Albert White – Vice President of Investor Relations Robert S. Weiss - Chief Executive Officer, Director Eugene J. Midlock - Chief Financial Officer, Senior Vice President

Michael Weinstein-JP Morgan Larry Biegelsen -Wachovia Joanne Wuensch - BMO Capital Markets Christopher C. Cooley - FTN Midwest Securities Brian – Jefferies & Company Song Shen - Goldman Sachs Andy Kiel [ph] - Citigroup Steven Willoughby – Cleveland Research Jared Holt – Thomas Weisel Partners

Welcome to the Cooper Companies third quarter 2008 earnings conference call. (Operator Instructions) I would now like to turn the presentation over to your host for today’s conference Albert White.

I am Al White, Vice President, Treasurer in Investor Relations and joining me on today’s call are Bob Weiss, president and chief executive officer and Gene Midlock, chief financial officer. Before we get started I would like to remind you that this 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 as a 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 available publicly and on request from the company’s investor relations department. Before I turn the call over to Bob 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, product launches, the market and guidance. Following Bob’s remarks Gene Midlock will comment on the third quarter financial results. We will then open 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 roughly one hour. We request that anyone asking question please limit yourself to only one question so that we may get to as many callers as possible in the allotted time. Should you have any questions following the call please call Lindy Katie at 925-460-3663 and we will 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 web site at www.coopercos.com under Investor Relations. With that let me turn the call over to Bob for his opening remarks.

This was a great quarter and I hope you agree. Following Al’s guidelines we are going to try to keep our commentary to about 30 minutes and I am going to do my best to give Gene his time to get through the financials. The key messages I hope you leave the conference call with by the end of this hour are a number. Number one is the contact lines market is recession resistant and that’s indicated by the fact that our most recent quarter, worldwide the market grew 6.5%. We continue our best in class roll out with Proclear 1-day and the Dailie disposable mode. They are now in the two-week mode and Biofinity in the monthly and beyond mode so we cover each of the three modalities of contact lenses. We have made great progress in expanding our capacity of Avaira, the two-week product that we launched in April, by more than doubling our yields in the last three months. By the end of the quarter we expanded our Proclear 1-day and Biofinity power range to add plus powers as well as higher minus powers, making that a more broad halo effect improvement of that product line. Yes we were in fact manufacturing a silicone hydrogel toric by the end of the third quarter, so Biofinity Toric is currently in production. Call outs which aggregated $0.28 for the quarter brought our year-to-date to $0.83 and I am happy to say that call outs have ended, we do not anticipate any in the fourth quarter. Our gross margin should move from 54% in the third quarter to roughly around 60% next quarter and I’ll add some color to that. Third quarter had a tremendous operating cash flow, $44 million and it brought free cash flow to $19 million and in fact we paid down over $13 million in debt. Lastly CSI delivered another great quarter and continues to be consistent. Third quarter results $285 million were up 14%, 8% in cost and currency. Cooper Vision contributed $243 million in revenue, up 15%, also 8% in cost and currency and Cooper Surgical $42.7 million was up 7%, all organic. Earnings per share GAAP wise were $0.39 and excluding call-outs $0.67 and I will let Gene elaborate more on the financial results. As far as new products go in the Proclear family, Biofinity revenue reached $15 million and now is annualizing at around $60 million. That’s four times the prior year and up sequentially 18% from the second quarter. At quarter end we expanded our power range to include high plus, meaning zero to eight plus high opters [ph] as well high minuses and as far as Avaira goes we are off to a great start delivering $4 million in revenue. We are on track with our rollout with 5,000 kits fitting sets placed by the end of the third quarter. Given a solid ramp up in Puerto Rico production where we more than doubled yields, we are accelerating our rollout. We had targeted 10,000 fitting sets would be out the door by the end of October, we are now looking at more like 12 ½ thousand and we are still targeting a total rollout of 17,000 in the US within the first 12 months. The high volume production line for Avaira in Puerto Rico is basically putting out about two million lenses a month which is about 2/3 of our expectations so we are very pleased with the progress that we have made there. 1- day Proclear led the way there, we had revenue up 47% and in cost and currency 32%. The Proclear family is performing outstanding, up 35% and in cost and currency 28% and that brings its revenue to 28% of our total Cooper Vision revenue. Geographically the star was the America’s up 13% and Europe also contributed 15% with Asia Pac off of a smaller bas, up 19%. Future products are still on track. We remain on track for our launch in Japan of Proclear 1-day in the first half of fiscal year 2009. Biofinity Toric production has started and is on track for a launch in the first quarter of calendar year ’09. Avaira Toric production is still targeted to be launched the end of calendar year ’09. With these launches we will basically have routed out our offering of spheres and torics. The market for calendar year Q208 ended June 30 showed solid growth accelerating above the first quarter. The first quarter was 6.3% worldwide cost and currency and the second quarter was 6.5%. The market growth in ’08 looks like it will come in just shy of the 6.8% that it grew in 2007. The Q2 stars continue to be single-use spheres, up 11%, torics up 12%, multi-focal up 12% and silicone hydrogel continues to make progress, up 21% above the prior year and now accounts for 30% of the worldwide market. In the United States silicone hydrogel is now 47% of total patient fits and 51% of total new patient fits. For torics these numbers in the US 45% total patient fits and 47% for new patient fits. Some real surprises during the quarter, HBR data results show the J&J launch of Oasis Toric put in play their Acuvue Advance for Astigmatism. The result was that Acuvue Advance for Astigmatism lost 2 ½ share points in new fits while Oasis picked up only 1.9%. Ciba’s Air Optics for astigmatism did surprisingly well, achieving 3.4 share points. Also a shocker was that Cooper Vision gained share in torics in the United States in total. Overall quarterly HBR data showed Johnson & Johnson lost 1.1 share points while Cooper for new fits increased 1.6 share points to 23.9 and for total fits increased 0.5 share points to 22.9 so we are very pleased with our progress there. Take aways from HBR data is eye care professionals are seeking alternatives to Acuvue Advance for Astigmatism. Eye care professionals will experiment with new products such as Air Optix for Astigmatism. The market remains healthy and total visits were up 0.8% and new patient visits were up 1.7% above the prior year and extended wear still is not an accepted modality, we represent 7% of the entire market. US CLI data contact lens institute data showed continued growth of the 1-day modality up 15% above the prior year and 1-day now accounts for 11% of the US market, yet it counts for 46% of the rest of the world. As far as call outs and gross profit percent, while call outs for fiscal year 2008 exceeded our $0.70 target the good news is that we don’t anticipate any in Q4 and going forward. Q3 included the remaining portion of our Biofinity start-up costs, pre the December shut down, including the modifications we made to the lines in December and basically that modification allowed us to double yields by March of ’08, so going forward after this quarter we will see the inventory trends going into the P&L reflecting that improved geol. For the third quarter also we had $0.05 for the 100% debouch [ph] were put to us by the bondholders on July 1. We do not have the $2.6 million share overhang which we used to have from that debaucher [ph]. Not included in call outs was the negative of foreign exchange contracts which negatively impacted our gross margin three percentage points and excluding call outs from start up costs now behind us, including a high volume conversion onto Gen II, Proclear 1-day on to Gen II as well as Biofinity and excluding the hedging contracts, our gross margin was 60%. This is ballpark where we expect it to be going forward. Going forward we believe the 1-day mix trend which will be offset by improvement in the production on the production side and will lead to gross margin in and around that 60%, it will also have favorable impact of the monthly modality including Biofinity. As far as cash flow and CapEx is concerned one of our big accomplishments in the third quarter was free cash flow of $19 million. Debt was reduced from $941 million to $928 million and our operating cash flow equaled $44 million. We continue to focus in on this area; going forward we believe that next year we should be able to generate from $50 to $100 million in free-cash flow, that we will be slightly cash flow positive in the fourth quarter in spite of the fact that we have a semi-annual payment of note interest of $12.5 million and that the improving cash flow next year will reflect improving operating margins, lower CapEx requirements, stability in inventory levels and improving top line growth contribution. By mid-next year when our second Avaira line goes into production we will have completed essentially all of our major capital expenditure projects. By October of ’08 most of the $600 million of CapEx projects are done. Three distribution centers, the Biofinity lines, the high-volume Gen II conversion, the one-day production ramp up and two building expansions. Going forward post the first quarter of ’09 it’s mainly Avaira CapEx requirements and maintenance CapEx requirement, which is around $35 million and then just substantial growth, anything above double-digit. We believe that this year we’ll come in at about $140 to $160 million in CapEx and that next year we’re still projecting $125 to $140 million and after 2009 that it will even be less than the $125 million. Our guidance for 2008, we narrowed the range revenue for the Cooper Companies of $1 billion 80 to $1 billion 95 with vision at $915 to $925 and surgical at $165 million to $170. My point out that there’s about a $10 million care cut for foreign exchange given the strengthening of the dollar in that number. Earnings per share GAAP guidance is $1.35 to $1.41 and our non-GAAP guidance of $218 to $224. Our revenue guidance, as I indicated, reflects $10 billion haricot for the foreign exchange. It also reflects the fact that we expect continued contributions from Proclear Dailies as well as Biofinity, Avaira and the rest of the Proclear family going forward. Cooper Surgical has been steady, staying at the $165 to $170 million and earnings EPS excluding call outs in the fourth quarter is reflecting $0.58 to $0.64 as guidance, and once again we do not anticipate any call outs. Cooper Surgical our women’s health care franchise continues to execute to plan. For the quarter we put up 7% organic cost and currency growth. We completed the integration of a Canadian operation. Excluding this impact to the integration, which was minimal, gross margin would be 60% compared to 59 with it and operating margins of 20%. With minimal CapEx requirements for Cooper Surgical, it throws off a substantial amount of free cash flow. The hospital strategy we embarked upon three years ago continues to pay nice dividends through higher revenue and solid gross margins. Revenues for our hospital portion of the business were up 20% bringing that to $13 million for the quarter and hospital products now account for 31% of Cooper Surgical’s revenue. In summary, before I turn it overt to Gene, remember the key take aways: the lens market is great, recession resistant; we are marching to plan with our launch of Avaira, Biofinity and Proclear Dailie, our 1-day monthly and two week products; Avaira capacity is ramping up nicely; at the end of the third quarter we expanded our power ranges of both Proclear 1-day and Biofinity to pluses and high minuses; we are in production with Biofinity silicone hydrogel torics; our restructuring and start-up period is over; call outs are over; while start-ups and hedging contracts suppressed our gross profit percent in the third quarter, we expect approximately 30% gross margins going forward; and yes we generated $19 million of free cash flow. With that I will turn it over to Gene to cover the financial results.

I will now briefly review some of the financial results that Bob did not touch upon. If you would like more detail, please note that there is more information in our press release; we will file our 10-Q tomorrow, so by Monday that will be available as well as we will update our web site which also should be available by Monday. As Bob indicated operationally we had a solid quarter and most notable and Bob mentioned it a few times, I’ll mention it again, we became free cash flow positive by $18.6 million in the quarter and in addition we reduced our debt by $13 million. It has been a major focus of the organization, including the finance group, and we will continue to put major efforts to generate cash and reduce our debt load. Briefly touching on revenue, we had a strong quarter, revenue of $285.9 million, up 14% above the third quarter of ’07, 8% in cost and currency. Cooper Vision had revenue of $243.2 million, 15% above last year, 8% in cost and currency. Bob touched on various details of the product sales and material sales and geographies and the fairly strong results across the board. Turning to Cooper Surgical, it earned $42.7 million of revenue, an increase of 7% over the prior year and very strong sales of its surgical business unit which markets directly to hospitals, which grew 20% over last year and is now 31% of CSI’s total revenue and that’s a fairly high margin business for us. Gross margin on a consolidated basis was 54% compared to 58% in last years third quarter and excluding our call outs our non-GAAP results were gross margin 57% versus 63% in Q3 of last year. Cooper Visions gross margin was 53% versus 58% last year and excluding the call outs it was 57% versus 64%. This decrease, as Bob mentioned, was partially attributable to currency, roughly 3 percentage points as well as a change in product mix more towards the single-use spheres which have a lower gross margin percent, but that particular business increased, it represents 19% of our revenue, up from 15% last year; so that’s both the good news and the bad news. We expect CVI’s gross margins to be around 6j0% in Q4 and onto next year. Cooper Surgical’s gross margin was 59%, which is unchanged from last year; on a non-GAAP basis it was 60% which is also the same as last year. Again, consolidated we are expecting gross margins of around 60% next year and in Q4. Consolidated GAAP SG&A increased by 6% over last year to $110.6 million, but decreased as a percentage of sales from 41% to 39%. In the components of this, selling expenses increased 11% over ’07 and are 30% of revenue and that’s primarily due to costs supporting increased sales levels, obviously higher commissions and so forth, as well as increased lens distribution used in marketing programs for new products. G&A expenses on the other hand decreased by 8% from last year and are 9% of revenue and the decrease is generally attributable to a reduction in litigation costs and enhanced leveraging of certain of our administrative services. On a non-GAAP basis SG&A increased by 13% over last year and are 38% of revenue. Selling expenses increased 19% and G&A decreased by 1%. Looking at R&D expenses, in Q3 our GAAP R&D expense decreased by $2.4 million from last year to a little bit over $9 million, which represents 3% of sales. Now within the numbers CVI’s or visions R&D actually increased by 10% year-over-year to $7.9 million which is 3% of sales and on a GAAP basis CSI’s R&D decreased by $3.2 million from Q3 of last year, but note in there is $3 million of IP R&D or in process research and development in Q3 of ’07 from an acquisition of technology. And, if you look at the nine months for Cooper Surgical in ’07 it had $10.7 million of R&D included which was $4.2 million of Q1 IP R&D on an acquisition we made and then the $3 million in Q3 so on an adjusted basis it had $3.5 million ’07, in ’08 it’s 3.7 so it’s up actually 5%. Interest expense increased in Q3 to $15.3 million, however included in there is approximately $3 million of charges related to the repurchase of our converts as Bob mentioned. In Q4 we expect interest to decrease to $12.3 million which is a slight increase over the prior quarters, reflecting an increase in borrowing for capital expenditures and use of our revolver to retire the debt. As I mentioned earlier, our debt actually decreased in three from Q2 by $13 million. Turning to the effective tax rate, which probably looks a bit strange in Q3, on a GAAP basis it’s -2% and non-GAAP it’s a positive rate of roughly 3%. Again, this is largely attributable to the adoption of Fin 48 as I mentioned last quarter. That particular accounting pronouncement is going to cause major fluctuations in effective rates from quarter to quarter because of the requirement to more finely identify and recognize discreet items in the tax provision calculation; however for the full year we are expecting a GAAP rate of around 20% to 21% and a non-GAAP rate of 15% to 16%. Q4 should have an effective rate of 26.5%, so what we gain in Q3 we’ll give back in Q4 and come out to the projected rate we gave you for the full year. Again, Cooper is not unique. If you look at other companies, Intel or National Standard, any of the major public companies, you’ll see these types of fluctuations. In ’09 we’re projecting an effective rate of around 15% to 17%, again this could change, it depends on geographic fluctuations where revenue is earned. Bob mentioned our converts, which we repaid on July 1, which was a nickel dilutive in Q3 but should be around 2% accretive in Q4 because of the overhang of the 2.6 million shares being gone. Call outs were $13.3 million net of tax in Q3, so for the year they’re $38.9 and included is that $3 million of un-amortized bond issuance costs that we mentioned earlier. Note there will be no call outs in Q4. There are none. There is some marginal numbers below $100,000.00 which we will not call out. Getting down to operating margin, consolidated operating margin was 11% versus 9% last year. Excluding call outs it was 15% versus 20% and the decrease is generally attributable to the various items I mentioned earlier. Q4 we’re expecting operating margins of around 17% to 18% so for the year ’08 it will average out to around 12%. That’s basically my summary EPS. Bob mentioned GAAP was 39, non-GAAP was 67, Q4 we’re looking at somewhere between $0.58 to $0.64, which would leave us, for the year, GAAP at $135 to $141 and non-GAAP $218 to $224.

(Operator Instructions) Your first question comes from Michael Weinstein of JP Morgan. Michael Weinstein-JP Morgan: I would like to start on gross margins and if I think back over the conversations we’ve had on these calls going back the last several quarters it seems like we keep inching downward on where margins are coming out and expected to come out going forward for Cooper Vision. If we just look at this quarter, obviously there was the impact from your hedging contracts that even if we back that out and looked into that, what you’re saying going forward it just seems like margins keep inching their way lower to what you thought they would be 6 months ago, 12 months ago for that business. Part of that would be mix, but in this quarter what really surprised us versus a couple months ago about the mix of Dailie disposables, it seems like it’s more than just mix.

Well certainly this quarter it’s the two things, it ‘s the 3% from the hedging, as well as mix , as well as the remnants of the call outs, but excluding the call outs the 57 to the 60 is the impact of the hedging on gross margin. What we’re saying is that we expect to get to the sixties. You’re correct, our previous range was 61 to 63, we’re now saying in essence in around the low sixties. Quite frankly some of that is the substantial growth in the 1-day, 47% growth in 1-day for the quarter is a pretty quick shift. Longer-term will we get into the low sixties? Sixty is not an absolute, we’re saying roughly 60 and that could mean 62, 63. The things that push it up clearly are the same generators. We continue to improve cost of goods and certainly in all of our silicone hydrogel lenses. You double yields like we did with Avaira that’s a very positive impact, but I think we’re just being a little cautious on do we see 63 in the cards? I’m a little reluctant to say we’re going to move from 57 to 63. Michael Weinstein-JP Morgan: So if it’s mix why aren’t you making it up on the SG&A line? If we looked at just year-over-year and adjusted for FX hedges, your gross margins are down 300 basis points, but your SG&A line is only down 100 basis points. If its mix, why aren’t you getting more leverage and how much of that is because of give aways, because of handouts?

I would say we have increased our sales and marketing three percentage points year-over-year, so there is some synergy caused by the distribution center integration. There is ongoing leverage of G&A. We are not trying to leverage R&D. We are investing in R&D. We are investing in sales and marketing. You are correct that the shift in mix to the 1-day has a favorable impact on mix of operating cost and will continue to do so in the future, but given that we have three modalities we just launched in the last 13 months, from our launch of Biofinity in the US last June, we’re reluctant to put it into a milk mode when we’re investing in three viable product portfolios. Michael Weinstein-JP Morgan: On the tax rate, which came at 3% this quarter, obviously adjusted, wouldn’t you know during the first of a quarter what your tax rate is going to come out at? How do you have visibility on that, because obviously that’s relative to the 15% to 17% range, got you about $0.09 worth of adjusted earnings, so when do you know that? Do you know at the beginning of the quarter? Do you realize that after the quarter? How did you know you’re going to have that $0.09?

We know what the discreet items will be well in advance. Those are mainly credits that reduce the expense for expiration of the statute of limitations in various countries and so forth. They are varied. We are in 38 countries and they all have their own sets of rules, as you know, but we can pretty well predict that piece. What we can’t predict finitely is where we’re going to earn the revenue, in which jurisdictions. Made in the US, sold in the US attracts a higher tax rate than made in the UK and sold in the US for example, or in Puerto Rico; so that piece is based on forecasting, which we try to get better obviously in refining our techniques this year, but we’re pretty comfortable. Assuming our Q4 forecast is accurate on revenue by geography etc… what the rate will be.

I would add to that that of course we give full year guidance and in doing the full year, the way traditionally we’ve done it in the past, part of this year you develop a full year effective tax rate and you didn’t have the crazy gyrations we now go through, which has been frustrating this year for all of us. I do think, as Gene indicated, we are getting better at the way we think of effective tax rate by quarter, but in the absence of us moving into the mode of giving quarterly guidance, something we have decided against in the past, we pretty much gear our guidance to the full year. I appreciate that if I’m an analyst that could drive you crazy because effective tax rate can go from zero to, our fourth quarter our effective tax rate happens to be over 26% in that guidance; that’s just nothing more than if we normalized it we would end up where Gene indicated for the full year, but quarter-by-quarter it almost becomes a meaningless number, albeit tough to deal with.

It was I think decreased $0.07 this quarter and it’s going to go up $0.09 next quarter, I mean average amount —.

Or the other way around. We picked up $0.07 and we get back $0.09 in next quarter’s guidance.

Your next question comes from Larry Biegelsen of Wachovia. Larry Biegelsen -Wachovia: Just to follow up on Mike’s question regarding gross margin, Gene, did I hear you correctly when you said you expect the gross margin to be 60% in 2009, or was it about 60% in 2009?

Approximately 60%; as Bob indicated it is roughly 60%. Larry Biegelsen –Wachovia: Did you say why you lowered CapEx for 2008?

I did not, but the primary reasons are three fold: number one, a concerted effort to focus in on cash and given that we have adequate capacity in several of our areas to do what we can to slow up the process where we are a little ahead of ourselves in terms of our needs, so we’ve made some progress on that. Two is foreign exchange with the dollar strengthening ballpark 5% to 7%. In essence just like CapEx went up when the dollar weakened, CapEx comes down when the dollar strengthens. Then thirdly there is a project that we are working on for a new REP system that was in our numbers, at one point in time this year we pushed that project out. We are taking our time working through all the details of that and it will probably initiate next year and not this year; so that moves into next year. Conversely we will keep the same push on next year. We haven’t taken that up for the three reasons, we’re focusing in on cash flow FX and we will manage our way in a lets say in a managed mode on the ERP system. That will be over probably a five-year project, not an accelerated project. Larry Biegelsen –Wachovia: The Gen II Avaira capacity out of Puerto Rico, I don’t know if you gave us an update on that, where you are.

Yes I indicted that Gen II on Avaira, our yields doubled this quarter and I also indicated we’re approaching two million units monthly, which you may recall we said that when, up to our targeted levels we’d be up to three million a month or 36 million a year; so we’re 2/3 there. There is a lot of good progress in three months.

Your next question comes from Joanne Wuensch -BMO Capital Markets. Joanne Wuensch - BMO Capital Markets: Can you walk us through all the different places the impact of foreign exchange, because it sounds like it’s fairly impacted in a number of places on your income and your balance sheet? How did it impact you in the third quarter?

It does cover everything from top to bottom and this year, the impact is a lot more on cost of goods and you also will notice that we had a $2 million gain below the line on certain re-measurement of receivables, but cost of goods, since we do manufacture in the UK has taken by far the largest impact and as we indicated that was 3% of revenue. Going forward there are different ways to do contracts, we just happen this year to do contracts that impacted cost of goods. Next year we will attempt to make it less wild on the top to bottom of the P&L. The balance sheet basically can have large impacts on the equity section on re-measurement and can also impact cost of goods. When your currency moves very rapidly it creates some wild gyrations under what’s known as FAS 52, our financial accounting standards board #52 which has been around a long time. Joanne Wuensch - BMO Capital Markets: Taking a slightly different route what is going on at CSI? The growth rate was a little bit lower than we have been seeing over the last several quarters.

I think we’ve been at around 8% to 7% but we are, there is one product line that we continue to work at getting out that has certainly growth potential, which is a neo surge into the hospital market. We actually re-launched that product last quarter and then went slow one more time to tweak one of the two products that is in that neo surge line. We remain optimistic about that, but there was some impact on our revenue line because of a go slow on a launch within the hospital product group. Aside from that with no acquisitions year-over-year we’re expecting upper single digit, not much more than that out of this group. Joanne Wuensch - BMO Capital Markets: When I go back to the gross margins questions, is this something that you feel that your 60% level is a floor in a conversation rate as FX turns and you get better manufacturing you’ll see this is it, or is it sort of like each quarter as dailies move into more of the mainstream in the market it is something you’re constantly swimming upstream against?

I must say I’m a little skittish about gross margins after watching this year in foreign exchange. So, if you see the word rough it’s like foreign exchange has proved rougher for then, my crystal ball isn’t as good as some people’s are in foreign exchange and so that’s part of the softness and I truly believe that we have a lot of things from a manufacturing perspective that will lower cost of goods, which is a huge positive and that includes all of the silicon hydrogel families. Quite frankly event the 1-day story, I believe we will get gross margins well north of 50 as we go forward with some of the things we’re doing. So there is a lot of positives, but there is no doubt when you are growing your top line at the rate we are, 47% growth in single-use, is pretty big hurdle when that’s a lower gross margin. I think it was Mike that raised the question well if you’re growing so much with the single-use why don’t we see more leverage in operating costs. As we have historically said operating costs for the single-use product is much less, with the only exception being that we’re putting a lot of marketing dollars behind all three of these product families, 1-day, two-week and monthly and it’s happening kind of all at once. We will start seeing leverage as we look over the five-year period, but quite frankly with the amount of products we’re pushing into the market next year, that’s not our first priority, to see how much leverage we can get out of SG&A or particularly the sales side of that equation.

Your next question comes from Chris Cooley of FTN Midwest Securities. Chris Cooley - FTN Midwest Securities: Could you go back and maybe revisit the toric market, specifically here in the states. You mentioned in your opening comments that you gained share in total toric, but I’m curious what your growth rate was in the states if you backed out conventional made to order and you’re basically just looking at the DPR torics versus the market rate during the calendar quarter.

I’m going to have to look that one up. As far as excluding the made to order, so you’ll have to —. Chris Cooley - FTN Midwest Securities: Or just maybe more simplistically just back out in conventional.

]: The growth in the US, you will have to give me moment. Chris Cooley - FTN Midwest Securities: This is an easy one here; I’ll give you the softball. What are you assuming here for the fourth quarter just in regards to your currency assumptions when you’re looking at the top line? You have been kind enough to give that to us the last couple of quarters, I just want to make sure I’m thinking about this —.

Those rates were more where we are today. We took a $10 million hair cut. In fact we would have taken our range that $1.1 billion would have been, I think, one billion and five if we had left the $10 million in there. If the currency didn’t happen it would have been [inaudible]. Chris Cooley - FTN Midwest Securities: In regards to J&J they have launched True Eyes now on a limited basis in Europe and we have seen that at a fairly high price point. I think it’s roughly about 44, 45 pounds right now, the trial side. I am just curious what you’re hearing or seeing anecdotally in that market. I realize it’s not a full-blown roll out yet, but just kind of your initial thoughts or if it’s too early to call?

We are still looking harder at that product. They launched it at the same price point that they’re Moist is, which is definitely top end of the range. An example is that they sell Moist at $0.65 a lens; we sell Proclear 1-day at $0.44 a lens, so there is a huge gap between the two. True eye is at the same price point as Moist; so I think the jury’s still out on where they’re going to go with it. Of course it is a very limited launch in Europe. The US is not a 1-day market anyway and what they do in Japan which is, when we get into Japan and Asia that would be maybe a more important launch then their test market, if you will, over there. But there they are off the chart on their pricing, it is even higher than that $0.65 in the US. Going back to your other question on torics in the US, our toric sales in the US were up 12% during the third quarter and our conventional, if you will, was down 16% so all up our monthly, which is really sponsored by Proclear Toric was up like 28% so a very solid quarter for torics in the US. Chris Cooley - FTN Midwest Securities: Your reported growth rate was 12% for the total category and US ex conventional which has been [interposing].

Twelve was the all up, if I did it without the [interposing]. Chris Cooley - FTN Midwest Securities: Right, if I look at the US ex conventional which is the growth rate in the US toric franchise and then what do you think the domestic growth rate was on a [interposing].

It would have been, just roughing it, probably around 15%. Chris Cooley - FTN Midwest Securities: The market rate?

Our growth, oh I was giving you our growth. Chris Cooley - FTN Midwest Securities: Okay, so was that above the market rate for DOR torics?

Oh yes.

Your next question comes from Peter Bye with Jefferies & Company. Brian – Jefferies & Company: Hi you guys, this is actually Brian here for Peter. I want to start with a question about the CapEx guidance. Just, I heard the comments earlier about the fiscal ’08 and the reason for the change and obviously that’s very positive from a free cash flow perspective, but if you step back you have to say that in some sense this is just numbers moving around a lot. I am wondering about your sense of conviction about the fiscal ’09 number, given the movement in the fiscal ’08 number and maybe if you could share some of your methodology about how you feel comfortable with this number that you can kind of dial this in and expect it.

It’s moving around because we’re working hard to make it move, because we did shift our emphasis to cash flow heavily early in the third quarter, so that’s a concerted worldwide effort. We made a discretionary decision on the ERP system not to start yet, because we’re not ready to start yet. So I would say that was independent of the cash flow push. Then thirdly, foreign exchange, since so much of our capital is invested in the UK, foreign exchange does play a big part of it and of course the pound not to long ago was 205 and it’s 180 today, so that gets back into foreign exchange in a global market can get tricky. Why didn’t we take up next year? If we push things out of this year into next year, we didn’t take up next year because number one we are going to have that same concerted push on if we don’t need it, let’s not rush into it and see what we can do to not accelerate projects and two is foreign exchange will continue to ripple through next years CapEx requirements in the UK. Then the ERP system, we at one point in time we were going to do a so-called big bang approach which would have been a two to three year project. We are not going to do the big bang approach of a two to three year project, it will be a four to five year project, so that has a pretty large impact on the process also. Brian – Jefferies & Company: Shifting gears a bit, can you provide any anecdotal feedback on your silicone hydrogel launches in terms of maybe promotion strategies of how Biofinity gets marketed versus Avaira and where the growth is coming from there in terms of are these new patients, are these patients switching from competitive lenses are they switching from your conventional lenses? Anything on that is helpful.

Well I think it’s certainly on Avaira because we are just rolling that out and we’re a quarter into it. Other than that what I indicated we accelerated our roll out because of the progress we made on production. By that I mean we added another 2,500 fitting sets will go out the door by year-end, so we’re happy about that. There will be a lot of trust in that emphasis towards the eye care professionals and it’s one where we want to make sure it goes in the hands of the guy that writes the Rx, so that will be one part of the orientation. There is no doubt that the market is bifurcated into two pieces, with Biofinity basically being the monthly modality and J&J not playing in that part of the market and Biofinity really going head to head with things like Pure Vision which is a first generation silicone hydrogel lens, so we kind of like our hand there. As you can see from Proclear numbers, we’re not stumbling with Proclear; it was up in costs and currency 28% worldwide. Having said that there is no doubt that some of our two week modality that we bought from Ocular Biomedics has been under the gun since really 2005 and as a a result of that that is a non-growth piece of the business that really will be supplemented or filled back in with Avaira once Avaira is really into roll out in the United States. So that piece of the business, the two-week, we are clearly not in the mode of gaining market share yet. With Biofinity we’re certainly doing a good job of retaining and/or gaining market share and with the monthly modality worldwide we have about 39% market share worldwide, so we’re a huge player in the monthly and beyond modality where J&J doesn’t have an entrée, they only play in the single use and in the two-week modality, Oasis and Acuvue Advance are both two-week modality products. Of course there are some ongoing, when you kind of look at the lay of the land in the marketplace there is more and more attention to compliance and being compliant as aware for a variety of reasons. The two-week modality is the least compliant by far, the monthly is the most compliant by far. If you were to make everyone in the two-week modality compliant that market would literally double in the United States. I don’t think that’s going to happen. I think there’s a price point there, but there is that dynamic. We don’t care which of the three markets win. We don’t care if silicone hydrogel wins or if the non-silicone hydrogel wins. Proclear still is featured in the 70% of the market that is other than the silicone hydrogel lenses and now we have good entrées in the silicone hydrogel space. Our attitude is go with the flow. We have best in class entrées in all areas and we’re not going to go into consumer advertising. We’re not going to go head to head with J&J on TV that is for sure. We will continue to leverage number one our relationship with the eye care professional; number two we are willing to private label and if the right large company wants a private label and the price is right and it’s a win, win, we will let them leverage their name, and I don’t care what their name is, Wal Mart, Costco or whoever. If they can command enough of an order they will get a private label of Avaira. That is something J&J is not willing to do and that is a rub with a lot of retailers who had to leave the private label business behind in 2005 when it shifted into silicone hydrogel lenses. Brian – Jefferies & Company: Did you give a non-GAAP tax rate for the fourth quarter?

We gave a GAAP and non-GAAP because there is no call outs.

Your next question comes from Song Shen of Goldman Sachs. Song Shen - Goldman Sachs: With respect to CapEx, we saw a nice sequential decline going into the third quarter here at $25 million level, but despite the lowered expectation of Cap Ex for the full year, the guidance implies a pick up back up to roughly $38 to $58 million in the fiscal fourth quarter. So you spoke about pushing out the ERP spending into next year, what is driving that ramp in planned CapEx spending here?

Right now we have a lot of Gen II equipment on order that each Gen II line is about $12 million and that’s for the single use product portfolio. We are a little ahead of ourselves, so if we can just turn that off it wouldn’t show up, but the fact of the matter is you have vendors that are making that equipment and we have agreements with those vendors, so they’re clearly the bubble between the fourth quarter and the first quarter will be two high CapEx quarters resulting from a lot of Gen II equipment.

That’s what an 18-month lead-time on that stuff?

Gen II is 12 the Avaira lines are 18 and quite frankly some of the pieces of Gen II go beyond the 12 months. Song Shen - Goldman Sachs: So if the CapEx were to come in towards the upper end of that $48 to $58 million range for the fourth quarter, is there any risk to free cash flow possibly not being positive in the fourth quarter?

I would say there is some. If you assume the worse-to-worse yes I think that’s a valid question. Song Shen - Goldman Sachs: I was a little intrigued by the Avaira revenue number for the quarter, especially when you have been on record for Avaira sales being $2.6 million in the month of May alone, this would imply that the monthly sales in June and July were actually lower than what we saw in May. Can you tell me what was going on there and maybe give us a little bit more granularity as to how the progression of Avaira sales proceeded through the quarter?

Yes the May event was nothing more than we launched with a large retailer in the United States that has 3,000 stores and that large retailer not only got fitting sets in the month of May, they also bought inventory to be distributed through out their family of stores. You may recall we said we were paranoid about going on backlog and therefore wouldn’t accelerate a launch of fitting sets unless we really were comfortable we could deliver to that large retailer. A typical launch is where you have a big push and then it falls off the next two or three months as the lenses find their way onto the shelf and then get on eyeballs and then you have a replenishment order. So, all that means is we didn’t have one big launch followed by another big launch, followed by another big launch of three different large retailers. We stuck with one and that was it. Song Shen - Goldman Sachs: Then could you frame for us how we should think about Avaira revenues in the fourth quarter? Should we use the implied runway we saw in June and July as the monthly revenue run rates for Avaira through out August, September and October?

No we’re still, we haven’t backed off on, we were estimating officially 8 to 10, and I think more 10 to 12. We’re not backing off on let’s say a ballpark of $10 million number; because part of what happens is number one, we are expanding now that we have the supply. We are expanding and accelerating the launch and number two is that a large retailer, among others, will be re-ordering some of which is not on eyeball. You had a big push in May and them they basically bought nothing in June and July, but they’ll be back later because they had a big promotion on back to school and things of that nature. Song Shen - Goldman Sachs: So in the fourth quarter we could see revenues somewhere in the anywhere between $6 to $8 million range, does that sound fair to you based on your guidance?

Yes, that’s right in the $6 to $8 million range. Song Shen - Goldman Sachs: The last question is just was there any contribution from the US government rebate checks that trickled through the market this quarter that you can speak of?

Not that I noticed, that would be a pure guess. Contact lenses are recession resistant and people are buying their lenses whether or not there is a recession, whether or not they get the check, I would say none.

Your next question comes from Amit Bhalla of Citigroup. Andy Kiel – Citigroup: This is Andy Kiel for Amit. We know you said you expect to get to the high sixties to low seventies with margins in silicone hydrogel, so we were wondering if you could give any insight as to where Avaira and Biofinity are now?

Other than to say Biofinity when it doubled its yields in March, which will be coming into the P&L in the fourth quarter is hopefully in the sixties. Avaira, which doubled its yield in the third quarter, is still in a ramp-up mode. In other words if we’re 2/3 of where we need to be, we’re more in the fifties than we are in the sixties and our expectation is to get into the upper sixties, low seventies all up. Andy Kiel – Citigroup: Maybe, could you just give us an overall outlook then for the silicone hydrogel market?

The overall outlook for the silicone hydrogel market, of course it grew 21%, you’re talking about the market itself, not us? Andy Kiel – Citigroup: Yes.

It grew 21% last quarter and I would expect it to continue to grow certainly upper teens going forward as it goes more global as opposed to how much further it can go in the United States. There are some rumblings out there that single-use is starting to catch hold in the United States. I don’t know how much that will drastically influence it, so there is some deceleration of silicone hydrogel in the US, but I do think there will be a little bit in pockets like Japan, which has a pretty good size non-single use market meaning 57% of Japan is single use, but that means 43% is primarily a two-week modality, so I think there will be some sustained growth in silicone hydrogels coming from the international effort. As far as the trading up, you now have Cooper moving up into that modality quite aggressively. No doubt there is a trade up possibly going to, if we went from biomedics to Avaira and or we took someone else’s lens and traded up, that phenomena of trade up is still going on to some degree. I think when you put silicone hydrogel into the package of single use and the fact that some silicone hydrogel lenses are now going to move into the single use arena, I would continue to expect it to be a driver of the overall industry growth.

Your next question comes from Steven Willoughby of Cleveland Research. Steven Willoughby – Cleveland Research: I have one question regarding Avaira. I know you said you are at two million lenses a month now and I’m just wondering how much longer you expect it to take to get to three million lenses. Then once you get the second Gen II line for Avaira, how long do you expect that ramp up to be for that second line? Is it going to take you as long as the first line or somewhere in between?

First of all the two million lenses was just Puerto Rico, so it may not take even a day to get to three million. The second Avaira line in Puerto Rico, which will arrive some time in the second quarter next year, should ramp up pretty quickly. In other words we always knew that we knew how to use 90% of that line and we weren’t sure about 10%. We now know we can do a half decent job with that other 10%; so being able to mimic that I don’t see as a major challenge. How quickly we move from being 2/3 there to 100% there, I’m not even going to attempt to make a prediction on that, because I’ve learned from Biofinity it’s sometimes one-step forward and one step back and it occasionally takes awhile to get two steps forward and one step back. So, I will hedge on when we move to the full three million on that production line in Puerto Rico. My answer on how long to get to three million just reflects the fact that we have other equipment fast track that’s used in the UK also to make Avaira product line.

Your final question comes from Jared Holt of Thomas Weisel. Jared Holt – Thomas Weisel Partners: On the gross margin line, if you just go through the products, you have these dailie disposables, then you have Avaira, Biofinity and you are starting the production for the Avaira Toric and the Biofinity Toric. If you compound all those products it seems like they are all going to be a drag on gross margins over the next year. Is there any reason to believe that between that and not that much leverage out of your operating margins that earnings for ’09 are not going to be flat to just slightly up?

First of all products like Biofinity which is now approaching a run rate of $60 million annualized, is not going to be a drag on gross margin. It’s already in the mid to upper sixties, so that one, no. Proclear 1-day there is a lot of progress we expect to make in terms of cost of goods in that area. So there is cost of goods improvements going on, but having said that we are acknowledging that the 1-day mix is a drag on gross profit movement, but if it continues at the same rate it did this year, as far as growth in 1-day, there would be some benefit on the operating cost as a percent. It is true that we’re investing to the extent that we get way ahead of ourselves on 1-day compared to other product lines, then you’ll see less of a gross margin and less of operating costs definitional wise. As far as the Avaira line being 2/3 to where we need to get it, yes there is a drag if we don’t make further improvements, but I wouldn’t call that a substantial drag. We are reasonably confident that we are in around 60 and to answer your question about improvement in ’09 versus ’08, we’re basically expecting to move our margin from 57 to 60, which would add basically 3% to your OI going into next year. We in the past have indicated our long-term objective is to grow 15% to 20% earnings per share and we really haven’t come off that objective. Jared Holt – Thomas Weisel Partners: Okay so I guess implied in that means that there is substantial leverage in other areas of the model in SG&A, R&D, and interest expense. Is that the right way to look at it?

Yes, interest expense, if we generate $50 to $100 million next year, we’re assuming that it’s quite back ended; so that’s about a neutral. As far as G&A that is correct, but next year to get to 15% growth that could be mainly gross margin driven next year. We just did not have 60% gross margins this year, with or without comps. Jared Holt – Thomas Weisel Partners: Right, I’m just thinking that if you don’t call anything out and there are substantial products that are going to be a drag on gross margins, even though you can get let’s say 59, 60, 61%, I’m just not sure where the other areas of earnings growth are coming from to get you to 15, but I guess we can talk about that another time. Then are you satisfied with the product portfolio you have now? You look at J&J and see that they have maybe six, seven core lenses and they seem to be running pretty efficiently at this point. Are there any plans to deemphasize or not focus on some of your core products in order to get the mix more towards Proclear and silicone?

The answer is we are putting our attention on the new products and a lot of the rest of it is clipping coupons. The way you manage depth of a product line is, for the most part, you increase prices on the product line until the fitter basically says, “you know these things are getting a little rich, I think I’ll switch to something else”. That happens gradually, it’s not going to be anything that we force rapidly. If you think of our portfolio from the point of view of what drives high margins and what drives low margins, think of the 1-day modality which has ARPs basically double the two-week, yet it doesn’t have costs double. Two-week is a high- margin piece of the business and that’s 27% of the global market and J&J doesn’t play in that, but that is a high margin because it’s a one-month modality price point. Think of basically specialty lenses as having high margins, torics, and we still have 34% of our business in specialty lenses; yes the cost of goods are higher, but so aren’t the ARPs are much higher. Think of multi-focal as a high gross margin business. We happen to be a star there, albeit in a small niche, but there are some indicators that J&J is intent on trying to turn that space, Dave said, publicly into a billion dollar market category. I sure hope they are right, because if anyone can move the needle and create a market in that area and do it part with a push and a pull it would be J&J. We would love for them to put their muscle behind that space and that clearly would be another opportunity for high gross margin business. The only thing that’s non-high gross margin, really when you cut through it, is single-use is a challenge and the two-week space is kind of middle of the road, it’s neither high nor low it’s more at that 60% point.

I think we’re all set. Thank you very much to everyone for calling in and I’m sure we’ll talk to a lot of you soon.