Good day, ladies and gentlemen and welcome to Second Quarter 2013 STAAR Surgical Earnings Conference Call. My name is Jason and I will be your operator for today. At this time all participants are in a listen-only mode. Later there will be a question and answer session. (Operator Instructions) This conference is being recorded today. I would like to turn the conference over to your host today, Mr. Doug Sherk. Please proceed sir.

Thank you, Jason, and good afternoon, everyone. Thank you for joining us for the STAAR Surgical conference call and webcast to review the company’s financial results for the second quarter which ended on June 28, 2013. The news release announcing the second quarter results crossed the wire about half an hour ago and is available at STAAR website at www.staar.com. Today’s call is also being broadcast live via webcast. In addition, a slide presentation will accompany remarks by management. To access both the webcast and the presentation slides, go to the Investor Relations section of STAAR’s website at www.staar.com. If you are listening via telephone to today call, and would like to review the slides that accompany management remarks, please navigate to the live webcast as I have just reviewed and choose the no-audio/slides-only option. In addition, an archived replay and slides will be available on the STAAR website. Before we get started, during the course of this conference call, the company will make forward-looking statements. We caution you that any statement that is not a statement of historical fact is a forward-looking statement. This includes remarks about the corporation’s projections, expectations, plans, beliefs and prospects. These statements are based on judgment and analysis as of the date of this conference call and are subject to numerous important risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Those risks and uncertainties associated with the forward-looking statements made in this conference call and webcast are described in the Safe Harbor statement in today's press release as well as STAAR’s public periodic filings with the SEC including a discussion in the Risk Factors section of our 2012 Annual Report on Form 10-K. Investors or potential investors should read these risks. STAAR assumes no obligation to update these forward-looking statements to reflect future events or actual outcomes and does not intend to do so. In addition, to supplement the GAAP numbers, we have provided non-GAAP adjusted net income and diluted net income per share information that excludes manufacturing consolidation expenses, Spain distribution and transition expenses, gains or losses on foreign currency, fair market value adjustments for warrants and stock-based compensation expense. We believe that these non-GAAP numbers provide meaningful supplemental information and are helpful in assessing our historical and future performance. A table reconciling the GAAP information to the non-GAAP information is included in our financial release which is available on our website and in our slide presentation. Now let’s turn the call over to Barry Caldwell, President and Chief Executive Officer of STAAR Surgical.

Thank you Doug and good afternoon everyone. I want to thank you for joining us today for our review of the second quarter 2013 results, as well as an update on our 2013 first half progress and expectations for our second half performance. With me today on the call is Deborah Andrews, our CFO. I’ll start our call this afternoon with an overview of the second quarter results against our key metrics for the year which were established at the beginning of the year. Deborah will then offer a detailed look at key second quarter and first half financial results, as well as a detailed update on our manufacturing consolidation project. In closing, I’ll discuss key regulatory and new product updates. Then we will open the call for your questions. We had a very good overall start to 2013 despite a couple of continued strong headwinds. Our four key 2013 metrics show that we achieved all four during the first quarter and the second quarter was very similar overall in results. As we’ll see, we repeated the first quarter performance and did achieve all four metrics during the second quarter of this year. Let me start by reviewing that performance, one by one against those four key metrics. First the revenue growth, revenues for the second quarter were $18.2 million which exceeded expectations for the quarter. Throughout the quarter, we consistently grew Visian ICL sales in the refractive surgery space in our major markets. Operationally, we saw continued success in the execution of our plans and are encouraged by the momentum that we are achieving globally. Revenues grew faster than our annual metric of 8% to 10% growth during the second quarter, so we can check that one off as accomplished. I will present our thinking about this metric going…

Thanks Barry. Good afternoon everyone. There are five areas on which I will focus my comments; the impact of foreign currency, the impact of manufacturing consolidation, gross margin expansion, GAAP and non-GAAP income result and some key first half results. As we have discussed the continuing decline in the value of the yen resulted in negative impact to our revenue of $1 Million for the quarter. Most of this $827,000 negatively impacted IOL sales and $143,000 was negative to our other product categories. The value of the yen was 80.1 during the second quarter of 2012 and the value during the current quarter was 98.6. The value of the yen has even got worse since the end of the quarter making it difficult to project to where it might go in the second half of the year. The strength of dollar also had a negative impact on gross margin as I will discuss this later. Sales for negatively impacted by exchange expenses favorably impacted by exchange. That positive impact for the quarter was $505,000. Now in terms of our manufacturing consolidation project, our manufacturing consolidation expenses for the quarter were $613,000, a decline of $84,000 from the second quarter of 2012. Expenses for the first half of the year was 1.5 Million as compared to 1.2 Million during the first half of 2012. As Barry mentioned earlier we are extending the completion date for the project to the first half of 2014. In order to build supply over Visian IOL ICL products, so we are prepared to deliver the increased demand for the product. We now expect the expenses for this project to be approximately 750,000 for the second half of the year. About 200,000 will spill into 2014 which would make the total three year cost of this project…

Thank you, Deborah. Good job. And I would like to cover two quick issues before we get to your questions. During the quarter first on the regulatory front, we did receive approval as we previously said of Visian ICL CentraFLOW technology in both Korea and Argentina and we do expect the same approval to follow in India in the next few weeks. We also did received a suggested protocol response from the FDA during the quarter for the CentraFLOW technology in US. Discussion continues on the terms of that protocol and we hope to have finalized shortly so this clinical trial in US can begin. We also expect during the third quarter, late in the quarter to receive CE mark approval for the new Visian ICL version 5. Additionally, during the quarter, we were told by the FBDA of their intent to take the Visian Toric ICL submission to the Ophthalmic Devices Panel. We have been working with the agency to prepare a panel package so that meeting can be scheduled, at this time we do not know when that day will be but the ball is currently in our court to complete the work requested by the agency. Now the new products is in update. During the second half of the year we will have the ability to commercialize current products in some additional markets, as we said the Visian CentraFLOW technology in Korea and Argentina and hopefully in India in the next few weeks. Next, the new generation Visian Version 5 ICL, as I said we expect to get approval late in the third quarter this technology incorporates the very successful CentraFLOW Technology plus it is a preloaded ICL with a larger optic. Our launch is planned for the ESCRS meeting in October so we should have some…

(Operator Instructions) The first question comes from the line of Chris Cooley with Stephens. Please proceed.

Congrats on a great quarter and a really great execution to the first half. Two quick questions and I will hop back in queue. You talked to us about the FDA, right now there is a September 19 and 20 panel, scheduled for the Opthalmic Devices Panel, is that realistic, I guess maybe just pressing here a little bit for maybe if you can give us some color about what you have to do and the review time before you can potentially be slated for a panel meeting and then I have one quick follow up.

I think Chris, thanks for your comments first but I think, given the sensitivities of where we are in the process right now, it’s best that I maintain comments with what I have in the script and that is, we have been told by the agency that we will go to panel, we have been working with them for several weeks on the panel package, it’s not yet complete, good progress has been made but not complete, there is still things that we have to respond to before the agency would be ready to schedule that date and those things have to be completed before that could happen.

Fair, enough. Had to try. If I could switch over then just to domestic market, and the growth that you realize there in the Visian ICL, one of the only public remaining LASIK providers reported results for the quarter, (inaudible) they have shown really continued softness; could you talk to us little bit about the growth you saw in the military as well as in the civilian channel and how those trends are evolving, it just really started to build, looks like at the end of the year, last year, just wanted to get a better understanding of kind of, where we are in the adoption continuum. Thanks.

Yes, okay. Good point and you are right, I think every signals we get from industry and surgeons is, at best the US market is flat but it’s probably not running at best right now. There seem to be a lot of negative headwinds, we have had good success in both military and the civilian sector during the first half, second quarter more growth which skew towards the military side but as you know, last year we were negatively impacted by a couple of surgeons who left the service, one who was off to Afghanistan but he is now back, I think also what we see is, we’ve see increased growing metric from our social media work. We are getting a lot more leads generated and our initial work in this has been driven here in the U.S., we are seeing more leads and we are seeing good response. Right now, 30% of the responders through social media actually have an ICL implant put in. So that’s a pretty good action rate. That’s the good news. The downside is we found 50% of those that respond are not being followed up by the individual surgeons. So there is training factor there involved to make sure that happens. Now in checking back to those 50% that weren’t contacted, 45% still have an interest in learning about the ICL. So, I think as we continue to move forward, we are going to try and experiment more things and we will learn more. But right now I think we are happy with where we are and how we are situated, and also potentially opportunity for more growth in the second half and in the next year.

Can I squeeze one quick follow up along those lines and then I’ll get back in the queue?

Yeah.

Just when you look at the domestic growth in the quarter, can you parse out for us, either incremental volume growth with an existent Visian ICL implanters versus growth with new implanters? Basically trying to get a feel for if you are seeing the physician base how you’re seeing that evolve here in the U.S. in the civilian sector?

Yeah, in the civilian sector, we have been more concentrated on driving share in those that are trained and have been doing procedures, who have bought into it. So I think thus far, that’s where we have been. Now into 2014 depending upon what happens, our tactics may change a little bit. We may look to expanding more surgeons into the Visian ICL line.

And your next question comes from the line of Matt O’Brien with William Blair.

Hey guys, this is Kayla in for Matt. Just a couple of questions for you. So with respect to Korea, you mentioned the two hires and the recent launch of the Visian CentraFLOW technology. When do you think that we really see those two initiatives begin to contribute to the top line? And then can you just touch on the initial feedback that you’ve heard in Korea following the launch?

Yeah, good question, especially since I’m still sitting here jetlagged from being in Korea over the weekend. But I’m really glad I went. I saw firsthand what was going on there. I visited several clinics in Korea. Also went to the movie theaters in Korea to see the ad that is being used in all the key markets in Korea. Our distributor Woo Jeon has 200 screens in Korea for a three month period. As a matter of fact, I was told while I was there that we have even had some patients call in and asked for the ICL with no PIs. It is kind of amazing to me that consumers could understand that concept, but particularly in a market where we have done quite a few ICLs for many years, maybe it’s a little better to understand that patients are aware that PIs are associated with ICLs and now they are not. Another very interesting developing trend I saw in Korea in two different accounts they are starting to promote what is called same day ICL surgery. What that means is patient comes in, and now with CentraFLOW, as long as there is an inventory and Woo Jeon does carry some inventory, and they have made some commitments to certain accounts to have inventory there within two hours, they will do ICL surgery the same day, the very first visit that a patient comes in. We actually had a call from Japan last night to try and develop the same kind of strategy. So it’s not something that we foresaw I would say, as we put this product line together, but it’s very interesting development. I think overall, for the back half of the year, we are expecting another good solid performance third quarter. But fourth quarter is always a stronger quarter for us overall. And part of the reason in our common decision to push back is we are expecting very high demands during the fourth quarter. And we are expecting a lot of that high demand to come from Korea and also from China. So we want to be ready for that. So I expect we are going to see continued good growth in third quarter and stronger growth fourth quarter in Korea.

Okay, thanks. That’s helpful. And then, just on the IOL side, you did mention the supply issues there and I’m curious as to how maybe how long you expect that dynamic to linger?

It’s a really good question. I think we have very good communication with the manufacturers. As a matter of fact, in the two and a half weeks, I’m going to go back and visit with them again. They have given us some higher numbers, some pretty good numbers I would say, for second quarter in terms of what they think they can make. We have not baked that into our equations yet for the second half of the year. But if they are able to produce what right now they are saying they will produce, it will be very good news for us in the second half.

(Operator Instructions) And at this time there are no further questions. I’ll turn the call back to the management for final remarks.

Great, thank you operator. And I would like to thank all of you for your participation on the call today. Oh I’m sorry; I’ve been told there is someone who wants to ask a question. Operator?

We do have a question from the line of Jack Fraser with Seamark Capital.

Good evening guys and congratulations again on the progress thus far this year. I’m curious if you wouldn’t mind just developing a little further your expected curve for preloaded nanoFLEX. I realize your rating CE mark for Q3 for the new version, but then the preloaded is going to be probably the big impetus to a really big ladder of growth. Can you just give us a little further detail on what you think might play out of the timing for that? Thanks.

Yeah I will try to Jack. And thank you for your comments. First of all, we want to make sure we get the version 5 ICL preloaded product across the finish line with CE mark and in the production and out the door. Our engineers have already preliminarily looked at the preloaded technology and it will work with the nanoFLEX product. But it will take some additional validations and some additional sterility work. I don’t really have a (timeline) on it yet because it won’t start until we get finished. But I would suspect that we would start to see preloaded nanoFLEX Toric and also some preloaded nanoFLEX IOLs into the market during next year.

Okay that’s helpful. Is it okay for us to be thinking of the technology challenges between nanoFLEX and the ICL to be relatively close? The materials are same, right? And lens sizes are fairly close, I’m guessing.

Yeah, it’s fair to say, and that’s what our engineers through their initial testing have found that they believe it’s very compatible for the nanoFLEX IOL the same technology we have been using on the Visian ICL.

And we have no further questions.

Okay, thank you again, operator. I’d like to again thank all of those on the call today and again remind you of our investor activities during the next few months. And if you would like to hook up with us in any one of those sites, please contact Doug Sherk at EBC. And have a good evening; we look forward to an update on our third quarter progress on October 30th. Thank you.

Ladies and gentlemen that concludes today’s conference. Thank you for your participation. You may now disconnect. Have a great day.