Question-and-Answer Session
Operator
Your first question comes from Steven Postal - Lehman Brothers.
Steven Postal - Lehman Brothers
How should we think about the CEREC trade-in program? When do you expect that to be completed? How should we think about the margin impact related to that program?
Jost Fischer
First of all, this trade-in program is a U.S. phenomenon only at this point in time and this is controlled by Patterson. Of course, we discussed amongst each other how this is executed and we expect that to continue for several quarters.
Jeffery Slovin
I think you would expect it to go through Patterson’s year end, the trade-in program.
Jost Fischer
True.
Steven Postal - Lehman Brothers
There has been some suggestion as it relates to moderating economic conditions in the U.S. that that has impacted capital spending plans by dentists. Can you maybe offer some perspectives on how you think about that, both in the U.S. and throughout the world?
Jost Fischer
I think from our point of view the underlying factors are great. We have had a number of good years in the past and we see that trend continuing. When we look at worldwide, we see everywhere, at this point, a very healthy condition for our dental equipment and I might remind you the U.S. is only about 30% of our total sales.
Alluding to the general conditions also in the U.S. we have seen some good growth in the general economy just recently. On the other hand, there are some factors that might cause a temporary confusion, as we said. Certainly in the Galileos world decision-making has not been done as fast. We do not attribute that to a general economic decision from the dentists’ side, we see rather it takes a little longer to make the decision. So we see generally the underlying factors as positive.
Second, from our product offerings even if the economy wouldn’t be in great shape, doctors will look at the offering that we have, digital imaging saves them a lot of money; it makes the situation easier for him. CAD/CAM is a profit bringer for every dentist that does restoration work. So we have seen in the past, notably in Germany, when we had a deteriorating economic situation, that our products were holding up steady.
Jeffery Slovin
I’ll just add that I think again, Steven, we have to take a look at our product offering and the fact that it’s really about execution. We have the right product for the U.S. market. Quite frankly, we have to do a better job executing on our strategies and tactics.
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