Good morning. Joining me today are Chairman and CEO Jim Mazzo and CFO, Michael Lambert who will take your questions after some prepared remarks.

During the call certain statements such as forecast of financial information, guidance, financial targets and goals, strategies for growth, expected product performance, technology adoption and market share, expectations for expectations for market and procedures, and the impact of a potential US economic downturn, projected regulatory approvals, benefits and launch dates of new products, expectations for the multipurpose solution re-launch and for initiatives to reduce cost and any other statements that refer to AMO's plans or estimated future results are forwarding looking statements. As such they reflect our current analysis of existing trends and information and represent our judgment only as the date of this call.

Actual result may differ based on various factors affecting our businesses. Review today’s press release and our recent SEC filings, for more information about these risk factors, specifically the discussion under the heading "Risk Factors" and our 2007 Form 10-K.

You'll find these and other documents in the Investors section at www.amo-inc.com or by calling us at 714-247-8455. Please note that year ago sales comparisons and the tables in today’s release do not include any IntraLase sales since we completed this acquisition on April 2, 2007.

The pro forma sales growth rates reflect comparisons that include the IntraLase performance as is this acquisition had occurred at the beginning of all periods presented. In addition I’d like to draw your attention to some changes to the sales breakdown in the global sales table that accompanies the news release.

We have made these changes to first quarter 2007 and 2008 sales as slide three explains. This new presentation is more consistent with the way we currently manage our business and compares more closely to the way competitors present their sales data.

Beginning this quarter and moving forward our geographic breakdown will provide sales by business for the US and for all other international markets in aggregate. Also beginning this quarter and moving forward our product sales will be broken down by our three businesses; cataract, refractive and eye care.

Within the cataract segment intraocular lenses now include only monofocal IOLs and Viscoelastics and Phacomulsification products are combined into one category. In the refractive segment the procedures, implant and related sales category includes all femtosecond patient interface device and eximer treatment card procedure sales as well as refractive IOL sales.

There are no changes to the way system sales are presented. However we have collapsed the mechanical microkeratomes sales which are quite small, into refractive service, parts and other.

There are no changes to the eye care segment breakdown. To assist you with modeling you’ll find a quarterly global sales table that breaks down 2007 sales according to this new method on our website in the Investor section under the historical financials tab.

Finally please note that our adjusted EPS and adjusted operating margin guidance are provided on a non-GAAP basis and exclude the impact of charges and write-offs related to acquisitions, reorganizations, restructurings and recapitalizations, unrealized gains or losses on derivative instruments and other periodic or one-time charges or gains. Refer to the Investors section of our website under historical financial for more information on our use of non-GAAP measures.

Unless we identify a number as adjusted in our remarks or the accompanying slides, you can assume that it is a GAAP number. With that, I’ll pass the call to Jim.

Thanks Sheree and good morning to everyone. Michael and I are very pleased to present AMO’s first quarter results which demonstrated meaningful progress against the four key 2008 priorities we laid out during last quarter’s conference call.

I’d like to begin the call by briefly reviewing each of these and highlighting key accomplishments towards their achievement. First leveraging our global refractive leadership and unique growth levers to mitigate the domestic LASIK softness and advance our complete refractive solution business model.

In the first quarter our refractive business delivered 3% growth on pro forma basis despite declines in US LASIK market volumes. We leveraged our unique dual laser platform to drive pro forma laser sales up 19% and to continue moving our proprietary LASIK procedure on a path to becoming the standard of care.

Number two, achieving on time delivery of critical pipeline products across all three businesses. To date we’ve introduced four new products.

In February we launched our first ever dry eye product, blink Tears. We now have extensive US retail shelf presence and are actively sampling practitioners across all of our businesses.

We followed that up month with the introduction of our new iDesign Advanced WaveScan Studio at the American Society of Cataract and Refractive Surgery meeting. In addition we are awaiting FDA clearance on the iFS Advanced Ferntosecond Laser which we also unveiled at the ASCRS.

We believe these two refractive technologies will further distance us from the competition and grow our sales and share. During the quarter European surgeons began trialing our new Tecnis one-piece IOL marking our entry into the single piece IOL category.

Number three, growing our multi purpose solution market share and returning our eye care business to sustain profitability and growth. Market shares for our complete branded multi purpose solution hit new post recall highs.

Moreover we delivered sequential quarterly multi purpose growth of 27% as more eye care practitioners began actively recommending our Easy Rub Formula and rub and rinse regimen. Just as important we took the eye care business back to profit contribution levels as measured by sales minus direct costs that compares to early 2007.

Note that it was hovering around breakeven to slightly positive levels in the fourth quarter of 2007 and was in negative territory much of 2007 due to the recall. Fourth increasing operational efficiency and cash flow to facilitate debt reduction.

We examined all aspects of our business and began executing on opportunities to enhance operating leverage. This includes reducing our fixed costs through increased headcount efficiency, better facility utilization and reductions in discretionary spending.

While its still too early to see meaningful financial benefits, the first quarter results showed sequential improvement in gross and operating margins and this progress should help us position us well to run at our 2008 target of adjusted operating margins in the mid to high teens. Cash flow from operating activities was positive in the quarter even with the restructuring charges.

And we expect improving cash generation to help us reduce debt as planned in the second half of 2008. Our organization continues to focus its time and resources on these critical priorities as we advance our strategy to deliver life improving refractive technologies to people of all ages.

Our refractive products, services and expertise are without peer and we are using this differentiation to achieve profitable growth. Now looking more closely at our businesses, slide seven shows our refractive business.

We posted first quarter refractive sales of $121 million up 3% on a pro forma basis. First quarter pro forma procedure implant and related sales grossed 4% versus the year-ago quarter.

This reflected the anticipated softness in the US [inaudible] and refractive IOL markets offset by increased US eximer custom mix and penetration of IntrLase femtosecond procedures as well as continued solid overseas growth of all of our refractive procedures. As you all know we typically use a trailing 12-month metric to explain our domestic procedure trends in our US eximer customer mix.

However we recognized that in the current market environment investors are understandably interested in our procedure trend line in the first quarter. So we are breaking from our typical practice for this quarter to provide both trailing 12-month and first quarter trends.

For the trailing 12 months ending March 28, our US eximer procedure volumes were up about 1% and down about 10% in the first quarter versus the comparable periods one year-ago. As we looked at the data most of the decline in the quarter is attributable to a sharp drop in standard procedures.

We believe this underscored the fact that the portion the LASIK market most affected by economic softness is the lower priced segment where more standard procedures are performed. This is further borne out in our custom mix which was 66% for the trailing 12 months ending March 28 and 69% in this first quarter compared to 64% in the year-ago quarter.

As you know AMO’s per procedure fee per custom is more than double our fee for a standard procedure. Looking at the market overall we believe total US eximer procedures were down between 13% and 15% in the first quarter demonstrating that we continue to gain share and these estimates assume on average that the competitions’ volumes were down approximately 18% to 19%.

We continue to forecast that total US LASIK procedure market to be down about 15% in units in 2008 and for AMO eximer procedures to be down about 10%. For the trailing 12 months ending March 28 our pro forma US femtosecond procedure volumes grew 30% and 16% in the first quarter.

As slide nine indicates our favorable performance relative to the market was evident in the latest market share data. In the first quarter market scope showed that we gained share across the board with our eximer procedure share rising to 63% and our femtosecond share up to 48%.

This illustrates that surgeons are increasingly turning to our LASIK procedure as the new standard of care. As Sheree indicated at the top of the call we are now reporting our refractive IOL sales as part of the refractive procedures as this reflects the way we run the business.

We have done this because over the long-term it gives us the opportunity to leverage our relationships with existing LASIK customers who are most likely to be refractive IOL implanters. In the first quarter our refractive IOL sales were down nearly $2 million as strong international growth could not upset the US declines.

Frankly we’re not seeing much growth of the US refractive IOL market. The universe of US doctors implanting these refractive lenses isn’t expanding and we’ve seen some share loss in the United States.

One of the ways we are addressing this is moving sales and marketing responsibilities to our refractive business which will help us better capitalize on resumed strengths. In addition we hit our previously communicated timeline and submitted the Tecnis multi focal PMA file to the FDA at the end of the first quarter and we expect these moves to help reinvigorate the US refractive IOL market and grow our share.

Our international refractive procedure and implant sales both continued on a strong growth trajectory in the first quarter rising 49% on a pro forma basis versus the year-ago period. We expect this trend to continue in 2008 fueled by the growth procedure revenues we’re seeing from laser units we placed in 2007 along with the continued expansion of our dual laser platform installed base and continued strong penetration of our Tecnis multi focal and ReZoom IOL sales which showed growth in the quarter.

On a global basis pro forma system sales were also strong in the quarter up 19%. On a unit basis femtosecond placements climbed 35% in the quarter.

Now this includes the ongoing installation at LTA Vision where there are now IntraLase Femtosecond Lasers in 73 of their 76 centers. Eximer unit placements were also strong in the quarter up 10%.

Our refractive business had a particularly strong showing at the ASCRS meeting last month in Chicago. There were numerous [inaudible] presentations and symposia highlighting the clinical superiority of our technologies as well as a training and certification session for our new custom view monovision treatment for [inaudible] which was attended by more than 500 surgeons and system operators bringing the total number trained to date at nearly 1,500.

Recall that we require this certification as a necessary prerequisite for surgeons wanting to perform the custom view monovision treatment. The high interest among surgeons is an excellent indication of their intent to perform the procedure which we expect to help to continue to drive our custom mix even higher.

In addition we unveiled two new refractive products at the ASCRS; the iFS Advanced Fermtosecond Laser and the iDesign Advanced WaveScan Studio. The iFS Laser is the fifth generation as slide 12 depicts [intra] laser and the latest in an eight year legacy of femtosecond innovation capable of creating a LASIK flap in under 10 seconds.

The iFS’s unique inverted beveled and side cut angle is designed to provide virtually effortless flat lift, increased post-operative flap adhesion and enhanced biomechanical stability of the post-LASIK cornea. With full customization capabilities it also produces an elliptical flap to enhance surgical options and included IEK.

We also introduced the iDesign which combines an [abberrameter] and topographer into one instrument. This machine which represents the first new technology from the WaveFront Sciences team we acquired in early 2007 offers the highest resolution WaveFront sensing capability in the market using five times more data points than current technologies allowing clinicians to capture more precise wavefront images in more patients, can lead to better outcomes and more efficient patient throughput.

These technologies are integral parts of AMO’s proprietary eye LASIK technology suite and tangible examples of our commitment to not only maintain the substantial advantage over competing systems but also to provide technologies that advance standard of vision care medically. Now turning to cataract, total sales rose 8% driven by foreign currency benefits.

Total monofocal sales rose 4% as 31% increase in Tecnis sales was offset by the declining sales in the older generation [refractive] lenses. We experienced strong sales of monofocal IOLs outside the US but were challenged domestically and we are addressing this with the Tecnis one-piece which will create competitive opportunities for us in the large US one-piece marketplace.

European surgeons began implanting the Tecnis one-piece IOL in the first quarter and we plan to make it available to US surgeons in the second quarter. As slide 16 highlights Tecnis is the only hydrophobic acrylic one-piece lens with the stability of the three-point fixation and the performance of a 360-degree barrier edge.

And our early doctor reviews from Europe have been quite favorable especially with respect to the ease of implantation [inaudible]. We also expect the Tecnis one-piece to play an important role in continuing to drive the mix shift of our monofocal IOL sales to the higher priced Tecnis platform.

In the first quarter Tecnis sales accounted for 61% of our total monofocal IOL sales versus 48% one year ago. Now looking at the other core cataract technologies, first quarter sales of viscoelastics and phacomulsification products climbed 15% and this was due primarily to solid growth in our phaco equipment and pack sales which rose 61% and 10% respectively.

On a unit basis our new phaco machine placements rose 48% and this above-market performance shows the appeal of our new WhiteStar Signature system as well as continuing productivity of our existing installed base and we expect this trend in phaco sales to remain positive and due in part to the release of new ellipse feature in the second half of 2008. Ellipse simultaneously blends longitudinal and transversal phaco modes for more effective cutting and improved fallibility for a more efficient safe phaco procedure.

Our first quarter growth in phaco systems also helped to fuel Healon viscoelastic sales along with the increased use of Healon 5 for the complicated surgeries. Overall performance shows that we are seeing stability in this product line and we expect growth to improve in late 2008 with the addition of our new dispersive Healon D viscoelastic.

Moving to eye care we spoke about the improved profitability profile of the business at the top of this call. Our eye care team has done an outstanding job through this difficult transition.

First quarter sales declined less than 1% to $59 million demonstrating our continued recovery from the May, 2007 recall. Multi purpose sales topped $25 million representing a 27% sequential growth rate now that we have our Complete Easy Rub formula on retail shelves in nearly all of our markets and have promotional and sampling programs ramping up globally.

You can see our progress in the latest market share information on slide 21. Based on the latest third party data available we estimate our global branded market share was approximately 10% in the first quarter.

This is not an exact number and may be a bit conservative because we have only one or two months worth of first quarter market share data for the Europe and Asia Pacific markets. Nevertheless it shows good progress since the global recall and we expect to exit 2008 at a run rate of 16% to 18% share of the global branded MPS share.

Hydrogen peroxide sales were strong again this quarter, up 27% due to strong international demand since we stepped-up promotion of our Oxysept hydrogen peroxide system and expanded this distribution to some parts of Asia Pacific. While we are pleased on its recent bump in sales we still expect that peroxide markets to contract as multi purpose cleaning regimens advance.

Our new blink Tears OTC dry eye product also contributed to sales growth in the quarter in the eye care, other category. Our product is designed to relieve symptoms of mild to moderate dry eye whether used alone or in conjunction with pharmaceutical therapies.

Clinic results have been excellent with blink Tears providing benefits over the markets’ leading tear product in terms of reducing blurring and improved retention time. We are preparing to launch blink Tears in Europe next month and we are now shipping a preservative per unit dose of blink Tears to US retailers.

We expect these moves to help us seize growth opportunities in the $500 million global OTC dry eye market. In addition I am very pleased to announce that AMO has formed an exclusive collaboration with the Institute for Eye Research or IER to develop contact lens disinfecting and cleaning solutions and related products.

IER is headquartered in Sydney, Australia and led my Professor Brian Holden and Chief Scientist, Professor Mark Wilcox. IER’s world class scientists and clinicians have had a major impact on the development of contact lenses and lens care technologies world wide and we look forward to working closely with the IER in conjunction with our strong R&D team here in Santa Ana on the development of next generation contact lens solutions.

With that it’s now my pleasure to pass the call over to our CFO, Michael Lambert.

Thanks Jim and good morning everyone. Let me begin with a review of our consolidated financial results for the first quarter.

Sales grew 20.7% to nearly $304 million including an estimated 6.5% increase related to currency impacts. On a pro forma basis our first quarter ’08 performance represents a 4% increase over year-ago results.

In terms of mix, cataract accounted for 41% of sales, compared to about 45% in the year-ago period. Refractive represented 40% compared to 31% in the year-ago period and eye care was 19% compared to 24% a year ago.

The shifts primarily reflect the addition of IntraLase and the ongoing effects of the eye care recall. It bears repeating here that these comparisons also reflect minor changes to sales classifications in both periods that Sheree reviewed earlier.

Geographically sales in US rose about 13% and accounted for about 41% of our total sales. Sales in all other markets rose 26% to equal about 59% of sales.

Compared to the same period one year ago, this represents a clear mix shift toward international markets. This is consistent with our expectations for a softer US [exima] market combined with continued strong international growth.

We are particularly pleased with recent performance in Asia Pacific where the company’s effort to shift focus to our premium branded products and to better leverage our structure are starting to pay off in terms of higher sales and profits. As slide 26 indicates gross profit was $188.1 million up 19% versus the year-ago period mostly reflecting the IntraLase addition.

Gross profit in last year’s first quarter was $157.4 million and included $2.3 million in unfavorable impacts from the 2006 eye care recall and a $4.7 million charge to discontinue a microkeratone distributor agreement. On a GAAP basis our first quarter gross profit was 61.9% compared to 62.6% in the year-ago quarter and 58.5% in the fourth quarter of 2007.

On a year-over-year basis margins were impacted by the combined affects of the IntraLase acquisition and other unfavorable mix shifts. Sequentially we showed progress on continued recovery from the May, 2007 eye care recall and higher procedure sales.

First quarter SG&A expense rose 16% or just over $17 million to $126.9 million. Several factors in addition to currency contributed significantly to the rise including the addition of an estimated $8 million plus in IntraLase expenses and a $7 million increase in non-cash intangibles amortization.

In fact these two items by themselves accounted for almost all of the $17 million net year-over-year change. Through prudent spending reductions and careful cost management we were able to offset the significant currency impacts plus a number of other items that were putting upward pressure on SG&A.

Our continuing actions enabled SG&A to grow at a slower rate than the top line. As a percent of sales SG&A in the quarter improved to 41.8% versus 43.5% one year ago and 49.2% in the fourth quarter of 2007.

In evaluating our SG&A progress I think a sequential comparison of the first quarter SG&A spending which totaled $127 million to 2007’s fourth quarter is revealing. Our fourth quarter 2007 SG&A profile was roughly $150 million and included about $20 million in recall and acquisition related costs.

When you compare these results to first quarter ’08 actuals which had no comparable recall and acquisition related costs, we are down about $3 million on a sequential basis even with significant unfavorable currency impacts. Our performance this quarter is consistent directionally with our goal to bring SG&A as a percent of sales to the upper 30% range over the next few years.

R&D expense rose about 4% in the first quarter to $19.9 million or about 6.6% of sales versus 7.6% one year ago with absolute spending up less than $1 million our R&D team has clearly succeeded in managing a tight but productive integration plan with IntraLase and WaveFront Sciences. We incurred $11.9 million in restructuring charges associated with our plans to reduce fixed costs announced in December and February.

These charges are primarily severance related to workforce reductions and are called out in the restructuring charges line on the P&L. You will continue to see dollars on this line over the remainder of 2008 as we execute the restructuring.

I’ll provide a further update on this in a few minutes. Moving down the P&L operating income was $29.4 million or 9.7% of sales including $11.9 million in total restructuring charges just mentioned.

As slide 28 notes, operating income was reduced by $5.1 million in stock-based compensation and $28 million in total depreciation and amortization expense of which $17.1 million was intangibles amortization. All of these items are non-cash expenses.

In the year-ago period we reported operating income of $27.2 million or 10.8% of sales which included $1.7 million in acquisition related one-timers most of which was an IPR&D charge. The year-ago operating income also included $4.7 million in 2006 eye care recall impacts, another $4.7 million in charges relating to exiting our microkeratone business arrangement, about $17.1 million in total depreciation and amortization of which $9.9 million was intangibles amortization as well as $4.7 million in stock-based compensation expense.

Non-operating expenses were $18.2 million and included a $3.3 million gain on the sale of an investment we made in SIS and a $2.1 million unrealized loss on derivative instruments. This compares to non-operating expenses of $7.8 million in the year-ago period which contained an unrealized loss of $0.4 million.

The increase reflects primarily higher interest expense associated with the IntraLase acquisition. We reported a tax provision in the quarter of $4.2 million compared to $7.4 million one year ago.

This translates into an approximate 38% effective tax rate consistent with our previous guidance. Looking at slide 29 our GAAP net earnings were $6.9 million or $0.11 per diluted share compared to $12.1 million or $0.20 per diluted share one year ago.

The 2008 first quarter results included charges and gains that on a net basis combined to reduce EPS by an estimated $0.11. As I just outlined these were $11.9 million in pre-tax charges associated with the recent restructuring announcements, $3.3 million pre-tax gain associated with an investment sale and a $2.1 million unrealized pre-tax loss on derivative instruments.

First quarter GAAP earnings also included non-cash intangibles and stock-based compensation expense that reduced EPS by an estimated $0.22. Turning to a few balance sheet and cash flow highlights as of March 28 cash and equivalents were about $32 million, trade receivables were $275 million compared to $250 million at year end ’07.

DSO’s were 83 days up eight days from 75 at year-end ’07. A portion of the DSO delta is explained by our growth in Europe sales which tend to have longer payment terms and our fiscal cut-off of March 28 in advance of normal calendar month-end payment cycles in certain international markets.

Inventories rose about $14 million to $174.2 million, days on hand stood at 132 up from 116 at year-end due primarily to increased bridging inventory related to the various manufacturing moves as well as new product launches. Working capital excluding cash was approximately $181 million at the end of the quarter, up from $146 million at year-end.

The rise was due to the AR and inventory items mentioned above. In the first quarter our capital expenditures were approximately $13 million in line with our full year CapEx spending plan in the range of $45 million to $55 million.

At year-end our total debt stood at approximately $1.6 billion roughly unchanged from year-end ’07. Our cash flow from operating activities for the first quarter was about $2.4 million which reflects the effects of the restructuring charges in the quarter.

We remain keenly focused on this as it is an important contributor to enabling us to reduce debt levels in the second half of ’08. I’d like to provide a quick status update on our plans to reduce fixed costs by improving manufacturing, headcount and facility efficiency.

To refresh your memories, we announced in December, ’07 a plan to relocate our Femtosecond manufacturing to Northern California and follow that in February, 2008 with the announcement of plans for a 4% workforce reduction and facility consolidation involving the old IntraLase headquarters building here in Orange County. These actions are designed to help us maximize opportunities to leverage our core manufacturing strengths and enhance our global competitiveness, operating leverage and cash flow.

We expect to incur one-time charges during 2008 between $36 million and $43 million, the vast majority of which will be cash. The significant cash components include severance and related costs for affected personnel as well as anticipated facilities charges net of a projected sublet of the IntraLase facility.

Given AMO’s existing operating and financial profile we expect these actions when fully implemented to deliver between $12 million and $16 million in annualized savings. We expect 2008 savings in the range of $4 million to $7 million.

So far implementation of these plans is proceeding close to our original timeline and as of the end of the first quarter we had recorded approximately $11.9 million of the expected charges. Combined with the $0.4 million we recorded in the fourth quarter of 2007 it brings the total charges recorded to $12.3 million or about 30% of the anticipated total.

Finally to reiterate our guidance for 2008 we forecast sales in the range of $1.2 billion to $1.24 billion and estimate 2008 adjusted EPS between $1.25 and $1.45. While we don’t provide guidance on a quarterly basis let me remind you that we do expect SG&A spending to remain a bit higher in the second quarter before declining sequentially in the back half of the year.

For the year we continue to forecast adjusted operating margins in the mid to high teens. With that I’ll pass the call back to Jim.

Thanks Michael and before opening the call to questions, again let me summarize by saying that the first quarter showed significant progress against our strategic priorities and we remain focused on sustaining the top line, close management of expenses deliberate of our pipeline and increasing our cash flow. With that, Michael and I will be pleased to answer your questions.

I appreciate the greater clarity on volumes in Q1 but is there any trend in the quarter through April fallout from the panel meeting that you’ve noticed, the negative news started hitting pre the panel last week and through this week. I know it’s early but any color there would be appreciated.

Let me break it down in its due points and talk a little about the panel. Obviously one will not know of the effects of the panel from the standpoint of what it means to the consumer because does he or she respond favorably or negatively.

One could show that there was some good information on why LASIK is a superior product and then of course there’s always that concern from a fear standpoint so I think over the next several months we’ll hear more about that. I will tell you though we think the panel was a success in that it was extremely well done.

Obviously we’re supportive of the study that’s going forward that talks about the superiority and again it stresses three very important points of right patient profile, right physician and right technologies. Looking at the trends for the quarter obviously we’re just into the second quarter but I think this week we saw two people report with LCA reporting as well as TLC and you saw TLC showed some very strong growth in the quarter.

So we’re still sticking to our 10% from a standpoint for ourselves with the market being around 15% down but we’ll update you as we go forward from that end.

The monofocal IOLs, obviously overall with the pretty solid quarter relative to expectations but it’s a high margin product, you obviously saw your competitor number there, anything with downdraft related to the pending launch of Tecnis one-piece or is it just more competitive pressure just generally?

Well I think to be direct, I think in the US this is an area where we did lose some share from our lead competitor because this is predominantly in the United States; a large one-piece market. That’s pretty much the market size now and I think now with the introduction of one-piece for us in the second quarter and I think you saw it at the ASCRS as well as your colleagues; this product performs extremely well with some definite superiority over the competition.

And then again we’re going to be able to of course leverage our strong phaco and viscoelastic platform to continue to be able to support the physicians’ total requirements in the US. I will tell you outside the US though our monofocal business continues to grow and gain share.

There’s a couple of reasons there. And really we haven’t even seen affects of the one-piece there because we are primarily just trialing it as you do with a new product.

There though that it’s a pretty much of a mix between a three-piece and a one-piece marketplace and we continue to do extremely well in the three-piece category with our strong Tecnis franchise and we saw some real positive affects in Asia Pacific so I think the dynamics in the marketplaces are a bit different but in the US we did lose some share and that’s why the one-piece will be helping us resurrect; real pleased though with the phaco performance because I think that shows how we can completely surround the practitioner with his or her needs.

Mike are you still comfortable that you’re going to be within the covenants on all the debt covenants through Q2. It looks like you’re alright with the pro forma in Q1 just with the gating of the quarters and the like?

We absolutely had a good Q1 relative to it and we’re in compliance comfortably. This is a function as I mentioned I think last quarter we are executing anywhere at or near the profile and the guidance we have put out, we’re fine.

Could you maybe help us out in regards to just backing into the number there on the peroxide, how much of that would have deemed stocking in the Asia Pacific region? And then just additionally from the fundamental standpoint when you look at the refractive business outside of the US could you give us a gauge for penetration of IntraLase just in terms of OUS procedures or if you want to look at it from an installed base standpoint and kind of how you see that progressing.

Repeat the first question please?

I was just trying to look at the peroxide number and trying to back in how much of that was normal selling pattern versus maybe some stocking as you reentered Asia inherent with that product.

There was no reentry of Asia for peroxide; it was reentry of Asia for complete so peroxide is actually is just continued strong growth. I think peroxide as you know is still a therapy that’s recommended outside the United States, has been, its been in some decline but I think with the recent issues that several of us have had, this has been well received.

I think in the US it’s a different phenomenon, its still a one-bottle primarily regimen so from a peroxide standpoint there was really nothing new that we had launched and again most of the growth came from Europe and Japan in that area. Now with regards to the IntraLase progress as you know again giving them IntraLase credit prior to our acquisition when we acquired them about 50% of there install base was already outside the United States so if I would tell you that our penetration continues to be, what’d we show, high 40s, market scope showed about 48% in the United States.

Again its very difficult to give you exact numbers but I would tell you that based on the amount of units placed by IntraLase and the continued expansion that we have had, I don’t have exact market share numbers but they’re probably not going to be that dissimilar, probably somewhere into the high 20s low 30 range because of the success that we’ve had especially with chains like Optical Express etc.

I know its maybe a little bit farther out now but with pause to move here this morning, any thoughts on the convertibles Mike longer term as to maybe how you may or may not want to handle that over time? I know it’s early but just trying to think about that from a cash flow standpoint.

We certainly have got some time to think about that and deal with that as you mentioned. Its one of those things that’s this far ahead, it’s a little bit difficult to predict as it would be for any company you know what the situation is going to be 12 to 18 months down the road, capital market conditions, our share price etc.

I think its one of those things that if there’s share price progress between now and then, there’s a reasonable shot that either the converts wouldn’t be put back to us, the first one in January, ‘010 or we could work with them and adjust the terms that would prevent the puts. That certainly is a possibility again with share price increase.

If not there are other things we’ll have to be using to deal with them as we head out to that time period. Part of that though is an opportunity for us is cash flow generation which is what we’re very, very focused on this coming year.

How should we think about gross margin trends throughout the year and the tax rate?

Tax rate I’d be expecting it to stay where it is. We do plan that on a full-year basis so you can imply from Q1 really what the expectations are for the full year.

On the gross margin side, let me talk about it a little bit because there may be other questions too. Let me spend a quick minute on Q1.

So in Q1 we had a 300 basis point sequential improvement from Q4. If you think about what was happening there we had about $6.3 million and about $0.8 million in recall and one-timers respectively that affected Q4 ’07.

So when you make those adjustments gross margin would have been about 60.9% versus Q1’s 61.9%. So you had about a 1% improvement sequentially.

What was happening in there was partly mix shift, a higher mix of refractive procedures versus IOLs. It was also partly continued recovery from the eye care recall.

And I can walk through the year-over-year comparison too. The year-over-year comparison shows there’s more moving parts.

The drivers here if you think about the adjusted a year ago of almost 65% give or take, the drivers here were the combined affects in IntraLase acquisition with negative margin impact from higher equipment mix more than offsetting positive margin impact from higher procedure mix. Also we had related partly to the IntraLase acquisition margin impact from increased cost to build out the team to service the equipment units which as everybody knows have been growing very rapidly.

And then finally year-over-year certainly we had a margin impact in eye care that affected us overall associated with the lower volumes and revs from the recall. When you look at those factors that affected Q1 you can extrapolate that quickly to the year and all I really mean by that, is there’s a bunch of moving parts.

You’ve got questions around the mix of refractive procedures versus equipment versus service. That mix certainly affected us with the addition of IntraLase as I mentioned year-over-year.

Execution against the eye care recall as an opportunity and a challenge obviously on the margin front. Refractive IOL fills trends which Jim mentioned on the call are down.

Well those are very high margin products for us. On the upside you also though have the intro of Tecnis one-piece which can be a help.

The intro of dry eye which should bring with it higher margins and some continued growth internationally in procedure volumes. So net net we’re not looking for meaningful change from Q1’s number as we look towards the year given all the different competing objectives on margins.

So longwinded response to your question but we should be anticipating margins at or around where we land in Q1.

So to get to your operating margin number it looks as if really most of it is coming out of second half of the year SG&A.

A good chunk is coming out of second half SG&A and also remember though there’s a couple of other competing factors. Remember from a revenue standpoint Q2 and Q4 tend to be very strong or much stronger on average from the cataract side of the business.

So if you look at it seasonality or cyclicality-wise and I don’t know exactly why that is myself but that trend you’ve seen over a couple of years. So there is top line opportunities certainly and then you do see SG&A, now remember we saw very little impact in Q1 from the headcount actions that we announced in February.

Also if you remember as I mentioned on the last call not all of the folks who were affected on that restructuring announced in February were leaving immediately. Some of them were leaving at various points in time over the course of the year.

As a result we’re not going to see all of that impact in Q1, Q2. So that will play through over the rest of the year which is why I mentioned the restructuring piece a minute ago.

Now the last piece I’ll leave you with, which I think we showed very good progress on in Q1, although it’s a little bit masked by the currency impacts which we don’t breakout exactly that last point is the discretionary spending coming out of the budgeting exercise. We have watched and monitored and set up for the year to spend less on a discretionary basis coming out of that budget exercise.

And so we do expect to deliver some of that in the later half of the year.

How much did FX contribute to EPS in the quarter?

We don’t breakout the FX impact down to the EPS level, all we really do provide is that number at a top line consistent I think with how others do it. I think the thing to keep in mind on that which was probably a quick bridge on the OpEx side.

If you take the sequential OpEx bridge, Q4 150, move out the recall and the one-timer gets you down to 130. We landed this quarter at about $127 million in comparable SG&A relative to that 130, even with that though we had a very significant impact on the SG&A line associated with currency.

So while we don’t break that out that $3 million improvement gap, $127 million to $130 million, was actually quite a bit larger if you adjust out currency. So we don’t provide that EPS impact per se but I did want to make sure I gave everybody a sense that the affects on expenses were significant.

Would you tell us for every dollar in top line from FX what percent floats through to operating income?

No because that would be answering the other question I mentioned to you that we don’t put out that detail on.

IntraLase, about how much of your IntraLase system sales were to LCA in the quarter?

Total from a standpoint they were a good portion of it but they were not the absolute portion of it so we had strong OUS IntraLase placements. I think in the US the majority only because of the sheer size of the amount but we still placed it in a lot of large independents and as you know most of the other key chains such as TLC already had IntraLase.

So I think from a standpoint on a global nature is about half.

And then back to the LASIK volume, you’re guiding for I think, your US procedure volume to be down 10% and the market about 15% for the year, given the consumer confidence continues to trend downward and given that there was some that at least the headlines see negative from the panel, I know you’re sticking to your full-year guidance but based on what we saw in the first quarter should we expect the second quarter to be a little softer? Just trying to set realistic expectations.

I think consumer confidence had been an issue even last year and was propelled and so with the US, the first quarter being the largest quarter, one would have expected to see that to have the greatest impact. So if we come through the first quarter with that, I think we’re fairly confident that we’ve got the number of the rest of the year because the first quarter being the largest quarter.

Question regarding how you’re changing around the revenue breakdown, it sounded like you alluded to that you’re changing some of the management of refractive IOLs, could you kind of explain what you’re doing with refractive IOLs now?

This is primarily in the US although its on a global basis, the refractive surgeon that we’ve noticed that has set his or her practice up has really set their practice up from a standpoint of laser both femto and eximer as well as refractive IOL. As we were hoping to see a greater penetration of refractive IOLs throughout the cataract physician, that really hasn’t matured to the level that we would like to see.

So our greatest opportunity as the markets providing today has been with those physicians that understand and have set their practices for a refractive practice. So by being able to purely leverage our femto and our eximer and our refractive IOLs together in that office is really through the refractive sales force and that’s why moving that under the direction of [Doug Post] who leads our global refractive business we can provide all of those products in during one call as well as with the BDMs.

Now this is not to say that obviously the cataract group that’s led by Randy globally will not still continue to build upon the refractive IOLs but we clearly saw very similar to a cataract procedure where you have a procedural sale of a phaco, a visco and an IOL, we’re seeing the same type of mentality with the refractive where by putting all of them together you can clearly balance the opportunities by each practitioner.

If you quickly comment regarding the IER relationship, is there a product in development or is just kind of more exploratory at this point?

All I can say with that is that they are one of the leaders, I don’t know if you know them but they are one of the leaders in development of contact lenses and solutions and so we just signed this agreement and are going to be working with our R&D team whose already in development of a product and this will only help us accelerate our efforts plus they have some outstanding people there that can just continue to add and again let me make sure this is within the current R&D budget spend. There will be no incremental spend for this.

One more follow-up on the refractive IOLs again, can you provide any more color, I know Michael made the comment the refractive IOLs were down year-over-year but due to the change in how you’re breaking out your revenue, can you provide any more color on what refractive IOL revenue was in the quarter?

Well remember that when Michael was referring to primarily was the US showed a decline of approximately was down, and OUS we were actually up so as we said, we were down about $2 million on a global basis from Q1 ’07 to Q1 ’08, we were down approximately $2 million but all the decline was, is in the US and upside in the OUS marketplace.

I was wondering if you could provide a little bit more clarity on what your expectations are for blink Tears in 2008?

Well we’re not going to breakout the revenue right now but all I can tell you is that we’re extremely pleased with the performance and you probably heard me say that we also just introduced a preservative-free and that really appeals to a whole new marketplace. We had the multi dose and now we have a unit dose and we’re going to continue to expand our blink Tears product line.

But for today we haven’t broken out the revenue. Again we just launched it, we’re going to be launching it in Europe next quarter so we’re really pleased with the performance and I think you can see in the eye care other category the strong growth there was partly due to blink although some other products did very well as well.

Why are you lumping together the phaco systems with viscoelastic, I mean one is a disposable, the other is a piece of capital equipment that just makes it harder to get a read on the business in my opinion. Why are you lumping those two things together?

Well first off we’re comparable now to what our competition reports as well. We have to be very careful too from a competitive standpoint to give granularity.

But I will tell you if you look at slide 19 you can see clearly that our phaco equipment sales rose 61% and our pack business grew 10%. So we did break that out, this clearly shows between the two.

But probably trying to simplify and obviously follow the same suit to what our competitors do.

Are you seeing any increase in eximer laser competition in the field and how is the next generation femco doing, is there any initial read on traction for that?

First off with the next generation femco, as I said we’re still waiting FDA approval so the response at the ASCRS was tremendous and we won’t be rolling that out until the end of the year but we haven’t placed any of those units. With regards to competition, you saw our share actually increase so we continue to gain share at the expense of every competitor and I think you have one competitor who is basically replacing their existing technology with another technology and the other competitor losing share across the board.

So we’re real pleased. I think we have the strongest product line out there and of course our leverage in the chains commanding a strong presence there in the United States.

As well as you saw that we actually increased placements of eximer in the first quarter and this is in supposedly the down market so that just shows the acceptability of our technology.

The 4.4% growth pro forma for the quarter on a year-over-year basis is that a constant currency growth rate or is that a reported growth rate?

Its not constant currency. It’s reported.

Okay for just on a pro forma basis, what would be the constant currency growth rate for the quarter?

The constant currency growth rate I think overall would have been, I think it was down 1%.

That’s obviously you had the impact of the recall as well as the eximer business being down in the United States.

I just wanted to get that number for the model. And then on the comments on SG&A, I realize you’ve talked a lot about it but you mentioned the cadence of SG&A throughout the course of the year where you’re going to have most of the rest of the incremental benefit happening in the back half of the year and you talked about that being a function of I think primarily the timing of staff reductions and is there anything else going on there beside the results in that particular cadence besides what you mentioned previously in terms of the timing of staff reductions?

Its not just staff reductions, although that certainly is a piece of it because remember the restructuring affects both SG&A, a little bit of R&D and cost of goods sold so it all can’t come from there anyway. A couple of things to remember about the SG&A profile in particular, it does tend to be more frontend loaded to Q1 and Q2.

Part of that is all the promotional activities as you kick off the year, ASCRS, things like that but you also have, and we’ve had new product introductions that we spent a significant amount of money in the first quarter and will continue in the second quarter. So we are anticipating the year to be more frontend loaded SG&A wise and that will leave us as you’re all inferring a bit more backend loaded from an EPS standpoint leveraged to SG&A.

However that said, we clearly have monitored and managed a view that some of that promotional spending in the second half we know we can find and we have locked it in.

I was wondering if I could ask you for a quick refresher on for your business particularly exactly how currency affects SG&A. And I understand you’re not going to give the absolute number but just the mechanics of how it affects SGA and in the past have you ever broken it out specifically what the impact was in terms of a percentage or anything like that?

Yes, to my knowledge, I’ve been here six months, but to my knowledge we have never broken it out in the past and I think that’s consistent with what others do. I think it’s similar to the earlier question why do we do some of the things we do, we’re doing them to be consistent with competitors.

In terms of thinking about the impact the simplest way to think about it is we’ve got a lot of spending on SG&A that sits out there at local currencies so it is affected by the currency changes and I’ll describe it I guess as simply as I can. When we get a revenue help or a revenue good guy on the top line associated with currency you can always understand that there’s a cost of goods sold and an OpEx hurt or bad guy coming in behind that.

And it’s a function of while we get local revenue, local dollars denominated revenue that were affected, we’ve got significant costs internationally that follow a similar progression.

It’s neither here nor there, some companies tell us what the bottom line impact is or generally, maybe 10% 15% falls to the bottom line. For [St.

Jude] for example its 50% falls to the bottom line and some don’t so it really is mixed.

As I mentioned I think what we’re trying to be consistent with what other people in our sector do.

Just wanted to talk about the LASIK business for a second, is it fair to say that this is going to be the best quarter you have from a procedural standpoint and from a system standpoint just based on a few factors such as FSA spending, the LCA vision purchases that were made, the limited amount of penetration. You can only go to 100% and also increase competition.

On a dollar basis is this going to be the best quarter we see?

I guess my overall answer is no, but what the caveat is obviously that it states Q1 is the largest volume but you asked a couple of questions there. I could tell you that if you looked at the penetration of custom we continue in every year to increase that so I think our custom penetration will continue to do well as we move forward.

So that’s a positive. I will tell you the penetration of IntraLase will continue to move upward as we have every quarter and I think our OUS international every quarter we’ve increased our business.

So I think those three parameters alone will show increase and again we placed more eximers again this quarter over previous quarters. So I think those factors lead yourself to say that obviously we’re going to continue to move forward.

But I did want to say that if you looked at the sheer number of procedures in the US, this is the highest quarter, historically, one might change with the economy moving better but I think I just wanted to let you know those metrics on those other ones, we will continue to see progress there.

I think at the January call you broke out the IRI share for your MPS, I think this call you said 10% globally, I was wondering if had that number handy to help us track how that’s going?

Yes it’s about mid sevens US.

And then as you think about the monofocal IOL business and you obviously talked about the share loss and some of the competitive issues and the Tecnis one-piece that’s coming but there’s also an element of it, it sounds like you’re still having the impact of some of the older products not being used and that obviously hurts the comparisons. So where I’m going with all this is when do you start to see that portion of the business become less of an issue so that you really start to look at fair comps?

It’s primarily a US phenomenon because again Tecnis was up as you saw; I think it was around 61% or something of that nature so Tecnis does very well. The older products, quote unquote the ones that we’re really not promoting where we were down was primarily the US so I would tell you that although like outside the US we still have some of those, our biggest opportunity is in the US and I think now with the one-piece that should not be as much of an issue because we will be obviously penetrating the one-piece market here in the United States.

So our loss in, our downward trend was primarily the US. We’ll still see some of the older three pieces migrate over a period of time but really for the cataract business to get really your basic question there is, very strong growth outside the United States, when are we going to see cataract growth in the United States.

I think that’s, in the IOL business that’s when we launch the one-piece.

And just along those lines just again so you help us understand how you’re thinking about this you launch the one-piece in the 2Q, so how long does it generally take when you get a product like this out there to sort of get that up and running. I would suspect the docs can switch over pretty quickly.

Actually interesting enough, it probably will take a good quarter. Let me tell you why because in Europe even though we launched it was primarily trialing.

When you’re doing an upgrade of your existing customer base that tends to happen quicker. When you’re attacking a competitor and being able to clearly move a competitor, they’re going to want to see the merits of the product so if you don’t have that relationship with that customer it tends to take a little slower.

So that’s why I think in Q2 you’re going to see the uptick in Europe very strongly and in US its going to take maybe probably a quarter to really make a dent in the one-piece category. Obviously though with our strong phaco platform and strong viscoelastic platform that helps us in markets like the ASCs, more than the hospitals.

Just again, there’s obviously been a lot of tension on the SG&A, just to make sure again that we’re thinking about this correctly, you obviously talked about loading of SG& in the first half of the year, if I go back and just look at historically how SG&A has trended the absolute dollar amount has always been the lowest in the first quarter and then has tended to trend up on an absolute dollar amount in the 2Q, 3Q and the fourth quarter has had some variances there. But is that still the right way to think about it as we think about this 127 number that you’ve talked about.

And then again when you strip away the currency benefit, I hear what you’re, where the currency hit, I hear what you’re saying relative to the progress you’ve made but if you take the euro and just go across the next couple of quarters, the comps may even get tougher in other words the benefit of the euro to the top line will be bigger and are you still confident that on an absolute basis you’re going to be able to really deliver a $20 million or $25 million reduction in SG&A to get to your guidance.

Well remember there’s a mix of factors in there too. Its all obviously not just SG&A but revenue upside, gross margin, it’s in the mix of all those assumptions that obviously we get to the EPS number.

Now that said, as we’ve looked at how this year was going to be scheduled out or laid out, we had blink happening early in the first quarter. We have other new product introductions that have a significant amount of spending on them in the first half.

We just got done with ASCRS I think as everybody knows and we have a huge presence there obviously and so as I, again in the last six months as I’ve learned about how the dynamics of the business work from an OpEx standpoint I’ve seen it that my expectation looks like Q1 and Q2 are the high points. Q2 in fact in particular I think will be the high point for the year.

And so some of that benefit on the backend as we talked about comes out of the headcount actions we’ve taken. Some of that benefit comes out of discretionary spending and things like that that we have planned in and modeled for.

I think that’s the best I can help you with on that. The second part of your question was about what again?

About the currency.

On the currency side, there again as we don’t break it out one thing I want to make sure that everybody has though is that if you think about it sequentially as an example, there was significant impact on the SG&A side associated with currency and so while I talked to about a $3 million gap or improvement gap between Q4 and Q1, we actually were quite a bit better than that if you exclude the currency impact. I heard your comments on the euro and it is in many respects, it is a function, in aggregate terms or in total terms, its going to be a function in some respects of what happens on the currency lines over the course of the next three to six months.

I don’t necessarily see the currencies changing direction although that will inevitably happen at some point but the question is will they continue on the path that they’ve been on or will the rate of change slows us.

And let me just tell you that management and everyone throughout the corporation is paid on budget rates not paid on any currency so they’re held accountable without the currencies. So again nobody gets a benefit from the currency on the top line.

So we run our business as of budget rates. I want to thank everyone for their attention today and I know we ran a little over and I appreciate everybody sticking on the call and I know several of us will be doing some follow-up calls with all of you.

Thank you for your time and your continued interest in AMO. Thank you.