Good day, ladies and gentlemen, and welcome to the third quarter 2009 The Cooper Companies, Incorporated earnings conference call. My name is [Wayne] and I’ll be your coordinator for today. (Operator Instructions) I’d now like to turn this presentation over to your host for today’s call, Miss Kim Duncan, Director of Investor Relations. Please proceed ma’am.

Good afternoon and welcome to The Cooper Companies third quarter 2009 earnings conference call. I’m Kim Duncan, Director of Investor Relations, and joining me on today’s call are Bob Weiss, President and Chief Executive Officer; Gene Midlock, Chief Financial Officer; and Al White, Vice President, Investor Relations and Treasurer. Before we get started I’d like to remind you that this conference call contains 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 manufacturing restructuring plans. 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 the 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 section of Cooper’s annual report on Form 10-K. These are publicly available and on request from the company’s Investor Relations department. Now, before I turn the call over to Bob Weiss, let me comment on the agenda for the call. Bob will begin by providing some highlights on the quarter then get into specific details including new products, the market and guidance. Following Bob’s remarks, Gene Midlock will comment on the third quarter financial results and provide some additional guidance. We will then open up the call for questions. We will keep the formal presentation to roughly 30 minutes of prepared remarks followed by 30 minutes of Q&A, so the call will last a total of one hour. We request that anyone asking questions please limit yourself to only one question so that we may get to as many callers as possible. Should you have any additional questions following the call, please call our Investor line at 925-460-3663. That’s 925-460-3663 and we’ll get back to you as soon as possible. As a reminder, this call is being recorded and a copy of the press release is available on our website at coopercos.com under Investor Relations. And with that I’ll turn the call over to Bob for his opening remarks.

Thank you, Kim and welcome everyone to our third quarter earnings call. Let’s get right into it. Here’s what I’m happy about. First of all, sales. CooperVision and CooperSurgical both posted solid revenues and we remain one of the rare companies these days with positive growth. Operating expenses, we continue to deliver cost containment without cutting into the muscle of the organization. As far as free cash flow, a wild factor. $56 million in free cash flow this quarter was extremely strong and our trailing four quarter number is $89 million, shows that we are capable of generating some solid cash flow. Silicone hydrogel, our silicone hydrogel sales were almost $32 million this quarter, equating to $127 million of annualized sale run rate. This puts us well on our way to exceeding our guidance of $100 million for the fiscal year. Now, what needs to be explained? Well, that’s obvious. Gross margins. I know all of you were expecting a better earnings per share number and this misses entirely in our gross margins. We had several items which we expected including $4.1 million that was the manufacturing restructuring as a result of Norfolk decision, $2.3 million which was idle equipment as a result of our decision to cut back on inventory levels, a net $7.9 million of currency which is reflected in our hedging numbers. These total $14.3 million and reduce gross margins around 500 basis points. But we also had $4.1 million in inventory and equipment write-offs and this was a disappointment and was a surprise. This reduced gross margins around 150 basis points and impacted our earnings per share around $0.09. Although I didn’t expect it, it’s part of doing business. We expect a little more in our fourth fiscal quarter but we already have built that into…

Good afternoon everyone, and thank you for joining us today. Before I begin the review of the third quarter’s statement of income, I would like to comment on a few aspects of the balance sheet. Let’s begin with cash. As Bob indicated, in Q3 we had approximately $76 million of operating cash flow and capital expenditures of $20 million. This resulted in $56 million of free cash flow. Through the third quarter, we have generated approximately $71 million of free cash flow and expect to generate approximately $100 million for the year. The trailing 12 months free cash flow is $89 million. As a result, we have been able to reduce our indebtedness by almost $57 million to $839 million from Q2, which leaves approximately $237 million of total credit availability. The $650 million revolver is now around $450 million. At the end of the third quarter, we decreased the ratio of funded debt to EBITDA from 3.24 at the end of the second quarter to 3.16. This will result in a continued interest savings of 25 basis points. Turning to inventories, we decreased the level by 11.3 million from the second quarter, with months on hand decreasing from 7.8 to 6.0. An excellent job by our supply chain folks. Accounts receivable were also closely monitored, especially in this recessionary time, and our DSO’s our days outstanding remained at 48 days. Now turning to the income statement, let’s start with revenue. Bob provided a good overview of the components of revenue that we earned during the quarter, so I will not repeat those details. Suffice it to say most of our businesses had a good quarter in light of the global recession. CooperVision grew 2%, which is 3% in constant currency over last year’s third quarter. For the second calendar…

Operator, are you there?

Yes I am. (Operator Instructions) Your first question comes from Peter Bye - Jefferies & Co. Peter Bye - Jefferies & Co.: The first question would be I guess then there is no management bonus in the guidance?

I’ll pass that question to Gene.

That’s correct, Peter. The accounting rules would not allow us to accrue a bonus this quarter. To be able to accrue a bonus it has to be probable and [estimatable]. Since our target bonus is driven by objective criteria which before the bonus accrual can begin, our earnings per share number that’s projected would not get us to the $2.29 on a GAAP basis. So unless the Board of Directors subsequently decides later in the year to add a discretionary element, there will be no bonus accrual. Peter Bye - Jefferies & Co.: This is a GAAP year, right? Isn’t that the whole sort of new turn the page? And you know we’ve taken some charges and then we’re quick to find some other ones as well now and I guess just how are investors supposed to look at you know the free cash flow is great but ’97 to ’05 probably proved to be a pure under investment in the business. You know about the 2%, 1% R&D reinvestment rate, maybe you weren’t investing enough in the business at that time. And now you’ve got a 2.7% R&D rate and CapEx dropping with gross margins dropping. What do you say to investors about how you’re maybe sacrificing the short term to the long term for some cash flow? Just maybe if you could address that question.

Sure, Peter. I think there is a perception that we’re somehow limiting capital that we need to spend. And I don’t know how clearer to say it than to say. Peter Bye - Jefferies & Co.: I guess just wrapping R&D into the question too a little bit Bob, too, just the fact that when you want to capitalize R&D in a manufacturing, call R&D manufacturing expertise. The gross margin is obviously concerning. It’s been concerning for a bit of time, not just CapEx but also R&D.

Okay. Well, I’ll put them all together. You’ve got R&D, you have CapEx and you have the gross margins. And clearly when it comes to concerns about generating cash by cutting back on capital expenditures I think we’ve been pretty clear that when you’re running a business at 60% capacity, you don’t need more plant, you need to utilize that plant. So hopefully there’s no real perception out there that we’re not spending money we need to allow us to build products in the future and go forward. On R&D quite frankly we’ve always been a company that has not spent a lot of money on the R&D line. However, we have spent a fair amount of money in process development, which we record in cost of goods not in R&D. Some companies might in fact pull it out of manufacturing and put it on R&D and look like they’re real R&D companies. You know, maybe we should, but we haven’t. Peter Bye - Jefferies & Co.: Could you just delineate what that might be? Like just what are you spending in manufacturing R&D i.e., because obviously that’s been a problem for you know a while and now you’ve sort of overcome the systemic risks and you produce product, but maybe give investors an idea of what you’ve been doing over the past couple of months and maybe even this quarter specifically, what that number was.

Well, I don’t know that we have the accounting system to have captured it all because we haven’t tracked it as if it’s R&D. I would say that the amount of energy in the cost of goods area that goes into developing and proof production, for example we’ve frequently talked about getting the alcohol out of making silicone hydrogel whence there is significant dollars being spent on that activity. The R&D effort to change if you will cycle times or the manufacturing effort to change cycle times easily could be develop a new piece of equipment, record that all through R&D. We just don’t do it that way. I would say we’d probably more than double, I don’t know if that’s a correct number, that’s just off the top of my head but it would be a substantial increase in the R&D level. So I think we need to make sure we give everyone else a chance at questions, so I’m going to move on, Peter, but by far if you know certainly if you have more questions and you want to cover them at the end of the call you know we can cover additional questions then also.

Your next question comes from Matt for Joanne Wuensch.

I have a couple of questions here. I guess the first thing I wanted to address is you know we’ve seen in our checks and it’s sort of been apparent in online retailers over the past few weeks and months that J&J’s been aggressively pricing down some Oasys products and offering rebates, bringing it more in line with Avaira and I hadn’t seen any kind of competitive response from you guys. I just wanted to get a comment as to if that’s affecting your business at all and if you had any plan to change Avaira pricing or take a new tack with that.

That’s a good question. I think the whole world is aware of J&J’s busy doing different types of activities that they have not in the past such as cutting the price by 20% for Oasys. There’s a lot of answers to why are they doing it, or a lot of speculation is probably better said from does it tie in with Vision Source Plan, VSP? Does it have to do with the litigation and the likelihood that they’re at risk if you will with Oasys in the U.S. because of the current status of that litigation? Or are there other reasons at play? You are correct. We are not reacting to what they are doing. Some of that activity has led to filling the shelves if you will in the pipeline. Thus far it has not translated to them gaining market share. You’ll recall I mentioned we’re up 2 year-to-date, CIBA’s gained 1 and Vistakon has lost 3 so you know thus far nothing to react to. The next HBR date is not really due until the end of October. We get it 30 days after it’s due so there’s not a early date appointed through September. We get it on a 30 day lag. So the answer is we’re gaining share our own way and we believe in the products and we’ll continue to act that way.

I just wanted to ask about gross margins. You said you know post-2010 you’re targeting 60%. Given some of the moving parts here over the next five quarters how do you see it playing out at the end of this year and maybe if you could give some color just qualitatively on next year?

I think the one thing you have to call out is the numbers we’ve given for the restructuring, which clearly are going to hit cost of goods and in aggregate of the $25 million we’ve said we will charge, we’ve already charged $4 so there is $21 to go, of which $7.5 will be in the fourth quarter. Excluding that the idle equipment that we took a $2.3 million charge, which includes two Avaira lines, the high volume as well as one fast track line, that is likely to continue through the first half of next year as we basically continue to reduce our inventory levels and reduce the through-put of the plants. That will then start up-ticking towards the back half of next year. Now the other thing that comes into play, don’t under state the value which is showing up first in cash but secondarily in gross margin of that lag of basically the 1,250 people that are being removed from the production process. That is a substantial amount of money. Assume that’s a net earn on average more than $30,000 so you can do your own math relative to the size of the whole pot. Some of that has started to happen in the third quarter and has been masked in all that activity, but there’s a lot more still to come. We indicated that the write-offs, the $4.1 million there’ll be some built into the fourth quarter and then it should drop off and be normalized going forward. So look to our margins going certainly north of 50% next year excluding the Norfolk piece and then pointed towards that 60% for 2011.

Your next question comes from Larry Biegelsen - Wells Fargo Securities.

Bob, in the press release you talked about certain challenges in the soft contact lens market and in the second quarter the market grew 1% constant currency. Can you talk about the challenges and can you talk a little bit about the trends you’re seeing in July and August? Are things getting better, staying the same or worse?

Well, you’re correct. The challenges have been and I’ve used the term in the past jerky. There are good months and there are bad months. We of course reported our growth for the quarter on a fiscal year basis as you know basically 3%, which was a solid 3% in constant currency. August was up 5% worldwide, so we’re off to a good start in the fourth quarter. Having said that, who knows? We know we have easy comps in October so presumably October is good, August has been good, stay tuned. So we’re optimistic about that. The jerkiness when I use that term reflects for example what happened in the second quarter compared to the first quarter. If you look at the Americas went from basically 8% to a negative 1 I believe it was. So that’s what I call jerky. Now did it really grow 8% in the first quarter and decline 1% in the second quarter? I really don’t think so. I think some of that is a push-pull process. You have things going on with Oasys as someone pointed out a little while ago. That come into play. So we’re seeing the contact lens market as we did at the beginning of the year, 0 to 4% and so far we think we’ll be in the upper half of that 0 to 4%. Year-to-date 2.5%, generally pleased with that.

What’s the constant currency growth rates implied in your fourth quarter sales guidance? I mean basically what do you expect the FX impact to be in the fourth quarter?

The constant currency rate in the fourth quarter will be around, let me think about that.

The number in the guidance is the as reported number.

And what are you expecting the FX impact to be in the fourth quarter?

We wouldn’t forecast the FX impact on what the quarter’s going to be in the future because that will depend on currency movements through the quarter. So all we do is that guidance forecasting standpoint [and do] actuals.

And you’ll recall from hedging we pretty much were within 1% this last quarter but of course that’s going to start moving around as the hedges annualize. So I think that is somewhat of a moving number.

Your next question comes from Jeff Johnson - Robert W. Baird & Co., Inc. Jeff Johnson - Robert W. Baird & Co., Inc.: Bob, wondering if we can just go back to gross margin, I hate to keep hammering on it here but so you said there was a $7.3 million net impact on gross margin. Is that what you said earlier in the call?

Well actually it was larger than that. There was $14.3 million which included $7.9 million of currency, the $4 million of manufacturing for the restructuring and the $2.3 million of idle equipment. And in addition there was another $4.1 million of write-offs. So all up it was $18.4 million in aggregate. Jeff Johnson - Robert W. Baird & Co., Inc.: Right. The currency impact itself was the $7.9?

Correct. Jeff Johnson - Robert W. Baird & Co., Inc.: So with where the dollar has moved I mean as I’m looking at my model here, it looks like that should pretty much neutralize out of the model next quarter. Is that correct?

Well, not quite. Directionally you’re right. The average pound cost floating through and keep in mind 60% of our cost is in pounds, was about $1.95. That is because we still have hedges in place likely to drop to about $1.82, a reduction of about 7%. And then right now the pound is I think at around $1.62, which is about 16, 17% down so that will start showing up next year. Jeff Johnson - Robert W. Baird & Co., Inc.: So it sounds to me you’ve stepped through all the different things that will and will not continue on gross margin, but the CVI gross margin should see a pick-up next quarter on a sequential basis in the 53%, 54% range. Is that right? And then a little bit sequentially higher than that throughout 2010. Is that how to think about it?

Yes. Just keep in mind next quarter we’re going to hit it with $7.5 million for the Norfolk restructuring. So that’s a bigger item. Jeff Johnson - Robert W. Baird & Co., Inc.: I think everyone’s willing to give you a pass on the Norfolk, that’s an understandable restructuring and you know so kind of back to the strategy you employed when the [ocular] deal was done but all these other things you know to Peter’s point on what’s recurring, non-recurring, you know I think trying to move back in or out of the model, is it fair to say that forgetting about Norfolk 53, 54% and then sequentially improving so plan on that basis?

Yes. Jeff Johnson - Robert W. Baird & Co., Inc.: And then you made a point on CSI that you wouldn’t necessarily shy away from deals that weren’t accretive in the first 12 months. What kind of dilution would you accept in CSI in the first year?

I think any deal we’re looking at is not likely to be you know it’s going to be less than $0.05 diluted. Excluding all size the acquisition accounting which gets pretty funky if you have in process R&D and things of that nature. Jeff Johnson - Robert W. Baird & Co., Inc.: Nothing going back and I forget back three years ago when you had those $0.15 diluted deals and what have you, now we shouldn’t be thinking about anything along those lines?

No. Once again excluding, we did an in-process R&D purchase then that would hit and that would be called out. Jeff Johnson - Robert W. Baird & Co., Inc.: And then the contact rate is coming down so much here for the year on the guidance, how do we think about tax rate for next year, Gene?

We’d still be in the 15% range again subject to where these write-offs repose. A lot of that will be in the U.S. you know from Norfolk closure. Some will be in the UK, again another 30% tax rate jurisdiction, but we still should be around that 15% run rate, Jeff.

In other words excluding the call-out, we’re still targeting going forward that 15% range. Jeff Johnson - Robert W. Baird & Co., Inc.: Because there are some EPS growth levers here in 2010 even though you’re not providing 2010 guidance. I’m taking it that’s not coming from gross margin and it won’t come from tax rate so it has to come from the SG&A and the revenue line?

No, I think once again excluding Norfolk there’s going to be improvement in gross margin. We talked about that flushing through and we’ll be exiting the fourth quarter in around that 53, 54% level you talked about and improving you know going forward on the exchange rate. But minimal improvement on the absorption factor. Jeff Johnson - Robert W. Baird & Co., Inc.: The take home message should not be here, Bob that the EPS levers are going away for next year as some of these things layer in?

Yes. In other words we’re still viewing that, our earnings per share is going to grow faster than the top line.

Your next question comes from Steve Willoughby - Cleveland Research Company.

Wondering if you could comment on your thoughts regarding the J&J CIBA litigation and kind of where it stands in the U.S.? What the impact you’ve seen over the past couple of months in France and the Netherlands? You know it’s been a few months now. Just kind of walk through what you’re thinking from that impact.

Okay. As far as the U.S., it’s clear that CIBA won, J&J lost, but it’s also clear that that judge is hoping not to have to make a decision and there’s multiple lawsuits going a lot of different directions. So he basically said I hope you guys get together and talk between now and October 20th, which is his next let’s all get together date. He has multiple choices and the worse case scenario clearly is what CIBA was seeking which is an injunction where Oasys comes off the market. What J&J has done in the U.S. is consistent with what they did in France which is they loaded up the pipeline for about nine months of inventory in order to not have to worry about anything that happens short-term with the idea that they’ll resolve whatever they have to do in that nine month period. As a result of that, whereas in the Netherlands we had an uptick in a very small market, where CIBA opened its mouth and was basically saying we won, what CIBA didn’t do in France is tell anyone. So it was the world’s best secret in France. What CIBA didn’t do in the U.S. is tell anyone, so it’s a secret in the U.S. also. I do gather there was like a one line comment in Contact Lens Forum but that was about it. So no one knows about it, if you can believe that. As a result of that and as a result of J&J’s activity of once again pushing hard and flooding the pipeline with their deal on Oasys, is likely that they have quite a buffer amount of inventory out there that probably will circulate in the global system for awhile. It has not helped us nor has it materially hindered us at this point in time.

And then I just had one follow up question for Gene and maybe I was just confused on some of the numbers jumping around there, but Gene you were maybe talking about a $0.10 impact from Norfolk and I was confused, I thought it was a $0.06 impact from Norfolk? Can you just kind of clarify what the $0.10 impact you were talking about before was?

Yes, $0.06 was for Q3 and we’re estimating Q4 will have a $0.10 impact, the $7.5 million estimated additional write-off in Q4.

Your next question comes from [Jared Holt] – Thomas Weisel Partners. [Jared Holt] – Thomas Weisel Partners: Can you just talk about the earnings guidance again? It’s a little bit confusing I think if you look at the adjusted number and the GAAP number. If we can just go back historically and go over the GAAP number and the adjusted number for each of the quarters so far, it looks like it was $0.53, $0.61 and $0.54 adjusted; $0.53, $0.54 and $0.48 GAAP. Is that the right way to look at it?

Well, GAAP through Q3 is $1.55 and non-GAAP is $1.61. [Jared Holt] – Thomas Weisel Partners: Well I’m just confused why it would be $1.61 if you did.

Plus the $0.06 for the restructuring that we had in Q3. [Jared Holt] – Thomas Weisel Partners: So $0.54 plus $0.61 and $0.53 is $1.68.

We’re adding back, Jared, the IT R&D charge and that is not added back. So when we released Q2 it was released purely as a GAAP quarter. [Jared Holt] – Thomas Weisel Partners: And then Gene you talked about the bonus structure of the company where accruing for bonuses on a GAAP number. Wouldn’t that be based on the numbers you’ve put up so far the $1.55 number and not the other number you’re talking about?

At the moment it’s $2.29. You know as we went through last quarter with the adjustment for the IT R&D that hit in the second quarter. That hasn’t changed. That’s where the bonus triggers. We’re forecasting $2.11 to $2.13 so we’re obviously sure of that by the $0.16 attributable to Norfolk. Unless the plan gets changed, there will be no bonus accrual unless we get to $2.29. At this point, our forecasting it’s a $0.16 hurdle and it’s too early in the quarter to make that assumption. [Jared Holt] – Thomas Weisel Partners: Now the $2.11 to $2.13, does that compare to the $2.16 to $2.36 that you had originally given?

$2.13 to $2.36 when we started the year was we didn’t split it into GAAP, non-GAAP. We didn’t anticipate a non-GAAP so arguably the $2.l6 to $2.36 was a GAAP number and the only thing that caused it to change was a deal sheet approved by the Board which was the in process R&D that took it to the $2.29. [Jared Holt] – Thomas Weisel Partners: So you’re viewing the $2.27 to $2.29 guidance as comparable to as apples-to-apples to the $2.16 to $2.36.

Right. [Jared Holt] – Thomas Weisel Partners: And then just on the new products, what are you doing as far as anything on the silicone hydrogel daily front? There’s some more new products there. And anything on the drug delivery front? I mean R&D obviously very light, but could you start making investments there?

As far as the daily front we are actively looking at that and working on some projects. Nothing immediate, so we’re not going to get into promising a one-day silicone hydrogel in the next several years. As far as drug delivery, that’s a horse of a different color from my perspective when you start saying get involved with the FDA on the drug side as opposed to the device side. Number one is the type of drugs, if they’re designed to deal with back of the eye issues, don’t expect to see us move into that domain certainly any time in the near future. Relative to those that deal with reactions to contact lenses or things that make wearing more palatable, we are actively looking at those arenas. [Jared Holt] – Thomas Weisel Partners: You’re giving a five year free cash flow projection. I’m just wondering why you wouldn’t give a one year sales and earnings guidance at this point. I mean if you have the visibility five years out on the cash front, why you wouldn’t have 12 month visibility on the top and bottom line. Thanks. That’s it.

Yes, I think that’s just the timing of when we’ll move into the mode of saying here’s a reasonable range. As you know doing a long range plan things like the dollar movement can radically skew the top line very quickly as learned in June of last year when the dollar really started moving radically. As far as earnings per share is concerned and cash flow, you’re right, we directionally know where we’re headed because we have a good idea of our capital requirements over the long range planning period. But we will certainly give that color when we do the fourth quarter and conclude the year.

Your next question comes from Chris Cooley - FTN Equity Capital Markets.

I think I just heard you in response to Jared’s question that you wouldn’t be contemplating a silicone hydrogel daily offering for I believe the word used was several years. With CIBA out now with a single use disposable toric and CIBA and Vistakon both have single use spheres and soak in hydrogelic calendar year end allegedly, I guess just pushing back on your gross margin assumption if we think about 2010 and then being improved in 2011, help me understand what’s going to be in that manufacturing? I mean are those six lines remain idle or do you need to retool those lines and bring them back in for that type of R&D work? And if so help us think about the cost both from a retooling standpoint but also from a working capital standpoint. And I have a quick follow up after that.

It is likely that any single use silicone hydrogel lens will undoubtedly not have alcohol which means it is most likely capable being made on that type of platform, meaning the [Gen2] platform and therefore to answer your question on retooling, I would not envision retooling over that. But we are several years away from that being firm. I think there’s the ongoing debate on how big could a single use, silicone hydrogel ever get and why would you do it. Would a person be willing to pay a premium and that debate continues. There is nothing out there that’s compelling that says that needle’s going to move very far if there’s a premium cost involved. So far we’re feeling good directional where we’re going with one day platform.

You alluded to maybe kind of revving up the M&A engine, CooperSurgical once again. Would you remind us just what type of hurdle rate you’re looking at internally generally when you look at these transactions? I mean in the early days these were Mom and Pop’s that you’d strip out and basically add the product into the reps bag but it looks like increasingly you’re going to have to assume some infrastructure related costs. So what kind of hurdle rates are you considering? Help us kind of think about the return that you’re seeking on your capital there versus possibly paying down debt faster.

Yes, our minimum return on investment capital is a hurdle rate of 15%. And keep in mind most of these are still tuck-ins so a tuck-in either into the hospital side, the IVF side or the in-office side. We already have the infrastructure in all three areas to leverage. So it’s a fairly easy model if you will that we’re following.

Just looking through your P&L on a dollar basis, interest expense increased sequentially there yet you reduced debt and had a lower interest rate. Was it just timing there? Was there something else in that interest line? Just help me with the math there.

When we idle the equipment, the [front end] two lines and the Avaira line, as a result of that the capitalization of interest that is tagged with construction in progress stops. So it goes straight to the P&L.

Your next question comes from Michael Weinstein - J.P. Morgan.

Let me start just to clarify, the $4.1 million in equipment and inventory that you wrote-off, what specifically did you write off?

Mike, you cut out. Could you ask that question one more time?

Yes. The $4.1 million in inventory and equipment that you wrote-off, what did you write off? What inventory did you write off? What equipment did you write off?

About $1.9 million of manufacturing equipment in the UK. Sorry?

I’m not asking for the breakdown of the financials. Sorry. I was asking more in terms of what products did you write off?

Mike, it has a lot to do with the restructuring activities where we’re moving equipment around. In some cases as you disassemble equipment and you plug it in someplace else you may knock a wall out, you may only end up with 80% of the equipment and 20% may get thrown away. So it really reflects some of the activities. You’ll recall there was a lot of 2008 activity on the restructuring of the various plants.

But this is separate from Norfolk, right?

Correct. Oh yes.

But you wrote off some inventory. What inventory did you write off? Was it specific products? Was it not? I’m trying to understand.

It was a combination, Mike, mainly some dated inventory in Belgium and [inaudible] in our central warehouse. Just a normal process they go through at the end of each quarter.

On the tax I was confused. I wasn’t sure exactly what you were guiding to for tax rate in the fourth quarter. Things like in order to get to the numbers you’re talking about we’re coming out with a 0% tax rate.

It’s higher than that, but not a whole lot. About 1%. That’ll get us to the run rate for around 11 or 12 for the year.

And then I heard your commentary about going forward. So the tax rate versus I guess the initial plan, 11 to 12 versus the 15 and I think this quarter was $0.04. I think for the year like a $0.09 pick up that you have on tax rate. But you do think that your assumption will be going into next year that 11 to 12% goes active roughly 15%?

Yes, Mike. The only thing really driving the tax rate lower than the targeted is the implications of Norfolk being a domestic event, U.S. event. Which creates a lot of tax benefit and therefore suppresses the effective tax run rate.

We’re taking the tax deduction if you will at 39% so it has a fairly significant impact on the rate.

If I look at your EBITDA line and I look back over the last, I think I was looking just earlier like the last five quarters, if I looked at this quarter your EBITDA was down 6% and over your last five quarters EBITDA is flat. And the back of the envelope math we did on the fourth quarter which you’re giving now in tax was just you’re guiding to a decline in EBITDA and again in the fourth quarter. I’m just trying to think a little bit about next year and you know when do you start growing your actual operating profits, your actual operating profits to start growing EBITDA as a company? And getting back to the question that some people were alluding to with earnings growth next year you know third quarter EBITDA is down, fourth quarter you’re guiding to another down quarter for EBITDA. And we roll into next year and with where gross margins are going to start off which is below what the average will be for 2009 and your tax rate is going to go from 11 to 12 to 15, my question is how do you grow EBITDA next year? And then given your tax rate’s going to jump up on you, how do you grow earnings?

Well, I think part of it, I think you’re doing a GAAP EBITDA and keep in mind a lot of that $25 million is fixed assets. And those fixed assets what will happen is the accelerated depreciation that is charged to the P&L that will hit gross margin, which will lead to an artificially high depreciation because it’s being written over its remaining useful life. And therefore you’re EBITDA’s going to look a lot better, vis a vie gross margin number you’re looking at.

Once you get through this with Norfolk you’re saying.

Yes. Well between now and the end of 2010 we’re accelerating the life of the depreciation of all the assets that are not making the move to the UK or Puerto Rico.

But that’s still from an EBIT basis and an earnings basis that’s going to put pressure on your earnings next year, so we’ll just step back from backing out the D&A but just thinking about basically your guidance for this year would imply a modest decline in EBIT 2009. Next year your tax rate’s going up on you and you’re accelerating the depreciation and I’m just coming back to the question can you grow earnings? And can you grow EPS next year?

Yes. As we said excluding Norfolk we’re expecting, emphasis excluding Norfolk we’re expecting earnings per share to grow faster than revenue next year.

In last quarter’s 10-Q we learned that there was a reversal for legal accrual which had helped out that second quarter probably $0.035. Any such items this quarter that we should be aware of?

Not that I’m aware of, no.

Your next question comes from Amit Bhalla – Citi. Amit Bhalla – Citi: Question on the SG&A line and we’ll look at the fourth quarter. If we roll in some of the assumptions that you’ve talked about it looks like SG&A to meet the guidance you have for the fourth quarter is down in absolute dollars just a tad bit. So I just want to confirm that. And then give me an idea of how the SG&A in absolute dollars should look as we move into 2010.

Largely the SG&A as we move into 2010 we will continue to target some leverage, albeit modest, 2010 versus 2009. And part of the reason is we’re looking more to the improvement in gross margin than we are in operating expense ratios in 2010, recognizing that we pushed hard on some things like T&E, salary increases and that nature this year. Having said that going favorable is we did the reduction in force which has the implication of about $2 million a quarter pick-up. Most of that starts moving, we get some of it in the third quarter and that will continue to accelerate into the fourth quarter. For example, we shut down our Canadian operation and integrated it. We now distribute product out of New York instead of Canada. That was effective June, so we have yet to see the full benefit in the quarter of that. There was some ongoing restructuring in Europe that you have yet to see all the benefits of. So there is even some operating expense ratio leverage next year. But in the context of staying pretty lean this year ratio wise, there’ll be only modest improvement. Amit Bhalla – Citi: So it’ll be somewhere around the 36% of revenues then. Right?

Are you talking about SG&A? Yes. Amit Bhalla – Citi: Just a housekeeping item here, I just want to understand. I’m looking at the P&L for the quarter. There’s a $462,000 restructuring charge below the gross profit line. When you talk about the $4.1 million of restructuring that led to the $0.06, is that $462,000 included there or?

No. Amit Bhalla – Citi: So that’s left in.

That is kind of left over from the reduction in force that we announced in the first quarter. That reflects some activity in Europe that’s still being worked on. Amit Bhalla – Citi: So you’re not excluding that at all for the quarter?

No. Amit Bhalla – Citi: Just on Avaira, can you just give me an idea of where the penetration rates were for the quarter in new fits and total fits?

I think maybe we can cover that one off line. I’ll have to ask you to look it up and we’re probably running a little long.

Thank you. At this time we have no additional questions. I’ll turn the call back to Kim Duncan for closing remarks.

I’ll just thank you for joining the call today and our next call will be for the fourth quarter results. That will be on the I believe it’s the 8th of December, if I have it right. So we’ll look forward to reporting to you results of the entire fiscal year and the fourth quarter at that point in time. Thank you.

And thanks, ladies and gentlemen. This concludes today’s presentation. You may now disconnect. Have a great day.