Becton Dickinson and Co (BDX) 2002 Q4 法說會逐字稿

Welcome to the earnings release conference call. At the request of BD, today's call is being recorded for replay and will be available at BD website at www.BD.com through November 14th, 2002. I would like to inform parties, your lines have been placed on a listen-only mode until the question and answer segment. Beginning today's meeting is Mr. Dean Paranicas, Vice President of Public Relations and Public Affairs. Sir you may begin.

Dean Paranicas Thank you, Chris. Good morning to all of you and we would like to formally welcome you and thank you for joining us call for fiscal results for 2002. Today's conference call is being simultaneously webcast and as the operators noted is available on our website at www.BD.com, and it will be also be available for playback at the following numbers. 1-88-562-0218, domestic, and 1-402-998-1407, international. By the way, those numbers are also on the Andavar earnings release, and they will be available at close of business November 14th, 2002.

Also joining us on this conference call are members of the media. In the course of this morning's discussion, we will make some forward-looking statements and it is possible that actual results could differ from the expectations we expressed today. Factors that could cause such differences to appear in the fourth quarter press release and in the management discussion and analysis sections of our reason SEC filings. Joining us this morning are Ed Ludwig, our Chairman and Chief Executive Officer, John Considine, our Executive Vice President and Chief Financial Officer; Gary Cohen, President of BD Medical Systems; Bill Kozy, President of BD Clinical Laboratory Solutions and Company Operations; Deb Neff, President of BD Bio-Sciences and Vince Orlent our Senior Vice President of Technology, Strategy, and Development. I also should note that Ed Ludwig appeared this morning on CNBC's wake-up call and we'll be posting a replay of that on our website, and I will now turn with that, I will turn the call over to Ed.

Thank you very much, Dean, and good morning to everyone. By now, I'm assuming that you all had time to review the earnings release and attachments that we issued after yesterday's market close. We would like to devote as much time as possible this morning to addressing your questions. However, before we begin, I would like to offer some brief comments about the quarter and the year as well as our outlook for fiscal 2003. Let me first discuss our results for fiscal 2002.

Over the past two years, we have been pursuing and communicating a very purposeful strategy with two interrelated goals. First, we're increasing revenue growth by focusing on products that have a higher benefit to patients, health care workers, and researchers. Second, we're implementing a broad, aggressive set of actions that will continue to improve our operating effectiveness and balance sheet productivity. This, in turn, will provide resources for our growth initiatives. Thereby, again rating higher shareholder returns. I'm pleased to report that our results in 2002 reflected the success of our strategy. Companywide revenue and earnings per share for the quarter and the year were in line with our projections that we shared with you throughout the year. Diluted earnings per share in the fourth quarter were 50 cents, which included a non-cash write-down primarily related to the carrying value of our equity investment in Tri-Path imaging. You will recall that we discussed this matter during our third quarter call and in our third quarter 10-Q filing. Excluding this charge, diluted EPS would have been 53 cents.

Full-year EPS of $1.79 also included 6 cents of special charges recorded in the second and third quarters in conjunction with our BD Medical Systems Manufacturing Restructuring. Excluding the write-down and the special charges, our full-year results were $1.88 per share. All three business segments turned in solid revenue performances. Led by our revenue growth drivers, which are safety engineered products, pre-fillable devices and BD Biosciences, as well as our diagnostic systems instrument platforms. As for our safety engineered products, these products are sold by both the BD any Cal systems and pre-analytical systems portion of the laboratories solution segment.

On a combined basis, I'm pleased to note that the U.S. sales totaled $573 million, excluding the offset of sales of conventional products. This represents a growth of 38% and exceeded our own full-year projection of $565 million. For 2003, we look for U.S. sales of safety engineered products to be about $660 million, which would represent an increase of about 15% over 2002.

Turning to BD Medical Systems, revenues grew 6.8% for the quarter and 7.3% for the year. Growth for the quarter and the year was driven primarily by U.S. sales of safety engineered products, as I previously mentioned, and pharmaceutical systems pre-fillable products, which experienced a year of mid-teens growth. U.S. sales of consumer health care products declined by 3% in the quarter and 5% for the year, reflecting the previously-disclosed impact of redirecting our promotional efforts for branded influence syringes from distributors to retailers. And needle revenues in the U.S. increased 30% for the year. We expect that the Diabetes care business in the United States will return to a more normal mid to low single digit growth in 2003.

Turning to BD Clinical Labs Solutions, revenues in this segment grew 10.5% for the quarter and 7.4% for the year. Once again, U.S. sales of our safety engineered blood collection products drove growth in the pre-analytical solutions portion of the segment. Gains in revenues related to BD Probe Tech ET, which saw revenues double over 2001 contributed to the growth in the diagnostic systems portion of the segment. BD Biosciences revenues are grown by 14.1% for the quarter and 9.4% for the year. This segment continues to benefit from strong sales of phammengen, immunology and cell-biology products, immuno-psytrometry systems and reagents and discovery labware.

Clone tech's revenue declined by about $2 million in the quarter due to softness in PharmaBiotech R&D spending and the upstream of DNA agents and toward downstream drug discovery and development products addressed by other parts of BD Biosciences. We remain confident in BD Biosciences growth potential. That growth is being driven by a number of strong and sustainable trends. These trends include the increase in biomedical research funding, the need for greater efficiency in productivity of the drug discovery and development process, and the growing demand for applications in the fields of stem cell research, vaccine development, and immune function monitoring.

I would like to now conclude my remarks by commenting on our strong companywide financial trends and provide you with a confirmation of our outlook for 2003. Consistent with our guidance throughout 2002, our fourth quarter gross profit margin of 49.2%, again, reflected sequential improvement over the preceding quarter. Sales of BD Biosciences positively affected the quarter's gross margin. Offsetting this on a year on year basis were the effects of the Latin America economic conditions on our BD Medical Systems and BD Clinical Lab Solutions operations. Variances recorded in connection with our inventory reduction efforts and the previously-mentioned costs incurred in conjunction with the BD Medical Systems manufacturing restructuring. Our ongoing efforts to focus on both operating effectiveness and balance sheet productivity generated strong cash flow.

For the year, we generated net cash from operations of about $900 million. During the year, we contributed about $100 million to the pension plan in the first quarter. $260 million was invested in capital expenditures, and this beat our target of $300 million and was over $100 million less than the $371 million we spent in 2001. We also re-purchased about 6.6 million shares of common stock for about $224 million. Turing to working capital, inventories declined by $10 million. As inventory turns increased from 2.76 to 2.96. Accounts receivable declined by $22 million. And day sales outstanding declined from 62 to 55 days. During the year, our debt-to-capitalization ratio improved to about 32.5%, which is down from 34.1% a year ago, keeping us solidly in our target range.

Looking at 2003, we expect diluted earnings per share of about $2.07. This would be about 10% over this year's same-store sales EPS number of $1.88, and this year's number of $1.88 excludes the special charges in the equity write-down. In addition, we expect to continue to increase cash flow fueled by our continued focus on productivity and companywide reported revenue growth of between 8 and 9%. In 2003 by segment in BD Medical Systems, we look for revenue growth of about 9 to 10%. We expect this will be driven primarily by U.S. sales of safety engineered devices and by pre-fillable products and by our new entry into blood glucose monitoring, which I will discuss in a minute.

In BD clinical lab solutions, we expect revenue growth of about 6% driven by U.S. sales of safety engineered devices and the continued expansion of reagent sales associated with BD Probe Tech ET. And BD Biosciences, revenue growth is expected to be about 10% driven by instrument, reagents, and discovery lab ware products. We do expect that first half Biosciences revenue growth will be slower due to reduction in ordered back log as a result of our improvements in our order fulfillment and installation processes in BD Biosciences. However, I would like to note that our order rates are on plan for the full year, and this is all reflected in the segments full-year revenue growth guidance, which, again, I said is about 10%.

On a companywide basis, we look to improve our gross profit margin by focusing on products with, as I said before, which have a higher value, higher margin and they have more direct benefits to patients, healthcare workers and researchers. We will also continue our lean enterprise efforts. We will work to increase our inventory turns. We will eliminate our sku’s and in 2003, we expect our gross profit margin to increase by 75 to 100 basis points. I want to point out that we are achieving this net improvement in gross profit not withstanding incremental costs for our Genesis roll-out and additional pension plan costs.

Also, I want to remind you that we are readying the launch of our blood glucose monitor in the United States. In previous calls, we informed that BD intends to enter this market before the end of calendar 2002. These plans are proceeding on schedule. Next month, we will communicate more fully our BCM launch plans, and we think that and you our customers will be impressed by what we have to say and the way we're going to approach this. So we ask you today that you wait a little bit longer to hear more about this subject and we will not discuss any additional details about our products or launch strategy during our call today, but we will have an event sometime in December to do that in great detail.

What we will confirm today is that our products have been cleared by the FDA in the United States and the first two quarters of fiscal 2003, we will be making an upfront investment as we seed the marketplace with these meters. Therefore, reflecting the aforementioned impacts of Biosciences and blood glucose monitoring, we expect the earnings diluted per share growth to be stronger in the second half of the year.

And more specific to the first quarter, we expect EPS of around 39 cents, which includes about 2 cents of incremental spending for blood glucose monitoring launch. With that said, let's begin the Q&A. In order to allow the broadest participation in light of our time constraints and there are other earnings calls this morning, we would appreciate that each of you would limit your questions to one plus a follow-up. I thank you for your cooperation in that, and I will turn it back to the operator to commence with the Q&A.

Thank you, sir. If you would like to ask a question at this time, please press star one on your touch tone phone. I will announce you prior to your question. Again, please press star one, now, if you would like to ask a question, and we will take a moment for our questions to register in our queue. Our first question comes from Glen Rison with Morgan Stanley. Your line is open, sir.

Good morning, folks.

Good morning good morning, Glen.

More of a conceptual question. As I look at your outlook for 2003 relative to mine, you are generally more optimistic on the sales side. I would have thought more like 7- 8% growth, not 9 to 10, so my question is the following. You are taking this upfront cost on the launch of the blood glucose monitoring system, but if 9 to 10% does prove to be optimistic and it does end up being more 7 or 8%, how much flexibility do you have in terms of meeting your bottom line projections for next year?

Well, this is Ed. What I will do with all of the questions is I will answer them at least in part and if we need further elaboration, we've got lots of folks here to help out. With respect to the guidance in revenue, you'll recall that this year's revenue growth as a base was, you know, 7.7 reported and 8.2 FX neutral, so it's a hot 7 or a light 8, and that already, in that guidance, we overcame an admittedly soft year in our consumer business and our Diabetes health care business, and as I said, we had a little bit of head wind from foreign exchange.

It doesn't take any degree of optimism to go from a 7 to 8 guidance to an 8-to-9 guidance. You get maybe about a point on foreign exchange and you get about a point on basic growth and you get a little bit of help by the fact that if our Diabetes health care core business grows in the low to mid single digits next year versus shrinking 3 to 5% this year, you also get a little tail wind. We think that the revenue guidance is prudent. Having said that, we are always looking very closely on controlling our expenses and as always, if the outlook doesn't come out as planned, we will take aggressive actions to control costs.

So my follow-up question is the following. How much are you expecting in revenues from the blood glucose system, and you can split out the 9 to 10%, and you mentioned the FX contribution, and I would like to get a sense of how even the growth is between the different regions.

Well, this year, we're not commenting. We're asking for your indulgence on blood glucose. We're having an event that you will be invited to in the December timeframe when we're really ready to talk about that, but on a U.S. versus international basis, this year, they were fairly evenly split. This year, our international growth was FX neutral, again, was about 8.6 and U.S. was about 7.8. I would think that they'd be about the same next year.

This year, we did have some softness in Latin America, and we had good growth in Europe and Asia and Japan. I expect that Europe, Asia, Japan will continue a pace, and Latin America will recover modestly, so I think if you think about U.S. growth about the same as ex-U.S. growth, that's not a bad way to go.

You don't want to quantify in dollars. I know we can't see the system. You already have your projections. You must know what it will contribute to your top line next year.

We're holding off until December. We'll be very clear about that, and I think everyone will be able to see it at that time.

Thank you.

You're welcome.

Our next question comes from Rick Wise with Bear Sterns. Your line is open, sir.

Good morning, everybody. A couple of questions. First of all, I wanted to make sure that I understood on the gross margin improvement, you were saying that, I mean, obviously, you expect it to go up, but it will be restrained a bit by pension costs and Genesis costs. Can you break that out for us and talk about what your pension contribution expense or incremental cost is going to be for the next couple of years?

Yeah. Let me just reiterate. The 75 to 100 basis point approving gross profit anticipates, and I will turn it over to John in a second, already includes some significant first-year costs for Genesis in the $40 million to $50 million range and pension costs in the $30 million range, and the pension costs are functioned, and I think you will be hearing this, and we're the first, because we're a 930 company, we're one of the first fiscal years to close. I think we and many other companies have to take hard looks about key assumptions, principally about how much return are you getting on the assets in the plan and when you make those changes and turn the Fas 87 crank, you get aggressive new costs, and these have been built into our guidance, and I will turn it over to John for further elaboration.

Hi, Rick.

Hey, John.

The margin gets hit with mostly pension costs in the year. Pension for us is incrementally going to be 25 to $30 million in expense for this year. Most of that will go for the gross margin. And that's in as guidance as 75 to 100 basis points. In terms of Genesis, those costs are plus or minus $45 million incremental, and that is as we turn on the system and roll it out, it starts to come in, in particular in the second quarter. Some of it is, it's not all cash, probably $20 million of it is amortization that just starts hitting the p&l so you will see our SSG&A spend go up and you really won't see that in gross margin other than in the first quarter, our gross margin will get hit more with it with the pension cost than in other quarters and then the margin for the year should benefit from, again, from safety, the rebound in the syringes and also the absence of those manufacturing restructuring costs that you know that ran through the p&l from last year.

Just a quick follow up on that. I was surprised that Diabetes business was only up 1% in the quarter. I thought we would have, you know, that was against a quarter that was down some, like 20% a year ago. I thought we would have started to see the react sell ration in growth there. What --re-acceleration in growth there. Why didn’t we and what kind of growth are we looking for in ‘03 and why? Thanks

That business was a little bit light. Not considerably. Next year, I think if you use a number of 4 to 5% on the base business, that's more in line, and the fourth quarter was a couple million down from the prior year versus a couple million up if it grew at a couple of percent and maybe John could elaborate on that just a little bit. But we didn't see that fourth quarter trend as significant. The important take-away is next year, think of the Diabetes business, independent of the new product launch, as growing in the 5% range.

Yeah. Gary may want to put some color on this, Rick, but just to allay any fears that we found any more inventory out there from that one distributor that we didn't name, we did not. As you recall in the third quarter, we had seen a brand new $8 million and we had to reduce revenues as a result of that. That slowed down since that inventory was out there, some of the buying of needles still slowed down in the fourth quarter, the beginning of the fourth quarter, but if you look at our month-on-month growth, it would come up toward the end of the quarter, so we're through all of that, and that's probably, I would say, same-store sales about $4 million worth of effect there. Gary, do you want to?

That's accurate. There were a lot of changes over the course of this year as previously has been communicated in the promotional approach, which had been previously directed toward, distributors and drug wholesalers which were redirected toward retailers this year, and the growth of pen needle market and that made predictability this year a little more challenging than we had anticipated. Those aspects have been worked through by the end of this year, and we are anticipating, with that said, a mid single digit growth in the U.S. for the core consumer health care business.

Thank you.

Our next question comes from Daniel Lematry with Merrill Lynch.

Good morning, gentlemen. Just a couple of questions particularly on the safety stuff first, and I'm just wondering if you could comment on the 15% projection that you have for next year, is your pricing assumption basically that the premium prices for safety continued holding? Can you just remind us where those are at this point?

I will turn it over to Gary. I think if you look in terms of -- as we've said in the past, by sort of toward the end of '03, but with a carry-through in '04, you know, these conversions start to mature, so to speak, in the United States. We're still looking for nearly $100 million in new safety business next year. We've also said that in '04, we would hope to see some measurable pickup in safety revenues beginning in Europe and other developed markets around the world. And let me turn it over to Gary and Bill to talk about pricing trends, which is the other part of your question.

The pricing in the market place is it's holding steady as we anticipated and that appears to be what will occur next year, and it's actually now this year for us, in '03, as well. We participate at multiple price points with different products for the same application, so there could be a mixed impact relative to that on pricing, but overall, we're expecting pricing to remain pretty much steady into '03. You know, we're growing off of a much bigger base now, so the near $100 million of growth reflects that as well as the fact that some the markets are moving toward near full transition to safety engineer devices, such as the IB catheter market which was approaching 85% plus conversion rate. With injection, a little bit slower than that because hospitals are putting their emphasis on blood fill needles, but that's growing nicely, as well.

Thanks. Just one follow-up on this, and Ed, you made the comment about '04 and international, which was actually going to be my question in terms of how we do expect that international roll-out to go. Is the '04 bolus and safety international a function of your ramping capacity, or is that demand finally catching up to where the U.S. is?

No. The '04 -- and again, we have some modest safety sales in places like Europe and Japan even today. You know, you may recall we began the safety and more personally, Gary and his team, began the safety campaign so to speak in this country in the late '80s, and that goes only so far on its own weight, and the real impetuous and the market is really driven by legislative activity, which in this country occurred over the last several years. What we anticipated that throughout '03, on a country-by-country basis, and that's let's use Europe as an example. We're hoping that there is some insight and some legislation and even on a pan European basis. We are ready to serve this market, you know, with the broadest line. We have over 200 stock keeping units in blood collection, hypodermic and catheters, so we're ready with capacity. We're waiting I think, the real inflection point outside of the U.S. will come from legislation.

Great. Hey, Ed, just for planning purposes, when is the meeting going to be when we see the glucose monitor, Franklin, New York, some place else?

It will be in the New York metropolitan area. We'll try to make it easy for you guys.

Okay.

If there are any suggestions for Dobos or something, we can entertain those. ( Laughter )

Thank you, guys.

Our next question is from Bruce Jacobs from Deutsche Bank.

Thank you. I want to ask about probe tech and Phoenix. Can you talk about where the placements ended the year, and also, I'm wondering if you can give us a sense for what kind of consumable stream is throwing off and how long a new placement takes to ramp up over time?

All right. I will turn that over to Bill. I think the way we try to help you folks think about it is to follow the cash, follow the dollars. The revenue in probe tech doubled year on year, and the revenue in Phoenix doubled year on year, although that is admittedly a smaller product. Phoenix is not being sold in the United States. That won't happen for another year, pending FDA approval, and Probe Tech really hasn’t had a successful year, and I will ask Bill Kozy to elaborate further.

As Ed has mentioned Probe tech has really been the higher impact instrument for the year, and we would estimate the placement that the end of FY02 to be around 530, and we're pleased that we have another 50- 60 instruments that are in real customer evaluation at this point in time. The consumable stream behind the probe tech has actually been pretty steady. There is quite a bit of demand, steady demand in and around the Chlamydia and GC testing and we're satisfied with consumables.

Can you help us with the numbers what is the system that is at peak utilization generates in revenue?

We can look at that. Give me a couple of minutes and see if I can come back with a number.

I will ask a quick follow-up. On the divestiture plan, can you wrap up for us –?

Go ahead,

I was asking on the divestiture plans that you talked about last year, can you just help us wrap up that whole process in terms what you had intended what you did and if you're fully done with anything you might do in the future?

Well, let me start at the end and work my way backwards. We have no divestitures planned at this point. What we decided to do is that in one case where we were pretty close to a deal, the buyer decided not to proceed and so that kind of took care of itself, and in the other sense, we didn't get what we thought were the kind of values that would have justified taking the operating profit dilution. You know, when you divest profitable concern and you reinvest the funds either in buying back shares or paying down debt, you just can never quite catch the operating return, and we were going to suffer through a dilution.

We thought if we were going to take dilution on a prospective basis, it's better to do it for something that's growing rather than going backwards. Those two deals evolved that way. I think we discussed it pretty much in the third quarter. We had guided that particularly one of those divestitures would have cost us 5 cents in dilution. We reinvested 3 cents as we guided for '03. We added 2 cents to the previous guidance to bring our guidance up to 207, and we invested the other 3 cents in the one business that we retained a little bit, and we put the other investables into further productivity efforts and our blood glucose launch.

Thanks so much, and on the probe tech, any answer there?

Yes. We went -- there is a range given the size in the account, but a good number would be $50,000 to $100,000 amortized

At peak levels?

$100,000 would be the large account, the high end, and 50 would be, obviously, the other end.

How long does it take for an account to get there post-placement, roughly?

How long does it take for an account get up to scale?

In the utilization.

A couple months.

After a couple of months, these systems are, you know, 3 to 6 months, they're pretty well up and running. Principally, thee are tests, if I'm not mistaken, Bill that are not manually now or in different methods. The beauty of the probe tech is that you can screen asymptomatic patients with a simple urine sample during a routine physical. These are typically female patients and the public health impact is that this is a condition, Chlamydia, in particular, which is asymptomatic, but could cause serious complications downstream if not detected, this system helps us detected it with a simple urine screen done with routine physicals and if positive, the treatment is a simple course of antibiotics, and so that's the public health, so to speak, benefit that this system is providing.

Perfect. Thanks so much, guys, appreciate it.

Our next question comes from Scott Davidson with Piper Jaffrey. Your line is open.

Good morning.

Hi, Scott.

I was wondering if Ed and Vince might be able to talk a little bit about your acquisition appetite, just in light of the balance sheet improvements and, you know, it seems like you're through the divestiture phase. If you would talk about your appetite for purchases.

Well, the first thing to say is that the strategy we're pursuing is driven primarily by internal innovation. Having said that, we are very aggressive in doing partnerships, and you'll be hearing more about that throughout '03. Deb and her team have done some very interesting partnerships in the area of reagents and proteomics. We have the capacity, as you point out, to make acquisitions, but these would be driven, and we have no acquisitions imminent, if we would focus acquisitions on areas where we could add strategic value to our portfolio, that there would be a technology involved or be a real strategic reason. You won't hear us talking about acquisitions related to just sort of market integration type of activities. These would be innovation driven acquisitions. There are none imminent, but our good cash flow gives us a lot of operating and strategic flexibility.

Thanks. Just one follow-up on the same cash flow. I may have missed this number and if you talk in terms of a CapX expectation for next year and then also plans in terms of additional share buybacks.

CapX next year, we're guiding at about 275, and we think that's sustainable. In terms of the buyback, we have 3.5 million shares left on our original 10 million authorization, and I would expect that we'd be looking for a new authorization next year. We've been talking generally in terms of in the range of 5 million shares a year and I would expect that we'd be looking at that. We do believe that the equity is undervalued and it represents a good investment to pursue buybacks, but that's it.

Thanks very much.

Okay.

Our next question comes from Ted Huber with Bank of America Securities. Your line is open, sir.

Thank you, just a follow-up, first, on the cash flow. Our model really has your debt to cap going down below your 30% target in '03, even with a modest buyback. Are there any more aggressive plans to give cash back to shareholders or do you have a target debt to cap that you want to keep this at or could we see this ride down well to the 20s in '03?

Well, we don't have any more aggressive plans to return cash to the shareholders. Let me ask John to elaborate on this. I think we will continue to look at -- well, we are making an investment, an additional investment in our pension plan this year that we may want to discuss, too.

Yeah, well, that's mild. Even with that, we're around 32.3 right now, as you know, Ted, depending on how you treat deferred taxes, and you know, our target range was to get below 35. We never intended to get, you know, below 30, and while, you know, you heard Ed's answer on the acquisitions, you know, it still doesn't prohibit strategic things that we may need either in the manufacturing space or in other spaces.

We have and obviously, you know if the question was, can you do increased dividends and stuff like that, you know, that's in the purview. Obviously, we would talk with them strategically about such things. We've had a pattern of increasing the dividend once a year, and you know, we'll be talking to them about that again. I don't see this company longer term being in the low 20s.

I think that the uses of cash, whether they are back to the shareholder or for other investment purposes will become, you know, will become obvious. It's kind of nice, though, right now coming down from 47% to the 33% over 2 1/2 years, so we'll have to get back to you with any more specificity on that at a later date.

You know, John, is there any timing in terms of board meetings or what-not when we might hear more formal announcements about those types of plans in '03 relative to dividends or an aggressive buyback?

Well this is Ed. I wouldn't anticipate. You should not anticipate any significant deviation in our long-standing financial policy regarding the dividend will go up as a function of trailing earnings, which it always does, and as John said, I think we're trying to keep our options available to us in terms of strategic investments and cash flow and I don't mean to signal -- we don't mean to signal any imminent change in our fundamental capital structure or cash policy.

Okay. That's helpful. Just as a quick follow-up then on the safety needle side of the business, Gary, you know, I think one of the reasons why you were working in this field for 10 years in the U.S. without a great significant amount of revenue was you didn't really have the product line. At this point as you guys pointed out, though, you have, you know, the biggest product line in safety. If you're promoting that around the world, if we assume that this pan European legislation does not come soon, what kind of revenues can you do with this product line in the western markets? You say Europe and Japan, in the next few years without that legislative push.

Let me first comment by giving you a absolutely alternative view. We actually had quite a complete product line as early as 1992, '93, and the company had some excellent growth that came out of the early adoption area of safety that were pre-legislation area, such as saved by the axis with the delivery needle system which gave a lot of growth in the '90 as well as blood collection stats which were big growers in the '90s and by the '90s we had a complete product range across the board which has been added to, including the newer technologies that I believe you're referencing, which are second and third generation technologies.

The international growth, we are beginning to get some already, and as we experienced in the U.S., they tend to be in the earlier adoption product categories, such as, again, safe IB access and in flood fill needles. The markets, in our view, will only go so far without some policy movement, and policy can take different forms. It could be formal legislation as it exists in the U.S. It could be other forms of regulatory action. We're seeing movement in that direction already occurring in Europe. Initially on a country by country basis, but there's activity going on potentially on a pan European basis, and we think that would come after some countries adopt laws and we would expect that at least one European country will put formal laws on the books that will require the use of these devices.

We have seen a lot of market development activity in Japan and other places, including Australia and Canada, so we think the markets are moving in that direction. As we always indicated, they're lagging the U.S., say, by 2 to 3 years. Whether the policies will take the same form and whether markets will have the same characteristics in terms of how they convert, still needs to be determined. The European market, for example, is a little more price sensitive, in general, in medical devices, and we would be readying our product lines accordingly, and as I mentioned earlier, we do have flexibility in having a number of different platforms to feature in the various markets around the world.

Because those markets are a little more unpredictable at this stage, we haven't been clearly as directly given projections. In part, when we get projections, we want to give projections that are very reliable, but by '04, '05, there will be a good supplement to the good global growth and safety coming from the other markets and we have continued tail wind in the U.S., even as the markets reach full conversion because those conversions occur during the course of the year and you get a full-year roll-out in the following year, and we will see that, for example, in '03 for IB catheters even though the market is fully converted. In terms of getting more detail on that in the out years the reason we are hesitating is that when we give you numbers, we want to make sure they're good numbers.

That's helpful. Thank you.

Our next question comes from Larry Kush with Goldman Sachs. Your line is open.

Good morning. Two questions, I guess. First on the pension costs for next year. Are you actually making any changes to the rate of return assumptions you have for those pension plans, and then secondly, can you just give us an update on sort of where we are with what's going on with the GPL rebating policies?

Let me ask John to comment on -- there's a series of assumption that go into pension planning, and I think he can enlighten you here, and this will be a primer for the 1231 companies. I think you're going to be hearing this, again in the future. Anyway, let me turn it over to John.

Larry, how are you? We are moving our return on asset expectation down to 8% it was 9.75%. We are moving our discount rate down to 6.75%, and as you know that, both of those when they move in a downward direction tend to move up the pension expense because the discount rate moves up accumulated benefit obligation and the expected rate of return on the assets moves down the return. So those are the two most important. Everything else is pretty much the same.

Although, because of unacceptable performance in the last couple of years, we have more amortization also that runs through the pension expense because we were out of the FAS87 corridor. That's why we went up by $25 to 30 million in pension expense. Just to set the some parameters, there are about roughly right around $500 million. Our assets were $350ish million at the end of the year and in November, we already made $100 million contribution, so we'll be basically fully funded or within $30 odd million of being fully funded. That's a cash kind of thing. You know, for the last two years, we put $100 million in each year and for the 7 year before that, no cash was necessary so I hope that answers that a little bit for you.

No, that was great.

Let me have Gary comment. Could you repeat your question on the GPO so I understand it.

Again, given all the noise we've heard over the last several months. I'm just wondering if anything new that cropped up with that, just sort of legislatively or investigation-wise, just trying to get a sense of where that's going.

I will ask Gary to comment, but the summary answer to this is there's nothing new to report.

And I would, you know, just add that we have historically and to date competed and established our market position by dealing and negotiating directly with health care institutions throughout the U.S. We've also negotiated with BD because that's what our hospital customers asked us to do, and you know, the various news and so forth that's in the marketplace, we believe that that these impacts will not be significant one way or the other for BD. Regardless of which direction they go because the basis of our position, the foundation of that is our interaction with hospitals in the U.S.

I think you're referencing perhaps that there has been some investigatory activities around GPO’s they’re aimed at GPO and not BD in any way.

Lastly, could you just remind us if there were any comparison issues from last year at this time, just given September 11 owe vents --just given September 11 events?

Yeah. I will ask Deb to elaborate a little bit. You will notice the flow, BD- Biosciences business was a little strong in the fourth quarter. That is partially the result of a favorable comparison to fourth quarter last year. For the year, we were at 10. We're guiding at 10, and there's a top-line BD growth, and maybe Deb can comment briefly on -- we did have a negative impact in Q4 last year for BD-B.

Last year, as you recall, we did have some negative impact because of September 11th, and so the growth this quarter was really driven by some comparisons, probably 2 to 3% if you kind of look at it, combined with September 11th, and then some of our install practice changes that occurred last year. The rest of it was really driven by success in the marketplace of new product launches. We launched in the fourth quarter our LSR 2 which is kind of the first 4 laser benchtop sytometer with increased flexibility in a wide range of applications as well as just ongoing growth in our research reagent lines because of very strong biomedical government-based research funding.

Okay. Great. Thanks very much.

Edward Ludwig Okay.

Our next question comes from Jessica San Filipo with Thomas Weisel Partners Inc. Your line is open.

Thank you. On the subject of BD-Biosciences and your flow of business, can you give us a bit more insight on where particularly you're seeing slowdowns? Imuno cells seem to be really strong in addition to your business, and a sub question to that, where you see Clone Tech going next year in the molecular biology business?

Edward Ludwig That's a good question. Let me remind the listeners, we'll finish the year at about $645 million in biosciences, and the biggest pieces of that are imunosytometry. Clone tech, which had big expectations all year, is about a $75 million business. It was down a couple million dollars in the quarter, but having said that, let me let Deb elaborate on this area which, again, we are reaffirming is a good growth opportunity for the company.

I think your question was what's really driving some of the growth on the flow business, particularly the flow and the immunology reagents?

Yes.

And I think it's a combination of factors. One, there's just ongoing growth in some major research areas, particularly around vaccine development in the whole area of cell therapy and stem cell research and just basic studies of immune systems around autoimmune diseases. Those are requiring tools that help you look at the proteins and the cellular processes, and our systems are well suited to do that, and because of our market leadership there, we've been able to continue to put out kind of new, innovative products that are helping to drive that marketplace.

Clone tech, particularly, we talked about a slowdown there. We do expect to see clone tech return to growth next year, probably in the mid single digit range, and because of a combination of the install and the back log that we worked down this last year, you will see comparisons in the first half this year a little bit lower on growth, but you will see the second half of the year will pick up again because of launches of new products that we will be introducing in the first half of this year.

Great. Thank you, and as far the stem cell and the cell therapy business, are you seeing that go more into more federally funded, like government institutions or academic institutions versus biopharma?

Yes. Would say the most funning is going into academic research institution.

Great. Thank you.

You're welcome.

Our next question comes from Ryan Roush with Adams, Hartness, & Hill. Your line is open.

Thanks. Some housekeeping issues. What is your share count assumption in your $2.07 estimate for next year? If you gave it, I apologize, what's your cash flow expectation for next year, and finally, where do you stand with the med design royalty issue?

I will have John answer the first two and Gary to answer number three.

Yeah, Ryan, the shares that you use are 265 for the year on average, and what was your second part of that? Cash flow?

Yes .

Gross cash flow, you're talking in excess of $900 million of gross cash flow. That's income noncash charges and improvements of the balance sheet and on a use basis, as I said we already put 100 million into the pension. Cap is set at 275. You know, we don't have the authorization for the remaining shares yet, but Ed gave you 5 million shares so if you use 5 million shares, at some price, let's hope it's 40 But anyway, you can do the math here and the rest is free cash flow, and that's about it on cash flow. Dividend is $100 million, you're right.

Growing is a function of income. And the question on –

Just to comment on metazyne. We have a wonderful relationship with med design. We work on additional products for the future that you will be hearing more about. We didn't agree on what the applicable, what royalty rate was for the syringe category, so by the terms of our agreement with med design, we went into an arbitration process that was agreed upon by both sides that we discussed along the way, and that's the way it stands. For BD, it's really not highly material either way that turns out.

Thanks a lot.

Our next question comes from Scott Wilkin with SG Cowan. Your line is open.

Thank you. Just two quick questions. First, on SG&A. It sounds like based on your guidance, SG&A will be growing faster than sales, which is a departure from the past with the company. Just wondering if you could talk about, you know, specifically what incremental SG&A you're planning on spending in '03, and if you could apportion that maybe on some of these new opportunities where it's going to be devoted?

Well, I'm not going to get too specific, but you're correct, on a very positive note, I think that we're able to point to because of our innovation strategy and, you know, sort of core growth, we're able to point to an 8 to 9% revenue growth, and we think we can sustain that for the foreseeable future and maybe even being optimistic, maybe even accelerate it. We're looking at 75 to 100 basis point improvement in gross profit. That's a fundamentally different investment outlook than we've been providing over the past several years where our revenue growth has been more modest and we've made margin expansion through squeezing down and making productivity on SSG&A

We will make investments in SSG&A. The function of sales is likely to go up. We are investing, and again, we're not going to get into specific details, but the topics are blood glucose launch. We are turning on Genesis, as John pointed out, a lot of that runs through SSG&A, and foreign exchange, you know, the good news is that tail wind, but it does tend to inflate, so to speak, when you translate back, it does tend to inflate SSG&A, and as John said, there will be some pension impact, mostly in gross profit, but a smaller fraction of that will go through SSG&A, and after you finish with all of that, the core spending, which is the other thing we keep a careful eye on is growing in the range of about 3%, and just beg your indulgence, we will be more specific about the kinds of investments we're making in BGM and our expectations in December when we have an event and we will be sure to invite everyone to that.

That's very helpful. One follow up on the pro-tech. Abbott did have a significant recall in the Chlamydia GC area. I think it was a $21 million recall. To what extent did that help your growth? Just going forward, when Abbott is back in the market, or they may be already, what does that bode for your ability to continue to grow in that segment?

I will let Bill Kozy comment on that.

Your observation is a good one. The fourth quarter sales for pro-tech were favorably impacted by our ability to capitalize on some of the available accounts of Abbott, and we look forward to continuing to maintain those accounts. We don't see significant risk of holding those accounts as we go forward.

Did you capture the majority of the business that was part of the recall?

I don't think we captured the majority. I wouldn't have an exact date on that. We certainly captured a fair portion of that given our traditional shares in this area, and I think we at least held our position in terms of, you know, the overall amplified market.

Thank you.

The fundamental basic, you know, I just to amplify, and you should pardon the expression, with what Bill is saying, this system, in our humble opinion, is a very good performing system. It provides great work flow advantages. It's very accurate, and the work flow advantage is really how we sell it. We have a new front end to this thing that helps do the sample processing. We call it viper, and it's a front end sample processing that for, again, think about what we talked about here with respect to screening for sexually transmitted deceases.

These are done sometimes in large batches in large public health labs or large facilities, and so the sample processing is a very important component of this, and we launched this viper, we call it viper front end, it looks like a sports car, hooked up to a diagnostic system, and it really does make the sample handling and the lab efficiency very, very effective, and it's on that basis that we are gaining share, so you know, whether they come back in the market or not, we believe that advantage is always going to be there.

Thank you very much.

Our next question comes from Steven Lickman with Credit Suisse First Boston. Your line is open.

Just a couple quick top-line questions. First, just to clarify, what is the expected Currency impact built into the 8 to 9% reported growth guidance for next year? And then, secondly, what top-line growth should we look for in F1Q? Thanks.

We're looking at about a 1% benefit in revenue from FX next year, and that is principally Europe, Japan, and Latin America continues to be a challenge. Q1 revenue, think about it again, about the same as your 8 to 9% reported revenue, 8 to 9% for the first quarter, but, again, as John commented and I commented, the EPS will be impacted because you will see a disproportionate increase in SSG&A as we make some of these investments. You can make 8 to 9% Q1 revenue guide line.

Okay. Thanks.

Our next question comes from Chris Lyla with Austria Suisse Capital. Your line is open,

hi, guys. Just a quick question on the free cash. Even including the pension contribution of $100 million, which doesn't seem like it will be $100 million each year going forward, including that, it looked like free cash ended up being higher at the end of the year. You can comment going forward on that relationship, and also maybe put a little more flesh on working capital opportunities, specifically receivables in inventory?

I will let John elaborate. But no, we do not expect how the stock market and other investments will recover over the next several years. I don't think any of us want to see a three-year in a row equity des client in the market again, and we have been through that. We see the contributions we're making in '03 as being, hopefully, the last for some period of time, again, we're flexible to do what we need to do to keep the pension plan nice and healthy.

In terms of working capital, I would look toward -- we tend to think about working capital, receivables and inventory in terms of turns or day sales outstanding and, we would continue to look to drive both of those metrics as we go forward, and therefore, I don't know that you'll see a lot of -- for example, this year, we said we had a $10 million reduction in inventory and a I think $20 million reduction in receivables. If we hadn't had hadn't improved returns in DSO that would have been a significant cash use as opposed to a modest cash source.

Sure.

So keep your eye on turns in DSO, and specifically turns, I think DSO if you are starting to reach some limits, get down into the mid-50s, you have to realize that some places in the world that DSO’s are in the early 100. U.S. DSO’s are very low for BD, in the 40 range, 40 something. So I don't know that we're going to see a lot of productivity in DSO, but the turns, we're working on inventory turns real hard, and we're going to keep driving that up. I took everything I thought John would say. John says yeah.

Thanks, guys.

he coached me well.

Our next question comes from Robert Goldman with Buckingham. Your line is open. Pardon me, his line is disconnected. Let's go to our next question, it comes from Glen Rison with Morgan Stanley. Your line is open.

Just some follow-ups here. John, can you give us an idea what was between the net income line and depreciation line and cash from operations? I had roughly, you know, you have roughly $500 million of net income, with depreciation and amortization of $300 million and how did you end up with 900? What was your delta?

You've got probably change in working capital were $50 odd million, and then you've got some other improvements of you know, 80, $90 million. Yeah, when you think forward, you know, Glen, you're thinking about a half billion dollars in network for the company and you're thinking about noncash charges of 300 million, so that's about 8, and then you're thinking about of balance sheet improvements. To expand a little bit on what Ed said, you know, our DSO’s in the U.S. are down to 37, so you know, we don't run anything but performance incentive programs ever in the U.S.

Internationally, we have large tender business, and they can move your DSO’s out. We have a major undertaking throughout the company in terms of productivity. I can give you a summary of the price increases that we've had in the company that would be none, and so therefore, we're dependent highly on leaning out the operations and manufacturing efficiency. Now, those programs all have new names now, but there's something this company has been doing for a lot of years, so there's continual improvement.

The sku’s are going down within the domestic and international businesses. Inventory turns are going up. When we look at ourselves in the peer group, we're in the top third in terms of those turns, so there's balance sheet opportunity there. When Chris had the comment on the pension, I, too, do not believe that you're going to believe a consistency of $100 million payments to the pension. That said, I don't also think you're going to see a situation where we're not paying pension costs, cash into the pension over seven years. We pay about $35 million out in benefits, and obviously, the pension fund requires some funding unless you have a bull market, but at 8% expected return on assets, I think we're very conservatively positioned.

Now in terms of the new accounting and how it works, do we have to discuss year-end push and what the ramifications are?

New accounting in terms of what?

Wholesalers and stuff like that. Looking at the working capital, it seems like you didn't push too hard in this quarter. I would be curious to know whether that, in fact, the case, or whether you think what the tone of the business is going in the first quarter given the strength of the fourth?

Remember, that new accounting started at the beginning of last year. There is no new accounting now. We push our distribution centers to ship clean and Deb pushed her business to enhance its ability to install these instruments, these instruments are not, you know, like plugging in a toaster. They have to be balanced. I'm not telling you anything you don't know, and they had significant power sourcing issues and we've become bet and better at getting those in, but disavow and let me allay any fears you have, there's no push for sales. There's no incentive programs out there. You know, we kind of play it where it lies.

Okay.

Let me just remind us in responding to a recent question, the quarter recently ended was about 8% performance, and we got about a point tail wind from foreign exchange, and that's 8 to 9, and that's the guidance I gave. Q1 just ended, 8 to 9. Q1 just ahead of us, 8 to 9.

Just a final follow-up, you can give us a little bit of flavor for the year within the medical/surgical business, medical division, domestically, international? What did infusion therapy grow out? Surgical, anesthesia, and did --could you break out those lines.

Did you want '02?

Yeah, '02.

As you might expect, the medical/surgical growth area came to There were some other areas of growth. We fell with flush solutions, and that was a source of growth, as well, and the infusion therapy area and the injection area were the two big growers. The other business areas, anesthesia, critical care, some other products that we have really posted very little growth.

You can put some numbers on that? Maybe in percentages, domestically and internationally?

Let me give you some round numbers overall. The overall business area, medical/surgical, I'm going to give it to you --I can give it to you on a reported basis, grew out $142 million over prior year, the medical/surgical business unit, and you know, roughly $108 million growth came from safety. That's before the impact of, you know, the offsetting impact of conventional devices which took about $224 million off of that. You know, we had over $10 million growth in the pre-fill flush product. That's separate from the pharmaceutical systems pre-fill, and those were the primary growth drivers. We had very strong growth in both the injection and the infusion business areas, both driven by safety. Those growth rates were in the high -- well, they were in the high teen’s rate.

Infusion, as well, was in the high teens?

Yeah. Infusion injection growths was in the high teens.

Okay. Thank you.

That's U.S.

Oh, U.S., and then what did international grow at?

International, you have to give me a couple minutes to get those numbers, but overall, the international growth, you know, it's about 6% in FX neutral basis for medical surgical, 4% on a recorded basis, you know, among the key growth drivers there, we have the auto disable category syringes that are sold in developing markets and among the product that was shown on CNBC, and they posted very nice growth in '02.

And a little bit of growth from the pre-fill cluster engine and growth from safety, so of the $24 million or so of reported growth internationally, the majority of that came from immunization, safety, and a small amount from pre-fill flush syringes and, in general, Europe has had a very solid year. Good growth in Europe, including growth in the base business, good growth in the base business.

Latin America had a very difficult year, and you know, full down the overall growth rate, they had a very good year. We had a good year in Asia. Recovering from a tougher year in prior year in '01. Very solid growth in Asia, and that was in particularly in India and China. Japan for medical was relatively flat but had a strong year in performance systems, and that takes you around the world.

Thank you very much.

Our next question comes from Rick Wise with Bear Stern. Your line is open.

A couple of follow-ups, as well. First, I want to make sure that we touched on the other interest expense and other lines. You were roughly down to $6 million in the fourth quarter. You're obviously paying down debt. Is that a reasonable quarterly run rate to assume in '03, John?

Yeah. Okay. The answer is we will see an up tick in our interest expense next year, and I will let John explain the mechanics around how that is going to look.

Absolute dollars out the door of interest you would not see an up tick, but as you know, we spent a lot of capital over the 3, 4 years and the way capitalization of interest happens in a P&L, if you think of a factory and it takes x years, you have to capitalize interest on that project over a number of years. Since our capital is dropping, since the major initiatives are done, the initiatives are done, the amount of that construction and progress declines, and so you capitalize less interest. Now I know I just confused everybody, but if you think about your model, think about kind of a $10 million swing, looking like more interest, but that's because you have less capitalized interest this year versus last year.

Is that on a quarterly or annualized rate in '03, what kinds of numbers are we talking about?

Think about $10 million or $11 million a quarter.

In fiscal '03.

In '03.

I assume other continues to be zero plus or minus one every quarter?

Yeah. There's just --there's basically noise in there. There's transactions. Transactional, you know, we take any transaction in foreign jurisdictions and hedge it. That's a different kind of hedge to lock in the dollar affect. Now, obviously, you know, we don't have very much in the way of equity investments on the balance sheet. We probably have 20 odd million of them, and most of them don't have a public market. On that Tri-Path, we probably have $6 million left on the balance sheet. It would have to be water for another six months in a row. Therefore, you wouldn't see anything if it did decline in the first quarter, but if it did, and we don't think it will, but, you know, your guess is as good as mine, you could see small stuff, but I think you can think of other as not a very active account.

Couple other things. I was actually surprised that you're still spending so much on Genesis or still such an impact on the p&l. When does that end? When do we start to -- I totally appreciate the sort of everyday benefit of having better controls and information, but is there some sort of step function benefit that we start to see in maybe fiscal '04. When do we see the major payback on the p&l?

As John pointed out, a good half of the up tick in expenses next year is just taking amortization of software and hardware and development costs and starting to advertise them over the life of project. The other part of it is to run a global system. I mean, we have taken the quality and sophistication and value of our whole I.T. infrastructure globally. I believe, again, very humbly into, I think, leading edge for our peer group and that comes with some expense.

I think as we go forward we will be looking for continued margin, and this is a big nut next year. We would continue to look for gross profit expansion on '04 and beyond. We're not going to be calling out, you know, -- it's very difficult to say, well this is a Genesis. The debits are easy to find. The expenses are easy to find. The benefits flow through every factory in the company. They flow through our distribution centers. We're now able to, beginning even now, but even more so next year to do business on-line through the global health exchange. We're able to do procurement on-line. We're able to see inventory flows throughout the world, so if I talk about getting our inventory turns well passed the 3.0 where they are now, that comes from this enabling things.

So you won't be hearing any specific references to benefits, but as we continue to expand our operating margins in the main and change our work systems and be more effective, Genesis really does enable that, but the real benefit comes from changing, and we really changed a lot of work systems here, Rick, and that was driven by Genesis and that was supported by Genesis, and I think that the big, big incremental hit that we referenced is an '03 event, and that pressure goes way down after that and the benefits start to accrue. You won't be hearing us talk about specific Genesis line items.

Two last questions and this sort of ties into what you were saying, Ed, and margins and SG&A. Will R&D as a potential of sales increase and sort of decline as a percentage of sales for this year. What's the outlook for '03? Just tying it all together, I assume we'll see some modest, still modest operating margin improvement in fiscal '03 over fiscal '02?

R&D will increase very modestly as a percent of sales which means it's a double-digit increase year on year, and the focus there is on advanced drug delivery systems and those systems are not going to show, you know, payout for a couple of years. Blood glucose monitoring, we're putting some investments in our ophthalmology business, and it's good growth opportunities, and we expect R&D will go up modestly more rapidly than the revenue, so that will be a little over 10%, and, again, if you think about the guidance that we're giving at, you know, sort of 8 to 9 top line and about 10% bottom line, you're not going to see a lot of margin improvement next year.

Again, I think the good news and the reason to be optimistic about next year and the beyond is that we're improving our profit by 100 basis points, we're investing in SSG&A’s and R&D, and again, we're able to, again, without being guilty of blowing our own horn here, but we are growing the top line about 8 to 9%. Bottom line 10%, and in that 10%, we have overcome. We have anticipated a very significant product launch, which we will elaborate on in December. We have overcome significant increase in pension, which we think is not, you know, once it ramps up, it's going to grow at inflation. It won't be another big increase, and we're turning on a major, arguably one of the most aggressive companywide ERP systems with Genesis, and we're getting through that, and all of that and we're growing the bottom line 10%, so I think that bodes well for the future.

Just one last question, did you pick a date for the December meeting yet?

No. It will probably be in the first half of the month.

Thanks so much.

One more question.

This will be our final question, it comes from Bruce Kirena with Lee Swan.

Thank you Good morning.

Edward Ludwig) Hi, Bruce.

Quick question. I think you mentioned '03 guidance for the Diabetes business and it's 4 to 5%.

The core business, yes.

Okay. Can you comment, I guess, briefly on, in your opinion, is that a market rate of growth? Is that how I should be thinking about that, broadly? In terms of the growth expectations going forward, is it a similar situation, U.S. and ex-U.S., and there are there competitive dynamics, especially in pens that mean that growth expectations are different by geography?

This is Gary, quick answer to your question. That growth rate is approximately the market rate of growth in those categories that we referred to as our base business of injection devices, and the U.S. growth rate should be a little bit higher than the international growth rate because of the conversion to pen needles which is a relatively low level in the U.S. relative to some other markets in Europe and Japan, and it should be faster in the U.S. and a little bit lighter than that internationally.

Can you remind us, just as a follow-up, are there any margin implications in the switch from -- the switch to pens?

Slightly positive.

Okay, that's what I thought. Thank you.

Thank you very much. I will turn the meeting back over to Dean for some housekeeping.

Thank you very much. And we very much appreciate everyone's participation, and I will remind you the call is available for playback and also that will be posting at CNBC interview for your viewing pleasure. And the website again is www.BD.com. Thank you very much again.