STERIS plc

Good morning and welcome to the Staris PLC first quarter 2020 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To try a question, please press star then two. Please note, this event is being recorded. I now would like to turn the conference over to your host today, Julie Winter, Senior Director of Investor Relations. Please go ahead, ma'am.

Thank you, Keith, and good morning, everyone. As usual on today's call, we have Walt Rosebra, our President and CEO, and Mike Tokich, our Senior Vice President and CFO. And I do have a few words of caution before we open for comments. This webcast contains time-sensitive information that is accurate only as of today. Any redistribution, retransmission, or rebroadcast of this call without the express written consent of Staris is strictly prohibited. Some of the statements made during this review are or may be considered forward-looking statements. Many important factors could also cause actual results to differ materially from those in the forward-looking statements, including without limitation those risk factors described in Staris' securities filings. The company does not undertake to update or revise any forward-looking statements as a result of new information or future events or developments. DERIS's SEC filings are available through the company and on our website. In addition, on today's call, non-GAAP financial measures including adjusted earnings per diluted share, segment operating income, constant currency organic revenue growth, and free cash flow will be used. Additional information regarding these measures, including definitions, is available in today's release, including reconciliations between GAAP and non-GAAP financial measures. Non-GAAP financial measures are presented during this call with the intent of providing greater transparency to supplemental financial information used by management and the Board of Directors in their financial analysis and operational decision making. With those questions, I will hand the call over to Mike.

Thank you, Julie, and good morning, everyone. It is once again my pleasure to be with you this morning to review the highlights of our first quarter performance. For the quarter, constant currency organic revenue growth was 10%, driven by volume and 120 basis points of price. We continue to experience strong underlying growth from our customers and success with new products. Gross margin for the quarter increased 190 basis points to 44.2%, and was favorably impacted by productivity, price, mix, and currency, somewhat offset by higher labor and material costs. EBIT margin for the quarter was 19.5% of revenue, an increase of 160 basis points from the first quarter last year, despite an increase in SG&A expenses, mostly relating to higher incentive compensation given the strength of the quarter. The adjusted effective tax rate in the quarter was 16.2 percent, somewhat lower than we had anticipated due to favorable discrete items, primarily the benefit related to stock compensation expenses. Net income in the quarter grew 23 percent to $105 million, and its earnings increased to $1.23 per diluted share, benefiting from revenue growth, margin expansion, and a lower tax rate. In terms of the balance sheet, We ended June with $238.1 million of cash and $1.2 billion in total debt. During the first quarter, capital expenditures totaled $49.8 million, while depreciation and amortization was $47.1 million. Free cash flow for the first three months declined, as anticipated, to $59.6 million due to the increased capital spending. With that, I will turn the call over to Walt for his remarks.