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8-K - FORM 8-K - COOPER COMPANIES, INC.d312672d8k.htm

Exhibit 99.1

 

LOGO    LOGO
NEWS RELEASE   

6140 Stoneridge Mall Road

Suite 590

Pleasanton, CA 94588

925-460-3663

www.coopercos.com

 

CONTACT:

Kim Duncan

Sr. Director, Investor Relations

ir@cooperco.com

  

THE COOPER COMPANIES ANNOUNCES FIRST QUARTER 2012 RESULTS

PLEASANTON, Calif., March 8, 2012 — The Cooper Companies, Inc. (NYSE: COO) today announced financial results for the fiscal first quarter ended January 31, 2012.

 

   

Revenue increased 11% year-over-year to $326.1 million. CooperVision (CVI) revenue up 10% to $268.9 million and CooperSurgical (CSI) revenue up 15% to $57.2 million.

 

   

GAAP earnings per share (EPS) $1.12, up 29 cents or 35% from last year’s first quarter.

 

   

Fiscal 2012 EPS guidance revised upward.

Commenting on the results, Robert S. Weiss, Cooper’s president and chief executive officer said, “We are pleased with our performance in the first quarter. Our strategy remains the same and our execution is illustrated in the numbers. We grew top line faster than our markets, we invested in our infrastructure with a focus on sales and marketing and research and development, and we posted double-digit earnings growth.”

First Quarter GAAP Operating Highlights

 

   

Revenue $326.1 million, 11% above first quarter 2011, 11% in constant currency.

 

   

Gross margin 65% compared with 60% in last year’s first quarter. The improvement was primarily the result of savings related to the closure of the Norfolk manufacturing plant completed in the fiscal first quarter of 2011, increased manufacturing efficiencies, and product mix.

 

   

Operating margin 19% compared with 17% in last year’s first quarter. The increase was driven by the improvement in gross margin offset by investments in sales, marketing, and research and development, and increased amortization expense.

 

   

Depreciation expense $20.2 million, up 11% from last year’s first quarter. Amortization $5.6 million, up 18% from last year’s first quarter as a result of acquired intangible assets related to recent acquisitions.


   

Interest expense $3.7 million compared with $7.0 million in last year’s first quarter.

 

   

Total debt increased $29.9 million in the quarter to $410.3 million, due primarily to share repurchases.

 

   

Cash provided by operations $41.6 million, capital expenditures $20.0 million, insurance recovery $1.6 million resulted in free cash flow of $23.2 million.

First Quarter CooperVision (CVI) GAAP Operating Highlights

 

   

Revenue $268.9 million, up 10% from last year’s first quarter, 10% in constant currency.

 

   

Revenue by category:

 

     (In millions)
1Q12
     % of CVI Revenue
1Q12
    %chg
y/y
    Constant  Currency
%chg

y/y
 

Toric

   $ 81.8         30     8     9

Multifocal

     20.8         8     25     26

Single-use sphere

     60.4         23     14     10

Non single-use sphere, other

     105.9         39     8     8
  

 

 

    

 

 

     

Total

   $ 268.9         100     10     10
  

 

 

    

 

 

     

 

   

Revenue by geography:

 

     (In millions)
1Q12
     % of CVI Revenue
1Q12
    %chg
y/y
    Constant  Currency
%chg

y/y
 

Americas

   $ 106.0         39     10     11

EMEA

     95.4         36     5     7

Asia Pacific

     67.5         25     19     13
  

 

 

    

 

 

     

Total

   $ 268.9         100     10     10
  

 

 

    

 

 

     

 

   

Selected revenue by material:

 

     (In millions)
1Q12
     % of CVI  Revenue
1Q12
    %chg
y/y
    Constant  Currency
%chg

y/y
 

Proclear®

   $ 70.8         26     7     6

Silicone hydrogel

   $ 86.9         32     39     40

 

   

Gross margin 64% compared with 59% in the first quarter of 2011. The improvement was the result of savings related to the closure of the Norfolk manufacturing plant completed in the fiscal first quarter of 2011, increased manufacturing efficiencies, and product mix, primarily the shift to higher margin silicone hydrogel products.


First Quarter CooperSurgical (CSI) GAAP Operating Highlights

 

   

Revenue $57.2 million, up 15% from last year’s first quarter, up 9% excluding acquisitions.

 

   

Revenue by category:

 

     (In millions)
1Q12
     % of CSI Revenue
1Q12
    %chg
y/y
 

Office, other

   $ 30.5         53     10

Surgical procedures

     22.9         40     24

Fertility

     3.8         7     10
  

 

 

    

 

 

   

Total

   $ 57.2         100     15
  

 

 

    

 

 

   

 

   

Gross margin 67%, up from 64% in last year’s first quarter. The improvement in gross margin was largely a result of manufacturing efficiency improvements and product mix including higher margin products used in surgical procedures.

Other Items

 

   

Share repurchases $46.1 million or approximately 663,000 shares.

 

   

IRS Notice of Deficiency for the tax years 2005 and 2006 settled, resulting in a favorable adjustment to the effective tax rate.

2012 Guidance

The Company revises upward its full-year 2012 EPS guidance. Guidance is summarized as follows:

 

     FY12 Guidance
Old
   FY12 Guidance
New

Revenues (In millions)

     

Total

   $1,385-$1,440    $1,385-$1,440

CVI

   $1,170-$1,210    $1,170-$1,210

CSI

   $215-$230    $215-$230

EPS

     

GAAP

   $4.80-$5.00    $4.90-$5.15

Non-GAAP

   $4.80-$5.00    $4.90-$5.15

Free Cash Flow (In millions)

   $200-$230    $200-$230


Conference Call and Webcast

The Company will host a conference call today at 5:00 PM ET to discuss its fiscal first quarter 2012 financial results. The dial in number in the United States is +1-800-435-1261 and outside the United States is +1-617-614-4076. The passcode is 38162301. There will be a replay available approximately two hours after the call ends until Thursday, March 15, 2012. The replay number in the United States is +1-888-286-8010 and outside the United States is +1-617-801-6888. The replay passcode is 23691259. This call will be broadcast live on our website at www.coopercos.com and at www.streetevents.com. A transcript will be available on our website following the conference call.

About The Cooper Companies

The Cooper Companies, Inc. (“Cooper”) is a global medical device company publicly traded on the NYSE Euronext (NYSE:COO). Cooper is dedicated to being A Quality of Life Company™ with a focus on delivering shareholder value. Cooper operates through two business units, CooperVision and CooperSurgical. CooperVision brings a refreshing perspective on vision care with a commitment to crafting a wide range of high-quality products for contact lens wearers and providing focused practitioner support. CooperSurgical focuses on supplying women’s health clinicians with market leading products and treatment options to improve the delivery of healthcare to women. Headquartered in Pleasanton, CA, Cooper has over 7,000 employees with products sold in over 100 countries. For more information, please visit www.coopercos.com.

Forward-Looking Statements

This news release contains “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Statements relating to guidance, plans, prospects, goals, strategies, future actions, events or performance and other statements which are other than statements of historical fact, including our 2012 Guidance and all statements regarding anticipated growth in our revenue, expected results of operations and integration of any acquisition are forward-looking. To identify these statements look for words like “believes,” “expects,” “may,” “will,” “should,” “could,” “seeks,” “intends,” “plans,” “estimates” or “anticipates” and similar words or phrases. Forward-looking statements necessarily depend on assumptions, data or methods that may be incorrect or imprecise and are subject to risks and uncertainties.

Among the factors that could cause our actual results and future actions to differ materially from those described in forward-looking statements are: adverse changes in the global or regional


general business, political and economic conditions due to the current global economic downturn, including the impact of continuing uncertainty and instability of United States and international credit markets that may adversely affect the Company’s or its customers’ ability to meet future liquidity needs; reduced sales, loss of customers, and costs and expenses related to the recall of certain lots of Avaira Toric and Avaira Sphere contact lenses and any additional adverse impact if this recall is expanded in the future; delays in obtaining, or failure to obtain, FDA approval to return Avaira Toric to market; a major disruption in the operations of our manufacturing, research and development or distribution facilities due to technological problems, natural disasters or other causes; disruptions in supplies of raw materials, particularly components used to manufacture our silicone hydrogel lenses; legal costs, insurance expenses, settlement costs and the risk of an adverse decision or settlement related to product liability, patent or other litigation; limitations on sales following new product introductions due to poor market acceptance; new competitors, product innovations or technologies; the impact of acquisitions or divestitures on revenues, earnings or margins; interest rate and foreign currency exchange rate fluctuations; the requirement to provide for a significant liability or to write off, or accelerate depreciation on, a significant asset, including goodwill; changes in United States and foreign government regulations of the retail optical industry and of the healthcare industry generally; changes in tax laws or their interpretation and changes in effective tax rates; dilution to earnings per share from acquisitions or issuing stock and other events described in our Securities and Exchange Commission filings, including the “Business” and “Risk Factors” sections in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2011, as such Risk Factors may be updated in quarterly filings.

We caution investors that forward-looking statements reflect our analysis only on their stated date. We disclaim any intent to update them except as required by law.


THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Consolidated Condensed Balance Sheets

(In thousands)

(Unaudited)

 

     January 31,
2012
     October 31,
2011
 
     
ASSETS      

Current assets:

     

Cash and cash equivalents

   $ 7,681       $ 5,175   

Trade receivables, net

     200,160         214,779   

Inventories

     272,774         253,584   

Deferred tax assets

     29,113         33,684   

Other current assets

     45,535         33,125   
  

 

 

    

 

 

 

Total current assets

     555,263         540,347   
  

 

 

    

 

 

 

Property, plant and equipment, net

     583,239         609,205   

Goodwill

     1,272,030         1,276,567   

Other intangibles, net

     122,873         128,341   

Deferred tax assets

     21,213         21,828   

Other assets

     44,649         48,230   
  

 

 

    

 

 

 
   $ 2,599,267       $ 2,624,518   
  

 

 

    

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY      

Current liabilities:

     

Short-term debt

   $ 39,191       $ 52,979   

Other current liabilities

     167,201         214,227   
  

 

 

    

 

 

 

Total current liabilities

     206,392         267,206   
  

 

 

    

 

 

 

Long-term debt

     371,114         327,453   

Other liabilities

     65,776         72,244   

Deferred tax liabilities

     18,628         20,127   
  

 

 

    

 

 

 

Total liabilities

     661,910         687,030   
  

 

 

    

 

 

 

Stockholders’ equity

     1,937,357         1,937,488   
  

 

 

    

 

 

 
   $ 2,599,267       $ 2,624,518   
  

 

 

    

 

 

 


THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(In thousands, except earnings per share amounts)

(Unaudited)

 

     Three Months Ended
January 31,
 
     2012      2011  

Net sales

   $ 326,060       $ 293,229   

Cost of sales

     115,607         116,623   
  

 

 

    

 

 

 

Gross profit

     210,453         176,606   

Selling, general and administrative expense

     131,748         113,453   

Research and development expense

     11,425         9,727   

Amortization of intangibles

     5,552         4,713   
  

 

 

    

 

 

 

Operating income

     61,728         48,713   

Interest expense

     3,662         6,951   

Other income (loss), net

     681         (734
  

 

 

    

 

 

 

Income before income taxes

     58,747         41,028   

Provision for income taxes

     4,124         1,813   
  

 

 

    

 

 

 

Net income

   $ 54,623       $ 39,215   
  

 

 

    

 

 

 

Diluted earnings per share

   $ 1.12       $ 0.83   
  

 

 

    

 

 

 

Number of shares used to compute earnings per share

     48,792         47,391   
  

 

 

    

 

 

 


Soft Contact Lens Revenue Update

Worldwide Market vs. CooperVision (Constant Currency)

The data below is extracted from a compilation of industry participants’ revenue by the Contact Lens Institute (CLI), an independent market research firm. This data is compiled using gross product sales at foreign exchange rates set by CLI. It therefore excludes items such as discounts, rebates, currency hedges and freight reimbursements.

Worldwide Manufacturers’ Soft Contact Lens Revenue

(U.S. dollars in millions; constant currency; unaudited)

 

     Calendar 4Q11     Calendar 2011  
   Market      Market
Change
    CVI
Change
    Market      Market
Change
    CVI
Change
 

Sales by Category

              

Spheres

   $ 1,282         4     6   $ 5,252         3     6

Torics

     314         8     10     1,297         7     10

Multifocal

     85         10     16     327         7     3
  

 

 

        

 

 

      

WW Soft Contact Lenses

   $ 1,681         5 %      7 %    $ 6,876         4 %      7 % 
  

 

 

        

 

 

      

Sales by Modality

              

Single-use

   $ 646         11     8   $ 2,586         9     9

Other

     1,035         2     7     4,290         2     6
  

 

 

        

 

 

      

WW Soft Contact Lenses

   $ 1,681         5 %      7 %    $ 6,876         4 %      7 % 
  

 

 

        

 

 

      

Sales by Material

              

Hydrogel

   $ 957         0     (4 %)    $ 3,937         (1 %)      (5 %) 

Silicone Hydrogel

     724         12     37     2,939         12     41
  

 

 

        

 

 

      

WW Soft Contact Lenses

   $ 1,681         5 %      7 %    $ 6,876         4 %      7 % 
  

 

 

        

 

 

      

Sales by Geography

              

Americas

   $ 617         6     11   $ 2,611         4     6

EMEA

     492         5     4     1,993         5     7

Asia Pacific

     572         5     8     2,272         4     9
  

 

 

        

 

 

      

WW Soft Contact Lenses

   $ 1,681         5 %      7 %    $ 6,876         4 %      7 % 
  

 

 

        

 

 

      

United States

   $ 522         7     11   $ 2,239         5     6

International

     1,159         5     5     4,637         4     7
  

 

 

        

 

 

      

WW Soft Contact Lenses

   $ 1,681         5 %      7 %    $ 6,876         4 %      7 % 
  

 

 

        

 

 

      

COO-E

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