Project Objectives

2. Project Objectives • Understand trends in case starts since January of 2007. • Quantify impact of the downturn of the national economy on case starts. • Estimate future volume of patient visits. Primary Objective:To understand patient trends in the past year and to estimate future trends.

3. Panel Intelligence draftsinitial survey &recruitment criteria Participants respond to surveywhile Panel Intelligence monitors data for integrity Clean andanalyze finaldata set Deliver finalanalysis andresults STEP 1: Setup STEP 2: Fielding STEP 3: Wrap-Up Kickoff: clarifyclinical orbusiness-relatedissues Program andtest onlinesurvey Inviteparticipants Respondentquota(s) reached; Survey closed Summarize resultsand key findings for final report Recruitment & Study Methodology QUANTITATIVE RESEARCH Quotas and Recruitment Criteria for Survey: • 101 dental professionals • Mix of solo and multi-dentist practice • Geographical mix • Practices with annual revenues greater than $200,000 Survey Detail: • Self-administered survey • Approximately 30 minutes’ duration • 101 total respondents • Fielded online from April 23, 2008 to April 25, 2008

4. Respondent Background Information • Solo practitioners: 58.4% n = 101 • Multi-dentist practice: 41.6% [Mean: 18.3 Range: 2 - 200] Questions S1 - S5

5. Key Findings: Trends in Dental Cases & US Economy Impact • Dentists expect volume of routine and non-routine visits to increase in 2008 compared to the same quarter in 2007. • For dentists expecting a decrease in visits in 2008, 90% indicate the state of the economy is a factor. • Dentists predicting an increase in visits in 2008 cite practice growth as a factor. • Nearly 80% of respondents currently have a negative to strongly negative perception of the general US economy. • 67% of dentists indicate the economy is currently having a negative impact on their practice. • Nearly 60% indicate that the US economy will have a negative on their practice impact 12 months from now. • Currently 15% of dentists feel the US economy is having a positive impact on their practice, yet over 30% indicate the economy will have a positive effect 12 months from now. • While respondents were split on awareness of new tax incentives, almost 32% will make an equipment technology purchase in 2008 because of the tax incentives. • The tax incentive will influence respondents to purchase new equipment, digital x-rays, large ticket items, and replace failures instead of fixing them. • Close to 63% of those making new equipment or technology purchases will spend $50,000 or more, which for 60% of respondents represents an increase in spending from 2007 by an average of 70%.

6. Key Findings: Consumables, Basic Equipment, and High Tech Equipment • 72% of consumables purchased are from primary distributors; Henry Schein is most commonly used. • Over 80% of dentists will not change the percent of total purchases supplied by their primary consumables distributor. • 68% of dentists purchase 16% of their consumables directly from manufacturers. • Choice of distributor is primarily driven by price (mean rank 1.8) followed by most consumable SKUs (breadth of products) (mean rank 3.1). • Over 65% of total basic equipment purchases are made from primary consumables distributors. • 80% of high-tech equipment is purchased through either primary consumables distributors (53%) or direct from the manufacturer (27%). • Digital x-ray (mean rank 1.5) is considered the most important high-tech equipment to dental practices, followed by the intra-oral camera (mean rank 2.3). • Outside of digital x-ray and CAD/CAM, respondents indicate laser dentistry, cone beam/CT, electronic records, and digital impressions as being the most promising new technologies in the next 5 years.

7. Key Findings: Digital X-Ray • 76% of dentists are performing intra-oral imaging, 65% are doing panoramic, 11% are doing neither. • Both intra-oral and panoramic users indicate digital is more beneficial than film, panoramic users slightly more so, 63% to 61% respectively. • Respondents estimate nearly a third of US dentists are currently using digital x-ray. • A 26% CAGR expected in digital x-ray use over the next 3 years. • Of the 42% of respondents without digital x-ray, 19% anticipate purchasing a system in 2008. • Over 68% of respondents are aware of 3-D x-ray systems, 60% of them see a need within their practice for one and 34% of those who see a need plan to purchase a system within the next 3 years.

8. Key Findings: Trends in Dental Implant Cases • Respondents perform an average of 7.8 implant cases per month, 60% of which are non-elective. • For the 15% of respondents that switched implant brands, most are leaving Nobel Biocare, going to either Straumann, or Astra, for various reasons. • 77% of dentists said price was not the most significant factor in choosing an implant manufacturer, ease of use and reliability are indicated as factors influencing selection. • Respondents report a consistent increase in the number of dental implant case starts over 2007, (16.5 in Q2 07) and they project the number to continually increase reaching 20.1 case starts per month by Q1 in 09. • The economy and energy prices are indicated as factors for those anticipating a decrease in case starts in Q2 2008 compared to Q2 2007. • Advertising/marketing and increased awareness are factors given for seeing an increase in case starts from Q2 2007 to Q2 2008. • 70% of dentists have not seen a change in outward referrals for dental implants in the past 12 months. • 26% have seen an increase by 26%. Reasons indicated for the increase include better patient education and awareness. • 5% have seen a decrease in outward referrals by 33%. Primarily because they are capable of doing implants themselves instead of referring out.

9. Key Findings: CAD/CAM • 65% of respondents feel the average 29 crown restorations they perform a month will not change over the next 12 months. 32% believe they will see an increase by 12%. • Respondents recognize a mean difference of $785.67 between the amount charged per crown and the amount paid in lab fees per crown. More dentists are paid cash by patients than through managed care. • While all respondents are aware of CAD/CAM 60% are not using it. • 60% of respondents indicate cost as the primary reason they have not purchased an in-office CAD/CAM system, followed by lack of necessity for 27%. • Of the 16% considering purchasing CAD/CAM, it would be in an average of 3.3 years. • 25% of those are considering the E4D from D4D. • A 15% CAGR is expected for in-office CAD/CAM system use over the next 5 years.

10. DETAILED FINDINGS SECTION ONE: TRENDS IN DENTAL CASES

11. Surveyed Practices Currently Manage an Average of 5,854 Patients The median number of patients respondents are managing is 2000. n=101 Q1. In total, how many patients is your practice currently managing/treating?

12. Volume of Visits to Increase in 2008 Compared to the Same Quarter in 2007 Patient visits in 2008 for routine and non-routine care are expected to increase from the same quarter in 2007. Q2. Please estimate the number of dental visits your practice experienced in the following time periods: Q3. In the table below, please estimate the number of visits you expect your practice to have in the following time periods. n=101

13. The State of the Economy Greatest Reason for a Decrease in Visits For over 90% of 22 respondents who predict a decrease in visits from Q2 2007 to Q2 2008, the state of the economy is a factor. n=22 Q4. You indicated that you expect a decrease in the number of visits in second quarter 2008 compared to second quarter 2007. Which of the following factors, if any, do you feel may contribute to the decrease in patient visits?

14. Other Factors Contributing to Decreasing Patient Visits Respondents indicate a number of other reasons for an anticipated decrease in patient visits from Q2 2007 to Q2 2008. n=22 Q5. What other factors not mentioned above, if any, may contribute to the decrease in patient visits?

15. Increases in Visits Due to Practice Growth Almost 29% of respondents indicate practice growth as the reason they will see an increase in the number of visits in Q2 2008 from Q2 2007. Q6. You indicated that you expect an increase in the number of visits in second quarter 2008 compared to second quarter 2007. What factors do you feel are contributing to the expected increase in patient visits? n=35

16. State of the Economy and Job Loss Drive Drop in Non-routine Care Visits For respondents anticipating a drop in non-routine care visits in Q2 2008 from Q2 2007, the state of the economy (86%) and job loss (64%) are factors seen as having the greatest impact. Q7. You indicated that you expect a decrease in the number of non-routine care visits in second quarter 2008 compared to second quarter 2007. Which of the following factors, if any, do you feel may contribute to the decrease in non-routine care visits? n=22

17. Patient Budgets and the Election Also Factors for Declining Non-routine Care Visits Respondents indicate changing budgets for patients and the election as other factors contributing to an anticipated decrease in non-routine care visits. n=22 Q8. What other factors not mentioned above, if any, may contribute to the decrease in non-routine care visits?

18. DETAILED FINDINGS SECTION TWO: US ECONOMY IMPACT

19. Negative Perception of the General US Economy Nearly 80% of respondents currently have a negative to strongly negative perception of the general US economy. Perception of the General US Economy Mean 2.9 % of Respondents Selecting Answer Q10. On a scale of 1 to 7, with 1 being a “Strongly Negative” and 7 being a “Strongly Positive”, what is your current perception of the general US economy? n=101

20. US Economy Currently Having Negative Impact on 67% of Practices While the majority of respondents indicate the economy is negatively impacting their practice, 15% say it is having a positive impact on their business. Impact General US Economy is Currently Having on Your Business Mean 3.3 % of Respondents Selecting Answer Q11. On a scale of 1 to 7, with 1 being a “Strongly Negative” and 7 being a “Strongly Positive”, how much of an impact, if any, do you think the general US economy is currently having on your business? n=101

21. Anticipate Economy Will Have Less Impact 12 Months From Now Nearly 60% of respondents indicate that the US economy will have a negative on their practice impact 12 months from now, but over 30% indicate it will have a positive effect, twice as high as current impact. Impact General US Economy Will Have on Your Business 12 Months From Now Mean 3.6 % of Respondents Selecting Answer Q12. How much of an impact, if any at all, do you think the general US economy will have on your business 12 months from now? n=101

22. While Not Well Known, Tax Breaks In New Stimulus Bill Will Make An Impact On Purchases While respondents were split on awareness of the new tax incentives, almost 32% will make an equipment technology purchase in 2008 because of the tax incentives. New Provisions Influence on Making An Equipment Technology Purchase in 2008 Awareness of New Provisions in Stimulus Bill Aware of New Provisions in Stimulus Bill Will Make an Equipment Technology Purchase in 2008 Not Aware of New Provisions in Stimulus Bill Will Not Make an Equipment Technology Purchase in 2008 % of Respondents Selecting Answer % of Respondents Selecting Answer Q 13. Are you aware of the new provisions in the recently-passed stimulus bill that increased the write-off a maximum of $250,000 on equipment and technology purchases installed and operational by the end of the 2008 calendar year? Q 14. Will this tax incentive for small businesses influence you to make an equipment technology purchase in 2008? n=101

23. Purchases Will Include New Equipment and Digital X-Ray The tax incentive will influence respondents to purchase new equipment, digital x-rays, large ticket items, and replace failures instead of fixing them. Q14.a Will this tax incentive for small businesses influence you to make an equipment technology purchase in 2008? If Yes, how so? n=32

24. More Than 60% Will Spend Over $50,000 44% of respondents who anticipate making a new equipment or technology purchase in 2008 will spend between $50,001 - $100,000. Anticipated Amount Spending in 2008 > $250,001 $200,001 - $250,000 $100,001 - $200,000 $50,001 - $100,000 < $50,000 % of Respondents Selecting Amount n=32 Q 15. How much do you anticipate you will spend on new equipment or technology in 2008?

25. Compared to 2007, 60% Will Increase Spending by 70% In 2008 60% of 32 respondents will increase their spending on new equipment or technology from 2007 by an average of 70%. Change From Spending In Previous Year Increase By: 70.3% n = 18 (with 1 outlier excluded) No Change n = 8 Decrease By: 35.6% n = 5 % of Respondents Selecting Answer n=32 Q 16. a Does this reflect a change in spending on new equipment or technology from the previous year?

26. Dentists Plan to Invest In Digital Technologies Several dentists indicate digital x-ray, and digital imaging as areas of investment in 2008. n=32 Q16.b Please highlight some of the technologies you will be investing in (CAD/CAM, digital imaging, etc.):

27. DETAILED FINDINGS SECTION THREE: CONSUMABLES

28. Henry Schein Most Commonly Used Primary Distributor; 72% Of Purchases Are From Primary Distributors Dentists use an average of 4 distributors for purchasing consumables. Percent of Total Consumables Purchased from Primary Distributor: 72.1% Q17. How many distributors do you currently use for purchasing consumable products? Q18. Who is your primary consumables distributor, and what percent of your total consumable purchases are from that distributor? n=101

29. Over 80% Will Not Change Percent of Total Purchases Supplied By Primary Distributor Less than 20% of respondents will change the percent of total purchases bought from their primary distributor. Anticipated Percent Change in Total Consumable Purchases from Primary Distributor Increase N = 9 Remain the Same N = 82 Decrease N = 10 % of Respondents n=101 Q 19.a Do you anticipate this percentage to increase, decrease, or stay the same in the future?

30. Patient Load Drives Changes In Purchasing Behavior Increasing patient loads supports more purchases, while decreases in patients and increasing prices are reasons for decreases in purchases. n= 9 increase n = 10 decrease Q 19.b If you anticipate this percentage to increase or decrease, what is the primary reason for the change?

31. 68% of Dentists Purchase 16% of Consumables Directly From Manufacturers While 32% of dentists make no purchases from manufacturers, nearly 16% of total consumable purchases made are direct from the manufacturer. Percent Purchasing Consumables Directly From the Manufacturer Average of 15.6% of Total Consumables Purchased Direct from Manufacturer Do not % of Respondents Q 20. Do you purchase any consumables product directly from the manufacturer? If so, what percentage of total consumables purchases does this represent? n=101

32. Price Drives Distributor Choice Although having a breadth of products is important (3.1 mean rank), price (1.8 mean rank) is still the most important factor in deciding on a consumables distributor. Q 21. Please rank the following factors by order of importance when selecting a distributor for consumable products. (1=Most Important, 2=Second Most Important, etc.) n=101

33. DETAILED FINDINGS SECTION FOUR: BASIC EQUIPMENT

34. Most Basic Equipment Is Purchased From Primary Consumables Distributors Over 65% of total basic equipment purchases are made from primary consumables distributors. Percent of Basic Equipment Purchases Made by Vendor Type Primary Consumables Distributor Secondary Consumables Distributor Direct from Manufacturer Other* % of Respondents Others Specified: pens, paper products; local full service dealer; Equipment Supplier; equipment service contractor; Dental repair technician; dart; appropriate distributor; already present when purchased this practice . n=101 Q 22. When purchasing high tech equipment, what percentage of purchases are made from the following vendors:

35. DETAILED FINDINGS SECTION FIVE: HIGH TECH EQUIPMENT

36. More Than Half of High-Tech Equipment Purchases Are Made From Primary Consumables Distributors Over 80% of high-tech equipment is purchased through either primary consumables distributors or direct from the manufacturer. Percent of High-Tech Equipment Purchases Made by Vendor Type Primary Consumables Distributor Direct from Manufacturer Secondary Consumables Distributor Other* % of Respondents Others Specified: On line or retail stores; local full service dealer; Equipment Supplier; distributor of particular item; dart; copiers, printers, computer. n=101 Q 23. When purchasing high tech equipment, what percentage of purchases are made from the following vendors:

37. Digital X-Ray and Intra-Oral Camera Are Ranked As the Most Important High-Tech Equipment With a mean rank of 1.5 digital x-ray is considered the most important high-tech equipment to dental practices. Q 24. Please rank the importance of the following types of high tech equipment to your practice (i.e., enhancing the customer’s experience, improving productivity, minimizing employee turnover, etc.) (1=Most Important, 2=Second Most Important, etc.) n=101

38. Laser Dentistry and Cone Beam/CT Seen As the Most Promising New Technologies Over the next five years, respondents indicate laser dentistry, cone beam/CT, electronic records, and digital impressions as being the most promising new technologies. Q 25. Outside of digital x-ray and CAD/CAM, what do you view as the most promising new technology expected to impact the dental market over the next five years? n=101

39. DETAILED FINDINGS SECTION SIX: DIGITAL X-RAY

40. Awareness of Digital X-Ray Is Over 90% Less than 9% of dentists were unaware of digital x-ray systems for oral imaging. Percent Aware of Digital X-Ray Systems For Oral Imaging Yes No % of Respondents n=101 Q 26. Are you aware of digital x-ray systems for oral imaging (as compared to the traditional film based imagers)?

41. More Dentists Practicing Intra-Oral Imaging Than Panoramic Imaging 76% of dentists are performing intra-oral imaging, 65% are doing panoramic, 11% are doing neither. n=101 Q 27. Which of the following types of imaging, if either, do you currently perform?

42. Both Intra-Oral and Panoramic Users Indicate Digital Is More Beneficial Than Film Based One-third of respondents indicate equal benefits among digital and film based imaging. Q 28. For the following types of imaging, please indicate the relative value of digital as compared to film based imaging. n=90

43. Estimated 33% Dentists Using Digital X-Ray n=101 Q29. Approximately what percentage of U.S. dentists do you think currently use digital x-ray for patients?

44. Digital X-Ray Use Expected To Increase To Over 65% Three Years From Now Respondents expect steady increase in digital x-ray use from 33% now to 65% 3 years from now (26% CAGR). Percent of US Dentists Anticipate Will Use Digital X-Ray in Next 3 Years Q30. What percentage of U.S. dentists do you predict will use digital x-ray: n=101

45. 58% of Respondents Have Digital X-Ray Systems Of the 42% without digital x-ray, 19% anticipate purchasing a system in 2008. Percent That Currently Have a Digital X-Ray System Yes • 19.0% (n=8) without digital x-ray systems anticipate purchasing one in 2008. • Brands mentioned: Kodak (2), Gendex (1), Dexis (1) No % of Respondents Q31. Do you currently have a digital x-ray system? Q32. Do you anticipate purchasing a digital x-ray system in 2008? n=101

46. 3-Dimensional X-Ray System Demand Is Increasing Over 68% of respondents are aware of 3-D x-ray systems, 60% of them see a need within their practice for one and 34% of those who see a need plan to purchase a system within the next 3 years. Percent Aware of Next Generation 3-Dimensional X-Ray Systems • 59.4% of those aware see a need for 3D x-rays in their practice • 34.1% of those who see a need plan to purchase a 3D x-ray system within the next 3 years* Yes No % of Respondents * Planmeca (4 mentions), I-Cat (3 mentions), Sirona (2 mentions), Kodak 9000 (1 mention) Q 33. Are you aware of the next generation 3-dimensional (3D) x-ray systems? Q 34. Do you see a need for 3D x-rays in your practice? Q 35. Do you expect to purchase a 3D x-ray system within the next 3 years? n=101

47. DETAILED FINDINGS SECTION SEVEN: TRENDS IN DENTAL IMPLANT CASES

48. Of the 7.8 Mean Implant Cases Per Month, 60% Are Non-Elective More dental implant cases are done on a non-elective basis than elective. Types of Dental Implant Cases Mean # of Dental Implant Cases Per Month Percentage of Dental Implant Cases n=94 n=7 have 0 implant cases n=100 Q36. How many dental implants cases do you currently start/perform per month? Q37. What percentage of your dental implant cases are:

49. 85% of Respondents Have Implant Brand Loyalty For the 15% of respondents switching implant brands, most are leaving Nobel Biocare, going to either Straumann, or Astra, for various reasons. Changes in Dental Implant Brands Used in Practice Percentage of Respondents n=94 n=7 have 0 implant cases n=14 Q38. Has your practice changed the brand of dental implant used in the past 12 months? Q39. Please indicate the former and new manufacturer:

50. Price Not the Most Significant Factor Influencing Implant Selection Ease of use and reliability are indicated as significant factors influencing implant manufacturer selection. Price Significance in Vendor Selection Percentage of Respondents n=72 n=94 n=7 have 0 implant cases Q40. Is price the most significant factor influencing your choice of implant manufacturer?