Hello, and welcome to BD's First Fiscal Quarter of 2023 Earnings Call. At the request of BD, today's call is being recorded, and a replay of the call will be made available on BD's Investor Relations website on bd.com. The call is also being made available by phone at (800) 695-0395 for domestic calls and area code +1 (402) 220-1388 for international calls. [Operator Instructions] I will now turn the call over to BD.

Good morning, and welcome to BD's earnings call. I'm Francesca DeMartino, Senior Vice President and Head of Investor Relations. On behalf of the BD team, thank you for joining us. This call is being made available via audio webcast at bd.com. Earlier this morning, BD released its results for the first quarter of fiscal 2023. We also posted an earnings presentation that provides additional details on our performance. The press release and presentation can be accessed on the IR website at investors.bd.com. Leading today's call are Tom Polen, BD's Chairman, Chief Executive Officer and President; and Chris DelOrefice, Executive Vice President and Chief Financial Officer. Tom will provide highlights of our performance and the continued execution of our BD 2025 Strategy. Chris will then provide additional details on our Q1 financial performance and our updated guidance for fiscal 2023. Following the prepared remarks, Tom and Chris will be joined for Q&A by our segment presidents, Mike Garrison, President of the Medical segment; Dave Hickey, President of the Life Sciences segment; and Rick Byrd, President of the Interventional segment. Before we get started, I want to remind you that we will be making forward-looking statements. I encourage you to read the disclaimer in our earnings release and the disclosures in our SEC filings, which are both available on the Investor Relations website. Unless otherwise specified, all comparisons will be on a year-over-year basis versus the relevant period. Revenue percentage changes are on an FX-neutral basis unless otherwise noted. When we refer to any given period, we are referring to the fiscal period unless we specifically note it as a calendar period. I will also call your attention to the basis of presentation slide, which defines terms such as base revenues and continuing operations. With that, I'm very pleased to turn it over to Tom.

Thanks, Francesca. And good morning, everyone. And thank you for joining us. We delivered another quarter of strong performance in Q1. Our results reflect the momentum of our BD2025 strategy, which we are driving through a powerful combination of innovation and strong execution. We exceeded our revenue and earnings expectations in Q1 despite market disruption in China and continue to drive consistent, durable performance in our base business, with revenue growth of 5.2% and $2.98 in adjusted diluted EPS. Our results are a testament to the continued relentless focus by our team of talented associates who are delivering BD products and solutions that are enabling our customers to provide high-quality, cost-effective care to patients around the world. In Q1, we continue to make excellent progress driving all three pillars of our strategy to accelerate growth, simplify the company and empower our associates. Our growth continues to reflect consistent performance of our durable core, which has become known as the backbone of health care and our continued shift into attractive and higher growth end markets through investments in both R&D and tuck-in M&A. These higher-growth transformative solutions are focused in the three areas we see reshaping health care and where we are currently investing approximately 60% of our R&D. And that's in smart connected care, enabling new care settings and improving chronic disease outcomes. Today, we have what I believe is the most exciting innovation pipeline in the history of the company. And through our investments, we are systematically increasing the WAMGR across our portfolio and supporting our strong growth profile. I'll have a few of the end markets that are driving our growth and some of the key products recently launched and in our pipeline that we're excited about. Our Medical segment is focused on improving medication delivery across a…

Thanks, Tom. Echoing Tom’s comments, we delivered another quarter of strong performance in Q1, which demonstrates our consistent, reliable, durable growth profile in our BD2025 strategy, playing out as planned. So first, beginning with our revenue performance. We exceeded our expectations for the quarter, delivering $4.6 billion in revenue with base business growth of 5.2% or 3% organic. We see underlying organic growth more at mid-single-digits when adjusting for strategic product exits, the licensing fee comparison in life sciences, and several COVID-driven comparisons. COVID-only testing revenues were $32 million, which is expected, declined from $185 million last year. Total company base business growth was strong across BD Medical and BD Interventional with approximately 6% growth. Base revenue growth in BD Life Sciences of 3.3% reflects the comparison to licensing revenues that impacted growth by almost 400 basis points. Base revenue growth was strong regionally as well with mid-single-digit growth in the U.S., EMEA and Asia Pacific. Revenues in China declined slightly, which reflects the impact of COVID restrictions, offset by strong performance from new product introductions in BDI and research solutions in BDB. For the full year, we continue to expect to deliver near double-digit growth in China. Our base business revenue performance continues to be supported by our durable core portfolio, and an increasing contribution from the transformative solutions in our innovation pipeline and tuck-in acquisitions. We also continue to benefit from the organic contribution from acquisitions we anniversaried, which was about 30 basis points in the quarter. Let me now provide some high-level insight into each segment’s performance in the quarter. Further detail can be found in today’s earnings announcement and presentation. BD Medical revenue totaled $2.2 billion in the quarter, growing 6.1%. BD Medical performance reflects strong growth in both Medication Management Solutions and Pharm Systems, which…

Thanks, Chris. The future has never been brighter for BD. We have demonstrated a powerful combination of innovation and strong execution and have the talent, vision and momentum to continue delivering robust performance. As we move through the back half of the fiscal year, you can expect to see continued relentless focus on execution of our strategy. I'd like to thank our associates worldwide once again for their tireless commitment to our purpose of advancing the world of health. With that, let's start the Q&A session. Operator, can you assemble our queue?

[Operator Instructions] Thank you. And our first question comes from Vijay Kumar with Evercore ISI. Please go ahead.

Hey guys. Congrats on the quarter and thanks for taking my question. Tom, maybe at a high level, when I look at this guidance here and Q1 performance, I think your prior comments were Q1 organic to be a couple of 100 basis points below the annual guide. And I'm looking at the annual guide – prior annual guide of 4.75, which included the product exits. So I think the Street was looking at sub 3%. You came in at 3%, slightly better. But the base here was increased by 50 basis points. It looks like underlying business momentum is accelerating. So maybe just talk about what's giving you confidence? I think you mentioned some new products. So what's driving this confidence in organic guide raise?

Good morning Vijay. And thanks for the great question. I'll turn that over to Chris.

Yes. Thanks, Vijay. Thanks to everyone for joining the call. Maybe a couple of macro comments. One, I just think this represents another quarter of strong execution, consistent with what we shared overall. When you think of our kind of forward-looking view from our updated guidance, I think, a few key things, not that we highlighted and then I'll address your question maybe with where we see some pockets of strength. But one, we did increase to your point, 50 basis points of growth on our base business. That strength is pretty broad-based when you think of it. I'll come back to that. And that's despite the fact that you had the restrictions and impacts in China as well. So we more than absorbed that. We also absorbed the COVID-only testing revenue, which given the testing dynamics in the marketplace are not surprisingly down when you think of COVID only relative to our position in the market. That's a higher-margin offering, and we absorbed that as well. I think importantly, we continue to execute against our margin, and we committed to our – at least 100 basis points of margin improvement and then we incorporated FX. Yes, and to your point, when we're entering the year, I mean, one, Q1 is still under-indexed relative to our full year guide. Right? So that still holds together. We know there was about 100 basis points of headwind associated with the licensing revenue impact in our Life Sciences business that you saw in our results. We had estimated there is maybe about another 100 basis points of other dynamics, comp-related issues, mostly attributed to COVID. We also had some difficult comps in the quarter in certain areas like pharma systems, for example, grew 18%, Q1 last year, and we still delivered north of 10% growth in this quarter. So, I think that continues to be a source of strength for us. I think the flu season, there is probably a timing dynamic there. It peaked a bit earlier than we thought and was a higher spike. As we go through this call, Dave can certainly amplify that, but it's played out like it's played out in other areas with a quick season that's going to abate. So I think you have a timing dynamic there as well. So there is various items such as that. But largely speaking, I think, things are very consistent. We feel really good about the first quarter of the year, and it gave us confidence to increase our guidance.

Understood. And then just one follow-up for me, Chris. And perhaps, Tom, you can chime in. One on, did you – a few questions here on combo and flu revenue contribution. I think on the prior call you had said you expect somewhere around 150-ish for the year. Did the estimate change? What was the China impact here in the quarter? And Chris, did I hear you correctly on gross margins? Should they be up sequentially here into 2Q? Or should gross margins be flattish or down?

Yes, real quick on gross margin, we didn't give specific guidance on gross margin, we more – just to give you kind of an anchor how to expect Q2 to play out. We said it would be in line roughly with how we ended our full year fiscal year 2022, which when you think of the inflationary environment we're in, in the first half of the year, right, we talked about peak inflation rolling through in Q1 and Q2. We had a 350 basis point impact of inflationary pressure in Q1. And so, a Q2 margin similar to how we exited the year is what we're thinking. We did not specifically highlight gross margin.

Vijay, on the other two questions that you asked, on China specifically, so China declined slightly in the quarter, obviously due to the COVID impact. We did see at the end of this month – last month, January, starting to see some recovery there. So, we're optimistic for the year, we still – as you know, we delivered double-digit growth in China. Last year, we said high singles or near double or about that this year, and that's unchanged. We think we will be able to recover in the back portion of this year. We still have our four-pronged strategy that we have in China we remain very confident in. We've got a very strong team there that's been navigating that challenging environment. Again, they delivered 10% plus growth in 2022, and we expect another strong 2023. And that strategy that focuses on bringing our global pipeline to China continuing to drive China tailored R&D. And you heard us talk about a new launch there in the midline of a product developed in China for China. We continue to move in to expand our market coverage into lower-tier settings, continue to manage through the BOBP where it exists, that's in our run rate. And we continue to strengthen our local presence in China, both our manufacturing presence as well as clinical expertise as we continue to train thousands and thousands of clinicians each year. That formula has worked very well for us in the past, and we continue to double down on that. I think as we think about the combo test, I'll turn that over to Dave to speak a little bit about what we're seeing there.

Thanks, Tom. Hey Vijay, good to hear you. Thanks for the question. Yes, so just on COVID and combo, as I think about both of those. I mean, as you saw in the quarter, we posted COVID-only revenues of $32 million. And as we said on the call, we now expect COVID only for the full year to be between $50 million and $100 million. I think Chris commented right, we are seeing obviously stabilization in the market. We are seeing a decline in testing for COVID only. Actually, as that testing shifts to these combination tests, and actually, for us, in Q1, our performance in that area did actually help offset that COVID-only decline. We had anticipated that that's the way that was going to become the standard of care. I'm actually very proud of the team in terms of the way they sort of anticipated and reacted and built these combination test supplies to support the Q1 performance. And I think if you think about the installed base that we've grown on BD MAX, the fact that we've released these combination assays on both BD MAX, BD Veritor, BD COR actually now in Europe is CE-marked. I think that dynamic, and we can talk about it later, the dynamic of what that looks like for the full year on the respiratory testing obviously continues to play out. But yes, COVID only, we definitely see a decline.

Sorry, did the prior guidance on that, I think you mentioned 150-ish for the year. Did that change?

Yes. So for the year, we think COVID only now will be in the range of $50 million to $100 million.

Sorry, on the combo test. I think flu combo...

So, yes. So, we never really – so, if I think about that, the way – if you think about what we said from a, let's say, a flu season pre-pandemic, we had said that was always in the $75 million to about $100 million range on the antigen testing and so on and so forth. There is obviously a lot of unknowns right now in terms of how the full year is going to play out. Obviously, quarter one, we saw the season start early, if you track those CDC graphs, we saw the season start early, it peaked, and we were able to respond to that. If we were looking at it now and for all the assumptions we have, we would think it will be about 1.5 times, let's say, a normal season. So $75 million to $100 million, we would say 1.5 times. And that's really enabled and driven by the installed base increases that we have and the fact that we have developed to launch these combination sets across those platforms.

Okay, we'll take our next question from Matt Taylor with Jefferies. Please go ahead.

Hi, thanks for taking the question. Sorry for the delay there. So, congrats on quarter, even though I'm not a – usually congrats on a good quarter guy, but that was very nice. So...

We appreciate that, Matt. Thank you.

Of course, Tom. I had a question, a follow-up on Chris’ comments on just the operating margin expansion improvement being more back-half weighted. I was hoping you could just talk a little bit more about that and maybe unpack that and talk about the sources of it just because there’s been so many moving parts and it’s an important part of the story.

Yes. No problem. Thanks, Matt. I appreciate the question. Yes, things are pretty consistent with what we shared when we started the year, and it seems to be playing out as such. Some of the key factors to contemplate. First of all, we talked about that from a full year standpoint, inflationary headwinds being another 200-plus basis points. This is on the back of two other years with last year also being over 200 basis points. So, we’ve been navigating an extremely challenging macro environment, right, when you think of that on a cumulative basis. What we did say around the inflationary pressures, it would be significantly weighted towards the first half of the year will be highlighted in Q1 that you saw flow through because a lot of this was inventory that was built last year that sold through. 350 basis points of outsized inflation. That’s on top of, I think, of normal inflation merit increases that everyone takes that would happen in any kind of environment, more of those 3% level. So, you’re really talking about, call it, 400 basis points plus of costs that you have to contend with within your P&L. So then when you think of the mitigation offset to that, so -- by the way, so when you think of our Q1 performance and margin on the back of a 350 basis point inflationary pressure in the quarter, we’re very pleased with how we started the year, because we knew the front half was going to be kind of the more challenging times. As we progress through the back half, there’s a few things that will play out. One, it starts with our internal focus on cost improvement initiatives, simplify, whether it be Project RECODE, driving outsized cost improvement through our plants and other…

Okay. I mean that was very comprehensive. Exactly what I was looking for. Thank you so much.

Thanks.

Thanks, Matt.

And we’ll take our next question from Larry Biegelsen with Wells Fargo. Please go ahead.

Good morning, Larry.

Good morning, Tom. Good morning, Chris. Thanks for taking the question and I’ll reiterate my congratulations on the nice quarter here. Chris, just one follow-up to Matt’s question. How much visibility do you have? I mean, the second half margin ramp is pretty strong. How much visibility do you have on that? And trying to calculate the numbers here quickly, but it implies, I think, pretty low OpEx growth, if I’m not mistaken. Just color on that, please?

Yes. Thanks, Larry. There’s a few things that obviously, I would call naturally. Well, kind of like, for example, we had reinvestment of the higher COVID-only margin from the first half and reinvestment was in the back half. That will stop. We talked about timing differences of the R&D spend. I mean, you got a 50 basis point swing just timing there from first half to second half as an example. I had also indicated on the call some of the SSG&A [ph] that we had incurred in Q1, there’s timing elements there. So there’s timing elements in probably R&D, SSG&A. You have the lack of reinvestment that you just stopped at. Those were onetime in nature. The other dynamic that you have in GP that I mentioned is the trend of some abatement while still elevated, but it’s all on a relative basis of the raw material cost in the second half in GP. Short of something significant changing, we have pretty strong line of sight to those dynamics. And then from there, it’s really just continuing the rhythm of our cost improvement initiatives. So, I think to your point, obviously, the macro environment has been fluctuating. So, we keep monitoring that. But I think given where we are, we feel pretty confident and we’re certainly well on track to deliver the, at least 100 basis points of improvement for the year.

That’s helpful. And just one quick follow-up. Tom, it looks like Parata is doing really well. I mean the $86 million inorganic contribution in Medical. It looks like there was one other acquisition there, but I assume most of it’s Parata. So any color on how Parata is doing? It looks like it’s doing better than the initial expectations. Thanks.

Larry, you’re right. We’re at or actually a bit ahead of the deal model there. We couldn’t be more pleased with Parata. And we’ve got Mike here in the room. So let me turn it over to Mike to talk about what the other acquisition is that’s in those numbers and a bit more about Parata.

Yes. The other acquisition is the acquisition of MedKeeper. That’s a pharmacy automation software that helps automate the processes that a pharmacy tech would use to prepare IV medications in the pharmacy hood. So that contributed a small amount into that acquisition number. From a Parata perspective, I think what we’re seeing there, and we are really pleased with it, is the combination of the energy and the product that Parata provides and the energy that the people from Parata are providing, along with the sort of discipline and coaching that BD and the scale that we provide to access new markets, access acute care settings and help drive the transformation of the pharmacy for acute care. So Parata is continuing to grow very strong in the alternate site in the retail area. And then we’re starting to open up the discussions with IDNs that are looking to transform their pharmacy operations. So I think that bodes really well for the future. We are very pleased with it, and we hope to continue to see the same type of response from our customers.

I think we – fair to say, Larry, we don’t see any change in the trajectory around the macro factors that are driving demand for that, right? The labor shortages, the need to repurpose pharmacists to do more things in the retail setting, like wellness checks and vaccines and address patients, all of that, right, drives the demand for automation and robotics. And it’s really a great example of our smart connected care strategy, one of the three transformational areas that we’re focused on. It’s a great example of us bringing that to life. So really good momentum in the Medical segment there.

We’ll take our next question from Robbie Marcus with JPMorgan. Please go ahead.

Good morning, Robbie.

Good morning and congrats on nice quarter. Chris, maybe to dig into some of the points you made already. COVID testing is a high-margin business going down. How much of the base business upside in guidance is coming from the combo COVID test? And then a lot of competitors are outperforming on COVID testing and potentially raising numbers for the year. I guess, how are you thinking about just Becton, Dickinson in the framework of COVID testing and your assumptions underlying how testing will be used for the balance of the year? Thanks.

Yes. Good question, Robbie. So I'll start with the COVID and Dave can add in here. But I would say a few things. One is, so our COVID testing as you know is primarily in professional settings. And when we talk about our – and molecular, to a degree as well, too, we don't have a strong presence in At Home. We do have an At Home test, but it's not it's a – it's not nearly as big of a presence as in our professional setting. So I think perhaps where you see the most outsized performance there is in company – is from companies with a large At Home presence where you've just seen a lot of the COVID testing migrate to At Home versus in professional settings since it's so easy to do and people can do that without going into a clinician. So I think that's one factor probably influencing some of the delta for us. As you know, we do have a combo test in development for At Home, and we'll share once we get that, hopefully that EUA and able to launch that. Dave, any other comments to add there on COVID?

Yes. Hey Robbie. I mean I think, Tom, you captured well. I think when we did our At Home COVID test; we made a very deliberate decision to pursue a digital strategy. You saw the acquisition that we made of Scanwell. We were very much aligned to the test, treat and trace reporting dynamics. And we intentionally sort of targeted that digital ecosystem with a higher price, higher margin rather than the visually red at-home test. We still think on a go-forward basis, as the sort of, let's say, the sort of the government contracts and things abate, as testing perhaps becomes more regulated At Home, 510(k) environments and so on, a digital ecosystem, again plays into the smart connected care of BD will be important. But I think for us, we just look at it all as we're seeing the softening in the COVID decline. We firmly believe that the standard of care going forward will be these – in an endemic type of approach, these combination tests and we've built a portfolio across BD MAX, BD COR, Veritor and potentially Veritor At-Home across all of these combination portfolios.

I think the good thing, Robbie that we would look at as is that we're really getting more to a durable revenue number in that, right? So I think as we look at 2023, it's a number that could be very much in line with how we think about it playing out in future years as well at that level where there's not still significantly high numbers that would drop in the future that were really at a kind of a durable level of performance in those categories. Chris, any other?

Well, just the way you started your question, Robbie. So if you think of us absorbing the COVID-only and increasing our base revenue guidance by the 50 basis points, it wasn't like a swap out into combination testing. It was actually broadly based across the business. As Dave mentioned earlier, we still see the combo part of our portfolio at that 1.5 times, and we'll continue to watch how it plays out. There was a little bit of strength there, but it wasn't outsized relative to the other areas we also had stressed.

Typically, yes. Just to add we typically wouldn't raise unless it was a highly unusual situation, trying to predict expectations on a full year basis on flu or a flu combo test just because it can drop off so quickly. And in fact, we are seeing, right, that's happening if you look at the CDC charts, those charts are showing significant drop-off like what happened in Australia. Rapid early peak and then a rapid drop, unclear if there could be second or third peaks in the future, but that's not something we can easily predict. So typically in Q1, we try to be conservative around that – those outlooks in that specific product category. More after Q2, we get a sense of where the full year plays out.

Great. I'll leave it there. Thanks a lot.

Thanks.

And we’ll go next on Matt Miksic with Barclays. Please go ahead.

Hey thanks. Wanted to follow-up with a couple of questions; one on sort of the margin side and then just a couple of clarifications on the revenue side. And just too sort of maybe summarize and make sure we've got a clear understanding of the sort of dynamics this year. I mean you have these significant restructuring efforts underway that you've talked about, that sounds like on a full year basis you're expecting those to kind of offset the inflationary – outsized inflationary cost at the COGS line, at the gross margin line? I'm guessing you're probably not fully offsetting those here in the first half. But as you pointed out, that 350 basis point of inflationary hedge or inflationary pressure are going to sort of ease in the back half. So full year, you sort of manage that to sort of neutral and then the benefits that you're getting here to get you to that 100 basis points really happened below the gross profit line in the form of leverage, in the form of timing as you pointed out. Is that the right way to think about the overall margin picture front half, back half, just to summarize and make sure I'm clear on it anyway? And then as – I have a couple of quick revenue follow-ups.

Yes. I think that – I mean, there's other puts and takes within there. But generally speaking, yes, that's how we see the year playing out.

Great. And then on the revenue side, just some other folks who have had some China pressure in the quarter as you did and obviously managed through that to deliver the beat here. But if you could maybe quantify that is sort of one clarification is give a sense of what the growth might have been if it's a 50 basis point overall hit to growth on the clarification on the combo testing, COVID testing changes that you made in terms of your expectation of COVID-only testing. It sounds like that's – that maybe not so much of an expectation that COVID testing in total is coming down, but it sounds like it's a bit more of a mix shift that's just – you're getting COVID testing in the form of that combo testing. So not directionally inconsistent, it seems with what other folks are talking about. They just don't have that combust [ph] exposure. And then I'll leave it there just with those two clarifying points would be super helpful? Thanks.

Yes. I think just real quick on China. Thanks, Matt, for the questions. So I mean, last year is just an interesting proxy, right? We went through restrictions in our fiscal Q3. Despite that, we navigated. We had an impact in the quarter. We actually still grew in that quarter last year and posted around double-digit growth in fiscal year 2022. This quarter, we saw a modest decline, 1%, and in China specifically, and normally if you think of it as a double-digit growth business. With that said, Q1 last year, was a strong comp for us in China. We had a very strong quarter for various dynamics, including some new products that were introduced, et cetera. So we would say the impact is probably just south of 50 basis points, if you want to think about it, plus or minus in the quarter headwind just to give you some direction. We did highlight we still feel great, as Tom mentioned earlier, with the core strategy with that business, short of like further disruptions occurring this year and these being a more kind of acute. We should see again around double-digit growth for the year is what we had shared. So we did see some trends, recent trends, like we're watching it. So we're watching it closely, but it looks like you're starting to kind of see some turnaround in that market. It's still early. So we'll look at it and we'll update, of course, in Q2. But I think longer term, our strategy and performance in China is really strong.

I think just to add in there, we had seen even versus the first half of January to the back half of January, we started seeing good recovery towards the back half of January as the COVID outbreak began to subside.

Yes. I think, COVID, I can let Dave and Tom jump in here too, kind of half accurate, I think, in your depiction. There’s significant market dynamics on call it, COVID-only testing in the marketplace this year. If you think of last year, there was a lot of government intervention and school requirements and businesses. I mean there’s – a lot of that has subsided. So there’s a portion of the reduced testing that’s just market dynamics playing out in terms of total volume, and that’s not just shifting the combination testing. With that said, we still feel good about our combo assay in having that because we do see that as the assay of choice as folks have are symptomatic going in and want to get tested for flu. So we saw strength in our platform. But as Dave articulated, the flu season did kind of spike early. So we’ll have to kind of continue to watch that as we navigate through Q2. So it certainly wasn’t a one-for-one shift by any means, not even really close to that.

Yes. And I think the only other things that I would talk about, Matt. Just in terms of the market dynamics, we track things like bed occupancy and so on really closely. And if you look at a lot of the data sort of in our first quarter and sort of beds that were occupied by COVID-only patients was like maximum peak of like 6%, which is way down from sort of north of 22% in sort of prior period. So that COVID-only dynamics is definitely softening. And I mean I’ll just reinforce what I said earlier on around these combination assays where the unmet need is if somebody presented symptomatically and you want to know, particularly in the respiratory season, do I have COVID, do I have flu, do I have RSV, we think that is going to be the norm on a go-forward basis. And I think we talked earlier on that we have those on MAX outside the U.S., on Veritor. Two things I would also highlight that is for the combination assay here in the U.S., we are under EUA review with the FDA right now. And actually, just late – or BD MAX, yes. And late last month, we actually did file our EUA for an at-home combination assay. So there are also two EUAs that are under review right now. Who – as I said, right now, the season is extremely quiet. But this is also about us planning and preparing for whatever the respiratory season may be towards the end of this calendar year.

Thanks Dave. Thanks Matt.

And we’ll take our next question from Rick Wise with Stifel. Please go ahead.

Good morning, Rick.

Good morning to you. Let me start off with new products. Tom, I was looking for the last couple of quarters, handouts here. And I don’t recall, but it feels like starting off with innovation in our handouts and the passion with which you review everything is – tells us all something very important about the direction you’re heading. And I was just curious from two angles. Which do you see – which would you want us to view as the most impactful to growth margins and to the franchises, which are you most focused on? And separate, but related, maybe you know that, as Chris highlighted, the balance sheet’s getting back in such excellent shape, what are your priorities? It’s clearly tuck-in, but is there any sort of franchise or technology or area we should be thinking about?

Great questions, Rick. Thank you. So on the innovation side; obviously, we appreciate the comments there. We’re really pleased with the momentum that we have. And as I’ve said many times, we think we have the most exciting pipeline in the company’s history. If you look at last year in FY 2022, we had 25 new product launches, things like our HealthSight diversion management moving into the operating room or the new Pyxis ES platform or a series of new dyes and the first of their kind in BDB or our core high-throughput platform. Asprex [ph] in the U.S. or PureWick Male are all great examples of products that we launched last year that are going to help drive growth this year. As we think about – and we highlighted quite a few this quarter as well. As we look ahead, as you know, there’s no – you can’t say for BD, hey, there’s these three or four products that are going to drive our performance and that if they go really well or don’t go as well, that it’s going to change our outlook and our thesis. That’s one of the strengths of BD. We’ve got a lot of singles, a lot of doubles. We’ve got triples here and there. But we’ve got a deep bench. What’s – what I’d point you to is we’ve been systematically moving our portfolio into higher-growth markets and shifting our WAMGR up. We talked a lot about that at JPMorgan this year. We gave updates specifically on our progress versus the WAMGR goals that we set at Analyst Day two years ago, and we’re very much on track to those. We’re really pleased with how our portfolio is progressing. We’re really pleased with how we’re executing R&D. We’ve shared before we exited FY…

And there are no further questions at this time. I’ll turn the call back over to Tom Polen for closing remarks.

I just want to thank everyone for your time today. Great series of questions. Obviously, we’re – we feel really good about the performance as we started this year, and we look forward to providing updates in the future. Thank you.

Thank you, and that does conclude today’s audio webcast. As a reminder, a replay of this call will be available on the BD Investor Relations website. Please disconnect your lines at this time, and have a wonderful day.