Good day, and thank you for standing by. Welcome to The Cooper Companies' third quarter 2022 earnings conference call. At this time, all participants are on a listen only mode. After the speaker's presentation, there will be a question-and-answer session. To ask the question during the session, you will need to press star one one on your telephone. I would now like to hand the conference over to your speaker, Kim Duncan, Vice President, Investor Relations and Risk Management. You may begin. Good afternoon and welcome to The Cooper Companies' third quarter 2022 earnings conference call. During today's call, we will discuss the results and guidance included in the earnings release and then use the remaining time for questions. Our presenters on today's call are Al White, President and Chief Executive Officer, and Brian Andrews, Chief Financial Officer and Treasurer. Before we begin, I'd like to remind you that this conference call contains forward-looking statements, including all revenue and earnings per share guidance and other statements regarding anticipated results of operations, market or regulatory conditions or trends, product launches, operational initiatives, regulatory submissions, and closing or integration of any acquisitions or their anticipated benefits. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and are subject to risks and uncertainties. Events that could cause our actual results and future actions of the company to differ materially from those described in forward-looking statements are set forth under the caption forward-Looking Statements in today's earnings release and are described in our SEC filings, including Cooper's Form 10-K and Form 10-Q filings, all of which are available on our website at coopercos.com. Also, as a reminder, the non-GAAP financial information we will provide on this call is provided as a supplement to our GAAP information. We encourage you to consider our results under GAAP as well as non-GAAP and refer to the reconciliations provided in our earnings release, which is available on the investor relations section of our website under Quarterly Results. Should you have any additional questions following the call, please email ir@coopercos.com. Now I'll turn the call over to Albert G. White for his opening remarks. Thank you, Kim, and welcome everyone to The Cooper Companies' third quarter conference call. Let me start by highlighting that this was the sixth consecutive quarter of double-digit organic revenue growth for CooperVision and the seventh consecutive quarter of double-digit organic revenue for CooperSurgical's fertility business. This impressive performance showcases the strength of our teams and the strong demand for our products and services. This momentum continued in August, and we're increasing the organic revenue guidance for both CooperVision and CooperSurgical, incorporating our strong third quarter and the strength we're continuing to see. Overall, the challenging macro environment, including headwinds from currency, inflation, and supply chain challenges has negatively impacted profitability, but has not reduced our ability to take share and drive sustainable top line growth. Moving to the third quarter results, consolidated revenues reached an all-time high of $843 million, with CooperVision posting record revenues of $566 million, up 11% organically, and CooperSurgical posting record revenues of $277 million, up 35% as reported, up 3% organically. Growth was led by our daily silicone hydrogel portfolio and myopia management products for CooperVision and fertility for CooperSurgical. Non-GAAP earnings per share were $3.19, and we posted record quarterly free cash flow of $217 million. For CooperVision and reporting all percentages on an organic basis, revenue growth was strong and diversified in all product categories spheres, torics, and multifocals and within all three geographic regions. The Americas was up 7%, EMEA grew 15%, and Asia-Pac grew 11%. This performance was driven by a number of factors, including new product launches, expanded product ranges, market leading flexibility through our customized offerings, growth in key accounts and strength in branded products. Regarding product details, daily silicone hydrogel lenses grew 24%, led by great results from both MyDay and clariti. Daily silicones continue to be the main driver of growth for the contact lens industry, and we offer the broadest portfolio in the market with MyDay and clariti available in a broad range of spheres, torics and multifocals. Within this, we're continuing to see especially strong growth from MyDay, including from the very successful rollout of the MyDay multifocal, which is taking share in markets around the world. The feedback from patients remains fantastic and optometrists continue reporting that our breakthrough Binocular Progressive Fitting System is allowing them to fit the lens quickly and accurately. This success is driving a positive halo effect on MyDay spheres and torics, and we remain very optimistic about the future of this brand. Clariti also posted a solid quarter, with particular strength noted in Asia-Pac. Our silicone hydrogel FRP lenses, Biofinity and Avaira, reported another solid quarter of 8% growth. Regarding product launches, we remain very active. I'm excited to announce we'll be seeding the market with MyDay Energys over the next several months with a full launch scheduled for early calendar 2023. We've had a lot of requests for the Energys technology in a daily lens, and given the success we've had with Biofinity Energys, we're really excited about this opportunity. MyDay Energys will use the same Digital Zone Optics technology as Biofinity Energys, providing wearers greater comfort when using digital devices along with enhanced end of day comfort. This daily lens is a perfect product for today's digital world and another great example of CooperVision leading with innovation and manufacturing know-how. Building on this, we'll also be launching an expanded MyDay toric parameter range in early fiscal 2023. MyDay already offers the most prescription options in the daily toric market, and this expansion will essentially match the leading offerings in the FRP toric segment, which will be a first for the contact lens industry. All this activity supports a fantastic MyDay brand and exemplifies CooperVision's focus on offering practitioners a wide variety of market-leading, technologically superior products. Meanwhile, we're expanding availability of clariti around the world, which will further strengthen relationships with customers using store brands. I'm also happy to report that we've recently increased production of Biofinity, including made-to-order extended range torics and Biofinity toric multifocals. Demand continues to exceed supply on these products, which has caused supply disruptions, so adding capacity is great news. Overall, these products and technologies improve how eye care professionals deliver clinical care, and it's allowing us to lead in defining standard of care, a core component of our ongoing share gains. Moving to myopia management, another exciting area where we're a market leader, we posted revenues of $24 million, up 42%, including MiSight up 109%. Our growth trajectory remains strong, with the main challenge being in China, where all contact lens sales, including MiSight and Ortho-K products, have experienced difficulties due to ongoing COVID restrictions. Outside of China, MiSight is performing really well, backed by its extensive 7-year clinical data and FDA approval, and we're seeing strength with key accounts and private practitioners around the world. We're also seeing a positive halo effect with customers selling MiSight, accelerating their use of other CooperVision lenses. For SightGlass myopia management glasses, our JV relationship with EssilorLuxottica is going well, and the team continues to make progress. In the U.S., we're finalizing the submission of the three-year clinical data and expect to submit it to the FDA in September. As a reminder, the only FDA-approved myopia management product on the market in the U.S. is MiSight, so obtaining approval for glasses has the potential to really propel the myopia management field forward. To finish on CooperVision, the contact lens market continues to perform exceptionally well, with estimated growth of 8% in calendar second quarter. Although COVID-related challenges remain, including here in the U.S., where back-to-school eye exam demand is exceeding exam capacity, the many long-term growth drivers of the industry remain intact. This starts with a large macro growth trend that roughly 1/3 of the world is myopic today, and that is expected to increase to 50% by 2050. This is driven by heightened screen time, among other factors. Additionally, the shift to silicone hydrogel dailies remains strong. The penetration of higher-value products, such as torics and multifocals, is growing. The number of wearers is growing, and we're seeing price increases. We expect global growth to remain healthy and believe we'll remain a leader with our robust product portfolio, ongoing product launches, fast-growing myopia management business, and leading new fit data. Speaking of data, I'm proud to say calendar second quarter U.S. stats show CooperVision was the number one company for new wearers and the only manufacturer to grow share in all three daily categories, spheres, torics, and multifocals. Moving to CooperSurgical, we posted a solid quarter led by fertility, which reported sales of $112 million, up 13% organically. As I mentioned earlier, this was the seventh consecutive quarter of double-digit organic growth, so a big congratulations to that team. Success was seen throughout the product portfolio and around the world, with particular strength noted in consumables, with products like media, pipettes, needles, and catheters doing well. Consumables are a core part of our fertility business and an excellent indicator of future growth, so we remain in great shape to continue delivering strong results. Regarding the broader fertility market, the fundamentals behind the industry's growth remain very healthy. There are many drivers, but women delaying childbirth is a primary factor, as fertility challenges start increasing around the age of 30, with a more pronounced negative impact starting at 35. It's now estimated that roughly 15% of reproductive-age couples worldwide have fertility challenges, and over 750,000 babies are born annually through fertility-assisted measures, and these numbers are growing. Regarding CooperSurgical's positioning, we estimate the portion of the market we compete in is roughly $2 billion in annual sales, and that it'll grow in the 5%-10% range for many years to come. In addition to increasing maternal age, other drivers include improving access to treatment, increasing patient awareness, growth in the number of fertility clinics, improved product offerings such as donor activity and cryopreservation services, and technology improvements for both male and female infertility challenges. Given the momentum of the industry and the diversity of factors driving growth, fertility is certainly an exciting market to be in. Moving to office and surgical products, which includes OBGYN medical devices, ParaGard, and stem cell storage, we posted sales of $165 million, up 36%, but down 3% organically. OBGYN medical device sales were negatively impacted by heightened back orders due to supply chain challenges. We've seen good demand and positive signs in our supply chain to start this quarter, so we expect healthy growth in fiscal fourth quarter. ParaGard was down 7% as expected due to a difficult comp with last year's price increase and related buy-in activity. We expect nice growth in fourth quarter with an easier comp, improving patient flow, and an increasing patient focus on the most efficacious forms of birth control, including 99% effective IUDs such as ParaGard. Lastly, our stem cell storage business that we entered with the Generate acquisition this past December grew 1%. This was in line with expectations against a difficult comp from prior to our purchase of the business. To wrap up on CooperSurgical, fertility remains strong. The other parts of the business are making progress, and the integration activity is going well. We expect a strong finish to this year and believe we're in an excellent position to deliver long-term mid-single-digit growth. To conclude, we operate in recession-resistant industries with strong macro growth trends, but we're not immune to supply chain challenges, and currency is having a material impact on our as-reported results. Having said that, our core business fundamentals are excellent. We're taking market share, we're leveraging where we can, we're taking price. We'll remain extremely focused on the challenges facing us, and we'll be proactive and we will proactively manage operations while maintaining a focus on delivering long-term shareholder value. With that, I'll turn the call over to Brian to discuss financial results and guidance. Thank you, Al, and good afternoon, everyone. Most of my commentary will be on a non-GAAP basis, so please refer to our earnings release for a reconciliation of GAAP to non-GAAP results. Third quarter consolidated revenues were $843 million, up 10% or up 9% organically. Consolidated gross margin was 66.1%, down 220 basis points from last year, driven primarily by currency. Operating expenses grew 13% and were 42.7% of revenues, primarily as a result of the acquisition of Generate Life Sciences. Consolidated operating margin was 23.4%. Within these results, currency is having a significant impact, negative impact, along with supply chain and inflationary pressures. We raised prices to offset some of this and have additional price increases coming, and we'll continue to work diligently controlling costs. Moving below the line, interest expense significantly increased year-over-year to $17 million, with higher rates and debt balances driving the large year-over-year increase. The effective tax rate was 10.2%, and non-GAAP EPS was $3.19, with roughly $49.6 million average shares outstanding. Year-over-year FX negatively impacted earnings by $0.67 in the quarter, which was $0.10 worse than we forecasted at the time of our last earnings call. As with last quarter, a large part of the $0.10 was attributable to the re-measurement of foreign currency-based intercompany trade receivables, which are recognized in other income and expense. In order to reduce this variability moving forward, we've made moves, including closing out certain non-functional exposures and improving our natural and synthetic hedge positions. Moving forward, we believe these efforts will do a better job mitigating the impact of FX gains or losses that occur below the operating income line. Returning to the quarter, free cash flow was extremely strong at $217 million, and we decreased net debt by $218 million to $2.64 billion. This reduced leverage to 2.44x, which lowered the borrowing rate on our long-term credit facility pricing grids by 25 basis points. As a reminder, $1 billion of our debt is fixed to 2025, with the remaining amount floating. Moving to guidance. We are increasing the full year organic revenue growth ranges for CooperVision and CooperSurgical to include our strong third quarter results and the strength we're seeing as we enter fiscal fourth quarter. For EPS, we're updating guidance to reflect the negative impact of currency and interest rates, offset slightly by better operational performance. Specific to fiscal fourth quarter, the consolidated revenue guidance range is $830 million-$850 million, up 9%-11% organically, with CooperVision revenues of $554 million-$565 million, up 8%-10% organically, and CooperSurgical revenues of $276 million-$285 million, up 10%-15% organically. Non-GAAP EPS is expected to be in the range of $3.05-$3.20 based on a roughly 13.5% effective tax rate and roughly $22 million of interest expense, which includes an assumption for a 75 basis point increase in September. Regarding currency, we're now forecasting the year-over-year negative impact in fourth quarter to be roughly an 8% headwind to revenues and a 20% headwind to EPS. For fiscal 2023, we won't be providing detailed guidance, but let me provide some high-level direction. Assuming currency rates remain similar to where they are today, interest expense increases to around $85 million due to multiple rate hikes, our effective tax rate increases to roughly 15%, and the macroeconomic environment remains challenging We expect to report low single-digit year-over-year non-GAAP EPS growth. These expectations do not include the pending acquisition of Cook Medical's reproductive health business. Lastly, as it relates to our pending acquisition of Cook, that transaction is still pending regulatory approval. We are currently exploring different options to close the transaction, including the potential sale of certain Cook assets in the U.S. and abroad. Given the process and necessary approvals, the timeline is tough to estimate, but we're hoping to close the transaction by June 30th, 2023. With that, I'll hand it back to the operator for questions. Thank you. As a reminder, to ask the question, you will need to press star one one on your telephone. We ask that you limit yourself to one question and one follow-up. Again, that's star one one to ask the question. Please stand by while we compile the Q&A roster. Our first question comes from the line of Jason Bednar with Piper Sandler. Your line is open. Hey, good afternoon. Thanks for taking the questions. Congrats on the strong organic growth here in the period. You know, maybe picking up on the real-time commentary you provided there, Albert, you mentioned strong growth for the business continuing into August. Just wanted to check, are you suggesting CVI and fertility both continue to grow at a double-digit pace? And then you also suggested contact lens demand is exceeding capacity with respect to office visits. You know, it's a fortunate problem, but do you have a sense, is this a function of staffing shortages or, you know, is demand around back to school simply really strong and above what's normal for the season? Yeah. On that second one, the back to school demand is strong. We've definitely seen an increase on that. There's some commentary of other people. I think National Vision talked about it on their call. It comes down to staffing shortages and really strong demand. That's putting pressure on the optometry community, whether it's retailers or independent optometrists, to meet all that demand. That's a challenge right now. Now, it's quote-unquote a good challenge, right? It's still a challenge that the industry needs to work through over the coming months. With respect to August, I won't give numbers on August, but yes, CooperVision and CooperSurgical, including fertility, are both having good August. All right. That's helpful. I hear the commentary on MiSight in China just probably got off to a little bit slower start with the lockdowns there. But you know, now that you're into July and August, things around med tech seem to have started to recover in China. I mean, can you talk about uptake of the lens in that market compared to other regions where MiSight's been available? Are you seeing the sales and education process you know, relatively shorter in that market? You know, just would love any color there. Thank you. Yeah. We have seen an uptake, uptick, if you will, in MiSight in the month of August, certainly, and including in China, where we've seen things loosen a little bit there. Positive news on that. The uptake of that product and success of that product is moving faster than we've seen in most other markets around the world. Certainly positive signs there, and fingers crossed we're now on a better path, right? Cause that's really the thing that impacted our numbers. It's really been China. That's 99% or 100% of what's impacted those numbers. Got it. Thank you. Yeah. Thank you. Please stand by for our next question. Our next question comes from the line of Larry Biegelsen with Wells Fargo. Your line is open. Good afternoon. Thanks for taking the question. Brian, thanks so much for the color on fiscal 2023. Maybe if I could ask about maybe some of the other assumptions embedded in the low single-digit year-over-year non-GAAP EPS growth. Underlying organic sales growth, do you think should we think about that in line with historical 6%-8% growth, organic growth for Cooper, or do you think you know can do better? Currency, Brian, I think I heard you talk about interest expense, but currency right now we think it's about 3% headwind to sales, $0.80 to EPS. Any color on those two? I had one follow-up. Hi. Hi, Larry. Thanks for the questions. You know, obviously you've followed us for a very long time. You know our story really well. You know, long term, you know, right now we've got a macroeconomic environment that makes it really challenging to provide specific guidance into the P&L this far in advance. We've decided to give a few elements today just to calibrate some people on a few important pieces. You know, again, I think we wanna reiterate that the core fundamentals of our business remain strong. We're raising prices, we're growing share, and we're diligently controlling costs and to leverage where we can. Obviously long term, we wanna drive mid to high single digit revenue growth and leverage to P&L to grow EPS to low double digits. Right now it's just too hard to say, and we're just not gonna go there this early in the year to talk about next year. Appreciate the questions, Larry, but we'll update that in December. Understood. Albert, on SightGlass, first of all, I didn't hear you reiterate the $90-$100 million for myopia management this year, but it looks achievable based on the $24 million you did in third quarter here. Just wanna confirm that. For SightGlass approval in the U.S., what's your confidence here by calendar year end, 2022? Did you hit, you know, FDA's goals for axial length and myopia progression? Thank you. Yeah, I think on myopia management globally, we'll probably end up in that $90-$95 million range. The only reason we're not at a hundred or a little over 100 ends up being currency. The other one would be obviously, China moving a little bit slower. I wouldn't take it completely off the table, but I'd probably say 90-95 is probably a better number that we'll settle in on. On SightGlass, I won't get into too many specific details on it, but I will say that, you know, we're submitting that data and looking forward to talking to the FDA on that and believe we have certainly a reasonable good chance to get approval by calendar year-end. Thank you. Yep. Thank you. Please stand by for our next question. Our next question comes from the line of Chris. Your line is open. Good afternoon, and thanks for taking the questions. Can you hear me okay? Yep. Hey, Chris. I'm sorry. She broke up there a little bit. Congrats on the strong organic growth. Just maybe two quick ones for me. First, when we just think about the new product cadence, the expansion of the MyDay portfolio, could you give us a little bit more color about when that will start to roll out, just to make sure I have that understanding correctly? Then on the surgical side, you know, maybe wrong here, but I mean, off of the fiscal second quarter, I thought we were gonna expect a little bit stronger organic growth on the office side with the equipment. Looks like that's still a little bit more supply chain constrained. Could you give us some color about what gives you confidence that improves as you go into the fiscal year end? Thank you. Sure. Good questions, Chris. You can see in the guidance we gave for CooperSurgical, that we're kind of in that 10%-15% organic growth range for CooperSurgical in fiscal fourth quarter. Expecting a really strong quarter. But we did have some stuff in third quarter because of supply chain move itself into fiscal fourth quarter. As I mentioned, we started off with a good quarter within both businesses, but within CooperSurgical to support that kind of guidance range. Anything that maybe you were thinking, Hey, it's gonna be a touch stronger in third quarter, you're gonna end up, I think, seeing in fourth quarter, 'cause I would imagine those kind of guidance expectations are a little bit above yours or most people's expectations for fourth quarter. If we look at CooperVision, yeah, the organic growth is really strong there. The business is doing really well. That team is putting up some impressive results and that's continuing. I think people underestimate the power of our portfolio, the breadth of our portfolio, the strength of our sales and marketing teams, and the amount of new products that we're launching, right? Whether that's a parameter expansion or a new product itself, we're very active, and we've been very successful in a lot of segments. That's gonna continue. As I mentioned, as we roll into this next fiscal year, we'll be expanding the parameter range of MyDay again. It's already market leading today. It's gonna be even better, up where kind of Biofinity is. So MyDay is kind of turning into a Biofinity daily, if you will, kind of success story, which is just awesome, amazing. When you think about Energys, I mean, I'm really excited about that. We launched Biofinity Energys. It did really well for itself. The demand around the Energys technology on a daily SiHy has been really strong. We've had to ramp up production considerably within MyDay to be able to do that. The manufacturing team has done a killer job to get us where we're at today. So we have that product. We're gonna start seeding the market here in the next couple of months, and look forward to getting that launched in early next year. All that activity, along with the other stuff I mentioned, you know, Biofinity and the things like Biofinity toric multifocal and extended ranges and so forth, are all gonna continue to support what I believe is gonna be some stronger than people are probably expecting organic revenue growth. Thank you. Appreciate these questions. Yep. Thank you. Please stand by for our next question. Our next question comes from the line of Jonathan Block with Stifel. Your line is open. Great, guys. Thanks. Good afternoon. Brian, maybe I'll start with you and just the EPS. Just the 22 EPS midpoint stepping down by roughly $0.40. I'm not sure if I missed it, but can you bridge, you know, the different components? Clearly, FX hit you. You had the interest rate, you know, come in above what you guys laid out last quarter. Maybe just walk us through the headwinds from FX and interest rate. You mentioned a little bit on supply chain as well, and then, you know, maybe what the offset was from better than expected. Sorry, there's a lot of noise. Better than expected operational growth as the organic came up by roughly 100 basis points. Yeah, sure. Hi, Jon. So prior guidance midpoint was $3.19. I gave the FX unfavorability versus last guidance in my prepared remarks of $0.10. The Q4 FX unfavorability is a 20% headwind to fourth quarter. Interest expense went up because of the Fed increases. Jon, were you asking about fourth quarter? I thought you were asking about 2023. No, I'm sorry. I'm asking for, just to be clear, on fiscal 2022, like let me just sort of make up some numbers. I mean, relative to when you last guided on the second quarter conference call, what did FX and interest rates take you down? You're lower by $0.40, but did you go down by $0.50 on FX and interest rates and then make back $0.10? I'm just making that number up on ops. I'm just trying to get the bridge to get clear. In the full year? Correct. Okay. Just starting with FX, I mean, I talked last quarter about the FX headwind to revenues for the full year being 5%, it's now 6%. The headwind to EPS last quarter was 14%, it's now 17%. As it relates to interest expense, forecasted of 50/50/25, and it was 75/75, and now we're saying 75 again in September. That's about $0.05 right there. We've adjusted our guidance primarily tied to just FX and interest expense and some, you know, a slight operational improvement, which gets you to that midpoint of 12.80. Okay. I think I'm there. Albert, I maybe have a longer one for you, but just, you know, you brought up the CVI organic growth again. Talk to us on the drivers. You know, is it new fits? It seems like it's certainly some incremental price. What do we think about price in fiscal 2023? Does that have to step back down, you know, relative to 2022? Then one last one on my side. We just picked up, you know, some chatter that you might have rolled out a rebate program very recently. Is that correct? If so, was that just a year one rebate for new wear or was that also arguably year two- year- three? Please, guys. Yeah. On MyDay, Jon, I think what you're probably referring to is back-to-school promotional activity. I mean, the back-to-school demand has been very strong, and we've seen that demand on the optometry community. As part of that, we were running or are running promotional activity for MyDay. I'm pretty confident that's what you're probably seeing out there. If we look at price, we took price earlier this year, and then we took price again this summer. We're looking at additional price increases right now and into next year. I think if everything holds as it is with the economy and inflationary pressures and so forth, you'll see incremental price increases from us. 2023 should still be a good growth year for us. We still have a lot of the underlying factors that are driving growth of the entire marketplace and our growth continuing. Now, we're gaining wearers. When you look at the fit data, as I mentioned, we're just doing really well. We're number one on fit data. When it comes to winning the new wearer who's coming in and winning the new fits, we're doing really well in that space. I think that as we continue to roll products out and launch some of these new products and improve availability of products, we'll continue to do well from a new fit perspective. When you combine that with some price, I think you end up with another pretty good year next year, frankly, for the entire marketplace and us included. Helpful. Thanks, guys. Thank you. Please stand by for our next question. As a reminder, ladies and gentlemen, we ask that you limit yourself to one question and one follow-up. Our next question comes from the line of Joanne K. Wuensch with Citi. Your line is open. Good evening, and thank you for taking the questions. I'm curious about a couple of things. You're talking about a price increase earlier this year, and then a second one, a third one that's being happening now, and then a fourth one. Can you quantify how much the price increases are? And then are those, sort of like to like products, or are they reflective of new product launches such as, you know, the Biofinity Energys family that's going out the door? Yeah. I won't quantify, Joanne, but there's different price increases happening on different products at different points around the world. Not only that, you're actually seeing some stuff in terms of like freight surcharges and so forth to offset some of those increases. I mean, the one I think most recently that we took a few months ago was Biofinity. We had other increases to start the year. You're right that MyDay Energys is certainly being launched or will be launched at a price premium, which will be another quote-unquote increase, as you will. We'll look at other opportunities as we move through the end of this year and certainly into next year. My second question is, I'm curious about your source for the new fit- share. Is that a new number one spot or is that a continued number one spot? That is a continued number one spot. On the source? A variety of areas. It would really depend on what product you're talking about. I mean, some of them are more dramatic than others. As an example, a MyDay multifocal is doing really well, and it's picking up from a number of other multifocal companies, and then it's also picking up new multifocals wearers who are coming into the market. New wearers, and I'm talking about new wearers, the new 15-year-old, 16-year-old who enters the marketplace, we're doing really well there with MyDay and clariti. We don't have the same opportunity of trade up, as you know, as some of our competitors do in terms of them shifting from like an old traditional, if you will, hydrogel daily lens to a new silicone hydrogel and getting the trade up benefit of that. We don't have as much of that. When you look at our growth, it ends up coming from those new wearers. It's really a variety of different areas and different spots around the world. Excellent. Thank you. Yep. Thank you. Please stand by for our next question. Our next question comes from the line of Matt Mishan with KeyBanc. Your line is open. Hey, good afternoon. Thank you for taking the questions. Hey, I know you guys have done some amazing things around the kind of resiliency and power supply down in Puerto Rico. Have you incorporated some assumptions for increased power costs in the U.K. and Hungary into the forward outlook? How should we think about, you know, the manufacturing in those regions, and some of the difficulty that may be this winter? Yeah, Matt, we have incorporated that. That was built into Brian's commentary when he was talking about the macroeconomy, if you will. Okay, excellent. I know some of your competitors have had some supply chain issues. How much of a benefit do you think you're getting from some of those peers? How sticky do you think those are? I would say very little benefit. In the contact lens industry, so much of it still goes around to the prescription itself, right? You go get a script, and you buy. If someone's having supply chain issues, their wearer base generally extends their lenses, or they wear their glasses or whatever in order to get those products. You have to have supply chain challenges of a decent magnitude that lasts a while before you really start seeing changing fitting behavior. I don't think very much right now. I would change that answer if those kind of supply chain difficulties stay at high levels and go an extended period of time, but I don't know. As of now, I would say very little. All right. Thank you. Thank you. Please stand by for our next question. Our next question comes from the line of Jeff Johnson with Baird. Your line is open. Thank you. Good afternoon, guys. Hey, Albert, I know you said you didn't wanna qualify the price increases. Sorry. Yeah. See if this is better, Albert. I don't know. It sounds like I'm having the same problem Jon Block was having. Can you hear me okay? We can hear you fine. Yeah. All right. Thank you. I know you won't quantify the price increases, but, you know, our checks would say maybe 1.5% earlier this year, another 1.5% in August. It's hard to know with your contracting in that. I mean, are those about the ranges we should be thinking about maybe 2.5 points total net so far this year on the CVI side? Yeah. I think that's probably fair. We had talked about this, I think in last quarter-to-quarter before, right? Some of those price increases for us move in a little bit slower than others. Some of the guys have a lot on list price, right? So when they raise their list price, they'll get a benefit from those price increases relatively quickly. We have a lot under contract, especially with respect to anything that we're doing about store brands and that kind of stuff. So some of those price increases for us have a tendency to roll in over a longer period of time as those contracts need to re-up. I think the magnitude of what you're talking about right now is somewhat in the ballpark or slightly lower. Yeah. Okay. Slash lower. Okay. Thank you. Then maybe two follow-ups on that. One, can you just remind me of the surcharges in that, transport costs and some distribution costs and that starting to come down a little bit. Do those fall into revenue, or those are an expense line item? Would you expect to keep those surcharges in place much longer, or just how to think about that one? Two, you mentioned MiSight, some back to school activity there on the promotion side. We were finding in our survey work maybe a little bit of lower sell-in price to docs as well on MiSight. Have you changed kind of your sell-in price, not just your sell out? No. We haven't changed our pricing in terms of our sell-in. We've held pricing. We are trying to do some other stuff, right? When you think about the most successful referral source, if you will, or person for us to market the product is anyone who's used MiSight. The success rate has been really, really positive. Those parents who are positive on the product are telling other people, right? We're trying to offer some promotional campaigns, for instance, for them. Hey, your kid's now in their second year or their third year wearing MiSight. We'll give you a discount for everybody who you refer in who comes to MiSight. That type of thing. Promotional activity for a brand new wearer coming into MiSight around back to school. There is some activity that we're doing, Jeff, to be fair in terms of that pricing. There's been a few highlights about the pricing being a little high. If you will, we haven't taken the list price down, but we are running promotional activity, especially with the heavy back-to-school season here. On the other side of things, on the freight, there's still. Freight's still a tough one, I gotta tell you. Yeah, I would say things are getting a little bit better, but everyone still has their challenges there. I think that my gut tells me that those changes are just permanent price increases, if you will. I think they all go through revenues, don't they? Yeah, freight revenue. Okay. I mean, the only thing I would add to that is as we are having difficulty meeting demand, it does force us to supply more than we'd like to, and we're not able to take advantage of the ocean freight. I mean, you're seeing freight charges go up all across the board. We're doing whatever we can to try to manage that by raising, you know, surcharges and so forth. There's still inefficiency in the way that we're having to ship to our customers, and you're seeing that as a detriment to, you know, both intercompany but also freight out and distribution. Yeah, that makes sense. All right. Thanks, guys. Yep. Thank you. Please stand by for our next question. Our next question comes from the line of Robbie Marcus with JP Morgan, your line is open. Hi, this is actually Lily on for Robbie. Thanks for taking the question. Operating margin came in lower than what we were thinking and pretty significantly lower than a year ago today. Is there any way to quantify how much of that is FX headwind versus operational challenges? Hi, Lily. Yeah, I'll take that one. You know, I think operating margins for us came in more or less where we expected. FX is just brutally killing our P&L, and you're seeing that in the third quarter. ParaGard was down versus last year's third quarter. That's a high gross margin product, so that impacted margins in the flow through. We also had inefficiencies within CooperVision, which we knew about going into the third quarter, tied to shutting down lines in fiscal first quarter that we always do to refurbish and, you know, what we usually do. Some of the activity we knew about, but it's really a story about FX. Got it. That's helpful. And just as a follow-up, where are new fits relative to normal levels? Are there any geographies that stand out as lagging or being above pre-pandemic levels right now? Thanks so much. Yeah. You know, it's really interesting going through that data because even the U.S. data we just got shows that new fits are not back to pre-COVID levels. There's different data at different spots kinda around the world being you know, as much as 5-10% below pre-COVID levels. If you look at the strength of the revenue numbers and where the industry is today, then you go, "Man, we still have five or 10% of fits to get back into the market just to get to pre-COVID levels," knowing that wearers are also increasing, right? You can get kind of excited about the potential opportunities there over the coming years. I happen to believe that a lot of those wearers are getting fit in different ways and maybe not getting fully captured in that data, like, through things like telehealth and so forth, so that people are able to get prescriptions renewed, are able to buy their lenses in different ways. To be fair, the data is showing that we're not back to pre-COVID levels in terms of fits. Got it. Thank you. Yep. Thank you. As a reminder, ladies and gentlemen, that's star one one to ask a question. Please stand by for our next question. Our next question comes from the line of Steven Lichtman with Oppenheimer. Your line is open. Thank you. Hi, Albert and Brian. Albert, just wanted to get your confidence on ParaGard improvements from here, beyond the easier comps. You know, what are you seeing on the ground there for ParaGard, and what do you see as potential drivers for improvement ahead? Yeah. On ParaGard, we had a tough quarter, as we said this quarter because of the comp. We'll have a good fourth quarter. We started off well here in August. Matter of fact, we finished strong at the end of July with ParaGard. With Roe v. Wade and what's happened, women are out there, and they're a little bit more concerned about things for obvious reasons. We are seeing that women are looking at, okay, well, what's the most efficacious form of birth control? What direction should I go here? We have seen an increase in interest in LARCs, and you've seen that in some of the numbers here more recently. We'll see if that trend holds. If it does, you'll continue to see outperformance in IUD. I would say that the kind of Roe v. Wade outcome, if you will, I was saying that it was a neutral to a modest positive to us. I would probably upgrade that to saying that that's turning out to be a modest positive to our business. We'll see how ParaGard goes, but I would envision a decent quarter in fourth quarter, that's for sure. Okay, got it. And Brian, you and Albert talked about ramping production, I think, across a number of lines in CVI. What is your outlook for CapEx spend in this year? Directionally, are you anticipating next year to be up, down, flat versus this year at CapEx? Yeah. Hi, Steve. Good question. Yeah. CapEx ticked up a little bit in the third quarter. Yeah, Albert, in his prepared remarks, talked about how we put some lines in place, and we're doing whatever we can as quickly as we can to ramp up capacity. It's hugely difficult to increase capacity quickly. We're having a tough time meeting demand. I'm expecting a pretty high CapEx number in the fourth quarter. Still free cash flow being strong for the full year, that trend kinda continuing where next year CapEx continues to go higher as we continue to put more capacity in place to try to meet demand. Got it. Thank you, guys. Thank you. Please stand by for our next question. Our next question comes from the line of David Saxon with Needham. Your line is open. Yeah. Hi, good afternoon. Thanks for taking the questions. Maybe just a follow-up on ParaGard. I think last quarter you noted softness in the market, but it sounds like you have a fair bit of confidence in it returning to growth here in the fourth. You know, is that market dynamic kind of past us at this point? Just on pricing, I know you took price. I guess you're gonna be lapping it soon, but any opportunity to take price again with ParaGard? Yeah. A couple things on ParaGard. We did see office visits down, OBGYN office visits down, and that was due to COVID-related staffing challenges, right? We've seen some of that same stuff obviously in optometry offices, and I'm sure everyone has seen that in other areas of the world. We definitely saw a negative impact to patient traffic, especially with respect to things like general OBGYN visits and contraception OBGYN visits during the summer months. After the Roe v. Wade situation and a little bit of improvement in terms of capacity, you had a bunch more attention, if you will, focused on the matter. We've seen that attention be a benefit to ParaGard because ParaGard is, I mean, it's highly efficacious, 99% plus efficacious. If you don't wanna get pregnant, get an IUD. As people look at that, become more aware of that, obviously ParaGard is the only non-hormonal IUD in the marketplace. We've seen an increase in terms of interest in the product and people inquiring about it, people searching for it. Our team, I think, has really done a nice job trying to capitalize on that activity. We saw that improvement starting in July. We've seen it continue here through August. Yeah, I think you'll see growth certainly in fourth quarter. TBD on price increases. One of our competitors did a price increase or is doing one here. We'll evaluate another one and take price if we can, if it's appropriate. Okay, that's helpful. On myopia management at 90%-95%, wherever it shakes out, is that portfolio gonna be profitable? If not, how should we think about when that starts to contribute to earnings? Thanks so much. Yeah. I would call that somewhere around the kind of breakeven this year. Let's go with, you know, let's just say it's breakeven, and then it'll shift to being profitable next year. We've built a lot of infrastructure there, in terms of myopia management support people and so forth. We'll start to leverage that infrastructure as we get into next year. Yeah, that's an operating margin drag certainly right now. It gets better next year. Then hopefully as if it continues to grow at the pace it's growing and what we're seeing, you know, we'll continue to improve that operating margin, hopefully at some point in the future, get that to be operating margin positive, especially with the gross margins in that business. Got it. Thank you. Thank you. I'm not showing any further questions. I would now like to turn the call back over to Albert G. White for closing remarks. Great. Thank you. Thank you, everyone. Again, strength in the business and the core fundamentals are driving what's making us optimistic, you know? I mean, the one thing Brian touched on it, is currency has been painful for us. It's been pretty brutal. We're working through it the best that we can, and we're taking the measures that we can take. If we exclude currency and really look at the fundamentals of the business, whether it's CooperVision or it's CooperSurgical, especially the fertility business, things are strong and we believe they're gonna remain strong. We started fourth quarter off well, and we're optimistic about finishing this quarter well and having a good year next year. Appreciate everyone's interest. Look forward to seeing people, hopefully some of you at the Wells Fargo Healthcare Conference with Larry here, I think next week. Look forward to speaking to everyone else during the quarter or on the fourth quarter call. Thanks. Ladies and gentlemen, this concludes today's conference call. You may now disconnect.