Good day, ladies and gentlemen, and welcome to the First Quarter 2015 The Cooper Companies Incorporated Earnings Conference Call. My name is Tony and I will be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to Ms. Kim Duncan. Please proceed.

Good afternoon, and welcome to The Cooper Companies' first quarter 2015 earnings conference call. I'm Kim Duncan, Vice President of Investor Relations. And joining me on today's call are Bob Weiss, Chief Executive Officer; Greg Matz, Chief Financial Officer; and Al White, Chief Strategy 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 or regulatory conditions, and integration of any acquisitions or their failure to achieve anticipated benefits. 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 the first quarter financial results. We will keep the formal presentation to roughly 30 minutes and then open up the call for questions. We expect the call to last approximately one hour. We request that anyone asking questions please limit yourself to one question. Should you have any additional questions, please call our investor line at 925-460-3663 or e-mail ir@cooperco.com. As a reminder, this call is being webcast, and a copy of the earnings release is…

Operator, we're ready to open up the call for some questions.

Your first question comes from the line of Mr. Jeff Johnson of Robert W. Baird. Please proceed. Jeff D. Johnson - Robert W. Baird & Co., Inc. (Broker): Thank you. Good evening, guys. Can you hear me okay? Gregory W. Matz - Vice President, Chief Financial & Risk Officer: Yes, Jeff. We can. Jeff D. Johnson - Robert W. Baird & Co., Inc. (Broker): Great. Hey, Bob, just wondering on the Sauflon capacity side. I guess a couple different questions there, I'll roll into one, but I think at your Analyst Day back a few months ago, you – or more than a few months ago, but you talked about a $420 million capacity split, primarily Budapest, but also some in the UK. Can you remind me how many lines that $420 million was spread over and then how do we think about maybe the incremental lines that'll be coming on over the next 6 months to 12 months? And sorry – other part to that, if you're going to be converting any of the other Sauflon lines, maybe two clariti lines away from other kind of Sauflon manufacturing? Thank you. Robert S. Weiss - President, Chief Executive Officer & Director: Yeah. What we have done to keep it focused and simple is, we're basically just running one-day through Hungary. So, it's north of a $400 million run rate with lines that I want to say are 9 or 10 lines. One of the important things about the lines is their – the timeline to get new ones added and we continue on that path, and of course, as I indicated, there are lower cost and in fact even much lower cost now with the euro and everything going down. So, that's the one silver lining of foreign exchange if…

Your next question comes from the line of Chris Pasquale of JPMorgan. Please proceed.

Thanks. I want to start with the surprising bottom line strength this quarter. So, Greg, on the 4Q call, you said that you thought both 1Q and 2Q would be down year-over-year, and I think you even called out 1Q as being the bigger challenge from an earnings perspective. So, what changed in the last half of the quarter relative to where you thought you would be? Gregory W. Matz - Vice President, Chief Financial & Risk Officer: I think if you look at where we'd be, just probably one-third of it was in gross margins, and two-thirds of it was in OpEx. So, on the gross margin front, I think as I mentioned earlier in my comments, there were probably several areas that contributed to the favorable margins. There was nothing that was really out of the ordinary driving margins, but as I mentioned, the high U.S. sales with no FX impact, especially with the higher mix of Biofinity, versus sales in Japan, which would have had a higher mix of dailies and lower margins, as well as the revenue hit you get from the – where the yen is at. In addition, there were lower manufacturing period expenses. We don't think this is necessarily a trend, and so that's why we kind of guided on the gross margin front to around 63% for the next three quarters and a little north of 63% for the year. I think on the OpEx front, the teams did a good job and good expense management. At the same time, I think, we appreciate some of the synergies that we've gotten from the Sauflon acquisition. Some of those are coming to fruition. And so, overall, it was just a very good quarter.

Okay. And then I just want to understand the moving pieces here with guidance. So, $0.21 beat this quarter relative to consensus, but now you're saying FX $0.43 greater headwinds for the year, so that's a $0.22 negative net. And you're raising the guidance by $0.05 at the midpoint. So, is the right way to think about this that you see $0.27 of additional operating leverage over the final three quarters of the year, or is your math different? Gregory W. Matz - Vice President, Chief Financial & Risk Officer: I think, that's...

That makes sense. Operator? Next question.

Your next question comes from the line of Larry Biegelsen of Wells Fargo. Please proceed.

Good afternoon. Thanks, guys, for taking the questions. Hopefully, you can hear me okay. I wanted to ask about the top line growth. So the pro forma sales growth for CooperVision is still 8% to 11%. You did about 6% this quarter. Can you talk about just kind of the cadence of sales and also EPS growth through 2015, back to (35:48) sales growth, do you expect the pro forma sales growth to improve in the second quarter from Q1? And I actually just have one very brief follow-up. Gregory W. Matz - Vice President, Chief Financial & Risk Officer: Yeah. I think from a phasing point of view, the second quarter is similar to the first quarter in terms of year-over-year challenge. You may remember a year ago, we had the – let's call it the Asia event or the Japanese event with VAT tax and a whole bunch of revenue coming into the second quarter not only for us, but on a calendar year basis for the industry. So that's a tough comp that we expect all other things forgetting about foreign exchange as a factor. And then obviously the foreign exchange comp will go down towards the back-end. We hope anyway that presumes stabilization, if you will. Our comps are easier in the back half for a variety of reasons. One is just the prior year comparison. In other words, some of the VAT tax in Japan came out of the third quarter. So there's somewhat of an easier comp there. In the fourth quarter, we had a number of events we talked about at year-end regarding distribution channels and as well as the recasting of the U.S. Sauflon launch as we migrated distribution from Hicksville into our West Henrietta facility. So, those comps are easier in the back half. And in addition, we have the – of course, the ramp-up and roll-out of the new products. So, we would expect a much more robust back-end growth in the first half.

Excellent. Bob, just to make sure I heard you correctly. The second quarter pro forma growth will look similar to first quarter about 6%, is that what you said? And then just lastly, clariti fitting sets, when do you expect to be distributing new fitting sets in the U.S., then I'll drop? Thanks. Robert S. Weiss - President, Chief Executive Officer & Director: Yeah. The 6% is not a bad – plus or minus, is not a bad gauge in the second quarter. Fitting sets is one I mentioned – it's more like weeks as opposed of months. So the fitting set timeline, if you will, is we stopped shipping fitting sets a couple weeks ago while we played catch-up, being responsive to those people that already had their fitting sets. We will remove that bottleneck of the fitting sets within weeks.

Thanks for taking the... Robert S. Weiss - President, Chief Executive Officer & Director: And therefore, it is not a limit – a rate limiter as we get into – really into the third quarter.

All right. Thanks for taking my questions, guys.

Your next question comes from the line of Mr. Anthony Petrone of Jefferies. Please proceed.

Thanks and congrats on another good quarter. Maybe, Bob, a little bit on your comments on the marketplace. A little bit of a slowdown in growth broadly, and you mentioned UPP pricing. So, can you specifically give us a little bit more color on where that practice is just industry-wide? In other words, how deeply is it implemented across the U.S.? What has been the feedback from optometrists, and maybe what has the feedback been from larger retailers? Robert S. Weiss - President, Chief Executive Officer & Director: Well, it's pretty predictable. The independent eye care professional loves it. The retailers, they're very vocal about that. And as far as where the practice is right now, of course, J&J was the most aggressive going well beyond new products, whereas the other competitors have pretty much been selective with new products. There is a lot of energy on all fronts that can be imagined going on in that arena, that who knows where it will shake out. I personally think that there are other options to address our loyalty and everyone's loyalty to the eye care professional who's the one that spends all the time, fitting the patient. And that's a little bit what's the undercurrent there. But just stay tuned. I'm more wishy-washy on where it goes, but I respect the individual parties weighing in on it.

And just to clarify, Cooper's position is still that they have not joined in on the new pricing structure. Robert S. Weiss - President, Chief Executive Officer & Director: We adopted clariti or the Sauflon position on clariti and continue that, and that's what we have done thus far.

Helpful. And then the last one from me is just for Greg. Maybe just an update on the extent of the CIBA royalty, what is still being paid overseas, the timing on when that rolls off and maybe what you think the benefit could be come 2016? Thanks again. Gregory W. Matz - Vice President, Chief Financial & Risk Officer: Yeah. That's a topic that we just don't cover. Again, we have contractual obligations in and privacy on that, so we have not gone into that level of detail. Sorry about that.

Next question?

Your next question comes from the line of Mr. Jon Block of Stifel. Please proceed. Jon D. Block - Stifel, Nicolaus & Co., Inc.: Great. Thanks and good evening, guys. I might just be asking an earlier question in different way, and then I have one incremental. But just on the guidance, I think the FX was actually $0.47 relative to the last time you guided. In other words, I think you said $0.43 for the balance of the year, 2Q, 3Q, 4Q, and $0.04 in 1Q. Well, you took out the midpoint by $0.05. So, I get roughly a $0.50 raise on call it operations, but, Bob, constant currency revenue growth really didn't change, and it didn't sound like you're running well ahead on synergy. So, can you just talk to where the $0.50 came from? Is it operations, or it seems like is it more synergies, and if so, where are you overall with synergies? Thanks. And then I got a follow-up. Robert S. Weiss - President, Chief Executive Officer & Director: Yeah. The synergies is a big factor of it. As Greg indicated, some of it was expense management. Some of it was the gross margin and the favorable mix, with a stronger U.S. showing, which, of course, was more immunized from foreign exchange. In fact, it has the benefit of lower landed cost. So, that was a part of a factor on the gross margin. But having Biofinity perform well with very high gross margin certainly helped gross margin, operating margin from top to bottom, if you will, a little less on the top line, but a lot on the gross margin and OI line. Synergy, clearly some of the early easy decisions, if you will, in terms of bigger dollars in the integration are contributors.…

Your next question comes from the line of Steve Willoughby of Cleveland Research. Please proceed.

Good evening, guys. Thanks for taking my question. I actually have a couple of them, if you don't mind, circling back on some earlier questions. First, and I'll just kind of rattle off the questions and let you guys have them, I guess, first, Bob, I'm just curious as to how important or the importance of UPP is to Sauflon in your mind? I heard your comments earlier. I do know, there's been a class action lawsuit filed within the past day or two regarding UPP. And so I was just wondering how important it is to Sauflon and its growth. That's the first one. Then secondly, on the clariti rollout, I'm trying to figure out what's going on in terms of why you're halting the fitting sets. Is it more that you – is it a manufacturing capacity issue, or is it something going on with the distribution of lenses that is causing the bottlenecks? And then I guess the final thing is just for Greg. Greg, I heard your response to some earlier questions, but with the revenue guidance coming down, but still expecting operating margins around 23%, I'm not – I don't understand how the EPS guidance is what it is. I would think that given the revenue coming down, operating margins would have needed to go up for the full year to maintain the guidance like you have? Thanks, guys. Robert S. Weiss - President, Chief Executive Officer & Director: Okay. Well, I'll start with the first couple and maybe add a little to the third one. The class action on UPP, how important is it to clariti? Of course, our view is that there are other ways to support the eye care professional than UPP, but we are going to respect the fact that that…

Okay. Robert S. Weiss - President, Chief Executive Officer & Director: Unless there's outstanding. So, some of it is on the top – bottom line also.

Got you. Thanks, guys. Gregory W. Matz - Vice President, Chief Financial & Risk Officer: Yeah, that's a good point.

Okay.

Your next call question comes from the line of Joanne Wuensch. Please proceed. BMO Capital Markets.

Hi. Can you hear me okay? Robert S. Weiss - President, Chief Executive Officer & Director: We can.

Terrific. Thanks. And nice quarter. Particularly, your gross margin number. I'm curious if you did 64.2% in the first quarter and your guidance for the full year was just north of 63%. What is happening over the next three quarters that would drive that down? Gregory W. Matz - Vice President, Chief Financial & Risk Officer: Well, Joanne, I mean, we're still expecting major headwinds in the FX. So, on revenue, as you saw, going out until next three quarters, still – currency still being an issue. So, that hasn't changed. Also, the fact of the matter is that as we are successful with clariti and we add more 1 day, we're going to see – again, we'll continue to see the pressure on – the headwind on gross margin. So, we feel very comfortable with the 63% range at this point. I think that it's the right number going forward.

Okay. Robert S. Weiss - President, Chief Executive Officer & Director: The first quarter did not get the full brunt of the headwind from currency. That kind of – clearly, the first half of the quarter was already in the bag when we gave guidance previously. And so, your headwind continued to grow and actually accelerated, I think, as we got into even the post first quarter timing. So February has not been kind to the euro.

Okay. And then my follow-up question, your SG&A which we've been really focused on as a leverage point for you have come down quite a bit year-over-year. How much more is that – or how much more room is there to move that metric down? Gregory W. Matz - Vice President, Chief Financial & Risk Officer: I would say, we're still north of 40$, and I don't think north of 40% reflects strong leveraging and still reflects a lot of investment around the world in area of geographic expansion and whatnot. So I don't call 2015 a high leverage scenario, in other words, we still see that the way forward to 2018 is going to be more about leverage of operating cost and less about improvement of gross margin while I would say it will be substantial cost reductions in manufacturing. Meaning the cost will be coming down, the mix will be offsetting a lot – some of the mix factor. But mix will outplay cost reductions on cost of goods and gross margin. And then we will get leverage out of operating cost part of which is the operating cost in a one-day modality are less than the operating cost in your monthly and your two-week modality.

Terrific. Thank you so much.

Your next question comes from the line of Mr. Matt Mishan of KeyBanc. Please proceed.

Great. Thank you and thank you for taking my questions. You've had Sauflon for a couple months now and you've been talking a lot about the synergies. Have you given a total number and are you ready to give a total number for what the synergies could be for Sauflon? Robert S. Weiss - President, Chief Executive Officer & Director: Well, it's kind of lumped in to the guidance we've given which, of course, has been gobbled up by foreign exchange. And I think when Greg gives his earnings per – translates the earnings per share guidance to what it would be were it not for foreign exchange, which is basically 22% to 26%, it's best to think of that increment and then some as being contributed by Sauflon synergy. In other words, we were running low-double digits, and now were running basically 22% to 26% were it not for foreign exchange gobbling up some of that.

Okay. And then I believe you also mentioned that, at least for MyDay, you think you get faster margin expansion than you expected going forward, and I was just curious why that was. Robert S. Weiss - President, Chief Executive Officer & Director: I'm sorry. Say that again?

I think you mentioned when you were talking about the ramp in MyDay that you expected faster margin expansion than you thought you'd get. Robert S. Weiss - President, Chief Executive Officer & Director: Yeah. Part of that is a reflection of the fact that number one we're taking a little bit more time to roll out MyDay, meaning we've taken the time to upgrade some of the manufacturing platform. An example of that might be part of the platform has been upgraded to have automated inspection instead of manual inspection. So, a whole bunch of direct labor comes off the line, sending margins higher. Part of that is the luxury of having a little bit of time. The other thing is we indicated that the pricing strategy of MyDay will be basically more of a premium. So the fact that we will have more of a premium pricing than the mass market pricing or some place in the middle is the second contributor, higher ARPs.

Okay. Great. Thank you very much.

Your next question comes from the line of Steve Lichtman of Oppenheimer. Please, proceed. Steve M. Lichtman - Oppenheimer & Co., Inc. (Broker): Thank you. Hi, guys. I guess, just two questions. First, as we think about the launch of MyDay later this year in the U.S., can you talk a little bit about how it's being positioned versus other premium si-hy dailies in Europe and thus what your positioning will be here in the U.S. Anything on the messaging around that lens would be helpful. Robert S. Weiss - President, Chief Executive Officer & Director: Well, it's going to be positioned obviously out at the mass market sector, meaning a premium to that. We have not necessarily indicated exactly what we're coming out relative to the pricing versus Total 1 and TruEye which would be your two premium priced products. Whether or not it's above or below TruEye, we have not indicated at this point in time. Relative to the separatism, of course, since we've not launched in the U.S., it's kind of a blank piece of paper. The description of MyDay, we believe MyDay versus TruEye and Total 1 measures up very well. And particularly has issues of not only the price point factor that may come into play but also certain things to do with handling ability and whatnot. So there's certain features that MyDay had that when we get into detailed marketing literature we will play out. Steve M. Lichtman - Oppenheimer & Co., Inc. (Broker): Got it. And then just – Greg, just on a follow-up on gross margin, you mentioned lower period expenses in F 1Q. Are you anticipating those expenses to bump higher looking forward? Does that play a part in gross margin maybe coming down a bit from F 1Q levels beyond obviously the FX and daily, that mix that you talked about? Gregory W. Matz - Vice President, Chief Financial & Risk Officer: Yeah. I think, it's some of the period expenses. They were a little lower than we normally run, but that being said, they do fluctuate. So they were lower than we expected. We have seen quarters where they kind of more lined up and were higher than we expected. And so we just felt they were probably running at a lower rate than is reasonable through the remainder of the year. Steve M. Lichtman - Oppenheimer & Co., Inc. (Broker): Okay. Got it. Great. Thanks, guys.

Your next question comes from the line of Mr. Larry Keusch of Raymond James. Please proceed. Lawrence S. Keusch - Raymond James & Associates, Inc.: Thanks for fitting me in. Just two questions, obviously a lot of talk about Biofinity and the strength in the quarter and the positive benefit that that has on gross margin and mix. Just trying to figure out what was perhaps behind Biofinity doing as well it was. So I'm sort of curious geographically, where you were perhaps seeing that strength. And you also obviously had some distributor reductions in the fourth quarter and just was curious if you're seeing some improved buying. And then the second question was, Bob, you've made some comments about feeling like the market would improve and move up towards 6% in 2015. And obviously I understand the benefits of some of these higher price lenses, but from a demand perspective, are you expecting much change in volume, or is it really all, again, mix towards higher-price lenses? Robert S. Weiss - President, Chief Executive Officer & Director: Yeah. So, a little of all of those. So, I would say the continuation of the success of silicone hydrogel moving into the one-day space is a strong plus, meaning, Total 1 is doing well. I believe clariti will do well, and when MyDay gets to the U.S. market, I believe it will do well. So, that will push up clearly ARPs per ware, if you will. The shift continues from the two-week sector where, of course, J&J's sweet spot is into the one-month, which is still growing, and the daily. So, that shift is a continuation plus. I think what's muddied up the growth as much as anything is clearly UPP and some of the tactics that have gone on, and it's hard to kind of work through what that all means. But some retailers, for example, have withdrawn somewhat, contracted somewhat. And how it shakes out or how it long it takes to shake out may take a little while, but I do think there's been kind of a distortion caused by UPP in the marketplace that will flush out in the near term, meaning over the next three months to six months. Relative to Biofinity, I think Biofinity just has good karma. We have continued to round out the parameters, if you will, and a lot of it is geographic expansion. So, it's got a good name. It's well-respected, and it's doing well going globally as a factor. But I think it also is getting some windfall from a maybe more rapid shift out of two weeks coming into the growth of the monthly sector as well as into the one-day. It's picking up its fair share of the monthly sector. Lawrence S. Keusch - Raymond James & Associates, Inc.: Okay. Great. Thank you.

There are no further questions in the queue. We will now turn the call back over to Mr. Bob Weiss for closing remarks. Robert S. Weiss - President, Chief Executive Officer & Director: Okay. Well, I want to thank everyone for participating. We're obviously excited about where we are relative to the quarter. I have a – I had a recommendation I will not share with you on how to fix the dollar. Everyone would laugh too much. So, I won't give you the recommendation, but someday in private, I may share with some of you. But we have a long way to go to figure out where currencies – when they're going to stabilize, but I certainly hope they do. That's our, by far, number one pain in the neck right now, although I also respect the fact everything goes in cycle. So, kind of with that complaint as a parting comment, I look forward to updating you on the great progress we're making and the great roll-outs of our products on our call on June 4, the end of our second quarter. That'll be it. Operator?