follows: One, we'll make up the third quarter miss; but two, slower orders in Europe; and three, FX will impact and will offset so that we will be about $0.10 short of the objective that we communicated during our Q2 earnings call. And if you remember, that was achieving full year performance at the midpoint of our originally stated EPS range of $3.07 to $3.32. This update assumes about $0.12 of FX impact, and that's, again, the transactional and translational combined in Q4 versus fiscal year '11. So that equates to $2.72 on a continuing operations basis. And I'm sure you're wondering how to model 2013 for us given all that we've thrown out in this call. Let me attempt to, at least, frame up how I'm thinking about next year. And this is an early rough look basically to base your math on. In terms of revenue expectations, I think low single-digit organic sales growth is realistic. On a regional basis, we expect increases in Asia and the Americas to more than offset a decline in Europe. And on every point of sales growth, so that's every point of organic sales growth, will yield about $0.06 of EPS. Additionally, our restructuring plans are ratcheting up as we speak, to both protect 2013, but also to properly structure the company for the future. We have most of our senior team now in place, and we have well-defined action plans. As such, we're targeting $100 million of structural cost actions over a multi-year period, of which more than 1/2 of that $100 million will take effect in fiscal year 2013. So given the above, from a pro forma basis beginning at $2.72 for this year, which excludes Blood, the math is very roughly as follows: We'll achieve about 35% incremental margin on the organic sales growth, again, that's the $0.06, the $0.06 EPS that I referred to on every organic sales dollar or sales point generated, plus the benefit of the restructuring that I just referred to. Now Lisa outlined our FX exposure, and I discussed how we intend to, and we discussed how to mitigate that, particularly the further dislocation. We'll quantify our planning assumptions next quarter, but you can do the math based on today's rates. So depending on how you model for the year-over-year sales growth that I just spoke to, that would set your foundation for 2013. Obviously, none of that math includes any EPS contribution from share repurchase as associated with the Blood business divestiture or otherwise. And we're not sure that it will be such a difficult economic environment, but we're planning for it. We're taking action now to perform well in spite of it. And we'll provide far more clarity in our year-end call next quarter when we provide fiscal year 2013 guidance, but I wanted to give you a sense for how to apply, again, your math, given our European exposure and the macro headlines. And I'll say again, we have our team in place, and we have a very capable balance sheet. Our business model is very resilient as our performance in previous times of economic stress had shown, it's not unaffected by macroeconomic trends, but the nondiscretionary nature of many of our sales and the ability, frankly, for us to continue to spec in product through this kind of environment is comforting. And it will continue to support a good growth opportunity, even in the softening global environment. So with that, we're going to open the call to your questions.

[Operator Instructions] Your first question comes from Richard Eastman with Robert W. Baird. Richard C. Eastman: Larry, just in the context of the systems business and the orders number that we saw in the quarter, the orders declined 42% on a consolidated basis between segments. Can I just ask, within that orders number and within your outlook for '13, what's -- is there any self-inflicted -- are we passing on any business in the systems area? And are we attempting to maybe wean ourselves off of the low-profit sales growth that systems has contributed over the last couple years? Lawrence D. Kingsley: Rick, there is a little bit of that. But when you look at the performance and you're thinking about organic orders as it relates to systems, as referenced in the quarter, it's a fairly small contribution to that delta. We are making decisions around which unprofitable, frankly, in non-consumables generating systems opportunities, particularly on the Industrial side, that no longer makes sense for us to entertain. Against the numbers that we posted in the quarter, it's a fairly small contributor. I think there's a lot of noise in the numbers as we can all see. Now there is another self-inflicted element to this in terms of, frankly, sales folks holding customers’ hands through a go-live process. And I think some of the orders number that you see in the quarter really reflects some of the distraction. That's not lost, it's business that, I think, again, we'll see placed over the fourth quarter here and into the first. And in fact, in May we saw some of those systems projects come in already during the last month. Richard C. Eastman: Yes. So against the total low single-digit maybe thought process or assumption for fiscal '13, is it -- is this growth rate still going to be skewed around that consolidated number as systems would still be the bigger opportunity? And I think of housing as in the context of systems. Lawrence D. Kingsley: Okay. Well, look, I think that you got to take the perturbations of systems performance quarter-to-quarter out and talk about so-called base or consumables. And as we head into next year – now, and again, we're pre-planning process, but we've spent a fair amount of time given the nature of the situation at hand, it still supports a base growth opportunity next year in Asia of high single digit, if not double digit. The Americas, I think indicative of what we saw exiting the third quarter, nice acceleration in some of the segments. And as I mentioned in the prepared remarks, we're seeing MicroE tick up pretty nicely on a sequential basis and forward-looking indicators there are quite strong. Good news is when you think about mix as we head into next year, frankly, our 2 strongest and highest margin businesses, that being MicroE and BioPharm, basically have pretty decent forward-looking indicators at this point. So it is a very dynamic time, Rick. And I wouldn't want to steer you specifically to modeling systems organic orders performance as we head into 2013, but there is -- frankly, there's some sanity in how we've done our analysis in looking at both base and systems that still provides a fair amount of, I think, comfort in at least the low single-digit organic opportunity next year. Richard C. Eastman: Okay, and then just a real quick characterization. The $100 million of restructuring, and I know that's multi-year, would it be safe to apply the stranded overhead Blood percent of that $100 million savings, dollar amount, to the Life Sciences business? And then consequently the balance, is there more of a targeted effort on the Industrial P&L? Lawrence D. Kingsley: The answer is the Blood overhead savings are assumed within the $100 million. We're still working this. In terms of how we deal with the fixed costs absorption, it will be applied to both segments, because a good chunk of this is the corporate fixed costs that should be reconciled against both going forward. And we'll provide you with clear modeling as we give you the fiscal year '13 guidance by segment.

Your next question comes from Jon Groberg with Macquarie Capital. Jonathan P. Groberg: So one, if I can, just clarify a little bit on the comments you're making about BioPharm outlook. I know in Europe, in particular, that's where you're struck and just trying to understand the comments around Europe and your comments around that business. So can you maybe just talk about -- I recognize that these products go around the world, but can you maybe talk about the BioPharm business in Europe and kind of what happened in the quarter and what you're expecting for the year? Lawrence D. Kingsley: Sure. Again, I wouldn't try and draw too much of a trend line off of the quarter given the noise that I just spoke to. If you look at BioPharm in Europe, it was actually more influenced by a particular customer year-over-year comp that represented essentially kind of all the delta between what has been fairly typical strong European BioPharm, both orders and sales performance, versus what we witnessed in the quarter. So one customer, who was divesting kind of their demand rates, I don't want to get too more specific than that, but it's a very large global customer that we do quite a bit of business with. We haven't lost any share with them by any means, it's just a matter of how they're thinking about adjusting their needs. When you level that out or when you smooth that out, your comments, just to emphasize them, because they're important, are that all of these European or American BioPharm customers are global. So regional macro issues, they have some impact on any of these folks. But it's really a global market that our customers are selling into and, frankly, some of their fastest growth will continue to be in the emerging countries around the world for obvious reason. So I think that, without speaking specifically to what we think Q3, 4 and next year look like for BioPharm, you get to a consumables assumption still pretty much in line with what we performed over the last couple of years, which is a very, very strong high-single, if not double-digit organic kind of pattern. Jonathan P. Groberg: That was going to kind of be my question because historically, I know that the long-term trend is good, but historically we've seen periods of time where there has been pretty big build-out, and you see really good growth in this business for a few years. And then actually it's going to be weak for like a year and then it can be a bit more cyclical. So I was just curious of what you're seeing out there. I was just trying to put in context what you’re saying about Europe versus your outlook for the year. So you're not seeing anything currently in terms of the customers that you deal with that would suggest that we're in kind of a broader slowdown for that -- for investment in that space right now? Lawrence D. Kingsley: Well, there's a couple of things to think about. So the majority of our business is in the actual processing, the manufacturing of the various drugs. And what we tend to drive most of our revenue from is the ongoing consumables associated with producing them. So that doesn't cycle so heavily. What can cycle, and is proving to cycle right now to a much larger degree, is the Lab instrumentation purchases. And you've seen and heard about some of that from some of the others that have reported on a calendar fiscal year basis as to how they're seeing, either by way of federal subsidy funding declines and/or research spending declines, the relatively slow sales right now from instrumentation purchases associated with research. We spoke to that a minute -- in our prepared remarks ago with respect to our instrumentation sales also, we're relatively slow in the quarter. Now again, we're seeing evidence of that improving as we look at May. But if I had to draw a comment relative to cyclicality in the Life Science space and where the more pronounced impact will be -- it's likely to be a research versus the production. Jonathan P. Groberg: Okay, I think that's a fair comment. And then if I can, I think there's a lot of expectation going into quarter around this restructuring and obviously, there wasn't much in the press -- there was nothing in the press release, you kind of talked about in the call. And can you maybe just provide more detail where that restructuring is occurring in that $50 million for '13? I mean, can we assume that’s a full year number so that we can just tax test adjust and get an EPS kind of impact for the year? I'm just trying to understand how -- kind of where that's current -- how we should think about it. Lawrence D. Kingsley: Yes, there's a couple of things. So I'll repeat what I said first. And that is we have a plan that has line of sight to $100 million of structural cost reductions. So this is not temporary T&E spend reductions, things of the sort. This is structural actions that we'll be taking over a multi-year period. And we have line of sight to more than half of that, so more than $50 million of P&L help [ph] that comes out pro forma in 2013. And again, we're already getting started with that. In terms of how it breaks out over the multi-year period, it's roughly 30% in operations, that's footprint-associated and about 70% SG&A, where we think we've got plenty of opportunity and that comes down to combinations of back office, IT, finance, HR, et cetera, but also other support functions where, you know, I think as we properly structure the company for the future, we can lean it out, we can delayer it, we are already doing so. And we think that, that kind of a restructuring opportunity is very realistic and very achievable. Jonathan P. Groberg: Okay, and if I -- sorry, if I could just, one clarification, Lisa, and then we can take about this offline as well, but trying to make sense of all the FX comments. Can you just distinctly kind of say again on a year-over-year basis what you expect the total FX impact to be in the fourth quarter? I just -- it was kind of unclear to me. Lawrence D. Kingsley: Yes, I'm not sure I can say it distinctly. You have to get to kind work through the components but...

In the fourth quarter... Jonathan P. Groberg: I mean just given where rates are today, what reason.

In the fourth quarter where rates are today year-over-year combined, so there’s what we call transactional, which is kind of the above the line P&L hit, as well as the translational piece, which results from consolidating our euro-dominated subsidiaries into our financial statements year-over-year about $0.11. Jonathan P. Groberg: Okay. That makes sense. I thought I’d heard a lower number, but that makes sense. Okay. Lawrence D. Kingsley: Yes, so it's $0.11 or better. And, let me just make one more comment with respect to FX, because it's not as though we're just rolling over and taken a beating here in FX. There's a number of things that we're looking at strategically, structurally and within our fiscal tool capability set here to make sure that we don't expose ourselves further. And that comes down to how we think about supply chain and how our cost of goods is denominated. Frankly there's no reason long term why we need to have the dislocation issue, that is the pound versus the euro, in terms of how it impacts our cost of goods, so that's underway. And we'll -- it's not an easy fix, but we'll get it fixed. I think a good chunk of it in 2013. We are looking at various things, and Lisa spoke to them briefly, around how we can basically hedge forecasted transactions. But also in some cases, we've got just the transactions themselves denominated in currencies i.e., we've got customer contracts in British pounds for customers that don't need to be sold in British pounds. So that's the stuff that we can fix either way to make sure that we end up with a more balanced and appropriately hedged exposure to the currency if it does continue to dislocate.

Your next question comes from Jeff Zekauskas with JPMorgan. Jeffrey J. Zekauskas: Was there an asset sale in the quarter, and did you book a gain from it?

No. There's no asset sale on the quarter. Maybe what you're thinking of is what we reflected on our balance sheet as assets held for sale related to the Blood sale. Jeffrey J. Zekauskas: I was looking at the proceeds from sale of assets of $25.6 million. It seems to be a little bit higher than, I think, you booked $19 in change in the first quarter. And so I was wondering if there was an income statement from that?

No. No. That just relates to some non-qualified pension plan assets that are on our balance sheet, so it's kind of a flip and turn of maturity and reinvesting. Jeffrey J. Zekauskas: Okay, And I think the tax rate or the adjusted tax rate in the quarter was about 21%. Can you talk about that and can you talk about your ongoing tax rate?

Well, the ongoing tax rate, as I said, will be slightly lower for the fiscal year than we had anticipated. So slightly south of the 24.5% we had forecast. The lower rate in the quarter just represented a little bit of a different position on our foreign cash, especially as it relates now to the cash that we expect to receive in the U.S. related to the Blood transaction. So that really presents the full year lowering of the rate background. Jeffrey J. Zekauskas: And lastly, are there charges that will -- are there charges that you have to take to pull out your $100 million in costs? And if there are, what's the rough magnitude of that? And secondly, why did the SAP implementation go so poorly, that is, what happened that you didn't expect?

So I'll take your first question. And yes, there are charges related to pulling out the $100 million, and right now we're estimating that they're north of $60 million and that we will start to recognize significant portions of that consistent with Larry's remarks that we are already executing in this quarter, meaning the fourth quarter. I think Larry would like to answer the question on the SAP implementation. Lawrence D. Kingsley: Let me try and characterize it. Understand that in the brand or scheme of how major ERP implementations are handled and how radically wrong they can go, this is by no means a disaster. What we're talking about here is the equivalent of about 3 days of missed shipments. Now in reality, what it was is several weeks, and we're still kind of ramping up to full speed but almost there of missed signals to the supply chain. And we've got a very complex, vertically integrated supply chain internally and then also a very broad set of suppliers externally. Again, more complex than it needs to be that but not something that's going to get fixed easily overnight. So the question is: Why didn't we foresee this? Why didn't we deal with it? Why didn't we better prepare more inventory? All those good things. We went live in some of the satellite operations as you may be aware over the last couple of years, and we did learn from that, and we applied all that learning. This one really was the -- as I mentioned, this is kind of the Big Bang. It tied everything together, and largely we executed quite well. We brought the people from the other regions in, so that we had not just the benefit of their documented learning, but them to be part of the go-live. We did all the appropriate training and things of the sort. But to give you a sense for what we're dealing with, the company has had a history of basically being kind of a workaround culture, not very strong with respect to operational process and procedure. So we're not just trying to push a button and go live with a new IT system here. We're trying to really retrain a company to think end to end, so that we can take full advantage of what a system of this capability brings and allow us to deal with all of the structural issues we have within operations and supply chain. What I would tell you is these things never are perfect. This one was not nearly as good as what I had anticipated. I think that we've now got the benefit of all the hindsight. There's no surprises of anything that we didn't understand. We've handheld our customers very appropriately. We're rebuilding the appropriate inventory position in that vertically integrated supply chain to make sure that we've got the appropriate stock in place. And all that, frankly, is against a backdrop of an incredibly dynamic and very rapidly changing mix environment given what's going on in the economy simultaneously. So it's kind of the trifecta here of internal issues. A couple of them combined with the macroeconomic very dynamic environment that you see the bloody results for. So the good news is, I think, we're on our way out. We've got an organization that's embraced this. It's going to be a great enabler for us, a very critical step for us to take -- to go to move forward as a company and mature. But it was painful for the last several [ph] weeks.

Your next question comes from Jon Wood with Jefferies.

So Larry or Lisa, did you give the FX impact in a vacuum? I realize you're looking at various things in sourcing, in finance. But what is the FX impact in 2013 at this point, just assuming a static model? Lawrence D. Kingsley: We didn't specifically quantify it. We think we gave you a fair amount of visibility as to how to think about the transactional impact given our exposure. So we talked about -- big picture, about 40% of our revenue is in total in Europe, 25% of that revenue -- of the company's revenue is euro-denominated. And of that, about 80% has a misalignment in terms of costs, principally cost of goods borne in a different currency, either the dollar or the pound.

And mostly the pound. Lawrence D. Kingsley: And mostly the pound. And so we gave you, I think, enough that you can kind of get a picture as to what that looks like on today's FX for those respective currencies going into next year. And then on the translational piece, it's -- again, you can kind of through the experience of what we've seen over the last couple of quarters model out 2013. We're not trying to make this difficult for you, but what we don't want to do is get ahead of ourselves and thinking about our available actions. So when we talk next quarter, we’ll include more specificity as to what 2013 looks like on a modeled basis where we've got operational initiatives in place and where we've got known capability from a financial hedging perspective in place. And then you can have, I think, an easier time at modeling it. But it's not doomsday by any means with the available tools that we have at this point, not bad at all.

Okay, so I want to make sure I'm thinking about the pieces correctly. So your basis, $2.72, you've got, let's call it, $0.18 of organic contribution. You've got $0.30 of restructuring contributions. So you're basically starting at $3.20 or so without the impact of FX and without the impact of share buyback. Is that the right way to think about it? Lawrence D. Kingsley: I could do the math that way, too, exactly.

Okay. So Larry, and totally understand your comments about share repurchases, but if you were to pursue that avenue with the proceeds, how would that play out over the next, let's call it, 2 quarters, meaning how fast could you do it with that kind of -- that $400-plus million of net proceeds in order to, first, to give us some sense of how the accretion impact would play out for '13? Lawrence D. Kingsley: I think it's been the company's policy to not really comment on the contemporaneously purchased or potentially purchased shares in the period, certainly not from a forward-looking perspective. But I don't know, Lisa?

Yes, I mean I can comment on how fast we could do it if we so chose. We could pretty quickly within, let's say, a month or less execute to that level of buyback given kind of the rules around our annual run rate. But again, to Larry's comment, as a matter of policy, we don't comment on current activity contemporaneously. We comment after the buybacks are completed.

Okay, great. And then one last one. Can you give the -- what was the ForteBio contribution in the biotech piece for the quarter, if you're going to give revenue and also OP would be great?

Well, I'll say this. It added about a point of sales on an all-in basis for Pall. And it was about $0.01 dilutive in the quarter. Lawrence D. Kingsley: And we still have within our assumptions that -- we have talked about that in 2013 that becomes accretive, everything is going very well with the integration of the acquisition, the product lines are selling exceptionally well, and so we do see it as a nice kind of albeit small, a nice acquisition for the BioPharm group.

Your next question comes from Hamzah Mazari with Crédit Suisse.

Larry, maybe if you could just talk about the $100 million structural cost stakeout, how complicated is that process? What's your level of confidence in taking those costs out? I know you said most of that is SG&A. If you could give some color there. Lawrence D. Kingsley: My confidence is extremely high. It's not all that complicated. And it's something that this organization’s learning how to do, and we're already underway with, Hamzah. And again, it would come back to organizational structure in place, largely in place, that we put in place over the last couple of months. So management who now have action plans and who now need to execute to those agreed plans.

And is it fair to say that this ERP issue is behind you now? Lawrence D. Kingsley: The only thing that's not behind us, so let me put it this way, is we're still catching up. We're demonstrating to ourselves that we are catching up nicely. We're reducing our past due backlog. The supply chain signaling is a very complex task given the nature of how we are structured. And that's still got bits and pieces associated with it, but 99% complete. And I think, again, we'll demonstrate that as we finish the year.

And just to follow up on the cost stakeout. The $50 million is what you expect to benefit in 2013 fiscal year or is that a run rate number? Lawrence D. Kingsley: It's pro forma number. And it's -- I hope it's a little more than that.

And just lastly -- sorry.

And yes, it is fiscal '13, Hamzah.

Okay. And just lastly for me. With the use of proceeds from blood filtration, are you going to buy back stock? I just -- I don't think it was a very clear to me whether you guys are officially going to use those proceeds to buy back stock, or is that a decision that you're still going to make? Lawrence D. Kingsley: I think we've made the comments that we're going to make, Hamzah. The way -- let me come back to capital allocation strategy, let's forget about the Blood business proceeds, but we absolutely have a fantastic balance sheet, as you are well aware. We've got acquisition processes now that are coming into place. We've got people that are joining the company, that are great business development folks, so we're building a pipeline or a funnel. However, when we look at the very short term, particularly if the economic data continues to demonstrate volatility, what tends to happen is that particularly private sellers’ expectations, costs or prices, I should say, for their businesses, tend to lag the reality of what's happening in the economic environment. And what we're not going to do is pay top-of-market prices through acquisitions. Frankly, it doesn't make any sense. We've got plenty of balance sheet capability to do both. Both repurchase the shares if we decide to do that and aggressively acquire. So I think, I know for a fact that you'll see us be very thoughtful, very disciplined in our capital allocation thinking considering both the short term and the growth plans as we go forward.

Your next question comes from Brian Drab with William Blair.

My question lasted all the way up until that last one. So it always goes that way. One thing I wanted to ask was, Larry, the $0.10 shortfall related to ERP implementation, would that break down maybe roughly $0.02 or $0.03 related to the revenue shortfall and about $0.07 related to the incremental hyper care expenses? Lawrence D. Kingsley: It's probably closer to the inverse of that.

Is that right? Okay. Lawrence D. Kingsley: Yes.

Yes.

Okay, that's helpful. And then Lisa, just one clarification point. Sorry to ask something further on the FX. But when you say $0.08 negative compared with forecast, I just want to know, is that your forecast compared to your forecast at the beginning of the year, or your forecast that you gave us at the end of the second quarter?

From the beginning of the year. So our original guidance of $3.07 to $3.32 and the rates that were assumed in that guidance.

Okay. And then can you just give a rough breakdown of Europe sales by end market in the period? Is BioPharma, or your Life Sciences still, the majority of that or was it in the most recent period?

Well, for Europe, I -- so do you -- are you talking about in terms of growth or are you talking about in terms of pie chart?

Just total revenue. How did that mix look in the quarter?

Well, total revenue was around $260 million in Europe. As we said, it was up about 1%. If you break it down by mix, as always the greater proportion is Life Sciences to Industrial. And within Europe, we did see a flat result for BioPharm. Food & Beverage, as Larry mentioned, had some challenges and was down double digit; while Process Technologies, mostly in the emerging markets, which we account for in Europe, were up mid-single digits. Aerospace performed very well, up low-double digits. And MicroE, which is very small in Europe, was down just like the Rest of the World pretty much, high single, low double digit. Does that answer your question?

Yes, that's great. And I'll follow up with you more later today.

Your next question comes from Nick with BB&T Capital Markets. Nicholas V. Prendergast: So most of my questions have already been answered at this point. So I guess, I just got a couple upper-level queries for you guys. Regarding the ERP disruption, can you just maybe explain the mechanics of a typical transaction and how it got disrupted, just to make sure I'm understanding it properly? Lawrence D. Kingsley: There's lots of things that can go wrong in an ERP implementation. You tend to run into data migration issues. So when you're porting information from old system to new system, not all the information gets properly handheld through that and you can miss data, which, in fact, that did happen in this case to some degree. You tend to try and use old people process to manage new systems. And in our case, as I mentioned earlier, we've got a lot of -- or we had a lot of tribal knowledge-based workaround types of processes. And the new system frankly forces a rigor much more standard work process kind of mentality to how things get done. So a lot of the miss was people not understanding the system at very early stages and not acting appropriately or people thinking they had acted and frankly not having done so. Then you get into our vertically integrated supply chain and the signaling for purchasing and that's where it gets frankly pretty hairy and complicated, and that's where we went through several weeks or a few weeks, at least, of not having the right buy queues by way of the system and the people interface to the system, such that it takes a while for that kind of that deficit and material supply to work its way back through to the point of finished goods that are available for shipment. So again, we can quantify everything in the quarter right down to customer and product and site and past due total, and all that obviously has been done. And this hyper care [ph] thing that we spoke to is really a matter of making sure that our customers all over the world understand our position, our ability to respond to recover, and we're in the process of doing so. And we're making good, very good progress at this point. Nicholas V. Prendergast: Okay, thank you, that's helpful. And maybe to follow up on that hyper care, is that just the extra handholding, is that why the SG&A has gone up on that? Lawrence D. Kingsley: It's everything you can imagine in terms of double teaming people to get things done, experienced people with others, it's people that have been brought in who are systems experts for periods of time to help with training. It's everybody you can imagine, including yours truly, going to see customers and making sure that things are okay. It's a lot off transoceanic flights for Pall employees around the world. It's everything that's necessary to properly care for customer when you're going through something like this. Nicholas V. Prendergast: Understood. And I guess one more thing on the M&A front. It sounds like there's a couple of options on the table what to do with the proceeds of this sale to Haemonetics. You're talking about possibly seller expectations out there, and they're possibly high. Is it safe to assume that those -- the valuations out there are dramatically greater than what Pall is at currently? Lawrence D. Kingsley: In some cases.

Thank you. I would now like to turn the conference back to Mr. Kingsley for closing remarks. Lawrence D. Kingsley: Well, let me just say that, obviously, this was a messy quarter, and I think I already described in one of the peer reports this morning as an ugly quarter. I would concur. Not proud of it in any way. But let's put it in perspective. What we did accomplish in the quarter was take a very major step forward in terms of preparing our company for the future and to grow, both organically and acquisitively. That's really the internal element of what we worked through in the quarter, and a little bit of work that we still got ahead of us in the fourth quarter. Now in terms of the environment, which is kind of unrelated but an important subject for us to consider, given the kind of where we report off calendar fiscal year, now we did see a fairly dynamic order pattern in the quarter. Again, I wouldn't draw trend lines out of the order pattern that we saw in the quarter. We do think that based on our May experience rate and what we have seen this last month, plus the history and how we think about how the breadth of the business plays against the cycle, and evidence of even sequential improvement in a couple of the businesses right now that are destined for that. That the assumptions that we provided in the call are fairly realistic. And beyond that, we've already got those action plans in place. We're prepared, we're underway with what the appropriate cost mitigation set of things to do, any good company should be doing, we're under way with that right now. So again, I think that we're in good shape for entering what will undoubtedly be a dynamic 2013. I'd like to thank you for joining. I'm sure we'll be speaking with many of you in the after calls and through the course of the quarter. And we'll look forward to seeing you -- many of you as well. With that, we'll wrap, operator.

Thank you. This concludes the conference. You may now disconnect.