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Exactech revenues for the first quarter of 2012 were $58.6 million, which is a 10% increase over $53.4 million in the first quarter of 2011. Net income was $3.3 million or $0.25 per diluted share compared to $3 million or $0.22 per diluted share in the same quarter a year ago. Now looking briefly at our different product lines. Our knee implant revenue was up 1% to $21.5 million. Extremity implant revenue increased 37% to $13 million. Hip plant revenue also increased 37% and that was to $11 million. Our biologic and spine revenue decreased 13% to $6.2 million and other revenue which includes primarily instruments and bone cement, decrease 6% to $7.1 million.Our growth of 1% in our knee prosthesis line is about on pace with what we believe the industry growth was. Our biologic and spine revenue as I mentioned decreased as did our other product sales. However, our growth in both hips and extremities far exceeded industry growth. Most of the extremity growth was domestic though we are certainly making inroads outside the U.S. as well. Our hip growth is attributable to success with our new hip products generally, and also growing sales in Asian and Latin American markets. Looking at the breakdown between in the U.S. and outside the U.S. sales, our outside the U.S. sales increased 19% to $21.9 million from $18.4 million in the same quarter last year. Our domestic sales or U.S. sales increased 5% to $36.8 million compared to $35 million in the same quarter last year. Our international revenues now comprise about 37% of our total revenue. I am now going to ask Jody Phillips to give a little more of the financial detail. Jody? Joel Phillips Thank you, Dr. Petty. Good morning, everyone and thank you for joining us for this morning’s first quarter conference call. As I mentioned in the release, the first quarter sales and earnings results were slightly ahead of our expectation and we feel we have a solid start to 2012. In order to review our first quarter operating performance, I will review the major elements of the income statement and then make a few comments on balance sheet items.
Our gross margin percentage expansion during the quarter from 68.7% to 69.1% was consistent with our expectation, and as we look to the balance of 2012 we expect flat to a modest 50 basis point increase in gross margin percentages on quarter-over-quarter basis, as we expect internal manufacturing cost reductions to continue to offset modest pricing pressure.From a S&M expense perspective, the 9% increase was consistent with our sales growth and we expect sales and marketing expense growth to be in line with sales growth for the balance of the year as the large infrastructure buildup in direct operations outside the U.S. that occurred during 2010 and early 2011, has now annualized. First quarter 2012 G&A expenses were roughly flat as compared to the same quarter last year, as compliance spending was roughly half of what we experienced in the first quarter of 2011. At this time we have elected to discontinue our non-GAAP reporting as we feel that the compliance spending that we are expecting is our new reality, and this type of spending will continue for the foreseeable future. R&D expenditures it the first quarter returned to an increase of 18% as we continue to full fund our product line and also due to cartilage study expenses related to our Taiwanese clinical trial. For the balance of the year we expect similar to slightly higher growth dollars on R&D expenses and therefore we continue to expect a full year increase of approximately 20%. Although that increase will be significantly higher in the second quarter and then lower in the third quarter and fourth quarter due to different comparables from 2011. Read the rest of this transcript for free on seekingalpha.com