Good day, ladies and gentlemen, and welcome to the Owens & Minor first quarter 2017 financial results conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Ms. Trudi Allcott. Ma'am, you may begin. Truitt Allcott - Owens & Minor, Inc.: Thank you, operator. Good morning, everyone, and welcome to the Owens & Minor First Quarter 2017 Earnings Call. I'm Trudi Allcott, and on behalf of the team, I'd like to read the Safe Harbor statement before we begin. Our comments today will be focused on financial results for the first quarter 2017, which are included in our press release. In our discussion today, we will reference certain non-GAAP financial measures. Information about these measures and reconciliations to the most comparable GAAP financial measures are included in our press release and in the supplemental information posted on our website. In the course of our discussion today, we may make forward-looking statements. These statements are subject to risk and uncertainty that could cause actual results to differ materially from those projected. Please see our press release and our SEC filings for a full discussion of these risk factors. Participating on our call this morning are Cody Phipps, our President and CEO, who will provide an overview of the business and the new strategy; and Randy Meier, EVP and Chief Financial Officer and President, International, who will give an update on our results and insight into the performance of our three segments. Now, I'd like to turn the call over to Cody Phipps, our President and CEO, who will start things off this morning.…

Thank you. Our first question comes from the line of Lisa Gill of JPMorgan. Your line is open. Lisa Gill - JPMorgan Chase & Co.: Thanks very much, and good morning. Let me first start with your commentary around margin pressure on the distribution side of the business. Randy, I didn't hear you go into any detail specifics to that. Is that just kind of normal pressure? I mean, you did call it out in the press release. Is there something specific that's happening in the marketplace right now on the competitive side? Richard A. Meier - Owens & Minor, Inc.: Hello, Lisa. Thanks for the question. And I think all we're just trying to allude to – over the past three or four quarters, we've just been alluding to the fact that there's been broad-based margin pressure as an industry consequence. And we keep pointing it out that it's going to continue to be a headwind as we move forward into the year. So it wasn't anything unique to the quarter, it's just been an area that we've been highlighting for folks. Lisa Gill - JPMorgan Chase & Co.: Okay. And then... Paul Cody Phipps - Owens & Minor, Inc.: Lisa, it's Cody. I would just add that as you see industry consolidation accelerating, and obviously, there's significant cost pressures up and down the value chain, we just think the margin pressure is a natural outgrowth of those two factors. Lisa Gill - JPMorgan Chase & Co.: And as we think about the announcements that have been made, specifically the Medtronic announcement with Cardinal, who's one of your larger competitors, do you think, Cody, that that's going to change any of the – perhaps increase margin pressure now that you're going to have to be sourcing some product from…

Thank you. And our next question comes from the line of Michael Cherny with UBS. Your line is open.

Good morning, guys, and thank you for the details so far. Paul Cody Phipps - Owens & Minor, Inc.: Hey, Mike.

First, just one – hey, how are you? One technical question on the Byram deal in particular. I noticed you didn't buy any shares in the quarter. Are we to assume that this means you'll be halting your share buyback on a intermediate basis? Richard A. Meier - Owens & Minor, Inc.: Mike, no. We just decided as we moved in to this year, because of the significant amount of shares that we bought back in the second half of the year, that we'd just moderate repurchase. We continue to look at just being neutral to our share count throughout this year. So I wouldn't think that we would halt – or we're not planning on halting it, but I think we'd go back to more modest levels as we had in 2014 and 2015.

Got it. Thank you for that, Randy. And then just, I guess, to follow up on Lisa's question related to the manufacturer consolidation, is it possible to look back at other periods in time where you've had this level of consolidation, and maybe talk about some of the areas where Owens & Minor's been able to help the manufacturers, maybe give a couple specific examples? And if there are any areas where there have been some choke points or any type of supply disruption as these players try to sort out their path going forward. I guess, just to understand the puts and takes given what history has told us would be helpful given the pretty sizable level of M&A over the last couple weeks. Paul Cody Phipps - Owens & Minor, Inc.: Again, Mike, what I'd point out is if you look at the two big transactions that were announced in the last couple weeks, we're terrific strategic partners to all four of those parties. And again, our view is that the value of a logistics partner is actually increasing. So when those companies come together, in both of those cases, they're very much focused on enhancing their product portfolios, and they're looking for ways to drive synergistic value of (20:52) companies together, and we think we can play a major role in that up and down the value chain. So not only are they looking for logistics cost reductions, but they're looking, we believe, more and more, they're going to look for services at the point of care that can differentiate their products at the point of care. So again, in both of those big transactions, again, on the surface, consolidation looks bad. We see opportunities in both of those cases.

Got it. Great. Thanks, Cody. Paul Cody Phipps - Owens & Minor, Inc.: Thank you.

Thank you. And our next question comes from the line of David Larsen with Leerink. Your line is open.

Hi. Can you talk a bit more about the CPS segment? And I think you mentioned that there were production challenges. The EBIT was a bit lower than what we had been modeling. Obviously, a pretty – I think there was a significant decline year-over-year. So any color there that you can provide would be very helpful. Richard A. Meier - Owens & Minor, Inc.: Sure, Dave. We've been highlighting a transition in the CPS business for the past couple of quarters. As you may recall, we onboarded a fairly significant customer towards the second half of last year. That onboarding created a bit of capacity issues for us, which had kind of created some challenges from the operational side in the second half. A lot of those capacity issues, we've been able to mitigate as we've moved through the fourth quarter and into the first quarter. So I think we're in a much better position now. The performance and the steps that we needed to take to do that created some cost issues for us, as you're seeing. Some of those – that impact happened in the fourth and certainly, in the first quarter. But I think as we look towards the balance of the year, you'll begin to start seeing some gradual improvement in that business as we continue to improve our service levels and our delivery levels with our customers. I think one of the impacts, though, on a year-over-year basis, we did have a third-party customer that we did some special manufacturing for first quarter of 2016, so that did have a bit of a benefit. We had it in the fourth quarter and into the first quarter, so it was a little bit of a difficult comp. Nevertheless though, we did have some challenges that we were working through second half of the year and into the first quarter. But we do see that improving as we go through the remainder of the year.

Okay. So operating margins as a percentage of revenue in CPS should sort of, I guess, get back up to, let's call it 10% by 4Q of 2017? Richard A. Meier - Owens & Minor, Inc.: Well, we haven't provided operating margin directly for the CPS business. It's kind of a combination of our sourcing and our CPS business, so a little hard to talk about operating margins per se. But we do see second half of the year, us moving at a much more positive direction and ending the year on a positive note.

Okay. Great. And then, Cody, can you maybe expand a bit on the technology piece of your strategic vision? What is ultimately sort of the end product that you have in mind that you want to build for your clients that they don't have now? And you said that your team is putting together a blueprint. Like what is the ultimate sort of product that you want to have created? Paul Cody Phipps - Owens & Minor, Inc.: Yeah, good question, Dave. We're excited about that. Again, we see the value of a very robust supply chain increasing in the industry. Now, when I look at the health care industry vis-à-vis the other industries, it's behind. And one of the areas we're very excited about is the ability to bring end-to-end connectivity to the supply chain from point of manufacture to point of care. We think we're in a great position to do that. And that information and data can be used to reduce cost, reduce complexity, and that's music to the ears of both the provider customers we serve and the manufacturers we serve. So first and foremost, the outcome we're looking for is end-to-end connectivity and a better data architecture to capture that information. The second thing we're looking for is more and more information about the use of products at the point of care. And so, again, there's a lot of focus on patient outcomes, improving patient outcomes, preventing re-admits to the hospital. A lot of other players are focused there, but we think we can bring valuable new information to what's happening at the point of care. And the third thing I'd say is that the combination of those two things, we think, provides the opportunity for us to invent new services for both manufacturers and providers. So it's probably – of our four-part strategy, it's the least developed at this point. But our teams, our operating teams and our IT teams, are working through the first component of that, which is the end-to-end connectivity and the data architecture to bring that data to life.

Okay. And then with the Byram deal, can you maybe talk a bit about reimbursement? Like how do these products get reimbursed for? If they're being shipped to the members at home or to home health agencies, is Medicare a big piece of reimbursement? Can you size what percentage of revenue might come from Medicare? Is it like 50%? And then have you done diligence on how those reimbursement rates are trending? Richard A. Meier - Owens & Minor, Inc.: Sure, Dave. It's a great question, and I think this leads to why we're so excited about adding not just the new line of business, but a very experienced management team with the breadth and depth to manage these resources as we go forward. For the most part, we engage in managed care contracts across the spectrum. It's a nationwide enterprise. So we have contracts with various entities across the country. Specifically to your question, we have about – all about 30% to 35% of the business is related to Medicare or Medicaid, so not a large portion. And as you may know, with some of the shifts going on, that should be reduced over the coming years. We see this as a tremendous asset in a sort of direct-to-patient billing market, and expanding our ability to complement what we do with the acute-care center, and go all the way to the home. So we see this as a nice adjunct to our business as something complementary as we expand down the continuum of care.

Okay. Great. And then just one last one. Sorry. I think you said in your K that maybe 13% of your 2016 revenue was from Medtronic. Can you – like, any sense for what portion of that would now be Cardinal? Richard A. Meier - Owens & Minor, Inc.: What I think we were alluding to in that is just as a supplier to us, with the consolidation of Covidien into the Medtronic, Medtronic became a significant supplier to us. And as Cody mentioned earlier, Cardinal is one of our major suppliers, so we see this as continuing a very solid relationship with one of our major suppliers.

Okay. Appreciate it. Thank you. Paul Cody Phipps - Owens & Minor, Inc.: Thank you.

Thank you. Our next question comes from the line of Robert Jones with Goldman Sachs. Your line is open. Robert Patrick Jones - Goldman Sachs & Co.: Okay. Great. Yeah, I'll just try to stick to the two questions here this morning. Just to go back to the acquisition, could you maybe talk about the growth in margin profile of Byram? Just trying to get a better sense of how we should think about the accretion or the modest accretion you guys touched on in 2018. You mentioned it being the third player in the market. Curious if maybe the first player in the market would be a good comp for us to use. Richard A. Meier - Owens & Minor, Inc.: Just to correct you, I think we mentioned it's the number two player in the market out there. Byram, as an asset, has been growing in the mid-teens top line for a while, and has margins well above our own margins. So again, as Cody pointed out earlier, we should see some nice benefits to this as we move forward. And I think as we sort of move ahead here, we would see a continuation of that. So I'm not sure that when we look at this asset that we see any difference in the performance going forward. We would continue to see a very nice top line growth and continue to expand in the market. Robert Patrick Jones - Goldman Sachs & Co.: All right. So then, I guess, just to be clear, that there's nothing structurally different than the number one player in the market that would preclude it as being a good comp as far as the growth in margin profile? Richard A. Meier - Owens & Minor, Inc.: I think the number one player…

Thank you. Our next question comes from the line of Steven Valiquette with Bank of America Merrill Lynch. Your line is open.

Hey, thanks. Good morning, Cody and Randy. Paul Cody Phipps - Owens & Minor, Inc.: Steve.

So as we try to analyze the Byram revenues and we look at your deal financing costs, then your comments around limited impact to 2017 earnings, but then modestly accretive in 2018, when we try to triangulate all that, we get the EBIT margins might be in the 3% to 5% range. I'm wondering if that's a reasonable assumption. Because, I guess, if you're saying the margins are way higher than yours, if it's way higher than 3% to 5%, then it seems like the accretion could be also way higher than what you're suggesting, which obviously would be a good thing for you. So we're just trying to triangulate, is that 3% to 5% operating margin reasonable for where Byram is right now? Richard A. Meier - Owens & Minor, Inc.: Well, I think what we were trying to allude to, and obviously, in any transaction, year one, you get a tremendous amount of transaction costs embedded in it, so it kind of – it's a bit of opaqueness to the overall performance in that first year. And given that we had given two-year guidance on Investor Day, we wanted to give people the impression that there is certainly going to be some accretion associated with this. But depending on the timing of the close, we'll probably have limited benefit in 2017, and then transitioning up given that – would sort of see that first full year of operations trail into 2018, that there'd be modest accretion in 2018. So I think you're probably underestimating what the broader margins of this asset would be. But I think when you look at how that gets integrated into our business, it's just a lot of the transaction costs and the nature of whether we do it beginning in the third quarter or it trails off into the tail end of the third quarter. Paul Cody Phipps - Owens & Minor, Inc.: And, Steve, we'll provide more guidance on this. Obviously, we just announced the transaction. So we'll provide more guidance going forward on this. But the other thing I'd say, too, is we're very excited about this new platform and we want to get it off to a good start. So we're analyzing some of the investments we want to make to accelerate their growth. So I think, as Randy said, the margin profile is better than what you outlined, but we also want to make sure we take the right steps to continue on the great track record of growth that they've had, even accelerate that. So, we'll provide more guidance on that as we go forward.

Okay. Yeah, that'll be helpful. I think if you got a lot of the one-time charges and the stuff that you're including in the neutral to earnings for 2017, that helps to triangulate all that. One other quick question on Byram now, just curious if there's going to be a lot of a cost-cutting synergy with that deal or is this kind of more of a bolt-on deal where it still runs independently? I think we're all just curious how much integration work you plan to do with that asset. Thanks. Paul Cody Phipps - Owens & Minor, Inc.: Yeah. I think your characterization as a bolt-on strategic acquisition is better. We obviously see some synergies, particularly on the distribution side, but our primary focus is going to be bringing them into the fold, accelerating growth. So it's not a big – we don't see a big cost-cutting agenda early on with this. If anything, we want to take this strong management team, their track record for growth, and accelerate that. So our focus is more on that.

Okay. Got it. Okay. All right. Thanks. And congrats on the deal. Paul Cody Phipps - Owens & Minor, Inc.: Thank you.

Thank you. And I am showing no further questions at this time. I'd like to turn the call back to Mr. Phipps for closing remarks. Paul Cody Phipps - Owens & Minor, Inc.: Thank you for participating on the call today. We're very excited about the acquisition of Byram, and we're encouraged by the work our teams are doing to drive operating improvements and to execute our strategy. We look forward to sharing more detail about the acquisition on our next call and on the progress of our strategic agenda. Thank you, and have a good day.

Ladies and gentlemen, thank you for participating in today's call. This does conclude the program, and you may all disconnect. Everyone, have a wonderful day.