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Public Orthopedic Revenues Jump 18% in First Half of 2003 – A New Record BY EDITOR, SEPTEMBER 2, 2003

We told you so. We said orthopedic industry revenues were accelerating. We just didn't predict that they'd be this strong. We were thinking 16%. Now that the last conference call of the second quarter is over, we've added up all public ortho company's second quarter's revenues – the table is on our website and is available to subscribers. Read 'em and be impressed. $7.1 billion in sales from 22 reporting orthopedic products suppliers. (There are, we estimate, upwards of 1,500 orthopedic companies in the world – over 1,300 are in our database).

That revenue figure is 18% higher than the $6.0 billion these same companies reported in the first half of 2002. And that number is 14% higher than the $5.3 billion reported in the first half of 2001.

Did anyone predict this? Not Merrill. That Institutional Investor ranked team had been predicting an orthopedic revenue slowdown for over three quarters. CSFB?  Piper? Not a single one.

It's been the industry itself that's been saying very clearly that growth rates were NOT slowing down. But, was Wall Street listening, much less understanding?

Four reasons, we think, account for this extraordinary growth record;

To be perfectly clear about the position of the orthopedic implant industry today: large joint penetration rates are still under 10% of the available patient population and spine surgery penetrations rates are even lower.

Orthopedic revenues are, we believe, in the process of quadrupling over the course of the coming decade rising from $15 billion in 2002 (over $17 billion in 2003) to $65 billion in 2012.

Outlook for the 3^rd quarter 2003.

Last year, reported orthopedic revenues reached $3.1 billion, up 15% from prior year levels. This year, the consensus Wall Street and HealthpointCapital revenue forecast for the 3^rd quarter is $3.5 billion, a 16% rise over last year's level. The third quarter's revenue growth rate will likely be the slowest of the year but at 16%, it will no doubt surprise the geniuses on Wall Street. Rock 'n' roll!