The Cooper Companies Announces Third Quarter 2014 Results
The Cooper Companies Announces Third Quarter 2014 Results
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Revenue increased 5% year-over-year to
$432.5 million , up 5% in constant currency and excluding the divestiture of Aime. CooperVision (CVI) revenue up 6% to$349.9 million , up 6% in constant currency and excluding the divestiture of Aime.CooperSurgical (CSI) revenue up 1% to$82.6 million . -
GAAP earnings per share (EPS)
$1.80 , up1 cent or 1% from last year's third quarter. -
Non-GAAP EPS
$1.90 ($2.00 excluding amortization), up16 cents or 9% from last year's third quarter. See "Reconciliation of Non-GAAP Results to GAAP Results" below.
Commenting on the results,
Third Quarter GAAP Operating Highlights
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Revenue
$432.5 million , up 5% from last year's third quarter, 5% excluding currency and the divestiture of Aime (CVI's rigid gas permeable contact lens and solutions business inJapan , sold effectiveOctober 31 , 2013). - Gross margin 65% compared with 65% in last year's third quarter.
- Operating margin 22% compared with 23% in last year's third quarter. The decrease was the result of acquisition related costs. Excluding these costs, operating margins would have been 24%.
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Depreciation
$25.7 million , up 10% from last year's third quarter. Amortization$6.8 million , down 12% from last year's third quarter. -
Total debt increased
$3.3 million fromOctober 31, 2013 to$347.9 million . Interest expense$1.5 million compared with$2.3 million in last year's third quarter. -
Cash provided by operations
$107.9 million , capital expenditures$55.8 million , and excluding acquisition costs$1.7 million , resulted in free cash flow$53.8 million .
Third Quarter CooperVision GAAP Operating Highlights
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Revenue
$349.9 million , up 6% from last year's third quarter, 6% in constant currency and excluding the divestiture of Aime. - Revenue by category:
(In millions) 3Q14 |
% of CVI Revenue 3Q14 |
%chg y/y* |
Constant Currency Excluding Aime %chg y/y |
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Toric | $ 112.3 | 32% | 11% | 9% |
Multifocal | 38.4 | 11% | 16% | 15% |
Single-use sphere | 73.8 | 21% | 4% | 4% |
Non single-use sphere, other | 125.4 | 36% | -% | 3% |
Total | $ 349.9 | 100% | 6% | 6% |
* Excluding the impact of the divestiture of Aime, "Non single-use sphere, other" would have grown 5% year over year and total revenue would have grown 8% year over year.
- Revenue by geography:
(In millions) 3Q14 |
% of CVI Revenue 3Q14 |
%chg y/y* |
Constant Currency Excluding Aime %chg y/y |
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$ 149.5 | 43% | 5% | 5% |
EMEA | 133.9 | 38% | 13% | 8% |
Asia Pacific | 66.5 | 19% | -4% | 7% |
Total | $ 349.9 | 100% | 6% | 6% |
* Excluding the impact of the divestiture of Aime,
- Selected revenue by material:
(In millions) 3Q14 |
% of CVI Revenue 3Q14 |
%chg y/y* |
Constant Currency Excluding Aime %chg y/y |
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Silicone hydrogel | $ 173.7 | 50% | 21% | 20% |
Proclear® | $ 88.6 | 25% | 3% | 2% |
- Gross margin 65% compared with 65% in last year's third quarter.
Third Quarter CooperSurgical GAAP Operating Highlights
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Revenue
$82.6 million , up 1% from last year's third quarter. - Revenue by category:
(In millions) 3Q14 |
% of CSI Revenue 3Q14 |
%chg y/y |
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Office and surgical procedures | $ 54.5 | 66% | 1% |
Fertility | 28.1 | 34% | 3% |
Total | $ 82.6 | 100% | 1% |
- Gross margin 65% compared with 64% in last year's third quarter as lower capital equipment sales within Fertility and growth in certain surgical products increased overall gross margins.
Other
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On
August 6, 2014 , completed the acquisition ofSauflon Pharmaceuticals Ltd , a European manufacturer and distributor of soft contact lenses and solutions. Also closed a$700 million 3-year Senior Unsecured Term Loan which maturesAugust 4 , 2017.
2014 Guidance
The Company revises its full year fiscal 2014 guidance. Guidance assumes constant currency as of
FY14 Guidance Old |
FY14 Guidance New |
4Q14 Guidance New |
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Revenues (In millions) | |||
Total |
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CVI |
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CSI |
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EPS | |||
Non-GAAP |
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* Fiscal 2014 non-GAAP EPS guidance excludes actual amortization of intangibles of
Reconciliation of Non-GAAP Results to GAAP Results
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 costs related to acquisitions and severance costs which we generally would not have otherwise incurred in the periods presented as a part of our continuing operations. The severance costs in
In the fiscal third quarter of 2014, our non-GAAP results exclude
Our fiscal third quarter of 2014 non-GAAP EPS excluding amortization is
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 |
Nine Months Ended |
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2014 GAAP | Adjustments | 2014 Non-GAAP | 2014 GAAP | Adjustments | 2014 Non-GAAP | |
Operating income | $ 96,565 | $ 5,138 | $ 101,703 | $ 267,111 | $ 6,124 | $ 273,235 |
Income before income taxes | $ 94,383 | $ 5,138 | $ 99,521 | $ 261,659 | $ 6,124 | $ 267,783 |
Provision for income taxes | $ 5,711 | $ 347 | $ 6,058 | $ 21,087 | $ 420 | $ 21,507 |
Net income attributable to Cooper Stockholders | $ 88,067 | $ 4,792 | $ 92,859 | $ 239,070 | $ 5,703 | $ 244,773 |
Diluted EPS attributable to Cooper stockholders | $ 1.80 | $ 0.10 | $ 1.90 | $ 4.89 | $ 0.12 | $ 5.01 |
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) | ||
2014 |
2013 |
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ASSETS | ||
Current assets: | ||
Cash and cash equivalents |
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Trade receivables, net | 261,964 | 229,537 |
Inventories | 353,384 | 338,917 |
Deferred tax assets | 39,445 | 41,179 |
Other current assets | 67,234 | 60,215 |
Total current assets | 895,813 | 747,241 |
Property, plant and equipment, net | 843,413 | 739,867 |
Goodwill | 1,390,911 | 1,387,611 |
Other intangibles, net | 176,292 | 198,769 |
Deferred tax assets | 18,633 | 16,279 |
Other assets | 42,312 | 47,494 |
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LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current liabilities: | ||
Short-term debt |
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Other current liabilities | 251,195 | 278,266 |
Total current liabilities | 297,687 | 321,253 |
Long-term debt | 301,449 | 301,670 |
Deferred tax liabilities | 26,152 | 24,883 |
Other liabilities | 65,809 | 65,961 |
Total liabilities | 691,097 | 713,767 |
Total Cooper stockholders' equity | 2,657,073 | 2,404,535 |
Noncontrolling interests | 19,204 | 18,959 |
Stockholders' equity | 2,676,277 | 2,423,494 |
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Consolidated Statements of Income | ||||
(In thousands, except earnings per share amounts) | ||||
(Unaudited) | ||||
Three Months Ended |
Nine Months Ended |
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2014 | 2013 | 2014 | 2013 | |
Net sales |
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Cost of sales | 151,892 | 143,719 | 437,761 | 412,923 |
Gross profit | 280,590 | 268,274 | 812,018 | 762,950 |
Selling, general and administrative expense | 161,203 | 152,141 | 475,095 | 453,487 |
Research and development expense | 16,070 | 14,865 | 48,077 | 43,008 |
Amortization of intangibles | 6,752 | 7,660 | 21,735 | 22,553 |
Operating income | 96,565 | 93,608 | 267,111 | 243,902 |
Interest expense | 1,499 | 2,258 | 4,713 | 7,268 |
Gain on insurance proceeds | -- | -- | -- | 14,084 |
Other expense (income), net | 683 | 86 | 739 | (461) |
Income before income taxes | 94,383 | 91,264 | 261,659 | 251,179 |
Provision for income taxes | 5,711 | 2,072 | 21,087 | 11,585 |
Net income | 88,672 | 89,192 | 240,572 | 239,594 |
Less: income attributable to noncontrolling interests | 605 | 241 | 1,502 | 840 |
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 | 48,922 | 49,754 | 48,901 | 49,623 |
Soft Contact Lens Revenue Update | ||||||
Worldwide Manufacturers' Soft Contact Lens Revenue | ||||||
(U.S. dollars in millions; constant currency; unaudited) | ||||||
Calendar 2Q14 | Trailing Twelve Months 2014 | |||||
Market |
Market Change |
CVI Change |
Market |
Market Change |
CVI Change |
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Sales by Modality | ||||||
Single-use | $ 760 | 3% | 8% | $ 3,075 | 10% | 17% |
Other | 1,100 | 3% | 4% | 4,330 | 3% | 7% |
WW Soft Contact Lenses | $ 1,860 | 3% | 5% | $ 7,405 | 6% | 10% |
Sales by Geography | ||||||
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$ 775 | 7% | 3% | $ 2,990 | 6% | 7% |
EMEA | 570 | 3% | 9% | 2,180 | 4% | 11% |
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515 | (3%) | 1% | 2,235 | 7% | 14% |
WW Soft Contact Lenses | $ 1,860 | 3% | 5% | $ 7,405 | 6% | 10% |
COO-E
CONTACT:Source:Kim Duncan Senior Director, Investor Relations ir@cooperco.com 925-460-3663
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