Welcome to Pall Corporation's Conference Call and Webcast for the First Quarter of Fiscal 2014. Today's call is being recorded and simultaneously webcast. [Operator Instructions] We'd like to remind you that the company's first quarter press release is available at www.pall.com. Again, that is www.pall.com. Management's remarks this morning will include forward-looking statements. Please refer to the 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 Chairman and CEO. Please go ahead, sir. Lawrence D. Kingsley: Good morning. Thank you, Stephanie. As is typical, all of our remarks this morning will be made on a continuing operations basis. I'm here today with Akhil Johri, our CFO; and Brent Jones, our VP of finance and Treasurer. We appreciate your joining us on this holiday-shortened week. And in that spirit, we plan to be efficient with the call this morning. I'll begin with our assessment of global markets that we serve, followed by a recap of the quarter and some concluding remarks before Q&A. I expect that most of you have had a chance to see our press release this morning and I'll summarize what you probably concluded. We executed an acceptable first quarter, consistent with our macro expectations and just a touch ahead of what we told you at our Investor Day last month. We didn't anticipate great organic growth for the first half of the year, but planned for solid execution to achieve reasonable performance. As we anticipated, industrial capacity expansion-related spend continues to be slow. As is typical, we see a broad range of end market performance across the combination of our Life Sciences and Industrial businesses. On the Life Sciences side, BioPharm continues to outperform the broad economy, while Medical and Food & Beverage are growing a little faster than GDP. Our Industrial end markets are still mixed with some of the consumer product end markets that we enable outperforming GDP while mining, primary metals and chemicals applications are still lagging. Our diverse end market exposure continues to work through the cycle to our favor, though. And some of our slower end markets are showing signs of cyclical improvement. All-in, we're cautiously optimistic based upon what we're seeing with general market activity. And our consumables business model serves us well in a slow-growth, weak industrial capital investment environment like the present. In terms of sales this quarter, Europe continued to grow and Asia continues to improve. The Americas was softer for shipments, but orders were strong. Overall, the mature country economies within all 3 regions, broadly defined, showed greater sales strength than the emerging world. And turning to the segments. Life Sciences, again, performed well, all up 7% in the quarter. And Industrial, MicroE and Aerospace grew nicely while the Process Technologies end markets, which includes Water and Fuels & Chemicals, was below expectations. However, the Industrial business, as a whole, is beginning to show the momentum in orders. Given these trends, we remain confident in our plan for FY '14. And relative to operations, we continue to build on strong progress from last year. Our team has again demonstrated their ability to operate, manage the impact of production volume and mix as it impacts absorption and achieve productivity, all while driving systemic improvements. So turning to Slide 5 for reference. Sales grew 2%, excluding FX. Again, the Life Sciences segment performed nicely, as I just mentioned. But total company sales growth was impacted by the Process Technologies' weakness. Gross margin declined 40 basis points to 51.7%, largely driven by mix, not only systems versus consumables but also product mix within consumables. SG&A, as a percent of sales, was down 30 basis points in the quarter while R&D spend was up 10 basis points. All-in, operating margin was 17.1%, down slightly from a year ago. The underlying tax rate in the quarter was about 22%, compared to about 23% in Q1 of FY '13. Pro forma earnings per share in the quarter were $0.70, an increase of $0.02 compared to last year. And bridging this increase, operating profit contributed $0.01, translational FX was a $0.02 headwind and our lower tax rate share count reduction and other items combined contributed $0.03. So on sales growth of 2%, EPS in the quarter grew about 6%, excluding the impact of translational FX. Now I'm going to hand it over to Akhil who'll go through the results in more detail. Akhil?

Thanks, Larry. I'm on Slide 6. As noted, I will talk to the year-over-year changes, excluding FX. In total, Life Sciences sales grew by 7% in the quarter while Industrial declined by 3%. Consumables, which were about 87% of sales in the quarter, grew 7% in Life Sciences and decreased 5% in Industrial. Systems were up 5% in total. 8% growth in Industrial more than offset a slight decline in Life Sciences. Turning to Slide 7 with some details on our Life Sciences segment. BioPharm consumable sales grew 5%. New products single-use systems and ForteBio performed well. Medistad, our recent bolt-on acquisition in Europe, contributed about 80 basis points of growth. Medical consumables increased 17% in total and 7% excluding the impact of Medistad. Consumable sales in Food & Beverage were up 6%, reflecting an improvement from past strengths. Life Sciences systems sales were down slightly in the quarter. On the orders side. Consumables increased 4% in the quarter with contributions from all markets. And in spite of tough compares and adverse customer timing in the BioPharm space, systems orders increased 45%. Q1 gross margins decreased 160 basis points to 57.1%. This primarily reflects the impact of our bolt-on acquisition in the quarter. It also reflects unfavorable product line mix within the 3 markets. SG&A decreased 80 basis points and R&D spend was down about 40 basis points. These savings partially offset the gross margin decline, resulting in segment margin of 22.9% compared to 23.3% last year. Turning to the Industrial segment on Slide 8. Process consumables sales were down 15% in the quarter. This primarily reflects weakness in Fuels & Chemicals and Machinery & Equipment or M&E applications. Fuels & Chemicals showed weakness in the emerging markets, including China, Venezuela and Russia. And M&E was impacted by continuing global weakness in the mining mobile OEM sector. Aerospace consumables sales were up 5% on a near double-digit increase in commercial sales. Military sales were flat, mainly due to some large helicopter programs sales in Q1 of fiscal '13 that did not repeat this year. MicroE returned to growth in the quarter with consumables sales up 9%, partially driven by some early orders related to upcoming manufacturing line moves in Japan. Systems sales increased 8% in the quarter, primarily from timing of capital projects in the Fuels & Chemicals area. Regarding orders. Consumables were up 6% in the quarter. Growth in Microelectronics and Military Aerospace was strong, partially offset by weakness in Process Technologies. Systems orders were up slightly. Q1 gross margin increased by 10 basis points to 46.2% in spite of adverse mix from growth in systems sales and a decline in consumables. SG&A was lower by about 50 basis points, reflecting the benefit of our cost improvement initiatives. R&D increased by 40 basis points or about $1 million. All-in, segment margin for the quarter improved by 10 basis points to 16.2%. Turning to Slide 9. Operating cash flow in the quarter was $86 million compared to $39 million last year. This improvement was driven by both improved working capital management in fiscal '14, as well as one-time tax payments associated with the sale of our blood product line and for the resolution of certain tax matters that reduced operating cash flow in Q1 of fiscal '13. CapEx was $19 million for free cash flow of $67 million or 94% of reported net income for the quarter. This puts us solidly on track to achieve the 100% free cash flow conversion ratio for the full year. Significant uses of cash during the quarter included $28 million of dividend payments and $125 million of share repurchase. Finally, on the liquidity front. Our cash position stood at about $968 million as of October 31. Our cash position, net of debt, was $240 million, compared to $299 million as of the end of fiscal '13. Although this quarter represents an improvement on the cash conversion side, we are just at the beginning stages of optimizing our working capital and cash generation. With that, let me turn it back to Larry. Lawrence D. Kingsley: Thanks, Akhil. So my assessment of the quarter is as follows: we're operating well in the face of continued uncertainty and we are on plan for the year. And we're also continuing to reposition the company and drive systemic improvement, all the ingredients that we've spoken specifically to you about as necessary to build sustainable value. In particular, we continue to focus on income statement fixed cost leverage and balance sheet deployment. And first, regarding the income statement leverage. We've made good progress but have more to do to size and allocate our fixed cost structure more appropriately to our business model. As promised, we're on track to deliver $25 million in hard savings this fiscal year and for '15, respectively, on top of the $50 million, which we achieved in FY '13. About half of the FY '14 and FY '15 savings will be in operations and the balance in G&A. And beyond the stated indirect fixed cost savings that we are achieving in operations, the Pall Enterprise System is enabling process efficiency improvements in our strategic sourcing initiatives. On the G&A side, our committed cost savings combined with modest sales leverage assumptions should improve our SG&A structure by about 100 bps annually for the next several years. Not only will these actions drive improvement in our operating margins, but will also ensure the incremental margins of 35% to 40% that were targeted. And finally, the balance sheet deployment. We're well aware of our underleveraged balance sheet. We increased our return to capital -- return of capital this year and expect to return 100% of net income to shareholders in the form of dividends and share repurchases. As you know, the M&A market is rich from a valuation perspective right now. We're not only committed to being good stewards of our shareholders' current capital, but also stewards of the best opportunities to invest for future return. As such, we will carefully consider the long-term strategic value of any potential transaction versus its shorter-term financial merits and we will be sure to balance these sometimes competing considerations appropriately. In summary, the economic backdrop hasn't changed dramatically. While there are some encouraging new order signs, we're not drawing a new trend line based on them yet. However, when you combine the assumption of slightly more buoyant orders with what we do have on our control, that is operational effectiveness and fixed cost improvement initiatives, most of which are underway, I remain confident in our outlook for low to mid-single-digit top line growth that delivers 9% to 15% pro forma EPS growth for the year. And so with that, we'll open the lines for Q&A, Stephanie.

[Operator Instructions] Your first question comes from the line of Brian Drab with William Blair.

First question is just on the systems sales. You spent about a year trimming the low-margin systems sales, but you really haven't highlighted that as a headwind on the year-over-year systems sales result this quarter. Was that a headwind on the year-over-year comparison? And I would've guessed that those cuts trimmed 5-plus points from that year-over-year change in systems sales. Lawrence D. Kingsley: Well, certainly the systems sales content that Akhil spoke to, about 13% of total sales, is where we had pegged it -- we expected it to be. In terms of headwind and how it impacts margin, there's a little bit of margin mix impact in terms of systems versus consumables in our total results. But in reality, the systems profitability for the quarter was pretty strong, up substantially from what we would typically see. So I think we're seeing the benefits of our reshaping of the systems business. Now I do anticipate in quarters to come that we'll not always see great margins out of systems. There are still a broader range -- there is a broader range of systems margins and we like the consumable content ratio more importantly than the initial system margin, as you know, and, therefore, I think, we'll see it balance around a tad, but generally improving.

Okay. And then looking at the orders this quarter, 5% growth in Industrial, 7% growth in Life Sciences, as we're looking forward to next quarter and building our models, would revenue growth at that type of level, in the 5% to 7% range, start to look attainable here in the near term? Lawrence D. Kingsley: I think there's good news and maybe not quite as good news element to the answer. First, some of the Industrial orders growth rate is off easier compares. So while book-to-bill swings in the right direction, we're certainly seeing the bottom of the trough in total and we're seeing, in some cases, within Industrial, some very positive order signs, I don't think you start to trend sales short term off of those kinds of organic assumptions. I still think you stick with what our annual guidance statement was, which is low to mid-single-digit in total. On the Life Science side, though, it's off tough compares. And so what you're seeing there is pretty good sustainable performance year-over-year built off a strong foundation. But anyway, back to the total, I'd say stick to the same comment that you've heard us speak to year-to-date.

And just a reminder, Brian, I think we have talked about this before, but we did -- we have probably 1 more quarter off the SAP-related impact in fiscal '13 where we were still running down or working down the back orders that had got built up in fiscal '13. So that will certainly dampen a little bit of the impact. And I would say the other thing is, yes, the orders are good and we certainly feel good about that in terms of year-over-year numbers. One other ratio I look at is the book-to-bill and that's just a tad about 1. I feel a lot better when it starts to trend significantly above 1, right?

Okay, okay. Great. And Akhil, one more quick one for you. Could you size the impact on transactional FX -- the transactional FX impact related to Japan in the quarter on an EPS basis or otherwise?

Yes. It was about $0.03, as we had said before. No change in that. The yen is starting to move a little bit worse now recently in the last couple of days, but broadly in the same range. For the quarter, it was $0.03.

Your next question comes from the line of Hamzah Mazari with Crédit Suisse.

Larry, just a question on how you think about orders. Your bookings -- your business is not a backlog-type business. Lead times are pretty low. How accurate is the order book as a lead indicator to sales? I mean, traditionally, historically it's been very mixed. So I'm just wondering how much of a reliance should we be placing on order trends getting better? Do we need to see order trends get better for a couple of quarters? Or how do you think about the order book and its sort of source as a lead indicator? Lawrence D. Kingsley: That's what Akhil and I were both just trying to address in the past question that Brian asked. But the way to think about it is, yes, in short, to your question, that you need to see a couple quarters' worth of solid organic performance in the orders side to translate given what can be a changing book-to-bill or book-and-turn cycle in our business. And to Akhil's point, around last year on the sales side for what was our Q2 last year, there were still some runoff or catch-up associated with past due reduction following the famous ERP implementation. So I think that you've got to look at the combination of book-to-bill ratio currently, the year-over-year bookings comps because you do have change in the book-and-turn cycle that pertain year-over-year. And if I were you, I'd see a couple of quarters' worth of good organic bookings to make sure that you could kind of take those rates and trend them into organic sales.

Very helpful. And then maybe if you could just give us an update on where you are exactly in terms of optimizing your manufacturing footprint. And also on the supply chain, I believe, previously, last quarter, maybe you had said you were 25% of the way through. Any sense of where we are in that process, where your utilization rates are in your system? Lawrence D. Kingsley: We still have a long way to go in terms of optimizing footprint and really getting at our supply chain. We've -- 25% probably hasn't moved a lot, frankly, from the last quarter. The way to think about us is that we have a disproportionately large portion of our cost of goods tied up in the indirect or fixed cost elements within cost of goods as I think we talked about in our Investor Day. So it's roughly 45% of our cost of goods is tied into our indirect spend there and that needs to get better, for sure, by way of how we think about footprint. We're making continuous progress. The operating team, as I mentioned in my remarks, did a nice job in the quarter again and continues to have a clear line of sight to what we can do for a fairly long period of time. But I think you've got to assume this going to be years, not quarters, worth of continuous improvement, which is a good thing. And the same thing applies to the G&A side as we've been talking about. Our business model is more complex than it needs to be and so we're going at this in a prudent fashion. And hopefully growth enables better fixed cost leverage than any other actions that we take, but we do need to continue to improve the fixed cost design that is inherent to the way that we run the model today.

Okay, great. And lastly, do you deck up the buyback if you don't find any deals over the next year? Lawrence D. Kingsley: We haven't made any kind of different decisions between the board and management with respect to how we're thinking about it. We committed to the payout ratio numbers that you're well aware off and we've talked about it being more front half-weighted, which they have and will be. The bottom line is that I think you don't change the thinking at this point, certainly without reasons to do so.

Your next question comes from Isaac Ro with Goldman Sachs.

If I could start with just a question on the technical side for Life Sciences. You mentioned the strength in single-use for BioPharma. Can you talk a little about where you think that market is in terms of adoption of the technology. And maybe some specifics on what environments or what example do you have where you've been most successful. Is it in vaccines or some of the new monoclonal drugs? Just trying to figure out where you think that market has the most potency. Lawrence D. Kingsley: That's a good question. Welcome to coverage, Isaac. Well, there's no doubt that we're in the very early stage of single-use and how it impacts the drug production for the biotechs and for some of the adjacent segments. To answer your question in a couple different pieces, I guess I'd say, first, we see the best opportunity in the monoclonal world, in the large molecule world. We are, as you know, traditionally and historically, a filter company focused primarily on all the filtration, purification applications. We see a combination of organic and acquisitive opportunities to expand our presence, though, to go after single-use as it represents a bigger opportunity for spend as that market dynamic continues to evolve versus just where we've played historically. The other thing, though, that we have been talking about for a couple of quarters, Isaac, is that at this stage in the market when we're early in product design and we don't have volume leverage and for that matter it's a relatively complex customized product solution, our margins aren't where our traditional BioPharm historic filtration margins are. And what we tend to see right now is margin for single-user kind of plus or minus the Pall company average, but that's a good bit of a distance away from where we'd like it to be going forward. So it's a very interesting space, very attractive space. It's going to move beyond just kind of the monoclonal world and we are certainly going to continue to make big investments in R&D there to go after it. You'll see and hear much more of that to come.

That makes a lot of sense. Okay. And then just on the Medical side, if we just back out the onetime or that 7% growth, I think, you said, it's still pretty good numbers. So just wondering if there was anything in there that was unusual from customer concentration or stocking standpoint that would have otherwise taken the number higher than the market trend rate. Lawrence D. Kingsley: Actually within the Life Sciences' reported number that you're speaking to, there was fairly strong, both Medical and Food & Beverage performance, stronger than it's been for several quarters. So we actually saw a good share gain in Food & Beverage, some key projects. We also saw some relatively lower-margin performance out of some of the Food & Beverage consumable products, though. And then on the Med side, it was more OEM sales that drove the growth there, which are also kind of margin dilutive to the mix for Life Science.

Your next question comes from the line of Jeff Zekauskas with JPMorgan. Jeffrey J. Zekauskas: Your restructuring charges in the quarter were $9.2 million. If you had to allocate them to Life Sciences and Industrial, how would you do it? And what do you expect your restructuring charges to be for fiscal '14 pretax?

Firstly, half of that restructuring charge, Jeff, was to do with some environmental liability that we had to take up as a result of discussions with the agencies, with the environmental agencies. So it was only about $4 million of the $9 million that had to do with the severance or restructuring element as you traditionally know of. I think it's across the 3 segments. I would say it's 2 business segments, but also the G&A side of it, which we have been addressing. It related to about 60 headcount reductions, those charges, plus a few true-ups associated with prior restructuring we had done. I would say we continue to look at opportunities where we have to rightsize the cost structure. That is a key area of focus. I'm not sure we have given out a guidance for that for the year, but you would expect some amount of charges every quarter as we continue to work on our cost structure. Jeffrey J. Zekauskas: I know, that's why I asked. Is the number, I don't know, order of magnitude $20 million or $30 million? What's the general size of the restructuring you expect?

I think that's probably in the right ballpark at this point. Jeffrey J. Zekauskas: And then lastly, your Electronics consumables, I think, were up 9% but the revenue was basically flat. Why is that?

Sorry? Microelectronics revenue is up 9%, 8% in total and 9% for the consumables.

Your next question comes from the line of Paul Knight with Janney Montgomery Scott.

On your -- Larry, on your acquisition, you'll go upstream to more research-oriented products, meaning with like HyClone being free from Thermo, like this morning they announced with HyClone and that type of upstream work in your business model in the future? Lawrence D. Kingsley: Well, I mean, just to talk kind of generically about where our -- what we've said about our strategy, we have, I think, by all measures, one of the most attractive business models in our BioPharm business where we play today and that's classically referred to as downstream. What's adjacent to that is also interesting. There's no doubt about it. People think about upstream typically in 2 fashions: one, what's within the bioprocess, so the production of the drugs that's slightly upstream from what we currently do and that's where that brand would be positioned. But also the research lab where materials, consumables, but also instrumentation are applied from the point of research to get to, eventually, production. And both of those represent opportunities as we grow out our Life Science business. Since we have acquired bits and pieces in the last few years, they've all been trying to tackle both of those what we think are very attractive opportunities going forward. So I think the short answer is yes, we like the downstream business. We're going to do what we need to, to make sure organically that continues to contribute what it has and more. And then we build out accordingly as it make sense.

And then you had cited Industrial orders were growing. What happened with orders on the Life Science side if you -- maybe you said it and maybe I didn't get it, but what's the color on orders on that half of the business? Lawrence D. Kingsley: It's good. Bottom line is it's basically pretty similar to what we talked about in the sales line, all-in, with pretty strong performance across-the-board globally. But you have it, just for your reference, you have it on the slide there. You can see it on Slide...

Seven. Lawrence D. Kingsley: Seven, yes.

Your next question comes from the line of Derik De Bruin with Bank of America Merrill Lynch.

How should we think about the gross margin for progression for the rest of the year? You did actually about 50 bps better in the first quarter than we were forecasting. So I'm just wondering how we should sort of think about progression in the year? Lawrence D. Kingsley: Well, let me give you a big picture view and then, Akhil, feel free to jump in. But first, there's a couple bits and pieces which are buried within the number, which, frankly, I feel better about than what jumped off the page. We did a nice job in the quarter with productivity in the world of rapidly changing mix. And that's just a challenge in any environment, but particularly in ours where you got this vertically integrated operating footprint, our team did a super job of allocating resources where there was volume and where there wasn't. And that's just an amazing thing, frankly, given kind of where we've been historically. So productivity was actually quite strong. What, unfortunately, wasn't so good in the quarter was the impact associated again with the transactional component that Akhil already spoke to in EPS metrics or terms. And then that -- the impact of the Medistad acquisition, a little bolt-on, which cost us about 35 bps on a company-wide basis. But I guess, if I think about where we are for the first quarter and trended forward -- and I'll let Akhil speak to volume and the other impact that we see from a sequential perspective for the quarters to follow -- I feel pretty confident that we'll achieve good fundamental cost, that we'll do a nice job allocating our operating both variable and fixed costs, so that we do a nice job on the absorption side as well. We should be able to achieve reasonable price. And as long as mix doesn't whack us hard, I think we'll see it improve through the course of the year. I still, in total, think to draw your conclusion pretty close to what we guided on an annual basis, which is that kind of 20 bps to 40 bps year-over-year improvement.

Just one other point to add to that. So as we look at our margin in the backlog, even though you saw some good margin strength in the systems business in Q1, but based on the backlog which we'll convert into sales in Q2, we do see some pressure in the systems margins just based on the orders that are -- the jobs that are in the backlog. So I think if I were to frame it, that is exactly right. We do expect the 20 to 40 basis points for the full year improvement in gross margin, but second quarter probably down from Q1 and then improvements going forward. The consumables gross margins should sequentially stay okay for Q2 and improve going forward.

Great. That's very helpful. Any update in terms of the FX implications for the full year guidance on the top and bottom line?

I think we are still in the same ballpark that we had said before, which was maybe a $0.00 to $0.03 positive on the EPS for the full year. First quarter was negative, largely due to the Japanese yen and a couple of other currency -- and the offset from euro was just not enough to take care of the other currencies that had weakened versus the U.S. dollar. We do expect those compares to get better, as you know, starting Q3 when the Japanese yen had really surged, if you will, or weakened, if you will. So we expect to still, on a full year basis, about the same, $0.00 to $0.03 on the EPS side.

Your next question comes from the line of Richard Eastman with Robert W. Baird. Richard C. Eastman: Just a couple of things. If we look at the geography and the performance by the segments within the geographies, do you happen to have an order number by geography for the quarter? Lawrence D. Kingsley: Well, we can walk you through the geographies and yes, we can give you some rough sense of what orders look like by geography. The... Richard C. Eastman: I'm mostly just curious, on the Americas, the kind of the lack of growth there may be a little surprising relative to PMI trends, utilization trends. And that's the piece I'm more curious about. Lawrence D. Kingsley: Yes -- no, that's a good question, Rick. So let me give you the short answer and will walk you back through some, I think, some important supporting information. First, on orders all-in: great growth in Asia, double digit; good growth in the Americas, double digit, so just under 11%; and then we're seeing a little bit, very slight decline -- organic decline in Europe. And against that, it would be a similar set of comments to what I mentioned earlier with respect to the comps on the Industrial side, so relatively easy comps there, but tough comps or reasonably difficult comps from a Life Science standpoint, which we still are in the same 7% in the Americas alone versus the 7% in global order -- organic orders growth. Now the thing that's probably most distinguishing and I mentioned it very briefly in my prepared remarks, but certainly versus -- better than a year ago is if you look at the all-in developing or emerging market growth rates versus the developed market growth rates, very consistent around the globe. The developed world is contributing nicely. And almost every country in the developing world is not growing at the pace that it had been and very universal to the world we play in, primary metals and mining and energy and some of the other industrial sector applications. Richard C. Eastman: Okay. And within the -- you touched on this, but within the Pall Life Sciences in the Americas, again, it's really just a composition of the growth that maybe surprised me a little bit. Is this Medical -- is this Medical growth? You mentioned it's in the OEM side. Is this the media supply contract here to Haemonetics that jumps this up? Lawrence D. Kingsley: Some of that's media to them and some of it's also OEM sales, otherwise. Richard C. Eastman: Okay. And then just the last thing that I had a question on. If I look at how you performed in the quarter, very good and a little bit ahead of our sales estimate and kind of holding guide for the year, which I understand. It feels like you're assuming your end markets are kind of returning to maybe a more normal demand pattern than what we've seen in previous years. So again, maybe thinking out loud, the first half of the year is less than half sales and the back half is slightly more than half sales, but kind of returning to this normal seasonal pattern in really both pieces of the business. Is that fair at this point? Lawrence D. Kingsley: I mean, that's essentially what the plan has assumed, so yes, from a seasonality perspective. Although I will tell you when you get down into the individual end markets and you dice it up, I don't know that there are such things as normal demand patterns.

Just to clarify. On the sales side, I think we have said it before, the Industrials part of the business, we do expect it to be down for the first half, as you know, and first quarter was in line with that. And then we see that improving in the second half. So in addition to the seasonal comment Larry made, there's also that year-over-year thing that you've got to keep in mind.

Your next question comes from the line of Brandon Couillard with Jefferies. S. Brandon Couillard: Larry, on the Microelectronics business, can you just elaborate a little bit in terms of how much you think the return to growth is a reflection of easier comps versus an actual perhaps uptick in demand? And then maybe I missed this, but if you could give us the orders for Microelectronics, that'd be helpful as well. Lawrence D. Kingsley: Sure. I'm going to hold off giving you orders on MicroE. But I will tell you this, it's easier comps to a degree versus where the market segment had been a couple years ago because, obviously, it's been trending down for some time. We're pretty encouraged, though, frankly, by the performance in the quarter because it's indicative of what we're doing to win new applications. And without getting into specifics for kind of market competitive reasons, our new technology is doing very well, our new platforms. And it's great to see the benefit of that. We did talk, I think Akhil mentioned, that consumables were up 9%. So you've got that orders data out of the prepared remarks. And I would tell you that, I think, we're going to participate very nicely on this next return to better cyclical performance out of the MicroE space globally. So I'm kind of refraining from too much transparency or clarity there just given the nature of the space. S. Brandon Couillard: Got you. And then a 2-part question for Akhil. First, could you give us the impact of price to the top line in the first quarter? And then secondly, was the Medistad impact to Life Sciences overall about $5 million in terms of revenue contribution?

Yes, just a little more than $5 million to answer your second question first. So just about $6 million. And in terms of pricing, we saw about 50 basis points of price improvement in Q1 of this year.

Your next question comes from the line of Jon Groberg with Macquarie. Jonathan P. Groberg: So just to follow up on the Medistad. I was going back and looking at FactSet and press releases and everything, so maybe I missed it. But when did this deal close and when do you expect it to kind of anniversary?

It was August 1, actually. So just the first day of our new fiscal year, July 31. If you look at our cash flow statements from last year, last fiscal year, we had that acquisition spend in there. So we paid out the money towards the end of July last year and it closed on August 1. Jonathan P. Groberg: Okay. And so the $6 million or so is roughly a decent run rate to think about for the year, or is there any kind of...

No, that's a fair quarterly run rate, yes. Jonathan P. Groberg: Okay. And then going back on the Industrial side, the gross margins. You mentioned, obviously, consumables were down, systems were up. You've mentioned some of the culling of the systems to try to get more profitable systems. But still, I'm just curious if there's anything -- having gross margins being up despite kind of that mix just on that Industrial piece, any other kind of insight as to what was going on there? Lawrence D. Kingsley: Again, it comes back to the comments I've made with regard to very solid operational execution. So the benefits there are really around productivity more than anything else. Jonathan P. Groberg: Okay, all right. And then last one, a follow-up on the question with respect to your comments around M&A, but then also the before selling maybe here of Thermo they need to divest some of their businesses tied to this Life acquisition. I guess, thinking -- I mean, we've talked about this in the past, too, but thinking of -- how big, I guess, or how important -- what kind of competitive foothold, as you evaluate kind of upstream versus downstream in the bio production process of things, do you need to have in order for that to be a compelling business for you to enter, right? I'm guessing at a certain size, certain scale maybe it's less relevant. So I'm just curious kind of how you're thinking about -- in the downstream portion of the business, you have a very good presence, in fact, growing some of your presence, given some of your competitor's issues. So I'm just curious kind of how you think about it. If you were to move upstream, can it be niche-y or do you need to do something in a larger -- if you were to do that, need to do something in a larger scale? Lawrence D. Kingsley: How about a one-word answer? Yes. Look, we wouldn't comment prospectively about acquisitions specifically. The bottom line is that we have an incredible presence, brand and growing position downstream, as I mentioned earlier and we're executing very well in the marketplace. We're executing well behind the scenes in terms of how we put together the operations capability to support our strategy. And so our intent is to grow that business and it's very, very high in our priority list.

Our next question comes the line of David Rose with Wedbush Securities. David L. Rose: Just a couple points of clarification. I think you made a comment in MicroE about a particular order for a customer. Can you give us a sense, is that a good part of what we saw from the uptick? I understand market share is part of the gain. And what should we think about in terms of Q2 in terms of the comps? The same thing applies in terms of Food & Beverage, I think comps get a little bit tougher in Q2 if I'm not mistaken. So how should we think about the comparisons for microelectric -- Microelectronics if you pull forward a sale. Food & Beverage, difficult comps. And then the same thing on Medical. Lawrence D. Kingsley: Okay. Well, there was not a pull-forward element to what you think about the year-over-year comparison. The wins in Microelectronics were, essentially, new share for us. It's not just one customer. The evidence will certainly play out over time, but we're doing very well with some technology we developed over the last 18 months and we've got a lot of customer interest in it. I can't -- don't want to comment more specifically than that. Now with regard to Food & Beverage, I don't think the comps get that much more difficult in Q2, but they do. So yes, I don't think you're going to see organic trend rates at the same pace that you saw in Q1. That kind of comes back to more macro bookings comments that I've made in terms of -- it was more in the Industrial side, but relatively easy bookings comps. Same would apply to Food & Bev. And then Medical is more the dynamic of the OEM piece within the total. And I don't think you trend out the same kind of growth for Medical for the full year by any means, but it doesn't move the needle that much in terms of margin or contribution to company profitability anyway.

Yes, I would just remind you of our original guidance, which hasn't changed very much. I think we've talked about mid to high single digit for Life Sciences overall for the year with BioPharm probably towards the high end of that range and with Medical somewhere in the middle or towards the low end and Food & Beverage probably slightly below that. And that's still consistent with what our thinking is. David L. Rose: Okay. I mean, I don't want to get too granular on a quarterly basis but -- and I don't want to take away anything from a great quarter. But I may have been a little bit more enthusiastic or expecting a little bit more out of the BioPharmaceuticals segment, particularly given one of your comments coming from one of your key competitors in that space. Was there anything in there that was maybe off from what you were hoping for and that should accelerate the growth in Q2? Is there just something in the quarter that stood out? Lawrence D. Kingsley: Nothing big. So if you think about BioPharm, it is certainly a global market and the customers participate globally. You do see share and relative production rates move around quarter-to-quarter. And what we did see in the quarter was a little stronger buying activity out of those customers of ours that are geographically located outside of the U.S. versus those in the U.S. Again, I don't think we're drawing trend lines off of that right now, but we do see that impacted us in terms of relative growth rate. So for the Americas, a little lower than what we would anticipate out of that BioPharm segment for those big global players that happened to be located in the U.S.

At this time, there are no additional questions. I'll turn it back over to management for closing remarks. Lawrence D. Kingsley: Okay. Well, I think we covered almost everything, which is great. We certainly want to wish everybody a super Thanksgiving. And we will continue to perform. And we reinstate our view that the full year's on plan and we're looking forward to having a conversation through the quarter and, again, a quarter from now. So thank you. Enjoy your Thanksgiving if you're in the U.S.

Thank you. This concludes today's conference. You may now disconnect.