Question-and-Answer Session
Operator
(Operator Instructions). Our first question comes from the line of Derek W. Leckow - Barrington Research Associates.
Derek W. Leckow - Barrington Research Associates
Listening to your comments and your prepared remarks, there is tremendous amount of opportunity in your comments and looking at the back half of this year and the conservatism I am hearing on the second half revenue outlook, I am wondering if you could just talk about those two disconnects for me?
Ronald L. Rubin
The second half of the year is slightly down because of some of the issues we discusses in our Latin American business, but yes, you’re right, we have several initiatives in play and we’re really teed up nicely, I think, for 2010 revenue growth with some of these big initiatives; the launch in the products. As far as the back half, there are several factors that are driving the growth more toward the fourth quarter first of which is the timing of the purchasing and the distribution channel because of the changes we made with a large distribution customer, there is going to be a shift in their orders from the third into the fourth quarter. Another factor is, just a ramp-up of the business with all the new accounts particularly Liberty as that continued to place new patients on the system and that’s going to drive a big ramp in the fourth quarter.
Derek W. Leckow - Barrington Research Associates
So as far as the order of magnitude, it sounds like it’s mainly that distribution issue or is it more of the international?
Ronald L. Rubin
It’s mainly the international, a little bit on the conservative in terms of where ultimately the inventory levels are going to end at the end of the year.
Derek W. Leckow - Barrington Research Associates
Some of the growth initiatives you’re talking about, they tend to kick in later in the fourth quarter and so your outlook is for much stronger growth than in 2010; I guess this is what I am hearing.
Ronald L. Rubin
Correct.
Derek W. Leckow - Barrington Research Associates
Pricing, were there any changes you made to pricing? You mentioned the $999 TRUE2go Color options, but was there any other change in pricing anywhere else?
Ronald L. Rubin
No, I think overall for the business in the quarter, pricing was down in that 12% to 13% similar to the first quarter; volumes are up 9%. What’s driving the price is primarily in the mail order channel, we got significant volume-based pricing arrangements. We also, as we discussed last quarter, have made some modifications to the TRUEtrack pricing and the distribution channel to make that product more competitive in the medi-medi space, and that’s really the main drivers of the pricing.
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