Good morning. My name is Shawn and I will be your conference operator today. At this time, I would like to welcome everyone to the EDAP third quarter 2008 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) I would now like to introduce Mr. R.J. Pellegrino of The Ruth Group. You may now begin your conference.

Thank you operator. With us today from management are Philippe Chauveau, Chairman of the Board, Marc Oczachowski, Chief Executive Officer and Eric Soyer, Chief Financial Officer. By now you should have received the copy of the earnings press release. If you have not received a copy, please call Stephanie Carrington at 646-536-7017 and she will fax or email you a copy. Before we begin, I would like to remind everyone that management's remarks today may contain certain forward-looking statements. Complete details of factors affecting forward-looking statements can be found in the company's SEC filings available on the company's website at www.edap-tms.com and are incorporated by reference for all remarks made during the course of this call. With that, I will now turn the call over to Philippe Chauveau, EDAP's Chairman of the Board.

I would like to share some opening remarks. First EDAP is well funded to execute and deliver our strategy. Second, EDAP has the momentum of machine and treatment revenue for growth in 2009. Thirdly, EDAP is progressing well with its HIFU FDA trials. Because of its strong cash position and solid order flow and backlog. EDAP is in good position to weather the current global economic storm. I will now hand over to Marc.

Thank you everyone for joining us on our third quarter 2008 earnings call. During today's call, I will review our fourth quarter 2008 outlook, provide additional comments on our strong cash position, discuss operations outside the US and explain our plans for expanding HIFU in Europe. Finally, I will provide a brief update on our US clinical trial. Before I turn to our third quarter 2008 performance, I would like to comment on the significant increase in order flow, we have experienced thus far in the fourth quarter. We are extremely encouraged with both our HIFU and lithotripsy backlog, which we believe will drive substantial revenue momentum in the fourth quarter. Midway through the fourth quarter, we already have a backlog of three of the Ablatherm machines equivalent to the number of machines, we sold during the entire nine months prior 2008. In addition to our current backlog, we continue to actively develop a robust pipeline of projects. Sales growth in our lithotripsy division looks just as promising with our two lithotripsy machines delivered in September, which will be recognized in our October 2008 sales period in compliance with accounting rules. At the beginning of the fourth quarter 2008, the company had a record backlog of 12 lithotripsy machines including six Sonolith I-Sys devices. Our strong backlog of machines across our entire product mix leads us firmly position for a solid growth in 2008. Our backlog of machines is complimented by our ample cash position, which was EUR14.1 million or US$91.8 million at September 30, 2008. Given today’s challenging economic climate and broader trends impacting equities across the board, we are confident that our robust cash position and innovative technology position has positioned us well in an uncertain macro environment. Most important, we are well funded to execute our growth…

Thank you, Marc. I will now discuss our third quarter 2008 financial results. Total revenue in the third quarter of 2008 was EUR4.6 million or $6.8 million compared to EUR4.7 million or $6.5 million for the same period in 2007. Our third quarter financial results reflected the anticipated seasonality for HIFU RPP sales and the return of lithotripsy sales to expected normalized levels over the period. In the third quarter of 2008, total revenue for our HIFU division was EUR1.9 million or $2.8 million flat from the same period in 2007 and reflected the sale of Ablatherm HIFU machines in the third quarter 2008. Revenues in our HIFU division were up 16.7% sequentially. For the nine months ended September 30, 2008, we sold three Ablatherm-HIFU machines equivalent to the three HIFU devices sold during the first nine months of 2007. Currently we have a strong backlog of three HIFU machines that we anticipate synchronizing by year end 2008 coupled with a strong pipeline of projects. Total revenue for EDAP’s lithotripsy division in the third quarter 2008 was EUR2.7 million or US$3.9 million compared to EUR2.8 million or US$3.9 million for the same period last year. In the third quarter of 2008, we sold seven machines, including one Sonolith I-Sys device. We also converted the portion of the second quarter 2008 backlog into revenue during the third quarter of 2008 and return to normalized machine sales as anticipated following a strong second quarter. Our current backlog in the fourth quarter consists of 12 lithotripsy machines, including six Sonolith I-Sys devices. During the third quarter 2008, our gross profit was EUR2 million or US$2.9 million compared to EUR1.8 million or $2.5 million for the third quarter 2007. Our gross profit margin increased to 43.8% up from 39.5% in the year ago period.…

(Operator Instructions) Your first question comes from the line of Matt Dolan from Roth Capital Partner. Your line is open.

Good morning, guys. This is Matt Pommer in for Matt Dolan. He sends his apology; he's unable to make the call today.

Hi, Matt.

Hi. Firstly, I was just wanting to first touch on your commentary about the order backlog and outlook for the fourth quarter, they are very positive. I was just wondering if you can comment on any color on the impact you may have seen from the macroeconomic weakness putting pressure on capital equipment sales procedure volumes and distributor performance both in the quarter and since the quarters ended?

Okay, Matt, that's a good question. Actually as you've noticed, we have a very strong backlog of machines what we call backlog just to clarify that is confirmed orders we have on hand and most of those orders will be delivered in Q4 indeed. And to answer your comment on the environment crisis, I have to say as we don't feel it yet, probably because budgets for hospitals are benefiting from a kind of momentum in the year of 2008. So I don't think we'll feel it until the end of the year.

Okay, great. That's very helpful. I was wondering secondly with respect to the ENLIGHT clinical trial, if you could help us understand how patient enrollment will ramp in 2009 and your expectations for the distribution and level of spend in 2009 for the trial?

We have good expectation because as we explained and we started in February, March 2008 to implement and execute our marketing program to promote the trial and create awareness among American patients about the trial and we are getting the fruits of these efforts and we are seeing more and more patients we served from those marketing initiatives. So we believe and we are working now on a getting all the action, so that we can convert as much as those patients from referral to treated patients.

Okay, great. And lastly is there any color you're willing to provide in terms of new product initiatives?

In term of new, I don't get your point.

You mentioned a product pipeline.

Project pipeline.

Project pipeline?

That means we have not only a strong and robust backlog, but we have also a lot of project in to the pipeline, but we are working on many projects for closing sales.

Right. Okay. Great. Thank you very much guys.

You're welcome.

Thank you.

(Operator Instructions).Your next question comes from [Greg Ralph] from [Liberty Harbor]. Your line is open.

Yes. Thanks. Just curious. It seems like you're selling more HIFU machines in the current environment and RPP staying relatively stable. Just curious why we're not seeing a shift more toward RPP and how your customers are financing the purchase of these HIFU machines?

Thank you for the question. It's a great question and as we usually experience at the end of the year, there are a lot of capital investment done because of the hospital utilizing the rest of their budgets. So Q4, for the company at least is always a good quarter in term of capital equipment sales. Mainly we have good quarters in capital equipments sales in Q4 because of hospital trying to use the entire budget they have left.

Okay.

Before starting a new year.

And then in terms of the favorable backlog for Q4, as you said those are confirmed orders, does company received deposits from the customers on those orders in advance?

(inaudible)

It depends, but most of times, those capital equipments sales are having secured payment. So it’s whether letter of credit or down payments or things like that and we usually deliver upon complete payment or complete secured payment.

And so do you have secured payment for the three to be delivered in Q4?

Absolutely.

Okay. And then the FDA process, is the timing still the same in terms of when you're hoping to get FDA approval?

Yes, absolutely. We are continuing to expect the same timing as we described and again we are working actively in converting all the referrals and increase the peripherals we are getting from the ENLIGHT marketing initiatives.

And so timing's on track, in terms of budget for the project, is that on track as well?

Yes, absolutely.

Okay. And then the positive working capital for Q3, can you sort of break that down? There was no cash flow statement provided. So what was the positive working capital primarily from?

That was primarily from collection of cash receivables and the management of our inventory.

Okay. And then, last question, any developments on insurance reimbursement in France or other countries around the world?

In France, we are continuing our efforts towards this objective which is to get the technology reimbursed. We are these days participating to the French Urology Association annual meeting which is held nowadays in Paris and we are again working with the support of the French Urology Association in getting that reimbursed. But as usual, this is something which is depending on the government and public authorities and we have no control on dates and amounts. So, we are continuing our efforts and we are continuing to push the project to get it achieved but we've not visibility as usual.

And how about any other positive developments on that in any other countries?

We are working. But other countries are a little bit different in terms for reimbursement. As you know, we already reimbursed in Germany and Italy privately in the UK. We are and other markets also sometime organized that you have double-digit utilization like in Spain for example our [pure] private patient. So it's really different from one country to the other and we try of course to adapt ourselves and to adapt our offering to all those specificities.

Okay, great. And congrats on the positive guidance for Q4.

Thank you very much.

Thank you.

Next question comes from the line of [Mark Wayneling] from Paulson Investment Company. Your line is open.

Yes. I would like to ask a few questions. Can you tell me the number of centers that are presently offering Ablatherm in Europe?

As I mentioned in our conference call, we have today a total of 210 centers thoughtfully trained on Ablatherm HIFU.

And as far as the number of procedures, can you share the actual number of procedures of last years compared to this year?

Again that's our estimation and it's not completely accurate due to the difficulty of getting all the data. But we are today approximately to about 17,700 treatments performed so far.

That's in total, is it not?

That's in total absolutely.

Do you have a breakdown and so far as the quantity of treatments that were performed for 2007 as opposed to the number of treatments performed for 2008 to date?

We could have an estimate of that, but we don't have it precisely. As again, it is quite difficult to get all the data and numbers from 210 centers. So, that's again an estimation. And we need to further work on the figures to make exact comparison. But basically today, we have an approximate number of 17,700 treatments performed.

Right. Thank you.

(Operator Instructions) Sir, there are no further questions at this time. Mr. Chauveau, do you have any closing remarks.

As I close this conference call, let me repeat what I said at the opening, because of its strong cash position and solid order flow and backlog EDAP is in good position to weather the current global economic storm. On that, thank you for joining us and talk to you either sooner or at the next conference call.

[That does conclude] today's conference call.