Full Press Release Details
THE COOPER COMPANIES ANNOUNCES FOURTH QUARTER AND FULL YEAR 2014 RESULTS
PLEASANTON, Calif., December 4, 2014 The Cooper Companies, Inc. (NYSE: COO) today announced financial results for the fiscal fourth quarter
and full year ended October 31, 2014.
results, Robert S. Weiss, Cooper s president and chief executive officer said, I am pleased to report record revenue this year at both our business units and record non-GAAP EPS. We accomplished this through continued market share gains
across all geographies and the acquisition of Sauflon Pharmaceuticals. Our business fundamentals remain strong and we expect fiscal 2015 to be a year of strong operational performance.
Fourth Quarter GAAP Operating Highlights
Fourth Quarter CooperVision (CVI) GAAP Operating Highlights
| (In millions) 4Q14 | % of CVI Revenue 4Q14 | % chg y/y | Pro forma* % chg y/y | |||||||||||||
| Toric | $ | 110.9 | 29 | % | 13 | % | 12 | % | ||||||||
| Multifocal | 40.1 | 10 | % | 26 | % | 20 | % | |||||||||
| Single-use sphere | 93.6 | 24 | % | 32 | % | 11 | % | |||||||||
| Non single-use sphere, other | 140.8 | 37 | % | 12 | % | 2 | % | |||||||||
| Total | $ | 385.4 | 100 | % | 18 | % | 9 | % |
| (In millions) 4Q14 | % of CVI Revenue 4Q14 | % chg y/y | Pro forma* % chg y/y | |||||||||||||
| Americas | $ | 152.9 | 40 | % | 8 | % | 5 | % | ||||||||
| EMEA | 163.0 | 42 | % | 43 | % | 13 | % | |||||||||
| Asia Pacific | 69.5 | 18 | % | -2 | % | 7 | % | |||||||||
| Total | $ | 385.4 | 100 | % | 18 | % | 9 | % |
Fourth Quarter CooperSurgical (CSI) GAAP Operating Highlights
| (In millions) 4Q14 | % of CSI Revenue 4Q14 | % chg y/y | Constant Currency % chg y/y | |||||||||||||
| Office and surgical procedures | $ | 55.0 | 67 | % | -1 | % | -1 | % | ||||||||
| Fertility | 27.6 | 33 | % | -5 | % | -1 | % | |||||||||
| Total | $ | 82.6 | 100 | % | -3 | % | -1 | % |
Fiscal Year 2014 GAAP Operating Highlights
Fiscal Year 2015 Guidance
The Company updated its fiscal year 2015 guidance. Guidance assumes constant currency as of December 3, 2014, and is summarized as follows:
| FY15 Guidance Old | FY15 Guidance New* | |||
| Revenues (In millions) | ||||
| Total | $2,000 - $2,060 | $1,900 - $1,960 | ||
| CVI | $1,675 - $1,715 | $1,575 - $1,620 | ||
| CSI | $325 - $345 | $325 - $340 | ||
| EPS | ||||
| Non-GAAP | $8.20 - $8.60 | $7.30 - $7.70 |
Reconciliation of Non-GAAP Results to GAAP Results
supplement our financial results presented on a GAAP basis, we use non-GAAP measures indicated in the tables below 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 the related integration activities, divestitures, severance and related restructuring costs, and proceeds related to
a business interruption claim. 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. Our non-GAAP financial measures include the following adjustments, along with the related income tax effects and changes in income attributable to noncontrolling interests:
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. To report
revenue growth excluding the October 31, 2013 divestiture of Aime, we excluded $6.6 million and $25.8 million of net sales in our fiscal fourth quarter of 2013 and fiscal year 2013, respectively. To report pro forma revenue growth including
Sauflon, we included $41.4 million and $158.6 million of net sales in our fiscal fourth quarter of 2013 and fiscal year 2013, respectively, for periods when we did not own Sauflon.
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
Selected GAAP Results to Non-GAAP Results
(In thousands, except per share amounts)
| Three Months Ended October 31, | ||||||||||||||||||||||||||||||||
| 2014 GAAP | Adjustment | 2014 Non-GAAP | 2013 GAAP | Adjustment | 2013 Non-GAAP | |||||||||||||||||||||||||||
| Net sales | $ | 467,997 | $ | $ | 467,997 | $ | 411,852 | $ | $ | 411,852 | ||||||||||||||||||||||
| Cost of sales | 188,445 | (16,097 | ) | A | 172,348 | 147,994 | 147,994 | |||||||||||||||||||||||||
| Gross profit | 279,552 | 295,649 | 263,858 | 263,858 | ||||||||||||||||||||||||||||
| Selling, general and administrative expense | 208,021 | (38,828 | ) | B | 169,193 | 157,247 | 157,247 | |||||||||||||||||||||||||
| Research and development expense | 18,181 | (648 | ) | C | 17,533 | 15,819 | 15,819 | |||||||||||||||||||||||||
| Amortization of intangibles | 13,976 | (13,976 | ) | D | 7,687 | (7,687 | ) | D | ||||||||||||||||||||||||
| Loss on divestiture of Aime | 21,062 | (21,062 | ) | G | ||||||||||||||||||||||||||||
| Operating income | 39,374 | 108,923 | 62,043 | 90,792 | ||||||||||||||||||||||||||||
| Interest expense | 3,251 | 3,251 | 1,900 | 1,900 | ||||||||||||||||||||||||||||
| Other expense (income), net | 1,248 | (1,067 | ) | E | 181 | (949 | ) | (949 | ) | |||||||||||||||||||||||
| Income before income taxes | 34,875 | 105,491 | 61,092 | 89,841 | ||||||||||||||||||||||||||||
| Provision for income taxes | 3,618 | 5,533 | F | 9,151 | 3,779 | 6,504 | F | 10,283 | ||||||||||||||||||||||||
| Net income | 31,257 | 96,340 | 57,313 | 79,558 | ||||||||||||||||||||||||||||
| Income (loss) attributable to noncontrolling interests | 470 | 75 | D | 545 | (83 | ) | 85 | D | 2 | |||||||||||||||||||||||
| Net income attributable to Cooper stockholders | $ | 30,787 | $ | 95,795 | $ | 57,396 | $ | 79,556 | ||||||||||||||||||||||||
| Diluted earnings per share attributable to Cooper stockholders | $ | 0.63 | $ | 1.32 | $ | 1.95 | $ | 1.15 | $ | 0.45 | $ | 1.60 | ||||||||||||||||||||
| Number of shares used to compute earnings per share attributable to Cooper stockholders | 49,126 | 49,126 | 49,723 | 49,723 |
| (In thousands) | CooperVision | CooperSurgical | Headquarters | Total | ||||||||||||
| Restructuring and related costs | $ | 19,727 | $ | 236 | $ | $ | 19,963 | |||||||||
| Acquisition and integration costs | 17,404 | 599 | 862 | 18,865 | ||||||||||||
| $ | 37,131 | $ | 835 | $ | 862 | $ | 38,828 |
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
Selected GAAP Results to Non-GAAP Results
(In thousands, except per share amounts)
| Year Ended October 31, | ||||||||||||||||||||||||||||||||
| 2014 GAAP | Adjustment | 2014 Non-GAAP | 2013 GAAP | Adjustment | 2013 Non-GAAP | |||||||||||||||||||||||||||
| Net sales | $ | 1,717,776 | $ | $ | 1,717,776 | $ | 1,587,725 | $ | $ | 1,587,725 | ||||||||||||||||||||||
| Cost of sales | 626,206 | (16,524 | ) | A | 609,682 | 560,917 | 560,917 | |||||||||||||||||||||||||
| Gross profit | 1,091,570 | 1,108,094 | 1,026,808 | 1,026,808 | ||||||||||||||||||||||||||||
| Selling, general and administrative expense | 683,115 | (44,524 | ) | B | 638,591 | 610,735 | (626 | ) | B | 610,109 | ||||||||||||||||||||||
| Research and development expense | 66,259 | (649 | ) | C | 65,610 | 58,827 | 58,827 | |||||||||||||||||||||||||
| Amortization of intangibles | 35,710 | (35,710 | ) | D | 30,239 | (30,239 | ) | D | ||||||||||||||||||||||||
| Loss on divestiture of Aime | 21,062 | (21,062 | ) | G | ||||||||||||||||||||||||||||
| Operating income | 306,486 | 403,893 | 305,945 | 357,872 | ||||||||||||||||||||||||||||
| Interest expense | 7,965 | 7,965 | 9,168 | 9,168 | ||||||||||||||||||||||||||||
| Gain on insurance proceeds | 14,084 | (14,084 | ) | H | ||||||||||||||||||||||||||||
| Other expense (income), net | 1,987 | (1,067 | ) | E | 920 | (1,410 | ) | (1,410 | ) | |||||||||||||||||||||||
| Income before income taxes | 296,534 | 395,008 | 312,271 | 350,114 | ||||||||||||||||||||||||||||
| Provision for income taxes | 24,705 | 11,043 | F | 35,748 | 15,365 | 15,299 | F | 30,664 | ||||||||||||||||||||||||
| Net income | 271,829 | 359,260 | 296,906 | 319,450 | ||||||||||||||||||||||||||||
| Income attributable to noncontrolling interests | 1,973 | 282 | D | 2,255 | 755 | 323 | D | 1,078 | ||||||||||||||||||||||||
| Net income attributable to Cooper stockholders | $ | 269,856 | $ | 357,005 | $ | 296,151 | $ | 318,372 | ||||||||||||||||||||||||
| Diluted earnings per share attributable to Cooper stockholders | $ | 5.51 | $ | 1.78 | $ | 7.29 | $ | 5.96 | $ | 0.45 | $ | 6.41 | ||||||||||||||||||||
| Number of shares used to compute earnings per share attributable to Cooper stockholders | 48,960 | 48,960 | 49,685 | 49,685 |
| (In thousands) | CooperVision | CooperSurgical | Headquarters | Total | ||||||||||||
| Restructuring and related costs | $ | 19,727 | $ | 430 | $ | $ | 20,157 | |||||||||
| Acquisition and integration costs | 22,609 | 896 | 862 | 24,367 | ||||||||||||
| $ | 42,336 | $ | 1,326 | $ | 862 | $ | 44,524 |
In fiscal 2013, our GAAP SGA included $0.6 million of costs related to the acquisition of Origio.
Conference Call and Webcast
The Company will host a
conference call today at 5:00 PM ET to discuss its fiscal fourth quarter and full year 2014 financial results and current corporate developments. The dial-in number in the United States is 1-877-415-3183 and outside the United States is
+1-857-244-7326. The passcode is Cooper . There will be a replay available approximately two hours after the call ends until Thursday, December 11, 2014. 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 80168074. 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 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 approximately 9,000 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 2014 Guidance and 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 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 fluctuations in the value of the yen, pound and euro 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); 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; 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; legal costs, insurance expenses, settlement costs and the risk
of an adverse decision or settlement related to product liability, patent protection or other litigation; 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; changes in tax laws or
their interpretation and changes in statutory tax rates; 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
We caution investors that forward-looking statements reflect our analysis only on their stated date. We disclaim any intent to update them except
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
| October 31, 2014 | October 31, 2013 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 25,222 | $ | 77,393 | ||||
| Trade receivables, net | 276,280 | 229,537 | ||||||
| Inventories | 381,474 | 338,917 | ||||||
| Deferred tax assets | 40,224 | 41,179 | ||||||
| Other current assets | 68,417 | 60,215 | ||||||
| Total current assets | 791,617 | 747,241 | ||||||
| Property, plant and equipment, net | 937,325 | 739,867 | ||||||
| Goodwill | 2,220,921 | 1,387,611 | ||||||
| Other intangibles, net | 453,605 | 198,769 | ||||||
| Deferred tax assets | 15,732 | 16,279 | ||||||
| Other assets | 39,140 | 47,494 | ||||||
| $ | 4,458,340 | $ | 3,137,261 | |||||
| LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
| Current liabilities: | ||||||||
| Short-term debt | $ | 101,518 | $ | 42,987 | ||||
| Other current liabilities | 340,664 | 278,266 | ||||||
| Total current liabilities | 442,182 | 321,253 | ||||||
| Long-term debt | 1,280,833 | 301,670 | ||||||
| Deferred tax liabilities | 69,525 | 24,883 | ||||||
| Other liabilities | 77,360 | 65,961 | ||||||
| Total liabilities | 1,869,900 | 713,767 | ||||||
| Total Cooper stockholders equity | 2,569,878 | 2,404,535 | ||||||
| Noncontrolling interests | 18,562 | 18,959 | ||||||
| Stockholders equity | 2,588,440 | 2,423,494 | ||||||
| $ | 4,458,340 | $ | 3,137,261 |
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per share amounts)
| Three Months Ended October 31, | Year Ended October 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Net sales | $ | 467,997 | $ | 411,852 | $ | 1,717,776 | $ | 1,587,725 | ||||||||
| Cost of sales | 188,445 | 147,994 | 626,206 | 560,917 | ||||||||||||
| Gross profit | 279,552 | 263,858 | 1,091,570 | 1,026,808 | ||||||||||||
| Selling, general and administrative expense | 208,021 | 157,247 | 683,115 | 610,735 | ||||||||||||
| Research and development expense | 18,181 | 15,819 | 66,259 | 58,827 | ||||||||||||
| Amortization of intangibles | 13,976 | 7,687 | 35,710 | 30,239 | ||||||||||||
| Loss on divestiture of Aime | 21,062 | 21,062 | ||||||||||||||
| Operating income | 39,374 | 62,043 | 306,486 | 305,945 | ||||||||||||
| Interest expense | 3,251 | 1,900 | 7,965 | 9,168 | ||||||||||||
| Gain on insurance proceeds | 14,084 | |||||||||||||||
| Other expense (income), net | 1,248 | (949 | ) | 1,987 | (1,410 | ) | ||||||||||
| Income before income taxes | 34,875 | 61,092 | 296,534 | 312,271 | ||||||||||||
| Provision for income taxes | 3,618 | 3,779 | 24,705 | 15,365 | ||||||||||||
| Net income | 31,257 | 57,313 | 271,829 | 296,906 | ||||||||||||
| Income (loss) attributable to noncontrolling interests | 470 | (83 | ) | 1,973 | 755 | |||||||||||
| Net income attributable to Cooper stockholders | $ | 30,787 | $ | 57,396 | $ | 269,856 | $ | 296,151 | ||||||||
| Diluted earnings per share attributable to Cooper stockholders | $ | 0.63 | $ | 1.15 | $ | 5.51 | $ | 5.96 | ||||||||
| Number of shares used to compute earnings per share attributable to Cooper stockholders | 49,126 | 49,723 | 48,960 | 49,685 |
Soft Contact Lens Revenue Update
Worldwide Manufacturers Soft Contact Lens Revenue
(U.S. dollars in millions; constant currency; unaudited)
| Calendar 3Q14 | Trailing Twelve Months 2014 | |||||||||||||||||||||||
| Market | Market Change | CVI Change | Market | Market Change | CVI Change | |||||||||||||||||||
| Sales by Modality | ||||||||||||||||||||||||
| Single-use | $ | 820 | 6 | % | 12 | % | $ | 3,120 | 9 | % | 16 | % | ||||||||||||
| Other | 1,085 | 0 | % | 6 | % | 4,330 | 2 | % | 6 | % | ||||||||||||||
| WW Soft Contact Lenses | $ | 1,905 | 2 | % | 8 | % | $ | 7,450 | 5 | % | 9 | % | ||||||||||||
| Sales by Geography | ||||||||||||||||||||||||
| Americas | $ | 765 | 2 | % | 7 | % | $ | 3,005 | 5 | % | 6 | % | ||||||||||||
| EMEA | 570 | 4 | % | 7 | % | 2,200 | 4 | % | 10 | % | ||||||||||||||
| Asia Pacific | 570 | 2 | % | 11 | % | 2,245 | 6 | % | 13 | % | ||||||||||||||
| WW Soft Contact Lenses | $ | 1,905 | 2 | % | 8 | % | $ | 7,450 | 5 | % | 9 | % |
Source: Management estimates and independent market research