Attached files

file filename
8-K - FORM 8-K - COOPER COMPANIES, INC.d498520d8k.htm

Exhibit 99.1

 

LOGO    LOGO
NEWS RELEASE     
     6140 Stoneridge Mall Road

CONTACT:

   Suite 590

Kim Duncan

   Pleasanton, CA 94588

Senior Director, Investor Relations

   925-460-3663

ir@cooperco.com

   www.coopercos.com

THE COOPER COMPANIES ANNOUNCES FIRST QUARTER 2013 RESULTS

PLEASANTON, Calif., March 7, 2013 — The Cooper Companies, Inc. (NYSE: COO) today announced financial results for the fiscal first quarter ended January 31, 2013.

 

   

Revenue increased 16% year-over-year to $379.8 million. CooperVision (CVI) revenue up 12% to $301.4 million, and CooperSurgical (CSI) revenue up 37% to $78.4 million.

 

   

GAAP earnings per share (EPS) $1.50, up 38 cents or 34% from last year’s first quarter. Includes final business interruption insurance proceeds of $14.1 million related to damage in one of our UK manufacturing facilities from October 2011.

 

   

Non-GAAP EPS $1.23, up 11 cents from last year’s first quarter. See “Reconciliation of Non-GAAP EPS to GAAP EPS” below.

Commenting on the results, Robert S. Weiss, Cooper’s president and chief executive officer said, “We began fiscal 2013 with a very solid first quarter. Revenues grew nicely with CVI continuing to show strong Biofinity® growth and CSI posting strong growth in the fertility category. Our investment strategies are continuing to prove positive as indicated by our market share gains, and we remain optimistic about the future.”

First Quarter GAAP Operating Highlights

 

   

Revenue $379.8 million, up 16% from last year’s first quarter, 11% excluding currency and acquisitions.

 

   

Gross margin 63% compared with 65% in last year’s first quarter. The decrease was primarily the result of lower revenue due to currency, primarily the yen, and higher cost inventory associated with the relaunch of Avaira®.

 

   

Operating margin 18% compared with 19% in last year’s first quarter. The decrease was the result of lower gross margin offset by positive SG&A leverage.

 

   

Depreciation $24.1 million, up 19% from last year’s first quarter. Amortization $7.4 million, up 33% from last year’s first quarter, primarily related to intangible assets from the acquisition of Origio.


   

Total debt increased $34.3 million in the quarter to $408.0 million, due to $44.4 million of share repurchases (460 thousand shares). Interest expense $2.6 million compared with $3.7 million in last year’s first quarter.

 

   

Cash provided by operations $47.6 million, capital expenditures $29.3 million, insurance recovery $0.6 million, and excluding acquisition costs of $0.3 million resulted in free cash flow $19.2 million.

First Quarter CooperVision GAAP Operating Highlights

 

   

Revenue $301.4 million, up 12% from last year’s first quarter, 14% in constant currency.

 

   

Revenue by category:

 

     (In millions)
1Q13
     % of CVI Revenue
1Q13
    %chg
y/y
    Constant Currency
%chg

y/y
 

Toric

   $ 91.6         30     12     13

Multifocal

     27.2         9     31     31

Single-use sphere

     65.5         22     8     13

Non single-use sphere, other

     117.1         39     11     12
  

 

 

    

 

 

     

Total

   $ 301.4         100     12     14
  

 

 

    

 

 

     

 

   

Revenue by geography:

 

     (In millions)
1Q13
     % of CVI Revenue
1Q13
    %chg
y/y
    Constant Currency
%chg

y/y
 

Americas

   $ 125.0         41     18     18

EMEA

     101.9         34     7     7

Asia Pacific

     74.5         25     10     17
  

 

 

    

 

 

     

Total

   $ 301.4         100     12     14
  

 

 

    

 

 

     

 

   

Selected revenue by material:

 

     (In millions)
1Q13
     % of CVI Revenue
1Q13
    %chg
y/y
    Constant Currency
%chg

y/y
 

Silicone hydrogel

   $ 119.6         40     38     38

Proclear®

   $ 75.5         25     7     8

 

   

Gross margin 63% compared with 64% in last year’s first quarter. The decrease was primarily the result of lower revenue due to currency, primarily the yen, and higher cost inventory associated with the relaunch of Avaira®.


First Quarter CooperSurgical GAAP Operating Highlights

 

   

Revenue $78.4 million, up 37% from last year’s first quarter, up 1% excluding acquisitions.

 

   

Revenue by category:

 

     (In millions)
1Q13
     % of CSI Revenue
1Q13
    %chg
y/y
 

Office, other

   $ 29.5         38     -3

Surgical procedures

     24.9         32     9

Fertility

     24.0         30     535
  

 

 

    

 

 

   

Total

   $ 78.4         100     37
  

 

 

    

 

 

   

 

   

Gross margin 64% compared with 67% in last year’s first quarter. The decrease was primarily the result of lower margins associated with our recently acquired Origio business.

2013 Guidance

The Company revises its full year fiscal 2013 guidance. Guidance is summarized as follows:

 

     FY13 Guidance
Old
     FY13 Guidance
New
 

Revenues (In millions)

     

Total

   $ 1,565-$1,625       $ 1,575-$1,625   

CVI

   $ 1,250-$1,290       $ 1,260-$1,290   

CSI

   $ 315-$335       $ 315-$335   

EPS

     

GAAP

   $ 5.90-$6.10       $ 6.22-$6.37   

Non-GAAP

   $ 5.90-$6.10       $ 5.95-$6.10   

Free Cash Flow (In millions)

   $ 210-$230       $ 170-$200   

Guidance assumes constant currency at the date of issuance.

Reconciliation of Non-GAAP EPS to GAAP EPS

To supplement our financial results presented on a GAAP basis, we use non-GAAP measures that we believe are helpful in understanding our results. The non-GAAP measures exclude insurance proceeds related to a business interruption claim and costs related to acquisitions. Our non-GAAP financial results and guidance are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements and guidance prepared in accordance with GAAP. Management uses supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the factors management uses in planning and forecasting for future periods.

In the fiscal first quarter of 2013, our non-GAAP results exclude $0.6 million of costs related to the acquisition of Origio recorded in selling, general and administrative expense and $14.1 million in business interruption insurance proceeds.

We also report revenue growth using the non-GAAP financial measure of constant currency revenue. Management presents and refers to constant currency information so that revenue results may be evaluated excluding the effect of foreign currency rate fluctuations. To present this information, current period revenue for entities reporting in currencies other than United States dollars are converted into United States dollars at the average foreign exchange rates for the corresponding period in the prior year.


     Three Months Ended January 31,  
     2013 GAAP      Adjustments     2013 Non-GAAP  

Operating income

   $ 68,821       $ 625      $ 69,446   

Income before income taxes

   $ 80,976       $ (13,459   $ 67,517   

Provision for income taxes

   $ 6,041       $ 171      $ 6,212   

Net income attributable to Cooper stockholders

   $ 74,667       $ (13,629   $ 61,038   

Diluted EPS attributable to Cooper stockholders

   $ 1.50       $ (0.27   $ 1.23   
     Fiscal 2013 EPS Guidance  
     2013 GAAP      Adjustments     2013 Non-GAAP  

Diluted EPS

   $ 6.22-$6.37       $ (0.27   $ 5.95-$6.10   

Conference Call and Webcast

The Company will host a conference call today at 5:00 PM ET to discuss its fiscal first quarter 2013 financial results and current corporate developments. The dial in number in the United States is +1-800-510-9834 and outside the United States is +1-617-614-3669. The passcode is 41618260. There will be a replay available approximately two hours after the call ends until Thursday, March 14, 2013. 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 40340337. This call will also be broadcast live at http://investor.coopercos.com and a transcript will be available 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 approximately 7,800 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 2013 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; foreign currency exchange rate and interest rate fluctuations including the risk of further declines in the value of the yen and the euro that would decrease our revenues and earnings; acquisition integration delays or costs or the requirement to record significant adjustments to the preliminary fair value of assets acquired and liabilities assumed within the measurement period; reduced sales, loss of customers and costs and expenses related to the recall of certain lots of Avaira Toric and Avaira Sphere contact lenses; 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, 2012, 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,
2013
     October 31,
2012
 
ASSETS   

Current assets:

     

Cash and cash equivalents

   $ 14,445       $ 12,840   

Trade receivables, net

     241,168         234,297   

Inventories

     325,394         320,199   

Deferred tax assets

     33,972         39,417   

Other current assets

     65,869         51,107   
  

 

 

    

 

 

 

Total current assets

     680,848         657,860   
  

 

 

    

 

 

 

Property, plant and equipment, net

     636,999         640,255   

Goodwill

     1,374,504         1,370,247   

Other intangibles, net

     214,564         214,783   

Deferred tax assets

     17,074         14,434   

Other assets

     45,555         43,805   
  

 

 

    

 

 

 
   $ 2,969,544       $ 2,941,384   
  

 

 

    

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

Current liabilities:

     

Short-term debt

   $ 30,459       $ 25,284   

Other current liabilities

     195,673         237,268   
  

 

 

    

 

 

 

Total current liabilities

     226,132         262,552   
  

 

 

    

 

 

 

Long-term debt

     377,512         348,422   

Deferred tax liabilities

     30,339         30,971   

Other liabilities

     86,013         86,281   
  

 

 

    

 

 

 

Total liabilities

     719,996         728,226   
  

 

 

    

 

 

 

Total Cooper stockholders’ equity

     2,232,062         2,192,751   

Noncontrolling interests

     17,486         20,407   
  

 

 

    

 

 

 

Stockholders’ equity

     2,249,548         2,213,158   
  

 

 

    

 

 

 
   $ 2,969,544       $ 2,941,384   
  

 

 

    

 

 

 


THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(In thousands, except earnings per share amounts)

(Unaudited)

 

     Three Months Ended
January 31,
 
     2013      2012  

Net sales

   $ 379,839       $ 326,060   

Cost of sales

     139,341         115,607   
  

 

 

    

 

 

 

Gross profit

     240,498         210,453   

Selling, general and administrative expense

     150,653         131,748   

Research and development expense

     13,653         11,425   

Amortization of intangibles

     7,371         5,552   
  

 

 

    

 

 

 

Operating income

     68,821         61,728   

Interest expense

     2,567         3,662   

Gain on insurance proceeds

     14,084         —     

Other income, net

     638         681   
  

 

 

    

 

 

 

Income before income taxes

     80,976         58,747   

Provision for income taxes

     6,041         4,124   
  

 

 

    

 

 

 

Net income

     74,935         54,623   

Less: Income attributable to noncontrolling interests

     268         —     
  

 

 

    

 

 

 

Net income attributable to Cooper stockholders

   $ 74,667       $ 54,623   
  

 

 

    

 

 

 

Diluted earnings per share attributable to Cooper stockholders

   $ 1.50       $ 1.12   
  

 

 

    

 

 

 

Number of shares used to compute earnings per share attributable to Cooper stockholders

     49,633         48,792   
  

 

 

    

 

 

 


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 4Q12     Calendar 2012  
     Market      Market
Change
    CVI
Change
    Market      Market
Change
    CVI
Change
 

Sales by Category

              

Spheres

   $ 1,356         4     8   $ 5,535         4     9

Torics

     330         5     8     1,397         8     10

Multifocal

     92         9     32     359         11     34
  

 

 

        

 

 

      

WW Soft Contact Lenses

   $ 1,778         5 %      10 %    $ 7,291         5 %      11 % 
  

 

 

        

 

 

      

Sales by Modality

              

Single-use

   $ 733         10     19   $ 2,908         10     16

Other

     1,045         1     7     4,383         2     9
  

 

 

        

 

 

      

WW Soft Contact Lenses

   $ 1,778         5 %      10 %    $ 7,291         5 %      11 % 
  

 

 

        

 

 

      

Sales by Geography

              

Americas

   $ 644         5     7   $ 2,794         8     11

EMEA

     488         2     6     1,985         2     7

Asia Pacific

     646         6     22     2,512         4     17
  

 

 

        

 

 

      

WW Soft Contact Lenses

   $ 1,778         5 %      10 %    $ 7,291         5 %      11 % 
  

 

 

        

 

 

      

United States

   $ 548         5     5   $ 2,417         8     11

International

     1,230         5     13     4,874         4     11
  

 

 

        

 

 

      

WW Soft Contact Lenses

   $ 1,778         5 %      10 %    $ 7,291         5 %      11 % 
  

 

 

        

 

 

      

COO-E

# # #