Good day ladies and gentlemen and welcome to The Cooper Companies second quarter 2008 conference call. (Operator Instructions) I would now like to turn the presentation over to your host for today’s call, Mr. Albert White, Vice President of Investor Relations and Treasurer; please proceed.

Thank you. Good afternoon everyone and welcome to the Cooper Companies second quarter 2008 conference call. I’m Albert White, Vice President of Investor Relations and Treasurer and joining me on today’s call are Robert Weiss, President and Chief Executive Officer and Eugene Midlock, Chief Financial Officer. Before we get started I’d like to remind you that this conference call will contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, including all revenue and earnings per share guidance and other statements regarding anticipated results of operations, market conditions and planned product launches. Forward-looking statements necessarily depend on assumptions, data or methods that may be incorrect or imprecise and are subject to risks and uncertainties. Events that could cause our actual results and future actions of the company to differ materially from those described in forward-looking statements are set forth under the caption ‘forward looking statements’ in today’s earnings release and are described in our SEC filings, including the business and risk factors section of Cooper’s annual report on form 10-K. These are available publicly and on request from the companies Investor Relations department. Now before I turn the call over the Robert, let me comment on the agenda for the call. Robert will begin by providing highlights of the quarter followed by details on several key topics. Following Robert’s remarks Eugene will comment on the second quarter financial results. We will then open up the call for questions. With that, let me turn the call over to Robert for his opening remarks.

Thank you Albert and good afternoon everyone. I hope everyone was as excited about our results as we were as we issued our press release moments ago on our second quarter results. Before I get too much into the details I’d like to make sure that everyone understands that if you hear nothing else, I’d like you to walk away with certain key highlights and key messages from today’s call. First of all, the global contact lens market remains very strong. We don’t say its recession proof we do its recession resistant. So we have a great market that we’re participating in. Secondly our products are doing fantastic. We view we have the best-in-class products in each of the three modalities of contact lenses; the single-use lenses which is our Proclear one-day entrée and the two-week space which is dominant in the United States where two-thirds of the market is one-week and two-week, we now have launched Avaira. And in the monthly space we have Biofinity best-in-class in the silicone hydrogel monthly market. Financially we’re performing very solidly. Our restructuring charges are almost behind us. We continue to see manufacturing improvements across all product lines and we should start seeing free cash flow in the third quarter, if not a net positive very close to a positive. CooperSurgical continues to perform well and really supports the overall business with its free cash flow. As far as second quarter results, I view them as very impressive and hope you share that. We had $263 million in revenue, up 17% and 10% in constant currency. CooperVision had revenue of $222 million, up 18% and 10% in constant currency. CooperSurgical contributed $41.5 million plus 11% and 9% of that was organic growth. Our earnings per share in accordance with GAAP was $0.25 for…

Thanks Robert, good afternoon everyone and thank you for joining us today. I’d like to spend a few minutes briefly, and I stress briefly, reviewing some of our key financial results for the quarter. I’ll try not to provide too many statistics and numbers so as to kill everyone. You can refer to our news release as well as the 10-Q which will be filed tomorrow morning at about 11:00 Pacific Time for more details. So let me begin by commenting on revenue and product sales, we had a very strong quarter with revenue of $263.5 million which is up 17% over the prior year and 10% constant currency as Robert indicated. CooperVision grew 18%, CooperSurgical grew 11%; so both of our operating divisions had very strong double-digit growth. Product sales, Robert summarized fairly well, but as you’ll note in the news release, our specialty lens group grew 11% over 2007. Proclear products grew 33% and the real gainer was our single-use spheres which were up 62% and that was recognized in all of our geographies. Asia Pac and EMA were up around 60% and the Americas were up approximately 95%. So we’re really pleased with our growth in our daily lens business. Geography-wise, overall basis, the Americas grew by 10%, Europe 20% and Asia Pac 38%; so solid growth again throughout the world for all of our products. CooperSurgical’s product line also grew very well as Robert indicated. The products that we sell to hospitals were up 17%. Our IVF unit sales were up 18% and the international business unit sales were up 25%. So really strong 11% growth overall. Turning to gross margin our consolidated gross margin was 57% compared to 55% in the second quarter of 2007 and if we exclude our non-GAAP expenses, gross margin was…

Thank you Eugene, thank you Robert. We’ll take questions now.

(Operator Instructions) Your first question comes from the line of Michael Weinstein - JP Morgan

Basically J&J disclosed today at its Analyst Meeting that one, an astigmatism lens is being launched this month in the US and now its available globally. Two they also are coming out with a silicone hydrogel lens on the daily disposable side utilizing a new silicone hydrogel material there. And they also disclosed that they’re completing the clinicals on their drug delivery lens for ocular allergies and they expect to file that later this year. Just given that you won’t have a silicone hydrogel toric offering until 2009 does this change your view at all on toric share for the balance of the year? And what do you think your prospects are for a daily silicone hydrogel lens and then do you have an internal program and have you made any progress in developing a drug delivery lens of your own to compete with J&J?

As far as—we haven’t really quoted our toric market share other then to say that once we come out with our own product line in the silicone hydrogel space that we expect to hold it, but coming off of a 33 worldwide we don’t have our own expectations of holding share. Having said that, dealing with Oasis—Oasis is coming out with another two-week spot where Acuvue Advance for astigmatism is Triple A. Price the same thing. There are two reads on that. Historically J&J has done a trading-up mode from Acuvue Two to Acuvue Advance and then from Acuvue Advance to Oasis. Well they’ve been trying to trade-up 20% or 30% each step-up, interestingly they’re not trying to do it with Oasis, they’re listing the price the same. And $24.00 a six-pack is what it’s being listed at. It seems to me what they’re doing is somewhat defensive. That Acuvue Advance for astigmatism is not the product they want to go with longer term. The other thing to keep in mind is typically a doctor will not move from a monthly modality to a two week modality so they’re coming into their same sweet spot of the market not finding their way into the monthly modality market; my opinion. Secondly the—as it pertains to the fact that they’re already in the two-week space, the fact that Acuvue Advance for astigmatism has been out there and doing pretty well, those people that wanted to trade to a two week silicone hydrogel lens by and large have traded over a long time ago. So those that are believers in the hydrogel side of the market and its clearly among other things, it’s the argument of if I’m taking them out every day I’m more concerned about the comfort level and there’s just…

Your next question comes from the line of Larry Biegelsen - Wachovia Capital Markets

In the past you talked about you were uncertain about some of the spending related to the launches of your silicone hydrogel now that you have a better understanding of what your capacity is and what your launch plans might be, how should we think about SG&A spending relative to sales growth? Is that going to exceed sales growth over the next couple of years and if so, can you help us think about that? Could you quantify that for us a little bit better?

I guess the way I think about it is overall operating costs, if we were to do a product line P&L on Avaira we’re not going to make money on it this year. We probably won’t make money on it next year. You don’t try to make money from the get go as long as you know it has good legs. That translates to continuing to invest in fitting sets and it translates into investing in the distribution channels we have available, meaning our sales and marketing organization and it also translates, depending on how much blending there is between private label. The one thing that could happen is private label is a trade-off between operating costs and lower margins so its got to be win-win; a win for us and if we leverage a large chain through private labels, then there should not be a higher percentage of G&A associated with that. Where we are going to continue to get leverage is the distribution centers that we’ve set up and G&A in those areas. So if we were to breakout SG&A I would expect our sales and marketing and the trial lenses to grow at least as fast as sales. I would expect to get a lot of leverage out of distribution and G&A and as Eugene indicated, we expect to grow our R&D at or above the revenue growth so net, net, net operating costs which are currently around 45% will drift down over a longer haul, I would say from 45 it will work itself toward the low 40s. From the point of view of gross margins, they’ll be somewhat influenced by the one-day mix coupled with how much private label going one way and then going the way is there’s a number of manufacturing improvements we expect to make that will keep trying to push the gross margin up as well as the shift to silicone hydrogel lenses.

Your next question comes from the line of Unidentified Analyst - Citigroup Unidentified Analyst – Citigroup: On Avaira production, can you give us an update on Avaira production out of the UK plant and give us a sense of how yields and utilization levels are tracking in Puerto Rico versus UK and when you will see production out of Puerto Rico?

Yields in the UK on fast track are at or above that of that Biofinity already. So we’re already—there’s no risk to the way we view fast track and there’s no risk to our ability to support the $8 million to $10 million or the $10 million to $12 million. Relative to are we getting product from Puerto Rico, yes we are. They’re making--it sequentially they’re doing at or above our expectation and keep in mind with Avaira in Puerto Rico it’s an engineer challenge, it is not a chemist challenge. We already know the chemistry. We actually know 90% of the platform so a small piece of the technology gets a lot of attention and as a result of that, we get to do a lot more trial and error. So as we see it within 12 months, we expect to hit a level that we’re comfortable with on that technology which is to say that we think we will get the platform—a $30 million piece of equipment up to the level of making 36 million lenses a year or a ballpark three million and we’re proceeding in a very satisfactory mode. To the extent we’re making more lenses then would support the $10 million to $12 million we may or may not sell those lenses given the fact that we have a lot of paranoia about going on back order with large chains, we would rather build some buffer stock. We’re going to play that conservative and not at all risk getting ahead of ourselves with certain or multiple large chains and then can’t deliver. Delivering is everything on that one. Unidentified Analyst – Citigroup: On margins for Biofinity and Avaira do you care to share those with us or give us a range of where they are?

The only thing I can help you with on Biofinity—I’ll make two points. One is our gross margins for silicone hydrogel we expect to get to the upper 60s to low 70s over the next two years, by the end of two years. Relative to the ramp up of where we are, we’re making Biofinity well below what we thought we would make. The yields are north of the targeted 50%. When I did the math of the four million lenses compared to two million lenses at the same price that translates to 100% gross margin on those last two million lenses. If you blend that all it moves up your margins substantially. What we’re telling you is all those call-outs associated with the lenses made prior to January of this year, are substantially gone from the point of view of what’s going onto the balance sheet. So we pretty much have the visibility that our margins for Biofinity will move into the upper 60s. On Avaira we’re early in the game. While fast track has done spectacular compared to our expectation was easy to do. The real trick to gross margins is going to be the high volume one in Puerto Rico and we’re a little early to get to cocky about it.

Your next question comes from the line of Joanne Wuensch - BMO Capital Markets

I’d like to ask a question about Avaira, if you could go into a little bit more detail about your ASPs on Avaira and how you’re positioning the product in your launch, what’s your strategy there?

As far as ASPs, we list the product at $19.00 a six-pack and that compares to Oasis at $20.25. So we’re below that on the listing. I won’t get into exact average realized prices obviously for competitive reasons, but suffice it to say, if we get into large volume rollouts with retailers, it is likely to be somewhat below that $19.00. I don’t want to put too much color on where it is other then it’s not unusually low and if we were to do private label that obviously would be a full debate over how much the retailer is going to put behind the product. So other then to say we’re under Oasis, the product is in my opinion as good or better then--its 30% softer from the point of view not being as rigid a material. So it has a lot of features that are going its way and we think it will do well in the market.

Can you comment on what you’ve seen so far in terms of reorder rates and comment on whether or not any of Avaira is on backorder with any of your customers?

I can’t comment on reorder rates, it really is—we’re a little over a month into it and by and large the job is getting it out there onto the shelves where the ODs of some of these chains—hope I didn’t come across as saying we’re only selling it to the large retailers. We are treating our loyal independent private practitioners. They are also being targeted by our sales guys. But having said that at the reorder point we’re way too early to have any read on that. I would say one thing, everyone that has tried it loves it. We hear rave reviews--I can’t translate that into financial dollars and cents at this point.

You said that you are constrained on Avaira but not on the other lines?

We are capacity constrained on Avaira and will probably be capacity constrained on Avaira for the next I’d say at least the next 12 months.

Your next question comes from the line of Lawrence Keush - Goldman Sachs Lawrence Keush – Goldman Sachs: As it relates to the call-outs, you did about $26 million year-to-date, you’re talking $35 million, I just want to get a sense of the gating, is 80% of the remaining call-out in the third quarter and a little bit left in the fourth? I just want to get a feel for how you’re thinking about that?

I think it’s accurate to say, I don’t know if it’s exactly 80% but there is a huge drop-off after the end of the third quarter and that’s nothing more then if you use the seven month factor you’ll see how a lot of that will drop off. Lawrence Keush – Goldman Sachs: You went a little fast with the cash flow expectations I’m wondering if you could just run through that quickly with your comments for 2008 and 2009.

Basically we’re out the door about $64 million year-to-date, $16 million this last quarter. Our expectation is that for the balance of this year we’ll be net positive to and including in the third quarter we expect to be net positive—it’ll be close but my bet if you will, is that we are positive. Going into next year, we expect to generate free cash flow in excess of $50 million. Relative to gating of capital requirements, there will be a huge drop-off after the first quarter of next year and that’s because all of our—the money we’re now spending was pretty much committed over the last six to 12 months. A lot of these equipments have 12 month to 18 month lead times. In the case of the large Avaira line, it would be 18 month lead times as well as CapEx on building expansion. So the visibility is once we’ve flushed through those existing commitments we know that we have more then enough capacity on Biofinity, on the one-day modality and the only one we’re continuing to source if you will in terms of CapEx requirements is primarily Avaira and then just wrapping up one building expansion in Puerto Rico that will be pretty much money out the door by the end of this calendar year. Lawrence Keush – Goldman Sachs: With the revolver and obviously not contemplating the put of the convert here, where do you stand with the available borrowings on that and where are you with your EBITDA covenant right now?

As far as we have adequate capacity under our revolver to convert the debt from 2 5/8 to the—underneath the revolver. On EBITDA coverage, let’s say we’re comfortably there. We’re monitoring—we obviously are keenly aware of our covenants and monitor that very religiously. Lawrence Keush – Goldman Sachs: You don’t have your kind of where you wound up at the end of the quarter with what’s available on that revolver?

I can give you that exact number, I think it was like $225 million, something like that available.

Your next question comes from the line of Peter Bye - Jefferies & Company Peter Bye - Jefferies & Company: On guidance, I guess you’ve got some visibility on gross margins because of the inventory you’re going to work through and you know what your margins were on this product earlier this year, if I just sort of add up what you did the first half of the year on pro forma EPS and if I assume no expansion from back half last year’s pro forma EPS, I get to $217. Now I understand interest expense a little bit higher and that’s only $0.03 or $0.04 and I was just wondering where—perhaps what’s precluding you from raising up the bottom end of the range? Well if you keep pro forma EPS flat from a year-ago even though you’ve had a fair amount of progress on the manufacturing front, why would EPS conceivably even possibly be flat from the back half last year?

I think that’s a fair question whether or not it should be flat with the prior year. We do have the investment in Avaira that’s going on. And quite frankly we took a position where we didn’t think we had enough change to want to change our guidance every quarter. So we’re kind of sticking with the range. The range is a little broader then it should be right now, you can argue we could have tightened it a bit. But I think those two factors are number one the Avaira launch and two is the fact that we just didn’t change the range. Peter Bye - Jefferies & Company: The Avaira launch, is it just the SG&A cost of launching the product or do you mean just because you’re not calling out the incremental cost of goods sales or both?

The Avaira launch start-up costs, we’ve made a decision not to flush that into the world of the call-outs. Is there start-up costs flowing through the P&L? Yes there is particularly as it relates to the—was we start hitting the P&L in the first six months with the Puerto Rico line equipment. That is a factor that will put some burden on gross margins that are not being called out. Peter Bye - Jefferies & Company: The range on GAAP is $0.45 and you’ve got $0.25 on non-GAAP and I guess certainly a $3 million on the put amortization expense explains some of it but there’s another $7 million there. Given how far we’re through the year and they really fall off the cliff after September, I’m just wondering what that delta is? Where that $7 million could fall or in call-outs?

In terms of where it’s going to fall, it’s going to fall heavily in the third quarter. Peter Bye - Jefferies & Company: I just meant there’s—you’ve got a wider range for your GAAP and non-GAAP right and its pretty much most of its in Q3 so I’m just wondering what’s accounting for the $10 million and sort of delta net income. Certainly $3 as you said could be the—potentially for the convertible put, I’m just wondering what the other $7 million delta could be. Or what sort of plays into that wider range?

A lot of that is start-up costs from a manufacturing point of view, not the put.

If I’m understanding you right, we did take a look at altering guidance just to bring them together but rather then change guidance every single quarter, we just held it. Peter Bye - Jefferies & Company: On the toric that you have going out there, are the monthly and the two-week going to be on the same platform? Are they both sort of out of the Biofinity type platforms on the UK or are—can you just explain a little bit?

Biofinity will go first, that’s the one that goes into production this quarter and will be launched in the calendar year first quarter next year, 2009. And then towards the end of calendar year 2009 will be an Avaira platform. The big difference is the Biofinity product can be produced on the existing Biofinity lines. The Avaira toric will not be on a Gen II, the one we have in Puerto Rico.

Your final question comes from the line of Jeff Johnson - Robert W. Baird

It looks to me adjusted CVI gross margin this quarter hit a five year low, I understand your comments that gross margin improvements can be seen with dailies and Biofinity over the next few quarters, but I also, at least in my model, I have to factor in start-up Avaira costs, potentially some start-up toric [inaudible] costs, and private label gross margin drags on the Avaira, so I guess my question boils down to where do you see gross margin on a CVI basis going on an adjusted basis over the next six to 18 months? And Eugene, you noted a low 60% gross margin for CVI this year, I thought prior guidance was a little more defined at 61% to 63%, should we assume low 60% could mean below the low end of that 61% to 63% for this year and maybe into 2009?

No, 61% to 635 is still accurate.

The only thing I’d add to that is why we’re hedging a little on the wording 61% to 63%, low 60% is given the robustness of our expansion of the one-day—the 62% growth in one-day for the quarter was eye-popping and obviously if we aggressively shift into that modality while we’re catching up with the silicone hydrogel pulling it the other way, that could keep us at the low end of that range of the 61% to 63%.

And the low end of that range not just over the balance of this year but probably as we go through 2009 as well?

I would say as we go through 2009, I think what’s going to happen is you’re going to start seeing the silicone hydrogel pulling the other way and then there’s ongoing cost reductions that are occurring but there’s kind of a race between the two horses and the more the one-day modality wins out and I’m not saying its going to continue to win out at that rate, we’re not projecting that type of a growth rate. That’s the one that causes me to hesitate; which is it. Private label if we got big into private label, that would push the silicone hydrogel from the upper 60s low 70s into the low, probably the low to mid 60s so that would have a mix impact but it would be favorable on the operating cost line. We’re not going to be the one that goes out and does all of the leg work like Viscon may do or someone that does a lot of commercial work, undoubtedly that would be the private label company.

On the Avaira toric will that not go on the Gen II line or can you just maybe finish that answer a little more clearly?

The Avaira toric will go on existing type of equipment we have in-house, modified for that product but it will not be on a Gen II type, it will not be on a high volume. It’ll be a low volume high SKU production level.

Your comments on the Wal-Mart agreement and that you are shipping to both maybe retail locations and private practitioner, some of the channel feedback we’re hearing is that at least a good number of private practitioners or other ways of getting lenses on the private practitioner side are kind of being told they may not have access to Avaira for the next three months or so as most of that product is being diverted to Wal-Mart. Does that have a near-term margin impact I’m assuming and can you just clarify that combined with your comments that private practitioners are still getting the Avaira product?

Everyone is on allocation including the retail or the chains so each sales rep has got an allotment to go out to the market with and we’re not going to expand beyond our reach that we’re capable of supporting but we’re not diverting it all from one channel or the other. Whoever we sign up as a customer we will support that customer and that’s—when I talked about holding back inventory even if we’re making more currently, it doesn’t mean—it just means that until we have enough buffer stock to expand beyond our first pass intentions of who gets it that we won’t go beyond it. You’re right, there are accounts being told you have to wait because there’s only so many units to go around at this juncture.

We’re going to wrap it up. Thank you to everyone who called in and talk to you next quarter.