The Cooper Companies Announces First Quarter 2014 Results
The Cooper Companies Announces First Quarter 2014 Results
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Revenue increased 7% year-over-year to
$405.0 million , up 11% in constant currency and excluding the divestiture of Aime. CooperVision (CVI) revenue up 8% to$326.3 million , up 14% in constant currency and excluding the divestiture of Aime.CooperSurgical (CSI) revenue up 0.3% to$78.7 million .
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GAAP earnings per share (EPS) and non-GAAP EPS of
$1.47 , down3 cents or 2% and up24 cents or 20% year over year, respectively.
Commenting on the results,
First Quarter GAAP Operating Highlights
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Revenue
$405.0 million , up 7% from last year's first quarter, 11% excluding currency and the divestiture of Aime (CVI's rigid gas permeable contact lens and solutions business inJapan , sold effectiveOctober 31, 2013 ).
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Gross margin 65% compared with 63% in last year's first quarter. Gross margin was positively impacted by a lower royalty payment on silicone hydrogel lens sales and favorable product mix, partially offset by lower revenue due to currency, primarily the yen.
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Operating margin 20% compared with 18% in last year's first quarter. The increase was the result of gross margin improvement and SG&A leverage.
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Depreciation
$23.9 million , down 1% from last year's first quarter. Amortization$7.5 million , up 2% from last year's first quarter.
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Total debt increased
$1.1 million fromOctober 31, 2013 to$345.7 million . Interest expense$1.7 million compared with$2.6 million in last year's first quarter.
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Cash provided by operations
$68.6 million , capital expenditures$61.0 million and insurance recovery of$1.4 million , resulted in free cash flow$9.0 million .
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Shares repurchased
$50.0 million (396 thousand shares).
First Quarter CooperVision GAAP Operating Highlights
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Revenue
$326.3 million , up 8% from last year's first quarter, 14% in constant currency and excluding the divestiture of Aime.
- Revenue by category:
Constant Currency | ||||
(In millions) | % of CVI Revenue | %chg | %chg | |
1Q14 | 1Q14 | y/y | y/y | |
Toric | $ 101.2 | 31% | 10% | 12% |
Multifocal | 33.7 | 10% | 24% | 24% |
Single-use sphere | 68.8 | 21% | 5% | 14% |
Non single-use sphere, other | 122.6 | 38% | 5% | 6% |
Total | $ 326.3 | 100% | 8% | 11% |
- Revenue by geography:
Constant Currency | ||||
(In millions) | % of CVI Revenue | %chg | %chg | |
1Q14 | 1Q14 | y/y | y/y | |
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$ 140.7 | 43% | 13% | 13% |
EMEA | 117.9 | 36% | 16% | 13% |
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67.7 | 21% | -9% | 6% |
Total | $ 326.3 | 100% | 8% | 11% |
- Selected revenue by material:
Constant Currency | ||||
(In millions) | % of CVI Revenue | %chg | %chg | |
1Q14 | 1Q14 | y/y | y/y | |
Silicone hydrogel | $ 154.2 | 47% | 29% | 30% |
Proclear® | $ 82.6 | 25% | 9% | 12% |
- Gross margin 65% compared with 63% in last year's first quarter. Gross margin was positively impacted by a lower royalty payment on silicone hydrogel lens sales and favorable product mix, partially offset by lower revenue due to currency, primarily the yen.
First Quarter CooperSurgical GAAP Operating Highlights
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Revenue
$78.7 million , up 0.3% from last year's first quarter.
- Revenue by category:
(In millions) | % of CSI Revenue | %chg | |
1Q14 | 1Q14 | y/y | |
Office and surgical procedures | $ 50.8 | 65% | -6% |
Fertility | 27.9 | 35% | 15% |
Total | $ 78.7 | 100% | 0% |
- Gross margin 63% compared with 64% in last year's first quarter. The decrease was primarily the result of lower margins associated with the fertility business.
2014 Guidance
The Company revises its full year fiscal 2014 guidance. Guidance is summarized as follows:
FY14 Guidance | FY14 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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Guidance assumes constant currency as of
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, in our fiscal first quarter 2013, 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.
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
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 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
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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2014 | 2013 | |
ASSETS | ||
Current assets: | ||
Cash and cash equivalents |
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Trade receivables, net | 235,288 | 229,537 |
Inventories | 339,496 | 338,917 |
Deferred tax assets | 35,499 | 41,179 |
Other current assets | 61,983 | 60,215 |
Total current assets | 701,094 | 747,241 |
Property, plant and equipment, net | 769,397 | 739,867 |
Goodwill | 1,387,983 | 1,387,611 |
Other intangibles, net | 190,812 | 198,769 |
Deferred tax assets | 18,885 | 16,279 |
Other assets | 46,584 | 47,494 |
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LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current liabilities: | ||
Short-term debt |
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Other current liabilities | 224,160 | 278,266 |
Total current liabilities | 268,307 | 321,253 |
Long-term debt | 301,589 | 301,670 |
Deferred tax liabilities | 24,447 | 24,883 |
Other liabilities | 66,503 | 65,961 |
Total liabilities | 660,846 | 713,767 |
Total Cooper stockholders' equity | 2,435,279 | 2,404,535 |
Noncontrolling interests | 18,630 | 18,959 |
Stockholders' equity | 2,453,909 | 2,423,494 |
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Consolidated Statements of Income | ||
(In thousands, except earnings per share amounts) | ||
(Unaudited) | ||
Three Months Ended | ||
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2014 | 2013 | |
Net sales |
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Cost of sales | 142,051 | 139,341 |
Gross profit | 262,929 | 240,498 |
Selling, general and administrative expense | 158,088 | 150,653 |
Research and development expense | 15,712 | 13,653 |
Amortization of intangibles | 7,507 | 7,371 |
Operating income | 81,622 | 68,821 |
Interest expense | 1,656 | 2,567 |
Gain on insurance proceeds | -- | 14,084 |
Other (expense) income, net | (510) | 638 |
Income before income taxes | 79,456 | 80,976 |
Provision for income taxes | 7,191 | 6,041 |
Net income | 72,265 | 74,935 |
Income attributable to noncontrolling interests | 422 | 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 | 49,006 | 49,633 |
Soft Contact Lens Revenue Update
Worldwide Manufacturers' Soft Contact Lens Revenue | ||||||
(U.S. dollars in millions; constant currency; unaudited) | ||||||
Calendar 4Q13 | Trailing Twelve Months 2013 | |||||
Market | CVI | Market | CVI | |||
Market | Change | Change | Market | Change | Change | |
Sales by Modality | ||||||
Single-use | $ 787 | 12% | 19% | $ 3,080 | 10% | 18% |
Other | 1,053 | 3% | 11% | 4,389 | 2% | 9% |
WW Soft Contact Lenses | $ 1,840 | 6% | 13% | $ 7,469 | 5% | 11% |
Sales by Geography | ||||||
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$ 692 | 8% | 15% | $ 2,955 | 6% | 12% |
EMEA | 520 | 5% | 12% | 2,100 | 4% | 9% |
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628 | 6% | 10% | 2,414 | 5% | 12% |
WW Soft Contact Lenses | $ 1,840 | 6% | 13% | $ 7,469 | 5% | 11% |
Source: Management estimates and independent market research
COO-E
CONTACT:Source:Kim Duncan Senior Director, Investor Relations ir@cooperco.com 925-460-3663
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