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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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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): August 27, 1996
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THE COOPER COMPANIES, INC.
(Exact name of registrant as specified in it charter)
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Delaware 1-8597 94-2657368
(State or other jurisdiction (Commission File Number) (IRS Employer Identification No.)
of incorporation)
6140 Stoneridge Mall Road, Suite 590, Pleasanton, California 94588
(Address of principal executive offices)
(510) 460-3600
(Registrant's telephone number, including area code)
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ITEM 5. Other Events.
On August 27, 1996, The Cooper Companies, Inc. (the "Company") issued a press
release announcing its third quarter and nine month year-to-date 1996 financial
results. This release is filed as an exhibit hereto and is incorporated by
reference herein.
ITEM 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit
No. Description
- ------ -----------
99.1 Press Release dated August 27, 1996 of The Cooper Companies, Inc.
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/ STEPHEN C. WHITEFORD
_________________________
Stephen C. Whiteford
Vice President and
Corporate Controller
(Principal Accounting Officer)
Dated: August 27, 1996
EXHIBIT INDEX
Exhibit Sequentially
No. Description Numbered Page
- ------ ----------- -------------
99.1 Press Release dated August 27, 1996 of The Cooper
Companies, Inc.
NEWS RELEASE [COOPER COMPANIES LOGO]
CONTACTS:
DAVID B. FRANK NORRIS BATTIN
JENNIFER R. WALL THE COOPER COMPANIES, INC.
D.F. KING & CO., INC. 714-597-8130 EXT. 3343 OR
212-269-5550 714-673-4299
FOR IMMEDIATE RELEASE
THE COOPER COMPANIES REPORTS THIRD QUARTER EARNINGS PER SHARE
OF 40 CENTS VS. 24 CENTS
1996 EPS Outlook Raised to Range of $1.30 to $1.35 Including Tax Benefits
-- Income From Operations Up 87% --
-- Core Businesses Post Combined 22% Quarterly Revenue Gain --
-- Hospital Group of America Reports Continued Improvement --
-- Quarterly Operating Cash Flow Improves To $5.3 Million --
IRVINE and PLEASANTON, Calif., August 27, 1996 -- The Cooper Companies, Inc.,
(NYSE/PSE:COO) today reported financial results for the third quarter of fiscal
1996 and increased its estimate of 1996 fiscal year net income and earnings per
share.
For the three months ended July 31, 1996, the Company reported net income of
$4.7 million, or 40 cents per share, compared to $2.8 million, or 24 cents per
share, in the third quarter of 1995. Income from operations rose to $5.5 million
from $2.9 million in last year's third quarter, an increase of 87%.
(MORE)
Results for the third quarter of fiscal 1996 include a gain of $615 thousand, or
5 cents per share, related to the reversal of tax accruals no longer required,
but not related to the anticipated recording of deferred tax assets in the
fourth quarter of 1996. Fiscal 1995 third quarter results included a $1.0
million credit to net income, or 9 cents per share, primarily related to the
settlement of certain disputes.
Revenue for the quarter was $28.9 million, up 14% compared to the third quarter
of 1995, with strong gains in the Company's two core businesses, CooperVision,
up 13%, and CooperSurgical, up 54%, including the beneficial effect of the
Unimar acquisition in April 1996. Together, these two businesses grew 22% over
the same period in 1995. Revenue at the Company's Hospital Group of America
(HGA) unit grew 4% over last year's third quarter.
For the first nine months of fiscal 1996, net income was $8.1 million, or 69
cents per share, compared to $3.7 million, or 32 cents per share, in the same
period a year ago. Income from operations increased by 107% to $11.2 million
from $5.4 million in the first nine months of 1995.
Revenue for the nine-month period was $77.9 million, up 8%. CooperVision's sales
grew 14% and CooperSurgical's sales grew 28%. Together, these two core
businesses grew 17% compared to the first nine months of 1995. HGA's revenue
declined 4%, but is flat when revenue from a hospital contract which expired in
May 1995 is eliminated from the comparison.
Commenting on the third quarter's performance, A. Thomas Bender, President and
Chief Executive Officer, said, "Our specialty healthcare product businesses,
CooperVision, our contact lens business, and CooperSurgical, our gynecology
business, continued this year's strong revenue and operating income performance.
We continue to gain market share in vision care and in women's health. At HGA,
our psychiatric healthcare business, results are improving. Hampton Hospital has
shown steady monthly revenue and operating income improvement as a result of the
first quarter's medical staff transition, and we have successfully expanded day
treatment and outpatient programs at all three of our hospitals.
"With these continued excellent operating results plus 35 cents per share in tax
benefits -- five cents per share recorded in the third quarter -- we are
increasing our earnings per share estimate for fiscal 1996 to a range of $1.30
to $1.35. We also continue to pursue our goal to acquire businesses that
complement our strategy, create profits and thereby accelerate the use of the
Company's $240 million net operating loss carryforward."
(MORE)
Operating cash flow, Bender noted, continued to rebound from the first quarter's
traditionally low levels to a positive $5.3 million during the third quarter. In
addition, the Company is finalizing documentation with its lender to amend its
$11 million of HGA debt. Among other things, the Company expects that the
interest rate on this debt will be reduced by two percentage points effective at
the beginning of fiscal 1997. A rate reduction of one percentage point has also
been recently effected under CooperVision's $8 million line of credit, which at
July 31, 1996, had $845,000 in advances outstanding.
Business Unit Performance
REVENUE BY BUSINESS UNIT
(Dollars In Millions)
Three Months ended July 31, Nine Months ended July 31,
1996 1995 % Growth 1996 1995 % Growth
---- ---- -------- ---- ---- --------
CooperVision $13.0 $11.5 13% $35.2 $30.8 14%
CooperSurgical 5.0 3.3 54% 12.1 9.5 28%
Hospital Group of America 10.9 10.5 4% 30.6 31.9 -4%
----- ----- ----- ----
$28.9 $25.2 14% $77.9 $72.2 8%
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CooperVision
CooperVision's sales grew 13% to $13.0 million in the third quarter and by 14%
to $35.2 million year to date. Sales in the United States grew 16% quarter to
quarter. This strong growth is driven by CooperVision's line of toric contact
lenses to correct astigmatism, that now accounts for 52% of its total sales.
Sales of toric lenses increased 36% compared to the third quarter of the
previous year and have grown 35% year to date. CooperVision recently announced
that it was doubling the capacity of its Scottsville, New York, facility where
its popular line of Preference Torico lenses are manufactured.
The Company estimates that the size of the toric contact lens market in the
United States is about $140 million at the manufacturers' level. About $60
million of this market is conventional toric contact lenses, a slow growth, low
priced segment. CooperVision competes primarily in the two faster growing, more
profitable toric lens market segments estimated at about $80 million: planned
replacement toric lenses and custom toric lenses.
(MORE)
In the estimated $50 million "planned replacement" toric segment, so called
because patients replace their lenses monthly or quarterly based on comfort and
clinical success, CooperVision has more than doubled its business during the
first nine months of the fiscal year.
Preference Toric'TM' lenses are manufactured using deposit resistant material
that can offer patients additional convenience by eliminating an extra step in
lens cleaning. Also, lens practitioners can fit patients more easily with
Preference"R" lenses than with competing brands because of the wide range of
lens parameters that CooperVision offers.
CooperVision now holds about 50% of the estimated $30 million custom toric
segment -- lenses manufactured-to-order for difficult to fit patients -- and
estimates its unit growth at twice the rate of the market.
The rapid growth in sales of higher margin toric lenses, together with ongoing
manufacturing efficiencies, has resulted in year-to-year gross margin
improvements from 73% to 76% of sales.
Bender, who is also President of Irvine, Calif., based CooperVision, said, "We
expect double-digit growth to continue in our contact lens business as we grow
our share of the toric lens market and enter into relationships with potential
Asian and European partners. In addition, we plan to add three new specialty
lenses to our product line during the next six to twelve months."
CooperSurgical
CooperSurgical's sales during the third quarter were $5.0 million, up 54% over
the comparable prior period last year, and have increased 28% to $12.1 million
year to date. For the nine-month period, the gynecology product line grew 43%.
The increase was due primarily to sales of the Unimar and Blairden RUMI'TM'
products acquired in April 1996 and June 1995, respectively, and continued
growth in its LEEP'TM' line of disposable surgical instruments. CooperSurgical's
sales mix continues to shift toward its gynecology product line, which now
accounts for approximately 90% of its sales.
In the first nine months of 1996, CooperSurgical has generated operating income
of $1.1 million compared with a moderate loss for the comparable 1995 period.
The Unimar product line, acquired in April, contributed positively during its
first full quarter as part of the division.
(MORE)
Nicholas J. Pichotta, President of CooperSurgical, said, "Over the past several
years, CooperSurgical has developed a strong franchise with the gynecologist. We
continue to build the business by actively pursing the acquisition of companies
and product lines, by developing strategic alliances with technology driven
companies and by launching a steady stream of internally developed new products.
During the past twelve months, we purchased Unimar and introduced six products
that we developed internally. Five more products are scheduled for launch in the
months ahead. CooperSurgical is now right-sized and well positioned to compete
effectively in the medical market for women's healthcare products."
During the quarter, CooperSurgical was awarded two patents. The first covers a
key LEEP'TM' accessory product, AstrinGyn'R', used to help control bleeding
after biopsy or excision procedures, and the second protects CooperSurgical's
RUMI'TM' uterine manipulator used in laparoscopic hysterectomies.
Hospital Group of America
Hospital Group of America (HGA), the Company's psychiatric services business,
reported third quarter revenue of $10.9 million compared to $10.5 million in the
third quarter of 1995. Year to date, HGA revenue declined 4% to $30.6 million,
but is flat when revenue from a hospital contract which expired in May of 1995
is eliminated from the comparison. In the second and third quarters of 1996,
following the transition of the Medical staff at Hampton Hospital, HGA's
revenues have shown positive growth compared to the comparable quarters in 1995.
As shown in the table below, increased patient visits to outpatient and day
treatment programs have helped to offset pressure on revenue resulting from
declining average length of stay.
In August, HGA announced that it would open a Residential Treatment Center in
Kouts, Indiana, to support its nearby Hartgrove Hospital facility. The new
Center is a subacute facility for intermediate-term stays that provides
stepped-down, cost-effective care for selected patients.
(MORE)
HOSPITAL GROUP OF AMERICA
SELECTED STATISTICAL INFORMATION
Three Months Ended July 31, Nine Months Ended July 31,
1996 1995 % Change 1996 1995 % Change
---- ---- -------- ---- ---- --------
Licensed inpatient beds 269 269 - 269 269 -
Inpatient admissions 1,373 1,186 16% 3,847 3,708 4%
Total inpatient days 15,932 15,398 4% 46,279 48,240 -4%
Average length of stay (days) 11.6 13.0 -11% 12.0 13.0 -8%
Total outpatient visits 11,884 6,795 75% 34,476 20,497 68%
Tax Benefits
In addition to the $615 thousand (5 cents per share) tax benefit recorded in the
third quarter of 1996, the Company's earnings estimate for fiscal 1996 includes
a credit to earnings of $3.5 million, or 30 cents per share, resulting from the
anticipated recording of a like amount of net deferred tax assets. This deferred
tax asset reflects an anticipated reduction of a valuation allowance which, in
accordance with Generally Accepted Accounting Principles, had precluded the
Company from carrying as an asset on its balance sheet the tax benefit
attributable to any of its $240 million net operating loss carryforward. The
Company anticipates that, effective at the end of the 1996 fiscal year, it will
be able to recognize a portion of this asset assuming certain levels of earnings
before taxes are achieved. The Company's current estimates considerably exceed
this required level.
Fiscal Year Business Outlook
This press release contains forward-looking projections of the Company's
results. Actual results could differ materially from these projections.
Additional information concerning factors that could cause material differences
can be found in the Company's periodic filings with the Securities and Exchange
Commission. These are available publicly and on request from the Company's
investor relations department.
The Cooper Companies, Inc. and its subsidiaries develop, manufacture and market
specialty healthcare products and services. CooperVision, Inc., located in
Irvine, Calif., with additional manufacturing facilities in Huntington Beach,
Calif., Rochester, N. Y., and Ontario and Quebec,
(MORE)
Canada, markets a broad range of contact lenses for the vision care market.
CooperSurgical, Inc., located in Shelton, Conn., markets diagnostic and surgical
instruments and accessories for the gynecological market. Hospital Group of
America, Inc. provides psychiatric services through hospitals and satellite
locations in New Jersey, Delaware and Illinois.
NOTE: An interactive telephone system that provides stock quotes, recent press
releases, financial data and management commentary about the Company may be
reached toll free at 1-800-334-1986. Press releases and selected financial data
are also available at www.businesswire.com on the Internet.
(FINANCIALS TO FOLLOW)
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Statement of Income
(In thousands, except per share figures)
(Unaudited)
Three Months Ended Nine Months Ended
July 31, July 31,
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1996 1995 1996 1995
-------- -------- ------- -------
Net sales of products $18,001 $14,751 $47,339 $40,323
Net service revenue 10,870 10,498 30,556 31,930
------ ------ ------ ------
Net operating revenue 28,871 25,249 77,895 72,253
------ ------ ------ ------
Cost of products sold 5,507 4,628 14,252 12,939
Cost of services provided 10,027 10,110 29,164 30,477
Selling, general and admin-
istrative expense 7,283 6,744 21,627 20,275
Research and development
expense 294 632 887 2,507
Amortization of intangibles 286 211 717 633
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Income from operations 5,474 2,924 11,248 5,422
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Credits from settlements of
disputes, net - 1,031 223 1,499
Interest expense 1,403 1,192 3,965 3,472
Other income, net 2 142 184 442
------- ------- ------- -------
Income before income taxes 4,073 2,905 7,690 3,891
Provision for (benefit of) income taxes ( 596) 85 ( 440) 191
------- ------- ------- -------
Net income $ 4,669 $ 2,820 $ 8,130 $ 3,700
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Earnings per share $ 0.40 $ 0.24 $ 0.69 $ 0.32
====== ====== ====== =======
Average number of common
shares used to compute
earnings per share 11,793 11,589 11,741 11,580
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(MORE)
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
(In thousands)
(Unaudited)
July 31, October 31,
1996 1995
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ASSETS
Current assets:
Cash and cash equivalents $ 3,143 $ 11,207
Trade receivables, net 21,519 17,717
Inventories 10,196 9,570
Other current assets 2,685 2,734
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Total current assets 37,543 41,228
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Property, plant and equipment, net 34,170 34,062
Intangibles, net 21,676 14,933
Other assets 1,570 1,769
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$ 94,959 $ 91,992
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current installments of long-term debt $ 794 $ 2,288
Notes payable 845 1,025
Other current liabilities 32,312 36,300
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Total current liabilities 33,951 39,613
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Long-term debt 48,136 43,490
Other liabilities 6,362 10,638
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Total liabilities 88,449 93,741
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Common stock, $.10 par value 1,166 1,158
Additional paid-in capital 183,977 183,840
Translation adjustments ( 349) ( 333)
Accumulated deficit (178,284) (186,414)
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Total stockholders' equity (deficit) 6,510 ( 1,749)
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$ 94,959 $ 91,992
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STATEMENT OF DIFFERENCES
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The trademark symbol shall be expressed as.... 'TM'
The registered symbol shall be expressed as.... 'R'
