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8-K - FORM 8-K - COOPER COMPANIES, INC.d366397d8k.htm

Exhibit 99.1

 

LOGO

   LOGO
NEWS RELEASE    6140 Stoneridge Mall Road

 

CONTACT:

Kim Duncan

Senior Director, Investor Relations

ir@cooperco.com

  

Suite 590

Pleasanton, CA 94588

925-460-3663

www.coopercos.com

THE COOPER COMPANIES ANNOUNCES SECOND QUARTER 2012 RESULTS

PLEASANTON, Calif., June 7, 2012 — The Cooper Companies, Inc. (NYSE: COO) today announced financial results for the fiscal second quarter ended April 30, 2012.

 

   

Revenue increased 6% year-over-year to $344.6 million. CooperVision (CVI) revenue up 5% to $288.0 million and CooperSurgical (CSI) revenue up 13% to $56.6 million.

 

   

GAAP earnings per share (EPS) $1.12, up 39 cents or 53% from last year’s second quarter.

 

   

Free cash flow $60.7 million. Total debt decreased $91.0 million to $319.3 million from prior quarter.

Commenting on the results, Robert S. Weiss, Cooper’s president and chief executive officer said, “I’m proud to report another strong quarter which included market share gains, improving margins, double-digit earnings growth and significant free cash flow generation. Additionally, as announced earlier this week, we have made a tender offer to acquire all of the shares of Origio, which would position CooperSurgical as a global leader in the in-vitro fertilization market. This acquisition, if completed, would continue our long history of adding shareholder value through strategic acquisitions.”

Second Quarter GAAP Operating Highlights

 

   

Revenue $344.6 million, 6% above second quarter 2011, 7% in constant currency.

 

   

Gross margin 64% compared with 62% in last year’s second quarter. 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 favorable product mix.

 

   

Operating margin 19% in line with last year’s second quarter.


   

Depreciation expense $21.5 million, up 14% from last year’s second quarter. Amortization $5.3 million, up 11% from last year’s second quarter as a result of acquired intangible assets related to recent acquisitions.

 

   

Interest expense $3.1 million compared with $4.3 million in last year’s second quarter.

 

   

Total debt decreased $91.0 million from January 31, 2012 to $319.3 million.

 

   

Cash provided by operations $80.6 million, capital expenditures $23.1 million, insurance recovery $3.2 million resulted in free cash flow of $60.7 million.

Second Quarter CooperVision (CVI) GAAP Operating Highlights

 

   

Revenue $288.0 million, up 5% from last year’s second quarter, 6% in constant currency.

 

   

Revenue by category:

 

     (In millions)
2Q12
     % of CVI  Revenue
2Q12
    %chg
y/y
    Constant Currency
%chg
y/y
 

Toric

   $ 89.4         31     5     8

Multifocal

     22.3         8     23     26

Single-use sphere

     62.6         22     6     6

Non single-use sphere, other

     113.7         39     0     2
  

 

 

    

 

 

     

Total

   $ 288.0         100     5     6
  

 

 

    

 

 

     

 

   

Revenue by geography:

 

     (In millions)
2Q12
     % of CVI  Revenue
2Q12
    %chg
y/y
    Constant Currency
%chg
y/y
 

Americas

   $ 122.0         42     4     4

EMEA

     98.0         34     1     6

Asia Pacific

     68.0         24     12     10
  

 

 

    

 

 

     

Total

   $ 288.0         100     5     6
  

 

 

    

 

 

     

 

   

Selected revenue by material:

 

     (In millions)
2Q12
     % of CVI  Revenue
2Q12
    %chg
y/y
    Constant Currency
%chg
y/y
 

Silicone hydrogel

   $ 103.8         36     29     32

Proclear®

   $ 71.4         25     -4     -2

 

   

Gross margin 63% compared with 61% in the second 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 favorable product mix, resulting primarily from a shift to higher margin silicone hydrogel products.


Second Quarter CooperSurgical (CSI) GAAP Operating Highlights

 

   

Revenue $56.6 million, up 13% from last year’s second quarter, up 8% excluding acquisitions.

 

   

Revenue by category:

 

     (In millions)
2Q12
     % of CSI  Revenue
2Q12
    %chg
y/y
 

Office, other

   $ 30.6         54     8

Surgical procedures

     22.0         39     22

Fertility

     4.0         7     8
  

 

 

    

 

 

   

Total

   $ 56.6         100     13
  

 

 

    

 

 

   

 

   

Gross margin 68%, up from 65% in last year’s second quarter. The improvement in gross margin was largely a result of manufacturing efficiency improvements and favorable product mix resulting primarily from a shift to higher margin products used in surgical procedures.

Other Items

 

   

On May 31, 2012, entered into an amendment to our senior unsecured revolving line of credit. Facility increased to $1.0 billion from $750.0 million, and the $234.4 million term loan was fully repaid using the new revolving facility. The facility offers additional availability, lower interest rates and extends maturity date to May 31, 2017 from January 12, 2016.

 

   

On June 4, 2012, announced a voluntary tender offer to acquire all the issued and outstanding shares and warrants of Origio a/s, Oslo Stock Exchange (Oslo: ORO) for an aggregate price of approximately NOK 28 per share (see http://investor.coopercos.com for details).

 

   

No share repurchases in the quarter.


2012 Guidance

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

 

     FY12 Guidance
Old
   FY12 Guidance
New

Revenues (In millions)

     

Total

   $1,385-$1,440    $1,400-$1,440

CVI

   $1,170-$1,210    $1,175-$1,205

CSI

   $215-$230    $225-$235

EPS

     

GAAP

   $4.90-$5.15    $4.88-$5.13

Non-GAAP

   $4.90-$5.15    $4.90-$5.15

Free Cash Flow (In millions)

   $200-$230    $200-$230

Guidance assumes constant currency at the date of issuance and no pending acquisitions.

Conference Call and Webcast

The Company will host a conference call today at 5:00 PM ET to discuss its fiscal second quarter 2012 financial results. The dial in number in the United States is +1-866-713-8307 and outside the United States is +1-617-597-5307. The passcode is 53347242. There will be a replay available approximately two hours after the call ends until Thursday, June 14, 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 64382545. This call will be broadcast live on our website at www.coopercos.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 certain European Union countries that could adversely affect our global markets; reduced sales, loss of customers, and costs and expenses related to the recall of certain lots of Avaira Toric and Avaira Sphere contact lenses; foreign currency exchange rate and interest rate fluctuations including the risk of further declines in the value of the Euro that would decrease our revenues and earnings; 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; 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)

 

     April 30,
2012
     October 31,
2011
 
ASSETS   

Current assets:

     

Cash and cash equivalents

   $ 7,745       $ 5,175   

Trade receivables, net

     202,882         214,779   

Inventories

     286,069         253,584   

Deferred tax assets

     33,226         33,684   

Other current assets

     46,361         33,125   
  

 

 

    

 

 

 

Total current assets

     576,283         540,347   
  

 

 

    

 

 

 

Property, plant and equipment, net

     593,603         609,205   

Goodwill

     1,275,444         1,276,567   

Other intangibles, net

     118,077         128,341   

Deferred tax assets

     20,237         21,828   

Other assets

     44,917         48,230   
  

 

 

    

 

 

 
   $ 2,628,561       $ 2,624,518   
  

 

 

    

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY   

Current liabilities:

     

Short-term debt

   $ 44,216       $ 52,979   

Other current liabilities

     183,909         214,227   
  

 

 

    

 

 

 

Total current liabilities

     228,125         267,206   
  

 

 

    

 

 

 

Long-term debt

     275,092         327,453   

Deferred tax liabilities

     19,008         20,127   

Other liabilities

     68,380         72,244   
  

 

 

    

 

 

 

Total liabilities

     590,605         687,030   
  

 

 

    

 

 

 

Stockholders’ equity

     2,037,956         1,937,488   
  

 

 

    

 

 

 
   $ 2,628,561       $ 2,624,518   
  

 

 

    

 

 

 


THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(In thousands, except earnings per share amounts)

(Unaudited)

 

     Three Months Ended
April 30,
     Six Months Ended
April 30,
 
     2012      2011      2012      2011  

Net sales

   $ 344,589       $ 325,301       $ 670,649       $ 618,530   

Cost of sales

     123,893         123,539         239,500         240,162   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross profit

     220,696         201,762         431,149         378,368   

Selling, general and administrative expense

     136,962         126,382         268,710         239,835   

Research and development expense

     13,031         10,390         24,455         20,117   

Amortization of intangibles

     5,263         4,734         10,816         9,447   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating income

     65,440         60,256         127,168         108,969   

Interest expense

     3,071         4,268         6,733         11,219   

Loss on extinguishment of debt

     —           16,487         —           16,487   

Other income (expense), net

     310         219         992         (514
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before income taxes

     62,679         39,720         121,427         80,749   

Provision for income taxes

     7,758         4,360         11,883         6,174   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 54,921       $ 35,360       $ 109,544       $ 74,575   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted earnings per share

   $ 1.12       $ 0.73       $ 2.24       $ 1.56   
  

 

 

    

 

 

    

 

 

    

 

 

 

Number of shares used to compute earnings per share

     49,007         48,239         48,941         47,807   
  

 

 

    

 

 

    

 

 

    

 

 

 


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 1Q12     Trailing Twelve Months 2012  
     Market      Market
Change
    CVI
Change
    Market      Market
Change
    CVI
Change
 

Sales by Category

              

Spheres

   $ 1,366         4     10   $ 5,379         3     8

Torics

     354         11     13     1,334         9     10

Multifocal

     87         13     34     335         9     13
  

 

 

        

 

 

      

WW Soft Contact Lenses

   $ 1,807         6     12   $ 7,048         5     9
  

 

 

        

 

 

      

Sales by Modality

              

Single-use

   $ 681         9     15   $ 2,704         9     11

Other

     1,126         4     11     4,344         2     8
  

 

 

        

 

 

      

WW Soft Contact Lenses

   $ 1,807         6     12   $ 7,048         5     9
  

 

 

        

 

 

      

Sales by Geography

              

Americas

   $ 719         10     13   $ 2,660         6     9

EMEA

     481         2     9     1,952         4     8

Asia Pacific

     607         4     14     2,436         4     11
  

 

 

        

 

 

      

WW Soft Contact Lenses

   $ 1,807         6     12   $ 7,048         5     9
  

 

 

        

 

 

      

United States

   $ 631         11     14   $ 2,307         7     9

International

     1,176         3     11     4,741         3     8
  

 

 

        

 

 

      

WW Soft Contact Lenses

   $ 1,807         6     12   $ 7,048         5     9
  

 

 

        

 

 

      

COO-E

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