Good day, ladies and gentlemen and welcome to the Third Quarter 2013 STAAR Surgical Company Earnings Conference Call. My name is Regina and I’ll be your conference operator for today. At this time all participants are in a listen-only mode. Later, we will be a conducting a question and answer session. (Operator Instructions) As a reminder, today’s event is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Ms. Leigh Salvo, Investor Relations. Please go ahead.

Thank you, operator, and good afternoon, everyone. Thank you for joining the STAAR Surgical conference call and webcast to review the company’s financial results for the third quarter which ended on September 27, 2013. The news release announcing the third quarter results crossed the wire about half an hour ago and is available on the STAAR’s 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, please go to the Investor Relations section of STAAR’s website again at www.staar.com. If you are listening via telephone to today’s call, and would like to review the slides that accompany management’s remarks, please navigate to the live webcast as I 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 today, 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. These 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 the 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 performance to the non-GAAP information is included in our financial release which is available on our website and in our slide presentation. Now, I would like to turn the call over to Barry Caldwell, President and CEO of STAAR Surgical.

Thanks, Leigh and good afternoon everyone. Thank you for joining us today for a review of our third quarter results, as well as an update on our performance for the first nine months of 2013 and expectations for the remainder of the year. With me today on the call is Steve Brown, who was named CFO during the quarter. Steve had previously served as Vice President, Global Finance at Bausch & Lomb that he had been there since 2008. Also on the call is Deborah Andrews who continues with the company as Vice President and General Accounting Officer, as well as Robin Hughes our Vice President of Research & Development and Regulatory. I’ll start our call this afternoon with an overview of the third quarter results against our four key metrics. Steve will then offer a detailed look at key third quarter and nine months financial results as well as an update on our manufacturing consolidation project. In closing, I’ll discuss key operating milestones and new product developments. Then, we’ll open the call for your questions. Our momentum continued globally through the third quarter and the results of product approvals in new markets and the benefits of our manufacturing consolidation are having a positive impact on our financial performance not just today but as we look out into the foreseeable future. The two significant headwinds we face this year, the value of the yen and IOL supply constraints persist. Let me start by reviewing our four key metrics which we established at the beginning of the year and updated accordingly throughout the year. These metrics as you can see are focused on our revenue growth, our gross margin expansion, profitability and our manufacturing consolidation progress. As you can see we met all four metrics during the first two quarters. You…

Thanks, Barry. And good afternoon everyone. It’s pleasure to join the STAAR team at this exciting time and the company’s growth. There are five areas in which I will focus my comments, the impact of foreign currency, the manufacturing consolidation, tax impact, gross margin expansion, GAAP and non-GAAP adjusted net income results and key financial results year-to-date. As Barry discussed, the continuing decline in the value of the yen resulted in a negative impact to our revenue of $1 million for the quarter. Most of this $809,000 negatively impacted IOL sales a $155,000 was a negative impact to our other product categories. For the nine month period the negative impact of foreign currency was $2.7 million primarily in IOLs by $2.2 million and other sales by $364,000. There was also a $110,000 impact on ICLs in the first nine months of this year. The value of the yen to the U.S. dollar for the first nine months has been 96.7 compared to 79.3 in 2012. There has also been a negative impact on gross profit for the year of $533,000 and a positive impact on our operating expenses of $624,000. Our manufacturing consolidation project is progressing as expected under our revised plan with positive results. Manufacturing consolidation expenses for the quarter were $490,000 a decline from $728,000 during the third quarter of 2012. Expenses for the first nine months of the year were $2 million as compared to $2 million during the same period of 2012. We expect to spend about $260,000 in the fourth quarter as these expenses wind down. Our manufacturing consolidation is already demonstrating a positive impact on our income taxes. In the third quarter, we recorded an income tax benefit of $433,000. Now that the manufacturing consolidation process – project is complete in Japan. We were…

Thank you Steve and it’s great to have you on the team.

Thanks.

I believe three key topics I’d like to turn to quickly. We’re seeing some very positive progress in our regulatory submissions on the ICL product line. First, let’s look to the Toric ICL Submission in the U.S. We did have an inspection visit both in Switzerland and U.S. from the FDA during the third quarter. Key reviewers of the Toric ICL Submission were present for two days in Switzerland and four days here in the U.S. The latest news is, we responded to a technical question not a clinical question on October 24. This morning, we received another technical not clinical question to which we need to respond by early next week. We’re waiting to hear from the agency for a Panel Day on the Toric ICL Submission. During the quarter, we received regulatory approval of the CentraFLOW technology in India, Korea and Argentina – I’m sorry third quarter was India, second quarter was Korea and Argentina. And you can see the success that we’ve had in Europe, we think that, that will help in these markets from this point forward. Three additional key submissions for the CentraFLOW technology are underway, China, Japan and the U.S. During the quarter, we visited directly with our consultants and the CFDA in China. We believe those discussions resulted in avoiding the need for additional testing and we remain on track for approval during the second quarter of 2014. In Japan, we also made very good progress during the quarter and now expect to have CentraFLOW approved during the first half of 2014. Previously, this was not on our schedule for next year. In the U.S. we submitted a revised clinical protocol for CentraFLOW to the FDA on October 5th. This revised protocol was a response to suggestions made by the FDA to our…

(Operator Instructions) And your first question today comes from the line of Chris Cooley with Stephens. Chris Cooley – Stephens: Hey, good afternoon everyone. Can you hear me okay?

Hi, Chris. Yes. Chris Cooley – Stephens: Great. Congratulations on another good quarter. Just a couple of housekeeping items and then maybe one forward looking item. Just in listening to your talk about the guidance for the full year and your confidence in the upper end of the revenue range, it seems pretty clear that you’re not going to be picking up much momentum just to the supply constraints and currency on the cataract side. So, am I doing the math right, are you implying fairly sizeable step up in terms of the growth rate for the Visian closer to 30 plus percent. And if so, can you help us pass out how much of that you think is an acceleration in underlying demand versus stocking as you go into these new countries with a new CentraFLOW technology. And then I’ve got a quick follow-up. Thanks.

Sure. First of all, let me say on the cataract side, if we do get increased KS-IOLs which we anticipate one of the things we would like to do is to eliminate the majority if not all of the backorders in Europe and finish the year clean. So, we would anticipate if we can get that supply the IOL line to be stronger. On the ICL side, we have been signaling I think even on the second quarter call that sales in China and Korea would be good third quarter but we expect there will be an quite strong fourth quarter. So, I think in those two markets in particular, we’re going to see very strong results during the fourth quarter and we do anticipate that Europe which has been running – I don’t have it in top of my head but close to 50% year-to-date growth in Europe we expect that to continue run at that kind of rate. Chris Cooley – Stephens: Okay. And then maybe just – I’m actually squeezed two and if I may and I promise to get back in queue. When I look at gross margin I understand the impact of FX which you guys are clearly building incremental inventory right now. Help us think about that, is that additive or is that a headwind right now in terms of running plants, I’m just trying to think about the cost structure as you wind down outside of the U.S. and ramp up in the states. And then similarly, we think about an inventory slipping out in the coming year 2014. Help me to think about the potential step up in margin. And then the last question that I had was just to get on the Toric, maybe if you could provide some clarity over ground what a technical question may or may not be and if we should expect further ones. Thanks so much.

Okay. So, first of all on the ICL inventory. It’s been our plan all along to build that inventory level. And I think one of the slide shows that our inventory level at the end of last year was about 13,000 ICLs in inventory. We aren’t even back to that level yet. We were at the end of second quarter 11,400. We want to be at least 20,000 lenses in inventory before we shut down the manufacturing in Switzerland. We think we’re on pace to do that but we also know we have an increasing number of ICL sales that increases the target. So, we’re challenging ourselves right now whether the 20,000 would be an adequate number or we actually need to be higher than that. And also it’s rolling on top of that what if the Toric ICL were approved early next year as the inventory requirements there. So, we’re trying to balance all of these factors to make sure that we have adequate supply and quality of our products before we make the plan and move it closing the Swiss facility. Then on your Toric ICL technical question, I’ll let Robin comment in minute but it’s basically around the conversion rate of the power of the ICL from the sailing solution to be assessed. Robin is that?

There was that question in the question that we got this morning is really about the measurement of power. So, it has nothing to do with the clinical submission, it’s a very simple question that we’ll as Barry mentioned we will answer in the early part of the next week. There is zero risk with answering that question. Chris Cooley – Stephens: Understood. Thank you, so much.

Your next question comes from the line of Jason Mills with Canaccord Genuity. (Operator Instructions) And Jason, your line is open now.

Great. This is actually [indiscernible] for Jason. My first question would be – just kind of thinking about next year and not really looking for guidance but perhaps looking at the U.S. how should we think about the growth trajectory given the upcoming or potential for product approvals?

Well the key product approval [Jeff] in the U.S. would be getting the Toric approved. And kind of a measure that we’ve used is in all the other 60 markets where we sell both the Toric and the standard myopic lens the Toric lens is about 50% of the sales. So, that’s the kind of increase we would expect to see in the U.S. now. Now, I’ve also caution that there is some pent-up demand out there and the early adoption might be higher than that and then it could level off.

Okay, great. Very helpful. My second question would be in regard to your cash balance. If you mind update us on your thoughts on the use of this cash?

Sure. First of all we think we’re in a good spot now in terms of cash and as those who on the calls they’ve watched company for a while, there has been periods of time, we’ve not going to be in a situation where we’ve been happy with our cash position. This gives us flexibility at this point. We are looking at some outside technologies that could enhance some of our products. So, we may do some licensing or purchasing of some of that technology. We also know that next year as you look at our business I mean we can really start to see it this year but next year with the consolidation complete, this business can generate lot of cash, that’s a kind of problem we’d like to deal with versus not having any. But as of today, we’re happy with the amount of cash we have. We are looking to license additional technologies that would help our product line and enhance our growth going forward.

Great. Thanks for taking the questions.

Thank you, Jeff.

Your next question is from the line of Jim Sidoti with Sidoti & Company. Jim Sidoti – Sidoti & Company: Good afternoon. Can you hear me?

Hi, Jim. Yes we can. Jim Sidoti – Sidoti & Company: Great. It sounds like capacities initially you need to build up inventory, you’re expecting an increase in the over next few quarters as those new products get approved. Are you confident that you have enough capacity in the U.S. once you shut down the Swiss plan and if not what are you doing about it?

Really good question Jim. And actually we were going over that earlier this morning. And we are debating the inventory level by ICLs needed. But overall, yes we’re very confident with the start-up here in the U.S. But the reason we are is because we’ve had such a great assistance from our employees in Switzerland that they’ve been very active here both in coming for one, two, three or four weeks at a time. Others who have made commitments over the next 12 months, 18 months to either stay here in the U.S. for come back over a periodic basis. We are adding individuals here in the U.S. and we are transferring those – we are transferring some from Switzerland here. We began our second shift during the third quarter and we do have the capacity here within the loss we currently have to triple of cloud drupal the ICL production. Jim Sidoti – Sidoti & Company: All right. And then my follow-up another Toric question. Are there more panels or I assume that it would probably done with panels for 2013. Do you know when the next panel would be in 2014?

I don’t believe there has been an announcement of the next panel date but as I would anticipate we’d be the next panel and we’re waiting to get that dates any day. Jim Sidoti – Sidoti & Company: Okay.

Your next question is from the line of Jan Wald with Benchmark. Erica Layon – Benchmark: Hi, this is actually Erica in for Jan. I have a quick question on your gross margin targets. Can you extend on into 2014 is that what you’re looking for. Does that mainly be looking for 250 basis point improvement next year doing that FX and the surprise suppliers visit aren’t causing you problems?

Well, really good question I mean if things were to turn around, with the value once again and also our IOL supply issues, what I’m trying to say is I think there is a possibility that we can catch up on what we lost in 2013 and get back on where we thought 2014 would be. And that if Toric is approved in the U.S. it should add more than 250 basis points. But we haven’t evaluated next year a plan and as we develop our key metrics for 2014, we’ll keep you informed. Erica Layon – Benchmark: Okay. Thank you. And I’d like to ask a quick question on this backlog, you have no – could you provide some idea on your confidence level that it could get this cleared up this year versus your expectations that it might roll into next year.

Yeah, it’s really good question now. Just to remind everyone the lens is made by a third-party vendor in Japan. We make the injector systems, they are marred together into a preloaded single piece and three piece acrylic IOL. And the results clean results have been great, the demand for the product has been high. I did visit Mongolia just a few weeks ago, our supplier which is Nidek has built a new facility for the enhanced capacity. They also sell the same product so they are just as motivated to get the supply up as we are. And we’ve offered to work with them in any way possible, I think our communications between the two companies has been very strong. And I’m more encouraged now than I was six months ago. Erica Layon – Benchmark: Okay. And if I could just follow-up with one small thing. Instead of selling the same product as well is there some sort of allocation strategy between and signing those deal and you think internally?

Well, yes they make the IOL, we make the injector system. So, we both pretty much please each other. Erica Layon – Benchmark: Okay. So, they’re not selling their component separately through lens.

They’re selling without our injectors. Erica Layon – Benchmark: And so allocation between selling it with your injectors are not as that point in said is 50-50 will be – I’m just worried about the rest could they to be selling it to their customers for where they supply your backlog.

They tell us it’s about 50-50, they will trust us. Erica Layon – Benchmark: Okay, thanks. Thank you, very much.

Thank you.

(Operator Instructions) Your next question comes from the line of Matt O’Brien with William Blair. Kayla Crum – William Blair: Hi, guys, this is Kayla in for Matt. Thanks for taking our questions. Just looking at Japan, I’m curious about the commentary about declines in LASIK procedures and whether or not your guidance assumes that there is going to be continued softness in that market in Q4 or as you’re seeing some sort of a recovery there?

Yeah, usually when these things happen they don’t quickly turn around. So, I think as we look at Japan for fourth quarter, we’re not looking for huge increases but we are looking for the trends to turn around, we are looking for ways to put the ICL in front of mind to patients and maybe even help to draw more patients into some of the key accounts. Kayla Crum – William Blair: Okay. And then with respect to Korea, what sort of growth are you seeing from CentraFLOW compared to the base business at this point?

Well, I think Korea grew about 7% the first half of the year during the third quarter that grew 13% and that’s just the early days of CentraFLOW because it was approved kind of during the middle of the third quarter but we would expect to see a larger improvement or increase during the fourth quarter. Kayla Crum – William Blair: Okay. All right. Thank you.

Thank you.

There are no further questions in queue at this time. So, I’d like to turn the call back over to management for any closing remarks you’d like to make.

Great. Thank you, very much operator. And we appreciate everyone on the call today. If you have additional questions, please feel free to contact us or if one of the staffs along our Investor Meetings if you’d like the schedule, visit with us, please contact EVC, through me or Doug. Thank you and have a good evening.

Ladies and gentlemen, thank you so much for your participation in today’s presentation. You may now disconnect. Have a great day.