Deborah R. Gordon - Vice President of Investor Relations Robert A. Cascella - Chief Executive Officer, President and Director Glenn P. Muir - Chief Financial Officer, Executive Vice President of Finance & Administration and Director David P. Harding - Senior Vice President and General Manager of International Steven Williamson - Senior Vice President and General Manager of GYN Surgical Products Peter K. Soltani - Senior Vice President and General Manager of Breast Health Line of Business

Amit Bhalla - Citigroup Inc, Research Division Anthony Petrone - Jefferies & Company, Inc., Research Division Tycho W. Peterson - JP Morgan Chase & Co, Research Division Jayson T. Bedford - Raymond James & Associates, Inc., Research Division William Carlile - Morgan Stanley, Research Division Sara Michelmore - Brean Murray, Carret & Co., LLC, Research Division Matthew Hewitt - Craig-Hallum Capital Group LLC, Research Division Isaac Ro - Goldman Sachs Group Inc., Research Division William R. Quirk - Piper Jaffray Companies, Research Division Richard Newitter - Leerink Swann LLC, Research Division Bill Bonello - RBC Capital Markets, LLC, Research Division Thomas Kouchoukos - Stifel, Nicolaus & Co., Inc., Research Division Jason R. Mills - Canaccord Genuity, Research Division

Good afternoon, and welcome to the Hologic Inc. First Quarter Fiscal 2012 Earnings Conference Call. My name is Melissa and I'm your operator for today's call. Today's conference is being recorded. [Operator Instructions] I would now like to introduce Deborah Gordon, Vice President, Investor Relations to begin the call. Please go ahead, Ms. Gordon.

Thank you, Melissa. Good afternoon, and thank you for joining us for Hologic's First Quarter Fiscal 2012 Earnings Call. I encourage everyone to visit Hologic's Investor Relations page of our website in order to view the PowerPoint presentation related to the comments that will be made during today's opening remarks. The replay of this call will be archived on our website through Friday, February 17. Please also note that a copy of the press release discussing our first quarter fiscal 2012 results, as well as our second quarter and fiscal 2012 guidance, is available in the Investor Relations section of our website under the heading, Financial Results. Before we begin, I would like to remind you of our Safe Harbor statements. Certain statements made by management of Hologic during the course of this conference call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements of Hologic to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, those detailed from time to time in the company's filings with the Securities and Exchange Commission. We expressly disclaim any obligation or undertaking to publicly release any update or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based. Also, during this call, we will be discussing certain financial measures not prepared in accordance with Generally Accepted Accounting Principles or GAAP. A reconciliation of these non-GAAP financial measures to the related GAAP financial measures can be found in Hologic's first quarter 2012 earnings release, including the financial tables in the release. Please note, today's call will consist of 30 minutes of opening remarks from management followed by a 30-minute question-and-answer session. [Operator Instructions] I would now like to turn the call over to Rob Cascella, President and Chief Executive Officer.

Thanks, Deb. Good afternoon, and thank you for dialing in to our first quarter earnings call. Joining me on the call is Glenn Muir, our Executive Vice President and Chief Financial Officer; Steve Williamson, our General Manager of our GYN Surgical business; Peter Soltani, our General Manager of our Breast Health business; and David Harding, our General Manager of our International Operations. Today, I'm going to cover just a brief summary of the first quarter performance. I'll provide some insight into what we experienced in terms of procedural volumes and capital equipment trends, update you on the launch of our Dimensions 3D tomo unit as well as provide an update on the growth in our digital mammography business overall. I'll provide an update on some of our key growth drivers and review our four-part growth strategy with you. Glenn will then discuss the financial results in greater detail and provide some color on our second quarter and fiscal '12 guidance, including increasing our fiscal year earnings guidance. We'll then open up the call for 30 minutes of Q&A. While we started fiscal '12 off very, very strongly with growth in all 4 of our operating segments, including robust double-digit revenue growth in Breast Health, Diagnostics and Skeletal, for the ninth consecutive quarter, we achieved record revenues. In Q1, revenues of $473 million increased 9% over the prior year's first quarter. We also improved year-over-year our non-GAAP gross margins in 3 of our operating segments. Our non-GAAP earnings per share were $0.34, $0.02 ahead of guidance and 13% above last year. We continue to execute on bringing new products to market with the FDA approval of our Cervista HTA; CE Marking of C-View; and the SFDA approval of our China manufacturing product, the Selenia -- the Serenity products, excuse me. Subsequent…

Thanks, Rob. Consolidated revenues of $472.7 million this quarter versus $432.6 million in Q1 of last year grew $40.1 million or 9.3%, exceeding our expectations. We saw growth in all 4 operating segments with double-digit year-over-year growth in 3. Our Breast Health segment was the largest contributor to this overall growth, increasing $20 million or 10.2%. Diagnostics again experienced strong performance, increasing $15 million or 10.8%. GYN Surgical revenues were up 3.8% and Skeletal Health grew 10.3%. FX had no impact this quarter. If we exclude the revenues from the 3 acquisitions we made in fiscal 2011, our organic growth was approximately 6% and our acquisition-related growth was 3%. Breast Health revenues grew to $215.4 million this quarter from $195.4 million in Q1 '11. This growth of 10.2% came from a $14.1 million or 10.9% increase in product revenues and a $5.9 million or 9% increase in service revenues. Breast Health product revenues primarily benefited from the continued shift in sales from Selenia to Dimensions mammography system. In addition, our breast biopsy products continued to gain market share, and once again, we had a record quarter with sales up 24% year-over-year. Our digital mammography product sales increased to $77.3 million in the quarter, representing 36% of total Breast Health revenue. Service, at $70.9 million, was 33% of total Breast Health revenues. Looking closer at digital mammography, product sales were 8.4% higher in Q1 of last year. On a sequential basis, digital mammography revenues, as expected, were lower than Q4 '11 due to the usual delayed purchasing decisions ahead of the RSNA meeting in late November, early December. This was highlighted in the guidance we previously provided for Q1 and we actually realized stronger growth than we had expected in the quarter. The year-over-year growth was driven by a significant increase…

Yes. Thank you, Glenn. Just to close, we're very confident that we have one of the finest product portfolios in the company's history today. And although there are many external challenges that remain, we believe Hologic's poised for sustained growth over the next 5 years. I want to remind everyone about the upcoming ECR in March and thank you for your participation on this call. We'll now be pleased to answer all of your questions. And operator, you can open up the line for Q&A.

[Operator Instructions] And our first question will come from Amit Bhalla from Citi.

So I wanted to just ask you a question, Rob, on leverage for the rest of the year. I think you've talked about in the past that if you could grow the top line 6%, you could see some real leverage in the business. This quarter, you grew 9% and the outlook looks pretty stable from here on out. So can you comment on your latest views on earnings leverage?

Yes, we'll hold to some of the estimates that we gave out earlier relative to, I think, once we cross over that 6% revenue growth or top line growth. Because not all of our expenses are variable, we start reaping the benefits at a much higher rate. So this quarter was a pretty strong top line growth at 9% and what we saw was a strong revenue -- or earnings benefit as a result of that. Now, as Glenn indicated, some of that was due to the fact that we had a deferral of some of our clinical expenses, but the -- a good 50% of that overage was because of just an operating benefit.

And just my follow-up is on the Surgical business. So you've made no change to your guidance of high single-digit growth. And I know you're expecting the second half of the year to be stronger, but you're also going to face some tougher comps in the Surgical business in the back half. So why not change that growth guidance at this point because you have to be growing well into the double digits to beat it?

Yes, Dave, you're in for that.

Yes. I guess when you look at our business with NovaSure, there's 2 key things that you want to look at. The first is where we have lost some share over the last couple of quarters when we launched the MyoSure product and some of the peripheral accounts. Now that we've got the sales reps on, we've got them through training, we see a regained focus on these smaller accounts to make sure that not only are we bringing them MyoSure but we're keeping -- we're growing the NovaSure business there. I think more importantly, something that Rob talked about were the IMS visits. As you probably are aware, IMS tracks about 640 different codes, and the 3 that we really pay attention to are total OB/GYN visits, which are women going into an OB/GYN for any kind of visit at all. The second is really annual exams and the third is excessive menstrual bleeding visits. We've typically seen that excessive menstrual bleeding visit number going down over prior quarters and the business has kind of tracked with that. Now that we see an increase there and we couple that with the more sales force that we've put in place, I think we've got some strong catalyst for growth in that business. And that's why we didn't revise the guidance there.

And next we'll take our question from Anthony Petrone from Jefferies Group. Anthony Petrone - Jefferies & Company, Inc., Research Division: Just a couple on Diagnostics and one on NovaSure to follow-up. You mentioned just on NovaSure a second-half recovery kind of baked in there as well. So I'm wondering if that does not develop, at what point do you kind of reconsider the DTC program for that product line? And then on Cervista, can you just explain, with HTA now approved, how you avoid the potential cannibalization of the ThinPrep business now that you're selling both offerings?

Yes, sure. I think with respect to NovaSure, Steve, why don't you give some color on that?

As far as the DTC program goes, we have really revisited it. We've changed it from getting out there and just getting information into these women's hands to focusing on conversion tactics, so getting those women to actually take action based on the information that they've received. I think this is probably one of the key contributing factors to this IMS growth rate that you've seen. Now these women have been given information. They've been told and shown how to take action and then they've taken that and they're going to the doctor and we're seeing that in the IMS visits. So we don't think that that's all going to pour through to us. We have some pharmaceutical and non-GEA competition out there, but I think this change in tactics is starting to pay off for us. And that's what we're expecting to see moving forward.

Yes, and as far as the dynamics between our HPV business with HTA and our ThinPrep business, we think there's a long way to go with HPV. I think initially, certainly there's going to be a greater rate of co-testing and potentially an interval expansion. We have not seen that thus far and I think it's because we're coming off of a couple of very, very low years or eroded years. I think, over time, over the long term and let's say that's a 3- to 5-year period, yes, we would believe that in addition to the market growing in HPV that we'll see interval expansion and some pricing compression on our cytology business. We are not seeing that today and we do not anticipate seeing that in a meaningful way throughout '12.

We'll now go to Tycho Peterson from JPMorgan. Tycho W. Peterson - JP Morgan Chase & Co, Research Division: Just thinking about some of the data you guys presented or that was presented by Mass General and, also on others at RSNA, can you talk to the degree to which the improved sensitivity that's representative of the data that has been kind of replicated in the field? I know you're hearing this from a lot of the early adopters. You also talked about having a broader set of early tomo adapters, but to what degree are they reporting improved sensitivity that we've seen in the data thus far?

Yes, anecdotally -- and I'll let Peter comment as well, but anecdotally, I think it clearly supports what the clinical trials have suggested and that we are hearing from sites all over the country, if not the world, about increased sensitivity or higher detection. Peter, you may want to add?

No, I would agree with that, that we're seeing fairly similar results really globally at all of our sites. But again, right now, it's a little bit anecdotal of [indiscernible]. Tycho W. Peterson - JP Morgan Chase & Co, Research Division: And how much of that is a focus to your discussions with payers?

It will clearly be a significant element of the arguments and positions that we present. I think the 2 pieces of our payer justification will be higher sensitivity or detection and also savings from a reduction in recall. So we're finding that these prospective trials that are being done certainly support higher sensitivity or detection and we have continued to promote the fact that there is a reduction in recall. So it is both elements that I think will be important to payers. Tycho W. Peterson - JP Morgan Chase & Co, Research Division: And then my follow-up on the China opportunity, you've put some numbers out there. Can you just help us think about how we should think about box numbers for Serenity in China? Are we talking hundreds? Or I mean, how do you think about the opportunity over the next couple of years for box placements?

Yes, this is David Harding. I think it's a little bit premature to give real specifics there, but I think in a couple of years' time, it should be in the hundreds for sure. We'll start it out relatively slow this year, certainly less than 100 for the remainder of this fiscal, but we hope to see that ramp very rapidly in strong double digits over time.

We'll now go to Jayson Bedford with Raymond James. Jayson T. Bedford - Raymond James & Associates, Inc., Research Division: Just one quick one on the gross margin. It looked like your fiscal '12 guidance was 61.5% to 62.5%. You just put up 62.5% with increasing revenue for the rest of the year. I guess, what would bring the gross margin line down outside of mix?

Yes, it is the mix though, Jayson. That is primarily what will affect it. So when we look at Q2, and the reason we guided down slightly for Q2 from where ended up on Q1 was the belief that Breast Health was going to have a stronger quarter than Q1. And the Breast Health margins, I mean, we're talking mid-50% type of gross margins versus the over 70% that we have on the Diagnostic disposable products. So the mix shift is the biggest contributor. But if we are successful in driving that top line revenue, that also is going to help us hit more the top end of that range. Jayson T. Bedford - Raymond James & Associates, Inc., Research Division: Okay. And just as a quick follow-up for clarification, Dimensions, you mentioned 62% in digital product revenue, which looks like it's about, let's call it, $48 million. This doesn't include the upgraded software, is that correct?

The 62% does include, on a revenue basis, the upgraded software. So as we look at Dimensions, which is 62% of that total, that includes both 2D and 3D, so that includes the tomo as well. And of the 3D that we're selling today, we're only converting 15% to 20% of those are really upgrades of a pre-existing Dimensions unit. So that's been slow the last few quarters. That was not where the initial focus was on 3D, it was selling new systems, but we are beginning to see an increase in that software upgrade as well.

And next we'll go to David Lewis with Morgan Stanley.

This is Bill Carlile, on for David Lewis. Looking at your tomo penetration and the targeted set of centers that you've been guiding us to for a while, you're in the 500 to 700 early adopters, and now you're mentioning that there are some centers beyond that set that are starting to adopt tomo. And maybe could you clarify about what percent of the tomo placements that you're getting right now stand outside that set of 500 to 700 centers?

Yes. I think when we look at it, and I want to also be clear because we're seeing a difference in what the definition of an early adopter is. I don't think we're seeing incremental sites, so I first want to make that statement. And if we do look at the difference between research university type versus community hospital, imaging center, it's about 50:50 today in terms of the profile of the current buyer. And I think the part that is maybe different, too, that is a bit of a surprise is, in university setting, and although that was what we believed our first target market is, I think they are struggling because they don't always know how to integrate a tomo unit into their practice where the imaging centers are doing it at a much faster rate because they see the commercial value in it. So that's where we may be trading off some of the research university type customers with private imaging centers over this very near-term period of time since we've introduced a product.

And has this dynamics really taken place over the entire course of the tomo roll out? Or has it accelerated, I guess, since data came out at RSNA?

That's a good question, Peter, I don't know if we have that kind of information, but what is...

So I mean, first of all, it's too soon after RSNA, but I would say it's been roughly about the same. I don't think there has been any particular trend one way or the other.

And Sara Michelmore from Brean Murray has our next question. Sara Michelmore - Brean Murray, Carret & Co., LLC, Research Division: Yes. I just wanted to clarify your comments on the timing of this Oslo study. So it sounds like in 12,000 patients, that's essentially half the patients, the target patients have been screened at that point. Do you need that study to be entirely complete to have the data you need? What's the timeframe in which you could receive some of that data? And is that still the study you think is the most important as you go out and try to talk to payers about reimbursement?

Sure, this is Peter, yes. When we spoke with Dr. Scott, who's the PI on the study at RSNA, his goal was to try to publish the data from the halfway point, which was roughly around 12,000, 13,000 patients. So we're hopeful that he will still do that sometime, say, in the next 6 months or so. And just as a reminder, it is a collaboration with folks at UPMC at Pittsburgh. So we do expect that that data will have tremendous value, both in the U.S. as well as outside of the U.S. So, yes, it will be a factor in our reimbursement efforts. Sara Michelmore - Brean Murray, Carret & Co., LLC, Research Division: Okay. And then just a clarification, Rob. You'd talked about that reimbursement may not be as big a gating factor in some of these early adopters as you might've thought. How important do you think the reimbursement is at this point? Can you just give us your updated thoughts on is this really what you need to have an inflection point? Or have your thoughts evolved on that?

Sure. Over all, in the broadest of assessments, yes, reimbursement is going to be necessary in order to get into the far reaches of the mammography installed base. I think over this period that we are now living through, which is this pre-reimbursement 2-year cycle, it is not reimbursement that is the factor that's causing either the acceleration or non-acceleration of the product. It is much more related to customers getting comfortable with the clinical validation and we think that's happening every day. And two, as more and more sites buy tomo and we're in about 38 or 40 states today with it, it is creating a competitive dynamic in state and city or in community, which in and of itself is driving further adoption. So we think those 2 elements of the tomo rollout is what's more important today than even reimbursement.

And our next question will come from Matt Hewitt with Craig-Hallum.

Just there's been some companies that are selling a little bit more capital equipment centric products that have been a little bit more conservative with their guidance from the year. And obviously, you've just put up a very strong first quarter. It sounds like you expect that to continue given the adoption. But meanwhile, you've had Moody's and both S&P are talking about some of the hospitals and their outlooks being negative. I'm just wondering how you balance the 2 sets. You've got strong growth and conversion versus issues at hospitals, sorry.

And it was a little bit of a comment that I made during my script that we don't think the traditional capital spending trends always apply when there is a new successor technology, which has the potential to obsolete that, which is the incumbent technology, but what ends up happening as a result is that there is an urgency in buying it because it is better. It may be clinically is better, from a marketing draw, it's better. So there are monies that would be rationed towards this new technology where perhaps those same dollars would not chase after the upgrade of a new ultrasound platform, the upgrade of a new MRR platform or a CT platform, because ostensibly, you're really just -- you're getting a very measured level of improved functionality where this is a displacement technology, and as a result of that, it is garnering more dollars. So our level of confidence is, I want to say, we've seen this kind of trajectory in the days of digital and we believe that the benefits of tomo are far more compelling over digital than digital was to analog. And that's what's giving us a sense of early confidence.

We will now take a question from Isaac Ro from Goldman Sachs.

I wanted just to probe a little bit more on tomosynthesis. Just going through the numbers, I think you had mentioned 27% penetration of that initial market in last quarter, I think 20%. And so just given the RSNA conference and that sort of tailwind you've got, what are the expected -- maybe a little bit of an acceleration greater than you saw. So maybe if you could just help give us a view of the backhaul you've got -- you have in that business exiting the quarter. And then maybe an addition to that, give us a sense of what the impact to gross margins was from your tomo mix just given how big it is now.

Yes, I'll take a crack at the issue of RSNA. I think as Peter said earlier, we're coming off RSNA, which was literally in the month that we were closing the quarter. So trying to see some strong activity that results from the RSNA interest probably isn't practical to think that Q1 was going to be the quarter that we would see that. As a matter of fact, I mean, as people get excited and budget dollars are reallocated, I mean, it is clearly a 3- to 6-month selling cycle. So I think we're seeing great interest and a lot of activity, but realistically, it's not like just turning the light switch on. It is going to take a few months to get that momentum behind the products.

Great, and if I could just kind of follow-up on that question about gross margins. You guys had obviously got a reasonable amount of mix in your Breast Health business now coming from tomo. So what impact has that had on your improvement year-over-year for gross margins? Can you maybe quantify how much that helped?

Yes, Isaac, I mean, I don't think there's an easy answer to try to quantify the actual gross margin amount from tomo. It clearly contribute to the higher gross margin. So Dimensions themselves, those 2D or 3D units, they themselves are at a considerably higher price point than the Selenia unit, which we're now moving away from. So that's giving us the first push forward. And just to repeat, to us, selling Dimensions is really the key whether it's 2D or 3D, because we do believe that in the future, every Dimension out there is going to upgrade to 3D to be able to offer the tomo capability. So it is all contributing in a positive way to hitting that 62.5%, but it's pretty difficult to quantify this quarter exactly what the percent was. There's a lot of mix between the disposable products and the capital equipment side, but it will be significant. The tomo margins are considerably better than the older Selenia margins, which are under 50%.

We'll now go to Bill Quirk with Piper Jaffray.

Yes. First off, Rob, you're talking more positively about utilization trends, really not in just one product category but across a couple of them. And you also just speak consensus, not on the other hand touching toppling guidance. So I guess, first question, what do we need to see or I guess what are you perhaps maybe more comfortable with in terms of the business in order to bump that number up?

Yes, I mean, it's a great question and I would say, look, this is the first quarter of our fiscal year. We're comfortable that we saw some very positive results. We also saw, I think, a bit of a recovery relative to utilization ends and it's across a couple of product lines, as you indicate. It was just a little early for us to feel as if we wanted to up our guidance on the top line at this point in time. I think we saw it on the -- obviously, we passed our earnings benefit through for the year, but I think as this year unfolds, we'll get much more confident about -- relative to revising our revenue forecast.

Understood. And then as a follow-up, if we think about the HPV space, Rob, we got a couple of new competitors here over the past couple of quarters. What are you seeing, if anything, in terms of average ASPs?

Yes, I think the segment of the market that we're playing in has been fairly insulated. It's the low- to mid-tier lab. I think where we're going to see some more aggressive pricing is in the higher volume labs. And I think that's a market that we're now going after, but it is clearly incremental revenue for us. So I know I won't anticipate margin erosion for us, but I do believe the AEPs are going to be lower than what they've been historically.

And we'll now take a question from Rich Newitter from Leerink Swann.

Just one on tomo. Glenn, you had mentioned that you're happy, of course, to sell a 2D that's 3D capable or the full thing all in and activated. Can you break down for us maybe what the mix is of the actual systems that are being placed that are fully activated? Is it most of them kind of coming in and being used or people kind of just waiting to see and getting ready to turn it on at some point in the future?

Yes, below the -- of the Dimensions unit, the 2D and 3D, which comprise 62% of digital mammography, so the balance being the Selenia systems, which has been a big reversal on one year, so shifting to Dimensions, of that total, less than half are the 3D tomo. So the bulk of the Dimensions today are still going out in the 2D format. So I think what you're seeing happening in the marketplace is there's a lot of interest in having 3D tomo or having the capability of having in the future because of what people are hearing and not wanting to be locked out of the market. So they're moving to the Dimensions 2D to protect that upgrade path.

Got you. And then just maybe to follow-up on that further, are these mostly customers that were just in the market? They were kind of among the earlier bunch to convert to digital and they're approaching their replacement cycle. Or is there just something else that's driving to make their decision?

It's Peter. I think it's probably a little bit of both. I mean, there are certainly customers who are in their natural replacement cycle looking to update their equipment and will have sought to get additional funding to move up to 3D. So it does represent sort of the mix.

And we'll now move on to Bill Bonello from RBC Capital Markets.

Completely switching gears, you guys have almost $800 million of cash on the books now. I'm just curious sort of what it would take for you to rethink your capital allocation policy and perhaps become a little more active or active on share repurchase and maybe, even God forbid, a dividend?

Yes. Well, Bill, I think I don't know if you can never have too much cash and we're very pleased with that balance. But when we look at our capital deployment strategy itself, I think we'd feel differently if we didn't think that they were tuck-in acquisitions that fit within our distribution and product categories that we might be interested in, in the future. So I think that continues to be a priority, including setting some cash aside for some of the earn outs that we have coming up during the remainder of the fiscal year. So we are still interested in looking at those tuck-ins and we're also interested, number two, in reducing the leverage from our debt, the convertible notes that we have outstanding. And, as you know, we have a piece of that due, a tranche of it due in December 2013. And, I mean, it's clearly far enough away for us to do a lot of different things. But our preference would be to begin to de-leverage a little bit with those notes. So I don't think a share repurchase is out of the question, but I think, at the moment, we believe we can drive a greater return by focusing on some of these tuck-ins. And you know what? We kind of walked through it last time. I mean, when we look at the tuck-ins, number one for us is we look at an IRR, we also look at a payback, we also look at the accretion to the EPS. So all of those factors come into play when we take a look at what we can do in the marketplace.

Okay. And then just as a follow-up to that, I mean, when we think about acquisition strategy, I mean, tuck-in sort of as big as we need to think about, is there any chance that you do something that's a bigger $500 million kind of spend?

I think we would define a tuck-in by how it fits within the organization so not so much about the price of it or the value that it brings. So it's about a technology that we think we can leverage with our sales and marketing infrastructure and possibly our factories and things like that. So I mean, I think it's maybe a little bit all over the map relative to the appropriate target, the expected rate of return and how well it fits within our existing infrastructure.

And we'll now go to Thomas Kouchoukos from Stifel, Nicolaus. Thomas Kouchoukos - Stifel, Nicolaus & Co., Inc., Research Division: Just I think as following on Tycho's question from earlier about the China opportunity with Healthcome, maybe a different way of asking, I think you talked about kind of a gradual ramp out with that Serenity product. I guess another way to ask is, how much market is there today in terms of revenue for that application? And then what do you feel you're losing out on by not having a low-end system in those regions?

Well, I think it's a little bit premature to say what precisely the size of the China market is. This is David Harding, by the way. The mammography market in China is still really developing. It's at a very nascent stage. And so we feel that we are going to grow with that market. And certainly, as Rob indicated earlier in his comments, we hope that our overall China business will get to a $300 million mark in 5 years. So a good chunk of that will be in the Breast Health space. And we hope that the Serenity product will occupy a large chunk of that. Right now in the other emerging markets, we're really using our value-oriented Selenia offering to capture those things and really take some of that market share. So we don't feel like we're necessarily losing a lot of opportunity right now, but we feel that we can actually accelerate our growth by deploying even more value-oriented Serenity product in the future. Thomas Kouchoukos - Stifel, Nicolaus & Co., Inc., Research Division: Okay. That's helpful. And then one follow up. Just I know it's very early and I think you just rolled this out in January, but on HTA, any anecdotal info you can provide just to how the system's performing and maybe what accounts are thinking at first run at this?

Yes, I think it's -- we're pleased with the product relative to its reliability, uptime, its performance. I mean, the FDA approval process was quite rigorous. So we know that it works well and we have a very stable assay now. So we're focusing on some of our existing customers that were using our sample transfer technology that are now going to full automation with the HTA as well as some of the sites that were still under an ASR. So we're -- I mean, it's a limited successes today, but all of the sites that we've installed, the product into today are enjoying good success with it. So it's a lengthy process, as you indicated; long validation times, a lot of extra training and so on and so forth. So I think we'll have probably more to report when we issue our second quarter results.

And we have time for one more question today and that question will come from Jason Mills from Canaccord.

A lot of my questions have been asked and answered, so I have a few P&L questions. Glenn, how do you think about your sort of an esoteric line on your P&L, but your tax strategies moving forward over the long term, just given the scale of your business internationally and the growth internationally as well?

Well, I think, Jason, there is an opportunity for us. We've never taken full advantage of any kind of offshore operation, either manufacturing or with our technology on the R&D side. And as we begin to expand in China, that is one area that we're taking a look at, the technology and transferring some of that to get some benefit. But I think you're probably referring to a 34% tax rate and how do we bring that down a little bit?

Yes.

Yes, and a part of it is 75% of our sales are here in the United States and this is where the majority of our manufacturing is. So it's harder for us to take advantage of some of the other, I think, tax strategies of offshore. But those are the areas for the future.

Okay. And then in the middle of the P&L, I mean, curious to note sort of the growth over the last, say, year or so in the headcount or resources that are applied directly to selling the product, both domestically and internationally, so then how do you see that transforming over the next couple of years with the opportunities you've talked about not only in China but Latin America? Perhaps a need to add to selling resources in those geographies relative to your expectations for the top line growth that could come from those initiatives as well.

Yes, and I don't think we'd see significant headcount additions in that area. When we talk about infrastructure additions, we're looking at really our own salespeople that would be in country supporting our dealers. So it's a handful of people on a country-by-country basis and they're really defined to assist as sales specialists. So we found that to be very, very successful in different parts of the world and we will continue on with that strategy. But I don't think there's any plan underway that would suggest that we need to add another 200 or 300 salespeople on a global basis at this point.

And ladies and gentlemen, thank you. That is all the time we have for questions today. That now concludes Hologic's Fourth Quarter and Fiscal 2012 Earnings Call. Have a good evening.