The Cooper Companies Announces Second Quarter 2011 Results
The Cooper Companies Announces Second Quarter 2011 Results
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Revenue increased 12% year-over-year to
$325.3 million .CooperVision (CVI) revenue up 14% to$275.3 million and CooperSurgical (CSI) revenue up 6% to$50.0 million . -
GAAP earnings per share (EPS)
73 cents , up63 cents from last year's second quarter. -
Non-GAAP EPS
$1.02 . See "Reconciliation of Non-GAAP EPS to GAAP EPS" below. -
Free cash flow
$41.7 million .
Commenting on the results,
Second Quarter GAAP Operating Highlights
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Revenue
$325.3 million , 12% above second quarter 2010, 8% in constant currency. - Gross margin 62% compared with 57% in last year's second quarter. The improvement was largely a result of manufacturing efficiency improvements and changes in product mix within both CVI and CSI.
- Operating margin 19% compared with 13% in last year's second quarter. The improvement was primarily the result of improved gross margins, partially offset by increases in operating expenses.
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Depreciation and amortization expense
$23.5 million , consistent with last year's second quarter. -
Interest expense
$4.3 million compared with$9.7 million in last year's second quarter. Interest expense decreased as a result of the redemption of our 7.125% senior notes in February as well as lower average debt. -
Total debt decreased
$49.0 million to$553.2 million . -
Cash provided by operations
$64.9 million and capital expenditures$23.2 million resulted in free cash flow of$41.7 million .
Second Quarter CooperVision (CVI) GAAP Operating Highlights
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Revenue
$275.3 million , up 14% from last year's second quarter, 8% in constant currency. - Revenue by category:
Constant Currency | ||||
(In millions) | % of CVI Revenue | %chg | %chg | |
2Q11 | 2Q11 | y/y | y/y | |
Toric | $ 84.9 | 31% | 14% | 11% |
Multifocal | 18.1 | 7% | -1% | -3% |
Single-use sphere | 58.9 | 21% | 17% | 8% |
Non single-use sphere, other | 113.4 | 41% | 15% | 8% |
Total | $ 275.3 | 100% | 14% | 8% |
- Revenue by geography:
Constant Currency | ||||
(In millions) | % of CVI Revenue | %chg | %chg | |
2Q11 | 2Q11 | y/y | y/y | |
Americas | $ 117.3 | 43% | 6% | 6% |
EMEA | 97.2 | 35% | 12% | 5% |
Asia Pacific | 60.8 | 22% | 34% | 19% |
Total | $ 275.3 | 100% | 14% | 8% |
- Selected revenue by material:
Constant Currency | ||||
(In millions) | % of CVI Revenue | %chg | %chg | |
2Q11 | 2Q11 | y/y | y/y | |
Proclear® | $ 74.3 | 27% | 7% | 3% |
Silicone hydrogel | $ 80.5 | 29% | 49% | 45% |
- Gross margin 61%, up from 55% in the second quarter of 2010. The improvement was largely a result of manufacturing efficiency improvements and changes in product mix.
Second Quarter CooperSurgical (CSI) GAAP Operating Highlights
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Revenue
$50.0 million , up 6% from last year's second quarter, up 5% excluding acquisitions. - Revenue by category:
(In millions) | % of CSI Revenue | %chg | |
2Q11 | 2Q11 | y/y | |
Office, other | $ 28.3 | 57% | 1% |
Surgical procedures | 18.0 | 36% | 16% |
Fertility | 3.7 | 7% | 11% |
Total | $ 50.0 | 100% | 6% |
- Gross margin 65%, up from 62% in last year's second quarter. The improvement was largely a result of manufacturing efficiency improvements and changes in product mix.
2011 Guidance
The Company amends its full-year fiscal 2011 guidance. Guidance is summarized as follows:
FY11 Guidance | FY11 Guidance | |
Old | New | |
Revenues (In millions) | ||
Total | $1,265 -- $1,290 | $1,280 -- $1,300 |
CVI | $1,070 -- $1,085 | $1,080 -- $1,095 |
CSI | $195 -- $205 | $200 -- $205 |
EPS | ||
GAAP | $3.60 -- $3.80 | $3.90 -- $4.05 |
Non-GAAP* | $3.70 -- $3.90 | $4.00 -- $4.15 |
Free Cash Flow (In millions) | $180 -- $210 | $190 -- $210 |
* Excludes the impact of the 2009 CVI manufacturing restructuring plan, items related to acquisitions and costs related to the redemption of our senior notes. See "Reconciliation of Non-GAAP EPS to GAAP EPS" below.
Reconciliation of Non-GAAP EPS to GAAP EPS
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 restructuring costs and costs related to acquisitions, including the one-time gain on settlement of a preexisting relationship related to the acquisition of certain assets from Aime, and the redemption cost associated with the extinguishment of our senior notes on
Non-GAAP net income and diluted EPS for the fiscal second quarter of 2011 excludes
The restructuring costs, primarily severance and costs associated with assets related to the closure of the Norfolk manufacturing plant, are recorded primarily in cost of sales. We completed the restructuring plan in the fiscal first quarter of 2011 and recognized total pre-tax restructuring charges under this plan of
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 April 30, | |||||
2011 GAAP | Adjustments | 2011 Non-GAAP | |||
Operating income | $ 60,256 | $ -- | $ 60,256 | ||
Income before income taxes | $ 39,720 | $ 16,487 | $ 56,207 | ||
Provision for income taxes | $ 4,360 | $ 2,816 | $ 7,176 | ||
Net income | $ 35,360 | $ 13,671 | $ 49,031 | ||
Diluted EPS | $ 0.73 | $ 0.29 | $ 1.02 | ||
Fiscal 2011 EPS Guidance | |||||
2011 GAAP | Adjustments | 2011 Non-GAAP | |||
Diluted EPS | $3.90 -- $4.05 | $0.10 | $4.00 -- $4.15 |
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 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
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 | ||
(In thousands) | ||
(Unaudited) | ||
April 30, | October 31, | |
2011 | 2010 | |
ASSETS | ||
Current assets: | ||
Cash and cash equivalents | $8,430 | $3,573 |
Trade receivables, net | 203,764 | 197,490 |
Inventories | 249,382 | 227,902 |
Deferred tax assets | 28,989 | 28,828 |
Other current assets | 47,870 | 33,547 |
Total current assets | 538,435 | 491,340 |
Property, plant and equipment, net | 606,005 | 593,887 |
Goodwill | 1,277,904 | 1,261,976 |
Other intangibles, net | 127,949 | 114,177 |
Deferred tax assets | 29,730 | 23,072 |
Other assets | 45,169 | 40,566 |
$2,625,192 | $2,525,018 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current liabilities: | ||
Short-term debt | $29,097 | $19,159 |
Other current liabilities | 177,053 | 180,361 |
Total current liabilities | 206,150 | 199,520 |
Long-term debt | 524,118 | 591,977 |
Other liabilities | 63,640 | 46,543 |
Deferred tax liabilities | 20,958 | 20,202 |
Total liabilities | 814,866 | 858,242 |
Stockholders' equity | 1,810,326 | 1,666,776 |
$2,625,192 | $2,525,018 |
THE COOPER COMPANIES, INC. AND SUBSIDIARIES | ||||
Consolidated Condensed Statements of Income | ||||
(In thousands, except earnings per share amounts) | ||||
(Unaudited) | ||||
Three Months Ended | Six Months Ended | |||
April 30, | April 30, | |||
2011 | 2010 | 2011 | 2010 | |
Net sales | $325,301 | $289,271 | $618,530 | $549,530 |
Cost of sales | 123,539 | 125,778 | 240,162 | 236,274 |
Gross profit | 201,762 | 163,493 | 378,368 | 313,256 |
Selling, general and administrative expense | 126,382 | 111,340 | 239,835 | 211,918 |
Research and development expense | 10,390 | 8,573 | 20,117 | 16,200 |
Restructuring costs | -- | 47 | -- | 410 |
Gain on settlement of preexisting relationship | -- | -- | 6,080 | -- |
Amortization of intangibles | 4,734 | 4,499 | 9,447 | 8,716 |
Operating income | 60,256 | 39,034 | 115,049 | 76,012 |
Interest expense | 4,268 | 9,730 | 11,219 | 19,955 |
Loss on extinguishment of debt | 16,487 | -- | 16,487 | -- |
Litigation settlement charge | -- | 27,000 | -- | 27,000 |
Other income (expense), net | 219 | 168 | (514) | (2,159) |
Income before income taxes | 39,720 | 2,472 | 86,829 | 26,898 |
Provision for (benefit from) income taxes | 4,360 | (1,984) | 6,174 | 2,020 |
Net income | $35,360 | $4,456 | $80,655 | $24,878 |
Diluted earnings per share | $0.73 | $0.10 | $1.69 | $0.54 |
Number of shares used to compute earnings per share | 48,239 | 46,367 | 47,807 | 46,197 |
Soft Contact Lens Revenue Update
Worldwide Market vs.
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 1Q11 | Calendar 2010 | |||||
Market | CVI | Market | CVI | |||
Market | Change | Change | Market | Change | Change | |
Sales by Category | ||||||
Spheres | $ 1,304 | 5% | 2% | $ 5,081 | 4% | 9% |
Torics | 319 | 7% | 11% | 1,207 | 10% | 16% |
Multifocal | 77 | 5% | (6%) | 306 | 19% | 2% |
WW Soft Contact Lenses | $ 1,700 | 5% | 4% | $ 6,594 | 5% | 10% |
Sales by Modality | ||||||
Single Use | $ 615 | 10% | 7% | $ 2,369 | 8% | 11% |
Other | 1,085 | 2% | 3% | 4,225 | 4% | 10% |
WW Soft Contact Lenses | $ 1,700 | 5% | 4% | $ 6,594 | 5% | 10% |
Sales by Material | ||||||
Hydrogel | $ 982 | (1%) | (7%) | $ 3,961 | (3%) | (4%) |
Silicone Hydrogel | 718 | 14% | 44% | 2,633 | 21% | 95% |
WW Soft Contact Lenses | $ 1,700 | 5% | 4% | $ 6,594 | 5% | 10% |
Sales by Geography | ||||||
Americas | $ 659 | 3% | 2% | $ 2,506 | 7% | 13% |
EMEA | 491 | 7% | 5% | 1,907 | 7% | 11% |
Asia Pacific | 550 | 6% | 6% | 2,181 | 2% | 3% |
WW Soft Contact Lenses | $ 1,700 | 5% | 4% | $ 6,594 | 5% | 10% |
United States | $ 568 | 3% | 3% | $ 2,138 | 7% | 13% |
International | 1,132 | 6% | 5% | 4,456 | 5% | 8% |
WW Soft Contact Lenses | $ 1,700 | 5% | 4% | $ 6,594 | 5% | 10% |
COO-E
CONTACT:Source:Albert G. White, III VP, Investor Relations and TreasurerKim Duncan Director, Investor Relations 925-460-3663 ir@coopercompanies.com
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