Question-and-Answer Session
Operator
Your first question comes from the line of Brett Jones.
Brett Jones
Hi, good afternoon. I was wondering if we could -- [against] the declining gross margin a little bit more, you mentioned that primary driver was hardware, I was wondering: if you could quantify that a little bit?
Paul Holt
Brett, we get into a lot more detail on the Q, which is going to be filed shortly. So, I guess, if I could just point you in that direction for now and do you have anything more you can follow-up.
Brett Jones
Or maybe you can just speak maybe -- was there increased pricing pressure compared to last year? Or: what you're seeing recently in the most recent quarters?
Pat Cline
Yes, Brett, I can speak from our competitive standpoint. We, over the last few quarters, as I have mentioned on the last call or two, we have seen our competition get a little more aggressive with pricing and while we haven't changed our list pricing where we have reacted on a case-by-case basis where it strategically makes sense to do so, but I think the decline in margin is more attributable not so much to any abnormal level of discounting, but to the mix as Paul mentioned just a little bit of hardware with the margins that we get, relative to hardware as you can imagine can swing the gross margin number a little bit.
Brett Jones
So, would you say that the number of these strategic relationships where you might discount: have those gone up? Or: are those pretty much the same?
Pat Cline
Over the last few quarters, we have seen a little bit of a trench where we might meet competition a little bit more but now I actually looked at this a few days ago looked year-over-year actually went back a few years and didn't see anything meaningful.
Brett Jones
Alright, great, thank you. I am sorry, Pat: did you say that there were 50 new agreements signed in the quarter?
Pat Cline
Yes.
Brett Jones
And so that's down from 70, and 70 in the quarter before that would you see the average deal side has gone up since sales were up?
Pat Cline
The average deal size has gone up, I mentioned also on a prior call that some practices were waiting to see what the local health system hospital or other organization was going to do relative to the Stark relaxation and Safe Harbor. But at the same time fortunately we have seen some of those large health systems and organizations making purchases. So, the number of deals is down, but the average deals are, it just considerably up.
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