Full Press Release Details
| NEWS RELEASE | ||
| 6140 Stoneridge Mall Road | ||
| CONTACT: Kim Duncan Vice President, Investor Relations ir@cooperco.com | Suite 590 Pleasanton, CA 94588 925-460-3663 www.coopercos.com |
THE COOPER COMPANIES ANNOUNCES SECOND QUARTER 2015 RESULTS
PLEASANTON, Calif., June 4, 2015 The Cooper Companies, Inc. (NYSE: COO) today announced financial results for the fiscal second quarter
ended April 30, 2015.
Commenting on the results, Robert S. Weiss, Cooper s president and chief executive officer said, We are very pleased with our continued market
share gains at CooperVision. During the second quarter, we made great progress with our launch of clariti in the United States and we made significant strides on the integration of the
Sauflon business. We remain confident we are well positioned to accelerate growth in the back half of this year and into fiscal 2016.
Second Quarter GAAP Operating Highlights
Second Quarter CooperVision (CVI) GAAP Operating Highlights
| (In millions) 2Q15 | % of CVI Revenue 2Q15 | %chg y/y | Pro forma %chg y/y | |||||||||||||
| Toric | $ | 107.1 | 30 | % | 2 | % | 7 | % | ||||||||
| Multifocal | 37.9 | 11 | % | 7 | % | 8 | % | |||||||||
| Single-use sphere | 85.1 | 24 | % | 19 | % | 7 | % | |||||||||
| Non single-use sphere, other | 129.5 | 35 | % | 9 | % | 3 | % | |||||||||
| Total | $ | 359.6 | 100 | % | 9 | % | 6 | % |
| (In millions) 2Q15 | % of CVI Revenue 2Q15 | %chg y/y | Pro forma %chg y/y | |||||||||||||
| Americas | $ | 152.5 | 42 | % | 7 | % | 5 | % | ||||||||
| EMEA | 143.3 | 40 | % | 20 | % | 8 | % | |||||||||
| Asia Pacific | 63.8 | 18 | % | -9 | % | 2 | % | |||||||||
| Total | $ | 359.6 | 100 | % | 9 | % | 6 | % |
Second Quarter CooperSurgical (CSI) GAAP
Operating Highlights
| (In millions) 2Q15 | % of CSI Revenue 2Q15 | %chg y/y | Constant Currency %chg y/y | |||||||||||||
| Office and surgical procedures | $ | 49.9 | 66 | % | -3 | % | -3 | % | ||||||||
| Fertility | 25.2 | 34 | % | -15 | % | -1 | % | |||||||||
| Total | $ | 75.1 | 100 | % | -8 | % | -3 | % |
Fiscal Year 2015 Guidance
The Company updated its fiscal year 2015 guidance. Guidance assumes constant currency as of June 3, 2015, and is summarized as follows:
Reconciliation of GAAP to Non-GAAP Results
our financial results and guidance presented on a GAAP basis, we use non-GAAP measures that we believe are helpful in understanding our results. The non-GAAP measures exclude costs which we generally would not have otherwise incurred in the periods
presented as a part of our continuing operations. These include costs related to acquisitions and integration activities, severance and restructuring costs; costs associated with the start-up of new manufacturing facilities; as well as certain legal
costs described below. 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 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. We believe it is useful for investors to understand the effects of these items on our consolidated operating results. Our non-GAAP financial measures include the following adjustments, along with the related income
tax effects and changes in income attributable to noncontrolling interests:
for earnings per share is provided on a non-GAAP basis due to the inherent difficulty in forecasting acquisition-related, integration and restructuring charges and expenses. We are not able to provide a reconciliation of these non-GAAP items to
expected reported GAAP earnings per share due to the unknown effect, timing and potential significance of such charges and expenses. Management does not consider the excluded items as part of our continuing operations.
We also report revenue growth using the non-GAAP financial measure of pro forma which includes 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. To report pro forma revenue growth including Sauflon, we included $47.4 million of revenue in our fiscal second
quarter of 2014, and $91.2 million in our fiscal first half of 2014 for the periods when we did not own Sauflon.
We define the non-GAAP measure of free
cash flow as cash provided by operating activities less capital expenditures and adjusted for acquisition related costs and integration costs. We believe free cash flow is useful for investors as an additional measure of liquidity because it
represents cash flows that are available for repayment of debt, repurchases of our common stock or to fund our strategic initiatives. As discussed above, we incur significant acquisition related and integration costs primarily related to the
acquisition of Sauflon that will diminish over time and we believe it is useful to investors to understand the effects of these costs on our free cash flow. Management uses free cash flow internally to understand, manage, make operating decisions
and evaluate our business. In addition, we use free cash flow to help plan and forecast future periods.
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Results
thousands, except per share amounts)
| Three Months Ended April 30, | ||||||||||||||||||||||||
| 2015 GAAP | Adjustment | 2015 Non-GAAP | 2014 GAAP | Adjustment | 2014 Non-GAAP | |||||||||||||||||||
| Cost of sales | $ | 166,960 | $ | (7,746 | ) A | $ | 159,214 | $ | 143,818 | $ | $ | 143,818 | ||||||||||||
| Selling, general and administrative expense | $ | 167,583 | $ | (5,434 | ) B | $ | 162,149 | $ | 155,804 | $ | (986 | ) B | $ | 154,818 | ||||||||||
| Research and development expense | $ | 16,819 | $ | (172 | ) C | $ | 16,647 | $ | 16,295 | $ | $ | 16,295 | ||||||||||||
| Amortization of intangibles | $ | 12,316 | $ | (12,316 | ) D | $ | $ | 7,476 | $ | (7,476 | ) D | $ | ||||||||||||
| Provision for income taxes | $ | 5,855 | $ | 1,913 | E | $ | 7,768 | $ | 8,185 | $ | 1,776 | E | $ | 9,961 | ||||||||||
| Diluted earnings per share attributable to Cooper stockholders | $ | 1.23 | $ | 0.49 | $ | 1.72 | $ | 1.62 | $ | 0.14 | $ | 1.76 |
| (In millions) | CooperVision | CooperSurgical | Total | |||||||||
| Restructuring and related costs | $ | (4.5 | ) | $ | 0.5 | $ | (4.0 | ) | ||||
| Acquisition and integration costs | 8.0 | 0.5 | $ | 8.5 | ||||||||
| $ | 3.5 | $ | 1.0 | $ | 4.5 |
Conference Call and Webcast
The Company will host a
conference call today at 5:00 PM ET to discuss its fiscal second quarter 2015 financial results and current corporate developments. The live dial-in number for the call is 855-643-4430 (U.S.) / 707-294-1332 (International). The participant passcode
for the call is Cooper . A recording of the call will be available beginning at 8:00 PM ET on June 4, 2015 through June 11, 2015. To hear this recording, dial 855-859-2056 (U.S.) / 404-537-3406 (International) and enter code
266737 (Cooper). A simultaneous webcast of the call will be available through the Investor Relations section of The Cooper Companies website at http://investor.coopercos.com and a transcript of the call will be archived on this
site for a minimum of 12 months.
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 developing 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 close to 10,000 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 2015 Guidance and all statements regarding the acquisition of Sauflon
including Sauflon s financial position, market position, product development and business strategy, expected cost synergies, expected timing and benefits of the transaction, as well as estimates of our and Sauflon s future expenses, sales
and earnings per share are forward looking. In addition, all statements regarding anticipated growth in our revenue, anticipated effects of any product recalls, anticipated market conditions, planned product launches and 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, 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 fluctuations in the value of foreign currencies that would decrease our revenues and earnings; acquisition-related adverse
effects including the failure to successfully obtain the anticipated revenues, margins and earnings benefits of acquisitions, including the Sauflon acquisition, integration delays or costs and the requirement to record significant adjustments to the
preliminary fair value of assets acquired and liabilities assumed within the measurement period, required regulatory approvals for an acquisition not being obtained or being delayed or subject to conditions that are not anticipated, adverse impacts
of changes to accounting controls and reporting procedures, contingent liabilities or indemnification obligations, increased leverage and lack of access to available financing (including financing for the acquisition or refinancing of debt owed by
us on a timely basis and on reasonable terms); legal costs, insurance expenses, settlement costs and the risk of an adverse decision or settlement related to product liability, patent infringement or other litigation; a major disruption in the
operations of our manufacturing, research and development or distribution facilities, due to technological problems, including any related to our information systems maintenance or enhancements, natural disasters or other causes; disruptions in
supplies of raw materials, particularly components used to manufacture our silicone hydrogel lenses; compliance costs and potential liability in connection with U.S. and foreign healthcare regulations, including product recalls, warning letters, and
potential losses resulting from sales of counterfeit and other infringing products; changes in tax laws or their interpretation and changes in statutory tax rates; limitations on sales following product introductions due to poor market acceptance;
new competitors, product innovations or technologies; reduced sales, loss of customers and costs and expenses related to recalls; new U.S. and foreign government laws and regulations, and changes in existing laws, regulations and enforcement
guidance, which affect the medical device industry and the healthcare industry generally; failure to receive, or delays in receiving,
U.S. or foreign regulatory approvals for products; failure to obtain adequate coverage and reimbursement from third party payors for our products; the requirement to provide for a significant
liability or to write off, or accelerate depreciation on, a significant asset, including goodwill; the success of our research and development activities and other start-up projects; dilution to earnings per share from the Sauflon acquisition or
other acquisitions or issuing stock; changes in accounting principles or estimates; environmental risks and other events described in our Securities and Exchange Commission filings, including the Business and Risk Factors
sections in our Annual Report on Form 10-K for the fiscal year ended October 31, 2014, as such Risk Factors may be updated in quarterly filings.
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
| April 30, 2015 | October 31, 2014 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 17,911 | $ | 25,222 | ||||
| Trade receivables, net | 267,183 | 276,280 | ||||||
| Inventories | 402,537 | 381,474 | ||||||
| Deferred tax assets | 35,774 | 40,224 | ||||||
| Other current assets | 76,561 | 68,417 | ||||||
| Total current assets | 799,966 | 791,617 | ||||||
| Property, plant and equipment, net | 961,762 | 937,325 | ||||||
| Goodwill | 2,177,551 | 2,220,921 | ||||||
| Other intangibles, net | 411,232 | 453,605 | ||||||
| Deferred tax assets | 8,554 | 15,732 | ||||||
| Other assets | 33,595 | 39,140 | ||||||
| $ | 4,392,660 | $ | 4,458,340 | |||||
| LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
| Current liabilities: | ||||||||
| Short-term debt | $ | 242,165 | $ | 101,518 | ||||
| Other current liabilities | 293,477 | 340,664 | ||||||
| Total current liabilities | 535,642 | 442,182 | ||||||
| Long-term debt | 1,105,544 | 1,280,833 | ||||||
| Deferred tax liabilities | 69,156 | 69,525 | ||||||
| Other liabilities | 66,581 | 77,360 | ||||||
| Total liabilities | 1,776,923 | 1,869,900 | ||||||
| Total Cooper stockholders equity | 2,609,666 | 2,569,878 | ||||||
| Noncontrolling interests | 6,071 | 18,562 | ||||||
| Stockholders equity | 2,615,737 | 2,588,440 | ||||||
| $ | 4,392,660 | $ | 4,458,340 |
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except earnings per share amounts)
| Three months ended April 30, | Six months ended April 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Net sales | $ | 434,676 | $ | 412,317 | $ | 879,847 | $ | 817,297 | ||||||||
| Cost of sales | 166,960 | 143,818 | 335,780 | 285,869 | ||||||||||||
| Gross profit | 267,716 | 268,499 | 544,067 | 531,428 | ||||||||||||
| Selling, general and administrative expense | 167,583 | 155,804 | 341,118 | 313,892 | ||||||||||||
| Research and development expense | 16,819 | 16,295 | 32,932 | 32,007 | ||||||||||||
| Amortization of intangibles | 12,316 | 7,476 | 25,911 | 14,982 | ||||||||||||
| Operating income | 70,998 | 88,924 | 144,106 | 170,547 | ||||||||||||
| Interest expense | 4,692 | 1,558 | 8,633 | 3,214 | ||||||||||||
| Other income (expense), net | 686 | 455 | (1,016 | ) | (57 | ) | ||||||||||
| Income before income taxes | 66,992 | 87,821 | 134,457 | 167,276 | ||||||||||||
| Provision for income taxes | 5,855 | 8,185 | 11,571 | 15,375 | ||||||||||||
| Net income | 61,137 | 79,636 | 122,886 | 151,901 | ||||||||||||
| Less: income attributable to noncontrolling interests | 424 | 476 | 994 | 898 | ||||||||||||
| Net income attributable to Cooper stockholders | $ | 60,713 | $ | 79,160 | $ | 121,892 | $ | 151,003 | ||||||||
| Diluted earnings per share attributable to Cooper stockholders | $ | 1.23 | $ | 1.62 | $ | 2.48 | $ | 3.09 | ||||||||
| Number of shares used to compute earnings per share attributable to Cooper stockholders | 49,163 | 48,754 | 49,139 | 48,883 |
Soft Contact Lens Revenue Update
Worldwide Manufacturers Soft Contact Lens Revenue
(U.S. dollars in millions; constant currency; unaudited)
| Calendar 1Q15 | Trailing Twelve Months 2015 | |||||||||||||||||||||||
| Market | Market Change | CVI Change | Market | Market Change | CVI Change | |||||||||||||||||||
| Sales by Modality | ||||||||||||||||||||||||
| Single-use | $ | 760 | 4 | % | 11 | % | $ | 2,980 | 6 | % | 14 | % | ||||||||||||
| Other | 1,030 | (2 | %) | 4 | % | 4,080 | 1 | % | 5 | % | ||||||||||||||
| WW Soft Contact Lenses | $ | 1,790 | 1 | % | 6 | % | $ | 7,060 | 3 | % | 8 | % | ||||||||||||
| Sales by Geography | ||||||||||||||||||||||||
| Americas | $ | 795 | 2 | % | 11 | % | $ | 3,035 | 4 | % | 8 | % | ||||||||||||
| EMEA | 505 | 7 | % | 7 | % | 2,050 | 6 | % | 10 | % | ||||||||||||||
| Asia Pacific | 490 | (7 | %) | (6 | %) | 1,975 | (2 | %) | 4 | % | ||||||||||||||
| WW Soft Contact Lenses | $ | 1,790 | 1 | % | 6 | % | $ | 7,060 | 3 | % | 8 | % |
Source: Management estimates and independent market research