James Wiltz - President & Chief Executive Officer Steve Armstrong - Executive Vice President & Chief Financial Officer

Larry Marsh - Barclays Capital Robert Willoughby - Banc of America/Merrill Lynch John Kreger - William Blair Derek Leckow - Barrington Research Mike Minchak - JP Morgan Jeff Johnson - Robert W. Baird A.J. Rice - Soleil Capital Errol Rudman - Rudman Capital Management

Ladies and gentlemen, thank you for standing by. Welcome to the Patterson Companies second quarter fiscal 2010 earnings conference. During today’s presentation, all parties will be muted. Following the presentation, the conference will be opened for questions. (Operator Instructions) I’ll now like to turn the conference over to James Wiltz, President & Chief Executive Officer.

Thank you. Good morning and thanks for participating in our second quarter conference call. Joining me today is Steve Armstrong, our Executive Vice President and Chief Financial Officer. We will be pleased to take your questions at the conclusion of our remarks. As was announced earlier in the quarter, I will be retiring at the end of the current fiscal year. Also announced earlier, Scott Anderson, President of Patterson Dental Supply will be my successor as President and CEO. Scott has compiled an outstanding record of achievement during his Patterson career and I will be working closely with him to ensure a smooth management transition. In today’s release, we announced Paul Guggenheim, currently Southwestern region manager of Patterson Dental, will become President of Patterson Dental at the end of fiscal 2010. Paul joined Patterson in 2000, following our acquisition of Guggenheim Dental. His knowledge of the dental industry gained over 25 years of experience and deep understanding of our company culture will serve him well as he assumes his new responsibilities. I, together with our entire Board of Directors, have every confidence that Scott together with Paul and the other members of his management team will lead Patterson to continued long term success. Such Regulation FB prohibits us from providing investors with any earnings guidance unless we release that information simultaneously. We’ve reiterated our previously issued annual financial guidance for fiscal 2010 in our press release earlier this morning. Our guidance is subject to a number of risks and uncertainties that could cause Patterson’s actual results to vary from our forecast. These risks and uncertainties are discussed in detail in our Annual Report on Form 10-K and other SEC filings, and we urge you to review this material. Turning now to our second quarter results, we believe Patterson performed reasonably well amid a very challenging economic environment. Consolidated sales of $815 million were up 7%, from $759 million in the second of 2009. As we expected, dental, veterinary and medical acquisitions transacted over the past 12 months accounted for a substantial portion of our second quarter sales growth. We also saw internal sales growth on a comparable basis in each of our segments for the quarter and unlike in recent quarters, foreign currency adjustments had only a nominal impact on our second quarter results. Second earnings of $49.3 million or $0.41 per diluted share, were up 5% from $46.9 million or $0.40 per diluted share in the second of 2009. In our last conference call, we spoke about a number of cost control measures that we began implementing during the second half of fiscal 2009. We took additional steps in this year’s first quarter by enacting companywide salary reductions. As a result of these measures, we have streamlined our overall cost structure and slowed our expense growth, which benefited our second earnings. Turning now to a brief review of our business unit performances, sales of Patterson Dental, our largest business, totaled $537 million in the second, flat with the year earlier level. Within Patterson Dental, sales of consumable dental supplies and credit office products were down 2% from last year’s second, largely reflecting the impact of dental practices of reduced discretionary spending and a high levels of unemployment brought on by the recession. However, as we had mentioned previously, two other factors have affected the year-over-year comparability of our consumable revenues. First a major consumer products company elected in January to take its professional toothbrush line direct as opposed to through distribution. The impact of this development will diminish as we continue to replace this lost volume with alternative products. The comparative impact on a revenue performance of this change which has averaged about 1% point a quarter while anniversary during the third quarter. A second issue affecting the comparability of our consumable revenues was a result of the change in the accounting necessitated by the launch of our new Patterson Dental advantages loyalty program this past January. We now defer a portion of consumable revenues generated by advantage customers that will be recognized in the future as the points are redeemed. Excluding both these factors, second consumable revenues would have been virtually unchanged from the year earlier period. All in all, our culled our consumables business has held up relatively well during the first half of 2010. Sales of dental equipment and software rose 3% in the second quarter. Within this product category, sales of CEREC dental restorative systems rose 45%, which offset a 7% decline in basic equipment, including chairs, units and lights. We believe the weak economy has been causing many dental practitioners to focus their investment dollars on equipment with rapid and high rates of return. This consideration helps explain the strong growth of CEREC dental restorative products thus far in fiscal 2010 and why sales of basic equipment have tended to lag. The unequal performance of CEREC has made it the industry leader by a considerable margin in the category of CAD/CAM equipment. We believe that CEREC is the only viable choice for dentists that want to purchase this type of equipment. Sales of Webster Veterinary increased 30% in the second quarter of fiscal 2010 to $161 million, which was consistently with internal forecast. Excluding the impact of Columbus Serum acquisition at October of 2008, veterinary sales were up a solid 8%, reflecting higher volumes of veterinary care for companion pets. However, equipment sales remained soft as many veterinary practices remained cautious about purchasing equipment. The integration of Columbus Serum a large and well established value-added distributor serving the Mid-Atlantic and Mid-Western states as proceeding on schedule. As part of the integration process, we are continuing to remove costs from the combined operation, and this process will be largely completed in the third quarter. Until then, this significant acquisition will continue to negatively affect the operating margins of our veterinary unit. The performance of Patterson Medical, our rehabilitation supply and equipment unit, exceeded our expectations in the second quarter. Sales increased 18%, to $117 million with internal sales accounting for 5% of this increase. Acquisitions accounted for the balance of Patterson’s Medicals second quarter sales growth. These included Mobilis Healthcare Group in April of 2009 and Empi Therapy Solutions a unit of DJO Incorporated in June of 2009. Patterson Medical definitely increased its share of the global rehabilitation market in the second quarter. We also believe that the overall rehabilitation market started firming during this period. The integration of the Mobiles and Empi acquisitions are proceeding on schedule and equally important, more business from these acquired units has been retained than we initially planned. We would expect to see a larger contribution to our operating profit from these acquisitions as we move deeper into the year. All in all, we believe Patterson Medical’s prospects are encouraging. Turning now to the earnings forecast contained in this morning’s release, we are reiterating our previously reported guidance of $1.70 to $1.80 per diluted share for the full year of 2010. At the same time, it should be noted that our equipment sales of last year’s third quarter were quite strong relative to the rest of the market. Just prior to the onset of the financial and economic meltdown last fall, our equipment sales benefited from a stronger pipeline of both CEREC and basic equipment orders. As we have reported since then, the basic equipment market has been solid. While we have aggressive marketing effort underway to encourage the dental customers to invest in their practices through both technology, and products and basic equipment, we remain cautious about our third quarter dental equipment performance. Looking farther down the road, we remain optimistic about Patterson’s future. Our three businesses, each of which holds a number one or number two position in the serve market are aggressively marketing their products. The long term fundamentals of the dental, veterinary and rehabilitation markets remains strong and we are continuing to generate substantial operating cash flows, which are providing us with ample resources for supporting our various growth initiatives. As a result, we are confident that Patterson is moving in the right direction. Thank you. Now, Steve Armstrong will review some highlights from our second quarter results.

Thank you, Jim. On a consolidated basis, the acquisitions accounted for just over six percentage points of our revenue growth for the quarter. While as Jim stated, currency exchange had a nominal effect. Our consolidated gross margin declined by 70 basis points from the prior year as a result of product mix. This is primarily due to the relative growth in the veterinary segment, which carries inherently lower gross margins in our other businesses due to its pharmaceutical product lines. As we move through this fiscal year, we expect this effect will dissipate for two reasons. First, we have passed the anniversary of the Columbus Serum acquisitions late in the second quarter. Thus the relative growth is in veterinary segment is expected to slow in the latter half of the year. Secondly and conversely, the medical acquisitions we previously mentioned will produce higher relative sales for this segment in the second half of our year, and the medical segment produces the highest gross margins of our three businesses. The gross margin for the dental segment improved 50 basis points in the quarter, as the positive impact of the Dolphin software and services business fell. While the medical segment did experience some erosion in gross margin in the quarter, we would expect improvement as the acquisitions become more fully integrated into the business. Our operating expense leverage improved 20 basis points in the quarter due to the expense control measures we have taken, but this effect was muted due to the expenses related to the integration of Columbus Serum, Mobilis, Dolphin, and Empi Therapy operations into our system. Again, we are expecting improvement in our operating expense leverage in the second half of the year. By segment, our second quarter operating margins were 11.6% for dental, 14.1% for medical and 3.6% for veterinary. We are now estimating an effective tax rate for the year of 37.8%, as we have seen our effective stake rate increase. We are realizing less benefit from our tax free investment income, because of this rate change, we had to catch up expense in the quarter, as well as a litany of discrete tax items in the second quarter, which together accounted for the 140 basis point increase in the tax rate for the quarter. Our balance sheet shows our inventory levels relatively consistent with this year’s first quarter levels. The increase of $25 million from the prior year balance results from normal seasonal increases in our warehouse inventories to improved service levels along with some impact from the acquisitions we made. Our DSO stands at 44 days compared to the same 44 days in the prior year, while inventory turns our 7.2 compared to 6.6 a year ago. The DSO of 44 days at the end of the quarter excludes approximately $100 million of finance contract that were generated during our CEREC promotion during the second half of fiscal 2009. These contracts will be sold to our regular funding source beginning in the third quarter. We generated cash flow from operations of approximately $8 million in the second quarter, compared to $25 million in the year earlier period. For the first six months, our cash flow is $55 million, compared to $58 million for the same period last year. The timing of payments on accounts payable and for income taxes in to the quarter diminishes the operating cash flow. We also had some bills and receivables from increased sales levels. We expect that by year end, much of this working capital effect will have evened out. During the quarter, we also repaid $14 million that we had outstanding at end of the first quarter under our revolving credit facility. We now estimate that capital expenditures for the year will foul to approximately $30 million to $35 million. We are negotiating the purchase of an existing facility that will accommodate the consolidation of several of our smaller Mid-Western distribution centers as we continue our program to consolidate our logistics functions. Our EMEA build a suit project was originally planned for fiscal 2011, but when this existing facility was identified, we decided to move the project forward into fiscal 2010. With that, I’ll turn it back to the operator, and we’ll try to answer your questions. Operator.

(Operator Instructions) Your first question comes from Larry Marsh - Barclays Capital. Larry Marsh - Barclays Capital: I don’t know, what happened. I don’t know if that’s a demotion or not, but a couple of follow-ups, if I could. First, I guess, still on the balance sheet. Was there any Steve was put on with the new CEREC promotion program in the quarter, and from a full year cash flow standpoint, I mean, I know you don’t guide the cash flow. Is there any reason why you wouldn’t be in that sort of $300 million neighborhood for the full year?

At this point first to answer your question is has there been some put on from the promotion? Obviously, yes we’ve been selling some CEREC. Not that much at this particular point. Secondly, with $300 million be the right number, still it should be in the ballpark area. Larry Marsh - Barclays Capital: The second question, and then just a follow-up on the payables, I know it went down some in the quarter. Sound like that’s more of a timing function than anything else. Second question on the cost savings, I know you before said it was over $25 million benefit, kicking off for really the summer. Is it too simplistic to say you got sort of a full quarter benefit of that $25 million so maybe six plus million of some cost saves in the quarter and is that sort of how we should think about it the next couple of quarters?

The answer would be yes, Larry, but remember we pick up some acquisitions and that cost is mitigating some of that. So that original $25 million we talk about was before these acquisitions. We got some infrastructure costs coming in, but the total programs we put in place we believe should have reduced our expense structure about $25 million on a gross basis before any new activity coming into business. Larry Marsh - Barclays Capital: Just confirming the $28 million of acquisitions cost in the quarter that was all the Empi acquisitions from this summer.

Generally, there’s some earn out payments, Larry, in there, from other acquisitions in earlier periods, but the most of it would have been the Empi transaction, correct. Larry Marsh - Barclays Capital: Finally a quick question, then, on imaging I know, you didn’t break out in your prepared comments. How did that do in the quarter, some of the 3D imaging products? I guess it sound like it’s fair to say that the CEREC promotion so far, we’re just a couple of months into it, would you characterize it is kind of meeting your expectations or, being a little bit ahead of time?

I think we’d say its meeting our expectations, Larry. Larry Marsh - Barclays Capital: With imaging?

The imaging, if you’re looking for all of imaging, 3D into our and so forth, we’ve generally only broken out the inter-oral in the past. Inter-oral was actually off a little bit in this quarter about 9%, but the 3D actually performed quite well during the quarter. We’ve never given out that number in the past Larry, and I’d just assume not start now. Larry Marsh - Barclays Capital: So the 9% compares to the up 16% you called that last quarter?

Yes. Larry Marsh - Barclays Capital: Why the big swing?

I think probably most that was caused by promotion that we ran in other quarter, Larry. Larry Marsh - Barclays Capital: So going off a promotion as opposed to $0.80 you have of some slip of market share or changing market pattern?

I think it was purely our internal promotion. We moved some sales forward.

I think, Larry, if you look at the industry specifics even with the down nine, I think Scott will tell you, we definitely out performed the market in the quarter.

Your next question comes from Robert Willoughby - Banc of America/Merrill Lynch. Robert Willoughby - Banc of America/Merrill Lynch: Steve or Jim, you said the CEREC promotion pretty much meeting your expectations. I’m not sure I really have a sense of what your expectation is, if yes look at the growth rate of 84%, 40%. I mean, what’s a realistic growth rate for the second half? Have you pulled forward sales with your first half numbers or you still expecting kind of robust double digit growth there?

We had a good third quarter last year in CEREC sales. We’ve some tough comparables coming up ahead of us, but the fourth quarter we’re pretty optimistic about our comparable in that fourth quarter. Robert Willoughby - Banc of America/Merrill Lynch: Would you say a flat experience for the third quarter, then would be a good reasonable expectation for you then, but…?

We’d be very happy with a flat CEREC number in the third quarter. Robert Willoughby - Banc of America/Merrill Lynch: Okay and then some growth in the fourth?

Correct. Robert Willoughby - Banc of America/Merrill Lynch: Just on the cash flow dynamic, Steve, we had expected some receivable sale on the quarter, did that happen or not?

Some of it did, yes, Bob, but most of that promotional activity was actually third quarter and fourth quarter, so most of it is going to comeback out in the third quarter and a smaller part in the fourth quarter. Robert Willoughby - Banc of America/Merrill Lynch: You said a $100 million, that’s a bigger number than I recall from last call. Is there a revision there on your part or is that…?

I think it’s been consistently around a $100 million that we’ve been telling you. Robert Willoughby - Banc of America/Merrill Lynch: Lastly, any update can you give us on software applications out the door, where you think your market share is and some of the Patterson preferred buyers programs? Where that enrollment is, and have you seen then any update in terms of incremental sales into any of those accounts, or is that still a wait and see?

As far as our advantages program, we are definitely seeing an up tick in the purchases from those customers. We’re starting to get some of the dollars redeemed on equipment purchases already. So we’re quite about that, that’s what we designed the program to do. EagleSoft installs are up. I won’t share a number for you, but we’re very happy with where we are. Robert Willoughby - Banc of America/Merrill Lynch: You did share a number with us before, though is that a number we’re not sharing anymore?

Frankly, I don’t have the number. Bob, if you want to call back, we’ll share the number with you. We have shared it before, but I don’t have it in front of me. I should have answered that way.

Your next question comes from John Kreger - William Blair. John Kreger - William Blair: Could you just step back and give us your latest thoughts on your three key end markets, which is performing the best from your perspective, in terms of broader demand and are you still seeing generally stable trends across those three or any signs of improvement?

I think in the vet business, we’re seeing improvement because we’ve got internal sales growth that’s been pretty dramatic both from the last two quarters. The medical business, this quarter, there’s some anomalies in there. So they did perform better than we thought, but they’re comparable to August and 2008 was quite easy. So that helped them. So I’d say we’re looking at basically a flat performance there, slightly up against acquisitions. Dental, as we’ve said has definitely been flat, and that’s how we plan the year of dental. John Kreger - William Blair: Jim, I look back at Analyst Day. There was some optimism expressed that maybe consumables trends in dental were improving a little bit. Do you guys still have that deal?

We think they have improved a little bit. We’re still bugged by those comparables I talked about with the two pressures going away and the reserve that we have to do for the advantages program. So it’s really probably going to be the third and fourth quarter of this year before we have a really clear view of that, but it would appear it’s slightly better, but I caution you that’s slightly. John Kreger - William Blair: Then I think now it’s been about a year and a half, since you put the new sales comp structure in place within dental, can you just give us an update. How is that going and any metrics that you could point to?

I think it’s working great. Most of our comp sales reps earned more money last year, under the new program. They’re starting to understand it that they’re starting to figure out how to use it. It’s driving a lot of our current business, so it’s working well. John Kreger - William Blair: Then, finally on your guidance, I think originally you’d said that it assumed about 11% to 11.2% EBIT on an aggregated basis are you still comfortable you can get there?

Yes, we’re.

Your next question comes from Derek Leckow - Barrington Research. Derek Leckow - Barrington Research: The gross margin, I think I wanted to elaborate on that a little bit, you said it was down 70, dental was up 50. So the erosion in medical, do that I improve here going into the next quarter, or do we still see that being an issue?

No, I just said in my comments Derek, we would expect that those acquisitions and Mobilis and Empi acquisition are further integrating we’ll see some bounce back in that medical gross margin. Derek Leckow - Barrington Research: So did it recover sort of some of the lost ground in this quarter or not...

No, by the end of the year we would expect it should be back. Derek Leckow - Barrington Research: Then just Steve, if you give me some comments on the dental feedback you’re getting from your sales force in terms of, seeing any kind better of visibility on that basic equipment, is there other transaction is being discussed in terms of real estate and so forth, are there any movement or anything that would help us get a better view into that end user demand?

The sales reps say there’s a lot of activity, but I can’t spend that at the grocery store, it’s so hard to gather that data. The order input rates are up slightly with our major partners, but again, I’ll caution you it’s only slightly and really I want to cautionary that, we had a great performance last year in the third quarter. We were up mid single digits and the market was down double digits. So, we going tough comparable coming up in equipment. Derek Leckow - Barrington Research: In back to the cash question on the $100 that’s coming here in the quarter, is this going to be redeployed almost immediately in terms of the additional finance contracts, or do you have plans to buyback stock, or is that going to be earmarked for acquisitions?

Just to clarify, the $100 will come in over the third and the fourth quarter. The bigger chunk will come in the third quarter, but again, as we stated previously, our priority is to concentrate on acquisitions should we not be able to deploy the money there, we’ll certainly look at getting it back to the shareholder in some fashion. How much of it will be used up in the current financing programs, we hope for awhile will be success and then we use it up, but it’s a little early to tell that here.

Your next question comes from Mike Minchak - JP Morgan. Mike Minchak - JP Morgan: :

Too early have to tell. Some effect, but it’s really too early to tell. Mike Minchak - JP Morgan: A couple of questions on the vet business, the margins were down a fair amount sequentially. You’d called out some of the integration costs for Columbus Serum did more costs hit this quarter relative to previous quarters?

Most of that, Mike, is not in operating structure and actually the operating structure is not too bad. It’s most of within the gross margin, as the rebates have fallen off; the volumes are softer than they were a year ago, even though they’re up, they’re still softer. So, there’s no rebate generally being earned so, all of that goes toward that gross profit, as well as the fact that in the Columbus Serum acquisition, there was some large animal business in there that will migrate out overtime, but that’s going to be diluted to the margin in the short term. Mike Minchak - JP Morgan: Is there any timeline in terms of when you expect that to migrate out?

No. We’ll deal within a national course we want to take care to customer obviously, and we’ll continue to carry some of those products and make it comfortable for the customer, but we’ll just let nature sort of take its course there. Mike Minchak - JP Morgan: Finally, another follow-up on the use of cash, on the last quarter, you had indicated that the board was discussing the possibility of starting a modest dividend. Is there any update to the discussions?

Not at this point.

Your next question comes from Jeff Johnson - Robert W. Baird. Jeff Johnson - Robert W. Baird: Steve, I want to follow-up on that margin question there. That you said most of that’s in gross margin, the decline this quarter. Correct me if I’m wrong, I think it was April 2009, you made the switch with a couple of manufacturers, at least one manufacturer from an agency to a distribution business. Is that having any impact at all on the margins, or can you quantify that impact? Then, on the top line, how much of that’s been responsible for getting back to this kind of 8% organic growth the last couple of quarters?

On that top line, it’s really anniversary, it would affect all of us it’s anniversaries in, Jeff. That switch to out of Mary AL was actually almost two years ago.

Two years ago, December.

So that’s almost a non-event. Obviously, the comforters’ product which is fully distributed from Lily has been a success from both Lily and ourselves, but again that’s pretty much grandfathered in, so it’s not having an impact. It’s more just the mix of the Columbus business and the loss of the rebates, Jeff. Jeff Johnson - Robert W. Baird: Maybe I’m wrong. I thought the summit vet farm 3D went from agency to distribution in April of 2009. Know?

It did, it’s a nice product, and we’re glad it, it’s there, but it’s not a major driver, Jeff. Jeff Johnson - Robert W. Baird: Just last question on the dental consumables, what would be organic growth, I didn’t hear an actual organic growth for dental consumables.

I think Jim gave it to you, 2% down.

Down 2%. Jeff Johnson - Robert W. Baird: That was organic two, because I know why isn’t there in Dolphin, I’m just trying to figure out by some of the deals from this year, what’s the number would have been?

That’s also no, it’s not in our consumable number. Jeff Johnson - Robert W. Baird: It was Hawaii and [Inaudible] or something…

Remember Jeff, we were on the bench there until the early part of September. We had only been online for a month. Relative… Jeff Johnson - Robert W. Baird: Down two is the number there. I guess, what I’m still trying to parrot out here is, maybe I’m wrong in my numbers, but last year in the fiscal first quarter, you had a 5% organic growth on consumables. In the second last year, it was down almost 1%. So the compound of about 600 basis points easier and the numbers stayed down 200 basis points. So just to me that sounds like the market may have softened up this quarter. I’m just wondering, just check if there was something specific in your numbers, I’m just reading? That it’s market related, what’s going on the consumables side there?

As far as we’re concerned, Jeff, it’s still the same. We haven’t seen any difference. Jeff Johnson - Robert W. Baird: So like trends have held in steady on kind of a monthly basis over the last two quarters and then not seen any incremental softening?

Correct.

Your next question comes from A.J. Rice - Soleil Capital. A.J. Rice - Soleil Capital: A couple questions I could ask. Could you give us any flavor on the CEREC strength? I know you got the upgrade as well as obviously the basic system, the relative strength of both of those and growth?

They’re both holding fairly strong, but we had a larger percentage of the sales have been in the upgrades. The customer has been very eager to move to the new camera, but we’ve good solid growth in our new user sales. A.J. Rice - Soleil Capital: So continued penetration overall of the market? I guess one of the aspects I was trying to get at you would see, do you have any sense of how penetrate we are with the product at some level at dental base…?

The number we’ve given and the only number I’m still comfortable putting out there is there were 10,000 installs out there. A.J. Rice - Soleil Capital: As we get to year end herein, obviously one of the things you already been ask about is a potential up tick on calendar year end. Is there any beyond CEREC and the software? Is there any promotional activity to try to spill that that’s worth culling out?

Yes. A.J. Rice - Soleil Capital: Any specific color on that?

I’m not going to share our promotions with you in advance. I really don’t care for the competition to know everything we’re doing.

A.J., public is out there, we’ve got that the year end promotions. We’ve financings on CEREC and Schick though there’s a lot of activity, but again it’s competitive, too. A.J. Rice - Soleil Capital: I’m trying to get more of a high level flavor in maybe the last year…?

I think it’s more important zeroing in on the fact that we had a strong third quarter last year in dental equipment. So we’re up against a tough comparable. A.J. Rice - Soleil Capital: Then just finally, thinking about the use of cash flow, someone had already asked you about. Can you just maybe give us some flavor about acquisition pipeline? Is there more deal activity? Are there things that are front burn in the pipeline maybe more so now than six months ago or maybe some commentary?

I think it’s probably about the same as we talked about six month ago. There are always some little deals that are bubbling out there. We’ve got some other stuff that we’re hopeful about over a longer term period of time, but the scene hasn’t changed in six months. A.J. Rice - Soleil Capital: Then lastly, on the veterinary business, the consolidation activity that’s taken place in big pharma and so forth, is that pretty much sorted out in terms of its potential impact on you in anyway or is that still in front of you to figure out whether that’s going to have any impact or not?

There’s still one issue that’s hanging out there that will have impact. Before Merck was able to finish their acquisition, they had to spin off their 50% interest in Maryal, back to Santa Fe. Part of that agreement in doing so was that they would have the right of the first hundred days after they closed their deal to go back and do some kind of joint venture with Santa Fe. I can imagine that the government will look closely of them, but that could be impact us if that happens.

Your final question comes from Errol Rudman - Rudman Capital Management. Errol Rudman - Rudman Capital Management: Could you describe the profitability for upgrade sales with CEREC versus outright sales?

Steve, do you have that number?

Yeah. Errol, generally the gross margin is not as strong on the trade ups, probably three to four point differentials on average in those transactions. Errol Rudman - Rudman Capital Management: If I understood the answer to A.J.’s question, you said that the upgrades were represented more than half of the sales within the quarter, but can you give us an idea of what the growth rate is for the outright sales in this quarter and the last couple of quarters?

I’m not sure that we really accurately even know that number, because of the way we attract and account for our equipment sales, there’s certain codings that the branches assign to it and so we don’t always know when it’s a trade up sale versus a regular sale if they coded it improperly. Errol Rudman - Rudman Capital Management: Also perhaps could you give us a bit of color as to why CEREC’s or if CEREC’s early entry into the market and their success now represents a barrier to entry or do you have any thoughts about that from competition?

We really do. Obviously, we feel very strongly about it and that’s why we made the investment we made to cement the exclusivity of it, that machine has been on the market for 25 years now and instead of trying to get the market with the technology period our R&D people at Sirona are very busy enhancing and updating, and giving us new and better gadgets to go sell. So we think they have the definite advantage and it’s a tough market to get into. The technology is not simple. Errol Rudman - Rudman Capital Management: So I take it, you’re very pleased about the investment that you made so far.

Absolutely.

(Operator Instructions) I show that there are no further questions; please continue.

Okay. Thank you very much. We appreciate everybody joining us for our second conference call and we will look forward to having you join us for our third quarter. Thank you.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.