Good day, ladies and gentlemen, and welcome to the second 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 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.

Good afternoon, and welcome to The Cooper Companies' second 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 the forward-looking statements are set forth under the caption 'Forward-Looking Statements' in today's earnings release, and are described in our SEC filings, including the business section of Cooper's Annual Report on Form 10-K. These are publicly available and on request from the company's Investor Relations department. Now, before I turn the call over to Bob, let me comment on the agenda. Bob will begin by providing highlights on the quarter, followed by Greg who will then discuss the second quarter financial 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. With that, I'll turn the call over to Bob for his opening remarks.

Thank you, Kim, and good afternoon and evening, everyone. We continue to maintain the same strategy and we continue to execute on it. This quarter was another successful step within our long-range objectives of taking market share, posting gross margin expansion, investing in infrastructure, delivering double digit earnings per share growth and delivering significant free cash flow. Let me address the elephant in the room, however, and that's our results versus analyst expectations. First off, as we discussed last quarter, we did have costs tied to the Avaira recall, the start-up costs on the single-use silicone hydrogel lens, Biofinity start-up costs in Puerto Rico, and higher manufacturing costs for Avaira, so nothing new on that side. More importantly, for new items, if you will, year-over-year currency reduced revenues $4.8 million or $0.07 in earnings per share. Outside of that was another $0.02 for shutdown expenses associated with our Australian manufacturing plant and a smaller amount of start-up -- or shutdown costs tied in with our CooperSurgical acquisition of Summit Doppler which was acquired in 2011. Most of these were built into our previous annual guidance we provided in the first quarter of 2012 or our call in March. In fact, overall, we were quite pleased with much of our progress and particularly our gross margins. Even given the current foreign exchange impact and the overall economy, we have left intact of our guidance range for the year excluding the charges associated with the recent credit refinancing or the non-GAAP, if you will. Some other key events or takeaways today to consider, our strong cash flow led us in the quarter to get upgraded by S&P to a triple-B-minus in investment grade. This update in our financial strength also led to a recent amend and extend of our credit agreement, increasing…

Thanks, Bob, and good afternoon, everyone. Let me just quickly highlight that our Q2 GAAP and non-GAAP numbers are the same. Bob has given you a pretty thorough view of our revenue picture, so let me start with gross margins. In Q2, the consolidated gross margins were 64% compared with 62% for GAAP and non-GAAP in Q2 last year. CooperSurgical had a gross margin of 68%, which compares to Q2 '11 of 65%. This improvement was mainly due to manufacturing efficiencies and favorable product mix, especially in the surgical space. As Bob mentioned, products like closure systems and uterine manipulators, to name a couple, continue to do well as they also have better than average gross margins. Looking at CooperVision, CooperVision reported gross margin just over 63% versus 61.5% in Q2 last year. As you can see, we had a strong gross margin quarter for this business. The increase was attributable to many different components like the completion of our Norfolk closure effective last year, which contributed about 130 basis points to CooperVision's gross margin. In addition, we had favorable product mix with silicone hydrogel sales now representing 36% of revenue, up 29% from last year and 32% on a constant currency basis. Excuse me. During the last call, we had a cautious outlook on CooperVision's gross margin due to numerous items which the team was in the early stages of working through. Our gross margin came in better than planned due to a couple of key items, a host of smaller items which I won't go into, but which seem to all go in the right direction. We had mentioned the startup of our first Biofinity line in Puerto Rico and the startup costs came in less than expected. We also had a strong product mix, including continued growth…

Operator, we are ready to take some calls -- questions, sorry.

(Operator Instructions). And your first question today comes from the line of Jeff Johnson with Robert W. Baird. Jeff Johnson – Robert W. Baird: Thank you. Good afternoon. Can you hear me guys?

We can hear you good. Jeff Johnson – Robert W. Baird: Okay, good. Hey, Bob, just one question I guess in multi parts, what qualifies as one question, but on the revenue side we've been hearing from a lot of our consumer companies whether that’s contact lenses or dental or what have you, that April looked somewhat slow, you're talking about the same thing. Is that all that's in the comments you made about April being slow and May picking back up? Was there anything specific to your business or the way your products are bought? And how sustainable then do you think the May pick up is? That's the first part. And then Avaira, I think, you had a very tough comp this quarter. If I remember, last year Avaira did extremely well in the fiscal Q1. Last quarter it sounds like Avaira was up year-over-year even after the recall. This quarter my guess is, it's down year-over-year, but could you give us any color there? And then why was Proclear down on a constant currency basis in the quarter? Just trying to understand that a little bit better. Thanks.

All right. You got your money’s worth there, Jeff. The softness on the market in April, you’re right, we went through February and March feeling pretty good about things, actually started off pretty good in April, and then it just slowed. Typically you would expect strong finish towards the end of a quarter, but it just didn't happen, it flat-lined. The good news is when we did get into May, it normalized. We had a very respectable May and kind of felt good on a year-to-date basis. And I might point out, when you look at the fourth quarter -- first quarter numbers in CLI data, our last page of the release, it was a very robust quarter for both the industry and for Cooper, 6% and 12%. So we’ve had a sustained market growth, probably not, was -- so was April, a little bit of a correction, maybe. But no hard -- nothing hard on that. But the feedback you’ve got seemed to be universal. There was a lot of softness for whatever reason towards -- throughout the April month, if you will. As far as Avaira year-over-year, your memory is excellent. A year ago, we were of course launching Avaira Toric, and so the Avaira product family was doing fine. This year, it doesn’t really have any of the benefits of a launch. Getting Avaira Toric back on the market did not influence our top line, it in fact took a lot of energy. Once we got the approval to relaunch Avaira Toric, that meant a lot of time and energy went into putting together fitting sets, which we have to do with a toric lens, entails a lot of energy upfront because it's an RX product and thousands and thousands of fitting sets have to be eventually put together refreshed and put back out into the marketplace over time. So the comp is that Avaira year over year did not grow, unlike the first quarter, it declined. Proclear family was down. It was down as much as anything because we're pretty aggressively doing the trading up of silicone hydrogel. Of course, a lot of Proclear is in the monthly category and Biofinity continues to rule. So, that's a factor. I would say that the Proclear 1 Day, which is really the catalyst of our growth within Proclear right now, is -- continues to do very well, it was up 13% worldwide. And let me just check, on a constant currency, I think it was up 15% in constant currency. So we're happy with that. When we look at our portfolio, you have the one day and that's going to be Proclear 1 Day, you have the two-week, and that's now going to be the Avaira family and you have Biofinity in the monthly. So it would not be unusual for, even the Proclear family, they get caught up in a market that is shifting out of hydrogels and in aggregate into silicone hydrogels. Next question?

Your next question comes from the line of Kim Gailun with JPMorgan. Kim Gailun – JPMorgan: Hi there. Thanks for taking the question. Can you hear me okay?

I can hear you fine. Kim Gailun – JPMorgan: Great. So, first question is on currency. You talked through the impact in the quarter and then what your expectations are for the back half of the year, but hoping you could just talk a little bit more on that piece. By my math it looks like you guys are implying about a 70% drop-through from that revenue line down to EPS line from currency. So, hoping you could talk through that, why that's so high and maybe bring the yen in there too. And then, why at this point in the year didn't you look to kind of know that EPS guidance range?

Good questions. Let me first try and then I'll ask, Greg, if you want to add anything to it. On currency, that model in the past we've always kind of said, look, if currency drops or increases 1% worldwide against the dollar, that means basically around $0.04 a year on a worldwide basis, assuming everything moves in parity. What didn't happen at all by far is parity. And the euro, if you think of our model, if you want to build a better model, you would think of about almost 30% of our revenue comes through in European currencies x the pound. And so when that moves against us as much as it now is, 13% year over year, then there's a huge hit there, unless it's offset by the pound going the same way. In this case the pound didn't go the same way, and also keep in mind that what goes on with the pound happens on a six-month lag basis. So, quite frankly, the pound was very strong in the third quarter a year ago, that came in and it hit the first quarter. So when I talked about a $0.04 foreign exchange hit in the first quarter, it didn't show up on the revenue line; that entire $0.04 showed up in cost of goods. Then you moved to the second quarter and now we have the impact really of no meaningful benefit of the pound, but a meaningful hit of the euro, and since we're so weighted there, you'll end up with a funky, if you will, ratio of bottom line to top line. But if we did that calculation in the first quarter, it would be even more quirky, because there would've been no foreign exchange on the revenue line, it would have all showed up on cost of goods. When you think of the model, if you try to develop a global model, the key things you really have to remember is we have about 30% of our revenue generated in euros. We have about 20% of it generated in yen, which is kind of a [yarn], but it's going to be slight negative in the back half of this year and that actually was a minimizer, it went the other way for us, minimizing the euro in the first quarter. And then think about half of our costs is pound related, our cost of goods, and you know our gross margins are basically -- you could pretty much model how the world is moving if you think of pounds, euros and yen against the dollar, and you can get pretty close to the bottom line by doing that. Greg, I don't know if you want to add anything to that.

Nothing, Bob. I think you nailed it. Basically with the way our structure is, and Kim, you picked up on it too, that about 30% or so is in the OpEx side and the rest of it did flow down to the bottom in our current calculations. And the fact that with the way how stable the pound has been has basically left us very little impact in the first three quarters really our expectation of on the production side.

Next -- Kim Gailun – JPMorgan: My follow-up was just on the guidance range and kind of the temptation to hold the width of the guidance range.

Yeah, the guidance range, and that's a good question, we actually debated, do you narrow it or don't you narrow it. And I think given where things are in the marketplace given the uncertainty of currencies, granted our guidance is basically assuming constant currency where we are today. So, we don't attempt to say it's going to go up or down from this point, it is where it is today. But there’s a lot of volatility associated with what's going on in the market right now, and that's why we left it broad. Next question?

Matthew O’Brien – William Blair: Good evening. Thanks for taking the question. And I apologize for the background noise. Just wanted to follow up a little bit on Kim's question in terms of the currency impact on guidance. I think you said that it should be another $0.30 of impact in -- for the second half of the year that was not contemplated in guidance following Q1. So, put another way, would your guidance have increased by $0.30 excluding the impact of currency or would the bottom end of the range likely have increased excluding the impact of currency?

Directionally, you're right that we're hurdling $0.33 in the back six months, and already have hurdled $0.11. So we would have been upping guidance were it not for foreign exchange considerably, and we would have narrowed the range were it not for currency also. Matthew O’Brien – William Blair: Okay, great. Thank you.

Next question?

Your next question comes from the Joanne Wuensch with BMO Capital Markets. Joanne Wuensch – BMO Capital Markets: Thank you for taking my question. Two things. One can you comment on the WellPoint acquisitions of 1-800 Contacts? And two, how much have you incorporated in your revenue guidance from your recent acquisition? And I’m going to add a third one in there, what is the restructuring of your credit facility do to this EPS calculation? Thank you.

Okay. On the second one, let me do that one first, there is nothing in our guidance for the acquisition. In other words, we don't anticipate that acquisition, it’s not a deal until the tender is effective and that we know we got to 90% of the shares tendered, that we will know a lot more by the 22nd June is the current initial date anyway. On WellPoint, the best answer I can give you is we’re scratching our head a little on the process. I think we’re trying to better understand their entire motivation and plan going forward. But it came out -- came from left field relative to most of the people in the industry. I think I'm starting to understand it a little, but not enough to want to comment very much on it. As far as I'm concerned, from our perspective, we’re not going to react one way or the other. It’s just a shift of who owns and ties in with 1-800. The third one, on the impact of the refinancing, of course I think Greg mentioned the $1.4 million write-off that we will take, which is $0.02 compared to our non-GAAP guidance. We’ve now given you guidance for GAAP and non-GAAP, the difference is $0.02, which is what we are writing-off. The benefits of that basically are -- and I'm defer to you maybe Greg on what, about 700,000 or 800,000, maybe pick-up on interest?

Yeah, we look at maybe it's roughly a penny over a 12 month period net in the first 12 months and -- or in the first six month to the year, roughly a penny. And other than that, it's really minimal -- it's kind of a minimal impact to the bottom line. It was really down for other reasons, again, increasing the limit, having a better pricing grid, and the opportunity to use that in the future, and it extends the range out for another, what, 18 months.

Sixteen months. And by the way, so what you have is, a penny going one way in the $0.02 going the other, so net of $0.01 GAAP hit. Next question?

Your next question is from the line of Larry Keusch with Raymond James. Larry Keusch – Raymond James: Hi, good afternoon. Just want to touch on expenses if I could. Obviously, the operating expenses, as Bob you pointed out, and the investments, have been elevated over the last several quarters, and just wanted to explore two things as we think about it in the second of the year. First, I want to make sure that I understand when you're talking about the expenses in SG&A flattening out, are you talking about absolute dollars or are we talking about as a percent of sales? And as part of that, are you really just coming to the end of the planned spending period or is there some element in there just given the uncertainty in the global markets that you're going to hold back on perhaps some discretionary items that you had in front of you such as China? And the other part of the expense question is just how should we think about expenses now associated with Avaira Toric as we move forward to the second half of the year?

Yeah, it's more that we will leverage, meaning our operating ratios will improve, as opposed to [flat] dollars, because our revenue does typically pick up the last six months of the year by definition. Did we slow up operating costs going forward or were we done spending? We've invested heavily over the last two years in expansion of feet on the street, in expansion of what we're doing in R&D. So I would say most of the reaction going forward is we arrived operationally, we’ve put the investment in. There is a little bit that is a reaction to uncertainty in the economy. So, I don't want to say none of it has to do with that. Some of it does. So we are tightening our belt somewhat. China, on that, we are, I would say, spending this year less than we had hoped to, and that's a function of just prudent timing, that we wanted to make sure we had the right people onboard. And I believe we had an announcement yesterday in the press or the trade press on the fact that we've now filled the key positions in Asia-Pac and in China, which certainly will facilitate our way forward, meaning the country manager of China just recently came aboard in May and we made that announcement to the trade press. As far as the impact of Avaira going forward, yes, we will be investing behind the Avaira relaunch, the Avaira Toric relaunch, certainly with fitting sets, which are put out there, and then they are amortized over a three-year period going forward. But that is a herculean effort when it comes to a toric rolled out on a global basis. So there's a lot of work and it will take a long time to get to the endpoint. We will be doing an Avaira Toric rollout not for weeks, not for months, but literally around the world beyond, well beyond one or two years. It's a big investment with a lot of energy. Larry Keusch – Raymond James: Okay. Thank you.

Okay. Next question?

Your next question is from the line of Steve Willoughby with Cleveland Research. Steve Willoughby – Cleveland Research Company: Hi. Thanks for taking my call. My one question was really just on products. I was wondering if you could give an update on the one-day silicone hydrogel you're working on, kind of where that stands and the progress you're making? And then, Bob, your comments just now on the Avaira Toric rollout, given that it will take a while, does that mean we're not going to see probably a meaningful impact to revenue from the Avaira Toric? I'm just kind of wondering on how you expect the Avaira Toric revenue to kind of come into the company.

No, I think I'm just putting it into context, a lot of rollouts. Very few rollouts go global all at once. As a matter of fact, I am not aware of any really in the contact lens space, particularly on the toric where you have a complex number of SKUs. So, nothing unusual about that; it takes just high energy effort. We're still a long way from rolling out Biofinity Toric and we started last June, but I would say nowhere close. We haven’t even gotten to China -- Japan rather with the product yet. As far as the single use silicone, it's -- of course, we’re still of the mindset, and the more that happens in the marketplace, the more compelling is the case. Single-use silicone right now is a niche product and will stay a niche product as long as everyone has a cost structure that precludes it from being a mainstream product. It’s priced out of most peoples' capability of buying it whether it’s the two other ones that are in the market in Europe, now that CIBA's launching it in some target markets in Europe. But we are, as much as anything, rolling this product out as a learning curve in getting it right and to make sure we are in with the evolution of this. How far and how long it will take? I think we are talking many mega years -- mega is a poor term -- three, four, five years before single-use silicone hydrogel lenses have a chance of becoming a mainstream. And now, yes, people like B&L actually taking things in a different direction, which is to say challenging the model of why do you need a silicone hydrogel at all. And we don't care who wins that argument, silicone hydrogel or hydrogels. We still like the Proclear material and we’re pretty versatile in terms of the way we respond to the market. Next question?

Your next question comes from the line of Larry Biegelsen with Wells Fargo. Larry Biegelsen – Wells Fargo: Hey, guys. Thanks for taking the question. On FX, I’m trying to understand the top line FX hit to each quarter in Q3 and Q4, because by my math, the second half guidance reported is about 2% to 8% and by my math, FX is about a 4% hit each quarter, which has implied constant currency guidance of 6% to 12% for the second half. So, can you give us the FX top line hit to the third quarter and fourth quarter? And secondly, the $0.19 to $0.14 you talked about hit from FX, that's not since the Q1 call. I think that’s for full-year '12. Can you just confirm that? I was just a little bit confused on that. And then just lastly, I guess another hot topic, is the CIBA royalty. And can you disclose if you've had any conversations with CIBA about buying out the royalty and maybe from your perspective the pros and cons of buying it out? Thanks.

I'll deal with the latter two of those first. The $0.19 and the $0.14 is basically a comparison this year to last year, so exchange rates where they are today against last -- assuming exchange rates stay the same. And the -- so, yes, it's not relative to anything in the first quarter, it's relative to year-over-year comps. The CIBA royalty, are we in discussions, we certainly wouldn't go down that path in terms of any discussions, if there were any, would be on a confidential basis and we wouldn't really discuss a month publicly. So, the only signal we have given time and time again is, on the royalty, assume we pay it out through the end of the patent period and nothing more, nothing else. If there were discussions to be had on a buyout, it takes a willing buyer and a willing seller and a number that made sense, that would be totally hypothetical, and your what-if is no different than my what if would be on something like that. So I wouldn't encourage a lot of conjecture in that area because it's certainly beyond anyone's control in this area. As far as top line impact of foreign exchange, Greg, do you have those numbers?

Yeah. From a Q3 perspective, we would look to get about $14 million impact, in Q4 about almost $12 million impact. Larry Biegelsen – Wells Fargo: Thanks, guys.

Okay. Next question?

Your next question comes from the line of Amit Bhalla with Citi. Amit Bhalla – Citi: Hi, good afternoon. I just wanted to -- I wanted to clarify one of the earlier questions on the single-use lens and timing. I think that previously you've talked about your new single-use lens being in the market by the end of fiscal '12. It sounds like that's no longer the case. And secondly, can you just give us an update on where you stand with the FDA on your US distribution facility, and whether or not there's any indication of the FDA going to the UK facility? Thanks.

Okay. On the silicone single-use silicone hydrogel, if I somehow implied there is a change in signal, there isn't. We are still intent on launching it out, we haven't identified where, by the end of fiscal year. As far as the FDA and West Henrietta, we are, I would say we're making progress with them and we would expect by the end of this month to still be on target for attempting to move the ball forward of removal of the warning letter. So we made good progress with them. The FDA has not given any indication to us that they're coming into the UK in any planned manner. We still expect it’ll arrive someday, but nothing new to report on FDA activity in the UK. Amit Bhalla – Citi: Okay. Thank you.

I think this concludes our time for questions. I want to thank everyone for joining the call today, and we'll look forward to giving an update on a number of matters in our third quarter release. Thank you. Operator?

Ladies and gentlemen, thank you so much for your participation in today's conference. This does conclude our presentation and you may now disconnect. Have a great day.