Quintin J. LaiThank you, Jan. I would also like to add my congratulations and best wishes to Kirk. I'm excited to join Sigma-Aldrich and I am looking forward to work with all of you on my new role. In today's call, Jan will lead off with a review of our second quarter and first half of 2012 performance. Rakesh will follow with that discussion with an update on the activities that contributed to our second quarter results and our updated 2012 outlook. After completing those reviews, we'll open up the call for your questions and comments. We will be using a slide presentation as part of today's call. That presentation can be viewed on our Investor Relations website at www.sigmaaldrich.com. Before beginning the review, I want to remind you that today's comments include forward-looking statements about future activities and our expectations for sales, earnings, cash flow and other possible future results. While we believe these expectations are based on reasonable assumptions, actual results may differ materially due to any number of factors, including the risk factors listed in our annual report on Form 10-K for the year ended December 31, 2011, and in the cautionary statement that is included in today's release and in our slides. We have no plans to update these forward-looking statements after this call. Also in today's conference call, we are providing information on non-GAAP financial measures. That information which consists of currency and acquisition-adjusted sales growth, operating income and related margins, net income and EPS results on both an adjusted and reported basis, and free cash flow reconciled to net cash provided by operating activities is also contained in today's earnings release which is posted on our website and in the appendix to today's presentation that begins with Slide 13. With that, I'll ask Jan to start with a summary of our second quarter results. Jan?
Jan A. BertschThank you, Quintin. As reported in today's release, second quarter sales were $664 million, a reported increase of 4% over 2nd quarter 2011. Our organic sales growth, which excludes the impact of changes in foreign currency exchange rates and the benefit of our recent acquisitions was 3%. Our Research and SAFC businesses generated organic sales growth of 1% and 8%, respectively. Acquisitions, primarily BioReliance and Research Organics, added another 6% to overall growth while changes in FX rates reduced the otherwise reportable sales growth by 5%. Our second quarter operating income was $167 million. Net income was $115 million and reported diluted EPS was $0.94. Our adjusted diluted EPS, which excludes $0.03 of restructuring costs related to some recent office closures was $0.97, a 4% increase from the same period last year. Year-over-year changes in FX caused the $0.04 EPS headwind and excluding this impact, adjusted EPS would have grown 9% to $1.01. Our effective tax rate for the quarter was 31% compared to 29% in the same period last year. The lower tax rate in the second quarter 2011 is primarily attributable to higher international tax benefit as compared to the second quarter of this year. The effective tax rate for 2012 is expected to be approximately 30% to 31% of pretax income and is unchanged from prior guidance. Our second quarter free cash flow was $56 million as compared to $77 million in the same period last year. The lower cash flow was due primarily to the timing of vendor payments. We don't expect this timing to have an impact on the full year. In the second quarter, we returned about $50 million to shareholders in the form of $25 million in dividends and $25 million in share repurchases. For the first 6 months of 2012, we generated an excess of $1.3 billion of sales. The first half overall organic growth rate was 3% and was consistent in both Q1 and Q2. Operating income in the first half was $339 million. Net income was $232 million. First half GAAP diluted EPS was $1.90 and adjusted diluted EPS was $1.96. For the first half of the year, we generated $168 million of free cash flow as compared to $210 million last year. As I mentioned earlier, this first half free cash flow is lower than last year's due primarily to the timing of vendor payments, as well as greater capital spending related to new facilities. For the full year, we expect to generate an excess of $400 million of free cash flow. Rakesh will provide more color when he discusses our second half and full year outlook. Read the rest of this transcript for free on seekingalpha.com