UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 26, 2005
THE COOPER COMPANIES, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 1-8597 | 94-2657368 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
6140 Stoneridge Mall Road, Suite 590, Pleasanton, California 94588
(Address of principal executive offices)
(925) 460-3600
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 1.01. Entry Into a Material Definitive Agreement.
Employment Agreement
On January 26, 2005, the Cooper Companies, Inc. entered into an agreement with Mr. Steven M. Neil related to his appointment to the position of Vice President and Chief Financial Officer. The material terms are set forth below in Item 5.02. The description of the agreement does not purport to be complete and is qualified in its entirety by reference to the offer letter, which is filed as Exhibit 10.1 to this report and incorporated herein by reference.
ITEM 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
On January 26, 2005, The Cooper Companies, Inc. issued a press release announcing several management changes. A copy of this release is attached as Exhibit 99.1 and incorporated herein by reference.
Mr. Robert S. Weiss, age 58, was named Executive Vice President and Chief Operating Officer of the Company on January 26, 2005. Prior to that, he served as Executive Vice President since October 1995 and Chief Financial Officer since 1989. He also served as Treasurer from 1989 to March 2002. From October 1992 until October 1995 he served as Senior Vice President. From March 1984 to October 1992 he served as Vice President, and from 1984 through July 1990 he served as Corporate Controller. He previously held a number of financial positions with the Company and at Cooper Laboratories, Inc. (the Company’s former parent) since joining the Company in 1977.
The Company is party to an employment agreement with Robert S. Weiss that provides if (i) the Company terminates him without Cause or (ii) he terminates his employment for Good Reason or following a Change of Control (as each term is defined in the respective agreement), the Company will pay Mr. Weiss 150% of his annual base salary except that Mr. Weiss’ payment would be reduced to 100% if the termination arises out of a Change of Control.
Mr. Steven M. Neil, age 52, was named Vice President and Chief Financial Officer of the Company on January 26, 2005. He served as Executive Vice President, Chief Financial Officer and Secretary of Ocular Sciences, Inc. from July 2003 to January 2005. From October 1997 until June 2003 he was Executive Vice President, Finance, Chief Financial Officer, Treasurer and Secretary of Sola International, Inc.
The Company is party to an agreement with Mr. Neil effective on January 26, 2005. The material terms of the one year agreement include a base salary of $331,500, participation in the 2005 Incentive Payment Plan at 45% of his base salary and receipt of options at the discretion of the Organization and Compensation Committee. The agreement with Mr. Neil also provides that if, within the first year of employment, (i) the Company terminates the employee without cause or (ii) the employee terminates his employment for Good Reason, the
Company will pay the remaining Base Salary which would have been payable until the end of the first year following the closing. In addition, he would receive a pro-rata share of any amounts that would have been payable under the Company’s Incentive Payment Plan.
ITEM 7.01. Regulation FD Disclosure.
On January 26, 2005, The Cooper Companies, Inc. issued a press release announcing quarterly guidance for fiscal 2005 and the Company made a presentation at an investor meeting that included additional non-public information. A copy of the release is furnished as Exhibit 99.2 and a copy of the presentation is furnished as Exhibit 99.3 to this Current Report and both shall not be deemed “filed” under the Securities Exchange Act of 1934, as amended.
Internet addresses in these releases are for information purposes only and are not intended to be hyperlinks to other Cooper information.
ITEM 9.01. Financial Statements and Exhibits.
(c) Exhibits.
| Exhibit No. |
Description | |
| 10.1 | Offer Letter addressed to Mr. Steven M. Neil dated January 25, 2005. | |
| 99.1 | Press Release dated January 26, 2005 of The Cooper Companies, Inc. | |
| 99.2 | Press Release dated January 26, 2005 of The Cooper Companies, Inc. | |
| 99.3 | Investor presentation dated January 26, 2005. | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| THE COOPER COMPANIES, INC. | ||
| By | /s/ Rodney E. Folden | |
| Rodney E. Folden | ||
| Corporate Controller | ||
| (Principal Accounting Officer) | ||
Dated: February 1, 2005
EXHIBIT INDEX
| Exhibit No. |
Description |
Sequentially Numbered Page | ||
| 10.1 | Offer Letter addressed to Mr. Steven M. Neil dated January 25, 2005. | |||
| 99.1 | Press Release dated January 26, 2005 of The Cooper Companies, Inc. | |||
| 99.2 | Press Release dated January 26, 2005 of The Cooper Companies, Inc. | |||
| 99.3 | Investor presentation dated January 26, 2005. | |||
Exhibit 10.1
Direct Line: 925/460-3678
Fax Line: 925/460-3676
cwallace@cooperco.com
January 25, 2005
Mr. Steven M. Neil
26343 Esperanza Drive
Los Altos Hills, CA 94022
Dear Steve:
Thank you for your efforts throughout the past several months in planning for the combination of Ocular Sciences, Inc. and The Cooper Companies, Inc. I am looking forward to working with you as we build the new organization.
As we have discussed I believe our new organization can offer you the type of growth opportunities you are seeking and I anticipate you will make a significant contribution to the Company.
On behalf of The Cooper Companies, Inc. (the “Company” or “Cooper”), I am pleased to offer you the position of Vice President and Chief Financial Officer (“CFO”) reporting to me as the COO of Cooper, effective as of January 26, 2005.
The terms of your new position with the Company are as set forth below:
| 1. | Term. The terms of this Offer Letter will be in effect for one year following the closing and will expire on the first anniversary of the closing. |
| 2. | Compensation. |
| a. | Base Salary. You will be paid an annual base salary at the rate of $331,500 per year (“Base Salary”), payable in substantially equal periodic installments with the same frequency as generally provided other employees of Cooper. |
| b. | Incentive Payment Plan (IPP). You will be eligible to participate in the TCC IPP for fiscal year 2005 (ending October 31, 2005) at a target of 45% of your Base Salary, pro-rated for your period of participation in the plan. All determinations regarding bonus awards under the IPP are made by the Committee (as defined below), in its sole discretion. |
| c. | Review. Your Base Salary will be subject to periodic review as part of the Company’s regular performance and salary review process. |
| 3. | Stock Options. As an employee of Cooper, you will be eligible to receive a grant of options to acquire TCC shares under the TCC Stock Option Plan (the “Option Plan”). Awards under the Option Plan are made by the TCC Organization and Compensation Committee (the “Committee”), in its sole discretion. I intend to recommend that you |
receive an initial stock option grant to purchase 30,000 shares. The number of shares, exercise price, vesting and other terms of any such award will be determined by the Committee.
| 4. | Other Benefits. |
| a. | You will be eligible to participate in employee benefit plans and receive such fringe benefits as are from time to time made generally available to similarly situated Cooper employees, which benefits currently include medical, dental, life, vision short-term disability and long-term disability insurance plans and flexible spending accounts. Vacation will accrue under the Cooper vacation policy and you will be entitled to holiday pay under the Cooper holiday schedule. |
| b. | Your participation in the Ocular Sciences 401(k) Plan will end on January 25, 2005. You will be eligible to participate in The Cooper Companies 401(k) Savings Plan on the first payroll following January 26, 2005 Your account balance in the OSI 401(k) Plan will be merged into The Cooper Companies 401(k) Savings Plan in early 2005. You will receive detailed information during the process of merging the plans. |
| c. | Additional details on benefit plans will be available after the closing. |
| 5. | Demonstration of Best Efforts. You agree to the best of your ability and experience that you will at all times loyally and conscientiously perform all of the duties and obligations required of and from you pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company. During the term of your employment, you further agree that you will devote all of your business time and attention to the business of the Company. The Company will be entitled to all of the benefits and profits arising from or incident to all such work services and advice. You will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, without the prior written consent of the Chief Operating Officer of Cooper and you will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company. So long as such activities do not conflict with your duties to the Company, you may accept speaking or presentation engagements in exchange for honoraria and may participate in charitable activities without violating this provision. |
| 6. | Confidentiality of Terms. You agree not to disclose, either directly or indirectly, any information regarding the terms of this agreement, to any person; provided, however, that you may discuss such terms with members of your immediate family and as reasonably required with any legal, tax or accounting specialists who provide you with individual legal, tax or accounting advice provided you advise such persons of these confidentiality provisions. You must also agree to the terms of the attached Employee Proprietary Information and Inventions Agreement. |
| 7. | At-Will Employment/Severance. Your employment with the Company will be on an “at will” basis, meaning that either you or the Company may terminate your employment at any time for any reason or no reason. However, for the first year following the closing, you will be eligible for severance (“Severance”) if (x) the Company terminates your employment without Cause or (y) you resign for Good Reason. |
| a. | In order to receive the Severance, you must execute a Separation Agreement, Including Release and Waiver of Claims, in the form attached hereto. |
| b. | The Severance will equal the remaining Base Salary and IPP bonus which would have been payable to you if you continued employment until the end of the first year following the closing. |
| c. | Severance amounts will be payable in a single lump sum on the first payroll date administratively feasible following the termination date or, in the case of any payment in respect of the IPP, as soon as administratively feasible following the date on which such IPP payments are made to active employees. |
| d. | For purposes of this Offer Letter, the following terms shall have the meanings assigned to them below: |
| (i) | “Cause” shall mean misconduct in the performance of your duties as determined in good faith by the Board of Directors of TCC. |
| (ii) | “Good Reason” shall mean, without your consent, a reduction in your Base Salary. |
| 8. | Notices. All notices, requests, demands and other communications made pursuant to this letter agreement shall be in writing and shall be deemed duly given (a) if personally delivered, at the time so delivered, (b) if faxed, on the date specified in the transmission confirmation, or (c) if mailed, three days after deposit for mailing at any general or branch United States Post Office enclosed in a registered or certified postpaid envelope addressed to the respective parties as follows: |
| If to Cooper: | The Cooper Companies, Inc. | |
| 6140 Stoneridge Mall Rd., Suite 590 | ||
| Pleasanton, CA 94588 | ||
| Attention: Chief Operating Officer | ||
| Fax: (925) 460-3648 | ||
| With a copy to: | The Cooper Companies, Inc. | |
| 6140 Stoneridge Mall Road, Suite 590 | ||
| Pleasanton, CA 94588 | ||
| Attention: Corporate Secretary | ||
| Fax: (925) 460-3662 | ||
| If to you: | ||
| to you at the most recent address in the Company’s records or to such other address as either party may have previously furnished to the other in writing in the manner set forth above provided that such notice of change of address shall only be effective upon receipt. |
9. Withholding. All compensation and benefits provided hereunder shall be subject to applicable income tax and other withholding obligations.
10. Governing Law. The validity, interpretation and performance of this letter agreement shall be governed by the laws of the State of California (without giving effect to its choice of law provisions).
To indicate your acceptance of the Company’s offer, please sign and date this letter in the space provided below, and sign and date the Company’s Employee Proprietary Information and Inventions Agreement and return both to me. This letter, together with the Company’s Employee Proprietary Information and Inventions Agreement, sets forth the terms of your employment with the Company (and all affiliates) through the end of the first year following the closing and supersedes all prior representation or agreements either written or oral. This letter may not be modified or amended except by written agreement signed by the Company and you.
I am pleased to be able to extend you this offer and look forward to working with you.
| Yours sincerely, |
| /s/ Robert S. Weiss |
| Robert S. Weiss |
| Chief Operating Officer |
| The Cooper Companies, Inc. |
| ACCEPTED AND AGREED: | ||||
| /s/ Steven M. Neil |
January 31, 2005 | |||
| Signature | Date | |||
Exhibit 99.1
NEWS RELEASE
CONTACT:
Norris Battin
The Cooper Companies, Inc.
ir@coopercompanies.com
FOR IMMEDIATE RELEASE
COOPER COMPANIES ANNOUNCES MANAGEMENT CHANGES
Weiss Appointed Chief Operating Officer
Neil Named Chief Financial Officer
LAKE FOREST, Calif., January 26, 2005 — The Cooper Companies, Inc. (NYSE: COO) today announced several management changes.
Robert S. Weiss, formerly Cooper’s executive vice president and chief financial officer, has been named executive vice president and chief operating officer reporting to A. Thomas Bender, the Company’s chairman and chief executive officer.
Steven M. Neil, formerly chief financial officer of Ocular Sciences, Inc., a company that Cooper acquired this month, was named vice president and chief financial officer, reporting to Mr. Weiss.
Carol R. Kaufman, vice president of legal affairs, secretary and chief administrative officer, was promoted to senior vice president.
Gene J. Midlock, a former executive with KPMG LLP has been named vice president, tax.
In addition, Gregory A. Fryling, formerly chief operating officer of CooperVision, the Company’s contact lens unit was named president and chief operating officer of CooperVision. Paul L. Remmell, formerly chief operating officer of the Company’s CooperSurgical unit, which supplies medical devices to the women’s health care market, was named president and chief operating officer of CooperSurgical.
Corporate Information
The Cooper Companies, Inc. manufactures and markets specialty healthcare products through its CooperVision and CooperSurgical units. Corporate offices are in Lake Forest and Pleasanton, Calif. The World Wide Web address is www.coopercos.com. A toll free interactive telephone system at 1-800-334-1986 provides stock quotes, recent press releases and financial data.
CooperVision manufactures and markets contact lenses and ophthalmic surgery products. Headquartered in Lake Forest, Calif., it manufactures in Albuquerque, N.M., Huntington Beach, Calif., Juana Diaz, Puerto Rico, Norfolk, Va., Rochester, N.Y., Adelaide, Australia, Hamble and Hampshire England, Ligny-en-Barrios, France, Madrid, Spain and Toronto. Its Web address is www.coopervision.com.
CooperSurgical manufactures and markets diagnostic products, surgical instruments and accessories to the women’s healthcare market. With headquarters and manufacturing facilities in Trumbull, Conn., it also manufactures in Pasadena, Calif., North Normandy, Ill., Fort Atkinson, Wis., Malmo, Sweden, Montreal and Berlin. Its Web address is www.coopersurgical.com.
Exhibit 99.2
NEWS RELEASE
CONTACT:
Norris Battin
The Cooper Companies, Inc.
ir@coopercompanies.com
FOR IMMEDIATE RELEASE
COOPER COMPANIES DETAILS QUARTERLY GUIDANCE FOR FISCAL 2005
LAKE FOREST, Calif., January 26, 2005 — The Cooper Companies, Inc. (NYSE: COO) today provided quarterly 2005 revenue and earnings per share detail for the full 2005 fiscal year guidance provided in Cooper’s earnings release off December 13, 2004.
THE COOPER COMPANIES, INC.
FISCAL YEAR 2005 QUARTERLY REVENUE AND EARNINGS GUIDANCE(1)
(Revenue in $Millions)
| Q1 |
Q2 |
Q3 |
Q4 |
FY 2005 | ||||||
| Revenue |
||||||||||
| CooperVision |
$122-$125 | $195-$198 | $215-$219 | $219-$223 | $755-$765 | |||||
| CooperSurgical |
$26-$27 | $27-$28 | $29-$30 | $31-$33 | $115-$118 | |||||
| Total Cooper Companies |
$149-$153 | $222-$226 | $244-$249 | $250-$256 | $870-$883 | |||||
| Earnings per Share |
$0.52-$0.55 | $0.72-$0.75 | $0.83-$0.86 | $0.96-$0.99 | $3.05-$3.15 |
| (1) | Exclusive of nonrecurring charges for accounting and restructuring |
Forward-Looking Statements
This news release contains “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. These include certain statements about our capital resources, performance and results of operations. In addition, all statements regarding anticipated growth in our revenue, anticipated market conditions, planned product launches and results of operations 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. Discussions of strategy, plans or intentions often contain forward-looking statements. Forward-looking statements necessarily depend on assumptions, data or methods that may be incorrect or imprecise and are subject to risks and uncertainties. These include the risk that the Cooper and Ocular businesses will not be integrated successfully; risks related to any uncertainty surrounding the merger, and the costs related to the merger; the risk that the combined company may not realize anticipated benefits from its cost-cutting measures; the ultimate validity and enforceability of the companies’ patent applications and patents and the possible infringement of the intellectual property of others.
Events, among others, that could cause our actual results and future actions of the company to differ materially from those described in forward-looking statements, include major changes in business conditions, a major disruption in the operations of our manufacturing facilities or distribution facilities, new competitors or technologies, significant delays in new product introductions, the impact of an undetected virus on our computer systems, acquisition integration delays or costs, increases in interest rates, foreign currency exchange exposure, investments in research and development and other start-up projects, dilution to earnings per share from acquisitions or issuing stock, worldwide regulatory issues, including product recalls and the effect of healthcare reform legislation, cost of complying with new corporate governance requirements, changes in tax laws or their interpretation, changes in geographic profit mix effecting tax rates, significant environmental cleanup costs above those already accrued, litigation costs including any related settlements or judgments, cost of business divestitures, the requirement to provide for a significant liability or to write off a significant asset, including impaired goodwill, changes in accounting principles or estimates, including the potential cost of expensing stock options, the potential impact of changes to FASB 128, and other events described in our Securities and Exchange Commission filings, including the “Business” section in our Annual Report on Form 10-K for the year ended October 31, 2004. 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.
Corporate Information
The Cooper Companies, Inc. manufactures and markets specialty healthcare products through its CooperVision and CooperSurgical units. Corporate offices are in Lake Forest and Pleasanton, Calif. The World Wide Web address is www.coopercos.com. A toll free interactive telephone system at 1-800-334-1986 provides stock quotes, recent press releases and financial data.
CooperVision manufactures and markets contact lenses and ophthalmic surgery products. Headquartered in Lake Forest, Calif., it manufactures in Albuquerque, N.M., Huntington Beach, Calif., Juana Diaz, Puerto Rico, Norfolk, Va., Rochester, N.Y., Adelaide, Australia, Hamble and Hampshire England, Ligny-en-Barrios, France, Madrid, Spain and Toronto. Its Web address is www.coopervision.com.
CooperSurgical manufactures and markets diagnostic products, surgical instruments and accessories to the women’s healthcare market. With headquarters and manufacturing facilities in Trumbull, Conn., it also manufactures in Pasadena, Calif., North Normandy, Ill., Fort Atkinson, Wis., Malmo, Sweden, Montreal and Berlin. Its Web address is www.coopersurgical.com.
Exhibit 99.3
THE COOPER COMPANIES, INC.
FORWARD LOOKING
STATEMENTS
This presentation contains forward-looking projections of Cooper’s results. Actual results could differ materially from these projections. Additional information concerning factors that could cause material differences can be found in Cooper’s periodic filings with the Securities and Exchange Commission. They are available publicly and on request from Cooper’s investor relations department.
THE COOPER COMPANIES, INC.
AGENDA
Introductions – Tom Bender
Soft Contact Lens Market Overview – Tom Bender
Integration of COO and OCLR – Greg Fryling
R&D Portfolio – Chris Marmo
Financial Overview and Guidance – Bob Weiss
THE COOPER COMPANIES, INC.
Tom Bender
Chairman of the Board,
President and
Chief Executive Officer
The Cooper Companies, Inc.
THE COOPER COMPANIES, INC.
WORLD SOFT CONTACT LENS MARKET
2003 2004 2008 CGR
(millions of U.S. dollars)
Total Market $3,541.0 $4,040.0 $5,475.0 8%
Specialty1 $1,001.0 $1,175.0 $2,190.0 16%
% Specialty 28% 29% 40%
1Includes 2 week disposable and daily disposable
Source: company reported data; independent market research
THE COOPPER COMPANIES, INC.
GEOGRAPHIC MARKET SEGMENTS
2003 2004 2008 CGR
(millions of U.S. dollars)
United States $1,400.0 $1,525.0 $2,085.0 8%
Europe $875.0 $1,025.0 $1,200.0 4%
Asia/Pacific $926.0 $1,130.0 $1,755.0 12%
Other1 $340.0 $390.0 $435.0 3%
TOTAL $3,541.0 $4,040.0 $5,475.0` 8%
1 Includes Canada, Latin America, Mid-East, Africa
Source: company reported data; independent market research
THE COOPER COMPANIES, INC.
WORLD SOFT CONTACT LENS SPECIALTY SEGMENTS
2003 2004 2008 CGR
(millions of U.S. dollars)
Toric $460.0 $535.0 $935.0 14%
Bifocal $91.0 $115.0 $285.0 25%
Cosmetic $300.0 $285.0 $285.0 FLAT
Dry Eye $150.0 $1,175.0 $685.0 30%
Specialty $1,001.0 $3,865.0 $2,190.0 16%
Nonspecialty $2,540.0 $4,040.0 $3,285.0 4%
TOTAL $3,541.0 $240.0$5,475.0 8%
1 Includes 2 week disposable and daily disposable
Source: company reported data; independent market research
THE COOPER COMPANIES, INC.
WORLD SOFT CONTACT LENS COMPETITION
2003 2004 2008 CGR
millions of U.S. dollars
Vistakon $1,300.0 $1,470.0 $1,950.0 8%
CIBA Vision $950.0 $1,120.0 $1,310.0 4%
CooperVision $651.0 $730.0 $1,190.0 13%
Bausch & Lomb $560.0 $635.0 $925.0 10%
Other $80.00 $85.0 $100.0 4%
$3,541.0 $4,040.0 $5,475.0 8%
Source: Company reported data; independent market research
THE COOPER COMPANIES, INC.
MARKET DRIVERS
Demographics - favorable
Myopia - growing
Specialty Lenses - transition
Technology - slower dropout
Geography - expanding
THE COOPER COMPANIES, INC.
CVI SOURCES OF GROWTH
2004-2008
Specialty Contact Lenses
– $ 320M to $700M
– 44% CVI revenue to 59%
– 26% of worldwide market to 32%
Toric Lenses
– $ 220M to $375M
– Match market growth of 14%
– Hold 41% worldwide market share
– 32% of CVI revenue
THE COOPER COMPANIES, INC.
CVI SOURCES OF GROWTH
2004-2008
Daily Disposable Lenses
– Market doubles: $1.1B to $2.2B
– CVI: $80M to $230M; 30% CGR
Specialty + Daily Disposable
– 55% revenue in 2004; 78% in 2008
THE COOPER COMPANIES, INC.
Greg Fryling
President and
Chief Operating Officer
CooperVision, Inc.
THE COOPER COMPANIES, INC.
THE COOPER COMPANIES, INC.
Why We Did the Deal
Grow revenue faster than the two companies could achieve on a stand-alone basis
$ 50 Million Operating Income Synergies After 3 Years
THE COOPER COMPANIES, INC.
Synergistic Revenue Opportunities
THE COOPER COMPANIES, INC.
Revenue Opportunities
Complimentary Product Lines
Product Category CVI OSI Market Size (Billion)
Daily Disposable No Yes $1.2
2 Week & Monthly Sphere Yes Yes $1.7
Color Yes Yes $0.3
Toric Yes Yes $0.5
Multifocal (Disposable) Yes No $ 0.1
Silicon Hydrogel * (Continuous Wear) No No $ 0.2
Total $ 4.0
*Launch Date FY05-06
Ability to bundle or pull through a family of products
THE COOPER COMPANIES, INC.
Revenue Opportunities
Ability to Go Direct
Location CVI OSI
Japan Distributor Direct
Germany Distributor Direct
Korea Distributor Direct
Sweden/Norway Direct Distributor
Spain Direct Distributor
Brazil Direct Distributor
Portugal Direct Distributor
Combined Market Size (excluding Japan): $400MM
Current Distributor Business (excluding Japan): $30MM
THE COOPER COMPANIES, INC.
Revenue Opportunities
Provide a Stronger Sales Force in Overlapping Markets
United States
Canada
Australia
United Kingdom
Italy
France
Benelux
THE COOPER COMPANIES, INC.
Revenue Opportunities
Stronger R&D Organization to Provide
New Products to the Market over a Quicker Timeline
THE COOPER COMPANIES, INC.
Synergy Opportunities
Manufacturing
$24MM synergies after 3 years
Two Major Manufacturing Processes
Lathing Platforms ($6MM)
Cast Molding Platforms ($18MM)
THE COOPER COMPANIES, INC.
Lathing MFG Synergies
(Three Years Out)
$6.0M Annual Savings
$ 1.4 from Facilities Consolidation
$ 4.6 from Manufacturing Platform Conversions (including labor)
Consolidate Lathing locations (currently 7)
Total Value of Production: $45MM
FY05 Budget Unit Production: 21MM
Revenue from Lathing Operations: ~$150MM
THE COOPER COMPANIES, INC.
Molding MFG Synergies
(Three Years Out)
$18.0M Annual Savings
Total Value of Production: $275MM
(including packaging)
FY05 Budget Unit Production: 624MM
Dailies Production: 250MM
Revenue from Molding Operations: ~$600MM
THE COOPER COMPANIES, INC.
Molding MFG Synergies
(Three Years Out)
Gen 2 Platform for high volume ProClear and Frequency products
Target 130 million units annual production after 3 years
Proclear Material: 60% of total volume
Methafilcon Material: 70% of total volume
Targeted Savings: $0.14 per lens cost reduction
THE COOPER COMPANIES, INC.
Synergy Opportunities
Operating Costs
$26MM synergies after 3 years
Reduce operating expenditures after three years by 3 percentage points of sales
Continue to make significant investments in R&D and regions where we have significant growth opportunities
THE COOPER COMPANIES, INC.
Sales Per Employee Targets
Sales per Employee Headcount (000’s) *
Pre-Merger 1,978 $ 334.0
Year One $ 410.0
Year Three $ 500.0
Note: Excludes Employees in Manufacturing and R&D
THE COOPER COMPANIES, INC.
Sales Force Headcount
Overlapping Countries
Before After Change % Change
309 241 -68 -22%
Overlapping Countries:
United States
United Kingdom
Italy
France
Benelux
Canada
Australia
THE COOPER COMPANIES, INC.
CLEAR – Contact Lens ECP Audit Report
US Distribution
95.7% 79.8% 84.9% 69.0%
100.0%
90.0%
80.0%
70.0%
60.0%
Percent of Distribution
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
CooperVision
OSI
Cooper/OSI
Overlapping Customers
Cooper or OSI
Accounts Per Rep (Pre-Merger): 550
Accounts Per Rep (Post Merger): 300
THE COOPER COMPANIES, INC.
Corporate Synergies
~$ 7-8 Million
CEO & Board Members
Corporate Staff & Facilities
SEC Filing Fees
Audit Fees
Tax Fees
Legal Fees
THE COOPER COMPANIES, INC.
IT Synergies
At Close 3 Years
Platforms 12 2
Headcount 113 113
Total Costs $23MM Will grow slower than industry avg.
THE COOPER COMPANIES, INC.
Distribution Synergies
(Three Years Out)
Lower Distribution Cost as a Percentage of Sales from 9% to 8% (approximately $7MM from Facilities and Labor Efficiencies)
Consolidate Distribution Centers (currently 19)
Current Spend of ~$70M
Freight Spend: 45%
Facility Spend: 20%
Labor Spend: 35%
THE COOPER COMPANIES, INC.
Ultimate Goal
Grow the business at a double digit rate over the next 5 years
Achieve cost synergies of $50MM in Production and Operating costs
THE COOPER COMPANIES, INC.
CVI Philosophy
Best of the Best
Best Practices
Maintain a Passionate Spirit
THE COOPER COMPANIES, INC.
CVI Organization
Greg Fryling
President & COO
***
Claire Dickerson
Exec. Administrator
John Calcagno
Chief Financial Officer
Global Finance
Global IT
Greg Zimmerman
Vice President
HR
Jeff McLean
President
US
Jack Gibson
President
Canada
Jim Welch
President
International
Northern Europe-Andrew Sedgwick
Southern Europe-Giacomo Grassi
Asia Pacific-Michael Kotow
Japan-Masakazu Niwa
Latin America-Juan Carlos Aragon
John Weber
Vice President
WW Operations
Christopher Marmo
Vice President
R & D
Christine Moench
Director
RA / QA
Dave Fancher
President
CooperVision Surgical
THE COOPER COMPANIES, INC.
Chris Marmo
Vice President
Research & Development
CooperVision, Inc.
THE COOPER COMPANIES, INC.
R&D
Pipeline
Gen II Continuous Wear
Daily Wear SiH Multifocal
Daily Wear SiH Toric ‘07
Daily Wear Silicone Hydrogel (SiH) Q1 ‘07
CW Toric Silicone Hydrogel Q4 ‘06
Proclear Daily Disposable
Daily Disposable Multifocal
Next Gen. Cosmetic Lens
Proclear Toric Multifocal Q2 ‘06
Microchannel for Japan Q1 ‘06
52% Asphere Daily Disposable
Continuous Wear Silicone Hydrogel Q4 ‘05
THE COOPER COMPANIES, INC.
Continuous Wear Silicone Hydrogel
Launch Q4 ‘05
Lens Attribute Patient Benefit
No Surface treatment
Softer Lens
Round Edge Superior Comfort
Asphere optics Better Vision
Highest oxygen
Permeability Ocular Health
Global Market - $200 Million
THE COOPER COMPANIES, INC.
CW Family of Products
Continuous Wear (CW) Material
Horizontal ISO Thickness
Comfort Enhancement
CW Toric Q4’06
Balanced Progressive
Technology
Next Generation CW
CW Multifocal
THE COOPER COMPANIES, INC.
52% Asphere Daily Disposable
Launch Q1 ‘06
Lens Attribute Patient Benefit
Asphere Improved Optics
Round Edge Improved Comfort
New strip blister Improved Handling
Gen II MFG Process Lower COGS
Global Market – $1.2 Billion
THE COOPER COMPANIES, INC.
Microchannel
Japanese Launch Q1 ‘06
Japanese Ophthalmologists desire increased tear film exchange
Increased tear exchange better ocular health
Microchannel
Japanese 2-week Market – $500 Million
THE COOPER COMPANIES, INC.
Proclear Toric Multifocal
Launch Q2 ‘06
Lens Attribute Patient Benefit
Proclear Material Increased end of day comfort
Toric Expertise
Consistent Visual Outcome
Balanced Progressive Multifocal Technology
THE COOPER COMPANIES, INC.
Next Generation Cosmetic Lens
Launch Q2 ‘06
Lens Attribute Patient Benefit
Iris replication
High resolution manufacturing process
Natural appearance
Strong Intellectual Property Position
Global Market - $300 Million
THE COOPER COMPANIES, INC.
Proclear Daily Disposable
Launch Q4 ‘06
Lens Attribute Patient Benefit
Proclear Material
Better end of day comfort
Gen II MFG Process
Lower COGS
Premium Daily Disposable
Global Market – $1.2 Billion
THE COOPER COMPANIES, INC.
Daily Disposable Multifocal
Launch Q4 ‘06
Lens Attribute
Patient Benefit
Ease of fit High Satisfaction
Gen II Lower COGS Manufacturing
Product targeted to emerging presbyope
Global Market – $100 Million
THE COOPER COMPANIES, INC.
CW Toric Silicone Hydrogel
Launch Q4 ‘06
Patented Toric Design
CW Toric
Innovative CW material
Next Generation of Toric Lenses
Global Market - $500 Million
THE COOPER COMPANIES, INC.
Daily Wear SiH
Launch Q1 ‘07
Lens Attribute Patient Benefit
Water retention
End of day comfort
No surface treatment
Improved Comfort
Round edge
Asphere optics
Better Vision
Gen II MFG Process
Lower COGS
Global Market - $ 1.7 Billion
THE COOPER COMPANIES, INC.
Daily Wear SiH
Family of Products
Daily Wear SiH Material
Asphere, Round Edge
Balanced Progressive
Technology
Sphere
Horizontal ISO
Thickness
Multifocal
Toric
THE COOPER COMPANIES, INC.
Proclear Daily Wear SiH
Family of Products
Proclear Daily Wear SiH
Asphere Round Edge
Balanced Progressive
Technology
Sphere
Horizontal ISO
Thickness
Multifocal
Toric
THE COOPER COMPANIES, INC.
Bob Weiss
Executive Vice President
and Chief Financial Officer
The Cooper Companies, Inc.
THE COOPER COMPANIES, INC.
Financial Highlights
THE COOPER COMPANIES, INC.
CONSISTENT PERFORMANCE
Growth Rates
1999-2004
5-Year*
24%
25%
28%
20%
Fiscal
2004
19%
23%
24%
13%
Revenue
Operating Income
EPS - Continuing Operations**
Cash Flow Per Share**
* Compounded annual growth rate
** Restated to include the dilutive effect of our contingently convertible senior debentures due to the adoption of EITF 04-8
THE COOPER COMPANIES, INC.
HISTORIC KEY RATIOS
2000
2001
2002
2003
2004
Revenue Growth
20%
17%
34%
31%
19%
Gross Profit
66.2%
65.4%
63.3%
64.4%
64.4%
Operating Expense
42.9%
42.0%
42.1%
41.3%
40.6%
Operating Income
23.3%
23.4%
21.2%
23.1%
23.8%
ETR
30.2%
28.8%
25.0%
24.0%
17.5%
Shares Outstanding
29.0M
30.5M
31.2M
33.2M
36.6M
THE COOPER COMPANIES, INC.
ASSUMPTIONS
2005 2006 2007
Organic Revenue Growth 12% 12% 12%
Gross Profit 63% 64% 64.5%
Operating Expense 38.5% 37% 36.5%
Operating Income 24.5% 27% 28%
ETR 21% 20% 20%
Shares Outstanding 47M 49M 50M
THE COOPER COMPANIES, INC.
GUIDANCE
(Revenue $’s in Millions)
2005 2006 2007
COO $870-$883 $1042-$1050 $1165-$1180
CVI $755-$765 $915-$920 $1025-$1035
CSI $115-$118 $127-$130 $140-$145
EPS* $3.05-$3.15 $4.00-$4.10 $4.75-$4.85
ETR 21% 20% 20%
* Excludes non-recurring items
THE COOPER COMPANIES, INC.
COO CONSOLIDATED REVENUE
($ in millions)
$1,250
$1,000
$750
$500
$250
$0
$1,173
$1,046
$143
$877
$490
$412
$315
$129
$235
$201
$117
$1,030
$101
$917
$82
$760
$71
$59
$389
$46
$330
$244
$155
$176
2000 2001 2002 2003 2004 2005 2006 2007
CVI CSI
THE COOPER COMPANIES, INC.
COO POOLED WITH OCLR CONSOLIDATED REVENUE
($ in millions)
$1,250
$1,173
$1,046
$143
$1,000
$937
$129
$820
$117
$723
$750
$101
$582
$82
$460
$71
$500
$1,030
$917
$358
$59
$820
$719
$46
$641
$250
$511
$401
$312
$0
2000
2001
2002
2003
2004
2005
2006
2007
CVI CSI
THE COOPER COMPANIES, INC.
CONSOLIDATED OPERATING INCOME
($ in millions)
$350
$328.4
30%
$300
$282.4
$250
$215.0
20%
$200
$150
$116.8
$95.2
10%
$100
$67.0
$46.9
$54.8
$50
$0
0%
2000
2001
2002
2003
2004
2005
2006
2007
Operating Income Operating Margin
THE COOPER COMPANIES, INC.
CVI
CONSOLIDATED OPERATING INCOME
($ in millions)
$350
30%
310.0
$300
269.0
$250
212.0
20%
$200
$150
106.6
88.8
10%
$100
51.4
60.4
47.3
$50
$0
0%
2000
2001
2002
2003
2004
2005
2006
2007
Operating Income Operating Margin
THE COOPER COMPANIES, INC.
CSI
CONSOLIDATED OPERATING INCOME
($ in millions)
$40
25%
35.8
29.7
20%
$30
23.4
$20.9
15%
$20
18.2
14.1
10%
10.1
$10
6.3
5%
$0
0%
2000
2001
2002
2003
2004
2005
2006
2007
Operating Income - Operating Margin
THE COOPER COMPANIES, INC.
EPS FROM CONTINUING OPERATIONS
$5.00
$4.80
$4.05
$4.00
$3.10
$3.00
$2.59
$2.09
$2.00
$1.57
$1.22
$1.01
$1.00
$0.00
2000
2001
2002
2003*
2004**
2005**
2006**
2007**
*Restated to include the dilutive effect of our contingently convertible senior debentures due to the adoption of EITF 04-8.
**Excludes accounting from stock option expensing to be adopted the end of FY 2005 with restatements.
THE COOPER COMPANIES, INC.
CASH FLOW PER SHARE
$8.00
$7.25
$7.00
$6.25
$6.00
$5.00
$5.00
$4.00
$3.50
$3.10
$3.00
$2.45
$2.07
$1.76
$2.00
$1.00
$0.00
2000
2001
2002
2003*
2004
2005
2006
2007
Pretax income from continuing operations plus depreciation and amortization
* Restated to include the dilutive effect of our contingently convertible senior debentures due to the adoption of EITF 04-8
THE COOPER COMPANIES, INC.
LIQUIDITY
Cash Flow from Operations
NOL’s
Free Cash Flow
THE COOPER COMPANIES, INC.
TAXES
Net Operating Loss Carryforwards $91 Million
Deferred Tax Assets $31 Million
Global Tax Arrangement
Effective Tax Rates
THE COOPER COMPANIES, INC.
CAPITAL STRUCTURE
($ in millions)
October 31,
2002
2003
2004
2005
2006
2007
Total Debt
$164
$186
$166
$708
$557
$395
Stockholders’ Equity
$311
$422
$544
$1,288
$1,484
$1,722
Total Capitalization
$475
$608
$710
$1,996
$2,041
$2,117
Total Debt/Capitalization
34%
31%
23%
35%
27%
19%
THE COOPER COMPANIES, INC.
CASH FLOW FROM OPERATING
ACTIVITIES
($ in millions)
$300
$270
$250
$237
$200
$155
$150
$101
$100
$80
$56
$41
$50
$26
$0
2000
2001
2002
2003
2004
2005
2006
2007
THE COOPER COMPANIES, INC.
DEBT % OF TOTAL CAPITALIZATION
40%
34%
35%
31%
30%
27%
23%
20%
21%
19%
20%
10%
0%
2000
2001
2002
2003
2004
2005
2006
2007
THE COOPER COMPANIES, INC.
CONSISTENT PERFORMANCE
Forecasted Growth Rates
1999–2004
2004–2007
5-Year*
3-Year*
Revenue 24% 34%
Operating Income 25% 41%
EPS - Continuing 28% 23%
Operations**
Cash Flow Per Share** 20% 27%
* Compounded Annual Growth Rate
** Restated to include the dilutive effect of our contingently convertible senior debentures due to the adoption of EITF 04-8 Excludes acquisition related and restructuring charges Excludes potential impact of stock option expensing
THE COOPER COMPANIES, INC.
QUARTERLY GUIDANCE
Revenue Millions
Q1
Q2
Q3
Q4
FY ‘05
Range
Low – High
Range
Low – High
Range
Low – High
Range
Low – High
Range
Low – High
Revenue
CVI
$122-$125
$195-$198
$215-$219
$219-$223
$755-$765
CSI
$26-$27
$27-$28
$29-$30
$31-$33
$115-$118
Total
$149-$153
$222-$226
$244-$249
$250-$256
$870-$883
EPS*
$0.52-$0.55
$0.72-$0.75
$0.83-$0.86
$0.96-$0.99
$3.05-$3.15
* Excludes non-recurring items
THE COOPER COMPANIES, INC.
QUARTERLY GUIDANCE
Revenue Millions
Q1
Q2
Q3
Q4
Range
Range
Range
Range
Low – High
Low – High
Low – High
Low – High
Revenue
CVI
$122-$125
$195-$198
$215-$219
$219-$223
CSI
$26-$27
$27-$28
$29-$30
$31-$33
Total
$149-$153
$222-$226
$244-$249
$250-$256
EPS*
$0.52-$0.55
$0.72-$0.75
$0.83-$0.86
$0.96-$0.99
* Excludes non-recurring items
THE COOPER COMPANIES, INC.
THE COOPER COMPANIES, INC.