Question-and-Answer Session
Operator
Thank you, sir. (Operator instructions) We will take our first question today from John Kreger with William Blair.
John Kreger – William Blair
Hi, thanks, Jim and Mary. I just wanted to probe a little more on your thinking behind the guidance for next year. Could you give us a sense about how you think your production versus small animal companion business is likely to perform in the coming year? And also, how you handle the issue of rebates in guidance?
Jim Cleary
Sure. I’ll address the first part, and then Mary Pat can address the rebate part of that. You know, when we came up with our guidance for the year, we evaluated many data points in the animal health market, as well as the financial information released by our competitors and other participants in the animal health market. And based on all those pieces of information, we came up with the guidance that we did, and which shows that we’re continuing to grow and we expect to significantly outpace the growth in the overall animal health market. With regard to small animal versus large animal, we’ve seen that the small animal market is performing relatively better than we would have expected. And the cattle market and the equine market are performing relatively weaker than we would have expected. And so that is built into that guidance, John.
And at some point in time, we think that the cattle market is going to turn, and we’ll start to have good comparables, and we’ll see some good growth there. But, up to this point in time, as I’ve said the small animal market has been relatively stronger than we would have expected, and the large animal market has been relatively weaker than we would have expected.
John Kreger – William Blair
Okay.
Mary Pat Thompson
Great. And I’ll just finish up with the rebate question. At this point in time it’s difficult to say about rebates for next year because obviously the contracts for 2009 have not yet been negotiated. I do still see trends for more margins being earned on upfront transactions and less weighted toward rebates. Overall, we would expect rebates to be down as a percentage of revenues in fiscal year 2009.
John Kreger – William Blair
And Mary Pat, when do you think you’ll have more clarity on that – is it a sort of an end of February timing?
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