MENTOR REPORTS THIRD QUARTER FISCAL YEAR 2008
FINANCIAL RESULTS

•    Net Sales were $92.9 Million in the Third Quarter of Fiscal Year 2008, an increase of 23% over $75.3 Million in the Third Quarter of Fiscal Year 2007

•   Diluted Earnings per Share from Continuing Operations was $0.32 in the Third Quarter of Fiscal Year 2008, which is equal to the Third Quarter of Fiscal Year 2007

•   Diluted Non-GAAP Earnings Per Share from Continuing Operations was $0.37, an increase of 16% over the $0.32 reported in the Third Quarter of Fiscal Year 2007

SANTA BARBARA, California, January 31, 2008 - Mentor Corporation (NYSE:MNT), a leading supplier of medical products for the global aesthetic market, today announced financial results for the quarter ending December 31, 2007, the third quarter of fiscal year 2008. 

"We are pleased with our third quarter results and our continued progress in fulfilling our aesthetic medicine strategy. During the quarter, we drove continued conversion to our MemoryGel product line in the U.S.," commented Joshua H. Levine, President and Chief Executive Officer.  "From a strategic perspective, we continued to invest heavily in research and development to diversify the product portfolio and support greater critical mass in terms of our overall business."

Total Net Sales
Total net sales were $92.9 million in the third quarter of fiscal year 2008, an increase of 23% over net sales of $75.3 million in the third quarter of fiscal year 2007.  The increase in net sales was primarily the result of the conversion from saline breast implants to MemoryGel™ silicone breast implants and strong sales of reconstructive products.  Internationally, Mentor experienced strong sales growth in the quarter, including sales from the recently acquired Perouse subsidiary of approximately $4.7 million.  Total net sales for the third quarter of fiscal year 2008 included approximately $1.6 million of positive foreign currency exchange effects.

Gross Profit and Margin
Gross profit for the third quarter of fiscal year 2008 was $66.7 million, or 71.9% of net sales, compared to $56.4 million, or 74.9% of net sales, in the third quarter of fiscal year 2007.  Excluding a $1.0 million charge for the "step-up" valuation of inventory associated with the Perouse acquisition, gross margin on a non-GAAP basis was 72.9% for the quarter.  The gross margin percentage was primarily adversely affected by sales of Perouse products. 

Selling, General and Administrative
Selling, general and administrative (SG&A) expenses in the third quarter of fiscal year 2008 were $38.9 million, or 41.9% of sales, compared to $32.4 million, or 43.0% of sales, in the third quarter of fiscal year 2007.  Included in SG&A expenses in the third quarter of fiscal year 2008 was $1.8 million of severance expense.

Research and Development
Research and development (R&D) expenses in the third quarter of fiscal year 2008 were $9.7 million, an increase of $1.9 million, or 25%, from the third quarter of fiscal year 2007.  For the first nine months of fiscal year 2008, the Company recorded expense of $32.2 million, reflecting an increase of 31% when compared to $24.7 million in the same period last year.  The Company has invested and expects to continue to invest heavily in clinical trials and related program expenses in support of its breast and facial aesthetics initiatives.

•          Dermal Fillers
Mentor anticipates approval for Prevelle™ Plus and Puragen™ Plus in the U.S. in late fiscal year 2008 and mid-fiscal year 2009, respectively.  The Company's next generation dermal filler, DGE, is in study follow-up with anticipated FDA submission in the third quarter of fiscal year 2009 and approval in the first or second quarter of fiscal year 2010.

•          Botulinum Toxin Type A Program
The Company expects 6-month follow-up to be completed in its Phase IIIa clinical trial by mid-March 2008 in its study for the correction of rhytides.  During the quarter, enrollment of 700 patients into the Phase IIIb study began and was completed on January 17, 2008.   The Phase IIIc patient enrollment is expected to begin by the end of February 2008.   In addition, Mentor anticipates completion of patient enrollment in its Phase I study for the treatment of pain from torticollis/cervical dystonia by the end of fiscal year 2008. 

•          MemoryGel silicone gel-filled breast implants Post-Approval Study (PAS)
As of January 30, 2008, Mentor has enrolled approximately 27,100 patients towards the total target of 42,900 patients required by the PAS conditions.  The Company expects to fully complete patient enrollment in the PAS within the FDA directed timeline of 2 years from the initiation date of the study, February 15, 2007.

Operating Income
Operating income from continuing operations was $18.1 million in the third quarter of fiscal year 2008, representing an increase of 12% over the $16.2 million reported in the third quarter of fiscal year 2007.  For the first nine months of fiscal year 2008, operating income from continuing operations was $60.4 million, representing an increase of 29% over the same period last year.

Net Interest
Interest expense, net of interest income in the third quarter of fiscal year 2008, was $0.2 million.  In the third quarter of fiscal year 2007, interest income, net of interest expense, was $4.9 million.  The decrease in interest income was due to lower cash balances primarily as a result of repurchases of shares of the Company's common stock.

Effective Tax Rate
Mentor's effective tax rate for continuing operations in the third quarter of fiscal year 2008 was 30.9% compared to 29.4% in the third quarter of fiscal year 2007. 

Earnings Per Share
Mentor recorded diluted GAAP earnings per share (EPS) of $0.32 in the third quarter of fiscal year 2008, compared to $0.29 per share in the third quarter of fiscal year 2007. 

Mentor reported diluted GAAP EPS from continuing operations of $0.32 in the third quarter of fiscal year 2008, which is equivalent to the $0.32 reported in the third quarter of fiscal year 2007.  Diluted GAAP EPS from continuing operations for the third quarter of fiscal year 2008 includes a combined $0.05 after tax effect related to severance costs and costs recorded in cost of sales related to the "step-up" valuation of inventory associated with our Perouse acquisition. 

Excluding these charges, diluted non-GAAP EPS from continuing operations was $0.37 in the third quarter of fiscal year 2008, an increase of 16% over the $0.32 in the third quarter of fiscal year 2007 when there were no similar charges. 

Balance Sheet
Mentor ended the third quarter of fiscal year 2008 with $107 million in cash and marketable securities, compared to $488 million at the end of fiscal year 2007.  In the first nine months of the fiscal year, Mentor repurchased approximately 9 million shares of its common stock for $368 million, invested cash of approximately $53 million in the acquisition of Perouse and paid dividends of $23 million. 

Conference Call
Mentor Corporation has scheduled a conference call today regarding this announcement.  Those interested in listening to a recording of the call may dial (800) 695-2122 at 6:00 p.m. ET today until Midnight ET, Thursday, February 7, 2008.  You may also listen to the live web cast at 5:00 p.m. ET today or the archived call at www.mentorcorp.com, under Investor Relations and "Audio Archives".

Note Regarding Use of Non-GAAP Financial Measures
The financial measures of non-GAAP gross margin, non-GAAP SG&A expense, and diluted non-GAAP earnings per share from continuing operations included in this press release are different from those otherwise presented under GAAP as these non-GAAP measures exclude certain charges.  In the third quarter of fiscal year 2008, these charges include severance expense included in SG&A and amounts recorded as cost of sales as a result of the "step-up" valuation of inventory related to the Perouse acquisition.  Neither of these items was recorded in the third quarter of fiscal 2007.  Mentor has provided these measures in addition to GAAP financial results because management believes these non-GAAP measures provide a consistent basis for comparison between quarters and of profitability rates that are not influenced by these charges and therefore are helpful in understanding Mentor's underlying operating results.  These non-GAAP measures are some of the primary measures Mentor's management uses for planning and forecasting.  These measures are not in accordance with, or an alternative to, GAAP and these non-GAAP measures may not be comparable to information provided by other companies.  Reconciliations of GAAP to non-GAAP results are presented at the end of this press release.

Safe Harbor Statement
This release contains forward-looking statements including, but not limited to, statements relating to Mentor's current and anticipated product development activity and expenses, and  market acceptance of those products; the approval with conditions by the  FDA of the Company's MemoryGel silicone gel breast implants PMA; the initiation, patient enrollment, and continuation of clinical studies with respect to the Company's botulinum toxin Type A program; the development program for a portfolio of hyaluronic acid-based dermal fillers; and the acquisition of Perouse Plastie by Mentor.

A number of factors could cause actual results to differ from the forward-looking statements including, but not limited to, U.S. market acceptance and adoption of MemoryGel breast implants; patient enrollment in the FDA-mandated post-approval study for MemoryGel breast implants; the amount and timing of expenses to be incurred with respect to the MemoryGel breast implants post-approval study; the timing and conditions of FDA approval, if any, of the Company's Contour Profile Gel breast implant PMA; the ability of the Company to move forward in a timely manner with the PMAs for its hyaluronic acid-based dermal fillers; the timing and outcome of other PMAs submitted to the FDA; results of clinical development programs; the timing and outcome of various clinical trials undertaken by the Company; the impact on revenue and expenses of delays in FDA approval and other governmental agencies for the approval and sale of any of the Company's products; seasonal and economic factors, in the U.S. and internationally, which affect demand for aesthetic products and procedures; the ability of the Company to identify and implement other product opportunities in the global aesthetics marketplace; competitive pressures and other factors such as the introduction or regulatory approval of new products by competitors and pricing of competing products and the resulting effects on sales and pricing of the Company's products; disruptions or other problems with sources of supply; significant product liability or other claims; difficulties with new product development, introduction and market acceptance; changes in the mix of the Company's products sold; patent and intellectual property conflicts; product recalls; FDA or other governmental agency  rejection of new or existing products; changes in Medicare, Medicaid or third-party reimbursement policies; changes in government regulation; use of hazardous or environmentally sensitive materials; and other events. Risks and uncertainties relating to the Perouse acquisition include that the businesses of Mentor and Perouse will not be integrated successfully; anticipated synergies may not be fully realized or may take longer to be realized than expected; and possible disruption of the Perouse business, including with customers, employees, suppliers or third parties.

Important factors that may cause such a difference for Mentor include, but are not limited to, those factors described in the Company's Annual Report on Form 10-K, Quarterly Report on Form 10-Q, recent Current Reports on Form 8‑K and other Securities and Exchange Commission filings.  These filings discuss the foregoing risks as well as other important risk factors that could contribute to such differences or otherwise affect the Company's business, results of operations and financial condition.  The Company undertakes no obligation to revise or update publicly any forward-looking statement for any reason.

Contact:

Mentor Corporation
Michael O'Neill
Vice President and Chief Financial Officer
(805) 879-6082