Good afternoon. Now I can finally say afternoon. Next up, as you know, I'm Travis Steed, the B of A analyst at Bank of America. Next up, we have Solventum, Bryan Hanson, Chief Executive Officer, and Wayde McMillan, Chief Financial Officer. Welcome. Thank you. Yeah, thanks for having us. Yeah, I just wanted to open it up. I think kind of a little over a year as a public company now. This is kind of your first conference a year ago. Just like maybe talk about some of the last years of public company, how you've kind of progressed versus your plan, some of the biggest surprises, and kind of how you feel about the business today versus where you did a year ago when you were here. Yeah. You want me to? Yeah. You're. Okay. You're the one here. Yeah, right. I would say, first of all, it's actually hard to believe it was only a year ago that basically a year ago we spun because so much has happened. I'll try to maybe break it down into two groups: things that probably went better than planned and maybe some things that surprised us a little bit on the negative side. First of all, I'd say that the takeaway is the speed at which the transformation is moving is the thing that stands out for me as maybe being a bit of a surprise because we've been able to move so fast, make so many changes without breaking anything, which is fantastic. Just a couple of examples in there, we hired people at the L1, L2, L3 level that have deep experience at a much more rapid pace than I expected. That really got things moving. That drove a quicker acceptance of the cultural change that we're pushing, which is dramatically different than what was existing before. It's more autonomy, quicker decision-making, just speed overall, and accountability. That happened faster than I expected. I think one that most people noticed is that we moved very fast on a transaction that was sizable and meaningful for us. We haven't closed it yet, but we're in the process with our purification and filtration divestiture. The other one is just, you know, people may have forgotten because there's a lot going on, but just the speed at which we moved to completely reorganize the company on a global basis. In particular, the commercial organization with, again, without breaking anything and coming into this quarter really strong with a completely revamped commercial organization from a specialization standpoint. The other thing I would say from a positive surprise standpoint beyond the speed is we probably had more meat on the bone than I expected in the brands that we already have in the market, things like Tegaderm CHG and the new product pipeline. We did not have much in there, but some of the ones that we found are pretty attractive. It is the combination of the enhancements we have made to the commercial team, the bright spot that we found in the brands that we already have in the market, and the NPI that is driving our performance right now. I probably did not appreciate, and I have said this before, how complex this separation was going to be. 3M was highly entangled, is highly entangled, and to disentangle that takes a lot of effort. We built a great team to do it, but it has been tough. It has been hard work. We're in the middle of that ERP cutover, the biggest one to date, actually started last week. A lot that's happening there. The other thing I would say, not really about the separation, but tariffs. We had so much going on in this business, and then everybody had to stop, drop, and roll to manage those. I think the team did a great job, but that was an absolute surprise, I think, for everybody. That's the way I would sum up the last year. I think you'd add, Wayde. Yeah, I think Bryan covered it really well. Maybe I would just add confidence has really grown. Last year at the conference a year ago, we were just a few weeks post our initial public offering. And most of the team that is in place today, at least at the L1, L2, L3 level, either was brand new or was not even with the team yet. As Bryan said many times, building our strategy over the last year really required having those leaders in place because you want those people accountable and part of the strategy. The confidence has built a lot over the last year in both what we have done execution-wise. As Bryan said, the speed has been a little ahead of where we thought we would be. As far as building our overall strategy as well, our confidence is building in where we can really take this business. Agreed. Thank you. That's helpful. Maybe just since you just reported Q1, it surprised at 4.3% when I first read it in the press release. And then you come on and said it was like only 2.5% underlying. It was still good. It's still better than expected. Maybe talk about kind of the underlying markets, what you saw in the quarter. How confident are you in that kind of 2.5% versus maybe the rough is really higher than you think? Maybe I'll start with the underlying markets, and then you can go to some of the stuff we saw individually in the quarter. I wouldn't say we saw anything dramatically different in the underlying markets. I wouldn't look at the quarter as being driven by changes that were unexpected in the market. The only market that we have that's really challenged now is dental, but that was relatively stable. It wasn't anything in the markets that drove it. From an underlying business strength standpoint, what really resonates with me is the commercial changes that I just talked about and the new products that we've launched recently in concert with some of the products we already had in the market that were under penetrated. That's where we're getting the steam right now. Again, it's happening a little faster than we expected. Our confidence level has gone up, and that's the reason why we're able to raise the guidance for the year. Relative to the one-time items, so that really attractive $4.3 turning into a $2.5, maybe Wayde, you can talk about those. Yeah, sure. Even the 2.5%, we think is a good, strong growth rate. It's more than double what we grew in all of 2024. It was nice to see broad-based across all four segments growing faster than we did in 2024. Off to a great start. Really good, strong Q1 for us. In relation to the order timing that we called out in the quarter that normalized us from 4.3% down to the 2.5%, it's primarily things related to the separation. Things like our ERP cutover, as Bryan just touched on, that we've got our first major ERP implementation happening right now here in Q2. We also have a distribution center cutover here in Q2. We had customers that we had communicated to buy ahead. That was primarily in our med surge business within the infection prevention surgical solutions area. That makes sense because that's the area where we have most of the fast-moving or high-frequency SKUs, and it's also sold through distribution. You wouldn't see it as much in some of the other areas. That's primarily where the normalization was. What we've talked about is we expect that we will give back that order timing later in the year. It's difficult to know exactly when. We think it'll impact Q2, Q3, and Q4, but mostly Q3. The reason we're estimating that is because the ERP and distribution center cutovers are here in Q2. We also saw some customers buying ahead of some of the SKUs that we're planning to exit this year. We've been looking at it a lot. We spent a lot of time on it. We've got a lot of questions around how difficult is it to predict. It's very difficult to predict the size and when. On the back end, after it happens, we have good fidelity on that. That's why we come up with an estimate of 2.5%. We know where our distributor inventories are, and those are estimatable. We also look at those SKUs that we're exiting, and we can see elevated purchasing on those. We have good fidelity on that 2.5% estimate. We think we're going to give it back later in the year. Nonetheless, off to a great, strong start here. I want to touch on the ERP. It's like probably from my seat, we only hear about it when things go wrong with the ERPs. Nobody talks about we did a good ERP. We have this negative connotation with the ERP integrations and risk associated with that. I want to understand how you have confidence in managing this ERP, kind of what you're doing differently than other companies have done with the ERP implementations. Yeah, I'll tell you, on top of that, we have a lot of other things going on. As we were coming into the year, it was very clear that we didn't want any distractions that we couldn't manage because we have too many things happening. We built a mitigation strategy on the ERP implementation that's probably as robust as I've seen anywhere. Not probably, I know. It's the most robust I've seen. We looked at it in three vectors. The first one was what you would normally do when you do an ERP cutover is what are all the things we can put into place to mitigate the risk of the ERP, the new system actually working. The whole goal there is get us to the point where that system is working and it's functional and we can make it, we can transact as a result of it. That was just one workstream to say all the mitigation you would normally have. The second was if it does work, what we knew was going to happen is you would have some deficiencies in the way the customer would feel the interaction with us because there was an interim state. We said that's unacceptable. We built a completely different workstream but connected to say how do we mitigate those additional, I just call it inefficiencies that the customer is going to have to deal with. Then we had a third one, which was a different team, but again, connected as a whole group to say everything breaks. We can't use the new system. All the mitigation that we had there did not work. What's our fallback position without having to use the system that we were moving to? We have built a plan around that too, to say we have old systems that we can go back to, distribution centers that we won't move out of, and even leveraging some of our customers from a distribution standpoint to leverage to get to our customers. That's three different prongs that we've had that I've never had before. It will not go perfect. I promise you something will go wrong, but I feel more prepared now than I ever have. We're about a week and a half now into the biggest implementation, as we just referenced. I really look at this as three days, three weeks, three months. That's your check-in points to see if it's going well. We're well past the three days. All systems go. Feels really good. Coming up on the three weeks, and then we'll keep you abreast. Right now, there's some wood here. I'm just going to knock on the wood. It feels pretty good. Anything you'd add, Wayde, on the ERP? Yeah, as Bryan said, we've been through these before, and you always have challenges with them. It's all about preparation. As Bryan said, we've got the resources on it. We've hired a really strong team that's implementing this for us. We get a lot of confidence both in the team as well as the processes they put in place. Having said that, will we expect some challenges as we work through them. It's all about how fast can the team address those challenges and keep us moving. Have you baked in some of the challenges into the revenue guidance this year? No, our expectation is that we'll continue to perform at the ways that we're supposed to perform at. Having said that, the high end of the guidance range means that everything goes perfectly and we don't see any headwinds. The low end of the range assumes some disruption from ERP. Okay. Anything else you'd call out on the cadence, the growth rate of the year? Yeah. I would probably relate it more to the order timing that we were talking about before. I mentioned that we're expecting to give back the order timing benefit that we saw in Q1 throughout the next three quarters, Q2, Q3, and Q4. In particular, Q3 is where we're assuming because the ERP implementation is happening in Q2 and assuming it goes well and we complete that as well as the big distribution center cutover, customers then get more comfortable and start to bring those inventory levels down in Q3. The tariffs you called out, $80 million-$100 million. Two days later, the rates changed. How are you thinking about the impact of the China mitigation on that $80 million-$100 million? You want me to start? Yeah. Okay. I would say great, great news. I mean, fantastic. We had said on the earnings day, I think it was prepared remarks and maybe in the Q&A that if tariffs went away, we would definitely see a benefit. I said in my prepared remarks that if it was not for tariffs, just the underlying business strength, we would have raised our EPS guidance. We will clearly see a benefit as a result of this. Wayde had referenced that China was about 50% by 0% of our overall tariff impact. The one thing I would just caution you on is we had three different vectors to be able to alleviate or just manage the tariff impact. One of those was underlying business strength. That clearly would be the thing that would allow us to have strength as a result of tariffs going away because it was there. It was just being eaten up by the tariff impact. The second was the FX benefit that we're getting. We're seeing some of that being given back already as soon as tariffs start to get less crazy. My guess is that we're going to see some of that FX benefit go away. We can count on that portion of it. The mitigation efforts that we put into place would really not be worth anything when the tariffs go away. As an example of that, if we have an exemption that offsets the tariff and the tariff goes away, there's no bounce back effect. The takeaway is we will see a benefit as a result of that going down, just not to the tune of mathematically 50% of the $80 million-$100 million. Okay. So some flow through from that. Some will flow through, yeah. How should we think about the cadence of gross and up margins of the year now that we've got the tariff stuff and all the other puts and takes? Yeah. Do you want me to start that one? Yeah. Yeah. Starting with gross margins, we called out in Q1, just so everybody has it, that we saw some normal seasonality in Q1. What that means is we had Q4 less absorption because we have some shutdowns in the plants due to the holidays in Q4. That naturally brings some COGS pressure into Q1. That is because we capitalize fairly fast in our business, probably one of the fastest out of all med tech companies out there. We capitalize our cost of goods sold into inventory, and then we turn it onto the P&L in about 90 days. Most med tech companies are in that five to six-month timeframe, almost double. With that, we have got pressure on our gross margins in Q1, and we are going to see that come back. We would expect Q2 to be more in line with what we saw in Q4. Of course, gross margins then get impacted by the tariffs in the second half of the year. That is where we are going to see the pressure. The reason I shared a little bit more on that deferral of our inventory COGS is because we turn the tariffs faster than most as well. We are going to build the higher tariff cost into our inventory here in Q2. That immediately starts to impact us in Q3, full effect in Q3 and Q4. For a lot of other companies who, say, have a six-month turn, they will have some of that deferred all the way into Q4 and probably will not see as much Q3 impact as we will. That is why, as Bryan said, we were working very hard to mitigate that, understanding that we have the faster turns impacting us in Q3. We are very happy with the combination of FX, the business performance, and then the mitigation that we put in place to hold it. Now, with the China exemptions changed, we are expecting that we will see some benefit to that. We have not calculated that out or talked about it publicly yet. It has just been a couple of days, so we are still working through it. As Bryan said, we would expect to see some positive benefit to our EPS when we do update. Okay. On operating margins, just quickly there. We had good operating margins in Q1, a little better, frankly, than we were expecting given the performance of the business in Q1. We do expect Q2 operating margins to be stronger and the business momentum to continue into Q2. Operating margins will feel the pressure of that gross margin or, pardon me, the tariff impact to gross margins in the second half of the year. We think that at the time of our earnings, that that all netted out to the low end of our 20-21% operating margin. We are going to have to rethink that now as we incorporate the China guidance. That's super helpful. I guess switching gears, I want to spend some time on med surge. I think the first way to break it down is you've got the wound care business, kind of $1.8 billion in revenue, and you've got the infection prevention and surgical solutions, which is like $2.8 billion. That kind of gets you to the $4.6 billion business that you've got. If you take that $1.8 billion that's in wound care, and I think I'm estimating about $1.5 billion of that is negative pressure wound therapy. Let me know if I'm off on that. [crosstalk] That's close. That's the majority. When you think about negative pressure wound therapy, talk about the market growth rates. Why is this market growing the way it is? What's your share in that market? How's that business growing for you within that $1.5 billion business growing? Just trying to sense where your position is in the market. There's the disposable single-use, there's the traditional negative pressure wound therapy, and obviously the single-use is growing faster than traditional. Where's their mix of your business and how are you planning on changing that? I just want to understand kind of the growth outlook for that $1.5 billion for that business. Yeah. Okay, there's a lot there. I'm going to. Yeah. Tell us everything you need to know about wound care. Maybe I'll just talk about the space. If you think about advanced wound care overall, negative pressure wound therapy is by far the largest category. We also have advanced dressings and some other products inside there as well. On the advanced dressing side, this could be a future area of concentration for us because we're pretty nascent in those dressings outside of negative pressure wound therapy, but we're calling on the endpoint. Either we do it organically or we acquire, but that's an area of interest for sure. It's relatively fast growth, good margin, and we have a right to play and win in the space. Let's set that aside for a second and talk about negative pressure wound therapy. This is a big business for us. I see growth vectors not just in the fastest growth category, which is single-use, but also in traditional negative pressure wound therapy as well because of the end of penetration of that business. If I just first look at the mix, first of all, we're a very significant player in the space. If you look at us and Smith & Nephew, we basically are the largest majority of negative pressure wound therapy. If you break them up and you look at traditional negative pressure wound therapy, we are the largest majority by far of that space. That's the slower growth category. If you look at the single-use, we're a little closer to the same size, a little bigger than Smith & Nephew, but again, we're the largest majority together of that space. What you find is that overall, we're the highest market share player in traditional negative pressure wound therapy, dramatically so, and even in single-use, we're the largest. What do we see as the opportunity for growth? Clearly taking advantage of more penetration of single-use. That is a double-digit growing category within negative pressure wound therapy. Unfortunately, it's the smallest piece of our overall negative pressure wound therapy business, but it is growing very rapidly. We have great technology in that area, and that's one of the reasons for the specialization of the sales organization to make sure that we're driving continued traction in that space. On traditional negative pressure wound therapy, the overall market, the individual market is not as fast growth, but it's under-penetrated. We see a huge opportunity here to be able to develop the market and ultimately, through that development of the market, grow it at a much faster pace. It's not really a competitive thing. We're not going to go out and try to take competitive business. We're going to go out and try to expand the usage of negative pressure wound therapy in that traditional way. One of the big benefits to us to do that is the specialized sales organization that we have that we just put into place and also the peel and place technology that we keep talking about, the V.A.C Peel and Place. The real beauty of the V.A.C Peel and Place dressing is it democratizes the technology. This is not a wound dressing. It's a therapy. And so it typically takes a more capable nurse to apply it. We've just made it simple so that almost any nurse could apply this technology, which just opens the door for more people to be able to use the therapy for their patient. The second piece to it is it just reduces the time. It takes a lot of time to put the dressing on. It's almost like arts and crafts. It's got to be perfectly done. We've taken all that out of it. We make it very simple for anybody to apply and have dramatically reduced the time it takes to place the dressing, again, making it easier for people to use. It can now be on the patient for seven days, which does not sound like a big deal, but if you are changing every three days, now it is every seven days, you have just changed the way you show up external from the hospital in home care because that is a better setup for home care. When we think about being able to develop the market, we see a real opportunity here, and it is all up to us. This is our responsibility. We built the market. We have technology differentiation in the market. We have under-penetration in the market. That is up to us to develop it. We believe we have the tools to do it. Is there, when you think about contact lenses, like going from traditional to single-use, and is that a growth driver for you guys, just like pushing more traditional to single-use? Or is that an option in this market? I don't know the market well enough to know. It's a great question. I'm glad you asked it, actually. I think maybe what's missed is that most of the single-use is a different application of the technology. It's not really cannibalistic. You could see a little bit of cannibalization, but it's very little. It is really using negative pressure wound therapy in a different way. If you think about traditional negative pressure wound therapy, it's more around hard-to-heal wounds, diabetic patients, hard-to-heal wounds, these venous ulcers, these types of things. If you think about the single-use, that's different. It becomes difficult to close incisions post-surgery. That's opening it up into orthopedics and other areas. It really isn't cannibalistic. It's actually just taking a great technology and finding other uses for it where we didn't have it before. That's the beauty of the speed at which that's growing. It's not hurting the other category. It's a different call point. It's a different call point. Similar technology, different call point, and just adds to the opportunity in negative pressure wound therapy. When you think about, is this a market where commercial focus can drive growth? How? I guess now that you've got sales reps more focused on this market, how's it going to lead to better growth here? Absolutely. I mean, when you have a clinically relevant product like this, and it's a challenging product to use, we talked about all the reasons that we talked about training and servicing and everything else, and it's going to cost more upfront than a traditional dressing. That is a very clinical sale that needs to happen. You've got to have a sales representative and clinical support that understands the clinical differentiation of the product, how you apply it, how I can teach people to use it, and then the benefits from a cost standpoint when you do use it. If you have a generalized sales organization and you have a product like that in their bag, it will be the very last thing they sell because they're going to go to the easiest thing. What we did is to specialize the sales organization. It's the only thing they can sell, and we're educating them on how to use the clinical documentation, giving them the support, but it's the only place they can go to drive revenue. In addition to that, their compensation is shifted to growth. So it's not just base salary and a little bit of variable based on growth. It is now most of their compensation with no cap on it comes from growth. And so it just dramatically changes the psyche of the individual, and it just assumes now that they're going to have to sell that because that's the only way that they can make their money. Right. That's helpful. Switching gears to the other $2.8 billion in your med surg business, infection prevention and surgical solutions, you kind of identified that and broke it down to five different buckets: IV site management, sterilization, surgical solutions, hospital consumables, and medical technology OEM. Those are kind of the five buckets there. You've called out two areas as the growth drivers right now: IV site management, sterilization assurance. I want to take those two separately since that's the growth drivers. I'd love to get a breakdown on how much of that $2.8 billion is in those two businesses, if you're willing to share it, and then what they've been growing and what you're doing to make those businesses grow more. Yeah. I don't think we've given specifics, but I would say I think we've said IV site management is the largest, but catch me. I'm looking at you to make sure I'm okay there. Sterilization is smaller, but the opportunity is nice. If I just take sterilization maybe first, it's sterilization assurance. It's not sterilizing products. We're just providing sterilization assurance that a product was sterilized. We're not competing against [STERIS]. We're not talking about capital. We're talking about ensuring that the products that are being used in an account are sterilized. That is the product that we have. This is a very surprisingly antiquated process that they use to do this. As a result, they don't use it as often as they should. You should always, for every load, every load of sterilized products that you sterilize in an account, you should check sterilization. It's pretty important to have sterile product when you are working on a patient. What we need to do is make it simpler and digitize it so that anybody can do it and you get confidence that you do have an outcome that you can count on. That's exactly what the eBowie-Dick is. We just launched this product. It's basically taking a decades-old technology and digitizing it and ensuring there's consistency in the way that you check for sterilization. Right away, you're going to have an opportunity to cannibalize whatever else is out there because it's a better technology, but you also will likely expand the market because it's under-penetrated today. You just got to make it easier, and you got to have people have confidence that it's actually telling them what they need to know. That's why we've looked at that as a growth driver for us. We have a dedicated sales organization there that was there before. Actually, we didn't specialize. They were already there. This new product launch is a big benefit to us. It's a smaller business, but an attractive area with good growth potential. Is that double-digit growth potential or high? I can't say that because we haven't said it, but it's fast enough to make one of our growth drivers otherwise. It wouldn't be there. If I look at IV site management, that's one that, again, is a pretty big business for us. Tegaderm is a technology that's a clear dressing, a transparent dressing that has had a really strong market share for a very long period of time. What we're able to do in Tegaderm, this was a while ago, was to get a CHG coating on it and then get a claim from the FDA that it can reduce infection, which is very hard to get, and not a lot of competition can get it. As a result of that, we have a significantly differentiated product on already a great delivery platform, which is Tegaderm. Actually, the investment that I talked about in capacity expansion in South Dakota was for that product to make sure that we have plenty of capacity to be able to drive capacity in that space. What I can tell you is that that one, for me, has an opportunity for us to go to friends and family where we already have Tegaderm in place because right now it is only about 30% penetrated with this infection prevention and upsell them to a technology that can reduce infection in a catheter, which is a big deal. If you have an IV site and you get an infection, it is very bad for the patient, and it costs a lot of money. We have an opportunity to go to our customers that already trust us, upsell and get a mixed benefit as a result of it and benefit the patient. That's the reason why that's become a growth driver for us because we already have the technology. It is clinically differentiated. It's under-penetrated, and it's a fast-growth market. That's another area where we specialize our sales organization. There have been a lot of Salesforce changes since you joined in this business? Yeah, a lot. I mean, that's why the reason why we were prudent in our guide for 2025 was that we had a lot of changes. We were completely restructuring the commercial organization. We're changing compensation for the commercial organization. We pretty much revamped the entire leadership of the commercial organization, and we're changing the culture all at one time. Hey, it's working. You could break something when you do that, but we haven't. That gave us confidence as we came into Q1 and saw the results that, hey, we can continue to move this forward. There have been a lot of changes, a lot of changes in that commercial organization. Before we run out of time, I want to touch on P&F divestiture and kind of once you get the proceeds from that pay down debt, how quickly can you go towards M&A? Are you considering a dividend at any point? Again, just curious kind of proceeds and kind of capital allocation after that. Yeah, sure. I can start the capital planning. You probably want to talk about our strategy around going on offense on M&A, which we're pretty excited about. From a capital planning standpoint, we, as you said, are very excited for this transformational deal with purification filtration, and it'll allow us to significantly pay down our debt. That's our number one priority today in our capital plan, get our debt paid down. We haven't talked about any switch to enhancing our capital plan with either dividends or share repurchases at this time. That's something we'll have to work through with our board once we get on the other side of purification filtration. The good news is it does get our leverage in a position to be able to start to contemplate other uses of cash. Certainly, we'll be going on offense on the inorganic side. Bryan, if you want to pick up on that. Yeah, just with a few seconds left here. For us, we looked at three vectors of growth. It was the enhancement of the commercial organization, new NPI, and then peppering in inorganic innovation through M&A. The fact that we're moving purification filtration through, we're going to change the balance sheet flexibility. We absolutely will be looking for M&A in 2026. Okay. Great. Thanks a lot. All right. Thanks. Thank you.