Question-and-Answer Session
Operator
Thank you. (Operator instructions) And the first question comes from Raj Denhoy from Thomas Weisel Partners. Please go ahead.
Raj Denhoy – Thomas Weisel Partners
Hi good morning guys.
David W. Petty
Hi Raj.
William Petty M.D.
Good morning.
Raj Denhoy – Thomas Weisel Partners
I wonder if I could just ask kind of a structural question. We're looking at kind of the second quarter now where your hip and knee growth has lagged the market. And obviously there's a lot of dynamics happening out there with slower procedure volumes. I'm curious why your growth has slowed. Is there something structurally happening out there that makes it more difficult for you to gain share? Really what can we point to there?
David W. Petty
I think Jody alluded to it a little bit, and this is David by the way, Raj Good morning. And let's speak about the first quarter specifically, and we I think reported this about a year ago now that our first quarter of last year had significant stocking activity internationally relative to a distribution change and also new market entry. And so that created some tough comparisons for us in both the hip and the knee. And speaking about hips specifically, and am not going to give the precise numbers, but I will just suggest that that our domestic hip growth in the first quarter of 2009 was substantially higher than the market, but we were dealing with the tough comp on international stocking from last year. So we feel good about what we are doing with our hip business. We have all noted that everybody, yourself included, is acknowledging a slowdown in the knee market in general, which obviously affects Exactech. And when you have the comparisons from a very strong first half, and I don't want to limit my comments about this to only the first quarter, but also include the second quarter, then we know we've got some tough comps in there. Fundamentally in our knee business and our hip business, we're launching new products. We feel good about our existing customer base. And we also note that though the market itself appears to be down at least in our world, that being down appears to have stabilized, meaning that we're not noting any additional deterioration. And in the face of that, of course, our strategy is to continue to add new customers domestically. And eventually, as we get into the second half of the year, reap the benefits of all of this activity a year ago and adding to our international distribution network. So in other words, we expect all that stocking activity to translate into real market growth outside the U.S. in the second half of the year.
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