Sirona Dental Systems (NASDAQ:SIRO) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.
Ross Taylor – CL King: Do you have any new evidence yet that the way you are segmenting the CAD/CAM market is kind of bringing in customers more quickly or kind of expanding the market for CAD/CAM relative to where it was before?
Jeffrey T. Slovin – President: Yeah, I think, Ross, it’s still early. We just launched this expanded portfolio at the IDS, which was at the end of March. We certainly saw the traffic and the enthusiasm from the marketplace to take advantage of all of these offerings. But we believe that CAD/CAM for everyone is best for dentistry because it allows us to segment the market, and we think that will lead to acceleration as we recognize that dentists have different needs, preferences and expectation and certainly Omnicam continues to command a lot of attention. So, we are happy to be able to provide this extensive portfolio. We think it’s right for dentistry. There isn’t one product that is right for every dentist, but we recognize that dentistry is about doing restorations and we think with this portfolio we’re able to help provide a better product for the dentist.
Ross Taylor – CL King: Two other questions. I know it’s early here still as well, but is the mix of CAD/CAM product versus the full Chairside compared to just the digital impression systems unfolding as you expected? Then my final question is just related to the guidance. You took up the low end of the guidance a little bit, but kept the high end the same, I just wondered if there was any reasoning or thoughts behind that?
Jeffrey T. Slovin – President: Ross, I think we’re clear about one thing. We believe the vast majority of dentists will go Chairside with CEREC because of the compelling value proposition that it has for the dental practice and the patient experience. So, we think digital impression only is important to have as a stand-alone product, but we’re very clear where we feel the future of CAD/CAM is in its Chairside…
Simone Blank – EVP and CFO: I’ll take your guidance question. Just to clarify, we increased guidance on the top line constant currency revenue growth. We now anticipate to be 10% to 12%, previously 9% to 11%. On the bottom line as you mentioned, we went from 10% to 13% to 11% to 13% bottom line growth. We feel very good about that. We continue to expect top and bottom line growth to be double digit. We think that’s pretty good. If you look at the bottom line growth, year-to-date we’re at 9.6%. So, we clearly expect this to accelerate in the back half of the year, driven by various factors, so that all went into our guidance.
Gross Margins Outlook
Steve Beuchaw – Morgan Stanley: On CAD/CAM, Simone, I wonder if you could revisit some of the conversations that we had back around the time of the Omnicam launch, specifically with regard to again CAD/CAM gross margins. The figure here in the quarter, how does that compare to what you expected for the early days of the Omnicam launch. How might that trend forward. And can you elaborate a little bit on the comment you made around – looking for opportunities to drive better CAD/CAM gross margins going forward?
Simone Blank – EVP and CFO: As we mentioned 67.4% in the quarter, clearly that was mainly impacted by Omnicam. Just for everyone, as a reminder, Omnicam has a higher sales price, but also higher manufacturing costs, but the absolute gross profit is on a similar level as for the Bluecam, and so the relative margins. So the margin, obviously, is lower which clearly shows in this quarter, and we saw that. Going forward, obviously, we will continue to look at opportunities to lower the manufacturing costs, because we just launched. It’s very normal that as you move into higher volumes, move into the next quarter for even years you will look for opportunities to do so. So there is something in there. Just as another remark I would like to make going forward for the rest of this year, you have to bear in mind that we will start trade-up programs in the second half of the year, which will have an impact on the CAD/CAM margin, because trade-ups typically have a little bit of lower margin than new user sales. So, that will impact the second half though...
Steve Beuchaw – Morgan Stanley: Jeff, I wonder if you could elaborate a little bit on a comment that you made around CEREC. Your words and I’ll get them not quite right, but you said something to the effect of you expect the vast majority of dentists to go Chairside with CEREC. I think a skeptic would say, well, hey, there are these new competitors out there. We believe in the CAD/CAM cycle, but CAD/CAM competition on the Chairside is something that we’re thinking about. Now that you’ve seen the new launches and now that you were at IDS, can you give us a sense for how you see the competitive landscape and what you think about your CAD/CAM Chairside share going forward?
Jeffrey T. Slovin – President: Certainly, we’re not surprised by the increased attention and efforts around CAD/CAM. Really, this only further supports our strong belief in the Chairside opportunity. The more people talking about CAD/CAM, the better for Sirona. We pioneered this market 28 years, in it with hundreds of millions, and I will tell you that our strategy of CAD/CAM for everyone came out long before these new entrants came into the marketplace. We continue to believe that Chairside is going to be the dominant choice of dentists because of the value proposition that you have from Chairside. If you’re a patient, you are looking to go to the dentist as few times as possible and when you do go, you want to be in the chair as shortest time possible and that’s what Chairside allows you to do. Now, we do recognize that there are dentists that are looking at a standalone digital offering and we want to assure them that they have that opportunity with Sirona. We feel that when they look at that, they will either decide to go with that with Sirona, but that may be an interim solution for them as they choose that Chairside is more of a compelling proposition for their overall practice. But that’s why we did what we did with CAD/CAM for Everyone, taking advantage of the Omnicam that we have, the Bluecam and our new software – our multiple milling units. Nobody has the breadth of products that we do and we understand what is important to take care of the customer to drive their overall satisfaction. We’re the only manufacturer that we believe can provide this. So long term, we continue to believe that we are going to be the dominant player in CAD/CAM.