Good day ladies and gentlemen and welcome to the first quarter 2012 The Cooper Companies Incorporated earnings conference call. My name is Regina and I will be your conference operator for today. At this time all participants on the phone line are in a listen-only mode. Later, we will be conducting a question-and-answer session. (Operator Instructions) Today’s event is being recorded for replay purposes. I would now like to turn the conference over to your host for today Ms. Kim Duncan, Senior Director of Investor Relations. Please go ahead ma’am.

Good afternoon and welcome to The Cooper Companies' first quarter 2012 earnings conference call. I'm Kim Duncan, Senior Director of Investor Relations, and joining me on today's call are Bob Weiss, President and Chief Executive Officer; Greg Matz, Vice President and Chief Financial Officer, and Al White, VP, Investor Relations, Treasurer and Chief Strategic Officer. 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 integration of any acquisitions. Forward-looking statements 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 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, let me comment on the agenda for the call. Bob will begin by providing highlights on the quarter, followed by Greg who will then discuss first quarter results. We will keep the formal presentation to roughly 30 minutes then open up the call for questions. We expect the call to last approximately one hour. We request that anyone asking questions please limit yourselves to one question. Should you have any additional questions, please call our Investor line at 925-460-3663 or email ir@cooperco.com. As a reminder, this call is being webcast and a copy of the earnings release is available through the Investor Relations section of the Cooper Companies' website. And with that, I'll turn the call over to Bob for his opening remarks.

Thank you, Kim. Good afternoon, good evening everyone. After a successful 2011 we started 2012 out strong. Our Biofinity and Proclear momentum continued for the first quarter of 2012 we put up solid top line growth plus 11% also in constant currency. We delivered $326 million in revenue, our gross profit margin achieved 65% with the strong top line, solid margins, lower interest expense non-GAAP earnings per share was up 32% to $1.12, 35% on a GAAP basis. The soft contact lens market rebounded in calendar year fourth quarter to 5% growth to provision at 7%. Key takeaways from today’s call we again put up great results with strong revenue growth, good margins, favorable impact from lowering interest expense with solid bottom line. Biofinity global rollout continues with Biofinity Sphere in Japan and Biofinity Multifocal in the United States and Europe. This work horse sealed 40% constant currency growth in our silicone hydrogel family Biofinity and Avaira. During the quarter, given the strength of our balance sheet and free cash flow $200 million on an annualized basis we announced the share repurchase program of up to $150 million. We in fact executed on part of the plan buying 666,000 shares for $46 million in a transaction that was $0.01 accretive for the quarter and will be $0.05 accretive for the fiscal year. While we continue to put up solid results and free cash flow we continue to invest. Our sales force expansion, marketing and R&D expenses are up in the 17% to 18% range. For competitive reasons, we won’t give the exact numbers, but our sales force expansion is 22% in the past 15 months and overall 36% in the past two and a quarter year. During the same two and a quarter year period our G&A headcount is up…

Okay, thanks Bob and good afternoon everyone. Bob has given you a pretty thorough view of our revenue picture so let me start with gross margin. But before I go there I want to provide some color on the Avaira recall expenses in Q1. By the end of Q4 we had accrued for about $20million of recall cost. In Q1 we had an additional $2.9 million and what we consider operational cost directly related to the recall, which were split about roughly equally between revenue for things like customer concessions and operating expenses for things like reviewing all Avaira Sphere fitting sets. To ensure that there were no lenses impacted by the recall in the fitting set. At this point we believe the majority of the costs are behind us but we expect we could have some small charges paid over time and so we have Avaira Toric back in the market. Now looking at gross margins, in Q1, the consolidated GAAP and non-GAAP gross margins for 64.5% compared with 60.2% and 60.9% respectively for Q1 last year. CooperSurgical had a GAAP and non-GAAP gross profit margin of 67%, which compares to Q1 ’11 64%, this improvement was mainly due to manufacturing efficiencies and favorable product mix especially in our surgical space. Products like closure systems and uterine manipulators to name a couple have done well and they also have better than average gross margins. CooperVision reported a GAAP gross margin of 64% versus 59.5% in Q1 last year. On a non-GAAP basis gross margin was again 64% versus 60% in Q1 last year. As you can see we had a strong gross margin quarter. The increase was attributable to many different components like the completion of our Norfolk closure effective last year, which contributed over one percentage point or…

Operator, we are ready to open up the call for questions.

(Operator Instructions) and your first question today comes from the line of Larry Keusch with Morgan Keegan.

Hi, good afternoon. Thanks for all the detail. Just if I’m looking at the numbers correctly growth in your single use lenses in the fourth quarter was about 8% and then the market grew 11%. Someone or if you could just talk a little bit again about your strategy there and what you can do to accelerate the growth there to have these market rates if not greater.

Yeah, Larry well we it’s that we are a little wider in the fourth quarter when you look at it from a first fiscal quarter basis we were up 10%, 14% all up 10% constant currency. So I think a lot of it is we continue to do well with our Proclear 1 Day, we are as I indicated credit coming out with the silicon hydrogel 1 Day not that I think that the it’s moved much beyond the little niche. But I think that’s fact is just joining and being a participant with the crowd so to speak. I still think that Proclear 1 Day will be the driver of our global business and reasonably hold its tone out in the marketplace not only in Japan where it’s done well but also in the U.S. where, you see J&J is putting a lot their energy to develop that market. We are of course going to (Inaudible) of their work and as they expand that market right now. It doesn’t take too many wearers to move the needle quite a bit from a dollar point of view in that market and U.S. comes around 10% or 11% a couple of years to 17%, 18% now. So they are clearly helping that. Next question?

Your next question is from the line of Jeff Johnson with Robert W. Baird.

Thanks good evening guys. Bob, I just wanted to ask a question on the gross margin guidance at 62.5% the low end of your guidance for the year. It looks like you are implying kind of flat to maybe even down a little bit over the past three quarters of the year related to last year, which just I hear what you are saying on some of the expenses. But if you could flush that out or flush that out a little bit it just sounds a little bit hard to believe at this point. And then Greg just a very quick question on the reversal and the tax rate what your comments meant to me there was about a $2.5 million reversal in the tax rate in the quarter. Thanks.

I will comment first and I will let Greg amplify both gross margin and then his part on the taxes. You are right we came in with a very solid gross margin to provision was 64%, compared to a year ago 59.5% that shows better the value of Norfolk, which is ongoing of course, the value, one of the real catalyst of our gross margin is mix in fact that literally our growth is being sponsored by Biofinity we suppose is the high gross margin. So importantly as we get back into the two week market more robustly that doesn’t have the same theme if you will as Biofinity it’s not going to have the margin. But I think the startup cost associated with getting into the relaunching Avaira Toric as well as startup cost of answering the 1 Day silicon hydrogel market, which from the get go is not going to be much of a gross margin to talk about at all. And as I think Greg alluded enough to the fact that you do start off a very steep curve in terms of high cost and then you work it down over a period of literally years. That’s the fact he did mention that we are now going to go through a startup phase or Biofinity in Puerto Rica so we have basically given the size of that product have decided to bite the bullet and go through a startup. It’s at a remote location compared to where all our other Biofinity is made, so there will be a cost on that. Those costs will be directly impacting the next three quarters. So I think what I will let Greg ask or clarify anything else and then respond on the tax side.

Well Bob, I think you’ve got the gross margin I think that makes sense on the tax side we don’t get to lie the detail I think you can really back into it based on the comments we mentioned earlier about Avaira and an offset between a likely offset between Avaira and the tax impact.

Operator, next question.

Your next question is from the line of Steve Willoughby with Cleveland Research.

Hi thanks for taking the question. Bob I was wondering if you could give us a little bit more color regarding the FDA and the FDA going through your various facilities. And the letter you received last quarter, just kind of any other color you can provide us regarding your discussions with the FDA.

Probably can’t give you too much more than I said that we are going through a process with the FDA responding to your questions. No, well it’s tough to say there is not reply we are cooperating with them we are getting through their questions and at this juncture we still expect to re-launch Avaira Toric in April. But of course that is totally depended on whether or not the FDA has any further questions. On the warning letter we are responding to the observations made by the FDA making good progress there. I think they are waiting on us to say we are complete with all the corrections, which is going to take several more months and at that point in time they will come back in and re-inspect. So that is down the road several more months. Relative to the FDA showing up in the UK plant you may recall they came into our plant in Puerto Rico there were no observations. They came into our plant in Scottsville no observations and they have not been in our plant recently in or since the recall anyway in the UK. They have made no indication that they have eminent plans they will show up when they want to show up, it is to our expectation that they will show up eventually. So when it happens it happens. Beyond that we are marching forward with Avaira Sphere and anxiously waiting to get Avaira Toric back out on the market. Next question?

Your next question is from the line of Chris Cooley with Stephens.

Thank you and good evening. Thanks for taking my questions. Hope you guys done a great job with CooperSurgical and consistently delivering good growth and margin expansion when you look at that franchise now is this, the new normal for profitability. And when do we start to see some, I guess some further development there on a little more global basis meaning how long could you provide that would be helpful? Thanks.

Yes Chris, we are very pleased with where we are with CooperSurgical. You know I think I would point out that if we aggressively go globally the margins that we are accustomed to seeing in the U.S. 67% gross margin, the 27% operating margin that we’ve now gotten to we will put some pressure on that that will be an investment. And I think obviously with the product portfolio we now have more like 600 products many of which have potential outside the U.S. It is worth exploiting that we initiated activity last year I would say where we are in Europe is slow going mixed results, clearly not a wild factor at this juncture. But it is early in that cycle. I think one of the ways that we would against the ball with CooperSurgical with the acquisitions that are outside the U.S. and I would hope that over the several years we at least at that ball by having some of those to continue to leverage where we are with the franchise. Next question?

Your next question comes from the line of Matthew O’Brien. Matthew O’Brien: Good afternoon. Thanks for taking the question. Just one quick clarification if I might you talked about this $0.05 of accretion from the share repurchase in the quarter is that assuming that you don’t do any further repurchases or the other $100,000 million essentially is not used?

Yes Matt, you are right that assumes it’s where we are at this point. Matthew O’Brien: Okay and then my primary question I’m a little bit more concerned about it if. When you talked about, a little bit about Biofinity in seeing multiyear kind of rollout or opportunity that you see in front of you can you just provide a bit more color on why you think that’s the case, is it a function of you know you still haven’t even got to all of your customers with the product and that your sales force expansion is that the new market opportunity that you see there. I mean why is this a multiyear process in terms of delivering a lot of growth from that specific family of products?

Well number one I would say we are early even in the United States, which is our most mature market. Early by that I mean the total of the totality as a family we are when we came out with Biofinity Sphere it did good, when we brought out the Toric the Sphere did even better as a halo effect and when you come out with the Multifocal there is the compounding halo effect. So they feed on each other as a family of products in front of practitioner he says I’m very comfortable with the material, you know how it works my Sphere they love it there and now I want to migrate. So Biofinity Multifocal of course we just launched it in mid last year and June of last year they have a long way to go. When I talk about, we are far from exploiting it around the world. I mean geographically, I mean when I talk about the brick expansion it is a good vehicle to get into some countries where perhaps we will be more challenged if we didn’t have a product like that, that is rapidly showing its presence in the silicon hydrogel space, which of course is the strong space. All that takes work, you are right about expansion as a sales force putting in place more feet on the street it’s one of the limitations we have. And I guess I would just say world is a pretty big place it takes a while to get there. Japan for example $400 million market we have, I would say we have only just began, we’ve been in that market since June of last year also we are yet to introduce the Toric, which will probably be later this calendar year in that market and we are in further away from introducing the Multifocal in that market. So it takes time in some cases there is registration processes you have to go through also. Next question?

Your next question is from the line of Larry Biegelsen with Wells Fargo.

Hi, good afternoon everyone. Thanks for taking the question. Just a two part question in the guidance. First, CooperVision grew 9% ex-IMA ex-FX in the quarter. But the guidance is still I think 4% to 8% the market actually accelerated from 3% to 5%, so why not take the low end of the guidance today. But is it just conservatism early in the year is it something you are seeing. And then secondly on CooperSurgical the high end of the current guidance assumes basically that sales are flat sequentially. Is that a trend that you would expect for the reminder of the year? Thanks.

Thank you, Larry. I think they are valid questions we debated guidance quite frankly one of the things that causes a little pause was that foreign exchange started moving against this, it’s the last. It’s volatile it changes like about every day depending on which way grief blows on in given morning. So as we were setting here with paper and pencil it was one of those days where currencies were moving more stronger against this so we were a little cautious as we roll that into in fact into top line and bottom line. On surgical I think we are probably a little conservative but having said that the franchise at 9% actually it’s 9% organically is they are good numbers they are not what we would deem as franchise would normally continue and sustain at 9%. So we are a little bit more cautious than assuming the first quarter’s strength of that organic growth.

Next question?

Your next question is from the line of Kim Gailun with JP Morgan.

Great. Hey, thanks guys. So a question on margins you talked a lot in the prepared comments about margin expansion in most of the highlights that you gave related to that expansion (Inaudible) at diverse margin line from what I heard. So I guess but I’m curious here you talk about is how you think about SG&A, SG&A numbers over the next few years. I guess the backdrop of you’ve added 22% to your sales force you are spending happily on free land worth of new product launches. So when do we start to bring some of that leverage through the SG&A line.

You will see some leverage first on the G&A distribution areas where we are as I indicated that only grew really 11% while everything else were growing substantially above that. We are investing heavily meaning we grew top line 11% we grew our line items for sales and marketing as well as R&D more like 17% to 18%. We are investing now we continue to expect to invest over the next couple of years particularly tied in with geographic expansion, which plays into pushing operating cost if you will and the best areas by investing in the operating cost and investing in the structure. And an example to that would be we talked about China in the past then spend much time on China today. But China would be one we are still in check on going down our path of investing upwards to a drain of 40 basis points to 50 basis points on our operating margin this year. And that is still part of our expectation in a area like that. Now when do you start getting the payback really the payback is going to happen post 2012 post 2013 and that has become somewhat a question of if we think we are getting our money’s worth by investing and expanding we might enter more countries. We haven’t really spend much time talking about aggressive investing in Brazil, aggressive investing or any investing in India, aggressive investing in countries such as Russia. So there are opportunities we saw there some of them are kind of not comfortable yet getting there. But I would hope two years from now we are talking about some of those countries more aggressively. I’m not so hung up on we think a natural migration of our operating margin is going to be where we are to the mid 20s and we can get there with a little bit of operating expense leverage and the natural fall out of gross margin, because of royalty expiration and what we can do in cost of goods sold. The first point is improve your operating margins weighting on cost of goods, continue to invest where it makes sense and seeing just how good the product is. The underlying assumption I’ve got three products in each modality 1 Day with Proclear family two week with Avaira and monthly with Biofinity and would be a shame to be short sighted not to have enough money to get the most out of this product so hopefully that help you. Next question?

Your next question is from the line of Joanne Wuensch with BMO Capital Market.

Thank you very much for taking my question. Two part question of your silicon hydrogel revenue what percentage of it is in United States and what percentage of it is outside United States. And when the (Inaudible) royalty starts to roll off of that 8% gain, which we are talking about, which will help you get to those mid 20% operating margin. Are you going to let it all go through or can we expect some reinvestment?

Well I will take the second one first you can expect some reinvestment we will take some of it to the bottom line but I would expect in the neighborhood of half of it will be reinvested. And keep in mind that happens over a period of time it doesn’t just, not a quiz though we will have some opportunity to plan that out. As far as silicon hydrogel’s the majority of our revenue actually the better half is outside the U.S. but it’s closer to 50-50 at this juncture. And therefore my opinion you know that 33% of revenue in the soft contact lens market is in the U.S. two-thirds it should be two to one. Well there are a lot of translators and a lot of leverage potential yet with silicon hydrogel outside the U.S. Next question?

Your final question today is from the line of Amit Bhalla with Citi.

Hi quick question on Europe and just a clarification on guidance on Europe just the last quarter you talked about it’s a softening market. But it looks like it bounced back you just talk about the sustainability of what you are seeing in Europe. And just second on the guidance clarification so you took the midpoint up $0.13 did I hear it right $0.05 from the share repurchase and that will leave about $0.08 from the lower end of the tax rate or is there anything else that’s driving the earnings revision upward.

Europe first, Europe is I call it a daily event but as far as it’s been okay for the contact lens industry. It was a little softness you see in the fourth quarter compared to how it did last year for example the contact lens industry in the fourth calendar quarter was that 5% the overall market was stronger than that last year. Actually I guess it wasn’t held on 5 to 5 but it was not bad for us in the first quarter. So it’s not as we are busting the woods prior two years where it was clearly strongest of the three regions but it’s holding its own. On guidance the best way to think of the $0.13 add is the accretion of, by the acting $0.05 related to the midpoint and the other $0.07 is non-detector or two offsetting items. The tax going one way and then there was some recall related to consensus going the other way those washed out. Meaning we flushed through the P&L certain recall and that impacted the revenue line somewhat and operating cost somewhat. The pickup of the $0.07 really the strength of the first quarter, so we came out $0.07 stronger than the quarter we retained that in the guidance numbers you have going forward. We didn’t keep the momentum of that $0.07 pickup in each quarter because we are investing and we talked about all the start up costs that will happen as we rollout, relaunch Avaira Toric and rollout SUS or single user silicon hydrogel, if you will and then have start up cost with the manufacturing of Biofinity in Puerto Rico. Any other questions?

You do have a follow-up question from the line of Jeff Johnson.

Thanks guys just two quick one here. So Bob, we danced around kind of gross margin and SG&A here. But it’s just operating margin are you still assuming there maybe 100 to a little north of 100 basis points for the year. And then did I hear you correctly if you are moving some Biofinity manufacturing to Puerto Rico some of that is even going to outside of the main Juana Diaz facility or we just knew why would you be doing that outside of that facility.

Let me come back on that one first the – we are not moving anything from UK where we make Biofinity to Puerto Rico we are expanding in Puerto Rico where they are starting up Biofinity production inside the plant. It’s in the same stall or some new location. Relative to gross margin and SG&A the expectation is we will be able to improve operating margin this year in that range of 50 basis points to 100 basis points, at the low end is the function of how impressive. We are with expansion in primarily China and at the high end assume that we get a little bit more out of leverage so it’s in the 50 basis points to 100 basis points improvement this year. Operator?

You do have a follow-up question from the line of Larry Biegelsen.

Hey, thanks for taking the follow-up question. Can you give us a little bit of comfort around some of the startup cost here? The new single daily use silicon hydrogel and Avaira Toric in the Biofinity line and I guess maybe on the single use of silicon hydrogel lens and have you made this lens. I guess I’m just trying to understand you know the risk here that there could be significant startup cost here versus modest startup cost the reminder of the year.

On the silicon hydrogel there are going to be cost it’s not going to be a high gross margin to get. And it’s I would say the technology we are using to make it is a somewhat a known commodity. So that will be somewhat controlled in that sense and we are not trying to go aggressively into the market in fact I should have been clear if I wasn’t that it is a limited launch we are talking about it’s not going to be a global launch. I didn’t get into where and for to keep the competition guessing we are not going to say where, but the risk of startup cost being well beyond what we expect I think is steadily limited and controlled. Some of those other startup costs there is no doubt I think Greg when he gave his guidance on gross margin 62.5 I think to 63 kind of tells us we are what we expect will happen as we flush that into the P&L over the last three quarters if you will.

I’m sorry go ahead.

Sorry, we are at the top of the hour we would like to conclude.

Go ahead and make your closing remarks then.

Well with that I thank everyone for joining us in today’s call. Hopefully, you are pleased as we were with the results of the quarter and the progress we are making towards exploiting our family of products around the world, both gaining market share as well as successes in women’s healthcare. So with that we look forward to talking to you in June.

Ladies and gentlemen thank you so much for your participation in today’s program. This does conclude the presentation and you may now disconnect. Have a great day.