Full Press Release Details
| NEWS RELEASE | ||
| CONTACT: Kim Duncan Vice President, Investor Relations ir@cooperco.com | 6140 Stoneridge Mall Road Suite 590 Pleasanton, CA 94588 925-460-3663 www.coopercos.com |
THE COOPER COMPANIES ANNOUNCES FOURTH QUARTER
AND FULL YEAR 2016 RESULTS
PLEASANTON, Calif., December 8, 2016 The Cooper Companies, Inc. (NYSE: COO) today announced financial results for the fiscal fourth quarter and
full year ended October 31, 2016.
Commenting on the results, Robert S. Weiss, Cooper s president and chief executive officer said, I am
pleased to report record revenue and free cash flow for the year. We accomplished this through market share gains, a successful push into the 1-Day silicone hydrogel space, growth in our
Biofinity franchise and very strong year in our CooperSurgical business. We enter fiscal 2017 with momentum and are well positioned for sustained growth in each of our businesses going
Fourth Quarter GAAP Operating Results
Fourth Quarter CooperVision (CVI) GAAP Operating Results
| (In millions) 4Q16 | % of CVI Revenue 4Q16 | %chg y/y | Constant Currency %chg y/y | |||||||||||||
| Toric | $ | 126.1 | 31 | % | 14 | % | 14 | % | ||||||||
| Multifocal | 42.6 | 10 | % | 9 | % | 10 | % | |||||||||
| Single-use sphere | 110.4 | 27 | % | 17 | % | 16 | % | |||||||||
| Non single-use sphere, other | 132.6 | 32 | % | 2 | % | 3 | % | |||||||||
| Total | $ | 411.7 | 100 | % | 10 | % | 11 | % |
| (In millions) 4Q16 | % of CVI Revenue 4Q16 | %chg y/y | Constant Currency %chg y/y | |||||||||||||
| Americas | $ | 168.1 | 41 | % | 8 | % | 8 | % | ||||||||
| EMEA | 155.7 | 38 | % | 5 | % | 12 | % | |||||||||
| Asia Pacific | 87.9 | 21 | % | 27 | % | 13 | % | |||||||||
| Total | $ | 411.7 | 100 | % | 10 | % | 11 | % |
Fourth Quarter CooperSurgical (CSI) GAAP Operating Results
| (In millions) 4Q16 | % of CSI Revenue 4Q16 | %chg y/y | Pro forma %chg y/y | |||||||||||||
| Office and surgical products | $ | 54.6 | 51 | % | 5 | % | 5 | % | ||||||||
| Fertility | 52.3 | 49 | % | 74 | % | 8 | % | |||||||||
| Total | $ | 106.9 | 100 | % | 30 | % | 6 | % |
Fiscal Year 2016 GAAP Operating Results
Fiscal Year 2017 Guidance
The Company initiated its
fiscal year 2017 guidance. Details are summarized as follows:
Non-GAAP earnings per share guidance
excludes amortization of intangible assets and other costs including integration expenses which we may incur as part of our continuing operations.
respect to the Company s guidance expectations, the Company has not reconciled non-GAAP earnings per share guidance to GAAP earnings per share due to the inherent difficulty in forecasting acquisition-related, integration and restructuring
charges and expenses, which are reconciling items between the non-GAAP and GAAP measure. Due to the unknown effect, timing and potential significance of such charges and expenses that impact GAAP earnings per share, the Company is not able to
provide such guidance.
Reconciliation of GAAP Results to Non-GAAP Results
To supplement 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. 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, and as appropriate, the related income tax
effects and changes in income attributable to noncontrolling interests:
We define the non-GAAP measure of free cash flow as cash provided by operating activities less capital expenditures. 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. 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 Selected GAAP Results to Non-GAAP Results
(In thousands, except per share amounts)
| Three Months Ended October 31, | ||||||||||||||||||||||||
| 2016 GAAP | Adjustment | 2016 Non-GAAP | 2015 GAAP | Adjustment | 2015 Non-GAAP | |||||||||||||||||||
| Cost of sales | $ | 222,678 | $ | (37,651 | ) A | $ | 185,027 | $ | 202,227 | $ | (37,866 | ) A | $ | 164,361 | ||||||||||
| Selling, general and administrative expense | $ | 189,131 | $ | (3,535 | ) B | $ | 185,596 | $ | 179,643 | $ | (13,621 | ) B | $ | 166,022 | ||||||||||
| Research and development expense | $ | 17,941 | $ | (283 | ) C | $ | 17,658 | $ | 18,360 | $ | (2,383 | ) C | $ | 15,977 | ||||||||||
| Amortization of intangibles | $ | 14,723 | $ | (14,723 | ) D | $ | $ | 13,053 | $ | (13,053 | ) D | $ | ||||||||||||
| Other expense (income), net | $ | 9 | $ | (127 | ) E | $ | (118 | ) | $ | 1,046 | $ | 1,046 | ||||||||||||
| Provision for (benefit from) income taxes | $ | 8,357 | $ | 4,565 | F | $ | 12,922 | $ | (588 | ) | $ | 5,063 | F | $ | 4,475 | |||||||||
| Net (loss) income attributable to noncontrolling interest | $ | (14 | ) | $ | $ | (14 | ) | $ | 336 | $ | 19 | $ | 355 | |||||||||||
| Diluted earnings per share attributable to Cooper stockholders | $ | 1.23 | $ | 1.05 | $ | 2.28 | $ | 0.75 | $ | 1.25 | $ | 2.00 |
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Reconciliation of Selected GAAP Results to Non-GAAP Results
(In thousands, except per share amounts)
| Twelve Months Ended October 31, | ||||||||||||||||||||||||
| 2016 GAAP | Adjustment | 2016 Non-GAAP | 2015 GAAP | Adjustment | 2015 Non-GAAP | |||||||||||||||||||
| Cost of sales | $ | 793,735 | $ | (69,562 | ) A | $ | 724,173 | $ | 726,798 | $ | (70,330 | ) A | $ | 656,468 | ||||||||||
| Selling, general and administrative expense | $ | 722,798 | $ | (24,145 | ) B | $ | 698,653 | $ | 712,543 | $ | (51,489 | ) B | $ | 661,054 | ||||||||||
| Research and development expense | $ | 65,411 | $ | (357 | ) C | $ | 65,054 | $ | 69,589 | $ | (4,600 | ) C | $ | 64,989 | ||||||||||
| Amortization of intangibles | $ | 60,790 | $ | (60,790 | ) D | $ | $ | 51,459 | $ | (51,459 | ) D | $ | ||||||||||||
| Other expense, net | $ | 2,257 | $ | (1,011 | ) E | $ | 1,246 | $ | 3,083 | $ | $ | 3,083 | ||||||||||||
| Provision for income taxes | $ | 20,699 | $ | 15,703 | F | $ | 36,402 | $ | 10,341 | $ | 15,505 | F | $ | 25,846 | ||||||||||
| Net income attributable to noncontrolling interest | $ | 1,017 | $ | 55 | $ | 1,072 | $ | 1,621 | $ | 137 | $ | 1,758 | ||||||||||||
| Diluted earnings per share attributable to Cooper stockholders | $ | 5.59 | $ | 2.85 | $ | 8.44 | $ | 4.14 | $ | 3.30 | $ | 7.44 |
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 2016 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
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. A recording of the call will be available beginning at 8:00 PM ET on December 8, 2016 through December 15, 2016. To hear this recording, dial 855-859-2056 (U.S.) / 404-537-3406
(International) and enter code 266737 (Cooper).
About The Cooper Companies
The Cooper Companies, Inc. ( Cooper ) is a global medical device company publicly traded on the NYSE (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 is committed to advancing the health of families with its diversified portfolio of products and services focusing on women s
health, fertility and diagnostics. Headquartered in Pleasanton, CA, Cooper has more than 10,000 employees with products sold in over 100 countries. For more information, please visit www.coopercos.com.
Forward-Looking Statements
This earnings 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 2017 Guidance and all statements regarding acquisitions including the acquired companies financial position, market position, product development and business strategy, expected
cost synergies, expected timing and benefits of the transaction, difficulties in integrating entities or operations, as well as estimates of our and the acquired entities 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
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 countries that could adversely affect our global markets, and
the potential adverse economic impact and related uncertainty caused by the United Kingdom s election to withdraw from the European Union; 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, 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); our indebtedness and associated interest
expense could adversely affect our financial health, prevent us from fulfilling our debt obligations or limit our ability to borrow additional funds; 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, enhancements, or new system deployments and integrations, integration of acquisitions, natural disasters, or other causes; changes in tax laws
or their interpretation and changes in statutory tax rates; disruptions in supplies of raw materials, particularly components used to manufacture our silicone hydrogel lenses; new U.S. and foreign government laws and regulations, and changes in
existing laws, regulations and enforcement guidance, which affect the health care industry, including the contact lens industry and the medical device industry; compliance costs and potential liability in connection with U.S. and foreign laws
and health care regulations pertaining to privacy and security of third party information, including product recalls, warning letters, and data security breaches; legal costs, insurance expenses, settlement costs and the risk of an adverse decision,
prohibitive injunction or settlement related to product liability, patent infringement 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; failure to receive, or delays in receiving, U.S. or foreign regulatory approvals for products; failure of our customers and end users to obtain adequate coverage and
reimbursement from third party payors for our products and services; the requirement to provide for a significant liability or to write off, or accelerate depreciation on, a significant asset, including goodwill, and idle manufacturing facilities
and equipment; the success of our research and development activities and other start-up projects; dilution to earnings per share from 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 the Company s Annual Report on Form 10-K for the fiscal year ended October 31, 2015, 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
| October 31, 2016 | October 31, 2015 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 100,817 | $ | 16,426 | ||||
| Trade receivables, net | 291,370 | 282,918 | ||||||
| Inventories | 417,696 | 419,692 | ||||||
| Deferred tax assets | 47,103 | 41,731 | ||||||
| Other current assets | 77,472 | 80,661 | ||||||
| Total current assets | 934,458 | 841,428 | ||||||
| Property, plant and equipment, net | 877,672 | 967,097 | ||||||
| Goodwill | 2,164,748 | 2,197,077 | ||||||
| Other intangibles, net | 441,086 | 411,090 | ||||||
| Deferred tax assets | 6,107 | 4,510 | ||||||
| Other assets | 51,847 | 38,662 | ||||||
| $ | 4,475,918 | $ | 4,459,864 | |||||
| LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
| Current liabilities: | ||||||||
| Short-term debt | $ | 226,325 | $ | 243,803 | ||||
| Other current liabilities | 310,130 | 324,979 | ||||||
| Total current liabilities | 536,455 | 568,782 | ||||||
| Long-term debt | 1,107,448 | 1,105,408 | ||||||
| Deferred tax liabilities | 37,532 | 31,016 | ||||||
| Other liabilities | 94,448 | 80,754 | ||||||
| Total liabilities | 1,775,883 | 1,785,960 | ||||||
| Total Cooper stockholders equity | 2,699,867 | 2,667,509 | ||||||
| Noncontrolling interests | 168 | 6,395 | ||||||
| Stockholders equity | 2,700,035 | 2,673,904 | ||||||
| $ | 4,475,918 | $ | 4,459,864 |
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, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Net sales | $ | 518,654 | $ | 455,536 | $ | 1,966,814 | $ | 1,797,060 | ||||||||
| Cost of sales | 222,678 | 202,227 | 793,735 | 726,798 | ||||||||||||
| Gross profit | 295,976 | 253,309 | 1,173,079 | 1,070,262 | ||||||||||||
| Selling, general and administrative expense | 189,131 | 179,643 | 722,798 | 712,543 | ||||||||||||
| Research and development expense | 17,941 | 18,360 | 65,411 | 69,589 | ||||||||||||
| Amortization of intangibles | 14,723 | 13,053 | 60,790 | 51,459 | ||||||||||||
| Operating income | 74,181 | 42,253 | 324,080 | 236,671 | ||||||||||||
| Interest expense | 5,321 | 4,780 | 26,190 | 18,103 | ||||||||||||
| Other expense, net | 9 | 1,046 | 2,257 | 3,083 | ||||||||||||
| Income before income taxes | 68,851 | 36,427 | 295,633 | 215,485 | ||||||||||||
| Provision for (benefit from) income taxes | 8,357 | (588 | ) | 20,699 | 10,341 | |||||||||||
| Net income | 60,494 | 37,015 | 274,934 | 205,144 | ||||||||||||
| Less: net (loss) income attributable to noncontrolling interests | (14 | ) | 336 | 1,017 | 1,621 | |||||||||||
| Net income attributable to Cooper stockholders | $ | 60,508 | $ | 36,679 | $ | 273,917 | $ | 203,523 | ||||||||
| Diluted earnings per share attributable to Cooper stockholders | $ | 1.23 | $ | 0.75 | $ | 5.59 | $ | 4.14 | ||||||||
| Number of shares used to compute earnings per share attributable to Cooper stockholders | 49,281 | 49,177 | 49,026 | 49,179 |
Soft Contact Lens Revenue Update
Worldwide Manufacturers Soft Contact Lens Revenue
(U.S. dollars in millions; constant currency; unaudited)
| Calendar 3Q16 | Trailing Twelve Months 2016 | |||||||||||||||||||||||
| Market | CVI | Market | CVI | |||||||||||||||||||||
| Market | Change | Change | Market | Change | Change | |||||||||||||||||||
| Sales by Modality | ||||||||||||||||||||||||
| Single-use | $ | 910 | 8 | % | 12 | % | $ | 3,365 | 10 | % | 14 | % | ||||||||||||
| Other | 970 | (4 | %) | 3 | % | 3,870 | (1 | %) | 5 | % | ||||||||||||||
| WW Soft Contact Lenses | $ | 1,880 | 1 | % | 6 | % | $ | 7,235 | 3 | % | 8 | % | ||||||||||||
| Sales by Geography | ||||||||||||||||||||||||
| Americas | $ | 805 | (3 | %) | 3 | % | $ | 3,100 | 1 | % | 5 | % | ||||||||||||
| EMEA | 530 | 7 | % | 8 | % | 2,030 | 6 | % | 8 | % | ||||||||||||||
| Asia Pacific | 545 | 3 | % | 9 | % | 2,105 | 4 | % | 14 | % | ||||||||||||||
| WW Soft Contact Lenses | $ | 1,880 | 1 | % | 6 | % | $ | 7,235 | 3 | % | 8 | % |
Note: This data is compiled using gross product sales.
Source: Management estimates and independent market research