Full Press Release Details
| NEWS RELEASE | ||
| CONTACT: Kim Duncan Senior Director, Investor Relations ir@cooperco.com | 6140 Stoneridge Mall Road Suite 590 Pleasanton, CA 94588 925-460-3663 www.coopercos.com |
THE COOPER COMPANIES ANNOUNCES THIRD QUARTER 2013 RESULTS
PLEASANTON, Calif., September 5, 2013 The Cooper Companies, Inc. (NYSE: COO) today announced financial results for the fiscal third quarter
ended July 31, 2013.
Commenting on the results, Robert S. Weiss, Cooper s
president and chief executive officer said, I am pleased to report another strong quarter for the Company. We continued to gain market share within CVI, CSI posted solid revenue growth driven by fertility, and we generated strong EPS and
significant free cash flow. We remain encouraged by our business trends and believe we are well positioned to deliver strong operating results to finish our fiscal year.
Third Quarter GAAP Operating Highlights
Third Quarter CooperVision GAAP Operating Highlights
| (In millions) 3Q13 | % of CVI Revenue 3Q13 | %chg y/y | Constant Currency %chg y/y | |||||||||||||
| Toric | $ | 101.5 | 31 | % | 7 | % | 8 | % | ||||||||
| Multifocal | 33.1 | 10 | % | 33 | % | 32 | % | |||||||||
| Single-use sphere | 70.7 | 21 | % | -1 | % | 9 | % | |||||||||
| Non single-use sphere, other | 125.2 | 38 | % | 2 | % | 4 | % | |||||||||
| Total | $ | 330.5 | 100 | % | 5 | % | 9 | % |
| (In millions) 3Q13 | % of CVI Revenue 3Q13 | %chg y/y | Constant Currency %chg y/y | |||||||||||||
| Americas | $ | 143.0 | 43 | % | 9 | % | 9 | % | ||||||||
| EMEA | 118.4 | 36 | % | 11 | % | 8 | % | |||||||||
| Asia Pacific | 69.1 | 21 | % | -9 | % | 8 | % | |||||||||
| Total | $ | 330.5 | 100 | % | 5 | % | 9 | % |
| (In millions) 3Q13 | % of CVI Revenue 3Q13 | %chg y/y | Constant Currency %chg y/y | |||||||||||||
| Silicone hydrogel | $ | 143.0 | 43 | % | 21 | % | 22 | % | ||||||||
| Proclear | $ | 86.0 | 26 | % | 9 | % | 11 | % |
Third Quarter CooperSurgical GAAP Operating Highlights
| (In millions) 3Q13 | % of CSI Revenue 3Q13 | %chg y/y | ||||||||||
| Office and surgical procedures | $ | 54.0 | 66 | % | 0 | % | ||||||
| Fertility | 27.5 | 34 | % | 180 | % | |||||||
| Total | $ | 81.5 | 100 | % | 27 | % |
The Company revises its full year fiscal
2013 guidance. Guidance is summarized as follows:
| FY13 Guidance Old | FY13 Guidance New | 4Q13 Guidance New | ||||
| Revenues (In millions) | ||||||
| Total | $1,575 - $1,605 | $1,586 - $1,601 | $410 - $425 | |||
| CVI | $1,260 - $1,280 | $1,271 - $1,281 | $330 - $340 | |||
| CSI | $315 - $325 | $315 - $320 | $80 - $85 | |||
| EPS | ||||||
| GAAP | $6.42 - $6.52 | $6.57 - $6.62 | $1.76 - $1.81 | |||
| Non-GAAP | $6.15 - $6.25 | $6.23 - $6.28 | $1.76 - $1.81 | |||
| Free Cash Flow (In millions) | $170 - $200 | $180 - $210 | $19 - $49 |
Guidance assumes constant currency at the date of issuance and excludes the financial impact for the proposed sale of Aime
announced on May 31, 2013.
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. Our fiscal third quarter of 2013 non-GAAP results include $2.5 million for income tax benefits arising from the projected fiscal year effective tax rate.
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 July 31, | Nine Months Ended July 31, | |||||||||||||||||||||||
| 2013 GAAP | Adjustments | 2013 Non-GAAP | 2013 GAAP | Adjustments | 2013 Non-GAAP | |||||||||||||||||||
| Operating income | $ | 93,608 | $ | $ | 93,608 | $ | 243,902 | $ | 625 | $ | 244,527 | |||||||||||||
| Income before income taxes | $ | 91,264 | $ | $ | 91,264 | $ | 251,179 | $ | (13,458 | ) | $ | 237,721 | ||||||||||||
| Provision for income taxes | $ | 2,072 | $ | 2,482 | $ | 4,554 | $ | 11,585 | $ | 3,522 | $ | 15,107 | ||||||||||||
| Net income attributable to Cooper stockholders | $ | 88,951 | $ | (2,482 | ) | $ | 86,469 | $ | 238,754 | $ | (16,979 | ) | $ | 221,775 | ||||||||||
| Diluted EPS attributable to Cooper stockholders | $ | 1.79 | $ | (0.05 | ) | $ | 1.74 | $ | 4.81 | $ | (0.34 | ) | $ | 4.47 | ||||||||||
| Fiscal 2013 EPS Guidance | ||||||||||||||||||||||||
| 2013 GAAP | Adjustments | 2013 Non-GAAP | ||||||||||||||||||||||
| Diluted EPS | $6.57 - $6.62 | ($0.34) | $6.23 - $6.28 |
Conference Call and Webcast
The Company will host a conference call today at 5:00 PM ET to discuss its fiscal third quarter 2013 financial results and current corporate developments. The
dial in number in the United States is +1-800-901-5213 and outside the United States is +1-617-786-2962. The passcode is 29370561. There will be a replay available approximately two hours after the call ends until Thursday, September 12, 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 23413821. 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 over 8,000 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 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; 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
| July 31, 2013 | October 31, 2012 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 25,482 | $ | 12,840 | ||||
| Trade receivables, net | 247,296 | 234,297 | ||||||
| Inventories | 339,908 | 320,199 | ||||||
| Deferred tax assets | 40,008 | 39,417 | ||||||
| Other current assets | 53,313 | 51,107 | ||||||
| Total current assets | 706,007 | 657,860 | ||||||
| Property, plant and equipment, net | 654,100 | 640,255 | ||||||
| Goodwill | 1,378,679 | 1,370,247 | ||||||
| Other intangibles, net | 203,398 | 214,783 | ||||||
| Deferred tax assets | 17,021 | 14,434 | ||||||
| Other assets | 47,703 | 43,805 | ||||||
| $ | 3,006,908 | $ | 2,941,384 | |||||
| LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
| Current liabilities: | ||||||||
| Short-term debt | $ | 28,338 | $ | 25,284 | ||||
| Other current liabilities | 220,948 | 237,268 | ||||||
| Total current liabilities | 249,286 | 262,552 | ||||||
| Long-term debt | 215,291 | 348,422 | ||||||
| Deferred tax liabilities | 23,298 | 30,971 | ||||||
| Other liabilities | 81,391 | 86,281 | ||||||
| Total liabilities | 569,266 | 728,226 | ||||||
| Total Cooper stockholders equity | 2,415,522 | 2,192,751 | ||||||
| Noncontrolling interests | 22,120 | 20,407 | ||||||
| Stockholders equity | 2,437,642 | 2,213,158 | ||||||
| $ | 3,006,908 | $ | 2,941,384 |
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except earnings per share amounts)
| Three Months Ended July 31, | Nine Months Ended July 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Net sales | $ | 411,993 | $ | 378,186 | $ | 1,175,873 | $ | 1,048,835 | ||||||||
| Cost of sales | 143,719 | 138,089 | 412,923 | 377,589 | ||||||||||||
| Gross profit | 268,274 | 240,097 | 762,950 | 671,246 | ||||||||||||
| Selling, general and administrative expense | 152,141 | 143,830 | 453,487 | 412,540 | ||||||||||||
| Research and development expense | 14,865 | 13,156 | 43,008 | 37,611 | ||||||||||||
| Amortization of intangibles | 7,660 | 5,861 | 22,553 | 16,677 | ||||||||||||
| Operating income | 93,608 | 77,250 | 243,902 | 204,418 | ||||||||||||
| Interest expense | 2,258 | 2,315 | 7,268 | 9,049 | ||||||||||||
| Gain on insurance proceeds | 14,084 | |||||||||||||||
| Loss on extinguishment of debt | 1,404 | 1,404 | ||||||||||||||
| Other (expense) income, net | (86 | ) | (2,144 | ) | 461 | (1,152 | ) | |||||||||
| Income before income taxes | 91,264 | 71,387 | 251,179 | 192,813 | ||||||||||||
| Provision for income taxes | 2,072 | 4,433 | 11,585 | 16,315 | ||||||||||||
| Net income | 89,192 | 66,954 | 239,594 | 176,498 | ||||||||||||
| Less: income attributable to noncontrolling interests | 241 | 79 | 840 | 79 | ||||||||||||
| Net income attributable to Cooper stockholders | $ | 88,951 | $ | 66,875 | $ | 238,754 | $ | 176,419 | ||||||||
| Diluted earnings per share attributable to Cooper stockholders | $ | 1.79 | $ | 1.36 | $ | 4.81 | $ | 3.60 | ||||||||
| Number of shares used to compute earnings per share attributable to Cooper stockholders | 49,754 | 49,302 | 49,623 | 49,069 |
Soft Contact Lens Revenue Update
Worldwide Manufacturers Soft Contact Lens Revenue
(U.S. dollars in millions; constant currency; unaudited)
| Calendar 2Q13 | Trailing Twelve Months 2013 | |||||||||||||||||||||||
| Market | Market Change | CVI Change | Market | Market Change | CVI Change | |||||||||||||||||||
| Sales by Modality | ||||||||||||||||||||||||
| Single-use | $ | 770 | 9 | % | 15 | % | $ | 2,920 | 9 | % | 17 | % | ||||||||||||
| Other | 1,100 | 2 | % | 8 | % | 4,330 | 1 | % | 9 | % | ||||||||||||||
| WW Soft Contact Lenses | $ | 1,870 | 4 | % | 10 | % | $ | 7,250 | 4 | % | 11 | % | ||||||||||||
| Sales by Geography | ||||||||||||||||||||||||
| Americas | $ | 740 | 4 | % | 11 | % | $ | 2,850 | 5 | % | 11 | % | ||||||||||||
| EMEA | 540 | 4 | % | 8 | % | 2,050 | 3 | % | 8 | % | ||||||||||||||
| Asia Pacific | 590 | 5 | % | 10 | % | 2,350 | 4 | % | 15 | % | ||||||||||||||
| WW Soft Contact Lenses | $ | 1,870 | 4 | % | 10 | % | $ | 7,250 | 4 | % | 11 | % |
Source: Management estimates and independent market research