The Cooper Companies Announces First Quarter 2013 Results
The Cooper Companies Announces First Quarter 2013 Results
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Revenue increased 16% year-over-year to
$379.8 million . CooperVision (CVI) revenue up 12% to$301.4 million , andCooperSurgical (CSI) revenue up 37% to$78.4 million . -
GAAP earnings per share (EPS)
$1.50 , up38 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 ourUK manufacturing facilities fromOctober 2011 . -
Non-GAAP EPS
$1.23 , up11 cents from last year's first quarter. See "Reconciliation of Non-GAAP EPS to GAAP EPS" below.
Commenting on the results,
First Quarter GAAP Operating Highlights
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Revenue
$379.8 million , up 16% from last year's first quarter, 11% excluding currency and acquisitions.
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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®.
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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.
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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.
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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.
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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
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Revenue
$301.4 million , up 12% from last year's first quarter, 14% in constant currency.
- Revenue by category:
Constant Currency (In millions) % of CVI Revenue %chg %chg 1Q13 1Q13 y/y 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:
Constant Currency (In millions) % of CVI Revenue %chg %chg 1Q13 1Q13 y/y 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:
Constant Currency (In millions) % of CVI Revenue %chg %chg 1Q13 1Q13 y/y 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
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Revenue
$78.4 million , up 37% from last year's first quarter, up 1% excluding acquisitions.
- Revenue by category:
(In millions) % of CSI Revenue %chg 1Q13 1Q13 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 | FY13 Guidance | |
Old | New | |
Revenues (In millions) | ||
Total |
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CVI |
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CSI |
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EPS | ||
GAAP |
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Non-GAAP |
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Free |
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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
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
Three Months Ended |
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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 |
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$ (0.27) |
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Conference Call and Webcast
The Company will host a conference call today at
About
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
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.
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Consolidated Condensed Balance Sheets | ||
(In thousands) | ||
(Unaudited) | ||
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October 31, | |
2013 | 2012 | |
ASSETS | ||
Current assets: | ||
Cash and cash equivalents |
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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 |
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LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current liabilities: | ||
Short-term debt |
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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 |
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Consolidated Statements of Income | ||
(In thousands, except earnings per share amounts) | ||
(Unaudited) | ||
Three Months Ended | ||
January 31, | ||
2013 | 2012 | |
Net sales |
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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 |
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Diluted earnings per share attributable to Cooper stockholders |
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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 | CVI | Market | CVI | |||
Market | Change | Change | Market | Change | 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% |
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$ 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
CONTACT:Source:Kim Duncan Senior Director, Investor Relations 925-460-3663 ir@cooperco.com
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