In a healthcare environment focused on improving the quality of life and managing costs, Respironics recognizes that importance lies not in the number of new products a company introduces, but in the effect that those products have on the individuals they are designed to help. We have been in the business of anticipating and providing comprehensive, cost-effective products and services to the respiratory marketplace since 1976. I believe that I can say, with confidence, that our company knows its business. We recognize our customers’ need to grow and manage their businesses; manage their patients’ disease state by providing effective treatment alternatives; and understand the reimbursement process imposed by our government and the insurance industry. As we move forward and address the challenges of the healthcare delivery system, we will be focused on innovating solutions around the needs of our customers. Net sales in fiscal 1999 were $357.6 million compared with $351.6 million in the prior fiscal year. Excluding charges in both periods discussed below, net income for the current year was $27.5 million versus last year’s $27.3 million. Diluted earnings per share, excluding charges in both periods, were $0.86 for the current year compared with last year’s $0.82. Results for fiscal year 1999, exclude the impact of restructuring charges of $2.4 million, or $0.04 per share, and a special addition to the company’s allowance for uncollectible receivables of $5.0 million, or $0.10 per share. Prior year results exclude the impact of charges related to the company’s merger with Healthdyne Technologies, Inc., which totaled $40.7 million, or $0.87 per share. Prior year results also exclude the impact of costs related to an unsolicited offer by another company to acquire Healthdyne, which totaled $650,000, or $0.01 per share. Fiscal year 1999 did not meet management’s expectations; this called for a definite change in direction. Therefore, with the close of fiscal year 1999, the intention to reorganize the company was communicated and, by the end of July, changes were announced and implementation began. The company has been reorganized into four divisions: Home Care, Hospital, Asthma and Allergy, and International; each is focused on its primary customers and channel of distribution. The major benefit of this realignment is that each division, excluding International, is now responsible for every aspect of delivering value to its customers beginning with research and development and ending with the marketing of a comprehensive package that will manage a respiratory disease state. Additionally, each division’s sales representatives are now focused on their customer base, and their primary goal is to build lasting relationships with their customers over the long term. Another restructuring effort that has allowed us to realign human and physical resources is the centralization of our distribution process. This effort will enhance our ability to provide higher service levels to our customers by allowing both the customer and our organization to have one point of contact which is capable of taking orders, delivering product in a timely fashion and providing technical service and repair. As a result, we will reduce personnel by closing our customer satisfaction centers and replacing them with a field service organization that works more efficiently with the company’s centralized distribution and technical service center in Youngwood, Pennsylvania. Based on thorough analysis of our manufacturing facilities, it was determined that home care products would be manufactured in Murrysville, Pennsylvania, and Marietta, Georgia; and hospital products would be manufactured in Vista, California. This reallocation of manufacturing processes allows Respironics to close its Westminster, Colorado manufacturing and product design center. Over the next year, the Marietta, Georgia facility will be relocated to a facility that will accommodate installation of Demand Flow® Technology — a state-of-the-art manufacturing approach. Overall, these changes will represent both physical and facility savings to the company for the new fiscal year. With the restructuring component well underway, I believe that these changes will allow us to be more responsive to the needs of the market. In addition, we have chosen to change the focus of our organization. Respironics is faced with an enormous opportunity. The healthcare delivery system is searching for ways to deliver the best possible care while controlling costs. Our customers — the healthcare providers — are looking for ways to manage and grow their businesses, while simultaneously providing the best products and services and keeping the cost of health care to a minimum. To capitalize on this enormous opportunity, our approach in this ever-changing healthcare environment will be to refocus our efforts on meeting the needs of our customers. Home Care Focus. Respironics’ home care products are designed to keep patients healthy and at home, where they are most comfortable and the cost of health care is lower. By providing more than just a product, we help our customer — the home care provider — to focus on growing their business with the programs that Respironics develops to manage disease states, in the home environment. The programs that our company offers focus on sleep disordered breathing, chronic obstructive pulmonary disease, asthma management, congestive heart failure, infant management and restrictive lung disorders. Our experience in these areas provides innovative products and unique services to the home care provider as we assist them with their goal — to grow their business more efficiently. Hospital Focus. As health care focuses on improving the quality of life and managing costs, Respironics continues to offer innovative ventilation solutions that offer exciting price points for the hospital and alternate care site caregiver. Our hospital products are easy to use and maintain. Clinical personnel can be trained easily, and product acquisition costs are kept low, which ties directly into the healthcare objective to control costs. International Focus. Respironics continues its strong commitment to international growth. Our objective to innovate culture by culture will be achieved by building upon a well-developed foundation. We will apply what we have learned domestically; leverage that knowledge of product development and disease management; and implement that same approach worldwide. Our international team anxiously approaches the opportunities this market has to offer. We are confident that assertive actions like these will fuel our company’s growth and progress into the future. Respironics is a company with a proven record of achievement. Our team is once again focused and equipped to grow one step ahead of the needs of the healthcare environment. We will continue to mobilize our resources to solve the problems of the present as we innovate around the future needs of the healthcare provider.