Question-and-Answer Session
Operator
(Operator Instructions). And your first question comes from the line of Dalton Chandler of Needham & Company. Please proceed.
Dalton Chandler - Needham & Company
Hi, good morning. Let me just start with your new guidance. You had included some specific FX assumptions in your previous guidance. Can you talk us through what the current assumptions are and if its changed from the previous assumptions?
Joseph Corasanti
Yes, Dalton. The assumptions that we were using previously, tied revenues and expenses to currency rates on average of the fourth quarter of 2008. Now, in the first quarter of 2009, it really wasn't too much of a change from those assumptions with perhaps the exception of the British pound which became weaker than expected compared to the U.S. dollar.
So, the assumptions going forward are basically the same that we've used in the past, that there would be... exchange rates would be similar to what occurred in the fourth quarter of 2008.
Dalton Chandler - Needham & Company
Okay. And then, Joe you've mentioned that you were anticipating an improvement in the hospital market in the second half. Some of your competitors have said similar things; other haven't. Could you just talk about what you have seen or what you are seeing in the market place today that leads you that conclusion?
Joseph Corasanti
Yes. What we saw certainly in Q4 and then in Q1 is a significant slowdown in capital. We did not anticipate a slowdown in disposable sales in Q1, although we did some of that. So, we're forecasting some of that going forward into Q2.
So as for the second half of the year, the point of your question, we do see that we're expecting pent-up demand just as result of surgeries needing to be performed and the replacement cycle of capital certainly needing to be performed as well. We just don't see our customers being able to differ much longer than Q3 and Q4.
Dalton Chandler - Needham & Company
Okay. Well, at this point are you seeing for example any increase in request for demos?
Joseph Corasanti
Its interesting. What we're seeing is a couple of high profile accounts where, for example 60 generators were evaluated in Q1 and in fact the evaluation, I believe began in Q4 and flowed over into Q1 and we expected that a few except to the evaluation has completed that the sale process would be completed and it was interesting for us to see that that was taken off from the table because of the cash conservation measures being exercised by the hospital.
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