STERIS plc

Good morning, and welcome to the Staris PLC second quarter 2020 conference call. All participants will be in listen-only mode. Should you need assistance, please signal conference specialists 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 answer your question, please press star then two. Those listening through the webcast may submit a question throughout the event by clicking on the questions on your screen. Please note, this event is being recorded. I now would like to turn the conference over to Julie Winter, Investor Relations. Please go ahead, ma'am.

Thank you, Keith, and good morning, everyone. As usual, on today's call, we have Walt Rosebrough, our president and CEO, and Mike Tokich, our senior vice president and CFO. I do have a few words of caution before we open for cameras. 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 DARIS is strictly prohibited. Some of the statements made during this review are or may be considered forward-looking statements. Many important factors could 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. Staris' 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 cautions, I will hand the call over to Mike.

Thank you, Julie, and good morning, everyone. It's once again my pleasure to be with you this morning to review the highlights of our second quarter performance. For the quarter, constant currency organic revenue growth was 10%, driven by volume and 90 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 150 basis points, to 43.6% and was impacted favorably by productivity, price, and currency, somewhat offset by higher labor costs. EBIT margin for the quarter was 20.3% of revenue, an increase of 150 basis points from the second quarter last year. The adjusted effective tax rate in the quarter was 19.1%, somewhat lower than we had anticipated due to favorable discrete items primarily the benefit of stock compensation expenses. Net income in the quarter grew 21% to $113.1 million, and earnings increased to $1.32 per diluted share, benefiting from revenue growth, margin expansion, and a lower effective tax rate. In terms of the balance sheet, we ended September with $225.5 million of cash and $1.2 billion in total debt. During the second quarter, capital expenditures totaled $48.4 million, while depreciation and amortization was $49.6 million. Free cash flow for the first six months declined slightly, as anticipated, to $162 million due to the planned increase in capital spending. However, we have not invested as much capital as we thought in the first half of the fiscal year simply due to the timing of projects. As a result, we are decreasing our full-year expectations for capital spending by $20 million to $260 million and increasing our free cash flow expectations to $320 million. With that, I will turn the call over to Walt for his remarks. Walt?