Good day, ladies and gentlemen. Thank you for standing by. Welcome to the STAAR Surgical's Third Quarter 2017 Financial Results Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the call will be open for questions. [Operator Instructions] This call is being recorded today, Wednesday, November 8, 2017. At this time, I'd like to turn the conference over to Mr. Brian Moore with EVC Group.

Thank you, Andrew, and good afternoon everyone. Thank you for joining us on the STAAR Surgical conference call this afternoon to review the company's financial results for the third quarter, which ended on September 29, 2017. On the call today are, Caren Mason, President and CEO of STAAR Surgical Company; and Deborah Andrews, Chief Financial Officer. The news release detailing the third quarter results was issued just after 4 p.m. Eastern Time and is now available on STAAR's Web site at www.staar.com. Before we begin, let me quickly remind you that 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 company'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. The risk 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. 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 net income per share information. 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 today's financial release. Following our prepared remarks, we will open the line to questions from publishing analysts. We ask analysts to limit themselves to two initial questions during the Q&A session then re-queue with any follow-ups. We thank everyone in advance for their corporation with this process. And with that, I'd like to turn the call over to Caren Mason, President and Chief Executive Officer of STAAR Surgical.

Thank you, Brian, and good afternoon everyone. I will begin our discussion with an overview of Q3 performance highlights, and then we'll spend a few minutes addressing ICL growth, particularly in China, clinical trial update and profitability. Deborah will then review key third quarter financial results before we open the call for your questions. During Q3, we achieved a number of milestones for the company. We were pleased to deliver a profitable quarter with $0.03 positive earnings per share and approximately $3.1 million in positive cash flow from operations. We achieved record revenue and gross profit for the quarter, while benefiting from planned expense management and a shift in marketing expense for our Experts Meeting and ESCRS to the fourth quarter. Top line results include record ICL sales and record ICL units with Canada units up 200%, China units up 76%, Japan units up 48%, Germany units up 28% and Global Distributors units up 22% over the prior year quarter. China's demand was especially strong as the third quarter encompasses the largest procedure volume of the year in China. As we’ve expanded our business substantially in China, the largest refractive surgery market globally, we now will be planning for greater revenue in Q3 than in previous years. Our first-in-man clinical trial for the next generation ICL with EDOF is nearing completion and the results continue to meet intended outcomes. We plan to begin our pivotal clinical trial during the first quarter of 2018 to evaluate the performance of an EDOF optic design to treat Presbyopia on the approved EVO Visian Implantable Collamer Lens platform. With regard to FDA remediation, we completed our internal work in the first quarter of 2017 and notified the FDA in March that we are ready for inspection. I’d like to focus today on growth of…

Thank you, Caren, and good afternoon, everyone. I will start the financial overview with a summary of top line results and then provide more details by product and market. STAAR reported net sales of $23.5 million in the third quarter of 2017, an increase of 17% over the $20.1 million of sales reported in the third quarter of 2016. The sales increase was driven by ICL revenue growth of 22% with unit growth of 18% and increased injector part sales, partially offset by decreased IOL sales. For the third quarter of 2017, total sales for ICL product line were $18.1 million compared to $14.8 million in the prior year quarter. Asia-Pacific ICL sales were $11 million during the quarter, an increase of 35% revenue and 34% units compared to the prior year period. China and Japan experienced strong double-digit growth that was partially offset by decreased sales in Korea as expected. India sales increased 3% after a couple of quarters of declines versus the prior year period. EMEA and LA ICL sales were $5.4 million during the quarter, an increase of 6% revenue due to increased average selling prices. Double-digit unit growth in Europe was offset by a decline in units in the Middle East and Latin America. North America sales were $1.6 million during the quarter, up 10% in revenue and units from the prior year period. The increase in sales was driven by the continued successful commercialization of the EVO Toric lens in Canada. For our IOL product line, total IOL sales were $3.9 million for the third quarter of 2017, which was down 16% in revenue and 6% in units from the prior year period. Decreased sales of silicone and Collamer IOLs were partially offset by increased sales of acrylic preloaded IOLs. Due to the discontinuance of…

Certainly. [Operator Instructions] Our first question comes from Jason Mills with Canaccord. Your line is now open.

Hi, Caren. Can you hear me okay?

Yes, I can, Jason. How are you?

Certainly good afternoon. Congratulations on a terrific quarter and look forward to your Analyst Meeting next week. I wanted to start, first question, Caren, just with respect to your guidance and you will probably go over this in enormous detail next week, but when you say 15% to 20% over the forecasted period, does that also include 2018, given we -- that’s a little bit higher than I would have expected, I think early days given what’s going on with respect to your clinical trial measurement. I could see it certainly ramping towards that or maybe above that over time, but that was a positive surprise to me and I wanted to make sure that 2018 was included in that commentary.

That’s a great question. We are not going to be giving specific guidance year-by-year, quarter-by-quarter. What we are aiming to do is to have that as a goal for as soon as we can possibly achieve it. The gating factor is, of course, the inclusion of increase in the United States business which at this time continues to wade on a successful removal of the warning letters so that we can get approval for Toric and other of our EVO family of lenses. So our goal is that if you were to look at the time period over the three years, that we would be able to show at least 15% to 20% growth. And we are -- our internal goals are, last year, for that for ICL unit growth.

Got you. That’s helpful. So kind of on a compounded basis, 15% to 20% is something you are comfortable with over a 3-year period time, got it.

That is correct.

Okay. That’s helpful. And then obviously I think most -- all of us on this call know -- understand how robust China has been and Aier -- how important Aier is. Could you help us understand the magnitude of opportunity not only in China with them, but also given expansion in their lofty goals with respect to sort of almost global domination of refractive surgery seemingly, what your opportunity is with them globally and I guess more specifically in the United States and so far as you’re willing to talk about what their plans might be in the U.S. And then also as part of that question, just how strong and long-term that relationship is? I think anything that’s positive, obviously, the potential downside is the relationship does not go as well down the line and perhaps you could give us a little bit more insight just with respect to how strong that relationship is and how long-term it is? Sorry for the length of the question, but I think it's an important one. Thank you.

It's a very important one, Jason. We have the greatest respect for our partnership with Aier Hospital Group. We do meet with the CEO routinely and I meet with them at least once or twice per year. We do share our strategic objectives and we do plan together, as I said, for expansive marketing, for doing clinical research together most recently on lower diopter ICLs, and we talk about more premium and primary opportunities in all the Aier clinics for the use of our EVO ICL lenses. And so, yes, as they have very ambitious growth objectives we work with them to be a big part of that growth and take a bigger percentage of our share of that growth. I would say that this is a long-term partnership that we continue to reassert and re-sign on an annual basis. And I also, though want to clarify that a strong and a successful partnership we have with Aier, we also have a lot of excellent other partners as well as clinics and hospitals throughout China that we are doing more and more business with even in and especially in the university setting. With regard to Aier and Baviera in Europe and the United States, that planning has been described by their CEO as to what they’re going to do, but I would say that they are going to be careful in their planning and they're going to be rolling out a growth strategy on a slower basis around some of their new acquisitions to be sure that the quality and the rollouts are most successful.

[Operator Instructions] Our next question comes from the line of Jim Sidoti with Sidoti & Company. Your line is now open.

Good afternoon. Can you hear me?

Yes, Jim.

Great. Start out with the quarter that just ended, were there any what you would consider one-time in the quarter? It sounded like there was unusually high volume of injectors. Is that something that you think won't occur going forward?

No, actually our injector sales are expanded to remain -- or expected to remain at a robust level. The company that we work with is doing some excellent growth and we are supporting them in their growth trajectory. So things will continue, I think on a positive trend with injector part sales.

Okay. And then you indicated that you think your STAAR clinical trial in 2018 for the lens for presbyopia, Any sense on what that will cost?

Well, normally as you're probably aware, critical clinical trials are usually in the millions of dollars. So, we will have to make sure that we -- and already have in our planning, are making sure that we run an outstanding clinical trial. And so, yes, you're looking at seven figures or short.

Okay, right. And then the success in Canada, after the recent approval of the lens astigmatism there, is there any reason to think that you wouldn’t have similar success in the U.S once you get the Toric lens approved here?

I would expect that. We would have great success with the Toric lens here in the United States. So we’re very excited for when that day finally comes.

Thank you.

Thank you, Jim.

And I’m showing no further questions at this time. So with that said, I’d like to turn the call back over to Caren Mason, President and CEO of STAAR Surgical for closing remarks.

Next week we will be participating at AAO in New Orleans on Friday, November 10 at the Refractive Surgery Subspecialty Day. We are pleased to support our refractive surgeons during this important clinical review day in lieu of exhibit booth representation. We look forward to speaking with many of you in the coming weeks and months. We will be presenting at the Piper Jaffray conference in late November and on a non-deal roadshow in Salt Lake City in early December. Thank you for your participation on our call today. We appreciate your interest and investment in our company. All the best to all of you.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Everyone have a wonderful day.