Good afternoon, ladies and gentlemen, and welcome to the Masimo Corporation Fourth Quarter 2014 Earnings Conference Call. The company's press release is available at www.masimo.com. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Please note today's conference is being recorded. Thank you. I would now like to turn the call over to your host for today, Eli Kammerman, Masimo's Vice President of Business Development and Investor Relations. Eli Kammerman - VP-Business Development & Investor Relations: Thank you. Hello, everyone. Joining me today are Chairman and CEO, Joe Kiani; and Executive Vice President of Finance and CFO, Mark de Raad. This call will contain forward-looking statements, which reflects Masimo's current judgment, including certain of our expectations regarding fiscal 2015 financial performance. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Risk factors that could cause our actual results to differ materially from our projections and forecasts are discussed in detailed in our SEC filings, including our most recent Form 10-K and Form 10-Q. You will find these in the Investors section of our website. I'll now pass the call to Joe Kiani. Joe E. Kiani - Chairman & Chief Executive Officer: Good afternoon and thank you for joining us for Masimo's fourth quarter earnings call. We ended 2014 on a high note with strong core product revenues of nearly $154 million, higher product gross profit margins, and continued control over our operating expenses resulting in $0.40 earnings per diluted share. Specifically, our SET pulse oximetry business grew by 17% over the same quarter a year ago. Some other important highlights for our quarter are that we shipped 44,000 Masimo SET pulse oximeters and rainbow Pulse CO-Oximeters in the fourth quarter,…

Thank you. Our first question comes from the line of Brian Weinstein from William Blair. Matt R. Larew - William Blair & Co. LLC: Hi. Good afternoon. This is Matt Larew asking question for Brian, today. Joe E. Kiani - Chairman & Chief Executive Officer: Hello, Matt... Matt R. Larew - William Blair & Co. LLC: Joe, you answered some of the new products there at the beginning – I think you mentioned maybe as many as six or eight that were sort of brought forth in 2014. Wondering if you could give us an idea of just how much those products are actually contributing to revenues right now, and how that might move through the next couple of years, how meaningful some of those products could be? Thanks. Joe E. Kiani - Chairman & Chief Executive Officer: Well, in 2014 they added about $2 million to $3 million of revenue. We expect that will hopefully about double in the New Year but over time we believe they will become, in the next three to four years, about 10% of our revenues. I think, as you may know, introducing products in the medical space unfortunately doesn't get traction overnight in hospitals. There's usually a 17-year period from the time something that's considered clinically necessary and good for patients till when it's broadly deployed and that's one of the things we've been dealing with with hemoglobin. But the great news is we have many of them out already, many of the ones, the 11 products I mentioned are not only out internationally but many of them are out in the U.S. through the FDA clearance process that we've gone through. Matt R. Larew - William Blair & Co. LLC: Okay. Thanks for that, Joe. And then just thinking about the SpHb…

Thank you. And our next question comes from the line of Tao Levy from Wedbush.

Yeah. Hi. Good afternoon. Joe E. Kiani - Chairman & Chief Executive Officer: Hi, Tao. Mark P. de Raad - Executive Vice President & Chief Financial Officer: Hi, Tao.

So maybe we could start on the guidance front. How should we think about the cadence of the quarters when we think about the flu season and how that might affect your first quarter? Mark P. de Raad - Executive Vice President & Chief Financial Officer: Well, I think, in general, Tao, the strength that we saw in the tail end of last year continues into the first part of this year. So that's very encouraging. We do think that if you look at our year-over-year revenue growth by quarter that simply because of the fact that we had a fairly slow or slower early part of 2014 that we actually expect to see some pretty nice year-over-year revenue increases in the first half of the year. And then those are likely to moderate a little bit towards the end of the year, based upon the strength, obviously, that we've seen at the end of fiscal 2014.

Okay. Perfect, helpful. And then when I look at – when you talk about the share expectations, shares outstanding, you're not assuming any repurchases? Mark P. de Raad - Executive Vice President & Chief Financial Officer: Correct. For now that's our assumption. Joe E. Kiani - Chairman & Chief Executive Officer: It's interesting because, as you know, we've assumed another $125 million draw on our line of credit.

Correct. Joe E. Kiani - Chairman & Chief Executive Officer: Yet we've not reduced the number of shares. At this point, given that we don't have an acquisition target, if we do draw the money that means shares will be reduced. But until it's done, we do not want to project it.

Okay. And then if we could talk a little bit about the rainbow performance in the quarter. I didn't quite understand or hear the reason why the Q4 was below expectations. I know it sounded like, at least from the prior quarter, there were a couple orders that might have slipped into Q4. Did these further slip? And then thinking about 2015, you are expecting some growth, so I wasn't sure again if these are orders that are shifting around a bit? Joe E. Kiani - Chairman & Chief Executive Officer: Yes. Unfortunately the rainbow numbers in Q4 did not pan out to what we had expected. We have about $20 million of rainbow business that are in big chunks and some of those big chunks, again did not come in as we'd expected. So going forward as we projected our rainbow revenues for 2015, we actually took out those big opportunities entirely. So, the $57 million to $60 million depending on FX that we projected does not include any of those opportunities that together add up to about $20 million. Now, if we do take the big chunk out of our business going backwards too, year-over-year Q4 wasn't as bad as it looks. It did grow in double digits if you take out that $2.2 million. But, again, it was still below our expectation predominantly because we did not get the big – some couple of the big chunks of business that we had planned for Q4 2014.

Got you. And then just, lastly. Joe, you mentioned expectations that GE and Philips would incorporate the new OMX board this year. Is that sort of the expectation that they will include that in sort of a higher end patient monitor at some point this year? Joe E. Kiani - Chairman & Chief Executive Officer: Yes. Yes, at least for Philips, we expect them to launch their high-end monitor towards the middle of this year. Philips has already launched their low-end monitor with rainbow worldwide, and we expect GE to launch their low-end monitor by midyear as well.

Perfect. Thank you. Joe E. Kiani - Chairman & Chief Executive Officer: Thank you. Mark P. de Raad - Executive Vice President & Chief Financial Officer: Thanks, Tao. Joe E. Kiani - Chairman & Chief Executive Officer: And by the way the earlier question, the insurance company that owns Allegheny Health is Highmark. I could not remember their name before. Thank you.

Thank you. Our next question comes from the line of Larry Keusch from Raymond James. Lawrence S. Keusch - Raymond James & Associates, Inc.: Hi. Good afternoon. Joe E. Kiani - Chairman & Chief Executive Officer: Hi, Larry. Lawrence S. Keusch - Raymond James & Associates, Inc.: Joe, you sort of finished up your prepared comments talking about the 10-year plan and the outlook for the next three years. Could you remind us again sort of how you're thinking about whether it be top line growth or operating margins where you expect those to be able to get over the remainder of that 10-year plan? Joe E. Kiani - Chairman & Chief Executive Officer: Sure. Sure. Larry, first of all, as you know, we've been successfully shipping over 160,000 monitors a year for over two years now, and we expect that to continue. So that continues to grow our installed base, of course, as it gets bigger in the single digit, but close to the 10% a year. Now the thing that we can definitely control is our cost of goods and our expense growth. And the thing we had done the first several years in this 10-year plan is to spend our resources aggressively towards filling out our product pipeline as well as our sales force worldwide with the clinical support worldwide and the infrastructure worldwide. Those investments have been made. We intend to watch our expense growth very, very carefully and limit it because we think we've got the infrastructure for the next three years to get to where we want to get to. And as far as where we are heading towards, we're heading towards gross margins of about 68% over the next three years with hopefully continued growth of our revenue without the FX issues in…

Thank you. And our next question comes from the line of Chris Lewis from ROTH Capital Partners.

Good afternoon, guys. Thanks for taking the questions. Joe E. Kiani - Chairman & Chief Executive Officer: Hi, Chris.

First is just around the core SET business that was up double digits again even excluding the additional selling week, excluding rainbow. So can you just elaborate? I think, Joe you mentioned that you continue to take share in that segment of the business. Can you elaborate on what's driving those market share gains you're experiencing and expectations for that to continue in 2015? Joe E. Kiani - Chairman & Chief Executive Officer: Yes. We clearly, there is a huge differentiation between our pulse oximeter technology and our main competitor's. The value proposition is intense, both in terms of saving eye sights of babies, helping detect critical and general heart disease with amazing sensitivity and specificity as well as cost of ownership reduction. Cost of use of our product is significantly lower than our competitors. So we have been successful in retaining 99%, 95%, I don't know what the exact percentage is, but very high percentage rate of accounts that convert to Masimo and then taking more and more. This year, we lost an account named Hartford. Within a year, they came back, entered into a very long-term agreement with us after experiencing what it was like again to go back. We got systems like Queen's in Hawaii, of course Allegheny Health Network, and Mayo Clinic in Scottsdale and Queens and Parkland and Dimension Healthcare, I mean, the list is long, St. Francis Medical. So we had a very robust year, and new agreements as well as renewals. We also continue to increase the number of OEMs that offer Masimo, we're definitely north of 50, maybe even near 100 patient monitoring companies that offer Masimo, and more and more percentage of their shipments are with Masimo. That's why, for the year, I think we did over 170,000 pulse oximeters and…

No. I appreciate all the color there. And then your comments around improving kind of hospital utilization, quite a bit different than kind of the bleak outlook you provided maybe a year ago. What's your best take of the current macro environment thus far in 2015 with what you're seeing in terms of hospital admissions and spending, both in the U.S. and then in Europe? Joe E. Kiani - Chairman & Chief Executive Officer: Well, first of all in the U.S., the flu season has been a pretty strong flu season compared to the last few years. In fact, I think the last flu season that rivaled this one I think was 2012. It came early and it lasted for a while. So I think certainly that's part of the strong revenues we're showing because of the utilization of our installed base is higher than a year ago. But, overall, you're right. My fear is last year, especially looking at what happened in Q4, then Q1, then Q2, I was worried that we might be seeing the impact of Affordable Care Act on a national level like we've seen on the smaller regional level in Massachusetts when they went through it. And I kind of did my best to forecast it thinking, oh, if that's what's happening then we could be in this thing for a few years. It looks like that is not happening. So, for example, you remember Q4 and Q1 last year, census was down by 4% each quarter. Then it started looking a little bit better in Q2. Finally by Q3, Q4, it wasn't that bad. I think Q4 was the first time we've seen a slight positive increase in census. I've heard about 1%. So that's the U.S. The U.S. we think census has improved, a bad flu season has helped. Worldwide there are pockets of the market worldwide where there's robust growth, pockets where there isn't. But because of the increase in our footprint that we've invested in the last several years, we are taking a healthy market share away from competitors in – whether it's Australia, New Zealand, or it's France and Germany, or it's Middle East or Turkey.

Thanks, Joe. And just one more from me for Mark. Can you quantify – I think you may have mentioned it, but I might have missed it. Can you quantify the contribution of the additional selling week in the U.S. and OUS? Thanks. Mark P. de Raad - Executive Vice President & Chief Financial Officer: Yeah, Chris, our best estimate is approximately $5 million was the benefit because it was a holiday-shortened week here in the U.S. And of that $5 million, about $4 million in the U.S., about $1 million OUS.

Okay. Great. Thanks for the time. Joe E. Kiani - Chairman & Chief Executive Officer: Thank you.

Thank you. And our next question comes from the line of Bill Quirk from Piper Jaffray. Bill R. Quirk - Piper Jaffray & Co (Broker): Great. Thanks. Good afternoon, everybody. First question, actually I kind of want to pick up off the last one. Mark, I realize it's difficult, but is there any way to quantify what the flu benefit was in the quarter? Mark P. de Raad - Executive Vice President & Chief Financial Officer: Bill, I don't think so. I mean, other than what Joe just said, there's no doubt that part of the strength that we saw in this quarter is undoubtedly due to that, and we expect that, frankly, to continue in the early part of the new year as well. But it's real hard to put a dollar figure on it in terms of how much of our year-over-year increase is due simply to that versus, obviously, the impact of the additional 170,000 drivers that we placed into the market since this time last year. Bill R. Quirk - Piper Jaffray & Co (Broker): Understood. And then two more for me. And, I guess, the first one is, you talked a little bit about some sustainable gross margin improvement over the next three years. So thank you very much for the long-term viewpoint. I couldn't help but notice, of course, that since you did expand your DIO, no doubt you're picking up some absorption improvement as well. I guess, is there any way to think about what that gave you here in 2014? Do you feel comfortable with where you are with respect to those inventory levels? And then I've got one more follow-up. Thanks. Mark P. de Raad - Executive Vice President & Chief Financial Officer: Yeah, Bill, I think best guess it probably…