The Cooper Companies Announces Fourth Quarter and Full Year 2012 Results
The Cooper Companies Announces Fourth Quarter and Full Year 2012 Results
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Fourth quarter revenue increased 10% year-over-year to
$396.3 million . Fiscal 2012 revenue increased 9% to$1,445.1 million . -
Fourth quarter GAAP earnings per share (EPS)
$1.46 , up31 cents or 27% from last year's fourth quarter. Fiscal 2012 GAAP EPS$5.05 , up 39% from fiscal 2011. -
Fourth quarter non-GAAP EPS
$1.47 . Fiscal 2012 non-GAAP EPS$5.16 . See "Reconciliation of Non-GAAP EPS to GAAP EPS" below. -
Fourth quarter free cash flow
$83.5 million . Fiscal 2012 free cash flow$230.4 million .
Commenting on the results,
Fourth Quarter GAAP Operating Highlights
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Revenue
$396.3 million , up 10% from last year's fourth quarter, 7% excluding currency and acquisitions. -
Gross margin 64% compared with 62% in last year's fourth quarter. The improvement was primarily the result of increased manufacturing efficiencies, favorable product mix and the
$6.0 million Avaira recall reserve for inventory and return provisions in last year's fourth quarter. -
Operating margin 20% compared with 18% in last year's fourth quarter. The improvement was the result of a higher gross margin and a
$10.0 million one-time charge related to the settlement of the Rembrandt patent litigation that was included in last year's fourth quarter. -
Depreciation
$23.5 million , up 13% from last year's fourth quarter. Amortization$7.3 million , up 31% from last year's fourth quarter primarily related to additional amortization from the acquisition of Origio. -
Total debt decreased
$106.4 million fromJuly 31, 2012 , to$373.7 million . Interest expense$2.7 million compared with$2.9 million in last year's fourth quarter. -
Cash provided by operations
$114.8 million , capital expenditures$32.6 million , and excluding acquisition costs of$1.3 million resulted in free cash flow of$83.5 million .
Fourth Quarter CooperVision (CVI) GAAP Operating Highlights
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Revenue
$318.1 million , up 5% from last year's fourth quarter, 7% in constant currency. - Revenue by category:
Constant Currency (In millions) % of CVI Revenue %chg %chg 4Q12 4Q12 y/y y/y Toric $ 91.4 29% 2% 5% Multifocal 26.6 8% 31% 34% Single-use sphere 72.4 23% 8% 10% Non single-use sphere, other 127.7 40% 1% 4% Total $ 318.1 100% 5% 7%
- Revenue by geography:
Constant Currency (In millions) % of CVI Revenue %chg %chg 4Q12 4Q12 y/y y/y Americas $ 139.5 44% 2% 3% EMEA 102.4 32% 4% 11% Asia Pacific 76.2 24% 10% 12% Total $ 318.1 100% 5% 7%
- Selected revenue by material:
Constant Currency (In millions) % of CVI Revenue %chg %chg 4Q12 4Q12 y/y y/y Silicone hydrogel $ 124.0 39% 21% 24% Proclear® $ 80.4 25% 1% 4%
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Gross margin 64% compared with 61% in last year's fourth quarter. The improvement was the result of increased manufacturing efficiencies and favorable product mix and the
$6.0 million Avaira recall reserve for inventory and return provisions in last year's fourth quarter.
Fourth Quarter CooperSurgical (CSI) GAAP Operating Highlights
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Revenue
$78.2 million , up 37% from last year's fourth quarter, 2% excluding acquisitions. - Revenue by category:
(In millions) % of CSI Revenue %chg 4Q12 4Q12 y/y Office, other $ 31.5 40% -3% Surgical procedures 23.8 31% 15% Fertility 22.9 29% 489% Total $ 78.2 100% 37%
- Gross margin 64%, down from 65% in last year's fourth quarter. The decrease was largely the result of lower margins associated with Origio.
Fiscal Year 2012 Operating Highlights
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Revenue
$1,445.1 million , up 9% from fiscal 2011, 8% excluding currency and acquisitions. -
CVI revenue
$1,189.2 million , up 6% from fiscal 2011, 8% in constant currency, and CSI revenue$255.9 million , up 22% from fiscal 2011, 6% excluding acquisitions. - Gross margin 64% compared with 60% in fiscal 2011.
- Operating margin 20% compared with 17% in fiscal 2011.
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Depreciation and amortization expense
$111.2 million . -
Interest expense
$11.8 million compared with$17.3 million in fiscal 2011. -
Cash provided by operations
$315.1 million , capital expenditures$99.8 million , insurance recovery$6.6 million and acquisition costs$8.5 million resulted in free cash flow of$230.4 million .
Other
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On
December 5, 2012 , the Board of Directors authorized the repurchase of up to an additional$150.0 million of common stock under the existing share repurchase program. With this approval the Company is now authorized to purchase up to$300.0 million of its common stock. The program has$228.9 million of remaining availability and no expiration date.
2013 Guidance
The Company initiated its full year 2013 guidance. Guidance is summarized as follows:
2013 Guidance Revenues (In millions) Total $1,565 --$1,625 CooperVision $1,250 --$1,290 CooperSurgical $315 --$335 EPS GAAP $5.70 --$6.00 Non-GAAP $5.70 --$6.00 Free Cash Flow (In millions)$200 --$230
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 debt extinguishment costs related to the amendment to our Credit Agreement 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 fourth quarter of 2012, 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 |
Twelve Months Ended |
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2012 GAAP |
Adjustments |
2012 Non-GAAP |
2012 GAAP |
Adjustments |
2012 Non-GAAP |
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Operating income | $ 78,980 | $ 822 | $ 79,802 | $ 283,398 | $ 4,863 | $ 288,261 |
Income before income taxes | $ 82,639 | $ 822 | $ 83,461 | $ 275,452 | $ 5,869 | $ 281,321 |
Provision for income taxes | $ 10,492 | $ 319 | $ 10,811 | $ 26,808 | $ 525 | $ 27,333 |
Net income attributable to Cooper stockholders | $ 71,920 | $ 504 | $ 72,424 | $ 248,339 | $ 5,344 | $ 253,683 |
Diluted EPS attributable to Cooper stockholders | $ 1.46 | $ 0.01 | $ 1.47 | $ 5.05 | $ 0.11 | $ 5.16 |
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) | ||
October 31, | October 31, | |
2012 | 2011 | |
ASSETS | ||
Current assets: | ||
Cash and cash equivalents |
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Trade receivables, net | 234,297 | 214,779 |
Inventories | 320,199 | 253,584 |
Deferred tax assets | 39,417 | 33,684 |
Other current assets | 51,107 | 33,125 |
Total current assets | 657,860 | 540,347 |
Property, plant and equipment, net | 640,255 | 609,205 |
Goodwill | 1,370,247 | 1,276,567 |
Other intangibles, net | 214,783 | 128,341 |
Deferred tax assets | 14,434 | 21,828 |
Other assets | 43,805 | 48,230 |
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LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current liabilities: | ||
Short-term debt |
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Other current liabilities | 237,268 | 214,227 |
Total current liabilities | 262,552 | 267,206 |
Long-term debt | 348,422 | 327,453 |
Deferred tax liabilities | 30,971 | 20,127 |
Other liabilities | 86,281 | 72,244 |
Total liabilities | 728,226 | 687,030 |
Total Cooper stockholders' equity | 2,192,751 | 1,937,488 |
Noncontrolling interests | 20,407 | -- |
Stockholders' equity | 2,213,158 | 1,937,488 |
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Consolidated Statements of Income | ||||
(In thousands, except earnings per share amounts) | ||||
(Unaudited) | ||||
Three Months Ended | Year Ended | |||
October 31, | October 31, | |||
2012 | 2011 | 2012 | 2011 | |
Net sales |
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Cost of sales | 143,537 | 137,275 | 521,126 | 526,031 |
Gross profit | 252,764 | 223,633 | 924,010 | 804,804 |
Selling, general and administrative expense | 152,363 | 139,685 | 564,903 | 513,138 |
Research and development expense | 14,118 | 11,738 | 51,730 | 43,581 |
Amortization of intangibles | 7,303 | 5,589 | 23,979 | 20,529 |
Operating income | 78,980 | 66,621 | 283,398 | 227,556 |
Interest expense | 2,723 | 2,906 | 11,771 | 17,342 |
Gain on insurance proceeds | 5,000 | -- | 5,000 | -- |
Loss on extinguishment of debt | -- | -- | 1,404 | 16,487 |
Other income (expense), net | 1,382 | (835) | 229 | (963) |
Income before income taxes | 82,639 | 62,880 | 275,452 | 192,764 |
Provision for income taxes | 10,492 | 6,242 | 26,808 | 17,334 |
Net income | 72,147 | 56,638 | 248,644 | 175,430 |
Less: Income attributable to noncontrolling interests | 227 | -- | 305 | -- |
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 | 49,386 | 49,184 | 49,152 | 48,309 |
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 3Q12 | Trailing Twelve Months 2012 | |||||
Market | CVI | Market | CVI | |||
Market | Change | Change | Market | Change | Change | |
Sales by Category | ||||||
Spheres | $1,416 | 4% | 10% | $ 5,478 | 4% | 8% |
Torics | 364 | 7% | 11% | 1,381 | 8% | 11% |
Multifocal | 89 | 10% | 38% | 352 | 11% | 30% |
WW Soft Contact Lenses | $1,869 | 4% | 12% | $ 7,211 | 5% | 10% |
Sales by Modality | ||||||
Single-use | $ 762 | 10% | 15% | $ 2,839 | 10% | 13% |
Other | 1,107 | 1% | 11% | 4,372 | 2% | 9% |
WW Soft Contact Lenses | $1,869 | 4% | 12% | $ 7,211 | 5% | 10% |
Sales by Geography | ||||||
Americas | $ 718 | 7% | 13% | $ 2,760 | 8% | 12% |
EMEA | 508 | 3% | 9% | 1,977 | 3% | 7% |
Asia Pacific | 643 | 3% | 13% | 2,474 | 4% | 13% |
WW Soft Contact Lenses | $1,869 | 4% | 12% | $ 7,211 | 5% | 10% |
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$ 621 | 7% | 13% | $ 2,392 | 8% | 12% |
International | 1,248 | 3% | 11% | 4,819 | 4% | 9% |
WW Soft Contact Lenses | $1,869 | 4% | 12% | $ 7,211 | 5% | 10% |
COO-E
CONTACT:Source:Kim Duncan Senior Director, Investor Relations 925-460-3663 ir@cooperco.com www.coopercos.com
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