<PAGE>

SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS SUPPLEMENT DATED
June 30, 1997


PROSPECTUS SUPPLEMENT
- ---------------------
(To Prospectus dated June 30, 1997)


[GRAPHIC OMITTED]

 


- --------------------------------------------------------------------------------
 2,000,000 Shares
 Common Stock

- --------------------------------------------------------------------------------
 
 All of the shares of common stock, $.10 par value per share ("Common Stock"),
 offered hereby (the "Offering") are being sold by the Cooper Companies, Inc.,
 a Delaware corporation (the "Company").


 The Common Stock is listed on the New York Stock Exchange, Inc. (the "NYSE")
 and the Pacific Exchange, Inc. (the "PCX") under the symbol "COO." On June 27,
 1997, the last reported sale price for the Common Stock as reported on the
 NYSE Composite Tape was $22 9/16 per share. See "Price Range of Common Stock
 and Dividends."


 For information concerning certain factors which should be considered by
 prospective investors, see "Risk Factors" commencing on page S-10 of this
 Prospectus Supplement and on page 3 of the accompanying Prospectus.


 THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
 EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
 OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
 THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. ANY REPRESENTATION
 TO THE CONTRARY IS A CRIMINAL OFFENSE.




               Price to     Underwriting     Proceeds to
               Public       Discount (1)     Company (1)(2)
 Per Share      $              $                $
 Total (3)      $              $                $

(1)  See "Underwriting" for information concerning indemnification of the
     Underwriters and other matters.
(2)  Before deducting expenses of the offering payable by the Company
     estimated at $    .
(3)  The Company has granted to the Underwriters a 30-day option to purchase
     up to an additional 300,000 shares of Common Stock, solely to cover
     over-allotments, if any. If all such shares are purchased, the total
     Price to Public, Underwriting Discount and Proceeds to the Company will
     be $ , $ and $ , respectively. See "Underwriting."

 The shares of Common Stock are offered severally by the Underwriters, subject
 to prior sale, when, as and if delivered to and accepted by them and subject
 to the approval of certain legal matters by counsel and certain other
 conditions. The Underwriters reserve the right to withdraw, cancel or modify
 such offer and to reject orders in whole or in part. It is expected that
 delivery of the shares of Common Stock will be made in New York, New York
 against payment therefor on or about July  , 1997.



 Deutsche Morgan Grenfell                            PaineWebber Incorporated


 The date of this Prospectus Supplement is      , 1997

 Information contained herein is subject to completion or amendment. This
 Prospectus Supplement shall not constitute an offer to sell or the
 solicitation of an offer to buy nor shall there be any sale of these
 securities in any State in which such offer, solicitation or sale would be
 unlawful prior to registration or qualification under the securities laws
 of any such State.


<PAGE>

                         PROSPECTUS SUPPLEMENT SUMMARY

     The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information in this Prospectus
Supplement and the accompanying Prospectus and in the consolidated financial
statements and consolidated condensed financial statements, including the notes
thereto, appearing elsewhere in this Prospectus Supplement. Except for the
historical information contained herein and in the Prospectus, the discussions
herein and therein contain forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed herein and therein. See "Risk Factors" and "Statement Regarding Prior
Projections; Forward-Looking Statements" in this Prospectus Supplement and
"Risk Factors" and "Forward-Looking Statements" in the accompanying Prospectus.
Unless otherwise indicated, all references to the "Company" refer to The Cooper
Companies, Inc., its predecessors and subsidiaries, and all information in this
Prospectus Supplement assumes that the Underwriters' over-allotment option will
not be exercised. See "Underwriting." The Company's fiscal year ends on October
31 of each year.

                                  The Company

     The Cooper Companies, Inc. is a rapidly growing specialty healthcare
company focused on serving selected niche areas with its products and services.
The Company operates through its primary subsidiaries:

   o CooperVision, Inc. ("CooperVision"), which develops, manufactures and
     markets a wide range of specialty contact lenses, with particular
     emphasis on soft toric contact lenses to correct astigmatism;

   o CooperSurgical, Inc. ("CooperSurgical"), which develops, manufactures and
     markets proprietary diagnostic and surgical instruments, equipment,
     accessories and devices for the physician's office, the surgicenter and
     the hospital that are targeted to the gynecological segment of the women's
     healthcare market; and

   o Hospital Group of America, Inc. ("HGA"), which owns and operates three
     psychiatric hospitals, in addition to satellite facilities, that provide
     inpatient, outpatient and other ancillary treatment primarily for
     children, adolescents and geriatric patients.

     The Company's objective is to increase the revenue and operating income of
each of its business units through strategies that combine internal growth,
selective acquisitions (some of which may be material) and penetration of new
geographic markets. Management believes the Company's $234 million of net
operating loss carryforwards ("NOLs") provides a significant competitive
advantage in the execution of this strategy.

     CooperVision. CooperVision is a rapidly growing developer, manufacturer
and marketer of specialty contact lenses. CooperVision's particular emphasis
is on the high-growth, high-margin soft toric contact lens segment. Toric
contact lenses provide visual correction for astigmatism--blurred vision
caused by an irregularly shaped cornea. Toric lenses, which account for
approximately 15% of the total United States contact lens market (estimated
by the Company at approximately $1 billion in annual sales at the
manufacturers' price level), comprised over 50% of CooperVision's sales
during the first six months of fiscal 1997. As compared with annual sales
growth (at the manufacturers' price level) of the United States contact lens
market as a whole, which the Company believes was approximately 8% in 1996,
annual sales of planned replacement toric lenses are estimated by the
Company to be growing more than 50% per year. In addition, the Company
believes that annual sales of custom toric lenses, a highly profitable
segment for difficult-to-fit patients, is growing at approximately 10-15%
per year in the United States. CooperVision's leading products serve these
two attractive segments. Sales during the first six months of fiscal 1997 of
CooperVision's planned replacement toric lens, Preference Toric(TM), which
was introduced in late 1994, grew approximately 70% compared with sales
during the first six months of fiscal 1996. Sales during the first six
months of fiscal 1997 of CooperVision's custom toric lens, Hydrasoft(R)
Toric, grew approximately 18% compared with sales during the first six
months of fiscal 1996.


                                      S-3

<PAGE>

     CooperVision's manufacturing technology enables CooperVision to market its
planned replacement toric lenses in over 13,000 prescriptive powers, more than
three times as many as its competition, and to produce custom toric lenses in a
sufficient number of lens parameters to accommodate more than 13 million
possible prescriptive powers. Its technology provides excellent lens
reproducibility, virtually assuring that replacement lenses will fit as well as
the original. CooperVision's extensive range of possible lens prescriptions
enables it to provide superior performance and comfort, generating brand
loyalty, particularly among difficult-to-fit toric lens patients, resulting in
a recurring revenue stream.

     In addition to toric lenses, CooperVision manufactures and markets more
than a dozen specialty and premium contact lens brands in the spherical lens
category. These include "opaque" contact lenses, which change or enhance the
appearance of the wearer's natural eye color, premium spherical lenses for
people with special lens requirements, and a range of other conventional and
planned replacement spherical contact lenses.

     CooperVision employs a highly experienced, commission-based direct sales
staff. The Company believes CooperVision's incentive compensation structure
creates a level of dedication and motivation necessary to promote top quality
marketing of CooperVision's products. CooperVision's order entry system links
its New York and California customer service centers to ensure efficient
ordering and to provide a backup system to maintain a high level of continuous
service. The Company believes CooperVision offers unsurpassed customer service.

     CooperVision's objective is to become the global leader in the specialty
soft contact lens market. It intends to build on its significant role in the
high-margin toric and spherical specialty lens segments by: continued
concentration on specialty lens segments; increasing market share through
development of new and enhancement of existing products for such segments; and
seeking appropriate acquisitions, alliances and joint ventures, both in North
America and in international markets. Although more than 95% of CooperVision's
revenue for the first six months of fiscal 1997 derived from sales in the
United States and Canada, CooperVision also markets its contact lenses in more
than 40 other countries. CooperVision, which following a 1989 divestiture of
its non-North American contact lens business was subject to a long term
non-competition agreement, is seeking to aggressively reestablish its
international presence, primarily through alliances with strong regional
optical distributors, such as Rohto Pharmaceuticals of Osaka, Japan ("Rohto"),
a leading manufacturer of contact lens care products and the largest supplier
in Japan of non-prescription ophthalmic products.

     CooperSurgical. CooperSurgical develops, manufactures and distributes
diagnostic and surgical instruments, equipment, accessories and devices for the
rapidly growing gynecology segment of the worldwide women's healthcare market.

     Based on current healthcare trends, including government policies focusing
on women's healthcare issues and the reimbursement policies of managed care
organizations, the Company believes that women will increasingly use
gynecologists as their primary care physicians. CooperSurgical plans to
capitalize on this evolving role of gynecologists as providers of a broadening
range of medical services for women through its product development and
acquisition efforts and through alliances with companies that are developing
new technologies for the women's healthcare market.

     CooperSurgical focuses on three segments of the gynecology products market
that offer substantial opportunities for growth: (i) products for use in
in-office diagnostic and surgical procedures, (ii) products for use in
operative gynecologic (including minimally invasive) procedures and (iii)
products for use in reproductive medicine procedures. The Company believes
CooperSurgical has attained through acquisitions and internal expansion of
product lines the critical mass necessary to maximize the efficiency of its
existing sales organization, successfully integrate future acquisitions,
complete additional licensing arrangements and introduce new products.


                                      S-4

<PAGE>

     The Company believes that CooperSurgical is well positioned within the
gynecologic products industry, which has traditionally been served by a large
number of companies, most of which are quite small in size, handle narrow
product lines and lack the resources necessary for expansion and acquisition.
CooperSurgical has completed five acquisitions since 1990 and intends to
continue its role as an industry consolidator by acquiring additional
innovative products and product lines that complement its existing products.


     HGA. HGA provides a broad continuum of psychiatric care to patients
through its inpatient, outpatient, day, educational and residential treatment
programs. HGA owns and operates three short term acute care psychiatric
hospitals located in New Jersey, Delaware and Illinois. These hospitals provide
intensive and structured treatment predominantly for children, adolescents and
geriatric patients (persons over 65 with behavioral disorders generally
involving dementia) suffering from a variety of mental illnesses and/or
chemical dependencies. Services include comprehensive psychiatric and chemical
dependency evaluations, inpatient and outpatient treatment and partial
hospitalization. HGA's hospitals are each complemented by various satellite
facilities, including outpatient and day treatment centers and, in Indiana, a
longer-term residential treatment center.


     In recent years, the behavioral healthcare market has been characterized
by the demands of both patients and payors for a broader variety of
cost-effective treatment alternatives tailored to meet local needs and trending
away from lengthy hospital stays. HGA is meeting these market demands by
providing a diverse continuum of behavioral healthcare services through a
system which promptly assesses and evaluates each client's clinical
disposition, thus facilitating optimum therapy through a wide range of
cost-efficient treatment options, which focus on short-term acute
hospitalization, longer term residential treatment, partial care and day
programs, outpatient therapy and specialized educational programs while
reducing dependence on long term acute care hospital stays.


     Since behavioral health care is primarily delivered locally, each HGA
clinical program is specifically tailored to the unique economic, social and
medical needs of its community. In addition to the diversity of its treatment,
HGA has designed high quality cost-effective programs, which have attracted
managed care, Medicare and Medicaid clients.


     HGA's success in serving its selected markets may be measured by an
overall average occupancy rate at its hospitals of 72% for the first six months
of fiscal 1997, which the Company believes is above the industry average, and
by a 47% growth in the number of outpatient visits during this same period.


     HGA's objective is to continue to increase its revenue and operating
income, while meeting the specific demands of, and becoming the preferred
provider in, the selected markets in which it operates.


     Tax Benefits from Net Operating Losses. At October 31, 1996, the Company
had NOLs of approximately $234 million, which the Company generally may use to
offset future taxable income and thereby reduce the Company's federal income
taxes otherwise payable. The NOLs generally will expire beginning in 2001 and
continuing through 2010 if such NOLs are not utilized by the Company, with
approximately $200,000 scheduled to expire if not utilized by the fiscal year
ending October 31, 2000. See Note 7 of Notes to Consolidated Financial
Statements included in this Prospectus Supplement. If the Company is able to
utilize all of the NOLs, then it will be able to shelter approximately $234
million in pre-tax income from future federal income taxes, in which case the
Company will be able to reduce its future federal income tax liability by
approximately $80 million (based on current federal corporate income tax
rates). There can be no assurance, however, that the Company will be able to
utilize all of its NOLs before they expire. Furthermore, section 382 of the
Internal Revenue Code of 1986, as amended (the "Code"), could limit the


                                      S-5

<PAGE>

Company's future use of NOLs in the event of an ownership change of the Company
as defined in the Code (an "Ownership Change"). The Company believes that the
Offering will not result in an Ownership Change. There can be no assurance,
however, that future transactions will not result in an Ownership Change and
thereby limit the Company's future use of its NOLs.

     The Company believes that any substantial cash savings provided by the
NOLs will provide it with a significant strategic advantage compared to taxable
competitors. The Company intends to deploy such cash savings to make selective
acquisitions and grow its businesses faster than it otherwise could if it did
not have the benefit of the NOLs.


                                 Risk Factors

     Prospective investors should carefully consider the factors set forth
under "Risk Factors" in this Prospectus Supplement and in the accompanying
Prospectus in addition to the other information contained herein and therein.


                                 The Offering



<TABLE>
<S>                                           <C>
Common Stock offered by the Company  ......   2,000,000 shares

Common Stock to be outstanding after the
 Offering .................................   14,447,576 shares (1)

Use of proceeds by the Company ............   The net proceeds to the Company from the
                                              Offering (after deducting applicable underwriting
                                              discount and estimated expenses payable by the
                                              Company) are estimated to be approximately
                                              $42.4 million ($48.8 million if the Underwriters'
                                              over-allotment option is exercised in full).
                                              Assuming that the Offering is consummated prior
                                              to the Refinancing (as defined below), the 
                                              Company intends to use the net proceeds to repay
                                              outstanding indebtedness, although the Company 
                                              may use the net proceeds for general corporate
                                              purposes or to fund acquisitions. See
                                              "Use of Proceeds."

NYSE and PCX Symbol   .....................   "COO"
</TABLE>


- ------------

(1) Does not include 871,126 shares of Common Stock issuable upon the exercise
    of outstanding options and warrants as of June 27, 1997.


                                      S-6

<PAGE>

                  Summary Consolidated Financial Information
                     (In thousands, except per share data)

     Other than the additional historical earnings per share information for
all periods, the summary consolidated financial information presented below as
of and for each of the fiscal years in the three-year period ended October 31,
1996 have been derived from the Company's Consolidated Financial Statements,
which have been audited by KPMG Peat Marwick LLP, independent certified public
accountants. The summary consolidated financial information presented below for
the six months ended April 30, 1996 and 1997 have been derived from the
Consolidated Condensed Financial Statements of the Company and, in the opinion
of the Company's management, reflect and include all adjustments (consisting
only of normal recurring adjustments, except for changes in estimates
associated with the balance of the deferred tax asset valuation allowance)
necessary for a fair presentation of such periods. The results of operations
for the six months ended April 30, 1997 are not necessarily indicative of the
results that may be expected for a full fiscal year. The summary consolidated
financial information set forth below should be read in conjunction with
"Selected Consolidated Financial Data," "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and with the Consolidated
Financial Statements and the Consolidated Condensed Financial Statements of the
Company and the related notes thereto included elsewhere in this Prospectus
Supplement. The additional historical earnings per share information has been
derived from the Company's records and is presented for informational purposes
only for all periods.


<TABLE>
<CAPTION>
                                                                                            Six Months Ended
                                                       Years Ended October 31,                 April 30,
                                               ---------------------------------------   ----------------------
                                                  1994          1995         1996         1996         1997
                                               -------------   ----------   ----------   ----------   ---------
                                                           (In thousands, except per share figures)
<S>                                            <C>             <C>          <C>          <C>          <C>
Consolidated Statement of
 Operations Data:
Net sales of products  .....................    $  51,034      $ 55,296    $ 66,118      $ 29,338   $ 37,657
Net service revenue ........................       44,611        41,794      43,013        19,686     24,382
                                                ---------      ---------    --------     --------    --------
Net operating revenue  .....................       95,645        97,090     109,131        49,024     62,039
                                                ---------      ---------    --------     --------    --------
Cost of products sold  .....................       17,906        17,549      19,911         8,745     11,135
Cost of services provided    ...............       41,039        40,454      40,235        19,137     22,055
Research and development expense   .........        4,407         2,914       1,176           593        738
Selling, general and administrative
 expense   .................................       31,027        25,826      29,717        14,344     17,040
Amortization of intangibles  ...............          843           859       1,249           431        692
Costs associated with restructuring
 operations   ..............................           --         1,480          --            --         --
                                                ---------      ---------    --------     --------    --------
Income (loss) from operations   ............          423         8,008      16,843         5,774     10,379
                                                ---------      ---------    --------     --------    --------
Provision for (benefit of) settlement of
 disputes  .................................        4,950         3,532        (223)         (223)        --
Debt restructuring costs  ..................          340            --          --            --         --
Investment income (loss), net   ............         (153)          444         281           198         74
Gain on sales of assets and
 businesses, net    ........................          214            --          --            --         --
Other income (expense), net  ...............           42            51          80           (16)      (131)
Interest expense    ........................        4,533         4,741       5,312         2,562      2,484
                                                ---------      ---------    --------     --------    --------
Income (loss) before income taxes  .........       (9,297)          230      12,115         3,617      7,838
Provision for (benefit of) income taxes   .        (4,600)          115      (4,488)          156       (845)
                                                ---------      ---------    --------     --------    --------
Net income (loss)   ........................       (4,697)          115      16,603         3,461      8,683
Less, preferred stock dividends    .........           89            --          --            --         --
                                                ---------      ---------    --------     --------    --------
Net income (loss) applicable to
 Common Stock ..............................    $  (4,786)     $    115    $ 16,603      $  3,461    $ 8,683
                                                =========      =========   ========      ========    ========
Earnings (loss) per share(1) ...............    $    (.47)     $    .01    $   1.41      $    .30    $   .72
                                                =========      =========   ========      ========    ========
Average number of shares used to
 compute earnings per share  ...............       10,193        11,576      11,761        11,715     12,052
                                                =========      =========    ========     ========    ========
</TABLE>


                                        

                                      S-7

<PAGE>



<TABLE>
<CAPTION>
                                                                               
                                                     October 31,                     April 30, 1997        
                                         -----------------------------------   --------------------------- 
                                          1994         1995         1996       Actual      As Adjusted(2)
                                         ----------   ----------   ---------   ---------   ---------------
<S>                                      <C>          <C>          <C>         <C>         <C>
Consolidated Balance
 Sheet Data:
Cash and cash equivalents ............   $ 10,320    $ 11,207      $ 6,837     $ 1,538         $ 1,538
Total assets  ........................     95,058      91,992      102,909     129,182         128,852
Total debt ...........................     47,637      46,803       48,764      52,896           8,949
Stockholders' equity (deficit)  ......     (3,654)     (1,749)      15,330      38,001          81,592
</TABLE>


- ------------

(1) Additional historical earnings per share information -- The earnings
    (loss) per share figures presented above include the following amounts
    for reversal of tax accruals no longer required and/or recognition of
    net deferred tax assets from the reduction of the beginning of the year
    valuation allowance:



                                            Per Share
Period                                       Amount
- -----------------------------------------   ----------
Year ended October 31, 1994  ............     $.49
Year ended October 31, 1995  ............      .02
Year ended October 31, 1996  ............      .40
Six months ended April 30, 1997 .........      .09
All other periods presented above  ......       --

(2) Gives effect to the sale by the Company of 2,000,000 shares of Common Stock
    at an assumed offering price of $22 9/16 per share (the closing price on
    the NYSE Composite Tape on June 27, 1997) and the application of all of
    the net proceeds therefrom to the repayment of indebtedness. See "Use of
    Proceeds" and "Capitalization."


                                      S-8

<PAGE>

       STATEMENT REGARDING PRIOR PROJECTIONS; FORWARD-LOOKING STATEMENTS

     The Company has made certain projections in prior reports and other
documents filed with the Securities and Exchange Commission (the "Commission"),
including projections of sales, market share and operating income for
CooperVision, projections of sales and operating income for CooperSurgical,
projections of revenue and operating income for HGA, projections of
consolidated revenue, operating income and earnings per share for the Company
(any and all such projections, collectively, the "Projections"). The
Projections are contained in the following documents: (a) Annual Report on Form
10-K for the fiscal year ended October 31, 1996 (the "1996 10-K"), (b) the
portions of the Company's 1996 Annual Report to Stockholders that have been
incorporated by reference in the 1996 10-K, (c) the portions of the Company's
Proxy Statement for its Annual Meeting of Stockholders held March 25, 1997 that
have been incorporated by reference into the 1996 10-K, (d) Quarterly Report on
Form 10-Q for the quarter ended January 31, 1997, (e) Quarterly Report on Form
10-Q for the quarter ended April 30, 1997 and (f) Current Reports on Forms 8-K
dated December 12, 1996, January 10, 1997, January 30, 1997, February 10, 1997,
February 25, 1997, March 18, 1997, March 26, 1997, April 7, 1997, May 21, 1997
and June 2, 1997 (items (a) through (f) shall be referred to collectively as
the "Prior SEC Filings").

     In light of the fact that the Company has an effective shelf registration
statement (of which this Prospectus Supplement is a part) under the Securities
Act of 1933, as amended (the "Securities Act"), and intends to offer shares of
its Common Stock under such registration statement, the Company has determined,
pursuant to Section 27A(d) of the Securities Act and Section 21E(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), not to
update, restate or amend the Projections at this time or issue further
projections of sales, revenue, market share, operating income or earnings per
share. Rather, in accordance with the terms of Rule 412 promulgated under the
Securities Act ("Rule 412"), the Company hereby supersedes the Projections by
deleting them in their entirety from all of the Prior SEC Filings. As a result,
the Projections are deemed not incorporated by reference into this document in
accordance with Rule 412. The Company may make other statements that are
"forward-looking statements" as defined in Section 27A(i) of the Securities Act
and Section 21E(i) of the Exchange Act.

     Cautionary statement for purposes of the "Safe Harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Statements contained in this
document that are not based on historical fact may be "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements may be identified by use of forward-looking
terminology such as "may," "will," "expect," "estimate," "anticipate,"
"continue" or similar terms, variations of those terms or the negative of those
terms. Certain statements (e.g. "Risk Factors") set forth in this document
constitute cautionary statements identifying important factors that could cause
actual results to differ materially from those contained in the forward-looking
statements. Additional factors that could cause or contribute to differences
include: major changes in business conditions and the economy in general;
decisions to invest in significant research and development projects; costs
associated with potential debt restructuring; and decisions to divest
businesses. Future results are also dependent on each subsidiary of the Company
meeting specific objectives.


                                      S-9

<PAGE>

                                 RISK FACTORS

     In addition to the risk factors set forth below, see "Risk Factors" in the
accompanying Prospectus.


Competition and Industry Dynamics

     Each of the Company's businesses operates within a highly competitive
environment. Numerous companies are engaged in the development, manufacture and
marketing of contact lenses. Many competitors in the contact lens business have
substantially greater financial resources and larger research and development
and sales forces than CooperVision. Furthermore, many of these competitors
offer a greater range of contact lenses, plus a variety of other eyecare
products, including lens care products and ophthalmic pharmaceuticals, which
may give them a competitive advantage in marketing their lenses to high volume
contract accounts. To a lesser extent, CooperVision also competes with
manufacturers of eyeglasses and other forms of vision correction. There can be
no assurance that the Company will not encounter increased competition in the
future, or that a successful entry into  CooperVision's higher-margin specialty
lens segments by a larger competitor would not have a material adverse effect
on the Company's business, financial condition or results of operations.
Additionally, while the specialty contact lens industry has experienced
significant growth in recent years, there can be no assurance that such growth
will continue or that a general economic slowdown or recession would not have a
material adverse effect on the Company's business, financial condition or
results of operations.

     In the surgical segment, competitive factors are technological and
scientific advances, product quality, price and effective communication of
product information to physicians and hospitals. CooperSurgical competes with a
number of manufacturers in each of its niche markets, some of which have
substantially greater financial and personnel resources and sell a much broader
number of product lines.

     In most areas in which HGA operates, there are other psychiatric
facilities that provide services comparable to those offered by HGA's
facilities. Many of these facilities have substantially greater resources than
HGA and, in some cases, tax-exempt status. While behavioral healthcare is
primarily delivered locally, psychiatric facilities also draw patients from
areas outside their immediate locale. HGA's psychiatric facilities thus compete
with both local and distant facilities. In addition, psychiatric facilities
compete with psychiatric units in acute care hospitals.


Importance of New Product Introductions; Risk of Product Obsolescence

     The niche areas of the healthcare industry in which CooperVision and
CooperSurgical operate are characterized by rapid technological advancements
and new product innovations. Although the Company's focus is on products that
will be marketable immediately or in the short term rather than on funding
longer-term, higher risk research and development projects, the expense of
developing new products, as well as the cost of obtaining necessary regulatory
approval to market such products, can be substantial. There can be no assurance
that the Company's new products will be successful in the marketplace and, as a
result, justify the expense involved in their development and approval. In
addition, there can be no assurance that new products or technologies will not
be developed that could lead to the obsolescence of one or more of the
Company's products, which could have a material adverse effect on the Company's
business, financial condition, or results of operations.


Risks Associated with Future Acquisitions

     The Company expects to continue to seek acquisitions, joint ventures or
other strategic arrangements that would enable it to expand its existing
product lines, broaden its geographic coverage or allow it to offer
complementary product lines. Although the Company currently has no definitive
agreements with respect to any such acquisitions, the Company, as part of its
strategy, actively seeks acquisition opportunities in the ordinary course of
its business and from time to time enters into discussions and letters of
intent with respect to possible acquisitions, certain of which could be
material. There can


                                      S-10

<PAGE>

be no assurance that the Company will continue to acquire businesses or
establish such arrangements on satisfactory terms or that any business acquired
by the Company will be integrated successfully into the Company's operations or
be able to operate profitably. The process of integrating acquired businesses
may involve unforeseen difficulties and may require a disproportionate amount
of management attention and Company resources. Making future acquisitions or
other strategic arrangements could require the Company to issue additional
shares of Common Stock, incur additional indebtedness or use a portion of its
cash balances, including the net proceeds of the Offering. Issuances of stock
in connection with any such future acquisitions could be dilutive to future
earnings per share.


Governmental Regulation and Policies


     Healthcare Products. The development, testing, production and marketing of
the Company's healthcare products are subject to the authority of the United
States Food and Drug Administration ("FDA") and other state and federal
agencies. The Company is currently developing and marketing medical devices,
which are subject to different levels of FDA regulation depending upon the
classification of the device. Class III devices, such as flexible and extended
wear contact lenses, require premarket testing and approval procedures, while
Class I and II devices are subject to less extensive regulatory requirements.
Noncompliance with applicable regulations could result in Warning Letters,
fines, injunctions, civil penalties, product recall or seizure, total or
partial suspension of production, refusal of the government to grant premarket
clearance or premarket approval, withdrawal of approvals or criminal
prosecution. The Company also is subject to foreign regulatory authorities
governing human clinical trials and medical device sales that vary widely from
country to country. Whether or not FDA approval has been obtained, approval or
marketing authorization of a product by comparable regulatory authorities or
organizations authorized to grant marketing authorization in foreign countries
must be obtained before products may be marketed in those countries. The
approval or authorization process varies from country to country, and the time
required may be longer or shorter than that required for FDA approval or
clearance.


     Compliance with United States and foreign regulations involves the
expenditure of considerable resources and usually results in a substantial time
lag between the development of a new product and its introduction into the
marketplace. There can be no assurance that all necessary approvals will be
obtained, or that they will be obtained in a time frame that allows the product
to be introduced for commercial sale. Furthermore, product approvals may be
withdrawn if compliance with regulatory standards is not maintained or if
problems occur after marketing has begun. Changes in existing laws and
regulations or adoption of new government regulations could prevent or delay
regulatory approval or clearance of the Company's products, and there can be no
assurance that the Company would not be required to incur significant costs in
the future to comply with such laws, regulations or policies.


     In addition, there is substantial federal and state governmental
regulation related to the prescribing of contact lenses. These regulations
relate to who is permitted to prescribe and fit contact lenses, the
prescriber's obligation to provide prescriptions to his patients, the length
of time a prescription is valid, the ability or obligation of prescribers to
prescribe lenses by brand rather than by generic equivalent or
specification, and other matters. Although these regulations primarily
affect contact lens prescribers and not manufacturers or distributors of
lenses such as CooperVision, changes in these regulations, or their
interpretation or enforcement, could adversely affect the effectiveness of
CooperVision's marketing strategy to eyecare practitioners. Adverse
regulatory or other decisions affecting eyecare practitioners, or material
changes in the selling and prescribing practices for contact lenses, could
have a material adverse affect on the Company's business, financial
condition or results of operations.


     Healthcare Services. The health care industry and physicians' medical
practices are highly regulated. Psychiatric and other healthcare services that
the Company offers and proposes to offer are  subject to extensive federal and
state laws and regulations governing matters such as licensure and
certification of facilities and personnel, conduct of operations, audit and
retroactive reimbursement policies, adjustment of prior government billings and
prohibitions on payments for the referral of business


                                      S-11

<PAGE>

and self referrals, and prohibitions against fraud and abuse, including false
claims and kickbacks. Failure to comply with these laws, or a determination
that in the past the Company had failed to comply with these laws, could have a
material adverse effect on the Company's business, financial condition and
results of operations. There can be no assurance that the health care
regulatory environment will not change so as to restrict the Company's existing
operations or limit the expansion of its business. Changes in government
regulation could also impose new requirements, involving compliance costs which
could not be recovered through price increases.


     Changes in government reimbursement programs have resulted in limitations
on increases in, and in some cases in reduced levels of, reimbursement for
healthcare services, and additional changes are anticipated. Such changes are
likely to result in further limitations on reimbursement levels. In addition,
private payors, including managed care, increasingly are demanding discounted
fee structures. Inpatient hospital utilization, average lengths of stay and
occupancy rates continue to be negatively affected by payor-required
pre-admission authorization and utilization review and by pressure to maximize
outpatient and alternative healthcare delivery services for less acutely ill
patients. In addition, efforts to impose reduced allowances, greater discounts
and more stringent cost controls by government and other payors are expected to
continue. Although the Company is unable to predict the effect these changes
will have on its operations, as the number of patients covered by managed care
payors increases, significant limits on the scope of services reimbursed and on
reimbursement rates and fees could have an adverse effect on HGA's business and
earnings.


     Healthcare Reform. In recent years, an increasing number of legislative
initiatives have been introduced or proposed in Congress and in state
legislatures that would effect major changes in the healthcare system, either
nationally or at the state level. Among the proposals under consideration are
price controls on hospitals, insurance market reforms to increase the
availability of group health insurance to small businesses, requirements that
all businesses offer health insurance coverage to their employees and the
creation of a government health insurance plan or plans that would cover all
citizens. There continue to be efforts at the federal level to introduce
various insurance market reforms, expanded fraud and abuse and anti-referral
legislation and further reductions in Medicare and Medicaid coverage and
reimbursement. A broad range of both similar and more comprehensive healthcare
reform initiatives is likely to be considered at the state level. It is
uncertain which, if any, of these or other proposals will be adopted. The
Company cannot predict the effect such reforms or the prospect of their
enactment may have on the business of the Company and its subsidiaries.


Dependence on Key Personnel


     The Company is dependent upon a limited number of key management and
technical personnel. The Company's future success will depend in part upon its
ability to attract and retain highly qualified personnel. The Company competes
for such personnel with other companies, academic institutions, hospitals,
government entities and other organizations. There can be no assurance that the
Company will be successful in retaining or hiring qualified personnel. The loss
of any of the Company's senior management or other key manufacturing, research,
clinical, regulatory or sales and marketing personnel, particularly if lost to
competitors, could have a material adverse effect on the Company's business,
financial condition and results of operations.


Risks Associated with Manufacturing Operations and HGA Facilities


     The Company, through CooperVision and CooperSurgical, manufactures a
significant portion of the products it sells. As a result, any prolonged
disruption in the operations of the Company's manufacturing facilities, whether
due to technical or labor difficulties, destruction of or damage to any
facility or other reasons, could have a material adverse effect on the
Company's business, financial condition and results of operations. In addition,
any prolonged disruption of the operations of any of HGA's facilities, whether
due to destruction or damage or other reasons, could have a material adverse
effect on the Company's business, financial condition and results of
operations.


                                      S-12

<PAGE>

Dependence Upon Certain Intellectual Property Rights


     The Company considers its intellectual property rights, including patents,
trademarks and licensing agreements, to be an integral component of its
business. The Company's policy is to file patent applications to protect
technology, inventions and improvements that are considered important to the
development of its business. There can be no assurance that patent applications
filed by the Company will result in the issuance of patents or that any of the
Company's intellectual property will continue to provide competitive advantages
for the Company's products or will not be challenged, circumvented by others or
invalidated. The Company's policy is to aggressively enforce and defend its
patents and other proprietary technology. The enforcement of intellectual
property rights, like any lawsuit, could involve substantial costs and is
inherently uncertain. In addition, the laws of foreign countries may not
protect the Company's intellectual property rights to the same extent as the
laws of the United States.


     In addition to patents, trademarks and licensing agreements, the Company
owns certain trade secrets, know-how and other intellectual property. There can
be no assurance that the Company's trade secrets and other intellectual
property will not become known by others and thereby become unprotected.
Furthermore, no assurance can be given that competitors will not independently
develop substantially equivalent proprietary information and techniques or
otherwise gain access to the Company's proprietary technology or that the
Company can meaningfully protect its rights in unpatented proprietary
technology.


Product Liability; Professional Liability


     CooperVision and CooperSurgical face an inherent risk of exposure to
product liability claims in the event that the use of their products results in
personal injury. The Company also faces the risk that defects in the design or
manufacture of its products might necessitate a product recall. The Company is
self-insured with respect to any product liability claims, and while the
Company has not had material product liability claims with respect to the
products it presently manufactures or markets, there can be no assurance that
the Company will not experience material losses due to product liability claims
in the future.


     In addition, HGA's business entails an inherent risk of physician
professional liability. HGA is occasionally a defendant in medical malpractice
lawsuits, and is subject to the attendant risk of substantial damage awards.
Although the Company has not had material professional liability claims and
believes HGA has adequate professional liability insurance coverage, there can
be no assurance that a pending or future claim or claims will not be successful
or if successful will not exceed the limits of available insurance coverage or
that such coverage will continue to be available at acceptable costs and on
favorable terms.


Environmental Matters


     The Company's facilities are subject to a broad range of federal, state
and local environmental laws and requirements, including those governing
discharges to the air and water, the handling of disposal of solid and
hazardous substances and wastes and remediation of contamination associated
with the release of hazardous substances at the Company's facilities and
offsite disposal locations. The Company has made, and will continue to make,
expenditures to comply with such laws and requirements. The Company believes,
based upon information currently available to management, that it is currently
in material compliance with all applicable environmental laws and requirements
and that the Company will not require material capital expenditures to maintain
its environmental compliance during fiscal 1997 or in the foreseeable future.
However, future events, such as changes in existing laws and regulations or the
discovery of contamination at the Company's facilities, may give rise to
additional compliance or remediation costs that could have a material adverse
effect on the Company's business, results of operations or financial condition.
Moreover, as a manufacturer of various products, the Company is exposed to some
risk of claims with respect to environmental matters, and there can be no
assurance that material costs or liabilities will not be incurred in connection
with any such claims.


                                      S-13

<PAGE>

Certain Anti-Takeover Effects

     Certain provisions of the Company's Restated Certificate of Incorporation
(the "Restated Certificate") and Amended and Restated By-laws (the "By-laws")
may inhibit changes in control of the Company not approved by the Company's
Board of Directors. These provisions include: (i) advance notice requirements
for stockholder proposals and nominations and (ii) the authority of the Board
to issue without stockholder approval preferred stock with such terms as the
Board may determine. The Company will also be afforded the protections of
Section 203 of the Delaware General Corporation Law, which could have similar
effects. The Company's Board of Directors adopted a preferred stock purchase
rights plan, commonly known as a "poison pill," pursuant to a Rights Agreement
dated as of October 29, 1987. The Rights Agreement is intended to prevent
abusive hostile takeover attempts by requiring a potential acquiror to
negotiate the terms of an acquisition with the Board of Directors. However, it
could have the effect of deterring or preventing an acquisition of the Company,
even if a majority of the Company's stockholders would be in favor of such
acquisition, and could also have the effect of making it more difficult for a
person or group to gain control of the Company or to change existing
management. These rights will expire on October 29, 1997. The Board has not yet
determined whether to adopt a new plan upon expiration of the existing rights.
See Note 3 of Notes to Consolidated Financial Statements included in this
Prospectus Supplement.

                              RECENT DEVELOPMENTS

Refinancing of Indebtedness

     On May 30, 1997, the Company entered into a commitment letter (the
"Refinancing Commitment") with KeyBank National Association ("KeyBank"),
pursuant to which KeyBank committed to provide (through a syndicate of lenders)
the Company a $50 million secured revolving credit facility (the "Refinancing")
with a term of five years and interest rates ranging from 0.5% to 2.25% over
the London Interbank Offer Rate ("LIBOR"), depending on certain of the
Company's financial ratios. Borrowing under the Refinancing would be secured by
substantially all of the assets of the Company and its wholly-owned
subsidiaries. The Company anticipates a closing of the Refinancing during its
fourth fiscal quarter of 1997. Consummation of the Refinancing is subject to a
number of conditions, and there can be no assurance that the Refinancing will
occur. Assuming that the Refinancing occurs after the consummation of the
Offering, the Refinancing may be used to repay other outstanding indebtedness
(to the extent not repaid with the proceeds of the Offering), to fund
acquisitions and for general corporate purposes.

                                USE OF PROCEEDS

     The net proceeds to the Company from the Offering (after deducting
applicable underwriting discount and estimated expenses payable by the Company)
are estimated to be approximately $42.4 million ($48.8 million if the
Underwriters' over-allotment option is exercised in full). Assuming that the
Offering is consummated prior to the Refinancing, the Company intends to use
the net proceeds to repay the Company's outstanding indebtedness, although the
Company may use the net proceeds for general corporate purposes or to fund
acquisitions (including selective acquisitions that complement the businesses
of CooperVision or CooperSurgical or provide additional or complementary
product lines or entry into additional geographic areas). The Company, as part
of its strategy, actively seeks acquisition opportunities in the ordinary
course of its business and from time to time enters into discussions and
letters of intent with respect to possible acquisitions, certain of which could
be material. The Company, however, currently has no agreements, commitments or
undertakings with respect to any acquisitions, nor can there by any assurance
that the Company will make any such acquisitions in the future. See "Risk
Factors -- Risks Associated with Future Acquisitions."

     If the net proceeds are used to repay indebtedness, the Company will repay
the outstanding principal amount of and accrued and unpaid interest on the
following: (i) 10% Senior Subordinated Secured Notes due 2003, the outstanding
principal amount of which was $21,943,000 as of April 30, 1997; (ii) a Term
Loan from Foothill Capital Corporation ("Foothill") maturing on August 1, 2001,
the outstanding principal amount of which was $10,342,000 as of April 30, 1997,
bearing interest at 2% above Foothill's prime rate (10 1/2% as of April 30,
1997); (iii) a Loan and Security Agreement with Foothill providing for


                                      S-14

<PAGE>

revolving advances of up to $8 million, the outstanding principal amount of
which was $1,332,000 as of April 30, 1997, bearing interest at 1 1/2% above
prime (as determined pursuant to such agreement) (10% as of April 30, 1997) and
expiring on August 1, 2001; (iv) two term notes issued to Cooper Life Sciences,
Inc. ("CLS") due January 1998, the outstanding aggregate principal amount of
which was $5 million as of April 30, 1997, each bearing interest at the prime
rate (8 1/2% as of April 30, 1997); and (v) a portion of a promissory note
issued to Wesley-Jessen Corporation due March 17, 2001, the outstanding
principal amount of which was $4,500,000 as of April 30, 1997 and bearing
interest at 12% (8% in cash and 4% in kind).


                                CAPITALIZATION

     The following table sets forth the Company's capitalization (i) at April
30, 1997 and (ii) as adjusted to give effect to the sale by the Company of the
2,000,000 shares of Common Stock at an assumed offering price of $22 9/16 per
share (the closing price on the NYSE Composite Tape on June 27, 1997) and the
application of all of the net proceeds therefrom to the repayment of
indebtedness. See "Use of Proceeds."




<TABLE>
<CAPTION>
                                                                         April 30, 1997
                                                                  ----------------------------
                                                                    Actual        As Adjusted
                                                                  -------------   ------------
                                                                         (In Thousands)
<S>                                                               <C>             <C>
Total debt  ...................................................    $  52,896       $   8,949
                                                                   =========       =========
Stockholders' equity:
  Common Stock, $0.10 par value; 20,000,000 shares authorized;
    12,441,376 shares of Common Stock issued and outstanding,
    and 14,441,376 shares as adjusted(1)  .....................    $   1,244       $   1,444
  Additional paid-in capital  .................................      198,264         240,433
  Accumulated deficit (2)  ....................................     (161,128)       (159,906)
  Foreign currency translation   ..............................         (354)           (354)
  Unamortized stock awards    .................................          (25)            (25)
                                                                   ---------       ---------
     Total stockholders' equity  ..............................    $  38,001       $  81,592
                                                                   =========       =========
Total capitalization    .......................................    $  90,897       $  90,541
                                                                   =========       =========
</TABLE>


- ------------
(1) Does not include 877,326 shares of Common Stock issuable upon the exercise
    of outstanding options and warrants.

(2) The decrease of $1,222,000 net is comprised of an extraordinary gain net of
    taxes related to the assumed early extinguishment of debt calculated as if
    the debt extinguishment occurred on April 30, 1997.


                                      S-15

<PAGE>

                   PRICE RANGE OF COMMON STOCK AND DIVIDENDS

     The Company's common stock is traded on the NYSE and the PCX under the
symbol "COO." The following sets forth the high and low sale prices for the
Common Stock for the fiscal periods indicated as reported by the NYSE Composite
Tape:



                                                    High       Low
                                                    --------   -------
   1995
   First Quarter   ..............................    $ 8 5/8    $ 6
   Second Quarter  ..............................      8 5/8      5 1/4
   Third Quarter   ..............................      9 3/4      5 1/4
   Fourth Quarter  ..............................     11 1/4      5 5/8

   1996
   First Quarter   ..............................      8          5 5/8
   Second Quarter  ..............................     11 1/8      6 3/8
   Third Quarter   ..............................     13 1/8      9 5/8
   Fourth Quarter  ..............................     15 1/8     10 3/4

   1997
   First Quarter   ..............................     18 3/4     14
   Second Quarter  ..............................     22 1/2     16 3/4
   Third Quarter (through June 27, 1997)   ......     23 1/4     18

     On June 27, 1997, the last reported sale price of the Common Stock on the
NYSE was $22 9/16.

     No cash dividends were paid with respect to the Common Stock in fiscal
1995 or 1996 or to date in fiscal 1997, and the Company does not anticipate
paying cash dividends on the Common Stock in the foreseeable future. Instead,
the Company currently intends to retain earnings to support its growth strategy
and reduce indebtedness. Any future determination to pay dividends will be at
the discretion of the Company's Board of Directors and will depend upon, among
other factors, the Company's results of operations, financial condition,
capital requirements and contractual restrictions. In addition, the Company is
currently restricted from paying cash dividends under the terms of the
indenture governing its outstanding 10% Senior Subordinated Secured Notes due
2003.

     The Transfer Agent and Registrar for the Common Stock is American Stock
Transfer & Trust Company, Brooklyn, New York.


                                      S-16

<PAGE>

                     SELECTED CONSOLIDATED FINANCIAL DATA

     Other than the additional historical earnings per share information for
all periods, the selected consolidated financial data presented below as of and
for each of the fiscal years in the five-year period ended October 31, 1996
have been derived from the Company's Consolidated Financial Statements, which
have been audited by KPMG Peat Marwick LLP, independent certified public
accountants. The selected consolidated financial data presented below for the
six months ended April 30, 1996 and 1997 and as of April 30, 1997 have been
derived from the Consolidated Condensed Financial Statements of the Company
and, in the opinion of the Company's management, reflect and include all
adjustments (consisting only of normal recurring adjustments, except for
changes in estimates associated with the balance of the deferred tax asset
valuation allowance) necessary for a fair presentation of such periods. The
results of operations for the six months ended April 30, 1997 are not
necessarily indicative of the results that may be expected for a full fiscal
year. The selected consolidated financial data set forth below should be read
in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and with the Consolidated Financial
Statements and Consolidated Condensed Financial Statements of the Company and
the related notes thereto included elsewhere in this Prospectus Supplement. The
additional historical earnings per share information has been derived from the
Company's records and is presented for informational purposes only for all
periods.





<TABLE>
<CAPTION>
                                                                Years Ended October 31,
                                         ---------------------------------------------------------------------
                                             1992            1993           1994          1995        1996
                                         --------------  --------------  -------------  ----------  ----------
                                                       (in thousands, except per share figures)
<S>                                      <C>             <C>             <C>            <C>         <C>
Consolidated Statement of
 Operations Data:
Net sales of products   ...............   $   43,873      $   47,369      $  51,034     $ 55,296   $ 66,118
Net service revenue  ..................       19,406          45,283         44,611       41,794     43,013
                                          ----------      ----------      ---------     ---------   --------
 Net operating revenue  ...............       63,279          92,652         95,645       97,090    109,131
                                          ----------      ----------      ---------     ---------   --------
Cost of products sold   ...............       18,236          17,538         17,906       17,549     19,911
Cost of services provided  ............       17,353          42,754         41,039       40,454     40,235
Research and development
 expense    ...........................        3,267           3,209          4,407        2,914      1,176
Selling, general and
 administrative expense    ............       44,600          49,382         31,027       25,826     29,717
Amortization of intangibles   .........          742             772            843          859      1,249
Costs associated with
 restructuring operations  ............           --             451             --        1,480         --
                                          ----------      ----------      ---------     ---------   --------
Income (loss) from operations    ......      (20,199)        (21,454)           423        8,008     16,843
                                          ----------      ----------      ---------     ---------   --------
Provision for (benefit of)
 settlement of disputes    ............        4,498           6,350          4,950        3,532       (223)
Debt restructuring costs   ............           --           2,131            340           --         --
Investment income (loss), net    ......       14,254           1,615           (153)         444        281
Gain on sales of assets and
 businesses, net  .....................        1,030             620            214           --         --
Other income (expense), net   .........          772             174             42           51         80
Interest expense  .....................        6,697           6,129          4,533        4,741      5,312
                                          ----------      ----------      ---------     ---------   --------
Income (loss) from continuing
 operations before income
 taxes   ..............................      (16,058)        (33,655)        (9,297)         230     12,115
Provision for (benefit of) income
 taxes   ..............................          100             417         (4,600)         115     (4,488)
                                          ----------      ----------      ---------     ---------   --------
Income (loss) from continuing
 operations before extraordinary
 items   ..............................      (16,158)        (34,072)        (4,697)         115     16,603
Loss on sale of discontinued
 operations net of taxes   ............       (9,300)        (13,657)            --           --         --
                                          ----------      ----------      ---------     ---------   --------
Income (loss) before
 extraordinary items    ...............      (25,458)        (47,729)        (4,697)         115     16,603
Extraordinary Items  ..................          640             924             --           --         --
                                          ----------      ----------      ---------     ---------   --------
Net income (loss)    ..................      (24,818)        (46,805)        (4,697)         115     16,603
Less preferred stock dividends   ......        1,804             320             89           --         --
                                          ----------      ----------      ---------     ---------   --------
Net income (loss) applicable to
 Common Stock  ........................   $  (26,622)     $  (47,125)     $  (4,786)    $    115   $ 16,603
                                          ==========      ==========      =========     =========   ========



<PAGE>

<CAPTION>
                                           Six Months Ended
                                               April 30,
                                         ---------------------
                                           1996       1997
                                         ----------  ---------
<S>                                      <C>         <C>
Consolidated Statement of
 Operations Data:
Net sales of products   ...............  $ 29,338  $ 37,657
Net service revenue  ..................    19,686    24,382
                                         --------    --------
 Net operating revenue  ...............    49,024    62,039
                                         --------    --------
Cost of products sold   ...............     8,745    11,135
Cost of services provided  ............    19,137    22,055
Research and development
 expense    ...........................       593       738
Selling, general and
 administrative expense    ............    14,344    17,040
Amortization of intangibles   .........       431       692
Costs associated with
 restructuring operations  ............        --        --
                                         --------   --------
Income (loss) from operations    ......     5,774    10,379
                                         --------   --------
Provision for (benefit of)
 settlement of disputes    ............      (223)       --
Debt restructuring costs   ............        --        --
Investment income (loss), net    ......       198        74
Gain on sales of assets and
 businesses, net  .....................        --        --
Other income (expense), net   .........       (16)     (131)
Interest expense  .....................     2,562     2,484
                                         --------   --------
Income (loss) from continuing
 operations before income
 taxes   ..............................     3,617     7,838
Provision for (benefit of) income
 taxes   ..............................       156      (845)
                                         --------   --------
Income (loss) from continuing
 operations before extraordinary
 items   ..............................     3,461     8,683
Loss on sale of discontinued
 operations net of taxes   ............        --        --
                                         --------   --------
Income (loss) before
 extraordinary items    ...............     3,461     8,683
Extraordinary Items  ..................        --        --
                                         --------   --------
Net income (loss)    ..................     3,461     8,683
Less preferred stock dividends   ......        --        --
                                         --------   --------
Net income (loss) applicable to
 Common Stock  ........................  $  3,461   $ 8,683
                                         ========   ========
</TABLE>


                                      S-17

<PAGE>



<TABLE>
<CAPTION>
                                                                                                        Six Months Ended
                                                          Years Ended October 31,                          April 30,
                                        ------------------------------------------------------------   ------------------
                                          1992          1993         1994        1995       1996       1996       1997
                                        -----------   -----------   ----------   --------   --------   --------   -------
                                                            (in thousands, except per share figures)
<S>                                     <C>           <C>           <C>          <C>        <C>        <C>        <C>
Earnings (loss) per share:
Continuing operations    ............    $ (1.96)      $ (3.43)      $ (.47)     $  .01     $ 1.41     $  .30     $  .72
Loss on sale of discontinued
 operations  ........................      (1.01)        (1.36)          --          --         --         --         --
                                         -------       -------       ------      -------    -------    -------    -------
Income (loss) before
 extraordinary items  ...............      (2.97)        (4.79)        (.47)        .01       1.41        .30        .72
Extraordinary items   ...............        .07           .09           --          --         --         --         --
                                         -------       -------       ------      -------    -------    -------    -------
Earnings (loss) per share(1)   ......    $ (2.90)      $ (4.70)      $ (.47)     $  .01     $ 1.41     $  .30     $  .72
                                         =======       =======       ======      =======    =======    =======    =======
Average number of shares used
 to compute earnings per share             9,167        10,035       10,193      11,576     11,761     11,715     12,052
                                         =======       =======       ======      =======    =======    =======    =======
</TABLE>




<TABLE>
<CAPTION>
                                                                  October 31,                             April 30,
                                        ----------------------------------------------------------------  -----------
                                          1992        1993         1994           1995          1996        1997
                                        ----------  ----------  -------------  -------------  ----------  -----------
                                                                       (in thousands)
<S>                                       <C>         <C>         <C>            <C>             <C>         <C>       
Consolidated Balance
 Sheet Data:
Cash and cash equivalents ............    $ 38,078    $ 10,113   $  10,320      $  11,207       $  6,837    $  1,538
Total assets  ........................     173,007     109,524      95,058         91,992        102,909     129,182
Total debt ...........................      63,781      53,926      47,637         46,803         48,764      52,896
Stockholders' equity (deficit)  ......      46,297         452      (3,654)        (1,749)        15,330      38,001
</TABLE>


- ------------

(1) Additional historical earnings per share information -- The earnings
    (loss) per share figures presented above include the following amounts
    for reversal of tax accruals no longer required and/or recognition of
    net deferred tax assets from the reduction of the beginning of the year
    valuation allowance:




                                                   Per Share
        Period                                       Amount
        ------                                     ----------
        Year ended October 31, 1994  ............     $.49
        Year ended October 31, 1995  ............      .02
        Year ended October 31, 1996  ............      .40
        Six months ended April 30, 1997 .........      .09
        All other periods presented above  ......       --
 


                                      S-18

<PAGE>


                MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

     The following discussion should be read in conjunction with the Selected
Consolidated Financial Data and the Consolidated Financial Statements and
Consolidated Condensed Financial Statements and the notes thereto included
elsewhere herein. All statements other than statements of historical facts
included in the following discussion regarding the Company's financial
position, business strategy and plans of management for future operations are
forward-looking statements. Although the Company believes that expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. See "Risk
Factors" and "Statement Regarding Prior Projections; Forward-Looking
Statements" in this Prospectus Supplement and "Risk Factors" and
"Forward-Looking Statements" in the accompanying Prospectus.


Results of Operations


Three and Six Months Ended April 30, 1997 Compared with Three and Six Months
Ended April 30, 1996

     Net Sales of Products: Net sales of products increased by $4.8 million, or
31%, and $8.3 million, or 28%, for the three and six months ended April 30,
1997, respectively.





<TABLE>
<CAPTION>
                           Three Months Ended April 30,         Six Months Ended April 30,
                         ---------------------------------   --------------------------------
                          1997        1996       % Incr.      1997        1996       % Incr.
                         ---------   ---------   ---------   ---------   ---------   --------
                                                (Dollars in thousands)
<S>                      <C>         <C>         <C>         <C>         <C>         <C>
CooperVision    ......   $14,875     $12,158      22%        $27,107     $22,228      22%
CooperSurgical  ......     5,755       3,626      59          10,550       7,110      48
                         --------    --------                --------    --------     
                         $20,630     $15,784      31%        $37,657     $29,338      28%
                         ========    ========                ========    ========    
</TABLE>


Net sales of CooperVision increased both domestically and in Canada. The
primary contributors to the growth included increased sales of the
Preference(R) spherical product line and the Preference Toric(TM) product line,
which together grew by approximately 50% over the comparable six-month period.
Sales of toric lenses to correct astigmatism, CooperVision's leading product
group, grew 38% over the comparable six-month period and accounted for 52% of
its sales, up from 46% last year. In March 1997, the Company acquired Natural
Touch(R), a line of opaque, cosmetic contact lenses, which contributed over
$700,000 of sales in the second quarter of fiscal 1997. See Note 4 of Notes to
Consolidated Condensed Financial Statements included in this Prospectus
Supplement. These increases were partially offset by anticipated decreases in
sales of more mature product lines.

     At CooperSurgical, year-to-date net sales increased by 48%.
CooperSurgical's gynecology product lines grew by approximately 64%, primarily
due to sales of products acquired in April 1996  (Unimar(R)) and April 1997
(Marlow). See Note 4 of Notes to Consolidated Condensed Financial Statements
included in this Prospectus Supplement.

     Net Service Revenue: HGA's net service revenue for the six-month period of
$24.4 million increased by 24% as revenue generated by Hampton Hospital has
improved dramatically following a successful transition of the physician group
begun late in the first quarter of fiscal 1996. Revenue continues to be
pressured by the trend toward increased managed care, which results in
decreased per diems and declines in average lengths of stay. Management is
mitigating these pressures by increasing the number of admissions to its
hospitals, improving its payor mix and expanding outpatient and other ancillary
services. For the six-month period ended April 30, 1997, admissions are up 25%,
and outpatient visits are up 47% over the same 1996 period. In April 1997, HGA
opened the Midwest Center for Youth and Families, a 50-bed residential
treatment facility in Kouts, Indiana, and set up a new management services
division, which contracts to manage behavioral health programs.


                                      S-19

<PAGE>



<TABLE>
<CAPTION>
                                                                           
                                          Three Months Ended April 30,       Six Months Ended April 30,   
                                        --------------------------------   ------------------------------ 
                                                               % Incr.                           % Incr.
                                         1997       1996       (Decr.)     1997       1996       (Decr.)
                                        ---------   --------   ---------   --------   --------   --------
<S>                                     <C>         <C>        <C>         <C>        <C>        <C>
Licensed inpatient beds  ............      319*        269        19%         319        269        19
Inpatient admissions  ...............    1,641       1,412        16        3,095      2,474        25
Total inpatient days  ...............   18,832      16,552        14       35,277     30,347        16
Average length of stay (days)  ......     11.3        12.2        (7)        11.3       12.5       (10)
Total outpatient visits  ............   17,935      12,804        40       33,151     22,592        47
</TABLE>


- ------------
*Midwest Center for Youth and Families opened in April 1997, adding 50 licensed
   inpatient beds.


     Cost of Products Sold: Gross profit (net sales of products less cost of
products sold) as a percentage of net sales of products ("margin") was as
follows:




                            Margin %                 Margin %              
                          Three Months              Six Months
                              Ended                   Ended
                            April 30,               April 30,
                         ---------------          --------------
                         1997     1996            1997     1996
                         ------   ------          ------   -----
CooperVision .........   77%      76%             77%      76%
CooperSurgical  ......   53       52              53       51
Consolidated .........   70       71              70       70
                                           
CooperVision's margin increased due to efficiencies associated with higher
production volumes. Also, CooperVision's product mix continues to improve, with
increased sales of its toric contact lenses that generate higher margins.


     Margin improved at CooperSurgical primarily due to the successful
implementation of cost reduction programs associated with the Unimar products
acquired in April 1996.


     Cost of Services Provided: Cost of services provided represents all normal
operating costs (other than financing costs and amortization of intangibles)
incurred by HGA in generating net service revenue. The result of subtracting
cost of services provided from net service revenue is a profit of $2.3 million,
or 10%, and $0.5 million, or 3%, of net service revenue in the first six months
of 1997 and 1996, respectively. The increase in profit is primarily
attributable to a combination of improved revenue and cost controls.


     Selling, General and Administrative Expense: Selling, general and
administrative ("SG&A") expenses by business unit and corporate were as
follows:





<TABLE>
<CAPTION>
                             Three Months Ended April 30,         Six Months Ended April 30,
                           ---------------------------------   --------------------------------
                                                   % Incr.                             % Incr.
                            1997        1996       (Decr.)      1997        1996       (Decr.)
                           ---------   ---------   ---------   ---------   ---------   --------
                                                  (Dollars in thousands)
<S>                        <C>         <C>         <C>         <C>         <C>         <C>
CooperVision   .........     $ 5,533     $ 4,353       27%     $10,315     $ 8,516        21%
CooperSurgical .........       2,172       1,433       52        3,970       2,714        46
Corporate/Other   ......       1,389       1,799      (23)       2,755       3,114       (12)
                            --------    --------     ----      --------    --------     ----
                             $ 9,094     $ 7,585       20%     $17,040     $14,344        19%
                            ========    ========     ====      ========    ========     ====
</TABLE>


SG&A expenses for the three- and six-month periods have increased 20% and 19%,
respectively, largely as a result of (1) higher selling, promotion and
distribution costs at CooperVision, which contributed to a 22% year-to-year
increase in sales and (2) CooperSurgical SG&A expenses related to the


                                      S-20

<PAGE>

Unimar and Marlow acquisitions, which were primarily responsible for the
year-to-year increase of 48% in CooperSurgical 1997 revenue over 1996. The
decrease in Corporate/Other SG&A expenses is primarily the result of the
consolidation of the executive headquarters.

     Income From Operations: As a result of the variances discussed above,
income from operations improved by $2.2 million, or 54%, and $4.6 million, or
80%, for the three- and six-month periods, respectively. Income (loss) from
operations by business unit and corporate was as follows:





<TABLE>
<CAPTION>
                             Three Months Ended April 30,         Six Months Ended April 30,
                           ---------------------------------   --------------------------------
                            1997        1996       Incr.        1997        1996       Incr.
                           ---------   ---------   ---------   ---------   ---------   --------
                                                  (Dollars in thousands)
<S>                        <C>         <C>         <C>         <C>         <C>         <C>
CooperVision   .........   $ 5,565     $ 4,651       $   914   $ 9,995     $ 7,880     $ 2,115
CooperSurgical .........       483         281           202       902         573         329
HGA   ..................     1,615         948           667     2,237         446       1,791
Corporate/Other   ......    (1,389)     (1,805)          416    (2,755)     (3,125)        370
                           -------     -------      --------   -------     -------     --------
                           $ 6,274     $ 4,075       $ 2,199   $10,379     $ 5,774     $ 4,605
                           =======     =======      ========   =======     =======     ========
</TABLE>


     Interest Expense: The decrease in interest expense was primarily due to:
(1) reduced interest rates on the HGA term loan and the CooperVision line of
credit, (2) reduced interest as a result of the redemption on April 9, 1997 of
all $9,290,000 principal amount of the Company's 10 5/8% Convertible
Subordinated Reset Debentures due 2005 (the "Debentures") and (3) reduced
borrowing on the line of credit at CooperVision, partially offset by increased
interest for certain bonds and promissory notes of the Company. See Notes 3 and
5 of Notes to Consolidated Condensed Financial Statements included in this
Prospectus Supplement.


     Provision for Income Taxes: The 1997 provision for federal and state taxes
for the first six months of $200,000 was offset by a reversal of $215,000 of
tax accruals no longer required, and the recognition of an additional income
tax benefit of $830,000 from reducing the valuation allowance against the net
deferred tax assets, based on Management's belief that the Company's future
results will continue to compare favorably with those of the prior year. The
Company recorded no deferred tax benefit prior to the fourth quarter of its
1996 fiscal year. The provision for the first six months of fiscal 1996 was for
federal and state taxes.


Comparison of Each of the Fiscal Years in the Three-Year Period Ended
October 31, 1996

     Net Sales of Products: The following table summarizes the increases and
decreases in net sales of products of the Company's CooperVision and
CooperSurgical business units over the three-year period. Sales generated by
the Company's CooperVision Pharmaceuticals ("CVP") unit were zero in 1996,
$16,000 in 1995 and $394,000 in 1994.




                                       Increase (Decrease)
                           1996 vs. 1995               1995 vs. 1994
                         ----------------             ---------------
                                     (Dollars in thousands)
CooperVision .........   $6,436     15%               $4,663     12%       
                         ======     ====              ======     ====
CooperSurgical  ......   $4,402     34%               $  (23)    N/M
                         ======     ====              ======     ====
                                          
Consolidated net sales of products grew 20% in 1996 and 8% in 1995.


     1996 vs. 1995: Net sales of CooperVision grew by 15%. The primary
contributors to the growth were increased sales of the Preference(R)
spherical and Preference Toric(TM) product lines, which together grew
approximately 70%. Sales of toric lenses to correct astigmatism, Cooper-
Vision's leading product group, grew by 35% year to year and by the end of
fiscal 1996 accounted for approximately one-half of its sales. The Company
expects this trend to continue and considers itself to be well positioned to
compete successfully in specialty niches of the contact lens market,
particularly with its Preference(R) line of planned replacement lenses and
its line of custom toric lenses. CooperVision recently announced plans to
double the capacity of its Scottsville, New York,


                                      S-21

<PAGE>

   facility where Preference Toric(TM) lenses are manufactured. These
   increases were partially offset by anticipated decreases in sales of more
   mature product lines.

   Net sales of CooperSurgical increased 34%. Its gynecology product line grew
   by approximately 50%, primarily due to sales of Unimar and Blairden
   products which were acquired in April 1996 and June 1995, respectively. The
   effect of increased sales of gynecology products was partially offset by
   reduced sales of nonstrategic or nongynecologic products. CooperSurgical's
   sales mix continued to shift toward its gynecology product line, which
   accounted by the end of fiscal 1996 for approximately 90% of its sales.

   1995 vs. 1994: The primary contributors to CooperVision's growth in 1995
   were increased sales of the Preference(R) spherical product line and the
   Hydrasoft(R) toric and Preference Toric(TM) product lines (the latter of
   which was launched in the fourth quarter of fiscal 1994). Sales of
   CooperVision's toric lenses in the United States grew by approximately 50%
   in 1995. Toric and other specialty lenses accounted for approximately
   two-thirds of CooperVision's total sales in 1995. The 1995 increases were
   partially offset by anticipated decreases in sales of more mature product
   lines. CooperVision's sales mix shifted toward daily wear, planned
   replacement and other specialty products and away from extended wear
   products.

   Net sales of CooperSurgical products were essentially flat in 1995 as
   compared to 1994. Nearly 75% of CooperSurgical's net sales in 1995 related
   to womens' healthcare products, as the unit continued to direct its sales
   efforts toward the gynecology market to take advantage of the lower cost to
   service a highly focused market niche.

   Net Service Revenue: Net service revenue consists of the following:




                                  1996        1995       1994
                                 ---------   ---------   --------
                                          (In thousands)
   Net patient revenue  ......   $43,013     $40,643     $42,611
   Management Fees   .........        --       1,151       2,000
                                 --------    --------    --------
                                 $43,013     $41,794     $44,611
                                 ========    ========    ========

     Net Patient Revenue: Net patient revenue by major providers was as
follows:





<TABLE>
<CAPTION>
                              1996                    1995                    1994
                      ---------------------   ---------------------   --------------------
                                             (Dollars in thousands)
                      Amount      % Total     Amount      % Total     Amount      % Total
                      ---------   ---------   ---------   ---------   ---------   --------
<S>                   <C>         <C>         <C>         <C>         <C>         <C>
Commercial   ......   $ 3,989          9%     $ 5,055         13%     $ 9,170        21%
Medicare  .........    13,034         30       11,767         29        9,225        22
Medicaid  .........     9,884         23        8,566         21        7,254        17
Blue Cross   ......     3,617          9        4,015         10        4,729        11
HMOs   ............     8,896         21        8,714         21        7,722        18
Other  ............     3,593          8        2,526          6        4,511        11
                      --------      ----      --------      ----      --------     ----
                      $43,013        100%     $40,643        100%     $42,611       100%
                      ========      ====      ========      ====      ========     ====
</TABLE>


Net patient revenue grew 6% to $43 million in fiscal 1996. In each of the last
three quarters of 1996, following the transition of the physician group at
Hampton Hospital, HGA's revenue showed improving growth rates compared with the
comparable quarter in 1995. Increased patient visits to outpatient and day
treatment programs have helped offset pressure on revenue resulting from
declining average length of stay. Outpatient revenue increased to approximately
12% of net patient revenue in 1996 from approximately 9% in 1995, and
approximately 5% in 1994.


     Net patient revenue decreased by $2.0 million or 5% in 1995. Revenue was
pressured by the industry trend toward increased managed care, which resulted
in decreased daily rates and declines in average lengths of stay. Management is
endeavoring to mitigate those pressures by increasing the


                                      S-22

<PAGE>

number of admissions to its hospitals and by providing outpatient and other
ancillary services. In addition, management estimates that the dispute with the
Hampton Medical Group, P.A. ("HMG"), which was settled in 1995, reduced revenue
during 1995 at Hampton Hospital by approximately $2 million compared with 1994.
 

     Management Fees: On May 29, 1992, PSG Management, Inc. ("PSG Management"),
a subsidiary of the Company, entered into a three-year management agreement
with Progressions Health Systems, Inc. ("Progressions"), under which PSG
Management managed three hospitals owned by Progressions, having a total of 220
licensed beds. PSG Management received a management fee of $166,667 per month
under the agreement, which expired by its terms in May 1995.

     Cost of Products Sold: Gross profit (net sales of products less cost of
products sold) as a percentage of net sales of products ("margin") was as
follows:




                                  Margin
                         ------------------------
                         1996     1995      1994
                         ------   -------   -----
CooperVision .........   77%      73%       71%
CooperSurgical  ......   51       52        48
Consolidated .........   70       68        65

     CooperVision's margin has increased from 1994 through 1996 due to
efficiencies associated with higher production levels, as well as a favorable
product mix, reflecting the growth in sales of toric contact lenses, which have
higher margins. CooperSurgical's 1996 margin decreased compared to 1995 due to
the acquisition of Unimar products, which have slightly lower margins as
compared to the Company's previous year's product mix. Cost reductions are
underway, which management anticipates will improve future Unimar product line
margins. CooperSurgical's 1995 margin increased compared to 1994 due to a
favorable product mix in the United States. Internationally, a margin increase
was primarily due to cost reductions accomplished within the LEEP product
line. Also, 1994 CooperSurgical margins were impacted by a $200,000 write-down
of endoscopy inventory, which reduced margins by 2%.

     Cost of Services Provided: Cost of services provided represents all normal
operating costs (other than financing costs and amortization of intangibles)
incurred by HGA in generating net service revenue. The results of subtracting
cost of services provided from net service revenue is an operating profit of
$2.8 million or 6% of net service revenue in 1996, $1.3 million or 3% of net
service revenue in 1995 and $3.6 million or 8% of net service revenue in 1994.
The 1996 increased percentage of operating profits as compared to 1995 is
attributable to increased revenue, as described above, while cost of services
were about the same as 1995. The decreased percentage of operating profits in
1995 compared with 1994 was primarily attributable to lower revenue as
described above, partially offset by lower cost of services.

     Research and Development Expense: Research and development expense was
$1.2 million or 2% of net sales of products in 1996 compared to $2.9 million or
5% in 1995 and $4.4 million or 9% in 1994.

     The decreases in 1996 and 1995 are primarily attributable to the Company's
decision to discontinue development of its calcium channel blocker compound.
This project accounted for 43% and 63% of consolidated research and development
expense in 1995 and 1994, respectively. A 1996 versus 1995 decrease of $418,000
in CooperSurgical research and development reflected primarily the May 1995
discontinuance of the development of Innerdyne Inc.'s thermal endometrial
ablation technology, begun in 1994, and on which CooperSurgical had spent
approximately $600,000 by mid 1995.

     The Company currently anticipates that the level of spending on research
and development has stabilized. The Company is focusing on acquiring products
which will be marketable immediately or in the short-term, rather than on
funding longer-term, higher risk research and development projects.


                                      S-23

<PAGE>

     Selling, General and Administrative Expense: The Company's SG&A by
business unit and corporate was as follows:




                           1996           1995          1994
                          ---------   ---------------   --------
                                      (In thousands)
CooperVision  .........   $17,281         $15,949       $13,621
CooperSurgical   ......     6,243           5,520         6,125
Corporate/Other  ......     6,193           4,357        11,281
                          --------        --------      --------
                          $29,717         $25,826       $31,027
                          ========        ========      ========

     The increase in 1996 versus 1995 Corporate/Other SG&A is primarily due to
the $1.3 million credits reflected in 1995 SG&A as noted below. The 61%
decrease in 1995 vs. 1994 Corporate/Other SG&A reflects the resolution of
various legal matters, a reduction in the level of corporate staffing, a credit
of $648,000 for the recovery of the Company's claim against the Cooper
Laboratories, Inc. Liquidating Trust, representing the recovery of previously
rendered administrative services, the reversal of a $649,000 receivable reserve
and certain other accruals no longer required and a significant reduction in
the cost of the Company's Directors and Officers insurance.


     SG&A for CooperVision increased by 8% and 17% in 1996 vs. 1995 and 1995
vs. 1994, respectively. The increase in 1996 vs. 1995 relates to increased
sales, and the increase in 1995 vs. 1994 was due primarily to costs associated
with the successful launch of the Preference Toric(TM) line of contact lenses
and the cost of programs associated with the launch of additional new products.
As a percentage of sales, CooperVision's SG&A was 35% in 1996, 38% in 1995 and
36% in 1994.


     The 1996 increase in CooperSurgical SG&A resulted primarily from the
acquisition of Unimar, Inc. See Note 2 in Notes to Consolidated Financial
Statements included in this Prospectus Supplement The 1995 decrease at
CooperSurgical reflects savings generated by the consolidation of
CooperSurgical facilities with attendant efficiencies.


     Costs Associated With Restructuring Operations: In 1995, the Company
recorded $1.5 million of restructuring costs to provide for costs primarily
associated with the closure of facilities in the Company's CVP, CooperSurgical
and corporate operations and downsizing HGA headquarters. See Note 5 of Notes
to Consolidated Financial Statements included in this Prospectus Supplement.


     Amortization of Intangibles: Amortization of intangibles was $1.2 million
in 1996, $859,000 in 1995 and $843,000 in 1994. In 1996, the Company
accelerated $246,000 of amortization for a use patent as a result of its
decision to discontinue the development and outlicensing of its calcium channel
blocker compound. The Company stopped funding this project in 1995. The balance
of the changes in each year reflect acquisition activity during the three-year
period. See Note 2 of Notes to Consolidated Financial Statements included in
this Prospectus Supplement.


     Income From Operations: As a result of the variances discussed above,
income from operations has improved by $16.4 million over the three-year
period. Income from operations by business unit and Corporate/Other was as
follows:




                           1996            1995            1994
                        ----------   ---------------   ------------
                                       (In thousands)
CooperVision  .........  $ 19,065        $ 13,959         $ 11,963
CooperSurgical   ......     1,667            (425)            (932)
HGA  ..................     2,573             878            3,321
Corporate/Other  ......    (6,462)         (6,404)         (13,929)
                          --------       --------         --------
                         $ 16,843        $  8,008         $    423
                          ========       ========         ========

                                      S-24

<PAGE>

     Settlement of Disputes, Net: In fiscal 1996, the Company recorded a credit
to income of $223,000 related to the agreement which settled cross claims
between HGA and Progressions related to purchase price adjustments (which were
credited to goodwill) and other disputes. Pursuant to this agreement, HGA
received $447,000 in fiscal 1996 of which $223,000 has been credited to
settlement of  disputes.

     In 1995, the Company recorded a charge of $5.6 million for the settlement
of the HMG dispute. This charge was partially offset by net credits to income
of $2.0 million, which primarily represented cash received by the Company in
connection with the settlement of other litigation matters.

   In 1994, the Company recorded the following items related to settlement of
   disputes:


      A credit of $850,000 following receipt of funds by the Company to settle
      certain of the Company's claims associated with a real estate
      transaction.

      A charge of $5.8 million which represented the Company's estimate of
      costs required to settle certain disputes and other litigation matters,
      including $3.5 million associated with the Company's criminal conviction
      and the related SEC enforcement action against the Company.

     See Note 4 of Notes to Consolidated Financial Statements included in this
Prospectus Supplement.

     Investment Income (Loss), Net: Investment income (loss), net includes
interest income of $250,000, $394,000 and $377,000 in 1996, 1995 and 1994,
respectively. The decrease in interest income in 1996 reflects lower investment
balances primarily as a result of the Company's use of cash for the acquisition
of Unimar, Inc. in April 1996. See Note 2 of Notes to Consolidated Financial
Statements included in this Prospectus Supplement. Also included in investment
income, net for 1994 is a $530,000 loss on the sale of marketable securities.


     Interest Expense: Interest expense was $5.3 million in 1996, $4.7 million
in 1995 and $4.5 million in 1994. The increase in interest expense for 1996
over 1995 is primarily related to the interest on $4,000,000 principal amount
of notes issued in April 1996 in connection with the acquisition of Unimar,
Inc. bearing interest at a rate of 12% per annum (see Note 8 of Notes to
Consolidated Financial Statements included in this Prospectus Supplement) and
accreted interest in 1996 related to the settlement of the HMG dispute. The
increase in interest expense in 1995 was primarily a result of the increased
borrowing related to a line of credit, partially offset by reduced interest
expense due to an exchange offer and consent solicitation which occurred in the
first quarter of fiscal 1994.


     Provision for (Benefit of) Income Taxes: Details with regard to the
Company's provision for (benefit of) income taxes for each of the years in the
three-year period ended October 31, 1996 are set forth in Note 7 of Notes to
Consolidated Financial Statements included in this Prospectus Supplement. The
1996 provision for federal and state taxes of $275,000 was offset by a reversal
of $615,000 of tax accruals no longer required and the recognition of an income
tax benefit of $4.1 million from reducing the valuation allowance against net
deferred tax assets. The 1995 provision for state income and franchise taxes of
$315,000 was partially offset by a reversal of $200,000 of tax accruals no
longer required. The 1994 provision for state income and franchise taxes of
$400,000 was offset by a reversal of $5.0 million of tax accruals no longer
required following the successful resolution of certain tax issues.


Capital Resources and Liquidity


     The Company's financial condition continues to strengthen in each of the
Company's business segments. On a consolidated basis, revenue improved by $13
million, or 27%, and operating income improved by $4.6 million, or 80%, in the
first six months of 1997 over the same period in 1996. The Company generated
$2.5 million of cash flow from operating activities in the second quarter of
1997. The 1997 six month cash flow from operating activities was $0.3 million,
a $7.7 million improvement over the $7.4 million of negative operating cash
flow experienced for the same period in 1996.


                                      S-25

<PAGE>

     The primary uses of cash for operating activities in the first six months
of 1997 included payments of $2.2 million associated with settlements of
certain disputes and payments totaling $2.0 million to fund fiscal 1996
entitlements under the Company's annual bonus plans. Cash disbursements for
1996 operating activities for the same period included payments of $4.4 million
associated with settlements of certain disputes and payments totaling $2.0
million to fund fiscal 1995 entitlements under the Company's annual bonus
plans. Primary uses of cash for investing activities for the six months ended
April 30, 1997 included purchases of property, plant and equipment of $4.1
million, of which approximately $0.9 million relates to CooperVision's
expansion of the Scottsville, New York, plant, and approximately $1.7 million
relates to the construction of the Midwest Center for Youth and Families, a
residential treatment center that HGA opened in April 1997. Investing
activities also included cash paid for acquisitions of $3.0 million for Natural
Touch(R), a line of opaque contact lenses from Wesley-Jessen, and $4.1 million
for Marlow Surgical Technologies, Inc., a gynecology products company,
investments in escrow funds of $2.9 million and other investment activities of
$0.4 million. Financing activities related primarily to a $1.3 million draw
down on the Company's line of credit, $5.0 million Cooper Life Sciences term
loan and $3.0 million industrial development note, all of which were primarily
used to support investing activities. The Company plans to maximize the value
of the line of credit by maintaining an outstanding amount until it is
refinanced.

     On April 9, 1997, the Company redeemed or converted into Common Stock all
$9.3 million principal amount of its Debentures. The Company expects that the
redemption or conversion will not be dilutive to 1997 earnings. See Note 3 of
Notes to Consolidated Condensed Financial Statements included in this
Prospectus Supplement for a further discussion of the redemption. The Company
currently anticipates that operating cash flows of its existing businesses will
be positive for the balance of fiscal 1997.

     On May 30, 1997, the Company entered into the Refinancing Commitment
with KeyBank, pursuant to which KeyBank committed to provide (through a
syndicate of lenders) the Company with the Refinancing. See "Recent
Developments--Refinancing of Indebtedness." Borrowings under the Refinancing
would be secured by substantially all of the assets of the Company and its
wholly-owned subsidiaries. The Company anticipates a closing of the
Refinancing during its fourth fiscal quarter of 1997. Consummation of the
Refinancing is subject to a number of conditions, and there can be no
assurance that the Refinancing will occur. Assuming that the Refinancing
occurs after the consummation of the Offering, the Refinancing may be used
to repay other outstanding indebtedness (to the extent not repaid with the
proceeds of the Offering), to fund acquisitions and for general corporate
purposes.

     The Company is evaluating acquisition opportunities which, if consummated,
would be funded by a combination of cash then on hand and/or other financing
vehicles. In addition to the Offering, the Company may elect to raise
additional funds through one or more additional issuances of Common Stock, the
proceeds of which may be used to reduce outstanding indebtedness, to fund
acquisitions or for general corporate purposes.

     Inflation and Changing Prices. Inflation has had little effect on the
Company's operations in the last three years.


Impact of Statements of Financial Accounting Standards Issued But Not Adopted

     In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based
Compensation. SFAS No. 123 applies to all transactions in which an entity
acquires goods or services by issuing equity instruments such as common stock,
except for employee stock ownership plans. SFAS No. 123 establishes a new
method of accounting for stock-based compensation arrangements with employees
which is fair value based. The statement encourages (but does not require)
employers to adopt the new method in place of the provisions of Accounting
Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to
Employees." Companies may continue to apply the accounting provisions of APB
No. 25 in determining net income, however, they must apply the disclosure
requirements of SFAS No. 123. Companies that adopt the fair value based method
of SFAS No. 123 would typically incur a higher compensation


                                      S-26

<PAGE>

cost for fixed stock option plans and a different compensation cost for
contingent or variable stock option plans. The recognition provisions and
disclosure requirements of SFAS No. 123 are effective for fiscal years
beginning after December 15, 1995. The Company will adopt the disclosure
requirements in its 1997 fiscal year. Such adoption will have no impact on
reported results.

     In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
("SFAS 128"), which will be effective for financial statements for periods
ending after December 15, 1997, including interim periods, and established
standards for computing and presenting earnings per share. Earlier application
is not permitted. Beginning with its unaudited consolidated condensed financial
statements for the first quarter of fiscal 1998, the Company will make the
required disclosures of basic and diluted earnings per share and provide a
reconciliation of the numerator and denominator of its basic and diluted
earnings per share computations. All prior period earnings per share data will
be restated by the Company upon adoption of SFAS 128.

     The Company expects that basic earnings per share figures to be reported
under SFAS 128 will be somewhat higher than the figures historically reported,
due to the removal of common stock equivalents from the calculation of average
shares and that diluted earnings per share will not differ materially from
historically reported figures.


                                      S-27

<PAGE>

 
                                  BUSINESS

     The Cooper Companies, Inc. is a rapidly growing specialty healthcare
company focused on serving selected niche areas with its products and services.
The Company operates through its primary subsidiaries:

   o CooperVision, which develops, manufactures and markets a wide range of
     specialty contact lenses, with particular emphasis on soft toric
     contact lenses to correct astigmatism;

   o CooperSurgical, which develops, manufactures and markets proprietary
     diagnostic and surgical instruments, equipment, accessories and devices
     for the physician's office, the surgicenter and the hospital that are
     targeted to the gynecological segment of the women's healthcare market;
     and

   o HGA, which owns and operates three psychiatric hospitals, in addition to
     satellite facilities, that provide inpatient, outpatient and other
     ancillary treatment primarily for children, adolescents and geriatric
     patients.

     The Company's objective is to increase the revenue and operating income of
each of its business units through strategies that combine internal growth,
selective acquisitions (some of which may be material) and penetration of new
geographic markets. Management believes the Company's $234 million of NOLs
provides a significant competitive advantage in the execution of this strategy.
See "--Tax Benefits from Net Operating Losses."

     The Company is a Delaware corporation organized in 1980, and its principal
offices are located at 6140 Stoneridge Mall Road, Suite 590, Pleasanton,
California 94588. The Company employs approximately 1,200 people in the United
States and Canada.


CooperVision

     General. CooperVision develops, manufactures and markets specialty
contact lenses. CooperVision's particular emphasis is on the high-growth,
high-margin soft toric contact lens segment. Toric contact lenses provide
visual correction for astigmatism--blurred vision caused by an irregularly
shaped cornea. CooperVision's three toric lens brands accounted for more
than 50% of its sales during the first six months of fiscal 1997.

     In addition to toric lenses, CooperVision manufactures and markets more
than a dozen specialty and premium soft contact lens brands in the spherical
lens category. These include premium lenses for people who rapidly accumulate
protein on their lenses and a line of "opaque" lenses that change or enhance
the appearance of the wearer's natural eye color. In the non-specialty
spherical category, CooperVision markets a range of conventional spherical
lenses. CooperVision markets its lens products primarily to eyecare
practitioners, who demand premium-quality products to ensure the optimum ocular
health and vision of their patients.

     Although more than 95% of CooperVision's revenue for the first six months
of fiscal 1997 derived from sales in the United States and Canada, CooperVision
also markets its contact lenses in more than 40 other countries and is
continuing to expand its international business through increased distribution
and licensing agreements. See "--Growth Strategies--Expand in International
Markets."


                                      S-28

<PAGE>

     The following table sets forth certain of the brand names under which
CooperVision's contact lenses are sold and the market segments they are
intended to serve:


                       CooperVision Contact Lens Products

<TABLE>
<CAPTION>
Type of Lens                                   Speciality                               Premium Sphere              Other           
- ---------------  -------------------------------------------------------------------- ---------------------  ---------------------  
                        Toric                 Opaque                  Sphere                
                 ----------------------  ------------------  ------------------------       
<S>              <C>                     <C>                 <C>                       <C>                    <C>              
Conventional:    Cooper Toric(TM)        Natural Touch(R)    Permalens(R) Aphakic      Vantage(R)             Cooper Clear(TM) 
                                                             Permalens(R) Therapeutic  Permaflex(R) UV        Cooper HT        
                                                             Vantage(R) Accent         Hydrasoft(R) Sphere    Permalens(R) XL   
                                                             Permalens(R) Plus                                CV43            
                                                             Gordon RGP                                       Permaflex(R) Natural 
Planned                                                                                                       Cooper Thin(R)   
Replacement:     Preference Toric(TM)                                                                                           
Custom:          Hydrasoft(R) Toric                                                    Preference(R)                           
                 CV55(TM)                                                              Hydrasoft(R) Sphere*                  
                 Cooper Custom                                                        
                  Toric(TM)

</TABLE>


- --------------------------------------------------------------------------------
 DEFINITIONS:
 Conventional Lenses: Designed to be replaced after 12 to 24 months
 Planned Replacement Lenses: Designed to be replaced every one to three months
 Custom Lenses: For patients with severe astigmatism and special vision needs
 Specialty Lenses: Meeting unusual visual requirements such as astigmatism or
 for ophthalmic disorders other than visual defects
 Premium Lenses: Offering value added features such as deposit resistance or UV
 protection
 Other: Used for common vision correction and offering no additional features

Market Overview. The Company believes that worldwide sales of contact lenses
totaled approximately $2 billion (at the manufacturers' price level) in 1996.
The United States market for contact lenses represents approximately 50% of the
total worldwide market, and the Company believes sales (at the manufacturers'
level) in the overall United States market for contact lenses are expected to
grow at approximately 8% per year through the year 2000. The industry is
divided into the soft lens portion, which represents approximately 90% of
United States wearers, and the hard lens portion (primarily rigid gas
permeable), which represents approximately 10%. Within the soft contact lens
market, there are three principal replacement regimens: conventional, requiring
periodic cleaning throughout the life of the lens and replacement after 12 to
24 months; planned replacement, designed to be replaced every one to three
months; and disposable, changed as often as daily and up to every two weeks,
depending upon the product. Disposable and planned replacement lenses are
gradually replacing conventional lenses in North America, where changing lenses
on a more frequent basis is viewed as improving comfort, convenience and health
of the eye for many wearers. The Company believes there is a greater trend
toward planned replacement lenses than to disposable lenses because, while
providing equivalent convenience, planned replacement lenses feature a
generally lower annual cost and enable practitioners to better retain their
patient base.


     In addition to segmentation by replacement regimen, the soft contact lens
market can be divided into the non-specialty spherical lens segment and the
specialty lens segment. Sales of non-specialty spherical lenses that do not
provide the value-added features required by patients with special visual needs
represent approximately 67% of the United States soft contact lens market. The
remaining 33% is represented by sales of specialty lenses, including toric
lenses to correct astigmatism, opaque lenses, which change or enhance the
appearance of the wearer's natural eye color, enhancement tint lenses that
enhance the wearer's natural eye color, and premium lenses that offer protein
deposit resistance, improved visual acuity, ultraviolet light protection or
enhanced comfort for dry eyes.


                                      S-29

<PAGE>

     The Company believes that, compared to sales in the overall contact lens
market, sales of  specialty lenses generally are growing more rapidly and
generate higher gross margins. While  CooperVision manufactures and markets
both specialty and non-specialty lenses, specialty lenses accounted for
approximately 70% of its sales during the first six months of fiscal 1997.
CooperVision's particular emphasis has been on soft toric contact lenses, which
accounted for more than 50% of its sales for the first six months of fiscal
1997. CooperVision also markets opaque lenses and premium spherical lenses for
people requiring extreme visual correction or who rapidly accumulate protein on
their lenses.

     The soft toric contact lens market is a high growth, specialized niche,
accounting for approximately 15% of total United States contact lens sales. The
soft toric market is currently estimated at approximately $170 million of
annual sales in North America (at the manufacturers' price level), and the
Company believes such market is approximately $100 million outside of North
America. Although 45% of the United States population requiring vision
correction has some degree of astigmatism, only approximately 6% of that
population currently wears toric lenses. This is because until recently, due to
the lack of a high quality, easy-to-fit soft toric contact lens, many patients
who required toric lenses were often advised that they were not good candidates
for soft contact lenses. In addition, many patients "dropped out" of the
contact lens market, including astigmatic patients who dropped out due to the
poor performance of their lenses. The underserved astigmatic patient base is
now being introduced or reintroduced to contact lens wear due to technological
advancements that have resulted in the availability of easy-to-fit soft toric
lenses in a wide variety of lens parameters. In addition, the potential
attractiveness of refractive surgery, including laser treatment, has encouraged
many contact lens "dropouts" to return to their eyecare practitioner's office,
where astigmatic patients often are fitted with soft toric lenses rather than
electing non-reversible laser surgery. Practitioners who specify lenses for
their astigmatic patients increasingly prescribe soft toric lenses as a way to
differentiate their practices and better retain their patient base. For these
reasons, the Company believes that the toric lens segment will continue to
grow.

     The United States market for planned replacement toric lenses is currently
estimated by the Company at $60 to $65 million of annual sales (at the
manufacturers' price level), and the Company believes such sales are growing by
more than 50% annually in the United States. Sales during the first six
months of fiscal 1997 of  CooperVision's planned replacement toric lens,
Preference Toric(TM), which was introduced in late 1994, grew approximately 70%
compared with sales during the first six months of fiscal 1996.

     The United States market for custom toric lenses, the segment for those
with severe astigmatism and special vision needs, is currently estimated by the
Company at $30 to $35 million of annual  sales (at the manufacturers' price
level) and the Company believes such sales are growing at an estimated annual
rate of approximately 10-15% in the United States. Sales during the first six
months of fiscal 1997 of CooperVision's custom toric lens, Hydrasoft(R) Toric,
grew approximately 18% compared with sales during the first six months of
fiscal 1996.

     The remaining portion of the United States toric lens market, which is
represented by sales of conventional toric lenses, is currently estimated by
the Company at $60 to $65 million of annual sales (at the manufacturers' price
level), which the Company believes is declining at approximately 10% per year.

     Competitive Strengths. The Company believes that CooperVision has the
following competitive strengths:

     Manufacturing Technology and Lens Design. Historically, toric lenses were
difficult to fit due to poor lens designs that did not adequately address the
critical need for rotational stability on the eye. The Company believes that
CooperVision is able to capitalize on its 15 years of toric lens design and
manufacturing technology experience to produce lenses that provide outstanding
stability and lens reproducibility. CooperVision utilizes two manufacturing
techniques in the production of its lenses. The first manufacturing technique,
using proprietary FIPS(TM) technology, which combines low-cost cast molding and
precision lathing, allows for a balance of low-cost production and wide
prescription range coverage. This enables CooperVision to market its planned
replacement toric lenses in over 13,000


                                      S-30

<PAGE>

prescriptive powers, more than three times as many as its competition.
CooperVision applies the second manufacturing technique to its line of custom
toric lenses, which are fully lathed to provide CooperVision with a sufficient
number of lens parameters to accommodate more than 13 million possible
prescriptive powers. Both manufacturing techniques provide excellent lens
reproducibility, virtually assuring that replacement lenses will fit as well as
the original.

     Customer Loyalty. The specialty contact lens industry is characterized by
high brand loyalty. The Company believes that wearers and eyecare practitioners
resist switching brands once a particular brand of specialty lens is prescribed
and fitted successfully. The Company believes that CooperVision has been able
to capitalize on this brand loyalty, particularly in the toric lens market,
where patients are often difficult to fit. CooperVision's extensive range of
possible lens prescriptions enables it to provide superior performance and
comfort. Once difficult-to-fit patients and their eyecare practitioners have
found the CooperVision toric lenses that provide the right fit, they are
unlikely to switch brands, thereby generating recurring sales for CooperVision.
The Company also believes that it generates brand loyalty throughout its
product lines through a reputation for premium quality. CooperVision markets
its lenses to eyecare practitioners, who demand such quality products to ensure
the optimum ocular health and vision of their patients.

     Customer Service. CooperVision employs a highly experienced, 
commission-based direct sales staff. The Company believes CooperVision's 
incentive compensation structure creates the level of dedication and 
motivation necessary to promote CooperVision's products. CooperVision's
order entry system links its New York and California customer service centers
to ensure efficient ordering and to provide a backup system to maintain a high
level of continuous service. The Company believes CooperVision offers
unsurpassed customer service.

     High Quality Materials. CooperVision uses advanced, clinically proven
materials in the manufacture of its lenses. Many of CooperVision's contact
lenses are manufactured from tetrafilcon A, a  polymer highly resistant to
naturally occurring deposits that can distort vision and cause interior lid
inflammation. CooperVision has documented the excellent protein deposit
resistant nature of tetrafilcon A in two published clinical studies involving
over 600 patients. Tetrafilcon A also is highly durable and tear resistant.

     Growth Strategy. CooperVision's objective is to become the global leader
in the specialty soft contact lens market. CooperVision intends to build on its
significant role in the high-margin toric and spherical specialty lens segments
through the following strategy:

     Concentrate on Specialty Lens Segments. CooperVision intends to continue
its concentration on the high-growth, high-margin toric contact lens segment.
The Company believes the North American market for toric contact lenses,
currently estimated at $170 million of annual sales (at the manufacturers'
price level), will grow by at least 15% annually, with a higher growth rate for
markets outside of North America. CooperVision will also seek continued
expansion of its market position in the opaque contact lens segment and the
premium spherical lens segment for those patients requiring extreme visual
correction or who rapidly accumulate protein on their lenses. In these
specialty markets, the Company believes CooperVision will be able to capitalize
on its reputation for high quality products and superior manufacturing
technology.

     Increase Market Share. CooperVision intends to enter new market
sub-segments by developing new toric and spherical lens products. CooperVision
also intends to strengthen its position in current markets through extending
the ocular powers of certain existing product lines, thereby allowing
practitioners to prescribe them to more patients. During the first six months
of fiscal 1997, approximately 40% of CooperVision's sales derived from products
that were internally developed within the past five years. In addition,
CooperVision has entered into a marketing alliance with a leading eyecare
equipment manufacturer, which will provide for cross-promotion of products.
CooperVision is also seeking (i) to emphasize its relationships with
distributors who employ their own sales forces and will independently promote
CooperVision's more profitable specialty lenses and (ii) to de-emphasize its
relationships with distributors who do not take an active role in initiating
sales.


                                      S-31

<PAGE>

     Focus on Acquisitions. During the first six months of fiscal 1997,
approximately 30% of the Company's sales derived from products that were
acquired in the past five years. CooperVision has increased sales of these
products, and its market share, through strategic expansion into new commercial
and managed care channels. CooperVision's most recent acquisition of the
Natural Touch(R) line of opaque lenses acquired from Wesley Jessen, provided
entry into a new specialty lens segment and also better positioned CooperVision
to increase sales of its toric lenses to the optical chain market segment.
CooperVision will continue to seek appropriate acquisitions, alliances and
joint ventures to grow substantially its specialty contact lens business.


     Expand in International Markets. Although more than 95% of
CooperVision's revenue for the first six months of fiscal 1997 derived from
sales in the United States and Canada, CooperVision also markets its contact
lenses in more than 40 other countries. CooperVision, which following a 1989
divestiture of its non-North American contact lens business was subject to a
long term non-competition agreement, is seeking to aggressively reestablish
its international presence, primarily through alliances with strong regional
optical distributors. In January 1997, CooperVision entered into an
agreement with Rohto, a leading manufacturer of contact lens care products
and the largest supplier in Japan of non-prescription ophthalmic products,
to market CooperVision lenses in Japan and other Pacific Rim countries.
Marketing is expected to begin, following regulatory approval, in
approximately two years. With more than 8 million contact lens wearers,
Japan has the second highest number of contact lens wearers in the world.
The Company also plans to expand its presence in the European market through
acquisitions and joint ventures, as well as by continuing to rely on
distributor relationships. See "Risk Factors--Governmental Regulation and
Policies--Healthcare Products."


     Products. CooperVision lenses are designed and marketed specifically for
conventional and planned replacement wear. CooperVision is the only
manufacturer to offer eyecare practitioners all three types of toric lenses:
(i) a custom-prescription conventional lens, Hydrasoft(R) Toric, (ii) a planned
replacement lens, Preference Toric(TM), and (iii) a common-prescription
conventional lens, Cooper Toric(TM). This allows practitioners to fit all types
of astigmatic patients more quickly and effectively.


     Hydrasoft(R) Toric custom toric lenses were developed in 1984 by
CoastVision, which  CooperVision acquired in 1993. The Company believes this
brand has retained its reputation as the easiest fitting and most successful
custom toric lens on the market.


     CooperVision launched Preference Toric(TM), a quarterly planned
replacement lens, in 1994. Preference Toric(TM) lenses are worn by those with
more common astigmatic prescriptions that do not require a custom prescription
lens. Preference Toric(TM) offers more than three times as many prescriptive
powers as its competition, and the Company believes that Preference Toric(TM)
offers excellent reproducibility, all-day comfort and visual acuity in a
planned replacement toric lens.


     The Cooper Toric(TM) lens is targeted for conventional wear and offers the
benefits of deposit resistance provided by the tetrafilcon A material.


     The Preference(R) lens is CooperVision's premium planned replacement
spherical product. This lens combines the benefits of the tetrafilcon A
material with quarterly replacement. This provides patients with benefits such
as convenience, low annual cost and excellent visual acuity. Practitioners
benefit from increased product differentiation and improved profitability.


     CooperVision also markets the Natural Touch(R) line of opaque contact
lenses, acquired from Wesley Jessen in March 1997. Natural Touch(R) lenses are
sold in the United States to customers who want to change or enhance the
appearance of their natural eye color.


     CooperVision's other major spherical brand name lenses include
Hydrasoft(R) Sphere, Vantage(R), Permaflex(R), Permalens(R) and Cooper
Clear(TM). These lenses contain varying amounts of water and different degrees
of oxygen permeability and come in different designs, parameters, diameters,
base curves and lens edges, providing practitioners with a wide variety of lens
offerings.


                                      S-32

<PAGE>

     Sales and Marketing. CooperVision employs a commission-based direct sales
staff of approximately 60 persons in North America having above-average
industry experience, to market its lens products primarily to eyecare
practitioners. The Company believes CooperVision's incentive compensation
structure creates a level of dedication and motivation necessary to promote its
products. CooperVision's 35 customer service representatives and technical
consultants, who average approximately five years of experience in the
industry, handle over 4,000 practitioner calls per day. This level of
experience allows the direct sales staff and the customer service
representatives to communicate more effectively with the private eyecare
practitioners--the majority of CooperVision's customer base. These private
eyecare practitioners, who specify the lenses for their patients, are either
ophthalmologists (medical doctors who specialize in eyecare) or optometrists
(state-licensed eyecare specialists who hold a Doctor of Optometry degree).
They may be in solo or group practice, corporate optometry practice within a
chain of optical stores, managed care clinics or affiliated with independent
opticians licensed to dispense eyewear.


     Although the contact lens market in the United States has been minimally
affected by recent managed care initiatives, many eyecare practitioners are now
finding it necessary to join managed care panels to retain their patient base.
CooperVision established its CooperCare division in 1996 to serve the managed
care market. CooperCare markets distinct lens brands labeled for managed care
organizations.


     CooperVision has established a marketing alliance with Humphrey
Instruments ("Humphrey"), a leading equipment manufacturer and a division of
Carl Zeiss Inc., a world leader in ophthalmic diagnostic instrumentation.
Humphrey offers a broad line of diagnostic equipment for the eyecare
practitioner's office, including instruments used to measure the parameters of
the eye that determine the correct contact lens prescription. The Company
believes that as managed care organizations expand and as optometrists
increasingly co-manage cataract and refractive surgery requiring
state-of-the-art corneal topographic equipment, this alliance will provide
significant cross-promotional opportunities.


     CooperVision also has an Internet website (www.coopervision.com) that
informs patients and overseas distributors about its products and provides
practitioners and managed care organizations with information about the fiscal
benefits of selling specialty-branded lens products.


     Manufacturing. CooperVision manufactures its lenses in three facilities
totaling 73,600 square feet of manufacturing space. The Company expects that
CooperVision's 380-person manufacturing staff will produce approximately five
million lenses in fiscal year 1997.


     CooperVision's largest facility, which is located in Scottsville, New
York, produces soft toric and spherical lenses. Because of increasing demand
for its planned replacement toric lenses, CooperVision has expanded the
facility and, since 1995, has more than doubled capacity. Lenses at the
Scottsville facility are fabricated predominantly from tetrafilcon A, a lens
material that resists build-up of protein deposits on the lens surface.
Tetrafilcon A products are manufactured using a proprietary technology known as
FIPS(TM), a technique developed by CooperVision over the past 15 years.
Combining the benefits of low-cost cast molding and automatic precision lathing
technologies, this unique process produces high-quality easy to fit lenses and
allows the flexibility to produce more than 13,000 prescriptive powers, more
than three times as many as any competitor. The Company believes that the
combination of the FIPS(TM) manufacturing technology and the tetrafilcon A
material would be extremely difficult to duplicate by competitors, given
CooperVision's extensive knowledge and experience with the technology and the
material.


     CooperVision's Huntington Beach, California, facility produces custom soft
toric and spherical lenses. These premium-quality toric and spherical lenses
are made from a material known as methafilcon B, using a precision lathing
technology. Rigid gas permeable (hard) lenses are produced in CooperVision's
facility in Markham, Ontario.


     Regulatory Activities. In addition to fully complying with FDA mandated
Current Good Manufacturing Practices (CGMPs), CooperVision is working to
achieve ISO 9001 certification and CE Mark


                                      S-33

<PAGE>

approval for its products. CE mark approval becomes mandatory for all products
shipped into the European community in June 1998, and while not required, ISO
9001 certification is a strongly recommended and widely recognized milestone in
the process of obtaining the CE Mark. Both United States facilities are working
toward ISO 9001, with certification expected in late 1997. CE Mark approval is
expected early in 1998.


CooperSurgical

     General. CooperSurgical develops, manufactures and distributes diagnostic
and surgical instruments, equipment, accessories and devices for the rapidly
growing gynecology segment of the worldwide women's healthcare market. Based on
current healthcare trends, including government policies focusing on women's
healthcare issues and the reimbursement policies of managed care organizations,
the Company believes that women will increasingly use gynecologists as their
primary care physicians. CooperSurgical plans to capitalize on this evolving
role of gynecologists as providers of a broadening range of medical services
for women through its product development and acquisition efforts and through
alliances with companies that are developing new technologies for the women's
healthcare market.

     The gynecological products market is highly fragmented, served primarily
by numerous small manufacturers that generally offer limited product lines
targeted at one or a few specific procedures. Since its formation in 1990,
CooperSurgical has moved toward consolidating this market by completing five
acquisitions, as described in the chart below. The Company believes
CooperSurgical can increase its revenue and operating income by continuing to
pursue this role as a market consolidator through additional acquisitions and
by further internal development of new product lines.

     CooperSurgical focuses on three segments of the gynecology products market
that offer substantial opportunities for growth: (i) products for use in
in-office diagnostic and surgical procedures, (ii) products for use in
operative gynecologic (including minimally invasive) procedures and (iii)
products for use in reproductive medicine procedures. The Company believes
CooperSurgical has attained the critical mass necessary to maximize the
efficiency of its existing sales organization, successfully integrate future
acquisitions, complete additional licensing arrangements and introduce new
products.

                    CooperSurgical Acquisitions Since 1990

<TABLE>
<CAPTION>
    ACQUISITION                                 PRODUCT LINE
- --------------------------------------------------------------------------------------
<S>                                     <C>
 Frigitronics, Inc.                     o Colposcopes
                                        o Cryosurgery Equipment
- --------------------------------------------------------------------------------------
 Euro-Med, Inc.                         o Biopsy Instruments
                                        o Instrument Cleaning Systems
                                        o Gynecology Instruments
- --------------------------------------------------------------------------------------
 RUMI(R)                                o Uterine Manipulator with Disposable Tip
- --------------------------------------------------------------------------------------
 Unimar, Inc.                           o Disposable Endometrial Biopsy Device
                                        o Disposable Uterine Manipulator
                                        o Disposable Cervical Pap Smear Device
                                        o Disposable Infertility Device
- --------------------------------------------------------------------------------------
 Marlow Surgical Technologies, Inc.     o Disposable Intrauterine Catheter
                                        o Laparoscopic Instrument with Disposable Tip
                                        o Disposable Balloon Cannula
                                        o Micro Laparoscopy Instruments
- --------------------------------------------------------------------------------------

</TABLE>


                                      S-34

<PAGE>

     Market Overview. Women's healthcare has become a central focus of United
States health policy. Obstetricians and gynecologists are playing an expanding
role in providing primary care to women. As a result, obstetric and
gynecological training programs are increasingly emphasizing primary care
practice designed to meet patients' needs from adolescence to senior years. It
is estimated that each year the approximately 35,000 practicing obstetricians
and gynecologists in the United States service approximately 60 million office
visits, assist in four and a half million births and perform over two million
surgical procedures, treating conditions including excessive menstrual
bleeding, cancer and its precursors, non-malignant fibroid tumors and
endometriosis (an inflammation of the lining of the uterus).

     Recent emphasis on female preventive care has resulted in expanded
coverage by managed care organizations, which now offer such commonly provided
screening services as PAP smears, annual gynecologic exams and mammography
screening to their members on a fully reimbursed basis. The Company believes
this trend will continue. In addition, both governmental and private
organizations are targeting new resources toward preventing and treating
diseases of the reproductive system. CooperSurgical anticipates expanding its
current position in the reproductive medicine market and is also considering
expansion of its product lines into the obstetrics, urinary incontinence and
tubal sterilization market segments.

     The gynecological products industry has traditionally been served by a
large number of companies. Most of these companies are quite small in size,
handle narrow product lines and lack the resources necessary for expansion or
acquisition. Conversely, large competitors in the healthcare industry, despite
greater financial resources, generally have not focused on the gynecological
products segment (other than on consumer products), because acquisitions in
this segment tend to be relatively small and would not produce the incremental
gains that such companies typically seek to achieve. As a result, the
gynecological products field remains fragmented, providing CooperSurgical with
the opportunity to continue to pursue its strategy of industry consolidation.
In addition, the Company believes that CooperSurgical will be able to
increasingly leverage its sales and marketing strengths to serve gynecologists
and achieve higher gross margins through manufacturing integration.

     Growth Strategy.  The Company believes that through acquisitions and
product development, CooperSurgical is successfully building a diverse
selection of gynecological products. By combining companies and product lines,
the Company believes it can capitalize on CooperSurgical's marketing,
manufacturing and distribution capabilities. The Company intends to continue to
grow CooperSurgical through: (i) continuing to develop and acquire additional
complementary innovative products and product lines; (ii) maximizing the
efficiency of its sales force to increase sales; (iii) capitalizing on
efficiencies and synergies by consolidating manufacturing and administrative
offices into CooperSurgical's operations in Shelton, Connecticut; and (iv)
developing and expanding an international sales and marketing presence to
capitalize on opportunities in selected developed countries. The Company
believes that there are a significant number of opportunities to acquire
additional product lines or companies in complementary lines of business and is
continuously exploring these opportunities.

     Products. CooperSurgical has increased its presence in the women's
healthcare market by developing and acquiring innovative diagnostic and
surgical products and systems for gynecology. In collaboration with its
Physician Advisory Board, CooperSurgical has designed products used to both
diagnose and treat numerous gynecological disorders. Approximately 60% of
CooperSurgical's sales during the first six months of fiscal 1997 are of
disposable or semi-disposable products, which typically result in a recurring
revenue stream. The following is a description of some of CooperSurgical's
products:

     Products for Office Practice.

     Colposcopy. Colposcopy is the standard procedure used to diagnose ailments
of the vaginal canal and cervix. Virtually all gynecologists and many primary
care physicians perform this procedure in their office. CooperSurgical offers a
full line of colposcopy systems in a variety of configurations.
CooperSurgical's overhead zoom colposcope systems currently account for the
majority of CooperSurgical's sales of colposcopy systems to gynecologists'
offices because they are easy to use and particularly well suited for use in
conjunction with the LEEP procedure.


                                      S-35

<PAGE>

     Loop Electrosurgical Excision Procedure ("LEEP"). The LEEP treatment
procedure can be used in connection with colposcopy to allow physicians to both
diagnose and treat cervical disease in their offices. The LEEP process is safer
for the patient than laser ablation, is easily learned by practitioners, and
reduces patient costs by enabling diagnosis and treatment to occur in the same
visit. For these reasons, LEEP has been recognized as a significant advancement
over alternative techniques for the treatment of dysplasia or pre-cancerous
cervical tissue. CooperSurgical's LEEP products, marketed since 1991, are
primarily used for the removal of cervical pre-cancerous tissue. The Company
believes that the LEEP procedure line is now viewed as the preferred method for
in-office treatment of pre-cancerous conditions of the cervix.

     CooperSurgical's LEEP System 1000(TM) branded products include an
electrosurgical generator, sterile single application LEEP electrodes, the
CooperSurgical(R) Smoke Evacuation System 6080, a single application LEEP
RediKit(R), a line of autoclavable coated LEEP surgical instruments, the Prima
Series(R), Cer-View(TM) lateral wall retractor, the Vu-Max(TM) specula for use
in the LEEP procedure and a series of educational video tapes.

     Hysteroscopy. Diagnostic hysteroscopy was one of the first minimally
invasive procedures enabling visualization of the uterine cavity to assess the
cause of various uterine ailments (such as abnormal bleeding). Operative
hysteroscopy allows the physician to obtain tissue samples and perform
therapeutic procedures such as endometrial ablation under direct visualization,
involving less trauma than a hysterectomy.

     Historically, both diagnostic and therapeutic uterine procedures were
performed in the hospital. However, with technology advancements, these
procedures can now be performed in more cost-efficient locations. Operative
hysteroscopy procedures are increasingly being performed in outpatient
facilities, while diagnostic procedures are increasingly being performed in
doctors' offices. Women's healthcare experts have generally endorsed this
shift as a more effective use of resources that results in lower procedure
costs and improved delivery of care. The Company believes that
CooperSurgical's diagnostic hysteroscopy systems, including the Hysteroscopy
Series 4000(TM) and accessories, afford gynecologists state-of-the-art
viewing and sampling capabilities including video recording and biopsy
instrumentation. The Company's ProTouch(R) Gynecologic Resectoscope was
designed specifically for operative hysteroscopy to perform a variety of
intrauterine surgical procedures.

     Gynecologic screening and diagnostic devices. CooperSurgical offers a
broad line of products for use in the office for diagnostic and surgical
gynecologic procedures. A number of these products feature unique patented
designs and/or incorporate proprietary manufacturing techniques.

     The Euro-Med Classic Series(TM) Biopsy Instruments are used by
gynecologists to obtain tissue suspected to be cancerous from the lower genital
tract. These precise and high quality instruments, which represent years of
developmental effort, are manufactured in Germany by a joint venture company in
which CooperSurgical owns the majority interest.

     The Pipelle(R) Endometrial Suction Curette used by physicians to obtain
biopsy samples from the intrauterine cavity has been established clinically
among gynecologists as the most reliable and consistent device of its type.
Pipelle(R) is marketed by CooperSurgical under a long term supply agreement
with its manufacturer.

     The Cervex-Brush(TM) Cervical Cell Sampler is a device used by the
physician to collect ecto- and endocervical cells for use in the PAP smear. The
Cervex-Brush(TM) uses a patented design that results in a highly effective
collection of cervical cells with reduced bleeding and patient discomfort.

     The FNA-21(TM) Fine Needle Aspiration device is used to obtain breast
tissue in the preliminary diagnosis of breast disease. Its unique patented
aspiration needle allows the physician to operate the device with only one
hand, making simultaneous localization and aspiration more achievable.

     Products for Operative Gynecologic Procedures.

     The Company believes that the current trend toward developing minimally
invasive procedures to treat complex gynecologic disorders will continue as
the health care system becomes more cost-sensitive and demand increases for
less traumatic treatment alternatives. CooperSurgical has pursued

                                      S-36

<PAGE>

the acquisition of both capital and disposable product lines to supplement its
current product offerings. Its range of products for the operative environment
has expanded to include the VerreScope(TM) system, a micro-laparoscopic
visualization system for use in either the hospital operating room or the
office surgical suite, the patented disposable Balloon Cannula access trocar
(which improves operative control and reduces patient trauma), the patented
Nu-Tip(R) instruments for laparoscopic surgery, the Kronner Manipujector(R) for
uterine manipulation, the J-Needle(TM) for closure of laparoscopic incisions,
and the ProTouch(R) Gynecologic Resectoscope.


     In 1995, CooperSurgical acquired the RUMI(R) uterine manipulator, a
patented system for controlling and positioning the uterus during surgery.
RUMI(R) product line extensions include the KOH Colpotomizer(TM), which
facilitates laparoscopic hysterectomy procedures. This system, which recently
received FDA clearance, was introduced in the first quarter of 1997. Compared
with competing products, these new CooperSurgical products offer gynecologists
substantially improved pelvic exposure, access and traction during laparoscopic
surgery and facilitate dye injection during fertility studies.


     Products for Reproductive Medicine.


     In April 1996, CooperSurgical entered the reproductive medicine market
through the acquisition of Unimar, a leading provider of specialized
disposable medical devices for gynecology. These devices include the Unimar
Aspirette(TM), which permits early aspiration of endocervical content, the
HUI(R)Mini- Flex, which facilitates radiograph examination of the uterus,
and the Uni-Sem(TM), which assists in artificial insemination.


     In April 1997, the Company acquired marketing and distribution rights to
the Wallace Women's Healthcare line of disposable products for reproductive
medicine in the United States as part of its acquisition of Marlow Surgical
Technologies, Inc. CooperSurgical expects to significantly augment its
reproductive medicine line with Wallace's proprietary devices to treat
infertility. These include the Wallace line of intrauterine catheters, which
are recognized by physicians specializing in treating infertility as resulting
in higher rates of pregnancy than those generated by comparable products and
which are used in a number of advanced reproductive techniques.


     Sales and Marketing.  CooperSurgical has a total of 55 sales
representatives working in combination with a telemarketing staff, a highly
recognized mail order catalog, and a network of international distributors, all
giving it widespread access to the market it serves. Unlike sales forces
marketing to multiple physician specialties, CooperSurgical's sales force
markets primarily to a single segment of the medical community. This allows its
personnel both to develop greater substantive knowledge in their relatively
narrow area of specialization and to concentrate on building personal
relationships with (and thereby more effectively exposing its products to) its
customers.


     CooperSurgical distributes approximately 45,000 direct mail catalogs three
to four times each year to physicians, surgery centers and hospital operating
room staffs. The mail order catalog enables physicians to conveniently obtain
more established product lines directly from CooperSurgical, allowing its sales
force to concentrate its efforts on promoting and demonstrating its newer, less
familiar products.


     Manufacturing. CooperSurgical operates a manufacturing and distribution
facility in Shelton, Connecticut, which is registered with the FDA and is
approved to manufacture, assemble and distribute medical devices.
CooperSurgical operates its facility in compliance with CGMPs. CooperSurgical's
facilities are subject to FDA inspections designed to assure operation under
controlled conditions and compliance with FDA regulations. In addition to
complying with the CGMPs standard, CooperSurgical is working to achieve ISO
9001 certification and CE Mark approval for its products. CE Mark approval
becomes mandatory for all products shipped into the European community in June
of 1998. CooperSurgical expects to obtain CE Mark approval by early 1998.


     In addition to products manufactured at the Shelton facility,
CooperSurgical obtains a number of products from outside manufacturers, and
such products meet quality control standards imposed by CooperSurgical.


                                      S-37

<PAGE>

     The Company believes that CooperSurgical's manufacturing capability
enables it to decrease the cost of producing acquired products. For example,
CooperSurgical has integrated the manufacturing of several products acquired
from Unimar in April 1996 into its own facilities, which has significantly
reduced the cost of manufacturing that product line. The Company believes
similar opportunities to decrease cost of goods exist among the products
acquired from Marlow.


Hospital Group Of America

     General. HGA provides a broad continuum of psychiatric care to patients
through its inpatient, outpatient, day, educational and residential treatment
programs. HGA owns and operates three psychiatric facilities: Hartgrove
Hospital in Chicago, Illinois (which currently has 119 licensed beds), Hampton
Hospital in Rancocas, New Jersey (which currently has 100 licensed beds) and
MeadowWood Hospital in New Castle, Delaware (which currently has 50 licensed
beds). HGA also owns and operates The Midwest Center for Youth and Families, a
50-bed residential treatment center for adolescents in Kouts, Indiana, which
was opened in April 1997 to support Hartgrove Hospital and surrounding
communities. To support its inpatient facilities, HGA also owns and operates
various satellite facilities, including 17 outpatient and day treatment
centers, and provides educational and other ancillary services.

     HGA's psychiatric hospitals provide intensive and structured treatment
predominantly for children, adolescents and geriatric patients (persons over 65
with behavioral disorders generally involving dementia) suffering from a
variety of mental illnesses and/or chemical dependencies. Services include
comprehensive psychiatric and chemical dependency evaluations, inpatient and
outpatient treatment and partial hospitalization. The Midwest Center's
objectives are to provide quality psychiatric care to patients who have been
unresponsive to outpatient treatment, partial hospitalization or in-home
treatment and to successfully treat those with a history of multiple
hospitalizations or other treatment failures, enabling them to return to their
families and communities.

     HGA's success in serving its selected markets may be measured by an
overall average occupancy rate at its hospitals of 72% for the first six months
of fiscal 1997, which the Company believes is above the industry average, and
by a 47% growth in the number of outpatient visits during this same period.

     Each of HGA's hospitals has attained the highest level of accreditation
offered by the Joint  Commission of Accreditation of Healthcare Organizations
("JCAHO"), a national organization that periodically undertakes a comprehensive
review of a facility's staff, programs, physical plant, policies and
procedures. Accreditation generally is required for patients to receive
insurance company reimbursement and for participation by the facility in
government sponsored programs. Each of HGA's inpatient, day program and
outpatient facilities has been accredited for a period of one to three years.
As soon as it is eligible for accreditation, the Midwest Center for Youth and
Families will pursue similar status.

     Market Overview. Recent data indicate that approximately 10% of the total
resources expended nationally on healthcare are spent on treatment of
psychiatric disorders. Specialty healthcare providers offering services
comparable to HGA's have been rapidly developing a broad range of treatment
alternatives to traditional methods of acute short term hospitalization. While
the overwhelming majority of treatment is still conducted through psychiatric
hospitals and the triage system, day treatment and outpatient programs are
expanding, growing from 10% of total entry admissions in 1992 to 28% in 1995.
HGA has similarly evolved, and it currently provides specialty treatment
through short-term acute inpatient, day treatment and outpatient programs,
predominantly providing service to children, adolescents and dual diagnosis
(psychiatric and substance abuse) and geriatric patients.


                                      S-38

<PAGE>

     Strategic Objectives. The Company believes that HGA is appropriately
positioned within each of its local and regional markets to provide accessible,
cost effective and comprehensive behavioral health services to both inpatients
and outpatients, as illustrated by the following data relating to its
psychiatric facilities and ancillary programs:




<TABLE>
<CAPTION>
                                                                          Six Months Ended                             
                                      Fiscal Year Ended October 31,           April 30,      
                                      -----------------------------      -------------------
                                      1994       1995       1996         1996       1997    
                                      --------   --------   -------      --------   --------
<S>                                   <C>        <C>        <C>          <C>        <C>     
Total inpatient days    .........     71,882     62,556     63,918       30,347     35,277  
Inpatient admissions    .........      4,787      4,782      5,353        2,474      3,095  
Average length of stay (in days)        15.0       12.9       11.9         12.5       11.3  
Total outpatient visits    ......     20,515     27,561     44,605       22,592     33,151  
</TABLE>
                                                                     

     As indicated above, patient admissions and outpatient visits have
increased since 1995, while average lengths of stay have decreased. In response
to market demand for an expanded continuum of care, HGA is further developing
both its outpatient and partial hospitalization programs by increasing the
number of its ambulatory programs, developing programs that emphasize a diverse
continuum of care services and entering into contracts to manage facilities
owned by third parties.

     HGA's objective is to continue to increase its revenue and operating
income, while meeting the specific demands of, and becoming the preferred
provider in, the selected markets in which it operates. HGA plans to achieve
this objective by:

   o Continuing to deliver premier short-term inpatient acute care primarily
     to children, adolescents and specialty geriatric clients at facilities HGA
     owns or manages;

   o Providing select services for longer term residential care for
     adolescents and adults;

   o Establishing additional day treatment and outpatient sites and programs
     to further develop a fully integrated continuum of behavioral health care
     services;

   o Retaining its position as a leading cost-efficient provider attracting
     managed care and other payor referrals; and

   o Entering into management contracts to provide behavioral health services
     to acute care hospitals.

     Facilities.  HGA's primary psychiatric care facilities are:

     Hartgrove Hospital. Hartgrove Hospital is licensed for 119 short-term
acute psychiatric beds. It has a fully integrated day treatment and
outpatient program in addition to its inpatient beds and primarily treats
children and adolescents. Hartgrove Hospital is a leading volume provider of
psychiatric services for children and adolescents in the State of Illinois
and is among the largest in the Chicago metropolitan area, providing service
to abused and traumatized and/or disadvantaged children and adolescents and
complex neuropsychiatric clients. It also provides multilingual family and
group therapy.

     The Company believes that Hartgrove's position in its market is primarily
attributable to: (i) its ability to provide extended psychosocial and
counseling services to neighborhood mental health agencies, schools, the
correction system and individual practitioners; (ii) its favorable cost
structure, which is particularly important to managed care organizations; and
(iii) its specially trained personnel able to competently treat the very acute
patient.

     The Midwest Center for Youth and Families opened in April 1997 to service
patients who require an extended sub-acute program and who have had
difficulties with short-term acute treatment or other ambulatory programs.
Located in Kouts, Indiana, the facility is close enough to the Hartgrove
service area that it can be viewed as an extension of the Hartgrove continuum.

     Hampton Hospital. Hampton Hospital is licensed for 100 short-term acute
psychiatric beds. It has ambulatory programs offering services to older adults,
the general adult population (including dual


                                      S-39

<PAGE>

diagnosis clients) and adolescents. Hampton is a regional leader in providing
psychiatric services to clients with both primary psychiatric disorders and
concomitant difficulties with substance abuse. As the only private psychiatric
hospital in Burlington and Camden Counties, New Jersey, its primary service
market, Hampton is also a regional leader in the treatment of patients with
geriatric disorders, including chronic problems.

     The Company believes that Hampton's position in its market is primarily
attributable to: its favorable price structure and working relationship with
managed care organizations; its wide range of psychosocial services to
geriatric patients in nursing homes, which are complemented by day programs and
inpatient care and supported by certified geropsychiatrists, licensed clinical
nurse practitioners and social workers; and its dual diagnosis service, which
offers full time psychiatrists certified in adult psychiatry as well as
addictionology, supported by certified drug and alcohol counselors.

     MeadowWood Hospital. MeadowWood Hospital is licensed for 50 short-term
acute psychiatric beds. Treatment at this facility is available for children,
adolescents, general adult and geriatric patients. MeadowWood has developed a
service delivery system which has successfully treated traumatized and abused
child and adolescent patients. It also provides, at a location contiguous to
the hospital, a day treatment program for children and adolescents.

     The Company believes that MeadowWood's success is attributable to: (i) its
high ratio of staff and psychiatrist to patients, which enables the facility to
properly diagnose and treat the acute population; (ii) its service capabilities
throughout the region, with treatment locations in southern and central
Delaware; and (iii) its full service geriatric care, supported by certified
geropsychiatrists and certified adjunct personnel.


Tax Benefits from Net Operating Losses

     At October 31, 1996, the Company had NOLs of approximately $234 million,
which the Company generally may use to offset future taxable income and thereby
reduce the Company's federal income taxes otherwise payable. The NOLs generally
will expire beginning in 2001 and continuing through 2010 if such NOLs are not
utilized by the Company, with approximately $200,000 scheduled to expire if not
utilized by the fiscal year ending October 31, 2000. See Note 7 of Notes to
Consolidated Financial Statements included in this Prospectus Supplement. If
the Company is able to utilize all of the NOLs, then it will be able to shelter
approximately $234 million in pre-tax income from future federal income taxes,
in which case the Company will be able to reduce its future federal income tax
liability by approximately $80 million (based on current federal corporate
income tax rates). There can be no assurance, however, that the Company will be
able to utilize all of its NOLs before they expire. Furthermore, section 382 of
the Code could limit the Company's future use of NOLs in the event of an
Ownership Change. The Company believes that the Offering will not result in an
Ownership Change. There can be no assurance, however, that future transactions
will not result in an Ownership Change and thereby limit the Company's future
use of its NOLs.

     The Company believes that any substantial cash savings provided by the
NOLs will provide it with a significant strategic advantage compared to
taxable competitors. The Company intends to deploy such cash savings to make
selective acquisitions and grow its businesses faster than it otherwise
could if it did not have the benefit of the NOLs.

Seasonality

     HGA's psychiatric facilities experience a decline in occupancy rates
during the summer months when school is not in session and during the year-end
holiday season. CooperVision's contact lens sales in the first fiscal quarter
are generally lower than subsequent quarters due to fewer patient visits during
the holiday season.

Legal Proceedings

     The Company is a defendant in a number of legal actions relating to its
past or present businesses in which plaintiffs are seeking damages. In the
opinion of the Company's management, after consultation with counsel, the
ultimate disposition of those actions will not materially affect the Company's
financial position or results of operations.


                                      S-40

<PAGE>

     In January 1994, the Company was found guilty on six counts of mail
fraud and one count of wire fraud based upon the conduct of a former
Co-Chairman relating to a "trading scheme" to "frontrun" high yield bond
purchases, but was acquitted of charges of conspiracy and aiding and
abetting violations of the Investment Advisers Act. The Company was also
named as a nominal defendant in several stockholder derivative actions filed
in the Court of Chancery of the State of Delaware, New Castle County in 1992
which have subsequently been consolidated or are subject to a motion to
consolidate under the caption In Re The Cooper Companies Shareholders
Derivative Action. The complaints in the derivative actions allege, among
other things, that certain directors of the Company and Gary A. Singer, as
Co-Chairman of the Board of Directors, caused or allowed the Company to be a
party to a "trading scheme" to "front- run" high yield bond purchases by the
Keystone Custodian Fund, Inc., a group of mutual funds. The complaints in
the derivative action request that the Court order the defendants (other
than the Company) to pay damages and expenses to the Company and that the
Court order certain of the defendants to disgorge their profits to the
Company.

     The stockholder plaintiffs in the derivative actions have filed motions
for summary judgment with respect to their claims against Gary Singer. There
can be no assurance that the Company will receive any monies as a result of the
prosecution of the derivative claims brought on its behalf. The Company has
advanced defense costs to certain of the former director defendants in the
derivative actions. See Note 11 of Notes to Consolidated Financial Statements
included in this Prospectus Supplement.


                                      S-41

<PAGE>

                                  MANAGEMENT


Executive Officers and Directors

     The following table sets forth information regarding the executive
officers and directors of the Company:




<TABLE>
<CAPTION>
Name                              Age     Position
- -------------------------------   -----   ---------------------------------------------------------------
<S>                               <C>     <C>
Allan E. Rubenstein, M.D.   .     52      Chairman of the Board and Director
A. Thomas Bender   ............   58      President, Chief Executive Officer, Director and President of
                                          CooperVision
Robert S. Weiss ...............   50      Executive Vice President, Treasurer, Chief Financial Officer
                                          and Director
Gregory A. Fryling    .........   42      Vice President, Business Development; President of
                                          CooperVision Pharmaceuticals, Inc.
Carol R. Kaufman   ............   48      Vice President of Legal Affairs, Secretary and Chief 
                                          Administrative Officer
Nicholas J. Pichotta  .........   53      President and Chief Executive Officer of CooperSurgical
Mark R. Russell    ............   48      President and Chief Executive Officer of HGA
Stephen C. Whiteford  .........   56      Vice President and Corporate Controller
Michael H. Kalkstein  .........   55      Director
Moses Marx   ..................   61      Director
Donald Press    ...............   64      Director
Steven Rosenberg   ............   48      Director
Stanley Zinberg, M.D. .........   62      Director
</TABLE>


     Dr. Rubenstein has served as the Chairman of the Board of Directors since
July 1994 and has been a Director of the Company since July 1992. He served as
Acting Chairman of the Board from April 1993 through June 1994. He is President
of MTC Imaging Services, Inc., a medical imaging company, founded by him in
1981, providing radiologic equipment to hospitals and physicians' offices. Dr.
Rubenstein is certified by the American Board of Psychiatry and Neurology and
by the American Society for Neuroimaging. He has been on the faculty of the
Department of Neurology at Mt. Sinai School of Medicine in New York City since
1976, and currently is Associate Professor and Director of the Mt. Sinai
Neurofibromatosis Research and Treatment Center. Dr. Rubenstein has authored
two books on neurofibromatosis and is Medical Director for the National
Neurofibromatosis Foundation.

     Mr. Bender was elected President and Chief Executive Officer of the
Company in May 1995. He has been a Director of the Company since March 1994. He
had been serving as the Chief Operating Officer of the Company since August
1994, and as Executive Vice President since March 1994. He served as Acting
Chief Operating Officer of the Company from March 1994 to August 1994, and as
Senior Vice President, Operations from October 1992 to February 1994. He
continues to serve as President of CooperVision, a position he has held since
June 1991. Between 1966 and June 1991, Mr. Bender held a variety of positions
at Allergan, Inc. (a manufacturer of eye and skin care products), including
Corporate Senior Vice President, and President and Chief Operating Officer of
Allergan's Herbert Laboratories, Dermatology Division.

     Mr. Weiss has served as the Executive Vice President of the Company since
October 1995. He has been the Treasurer and Chief Financial Officer of the
Company since 1989 and a Director of the Company since July 1996 and from
February 1992 to May 1994. From October 1992 until October 1995, he was also a
Senior Vice President; from March 1984 to October 1992 he served as a Vice
President; and from 1984 through July 1990 he served as Corporate Controller.
From January 1977 until March 1984 he held a variety of financial positions at
Cooper Laboratories, Inc., the former parent of the Company.

     Mr. Fryling has served as Vice President, Business Development since
January 1993 and has been serving as President of CooperVision Pharmaceuticals,
Inc. since May 1994. He has been an officer of various subsidiaries of the
Company, including Vice President and Controller of The Cooper


                                      S-42

<PAGE>

Healthcare Group from January 1990 through December 1992 and Vice President and
Controller of CooperVision from October 1988 through December 1989. He also
served as Vice President and Controller of CLS from September 1986 to September
1988.

     Ms. Kaufman has served as Vice President and Chief Administrative Officer
since October 1995 and was elected Vice President of Legal Affairs in March
1996. From January 1989 through September 1995, she served as Vice President,
Secretary, and Chief Administrative Officer of Cooper Development Company
("CDC") (a healthcare and consumer products company), a former affiliate of the
Company; from June 1985 through January 1989 she served as Vice President of
Cooper & Company, CDC's mergers and acquisitions subsidiary. From October 1971
until June 1985 she held a variety of offices at Cooper Laboratories, Inc., the
former parent of the Company.

     Mr. Pichotta has served as President and Chief Executive Officer of
CooperSurgical since September 1992. He served as Vice President of the Company
from December 1992 to May 1993 and as Vice President, Corporate
Development-Healthcare from December 1991 to December 1992 and as President of
CooperVision from November 1990 to June 1991. He has served in a number of
other positions since joining the Company in January 1989. From May to October
1988 he was Managing Director of Heraeus LaserSonics and from December 1986 to
May 1988 he served as President of the Surgical Laser Division of CLS.

     Mr. Russell has served as the President and Chief Executive Officer of HGA
since June 1993 and served as Executive Vice President and Chief Operating
Officer from January 1987 (through the time of its acquisition by the Company
in May 1992) until June 1993. From May 1986 to January 1987 he served as Senior
Vice President and Chief Operating Officer of Nu-Med Psychiatric, and from
February 1981 to May 1986, he served as Senior Vice President and Chief
Operating Officer of the Kennedy Health Care Foundation (the parent
organization for a diversified healthcare services company).

     Mr. Whiteford has served as Vice President and Corporate Controller since
July 1992. He served as Assistant Corporate Controller from March 1988 to July
1992, as International Controller from August 1986 to February 1988 and as Vice
President and Controller of CooperVision Ophthalmic Products from June 1985 to
August 1986. From July 1975 to June 1985 he held a variety of financial
positions at Cooper Laboratories, Inc., the former parent of the Company, and
its subsidiaries.

     Mr. Kalkstein has been a Director of the Company since April 1992. He has
been a partner in the law firm of Graham & James LLP since September 1994. He
was a partner in the law firm of Berliner Cohen from 1983 through August 1994.
He has been on the Board of Trustees of Opera San Jose since 1984 and served as
its President from 1992 to 1994. Mr. Kalkstein was a member of the Mayor's Task
Force on Arts 2020 in San Jose, California and a member of the Governor of
California's Special Force to implement the Agricultural Labor Relations Act.

     Mr. Marx has been a Director of the Company since May 1995. He has been a
general partner in United Equities Company (a securities brokerage firm) since
1954 and a general partner in United Equities Commodities Company (a
commodities brokerage firm) since 1972. He is also President of Momar Corp. (an
investment company). Mr. Marx is a director of CLS and of BioTechnology General
Corp. (a developer and manufacturer of biotechnology products). He previously
served on the Company's Board of Directors from September 1989 to September
1991.

     Mr. Press has been a Director of the Company since August 1993. He has
served as the Executive Vice President of Broadway Management Co., Inc. (an
owner and manager of commercial office buildings) since 1981. Mr. Press, an
attorney, is also a principal in Donald Press, P.C. (a law firm) located in New
York City. Mr. Press is a director of Components Specialties, Inc. (an
electronics company), Graham-Field Health Products, Inc. (a healthcare company)
and Branford Savings Bank.

     Mr. Rosenberg has been a Director of the Company since September 1993. He
has served as Acting Chairman of the Board of CLS since May 1995, and as Vice
President, Finance and Chief Financial Officer of CLS since 1990. From
September 1987 through April 1990, Mr. Rosenberg served as President and Chief
Executive Officer of Scomel Industries Inc. (an international marketing and
consulting group). Mr. Rosenberg is a director of CLS.


                                      S-43

<PAGE>

     Dr. Zinberg has been a Director of the Company since March 1997. He is an
obstetrician- gynecologist who has been Director of Practice Activities for the
American College of Obstetricians and Gynecologists since January 1994. From
1981 until 1993 he served as Chief, Obstetrics and Gynecology of New York
Downtown Hospital, where from 1990 through 1992 he also served as President of
the Medical Staff and a member of the Board of Trustees. He is certified by the
American Board of Obstetrics and Gynecology.


                                      S-44

<PAGE>

                                 UNDERWRITING

     The Underwriters named below, for whom Deutsche Morgan Grenfell Inc. and
PaineWebber Incorporated are acting as representatives (the "Representatives"),
have severally agreed, subject to the terms and conditions contained in the
Underwriting Agreement (the form of which is filed as an exhibit to the
Company's Registration Statement, of which this Prospectus Supplement is a
part), to purchase from the Company the respective number of shares of Common
Stock indicated below opposite their respective names. The Underwriters are
committed to purchase all of the shares, if they purchase any.



                                         Number of
Name                                     Shares
- --------------------------------------   ----------
Deutsche Morgan Grenfell Inc.   ......
PaineWebber Incorporated  ............   ----------
  Total    ...........................   2,000,000

     The Underwriting Agreement provides that the obligations of the several
Underwriters thereunder are subject to approval of certain legal matters by
counsel and to various other conditions.

     The Representatives have advised the Company that the Underwriters propose
initially to offer the Common Stock to the public on the terms set forth on the
cover page of this Prospectus Supplement. The Underwriters may allow to
selected dealers (who may include the Underwriters) a concession of not more
than $     per share. The selected dealers may allow a concession of not more
than $     to certain other dealers. After the Offering, the price, the
concession and the reallowance and other selling terms may be changed by the
Representatives. The Common Stock is offered subject to receipt and acceptance
by the Underwriters, and to certain other conditions, including the right to
reject orders in whole or in part. The Underwriters do not intend to sell any
of the shares of Common Stock offered hereby to accounts for which they
exercise discretionary authority.

     In connection with the Offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Common Stock. Specifically, the Underwriters may overallot the Offering,
creating a syndicate short position. Underwriters may bid for and purchase
shares of Common Stock in the open market to cover syndicate short positions.
In addition, the Underwriters may bid for and purchase shares of Common Stock
in the open market to stabilize the price of the Common Stock. These activities
may stabilize or maintain the market price of the Common Stock above
independent market levels. The Underwriters are not required to engage in these
activities and may end these activities at any time.

     The Company has granted an option to the Underwriters to purchase up to a
maximum of 300,000 additional shares of Common Stock to cover over-allotments,
if any, at the public offering price, less the underwriting discount set forth
on the cover page of this Prospectus Supplement. Such option may be exercised
at any time until 30 days after the date of the Underwriting Agreement. To the
extent the Underwriters exercise this option, each of the Underwriters will be
committed, subject to certain conditions, to purchase such additional shares in
approximately the same proportion as set forth in the above table. The
Underwriters may purchase such shares only to cover over-allotments made in
connection with the Offering.

     In addition, the Company, its directors and officers and CLS have agreed
not to, directly or indirectly, offer, sell or otherwise dispose of any shares
of Common Stock for a period of 90 days after the date of this Prospectus
Supplement, without the prior written consent of Deutsche Morgan Grenfell Inc.

     The Underwriting Agreement provides that the Company will indemnify the
several Underwriters against certain liabilities, including civil liabilities
under the Securities Act, or will contribute to payments the Underwriters may
be required to make in respect thereof.


                                      S-45

<PAGE>

                                 LEGAL MATTERS

     The validity of the Common Stock offered hereby will be passed upon for
the Company by Latham & Watkins, New York, New York. Certain matters relating
to the Offering will be passed upon for the Underwriters by Morgan, Lewis &
Bockius LLP. Certain members of Latham & Watkins and their families own
beneficial interests in less than 1% of the Company's Common Stock.


                                      S-46

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

                         INDEX TO FINANCIAL STATEMENTS






<TABLE>
<CAPTION>
                                                                                             Page
                                                                                             -----
<S>                                                                                          <C>
Consolidated Condensed Statements of Income for Three and Six Months Ended April 30,
 1997 and 1996 (unaudited) ...............................................................   F-2

Consolidated Condensed Balance Sheets as of April 30, 1997 and October 31, 1996
 (unaudited)   ...........................................................................   F-3

Consolidated Condensed Statements of Cash Flows for the Six Months Ended April 30, 1997
 and 1996 (unaudited)   ..................................................................   F-4

Notes to Consolidated Condensed Financial Statements (unaudited)  ........................   F-6

Independent Auditors' Report  ............................................................   F-10

Consolidated Statements of Operations for each of the Years Ended October 31, 1996, 1995
 and 1994   ..............................................................................   F-11

Consolidated Balance Sheets as of October 31, 1996 and 1995 ..............................   F-12

Consolidated Statements of Stockholders' Equity (Deficit) for each of the Years ended
 October 31, 1996, 1995 and 1994   .......................................................   F-13

Consolidated Statements of Cash Flows for each of the Years ended October 31, 1996, 1995
 and 1994   ..............................................................................   F-14

Notes to Consolidated Financial Statements   .............................................   F-16
</TABLE>


                                      F-1

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

                  Consolidated Condensed Statements of Income

                   (In thousands, except per share figures)
                                  (Unaudited)





<TABLE>
<CAPTION>
                                                        Three Months Ended       Six Months Ended
                                                             April 30,              April 30,
                                                       ---------------------   --------------------
                                                        1997        1996        1997       1996
                                                       ---------   ---------   ---------   --------
<S>                                                    <C>         <C>         <C>         <C>
Net sales of products    ...........................  $20,630      $15,784    $37,657      $29,338
Net service revenue   ..............................   13,033       10,991     24,382       19,686
                                                       -------     --------    -------     --------
  Net operating revenue  ...........................   33,663       26,775     62,039       49,024
                                                       -------     --------    -------     --------
Cost of products sold    ...........................    6,104        4,604     11,135        8,745
Cost of services provided   ........................   11,373        9,991     22,055       19,137
Selling, general and administrative expense   ......    9,094        7,585     17,040       14,344
Research and development expense  ..................      414          316        738          593
Amortization of intangibles    .....................      404          204        692          431
                                                       -------     --------    -------     --------
Income from operations   ...........................    6,274        4,075     10,379        5,774
                                                       -------     --------    -------     --------
Interest expense   .................................    1,255        1,268      2,484        2,562
Other income (expense), net    .....................      (77)         133        (57)         405
                                                       -------     --------    -------     --------
Income before income taxes  ........................    4,942        2,940      7,838        3,617
Provision for (benefit of) income taxes    .........     (431)         131       (845)         156
                                                       -------     --------    -------     --------
Net income   .......................................  $ 5,373      $ 2,809    $ 8,683      $ 3,461
                                                       =======     ========    =======     ========
Earnings per share    ..............................  $  0.44      $  0.24    $  0.72      $  0.30
                                                       =======     ========    =======     ========
Number of shares used to compute earnings per
 share    ..........................................   12,229       11,724     12,052       11,715
                                                       =======     ========    =======     ========
</TABLE>


                            See accompanying notes.

                                      F-2

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

                     Consolidated Condensed Balance Sheets

                                (In thousands)
                                  (Unaudited)





<TABLE>
<CAPTION>
                                                             April 30,     October 31,
                                                               1997          1996
                                                             -----------   ------------
<S>                                                          <C>           <C>
                             ASSETS
Current assets:
  Cash and cash equivalents    ...........................   $  1,538       $   6,837
  Trade receivables, net    ..............................     26,445          21,650
  Inventories   ..........................................     13,700          10,363
  Other current assets   .................................      4,195           3,645
                                                             ---------      ---------
     Total current assets   ..............................     45,878          42,495
                                                             ---------      ---------
Property, plant and equipment at cost   ..................     53,341          49,306
  Less, accumulated depreciation and amortization   ......     15,836          14,632
                                                             ---------      ---------
                                                               37,505          34,674
                                                             ---------      ---------
Goodwill and other intangibles, net  .....................     38,053          21,468
Other assets    ..........................................      7,746           4,272
                                                             ---------      ---------
                                                            $ 129,182       $ 102,909
                                                             =========      =========
          LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to related party    ........................   $  5,000       $      --
Other short-term debt    .................................      2,304             844
Trade accounts payable   .................................      7,369           4,560
Other current liabilities   ..............................     17,563          18,367
Accrued income taxes  ....................................      9,148           9,537
                                                             ---------      ---------
     Total current liabilities    ........................     41,384          33,308
                                                             ---------      ---------
Long-term debt  ..........................................     45,592          47,920
Other noncurrent liabilities   ...........................      4,205           6,351
                                                             ---------      ---------
     Total liabilities   .................................     91,181          87,579
                                                             ---------      ---------
Stockholders' equity:
Common stock, $.10 par value   ...........................      1,244           1,167
Additional paid-in capital  ..............................    198,264         184,300
Accumulated deficit   ....................................   (161,128)       (169,811)
Other  ...................................................       (379)           (326)
                                                             ---------      ---------
Total stockholders' equity  ..............................     38,001          15,330
                                                             ---------      ---------
                                                            $ 129,182       $ 102,909
                                                             =========      =========
</TABLE>


                            See accompanying notes.

                                      F-3

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

                Consolidated Condensed Statements of Cash Flows

                                (In thousands)
                                  (Unaudited)





<TABLE>
<CAPTION>
                                                                     Six Months Ended
                                                                        April 30,
                                                                  1997          1996
                                                                -----------   ------------
<S>                                                             <C>           <C>
Net cash provided (used) by operating activities    .........    $    295      $ (7,358)
                                                                 --------      --------
Cash flows from investing activities:   .....................
  Acquisitions  .............................................      (7,046)       (3,596)
  Purchase of property, plant and equipment   ...............      (4,103)         (743)
  Investment in escrow funds   ..............................      (2,898)           --
  Other   ...................................................        (365)          298
                                                                 --------      --------
Net cash used by investing activities   .....................     (14,412)       (4,041)
                                                                 --------      --------
Cash flows from financing activities:
  Proceeds from related party note   ........................       5,000            --
  Proceeds from industrial development note   ...............       3,000            --
  Proceeds from line of credit, net  ........................       1,332         2,458
  Proceeds from long-term debt    ...........................          --         1,320
  Payments of current installments of long-term debt   ......        (539)       (1,773)
  Other   ...................................................          25            81
                                                                 --------      --------
Net cash provided by financing activities  ..................       8,818         2,086
                                                                 --------      --------
Net decrease in cash and cash equivalents  ..................      (5,299)       (9,313)
Cash and cash equivalents -- beginning of period    .........       6,837        11,207
                                                                 --------      --------
Cash and cash equivalents -- end of period    ...............    $  1,538      $  1,894
                                                                 ========      ========
Cash paid for:
  Interest (net of amounts capitaized)  .....................    $  2,763      $  2,399
                                                                 ========      ========
  Income taxes  .............................................    $    374      $     63
                                                                 ========      ========
</TABLE>


                            See accompanying notes.

                                      F-4

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

          Consolidated Condensed Statements of Cash Flows, Concluded

                                (In thousands)
                                  (Unaudited)

Supplemental schedule of noncash investing and financing activities:




<TABLE>
<CAPTION>
                                                                1997         1996
                                                             ---------   -----------
<S>                                                          <C>         <C>
Acquisitions:      
Fair value of assets  ....................................  $18,483       $ 9,661
  Less:
  Cash acquired    .......................................      (45)         (404)
  Cash paid  .............................................   (7,046)       (3,596)
  Company stock issued   .................................   (4,662)           --
  Notes issued  ..........................................   (4,500)       (4,000)

                                                             -------      -------
Liabilities assumed and acquisition costs accrued   ......   $ 2,230      $ 1,661
                                                             =======      =======
</TABLE>


In April 1996, the Company purchased the net assets of Unimar, Inc. by paying
$3.6 million in cash and issuing $4 million in promissory notes. See Note 4 for
a discussion of fiscal 1997 acquisitions.













                            See accompanying notes.

                                      F-5

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

              Notes to Consolidated Condensed Financial Statements

                                  (Unaudited)


Note 1. General


     The Cooper Companies, Inc., and its subsidiaries (the "Company") develop,
manufacture and market healthcare products, including a range of hard and soft
daily, flexible and extended wear contact lenses and diagnostic and surgical
instruments and equipment. The Company also provides healthcare services
through the ownership of psychiatric facilities and by providing outpatient and
other ancillary services.

     During interim periods, the Company follows the accounting policies set
forth in its Form 10-K filed with the Securities and Exchange Commission.
Readers are encouraged to refer to the Company's Form 10-K and its Annual
Report to Stockholders for the fiscal year ended October 31, 1996 when
reviewing this Form 10-Q. Quarterly results reported herein are not necessarily
indicative of results to be expected for other quarters.

     In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments necessary to present
fairly the Company's consolidated financial position, results of its operations
and cash flows for those periods presented. Other than a reduction of $830,000
to the deferred tax asset valuation allowance recorded during the six months
ended April 30, 1997, based on Management's belief that the Company's future
results will continue to compare favorably with those of the prior year,
adjustments consist only of normal recurring items.

Note 2. Inventories

     Inventories are stated at the lower of cost, determined on a first in,
first out or average cost basis, or market.

     The components of inventories are as follows:



                           April 30,     October 31,
                             1997          1996
                           -----------   ------------
                                 (In thousands)
Raw materials  .........     $ 2,837       $ 2,318
Work-in-process   ......       1,148         1,028
Finished goods    ......       9,715         7,017
                             --------      --------
                             $13,700       $10,363
                             ========      ========

Note 3. Long-Term Debt

     Long-term debt consists of the following:




<TABLE>
<CAPTION>
                                                                      April 30,     October 31,
                                                                        1997          1996
                                                                      -----------   ------------
                                                                            (In thousands)
<S>                                                                   <C>           <C>
10% Senior Subordinated Secured Notes due 2003   ..................     $24,041       $24,285
10 5/8% Convertible Subordinated Reset Debentures due 2005   ......          --         9,220
Promissory notes -- Unimar  .......................................       4,155         4,000
Promissory note -- Wesley-Jessen Corporation ("W-J")   ............       4,500            --
County of Monroe Industrial Development Agency ("COMIDA")
 Bond  ............................................................       3,000            --
HGA term loan   ...................................................      10,342        10,675
Other  ............................................................         518           584
                                                                        --------      --------
                                                                         46,556        48,764
Less, current installments  .......................................         964           844
                                                                        --------      --------
                                                                        $45,592       $47,920
                                                                        ========      ========
</TABLE>


                                      F-6

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
 
      Notes to Consolidated Condensed Financial Statements -- (Continued)
 
                                  (Unaudited)
 
Note 3. Long-Term Debt  -- (Continued)
 
     The Company called for redemption on April 9, 1997 (the "Redemption Date")
all $9,290,000 principal amount of its 10 5/8% Convertible Subordinated Reset
Debentures due March 1, 2005 ("Debentures") at 100% of principal value, plus
unpaid interest through the Redemption Date. On the Redemption Date, holders of
47 Debentures received redemptions totaling $47,000 plus $527 of interest.


     Holders of $9,243,000 of Debentures converted, at the rate of $15 per
share, all of their Debentures into shares of the Company's common stock. A
total of 616,187 shares of the Company's common stock, plus $253 in cash in
lieu of fractional shares, were issued for the conversion. The holders who
converted forfeited the right to receive any interest on such Debentures after
March 1, 1997. No gain or loss was recorded by the Company.


W-J Promissory Note


     The W-J promissory note, due March 17, 2001, was issued in conjunction
with the acquisition of Natural Touch(R). (See Note 4.) Interest on the W-J
promissory note is payable semi-annually and accrues at a rate of 12% per
annum, of which 8% per annum is payable in cash and 4% per annum is payable in
kind.


COMIDA Bond


     The COMIDA bond is a $3 million Industrial Revenue Bond ("IRB") to finance
the cost of plant expansion, building improvements, and the purchase of
equipment related to CVI's Scottsville, New York, facility. Currently, interest
on the IRB is adjusted weekly. The interest rate in effect on June 5, 1997 was
3.85% per annum. Interest rates have ranged from 3.45% to 4.85% per annum since
the COMIDA bond was issued. Principal repayments are made quarterly, beginning
July 1997 and ending October 2012. At April 30, 1997, unutilized proceeds of
$2.9 million from the IRB, which must be used for the aforementioned project,
are carried in other assets. The IRB is secured by substantially all of CVI's
rights to the facility.


     A letter of credit was issued by KeyBank National Association ("KeyBank")
to support certain obligations under the COMIDA bond. CVI is obligated to repay
KeyBank for draws under and expenses incurred in connection with the letter of
credit, pursuant to the terms of a Reimbursement Agreement, which is guaranteed
by the Company. The Reimbursement Agreement contains customary provisions and
covenants, including the maintenance of certain ratios and levels of net worth.
CVI and COMIDA have granted a mortgage lien on the building and real estate
located in Scottsville and a first lien security interest on the equipment
purchased under the bond proceeds to KeyBank to secure payment under the
Reimbursement Agreement.


Note 4. Acquisitions


Natural Touch(R) Acquisition


     In March 1997, the Company acquired the United States rights to Natural
Touch(R), a line of opaque, cosmetic contact lenses, from W-J for $7.5 million
($3 million in cash and a $4.5 million promissory note) plus an ongoing royalty
ranging from 3% to 8% per annum on sales of Natural Touch(R) products other
than those supplied by W-J. The Company recorded intangible assets of $8
million for the patents, trademarks and distribution rights, which will be
amortized over 7 to 15 years (the life of the patents or trademark).


                                      F-7

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
 
      Notes to Consolidated Condensed Financial Statements -- (Continued)
 
                                  (Unaudited)
 
Note 4. Acquisitions  -- (Continued)
 
     Presently, a subsidiary of W-J manufactures and supplies the Company with
the products for the Natural Touch(R) line. A divestiture order issued by the
Federal Trade Commission (the "FTC") in connection with the acquisition of the
Natural Touch(R) line requires that the Company either develop on its own the
manufacturing capabilities to produce the Natural Touch(R) line or find a
suitable third-party manufacturer to produce it. The FTC may require the
Company to divest itself of the Natural Touch(R) line if the Company has not
either developed manufacturing capabilities that meet United States Food and
Drug Administration ("FDA") approval or found a suitable third-party
manufacturer meeting FDA approval within 18 months from the closing date (which
deadline may be extended up to 42 months by the FTC).


Marlow Acquisition


     In April 1997, the Company acquired Marlow Surgical Technologies, Inc.,
("Marlow"), a gynecology products company, for approximately $3.2 million in
cash, liquidation of $900,000 of Marlow debt and 144,800 shares of the
Company's common stock valued at $2.9 million at closing. As part of the
acquisition, the Company agreed to issue an additional $500,000 of its common
stock (valued as of the closing) on the third anniversary of the closing,
subject to reduction by the amount of any obligations of the seller to
indemnify the Company in connection with the acquisition. Also, the Company has
guaranteed that the total value of the shares of its common stock issued or to
be issued in the acquisition (valued at $3.4 million in total at closing) will
appreciate by $1.3 million by the third anniversary of the acquisition. This
guarantee has been included in the purchase price, with a corresponding credit
to additional paid in capital. The acquisition has been accounted for as a
purchase. Initially, $8.5 million has been ascribed to goodwill, which is being
amortized over 20 years.


Note 5. Cooper Life Sciences

     In April 1997, the Company issued two term notes to Cooper Life Sciences,
Inc. ("CLS") totaling $5.0 million and bearing interest at the prime rate per
annum. The CLS term notes are due January 1998. CLS owns approximately
1,447,533 shares (or approximately 12%) of the Company's common stock. Two
members of the Company's Board of Directors were designated by CLS and are also
directors and/or officers of CLS. In addition, a third member owns the majority
of the capital stock of CLS.


Note 6. Impact of Statements of Financial Accounting Standards Issued But Not
   Adopted


     In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
("SFAS 128"), which will be effective for financial statements for periods
ending after December 15, 1997, including interim periods, and established
standards for computing and presenting earnings per share. Earlier application
is not permitted. Beginning with its unaudited consolidated condensed financial
statements for the first quarter of fiscal 1998, the Company will make the
required disclosures of basic and diluted earnings per share and provide a
reconciliation of the numerator and denominator of its basic and diluted
earnings per share computations. All prior period earnings per share data will
be restated by the Company upon adoption of SFAS 128.


     The Company expects that basic earnings per share figures to be reported
under SFAS 128 will be somewhat higher than the figures historically reported,
due to the removal of common stock equivalents from the calculation of average
shares and that diluted earnings per share will not differ materially from
historically reported figures.


                                      F-8

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
 
      Notes to Consolidated Condensed Financial Statements -- (Continued)
 
                                  (Unaudited)
 
Note 7. Supplementary Earnings Per Share Information

     On June 30, 1997 the Company filed a prospectus supplement with the
Securities and Exchange Commission, for the proposed sale of 2,000,000 shares
of the Company's common stock at an assumed offering price of $22 9/16 per
share. The assumed proceeds from the proposed offering, net of underwriters
discount and transaction costs of $2.8 million will be used to repay
outstanding indebtedness.

     The following presents supplementary earnings per share information
assuming the proposed offering and the repayment of $34.7 million and $36.3
million of debt respectively on the first day of fiscal 1996 and fiscal 1997:





<TABLE>
<CAPTION>
                                                   Year Ended      Six Months Ended
                                                   October 31,       April 30,
                                                   -------------   -----------------
                                                      1996              1997
                                                   -------------   -----------------
<S>                                                <C>             <C>
Earnings per share:
From continuing operations .....................      $ 1.51            $  .74
Extraordinary item (1)  ........................         .14               .10
                                                      -------           -------
Earnings per share   ...........................      $ 1.65            $  .84
                                                      =======           =======
Number of shares used to compute earnings per
 share (in thousands):
Historical  ....................................      11,761            12,052
Shares, the proceeds of which are assumed to be
 used to repay outstanding indebtedness   ......       1,640             1,712
                                                      -------           -------
Total ..........................................      13,401            13,764
                                                      =======           =======
</TABLE>


- ------------

(1) Represents the per share amount related to a net extraordinary gain, net of
    taxes, of $1.4 million for the six months ended April 30, 1997 and $1.8
    million for the year ended October 31, 1996 related to the assumed
    extinguishment of debt, as if such extinguishment had occurred on the
    first day of the periods presented.


                                      F-9

<PAGE>


                         Independent Auditors' Report

The Board of Directors and Stockholders
The Cooper Companies, Inc.:

     We have audited the accompanying consolidated balance sheets of The Cooper
Companies, Inc. and subsidiaries as of October 31, 1996 and 1995 and the
related consolidated statements of operations, stockholders' equity (deficit)
and cash flows for each of the years in the three-year period ended October 31,
1996. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of The Cooper
Companies, Inc. and subsidiaries as of October 31, 1996 and 1995 and the
results of their operations and their cash flows for each of the years in the
three-year period ended October 31, 1996, in conformity with generally accepted
accounting principles.



                                          /s/ KPMG Peat Marwick LLP
                                          -------------------------------------
                                           



San Francisco, California
December 9, 1996


                                      F-10

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

                     Consolidated Statements of Operations





<TABLE>
<CAPTION>
                                                                      Years Ended October 31,
                                                              ---------------------------------------
                                                               1996         1995           1994
                                                              ----------   ----------   -------------
                                                                 (In thousands, except per share
                                                                              figures)
<S>                                                           <C>          <C>          <C>
Net sales of products  ....................................  $ 66,118     $ 55,296       $  51,034
Net service revenue    ....................................    43,013       41,794          44,611
                                                              --------     ---------     ---------
Net operating revenue  ....................................   109,131       97,090          95,645
                                                              --------     ---------     ---------
Cost of products sold  ....................................    19,911       17,549          17,906
Cost of services provided    ..............................    40,235       40,454          41,039
Research and development expense   ........................     1,176        2,914           4,407
Selling, general and administrative expense    ............    29,717       25,826          31,027
Amortization of intangibles  ..............................     1,249          859             843
Costs associated with restructuring operations    .........        --        1,480              --
                                                              --------     ---------     ---------
Income from operations    .................................    16,843        8,008             423
                                                              --------     ---------     ---------
Provision for (benefit of) settlements of disputes   ......      (223)       3,532           4,950
Investment income (loss), net   ...........................       281          444            (153)
Other income, net   .......................................        80           51             256
Interest expense    .......................................     5,312        4,741           4,533
Debt restructuring costs  .................................        --           --             340
                                                              --------     ---------     ---------
Income (loss) before income taxes  ........................    12,115          230          (9,297)
Provision for (benefit of) income taxes  ..................    (4,488)         115          (4,600)
                                                              --------     ---------     ---------
Net income (loss)   .......................................    16,603          115          (4,697)
Less preferred stock dividends  ...........................        --           --              89
                                                              --------     ---------     ---------
Net income (loss) applicable to common stock   ............  $ 16,603          115       $  (4,786)
                                                              ========     =========     =========
Earnings (loss) per share    ..............................  $   1.41          .01       $    (.47)
                                                              ========     =========     =========
Average number of common shares used to compute
 earnings per share    ....................................    11,761       11,576          10,193
                                                              ========     =========     =========
</TABLE>


          See accompanying notes to consolidated financial statements.

                                      F-11

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

                          Consolidated Balance Sheets



<TABLE>
<CAPTION>
                                                                            October 31,
                                                                    ----------------------------
                                                                       1996           1995
                                                                    -------------   ------------
                                                                           (In thousands)
<S>                                                                 <C>             <C>
Assets
Current assets:
  Cash and cash equivalents  ....................................    $   6,837       $  11,207
  Trade and patient accounts receivable, less allowances of
    $1,969,000 in 1996, $2,241,000 in 1995  .....................       21,650          17,717
  Inventories ...................................................       10,363           9,570
  Deferred tax asset   ..........................................          953              --
  Prepaid expenses and other current assets    ..................        2,692           2,734
                                                                     ---------       ---------
     Total current assets    ....................................       42,495          41,228
                                                                     ---------       ---------
Property, plant and equipment at cost    ........................       49,306          46,597
Less accumulated depreciation and amortization    ...............       14,632          12,535
                                                                     ---------       ---------
                                                                        34,674          34,062
                                                                     ---------       ---------
Goodwill and other intangibles, net   ...........................       21,468          14,933
Deferred tax asset  .............................................        3,195              --
Other assets  ...................................................        1,077           1,769
                                                                     ---------       ---------
                                                                     $ 102,909       $  91,992
                                                                     =========       =========
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
  Current installments of long-term debt    .....................    $     844       $   2,288
  Borrowings under line of credit  ..............................           --           1,025
  Accounts payable  .............................................        9,206           5,730
  Employee compensation, benefits and severance   ...............        6,418           6,978
  Other accrued liabilities  ....................................        7,303          13,596
  Accrued income taxes    .......................................        9,537           9,996
                                                                     ---------       ---------
     Total current liabilities  .................................       33,308          39,613
                                                                     ---------       ---------
Long-term debt   ................................................       47,920          43,490
Other noncurrent liabilities    .................................        6,351          10,638
                                                                     ---------       ---------
     Total liabilities    .......................................       87,579          93,741
                                                                     ---------       ---------
Commitments and Contingencies (See Note 11)
Stockholders' equity (deficit):
  Preferred stock, $.10 par value, shares authorized: 1,000,000;
    zero shares issued or outstanding    ........................           --              --
  Common stock, $.10 par value, shares authorized: 20,000,000;
    issued and outstanding: 11,670,898 and 11,576,482 at October
    31, 1996 and 1995, respectively   ...........................        1,167           1,158
  Additional paid-in capital    .................................      184,300         183,840
  Translation adjustments    ....................................         (326)           (333)
  Accumulated deficit  ..........................................     (169,811)       (186,414)
                                                                     ---------       ---------
     Total stockholders' equity (deficit)   .....................       15,330          (1,749)
                                                                     ---------       ---------
                                                                     $ 102,909       $  91,992
                                                                     =========       =========
</TABLE>


          See accompanying notes to consolidated financial statements.

                                      F-12

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

           Consolidated Statements of Stockholders' Equity (Deficit)

                  Years Ended October 31, 1996, 1995 and 1994




<TABLE>
<CAPTION>
                                         Series B                           Additional
                                         Preferred            Common         Paid-In
                                           Stock              Stock          Capital
                                     -----------------  ------------------  ------------
                                                Par                Par
                                     Shares    Value    Shares    Value
                                     --------  -------  --------  --------
                                                       (In thousands)
<S>                                  <C>       <C>      <C>       <C>       <C>
Balance October 31, 1993  .........     345      $--      10,043    $1,004   $181,819
                                      -----      ----    -------   -------   --------
 Net loss  ........................      --       --          --        --         --
 Aggregate translation 
  adjustment ......................      --       --          --        --         --
 Restricted stock amortization
  and share issuance, forfeiture
  and lifting of restrictions .....      --       --          99        10        436
 Exercise of stock options   ......      --       --           1        --          2
 Dividend requirements on
  Series - B Preferred Stock ......      --       --          --        --         --
 Conversion of Series B Preferred
  to Common .......................    (345)      --       1,150       115       (115)
                                      -----      ----    -------   -------   --------
Balance October 31, 1994  .........      --      $--      11,293    $1,129   $182,142
                                      -----      ----    -------   -------   --------
 Net income   .....................      --       --          --        --         --
 Aggregate translation 
  adjustment ......................      --       --          --        --         --
 Restricted stock amortization
  and share issuance, forfeiture
  and lifting of restrictions .....      --       --         176        18      1,526
 Exercise of stock options   ......      --       --           5         1          9
 Exercise of warrants and warrant
  valuation .......................      --       --         102        10        163
                                      -----      ----    -------   -------   --------
Balance October 31, 1995  .........      --      $--      11,576    $1,158   $183,840
                                      -----      ----    -------   -------   --------
 Net income   .....................      --       --          --        --         --
 Aggregate translation 
  adjustment   ....................      --       --          --        --         --
 Restricted stock amortization
  and share issuance, forfeiture 
  and lifting of restrictions            --       --           7         1         46
 Exercise of stock options   ......      --       --          22         2        117
 Exercise of warrants and 
  warrant valuation ...............      --       --          66         6        297
                                      -----      ----    -------   -------   --------
Balance October 31, 1996  .........      --      $--      11,671    $1,167   $184,300
                                      =====      ====    =======   =======   ========
</TABLE>



<PAGE>



<TABLE>
<CAPTION>
                                                                   Unamortized
                                                                    Restricted
                                     Translation    Accumulated    Stock Award
                                     Adjustments      Deficit      Compensation      Total
                                     -------------  -------------  --------------  -----------
<S>                                  <C>            <C>            <C>             <C>
Balance October 31, 1993  .........     $ (233)      $ (181,743)       $(405)       $    452
                                        ------       ----------       ------        --------
 Net loss  ........................         --           (4,697)          --          (4,697)
 Aggregate translation 
  adjustment ......................       (173)              --           --            (173)
 Restricted stock amortization
  and share issuance, forfeiture
  and lifting of restrictions .....         --               --          405             851
 Exercise of stock options   ......         --               --           --               2
 Dividend requirements on
  Series - B Preferred Stock ......         --              (89)          --             (89)
 Conversion of Series B Preferred
  to Common .......................         --               --           --              --
                                        ------       ----------       ------        --------
Balance October 31, 1994  .........     $ (396)      $ (186,529)      $   --        $ (3,654)
                                        ------       ----------       ------        --------
 Net income   .....................         --              115           --             115
 Aggregate translation 
  adjustment ......................         63               --           --              63
 Restricted stock amortization
  and share issuance, forfeiture
  and lifting of restrictions .....         --               --           --           1,544
 Exercise of stock options   ......         --               --           --              10
 Exercise of warrants and warrant
  valuation .......................         --               --           --             173
                                        ------       ----------       ------        --------
Balance October 31, 1995  .........     $ (333)      $ (186,414)      $   --        $ (1,749)
                                        ------       ----------       ------        --------
 Net income   .....................         --           16,603           --          16,603
 Aggregate translation 
  adjustment ......................          7               --           --               7
 Restricted stock amortization
  and share issuance, forfeiture
  and lifting of restrictions .....         --               --           --              47
 Exercise of stock options   ......         --               --           --             119
 Exercise of warrants and warrant
  valuation .......................         --               --           --             303
                                        ------       ----------       ------        --------
Balance October 31, 1996  .........     $ (326)      $ (169,811)      $   --        $ 15,330
                                        ======       ==========       ======        ========
</TABLE>


          See accompanying notes to consolidated financial statements.

                                      F-13

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

                     Consolidated Statements of Cash Flows





<TABLE>
<CAPTION>
                                                                   Years Ended October 31,
                                                            --------------------------------------
                                                              1996           1995         1994
                                                            ------------   -----------   ---------
                                                                        (In thousands)
<S>                                                         <C>            <C>           <C>
Cash flows from operating activities:
  Net income (loss)  ....................................    $ 16,603       $    115    $(4,786)
Adjustments to reconcile net income (loss) to net cash
 provided (used) by operating activities:
  Deferred income taxes    ..............................      (4,148)            --         --
  Depreciation expense  .................................       2,629          2,704      2,870
  Provision for doubtful accounts   .....................       1,849          2,300      2,431
  Amortization expenses:
     Intangible assets  .................................       1,249            992        975
     Debt discount   ....................................        (526)          (443)      (499)
  Stock compensation expense  ...........................          46             --        853
  Net (gain) loss from:
     Sales of assets and businesses    ..................          --             --       (214)
     Investments  .......................................          --             --        530
     Debt restructuring costs    ........................          --             --        340
Change in operating assets and liabilities excluding
  effects from acquisitions and sales of assets and
  businesses:
  Receivables  ..........................................      (4,998)        (1,918)    (5,373)
  Inventories  ..........................................        (445)         2,126      3,291
  Other assets    .......................................         266            275        405
  Accounts payable   ....................................         166         (1,050)     2,311
  Accrued liabilities   .................................      (4,488)        (2,000)      (925)
  Income taxes payable  .................................        (459)          (109)    (4,732)
  Other long-term liabilities    ........................      (4,287)           429        524
                                                             --------       --------     --------
Net cash provided (used) by operating activities   ......       3,457          3,421     (1,999)
                                                             --------       --------     --------
Cash flows from investing activities:
  Sales of assets and businesses ........................         532            173      2,720
  Cash received from Progressions for purchase
    price adjustment    .................................         224            421         --
  Purchases of assets and businesses   ..................      (4,080)          (821)        --
  Purchases of property, plant and equipment    .........      (3,182)        (2,185)      (938)
  Sales of temporary investments    .....................          --             --      7,302
                                                             --------       --------     --------
Net cash provided (used) by investing activities   ......    $ (6,506)      $ (2,412)   $ 9,084
                                                             --------       --------     --------
</TABLE>


          See accompanying notes to consolidated financial statements.

                                      F-14

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

                Consolidated Statements of Cash Flows-Concluded





<TABLE>
<CAPTION>
                                                                  Years Ended October 31,
                                                          ----------------------------------------
                                                            1996          1995          1994
                                                          -----------   -----------   ------------
                                                                       (In thousands)
<S>                                                       <C>           <C>           <C>
Cash flows from financing activities:
  Payments associated with the Exchange Offer
    and Consent Solicitation including debt 
    restructuring costs ...............................    $    --       $    --       $ (5,416)
  Proceeds from (repayment of) line of credit, net   .      (1,025)        1,025             --
  Proceeds from long-term note    .....................      1,320            --             --
  Net payments of notes payable and current long-
    term debt   .......................................     (1,808)       (1,270)        (1,462)
  Proceeds from exercise of warrants and options ......        192           123             --
                                                           -------       -------       --------
Net cash used by financing activities   ...............     (1,321)         (122)        (6,878)
                                                           -------       -------       --------
Net increase (decrease) in cash and cash equivalents        (4,370)          887            207
Cash and cash equivalents at beginning of year   ......     11,207        10,320         10,113
                                                           -------       -------       --------
Cash and cash equivalents at end of year   ............    $ 6,837       $11,207       $ 10,320
                                                           =======       =======       ========
Supplemental disclosures of cash flow information:
Cash paid for:
  Interest (net of amounts capitalized)    ............    $ 4,880       $ 4,755       $  4,791
                                                           =======       =======       ========
  Dividends on preferred stock    .....................    $    --       $    --       $     89
                                                           =======       =======       ========
  Income taxes  .......................................    $   119       $   224       $    132
                                                           =======       =======       ========
</TABLE>


Supplemental disclosure of noncash investing and financing activities:

     In April 1996, the Company purchased certain assets and assumed certain
liabilities of Unimar, Inc., by paying $3.9 million in cash and issuing $4
million of notes. (See Note 2.)


Acquisition of Unimar, Inc.
Fair value of assets acquired   ......    $ 9,661
Less cash acquired  ..................       (404)
Less cash paid   .....................     (3,880)
                                          -------
Liabilities assumed, notes issued
and acquisition costs accrued   ......    $ 5,377
                                          =======

     In January 1994, the Company completed an exchange offer and consent
solicitation by issuing $22,000,000 of 10% Senior Subordinated Secured Notes
due 2003 and paid approximately $4,350,000 in cash (exclusive of transaction
costs) in exchange for approximately $30,000,000 of 10 5/8% Convertible
Subordinated Reset Debentures due 2005. (See Note 8.)

          See accompanying notes to consolidated financial statements.

                                      F-15

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note 1. Summary of Significant Accounting Policies


General


     The Cooper Companies, Inc., (together with its subsidiaries, the
"Company") develops, manufactures and markets healthcare products, including a
range of hard and soft daily, flexible and extended wear contact lenses, and
diagnostic and surgical instruments. The Company also provides healthcare
services through the ownership of psychiatric facilities, and through May 1995,
the management of three other such facilities. Intercompany transactions and
accounts are eliminated in consolidation.


Foreign Currency Translation

     Assets and liabilities of the Company's operations located outside the
United States (primarily Canada) are translated at prevailing year-end rates of
exchange. Related income and expense accounts are translated at weighted
average rates for each year. Gains and losses resulting from the translation of
financial statements in foreign currencies into U. S. dollars are recorded in
the equity section of the consolidated balance sheets. Gains and losses
resulting from the impact of changes in exchange rates on transactions
denominated in foreign currencies are included in the determination of net
income or loss for each period. Foreign exchange gains (losses) included in the
Company's consolidated statement of operations for each of the years ended
October 31, 1996, 1995 and 1994 were ($13,000), ($130,000) and $53,000,
respectively.


Estimates in the Preparation of Financial Statements

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during each of the
reporting periods. Actual results could differ from those estimates.


Net Service Revenue

     Net service revenue consists primarily of net patient revenue, which is
based on the Hospital Group of America, Inc. ("HGA") hospitals' established
billing rates less allowances and discounts for contractual programs. Payments
under these programs are based on either predetermined rates or the cost of
services. Settlements for retrospectively determined rates are estimated in the
period the related services are rendered and are adjusted in future periods as
final settlements are determined. Management believes that adequate provision
has been made for adjustments that may result from the final determination of
amounts earned under these programs. In 1996 and 1995, the Company received and
recognized revenue of approximately $2,000,000 and $2,400,000, respectively,
associated with prior year cost report settlements. Approximately 53%, 50% and
39%, respectively, of 1996, 1995 and 1994 net service revenue is from
participation by hospitals in Medicare and Medicaid programs.

     The Company provides care to indigent patients who meet certain criteria
under its charity care policy without charge or at amounts less than its
established rates. Because the Company does not pursue collection of amounts
determined to qualify as charity care, they are not reported as revenue. The
Company maintains records to identify and monitor the level of charity care it
provides. These records include the amount of charges foregone for services and
supplies furnished under its charity care policy. Charges at the Company's
established rates foregone for charity care provided by the Company amounted to
$2,275,000, $2,142,000 and $2,498,000 for fiscal 1996, 1995 and 1994,
respectively. Hampton Hospital is required by its Certificate of Need to incur
not less than 10% of total patient days as free care.


                                      F-16

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
 
           Notes to Consolidated Financial Statements  -- (Continued)
 
Note 1. Summary of Significant Accounting Policies  -- (Continued)
 
     With respect to net service revenue, receivables from government programs
represent the only concentrated group of potential credit risk to the Company.
Management does not believe that there are any credit risks associated with
these governmental agencies. Negotiated and private receivables consist of
receivables from various payors, including individuals involved in diverse
activities, subject to differing economic conditions, and do not represent any
concentrated credit risks to the Company. Furthermore, management continually
monitors and, where indicated, adjusts the allowances associated with these
receivables.

Net Sales of Products

     Net sales of products consist of sales generated by the Company's
CooperVision ("CVI") and CooperSurgical ("CSI") businesses. The Company
recognizes revenue net of appropriate provisions for returns when risk of
ownership has transferred to the buyer.

     With respect to net sales of products, management believes trade
receivables do not include any concentrated groups of credit risk.

Cash and Cash Equivalents

     Cash and cash equivalents include commercial paper and other short-term
income producing securities with a maturity date at purchase of three months or
less. These investments are readily convertible to cash and are carried at cost
which approximates market.

Inventories

     Inventories are stated at the lower of cost, determined on a first-in,
first-out or average cost basis, or market.

     The components of inventories are as follows:



                               October 31,
                           --------------------
                            1996       1995
                              (In thousands)
                           --------------------
Raw materials  .........   $ 2,318     $ 2,212
Work-in-process   ......     1,028       1,114
Finished goods .........     7,017       6,244
                           --------    --------
                           $10,363     $ 9,570
                           ========    ========

Property, Plant and Equipment at Cost

                                         October 31,
                                     --------------------
                                      1996       1995
                                        (In thousands)
                                     --------------------
Land and improvements    .........   $ 1,360     $ 1,360
Buildings and improvements  ......    35,191      34,005
Machinery and equipment  .........    12,755      11,232
                                     --------    --------
                                     $49,306     $46,597
                                     ========    ========

     Depreciation is computed on the straight-line method in amounts sufficient
to write-off depreciable assets over their estimated useful lives. Leasehold
improvements are amortized over the shorter of their estimated useful lives or
the period of the related lease. Building depreciation is based on estimated
useful lives of 35 to 40 years, and all machinery and equipment are depreciated
over 5 to 10 years.


                                      F-17

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

           Notes to Consolidated Financial Statements  -- (Continued)
 
Note 1. Summary of Significant Accounting Policies  -- (Continued)
 
     Expenditures for maintenance and repairs are expensed; major replacements,
renewals and betterments are capitalized. The cost and accumulated depreciation
of depreciable assets retired or otherwise disposed of are eliminated from the
asset and accumulated depreciation accounts, and any gains or losses are
reflected in operations for the period.

Amortization of Intangibles

     Amortization is provided for on all intangible assets (primarily goodwill,
which represents the excess of purchase price over fair value of net assets
acquired) on a straight-line basis over periods of up to 30 years. Accumulated
amortization at October 31, 1996 and 1995 was $4,447,000 and $3,909,000,
respectively. The Company assesses the recoverability of goodwill and other
long-lived assets by determining whether the amortization of the related
balance over its remaining life can be recovered through reasonably expected
undiscounted future cash flows. Management evaluates the amortization periods
of intangibles to determine whether later events and circumstances warrant
revised estimates of useful lives.


Earnings (Loss) Per Share


     Earnings (loss) per share is determined by using the weighted average
number of common shares and common share equivalents (stock warrants and stock
options) outstanding during each year (except where antidilutive). Fully
diluted earnings (loss) per share is not materially different from primary
earnings (loss) per share.


Note 2.  Acquisitions

     In April 1996, the Company acquired the stock of Unimar, Inc., a leading
provider of specialized disposable medical devices for gynecology, for
$8,000,000 in cash and notes. Sales of Unimar products of $3,600,000 were
included in the Company's results for fiscal 1996. Goodwill from the purchase
has been recorded in the amount of $7,800,000, which is being amortized over 20
years. As part of the acquisition, the Company granted a warrant to purchase
83,333 shares of the Company's common stock for $11.375 per share. The warrant
is valued at $231,000. The exercise period of the warrant is from April 11,
1999 to June 10, 1999. The number of shares and the exercise price per share
are subject to adjustment as provided in the warrant.

     In June 1995, CSI acquired from Blairden Precision Instruments the
exclusive worldwide rights to The RUMI System uterine manipulator injector and
related products for $1,000,000. No goodwill arose from the recording of this
acquisition.


Note 3.  Stockholders Rights Plan

     In October 1987, the Board of Directors of the Company declared a dividend
distribution of one right for each outstanding share of the Company's common
stock (a "Right"). Following the effectiveness of the one-for-three reverse
stock split in September 1995, the number of Rights per share increased from
one to three. Each Right entitles the holder to initially purchase from the
Company a fraction of a share of participating preferred stock at an exercise
price of $60.00, subject to adjustment. The Rights are exercisable only if a
person or group acquires (an "Acquiring Person"), or generally obtains the
right to acquire beneficial ownership of 20% or more of the Company's common
stock, or commences a tender or exchange offer which would result in such
person or group beneficially owning 30% or more of the Company's common stock.
Once the Rights are exercisable, then under certain circumstances, including
certain acquisitions of beneficial ownership of 30% or more of the Company's
outstanding common stock and certain mergers or other business combinations,
each holder of a Right,


                                      F-18

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
 
           Notes to Consolidated Financial Statements  -- (Continued)
 
Note 3.  Stockholders Rights Plan -- (Continued)
 
other than an Acquiring Person, will have the right to receive, upon exercise,
shares of common stock of the Company, or of the acquiring company in such
merger or other business combination or asset sale, having a value equal to two
times the exercise price of the Right.

     The Rights expire on October 29, 1997 and may generally be redeemed by the
Company at a price of five cents per Right, at any time until the close of
business on the tenth day following a public announcement that an Acquiring
Person has acquired, or generally obtained the right to acquire, beneficial
ownership of 20% or more of the Company's common stock. After the redemption
period has expired, the Company's right of redemption may be reinstated if an
Acquiring Person reduces his beneficial ownership to 10% or less of the
outstanding shares of common stock in a transaction or series of transactions
not involving the Company.

     In June 1993, the Board of Directors amended the Rights Agreement, so that
Cooper Life Sciences, Inc. ("CLS") and its affiliates and associates would not
be Acquiring Persons thereunder as a result of CLS's beneficial ownership of
more than 20% of the outstanding common stock of the Company by reason of its
ownership of Series B Preferred Stock or common stock issued upon conversion
thereof. In January 1995, the Rights Agreement was further amended to provide
that any person who becomes the beneficial owner of 10% or more, but not more
than 30%, of the outstanding common stock of CLS, would not be an Acquiring
Person, provided that such person is not otherwise, and does not thereafter
become, the beneficial owner of more than 1% of the Company's outstanding
common stock. (See "Agreements With CLS" in Note 12.)


Note 4. Settlement of Disputes, Net


In 1996 and 1995, the Company recorded the following items related to
settlement of disputes:


HGA and Progressions Health Systems, Inc. ("Progressions") agreed to settle
certain purchase price adjustments (credited to goodwill) and other disputes in
return for a series of payments to be made to HGA. Pursuant to this agreement,
HGA received $853,000 of which $421,000 was credited to settlement of disputes
in 1995 and $447,000 of which $223,000 was similarly credited in 1996.

Under a 1985 agreement (the "HMG Agreement"), Hampton Medical Group ("HMG"),
which is owned by Dr. A. L. C. Pottash, contracted to provide clinical and
clinical administrative services at Hampton Psychiatric Institute ("Hampton
Hospital"), the primary facility operated by Hospital Group of New Jersey, Inc.
("HGNJ"), a subsidiary of the Company's psychiatric hospital holding company,
HGA. Subsequently, HGNJ delivered notices to HMG asserting that HMG had
defaulted under the HMG Agreement based upon billing practices by HMG that HGNJ
believed to be fraudulent.

The Company recorded a charge of $5,551,000 for the settlement of disputes with
HMG and Dr. Pottash. Pursuant to the settlement, (i) the parties released each
other from, among other things, claims underlying related arbitration, (ii) HGA
purchased HMG's interest in the HMG Agreement on December 31, 1995, and (iii)
HGNJ agreed to make certain payments to Dr. Pottash in respect of claims he had
asserted. While only HMG and Dr. Pottash are parties to the settlement with
HGA, HGNJ and the Company, the Company has not been notified of any claims by
other third party payors or others relating to billing or other practices at
Hampton Hospital. The settlement with HMG and Dr. Pottash resulted in a
one-time charge with a present value of $5,551,000 to fourth quarter fiscal
1995 earnings. That charge reflects amounts paid to Dr. Pottash in December
1995 of $3,100,000 included in other current liabilities at October 31, 1995,
as well as two payments scheduled to be made to HMG in May 1997 and 1998, each
in the amount of $1,537,500.

1995 charges were partially offset by the receipt of a $915,000 refund for
directors and officers insurance and a disgorgement of $648,000 from a former
officer of the Company.


                                      F-19

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
 
           Notes to Consolidated Financial Statements  -- (Continued)
 
Note 4. Settlement of Disputes, Net -- (Continued)
 
In 1994, the Company recorded the following items related to settlement of
disputes:

A credit of $850,000 following receipt of funds by the Company to settle
certain claims made by the Company associated with a real estate transaction.

A charge of $5,800,000, which represented the Company's estimate of costs
required to settle certain disputes and other litigation matters including
$3,450,000 associated with the criminal conviction and related SEC enforcement
action, summarized below.

     In January 1994, the Company was found guilty on six counts of mail fraud
and one count of wire fraud based upon the conduct of a former Co-Chairman but
was acquitted of charges of conspiracy and aiding and abetting violations of
the Investment Advisers Act. The Company was sentenced and was ordered to make
restitution of $1,310,166 which was paid in 1994. In addition, the Company was
ordered to pay a noninterest bearing fine over three years in the amount of
$1,831,568. Payments of $350,000 each were made in 1995 and 1996 with an
additional payment of $1,131,568 payable on July 15, 1997. Also the Company
settled in December 1994 a related SEC action under which the Company agreed to
the disgorgement of $1,621,474 and the payment of a civil penalty of
$1,150,000. A significant portion of the amounts imposed by the SEC were offset
by disgorgement and fines in the related criminal action.

Note 5.  Costs Associated with Restructuring Operations

     In the fourth quarter of 1995, the Company recorded $1,480,000 to provide
for costs primarily associated with the closure of facilities, with attendant
reductions in personnel, in the Company's CooperVision Pharmaceutical, Inc.
("CVP"), CSI and corporate operations and downsizing HGA headquarters.
Approximately 85% of this provision related to severance benefits accrued for
16 employees, substantially all of which was paid by October 1996. The balance
primarily reflected provisions for unproductive assets.

Note 6.  Financial Instruments

     The fair values of the Company's financial instruments, including cash and
cash equivalents, trade receivables, lines of credit, accounts payable, and
accrued liabilities, approximated their carrying values as of October 31, 1996
because of the short maturity of these instruments.

     The carrying amounts and fair values of the Company's 10% Notes and
10 5/8% Debentures follow:




                                       October 31, 1996
                                      Carrying     Fair
                                       Amount      Value
                                        (In thousands)
                                     ---------------------
10 5/8% Convertible Subordinated
 Reset Debentures Due 2005   ......   $ 9,220     $10,591
10% Senior Subordinated Secured
 Notes Due 2003  ..................    24,285      21,065

     The fair values of the 10% Notes and 10 5/8% Debentures, which are not
regularly traded, are based on applicable quoted market prices. The fair value
of the Company's other long-term debt approximated the carrying value at
October 31, 1996, as the debt was refinanced or entered into within the current
fiscal year.


                                      F-20

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements

Note 7. Income Taxes

     The income tax provision (benefit) in the consolidated statements of
operations consists of:

                           Years Ended October 31,
                     -----------------------------------
                       1996        1995        1994
                     -----------   -------   -----------
                               (In thousands)
  Current
  Federal   ......    $    146       $  --    $     --
  State  .........        (486)        115      (4,600)
                      --------      ------    --------
                          (340)        115      (4,600)
                      --------      ------    --------
  Deferred
  Federal   ......      (4,148)         --          --
  State  .........          --          --          --
                      --------      ------    --------
                        (4,148)         --          --
                      --------      ------    --------
                      $ (4,488)      $ 115    $ (4,600)
                      ========      ======    ========

     A reconciliation of the provision for (benefit of) income taxes included
in the Company's consolidated statements of operations and the amount computed
by applying the federal income tax rate to income (loss) before income taxes
follows:





<TABLE>
<CAPTION>
                                                                      Years Ended October 31,
                                                              ---------------------------------------
                                                                1996          1995         1994
                                                              ------------   ---------   ------------
                                                                          (In thousands)
<S>                                                           <C>            <C>         <C>
Computed expected provision for (benefit of) taxes   ......    $  4,119       $  78       $ (3,161)
Increase (decrease) in taxes resulting from:
  Income outside the United States subject to 
  different tax rates   ...................................         132         132            (65)
  Amortization of intangibles   ...........................         256         185            185
  State taxes, net of federal income tax benefit  .........          70          76            264
  Reversal of prior years' estimated tax liabilities no
    longer required    ....................................        (615)       (200)        (5,000)
  Amortization of restricted stock compensation   .........          --          --            (31)
  Net operating losses for which no tax benefit was
    recognized   ..........................................          --          --          3,293
  Interest expense related to original issue discount              (116)       (100)          (100)
  Utilization of net operating loss carryforwards for
    which no tax benefit had been previously
    recognized   ..........................................      (4,406)         --             --
  Change in valuation allowance    ........................      (4,148)         --             --
  Other, net  .............................................         220         (56)            15
                                                               --------       -----       --------
  Actual provision for (benefit of) income taxes  .........    $ (4,488)      $ 115       $ (4,600)
                                                               ========       =====       ========
</TABLE>


 

 

                                      F-21

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
 
           Notes to Consolidated Financial Statements  -- (Continued)
 
 
Note 7. Income Taxes  -- (Continued)
 
     The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities are as
follows:





<TABLE>
<CAPTION>
                                                                                  October 31,
                                                                          ---------------------------
                                                                            1996           1995
                                                                          ------------   ------------
                                                                                (In thousands)
<S>                                                                       <C>            <C>
Deferred tax assets:
  Accounts receivable, principally due to allowances for doubtful
    accounts  .........................................................    $  1,030       $  1,138
  Inventories, principally due to obsolescence reserves    ............         830            871
  Investments, principally due to unrealized losses and other
    reserves  .........................................................          73             73
  Accrued liabilities, principally due to litigation reserves and 
    compensation accruals  ............................................       2,507          4,868
  Deferred income, principally due to the debenture exchange  .........       1,066          1,258
  Net operating loss carryforwards    .................................      79,681         81,871
  Capital loss carryforwards    .......................................       2,523          2,428
  Tax credit carryforwards   ..........................................       2,705          2,560
  Other    ............................................................         596            490
                                                                           --------       --------
     Total gross deferred tax assets  .................................      91,011         95,557
     Less valuation allowance   .......................................     (80,304)       (88,755)
                                                                           --------       --------
     Deferred tax assets  .............................................      10,707          6,802
                                                                           --------       --------
Deferred tax liabilities:
  Plant and equipment, principally due to purchase accounting
    requirements    ...................................................      (6,461)        (6,507)
  Other, principally due to differences in accounting methods for
    financial and tax purposes  .......................................         (98)          (295)
                                                                           --------       --------
     Deferred tax liabilities   .......................................      (6,559)        (6,802)
                                                                           --------       --------
     Net deferred tax assets    .......................................    $  4,148       $     --
                                                                           ========       ========
</TABLE>


     The net change in the total valuation allowance for the years ended
October 31, 1996, 1995 and 1994 was a decrease of $8,451,000, an increase of
$1,580,000 and an increase of $2,327,000, respectively. In the fourth quarter
of 1996, the Company recognized an income tax benefit of $4,148,000 from
reducing the valuation allowance based primarily on the significant
improvements in the Company's 1996 operating results.

     Subsequently recognized tax benefits relating to the valuation allowance
as of October 31, 1996 will be allocated as follows to:


                                                   (In thousands)
                                                   ---------------
          Consolidated statement of operations         $78,604
          Goodwill and other intangible assets           1,700
                                                       --------
                                                       $80,304
                                                       ========

                                      F-22

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
 
           Notes to Consolidated Financial Statements  -- (Continued)
 
Note 7. Income Taxes  -- (Continued)
 
     At October 31, 1996 the Company had capital loss, net operating loss, and
tax credit carryforwards for federal tax purposes expiring as follows:



        Year of              Capital     Operating      Tax
      Expiration             Losses       Losses       Credits
- --------------------------   ---------   -----------   --------
                                       (In thousands)
  1998  ..................     $ 5,925    $     --     $    --
  1999  ..................       1,216         147         867
  2000  ..................         280          56       1,132
  2001  ..................          --      70,473         202
  2002  ..................          --      27,326          29
  2003  ..................          --       1,378         330
  2004  ..................          --      22,241          --
  2005  ..................          --      11,006          --
  2006  ..................          --      22,265          --
  2007  ..................          --      22,058          --
  2008  ..................          --      49,535          --
  2009  ..................          --       6,553          --
  2010  ..................          --       1,318          --
  Indefinite life   ......          --          --         145
                              --------    ---------    --------
                               $ 7,421    $234,356     $ 2,705
                              ========    =========    ========

Note 8.  Long-Term Debt

     Long-term debt consists of the following:





<TABLE>
<CAPTION>
                                                                               October 31,
                                                                           --------------------
                                                                            1996       1995
                                                                           ---------   --------
                                                                              (In thousands)
<S>                                                                        <C>         <C>
10% Senior Subordinated Secured Notes due 2003 ("Notes")    ............   $24,285     $24,816
10 5/8% Convertible Subordinated Reset Debentures due 2005
 ("Debentures")   ......................................................     9,220       9,215
12% promissory notes ("Promissory Notes") due April 11, 1999   .........     4,000          --
Bank term loan ("HGA Term Loan")    ....................................    10,675       9,889
Industrial Revenue Bonds ("HGA IRB")   .................................        --       1,458
Capitalized leases, interest rates from 8% to 13% maturing 1999   ......       584         400
                                                                           --------    --------
                                                                            48,764      45,778
Less current installments  .............................................       844       2,288
                                                                           --------    --------
                                                                           $47,920     $43,490
                                                                           ========    ========
</TABLE>


     Aggregate annual maturities for each of the five years subsequent to
October 31, 1996 are as follows:



                          (In thousands)
                          ---------------
          1997   ......       $   844
          1998   ......       $ 1,013
          1999   ......       $ 4,728
          2000   ......       $   667
          2001   ......       $ 8,007
 

 

                                      F-23

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
 
           Notes to Consolidated Financial Statements  -- (Continued)
 
 
Note 8.  Long-Term Debt  -- (Continued)
 
     The aggregate principal amount of $21,943,000 of Notes matures on June 1,
2003 and interest is payable quarterly. The Notes are redeemable solely at the
option of the Company, in whole or in part, at any time, at a redemption price
of 100% of principal plus accrued and unpaid interest to the redemption date.
The Company is not required to effect any mandatory redemptions or make any
sinking fund payments with respect to the Notes, except in connection with
certain sales or other dispositions of, or certain financings secured by, the
collateral securing the Notes. Pursuant to a pledge agreement dated as of
January 6, 1994, between the Company and the trustee for the holders of the
Notes, the Company has pledged a first priority security interest in all of its
rights, title and interest in stock of its subsidiaries HGA and CSI, all
additional shares of stock of, or other equity interests in HGA and CSI from
time to time acquired by the Company, all intercompany indebtedness of HGA and
CSI from time to time held by the Company, except as set forth in the indenture
governing the Notes, and the proceeds received from the sale or disposition of
any or all of the foregoing. In accordance with a debt restructuring completed
in January 1994, which was accounted for as a troubled debt restructuring, the
Company recorded a deferred premium of $4,005,000. The Company is recognizing
the benefit of the deferred premium as a reduction to the effective interest
rate on the Notes over the remaining life of the Notes. The effective interest
rate which includes the impact of the amortization of the deferred premium is
6.69%. As of October 31, 1996, the amount of the unamortized deferred premium
was $2,342,000.

     The aggregate principal amount of $9,290,000 of Debentures matures March
1, 2005. Interest at 10 5/8% per annum is paid semi-annually. The Debenture
holders may convert Debentures into shares of the Company's common stock at
$15.00 per share, subject to adjustments under certain conditions to prevent
dilution to the holders. The difference between the carrying amount and the
principal amount of the Company's Debentures represents unamortized discount
which is being charged to expense over the life of the issue. The effective
interest rate is 10.77%. As of October 31, 1996, the amount of unamortized
discount was approximately $70,000.

     The Debentures and the Notes each contain various covenants, including
limitations on investments, incurrence and ranking of indebtedness, payment of
cash dividends, acquisition of the Company's common stock and transactions with
affiliates.


HGA Debt

     Substantially all of the property and equipment and accounts receivable of
HGA collateralize its outstanding debt. The HGA Term Loan was renegotiated on
September 17, 1996. Terms of the amended agreement reduced the interest rate to
two and one-half percentage points above the bank's prime rate and extended the
loan maturity to August 1, 2001. Additionally, because HGA achieved targeted
operating results, the interest rate was further reduced effective November 1,
1996 to a rate of two percentage points (2%) above the bank's prime rate,
subject to a minimum of nine percent (9%). The rate in effect at October 31,
1996 and 1995 was 10.75% and 12.75%, respectively. Interest and principal
payments on the HGA Term Loan are due monthly through August 2001. The HGA Term
Loan contains covenants including the maintenance by HGA of certain ratios and
levels of net worth (as defined), capital expenditures, interest and debt
payments, as well as restrictions on payment of cash dividends. The HGA IRB
carried interest at 85% of prime. The HGA IRB holders elected their right to
accelerate all payments of outstanding principal at December 31, 1995. The
outstanding balance of the HGA IRB totaling $1,320,000 at December 31, 1995 was
paid, and the amount was rolled into the HGA Term Loan.


Loan and Security Agreement

     In September 1994, CVI entered into a Loan and Security Agreement ("Line
of Credit") with a commercial lender providing for revolving advances of up to
$8,000,000, which was amended on April 18,


                                      F-24

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
 
           Notes to Consolidated Financial Statements  -- (Continued)
 
 
Note 8.  Long-Term Debt  -- (Continued)
 
1996. On October 31, 1996 there were no amounts outstanding. Advances under the
Line of Credit bear interest at one and one-half percentage points above the
highest most recently announced prime rate of the three financial institutions
of national repute named in the agreement, with a floor of 8.5% per annum. The
rate in effect at October 31, 1996 was 9.75% per annum. The weighted average
interest rate for 1995 was 11.38%. CVI agreed to the payment of various fees
and minimum annual interest of $115,000. The amount of advances allowed under
the agreement is capped at the lesser of $8,000,000, or a percentage of CVI's
levels of eligible receivables and inventory as defined in the agreement
(approximately $7,000,000 in total line availability at October 31, 1996) and
is collateralized by virtually all of the assets of CVI.

     The Line of Credit provides that CVI (provided that no Event of Default,
as defined, has occurred and is continuing) may make loans, advances,
investments, capital contributions and distributions to the Company, and pay
management fees to the Company, so long as the total amount of all such amounts
does not cause Tangible Net Worth (as defined in the Line of Credit) to be less
than $3,000,000. At October 31, 1996, CVI had Tangible Net Worth of
$12,534,000, of which $9,534,000 was unrestricted under the terms of the Loan
and Security Agreement.

     The Line of Credit contains various covenants, including the maintenance
of certain ratios and levels of net worth (as defined), limitations on capital
expenditures and incurrence of indebtedness as well as limitations regarding
change in control and transactions with affiliates.

     In connection with the Line of Credit, the Company guaranteed all of the
obligations under the HGA Term Loan and CVI's obligations under the Line of
Credit, and the Company pledged all of the outstanding stock of CVI as
collateral for the HGA Term Loan guaranty.

     In October 1996, CVI obtained a lease line of credit providing for
borrowings of up to $500,000 from a commercial leasing company. Proceeds under
the lease line are to be used to finance the purchase of equipment from the
leasing company. The interest rate on each lease will be determined by the
lender. At October 31, 1996, the Company had not drawn on the lease line.


Promissory Notes

     In April 1996, Cooper Healthcare Group, Inc. (a subsidiary of the Company)
acquired Unimar, Inc. (See Note 2.) and issued Promissory Notes for $4,000,000
principal amount, bearing an interest rate of 12% per annum, maturing April
1999. Interest is paid annually. The Promissory Notes are collateralized by
a security interest in the shares of the common stock of Unimar, Inc., and
payment is guaranteed by the Company.


Note 9.  Employee Stock Plans 1988 Long-Term Incentive Plan ("LTIP")

     The LTIP is a vehicle for the Company to attract, retain and motivate its
key employees and consultants, who are directly linked to the profitability of
the Company and to increasing stockholder value.

     The LTIP authorizes a committee consisting of three or more individuals
not eligible to participate in the LTIP or the Company's Board of Directors, to
grant to eligible individuals during a period of ten years from September 15,
1988, stock options, stock appreciation rights, restricted stock, deferred
stock, stock purchase rights, phantom stock units and long-term performance
awards for up to 2,125,570 shares of common stock, subject to adjustment for
future stock splits, stock dividends, expirations, forfeitures and similar
events. Options generally vest based on the Company's stock price, however, in
some cases, both stock price and time are used as criteria. In July 1996, two
officers of the Company were granted special options totaling 280,000 shares.
These shares will vest in four tranches upon the achievement of specific prices
of the Company's common stock within prescribed periods. As


                                      F-25

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
 
           Notes to Consolidated Financial Statements  -- (Continued)
 
 
Note 9.  Employee Stock Plans 1988 Long-Term Incentive Plan ("LTIP")
 -- (Continued)
 
of October 31, 1996, 502,727 shares remained available under the LTIP for
future grants. Restricted shares of zero, 176,196 and 99,259 were granted under
the plan in fiscal 1996, 1995 and 1994, respectively. Restricted shares with
restrictions in place were 16,529, 91,659 and 54,444 on October 31, 1996, 1995
and 1994, respectively.


1996 Long-Term Incentive Plan for Non-Employee Directors ("1996 NEDRSP")

     In March 1996, the Company's stockholders approved a proposal to reduce
the annual cash stipend paid to Non-Employee Directors and to award grants of
restricted stock and options which are to be awarded annually at the start of
each fiscal year. Specifically, each Non-Employee Director will be awarded the
right to purchase restricted stock worth $7,500 for $0.10 per share (or $9,375
in the case of the Chairman of the Board who is a Non-Employee Director) by
January 15 of the year following the date the grant was made. Grants of
restricted stock that are not exercised by such date will expire. The
restrictions on the restricted stock will lapse on the earlier to occur of the
stock reaching certain target values or by the fifth anniversary of the date of
grant. In addition, each Non-Employee Director was granted an option to
purchase 5,000 shares of the Company's common stock in fiscal 1996 and will be
granted 3,333 shares in each subsequent fiscal year (or, in the case of the
Chairman of the Board who is a Non-Employee Director, 6,250 shares in fiscal
1996 and 4,167 shares in each subsequent fiscal year) through fiscal 2000. A
total of 215,000 shares of the Company's authorized but unissued common stock
have been reserved for issuance under the plan. As of October 31, 1996, 176,357
shares remained available under the 1996 NEDRSP for future grants. Restricted
shares of 7,393 were granted under the 1996 NEDRSP in fiscal 1996, and there
were no shares with restrictions in place outstanding October 31, 1996.

1990 Non-Employee Directors Restricted Stock Plan ("1990 NEDRSP")

     Under the terms of the 1990 NEDRSP, a total of 33,333 shares of common
stock were authorized and reserved for issuance. A total of 18,333 shares of
restricted stock with restrictions removed were awarded under this plan. Upon
approval by the Company's stockholders of the 1996 NEDRSP, the 1990 NEDRSP
terminated.

     Transactions involving the granting of options of the Company's common
stock in connection with the LTIP and the 1996 NEDRSP are summarized below.




<TABLE>
<CAPTION>
                                                                   Number of Shares
                                                              ---------------------------
                                                                LTIP         1996 NEDRSP
                                                              ------------   ------------
                                                                    (In thousands)
<S>                                                           <C>            <C>
Outstanding at October 31, 1993    ........................     178,075             --
Options granted  ..........................................     136,667             --
Options exercised at $1.68 per share  .....................      (1,073)            --
Options forfeited   .......................................     (48,113)            --
                                                               --------        -------
Outstanding at October 31, 1994    ........................     265,556             --
Options granted  ..........................................     131,121             --
Options exercised at $1.68 to $2.07 per share  ............      (5,153)            --
Options forfeited   .......................................     (62,683)            --
                                                               --------        -------
Outstanding at October 31, 1995    ........................     328,841             --
Options granted  ..........................................     441,111         31,250
Options exercised at $1.68 to $7.68 per share  ............     (15,505)        (6,250)
Options forfeited   .......................................     (39,785)            --
                                                               --------        -------
Outstanding at October 31, 1996 (219,164 and 25,000 shares
 exercisable, respectively)  ..............................     714,662         25,000
                                                               ========        =======
</TABLE>


                                      F-26

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
  
           Notes to Consolidated Financial Statements  -- (Continued)
  
 Note 9.  Employee Stock Plans 1988 Long-Term Incentive Plan ("LTIP")
          -- (Continued)
  
     Options issued and outstanding at October 31, 1996 have option prices
ranging from $1.68 to $34.00 per share.

     The excess of market value over $.10 per share of LTIP, 1990 NEDRSP and
1996 NEDRSP restricted shares on respective dates of grant is initially
recorded as unamortized restricted stock award compensation, a separate
component of stockholders' equity and charged to operations as earned.
Restricted shares and other stock compensation charged against income from
operations for the years ended October 31, 1996, 1995 and 1994 was $46,000,
zero and $55,000, respectively.


Old Stock Option Plans

     On October 31, 1996, there were 7,483 shares outstanding with option
prices ranging from $48.39 - $59.25 per share under old stock option plans.

Note 10.  Employee Benefits


The Company's Retirement Income Plan

     The Company's Retirement Income Plan (the "Plan") covers substantially all
full-time United States employees of CVI and the Company's corporate
headquarters. The Company's contributions are designed to fund normal cost on a
current basis and to fund over thirty years the estimated prior service cost of
benefit improvements (fifteen years for annual gains and losses). The unit
credit actuarial cost method is used to determine the annual cost. The Company
pays the entire cost of the Plan and funds such costs as they accrue. Virtually
all of the assets of the Plan are comprised of participations in equity and
fixed income funds. The measurement date for assumptions used in developing the
projected benefit obligation was changed to August 31 during fiscal 1996.

     Net periodic pension cost of the Plan was as follows:




                                              Years Ended October 31,
                                         ---------------------------------
                                           1996        1995       1994
                                         -----------   -------   ---------
                                                  (In thousands)
Service cost  ........................    $   256      $ 188      $ 173
Interest cost    .....................        598        521        479
Actual return on assets   ............     (1,047)      (982)      (531)
Net amortization and deferral   ......        488        491          2
                                          -------      -----      -----
Net periodic pension cost    .........    $   295      $ 218      $ 123
                                          =======      =====      =====

 

                                      F-27

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
 
           Notes to Consolidated Financial Statements  -- (Continued)
 
Note 10.  Employee Benefits  -- (Continued)
 
The actuarial present value of benefit obligations and funded status for the
   Plan was as follows:


<TABLE>
<CAPTION>
                                                                October 31,
                                                             ------------------
                                                             1996       1995
                                                             --------   -------
                                                               (In thousands)
<S>                                                          <C>        <C>
Vested benefit obligation   ..............................   $7,049    $7,250
Non-vested benefit obligation  ...........................       24        77
                                                             ------     ------
  Accumulated benefit obligation  ........................    7,073     7,327
Projected compensation increases  ........................      887       825
                                                             ------     ------
  Projected benefit obligation    ........................    7,960     8,152
Fair value of plan assets   ..............................    7,204     6,545
                                                             ------     ------
Projected benefit obligation in excess of assets    ......      756     1,607
Add (Deduct):
  Unrecognized net gain (loss)    ........................      538      (386)
  Contributions made 8/31/96 to 10/31/96   ...............     (335)        --
  Prior service cost remaining to be amortized, including
    unrecognized net asset  ..............................     (382)     (439)
                                                             ------     ------
Pension liability recognized   ...........................   $  577     $ 782
                                                             ======     ======
</TABLE>


     Assumptions used in developing the projected benefit obligation were as
follows:

<TABLE>
<CAPTION>
                                                          August 31,     October 31,
                                                            1996           1995
                                                          ------------   ------------
<S>                                                       <C>            <C>
      Discount rate on plan liabilities    ............     8.0%           7.5%
      Long-range rate of return on plan assets   ......     9.0%           9.0%
      Salary increase rate  ...........................     6.0%           6.0%
</TABLE>

The Company's 401(k) Savings Plan

     The Company's 401(k) Savings Plan provides for the deferral of
compensation as described in the Internal Revenue Code and is available to
substantially all full-time United States employees of the Company. Employees
who participate in the 401(k) Plan may elect to have from 2% to 10% (1% to 16%,
beginning October 1, 1996 for employees whose salary is less than $66,000
annually) of their pre-tax salary or wages, (but not more than $5,000 for
employees whose salary is more than $66,000 annually) for the calendar year
ended December 31, 1996, deferred and contributed to the trust established
under the Plan. The Company's contribution on account of participating
employees, net of forfeiture credits, was $102,000, $95,000 and $80,000 for the
years ended October 31, 1996, 1995 and 1994, respectively.

The Company's Incentive Payment Plan

     The Company's Incentive Payment Plan is available to officers and other
key executives. Participants may, in certain years, receive bonuses based on
performance. Total payments earned for the years ended October 31, 1996, 1995
and 1994, were approximately $1,753,000, $1,504,000 and $1,296,000,
respectively.


                                      F-28

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
 
           Notes to Consolidated Financial Statements  -- (Continued)
 
 
Note 10.  Employee Benefits  -- (Continued)
 
The Company's Turn Around Incentive Plan

     The Turn Around Incentive Plan ("TIP") was adopted in 1993 to recognize
the special efforts of certain individuals in guiding the Company through
certain difficulties that existed at that time related to the Company's then
capital structure and its former ownership of companies that manufactured and
distributed breast implants. All provisions of the TIP have been met, and all
required payments have been made to participants as follows:

     In May 1994 participants received an aggregate payment of approximately
$247,000 cash and approximately 99,000 shares of restricted stock from which
all restrictions were removed in May 1996.

     In August 1995 participants received an aggregate payment of approximately
$476,000 cash and approximately 97,000 shares of restricted stock. Restrictions
from one-half of these shares were removed in August 1996, and the restrictions
on the balance of the shares will be removed in August 1997.

Note 11. Commitments, Contingencies and Pending Litigation
     Total minimum annual rental obligations (net of sublease revenue of
approximately $173,000 per year through March 2000) under noncancelable
operating leases (substantially all real property or equipment) in force at
October 31, 1996 are payable in subsequent years as follows:



                               (In thousands)
                               ---------------
1997   .....................       $1,473
1998   .....................        1,051
1999   .....................          808
2000   .....................          766
2001   .....................          597
2002 and thereafter   ......          913
                                   -------
                                   $5,608
                                   =======

     Aggregate rental expense for both cancelable and noncancelable contracts
amounted to $2,508,000, $2,354,000 and $2,438,000 in 1996, 1995 and 1994,
respectively.

     An agreement was reached in September 1993 with Medical Engineering
Corporation ("MEC"), a subsidiary of Bristol-Myers Squibb Company, which
limited the Company's contingent liabilities associated with breast implant
litigation involving a former division of the Company (the "MEC Agreement").
The remaining liability recorded for payments to be made to MEC under the MEC
Agreement become due as follows:



December 31,     (In thousands)
- --------------   ---------------
1996    ......       $1,750
1997    ......        2,000
1998    ......        2,500
                     -------
                     $6,250
                     =======

     Additional payments to be made to MEC beginning December 31, 1999 are
contingent upon the Company's earning net income before taxes in each fiscal
year beginning with fiscal 1999, and are, therefore, not recorded in the
Company's financial statements. Such payments are limited to the 

                                    F-29

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
 
           Notes to Consolidated Financial Statements  -- (Continued)
 
Note 11. Commitments, Contingencies and Pending Litigation  -- (Continued)
 
smaller of 50% of the Company's net income before taxes in each such fiscal
year on a noncumulative basis or the amounts shown below:


December 31,     (In thousands)
- --------------   ---------------
1999    ......      $3,000
2000    ......      $3,500
2001    ......      $4,000
2002    ......      $4,500
2003    ......      $3,000

     Under the terms of a supply agreement most recently modified in 1993,
the Company agreed to purchase by December 31, 1997, certain contact lenses
from Pilkington plc, with an aggregate cost of approximately British Pounds
4,063,000. Lenses with an aggregate value of approximately British Pounds
520,000, British Pounds 477,000 and British Pounds 400,000 were purchased
under the terms of the supply agreement in fiscal 1996, 1995 and 1994,
respectively. As of December 31, 1996, there remained a commitment of
approximately British Pounds 2,354,000.

     Payments amounting to $3,100,000 were made related to a settlement with
HMG (See Note 4.) in December 1995. Two additional payments which are accreting
imputed interest are scheduled to be made to HMG in May 1997 and 1998, each in
the amount of $1,537,500. The October 31, 1996 classifications and carrying
values are $1,399,000 in accounts payable and $1,331,000 in other noncurrent
liabilities. These amounts were charged against net income in fiscal 1995.


Warrants

     The Company issued a warrant to Foothill Capital Corporation ("Foothill")
to purchase 26,666 shares of the Company's common stock at $5.625 per share in
connection with the loan and security agreement among Foothill, CVI, and
CooperVision Canada. (See Note 8 "Loan and Security Agreement.") The warrant
becomes exercisable on September 21, 1997 and expires on May 26, 1999. Both the
number of shares under the warrant and the exercise price per share are
adjustable under certain circumstances to avoid dilution.

     The Company granted a warrant to purchase 83,333 shares of the Company's
common stock at $11.375 per share, as part of the acquisition of Unimar, Inc.
(See Note 2.) The exercise period of the warrant is from April 11, 1999 to June
10, 1999. The number of shares and the exercise price per share ar e subject to
adjustment as provided in the warrant.


Pending Litigation

     The Company is a defendant in a number of legal actions relating to its
past or present businesses in which plaintiffs are seeking damages. In the
opinion of Management, after consultation with counsel, the ultimate
disposition of those actions will not materially affect the Company's financial
position or results of operations.

     The Company was named as a nominal defendant in a stockholder derivative
action entitled Harry Lewis and Gary Goldberg v. Gary A. Singer, Steven G.
Singer, Arthur C. Bass, Joseph C. Feghali, Warren J. Keegan, Robert S. Holcombe
and Robert S. Weiss, which was filed on May 27, 1992 in the Court of Chancery,
State of Delaware, New Castle County. Lewis and Goldberg subsequently amended
their complaint, and the Delaware Chancery Court consolidated the amended
complaint with a similar complaint filed by another plaintiff as In re The
Cooper Companies, Inc. Litigation, Consolidated C.A. 12584. The Lewis and
Goldberg amended complaint was designated as the operative complaint (the
"Derivative Complaint").


                                      F-30

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
 
           Notes to Consolidated Financial Statements  -- (Continued)
 
Note 11. Commitments, Contingencies and Pending Litigation  -- (Continued)
 
     The Derivative Complaint alleges that certain directors of the Company and
Gary A. Singer, as Co-Chairman of the Board of Directors, caused or allowed the
Company to be a party to a "trading scheme" to "frontrun" high yield bond
purchases by the Keystone Custodian Fund, Inc., a group of mutual funds. The
Derivative Complaint also alleges that the defendants violated their fiduciary
duties to the Company by not vigorously investigating certain allegations of
securities fraud. The Derivative Complaint requests that the Court order the
defendants (other than the Company) to pay damages and expenses to the Company
and certain of the defendants to disgorge their profits to the Company.

     The parties have been engaged in negotiations and had agreed upon the
terms of a settlement. Although the proposed settlement was submitted to the
Court for approval following notice to the Company's stockholders and a
hearing, Plaintiffs have decided not to proceed with the settlement in its
present form, and the parties have reopened settlement discussions. There can
be no assurance that the current discussions will ultimately end the
litigation. The individual defendants have advised the Company that they
believe they have meritorious defenses to the lawsuit and that, in the event
the case proceeds to trial, they intend to defend vigorously against the
allegations in the Derivative Complaint.

     The Company was also named as a nominal defendant in a stockholder
derivative action entitled Bruce D. Sturman v. Gary A. Singer, Steven G.
Singer, Brad C. Singer, Dorothy Singer as the Executrix of the Estate of Martin
Singer, Karen Sue Singer, Norma Singer Brandes, Normel Construction Corp.,
Brandes & Singer, and Romulus Holdings, Inc., which was filed on June 6, 1995
in the Court of Chancery of the State of Delaware, New Castle County. The
complaint is similar to a derivative complaint filed by Mr. Sturman in the
Supreme Court of the State of New York on May 26, 1992, which was dismissed
under New York Civil Practice Rule 327(a) on August 17, 1993. The dismissal of
the New York case was affirmed by the Appellate Division on March 28, 1995. The
allegations in the Delaware complaint filed by Mr. Sturman relate to
substantially the same facts and events at issue in In re The Cooper Companies,
Inc. Litigation described above, and similar relief is sought. The parties had
agreed that Mr. Sturman's Delaware action would be consolidated into and
tentatively settled with In re The Cooper Companies, Inc. Litigation.

Note 12. Relationships and Transactions between the Company and CLS


Agreements with CLS

     On June 14, 1993, the Company entered into a Settlement Agreement with CLS
(the "Settlement Agreement") in order to resolve all then pending disputes with
CLS and to avoid a costly and disruptive proxy fight, while continuing to
maintain a Board of Directors, the majority of whose members are independent.
Pursuant to the Settlement Agreement, among other things, the Company agreed to
nominate and use its reasonable best efforts to cause, and CLS agreed to vote
all shares of Common Stock of the Company owned by it in favor of, the election
of a Board of Directors of the Company consisting of eight members, five of
whom were designated by the Company (of which a majority would not be employees
of the Company or employees, affiliates or significant stockholders of CLS),
and three by CLS. Such agreements were to terminate on June 14, 1995, subject
to earlier termination or extension under certain circumstances, and were later
extended to, and expired on, October 31, 1996. Following such termination and
through June 12, 2022, pursuant to the Settlement Agreement, CLS continues to
have the right that it had pursuant to a 1992 settlement agreement with the
Company to designate two directors of the Company, so long as CLS continues to
own at least 800,000 shares of Common Stock, or one director, so long as it
continues to own at least 333,333 shares of Common Stock.

     Pursuant to this provision, Donald Press and Steven Rosenberg continue to
serve as directors designated by CLS. In addition, the Board of Directors,
other than the CLS designees, determined to continue Moses Marx as a non-CLS
designated director of the Company.


                                      F-31

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
 
           Notes to Consolidated Financial Statements  -- (Continued)
 
 
Note 12. Relationships and Transactions between the Company and
   CLS -- (Continued)
 
     Prior to September 1994, CLS had an investment in the Company's Series B
Preferred Stock having an aggregate liquidation preference of $3,450,000 and a
par value of $.10 per share (the "1993 Exchange Agreement"). Such shares, and
any shares of Series B Preferred Stock issued as dividends, were convertible
into one share of common stock of the Company for each $3.00 of liquidation
preference, subject to customary antidilution adjustments.

     The Company also had the right to compel conversion of Series B Preferred
Stock at any time after the market price of the common stock on its principal
trading market averaged at least $4.125 for 90 consecutive calendar days and
closed at not less than $4.125 on at least 80% of the trading days during such
period. On September 26, 1994, the Company's common stock met the above
requirements, and the Series B Preferred Stock was converted into 1,150,000
shares of the Company's common stock.


Other

     CLS was formerly an 89.5% owned subsidiary of the Company's former parent,
Cooper Laboratories, Inc.

     As of December 31, 1996, CLS owned 1,963,233 shares (or approximately
16.83%) of common stock of the Company.

     Two members of the Company's Board of Directors are also directors and/or
officers of CLS. Moses Marx is a Director of CLS (and is the controlling
stockholder of CLS). Steven Rosenberg is serving as Acting President, Vice
President and Chief Financial Officer of CLS and he is also a Director of CLS.
In addition to shares purchased on the open market, Mr. Marx owns 3,037 shares
and Mr. Rosenberg owns 3,370 shares of the Company's common stock, obtained
through the NEDRSP. (See Note 9.)

Note 13. Business Segment Information

   The Company's operations are attributable to three business segments:

   HGA, which provides healthcare services for inpatient and outpatient
   treatment and partial hospitalization programs through the ownership and
   operation of certain psychiatric facilities, and through May 1995 also
   managed three other such facilities,

   CVI, which develops, manufactures and markets a range of contact lenses,
   and

   CSI, which develops, manufactures and distributes diagnostic and surgical
   equipment instruments and disposables, primarily for gynecology.

     Total net revenue by business segment represents service and sales revenue
as reported in the Company's consolidated statements of operations. Operating
income (loss) is total net revenue less cost of products sold (or services
provided, in the case of HGA revenue), research and development expenses,
selling, general and administrative expenses, costs of restructuring and
amortization of intangible assets. Corporate operating loss is principally
corporate headquarters expense. Investment income, net, settlement of disputes,
net, debt restructuring costs, gain on sales of assets and businesses, net,
other income (expense), net, and interest expense were not allocated to
individual business.

     Identifiable assets are those assets used in continuing operations
(exclusive of cash and cash equivalents). Corporate assets include cash and
cash equivalents and temporary investments.


                                      F-32

<PAGE>

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements

Information by business segment for each of the years in the three year period
ended October 31, 1996 follows:



<TABLE>
<CAPTION>
                                                                                Corporate &
                                            HGA         CVI          CSI        Eliminations     Consolidated
                                           ---------   ---------   ----------   --------------   -------------
1996                                                                 (In thousands)
- ----
<S>                                        <C>         <C>         <C>          <C>              <C>
Net revenue from non affiliates   ......   $43,013     $48,892      $17,226       $      --        $109,131
                                           ========    ========     =======       =========        ========
Operating income (loss)  ...............   $ 2,573     $19,065      $ 1,667       $  (6,462)       $ 16,843
                                           ========    ========     =======       =========        ========
Investment income, net   ...............                                                                281
Settlement of disputes, net    .........                                                                223
Other income (expense), net    .........                                                                 80
Interest expense   .....................                                                             (5,312)
                                                                                                   --------
Income before income taxes  ............                                                           $ 12,115
                                                                                                   ========
Identifiable assets   ..................   $49,051     $23,756      $18,089       $  12,013        $102,909
                                           ========    ========     =======       =========        ========
Depreciation Expense  ..................   $ 1,511     $   800      $   236       $      82        $  2,629
                                           ========    ========     =======       =========        ========
Amortization Expense  ..................   $   205     $   314      $   461       $     269        $  1,249
                                           ========    ========     =======       =========        ========
Capital Expenditures  ..................   $ 1,431     $ 1,293      $   404       $      54        $  3,182
                                           ========    ========     =======       =========        ========
1995
- ----
Net revenue from non affiliates   ......   $41,794     $42,456      $12,824       $      16        $ 97,090
                                           ========    ========     =======       =========        ========
Operating income (loss)  ...............   $   878     $13,959      $  (425)      $  (6,404)       $  8,008
                                           ========    ========     =======       =========        ========
Investment income, net   ...............                                                                444
Settlement of disputes, net    .........                                                             (3,532)
Other income (expense), net    .........                                                                 51
Interest expense   .....................                                                             (4,741)
                                                                                                   --------
Income before income taxes  ............                                                           $    230
                                                                                                   ========
Identifiable assets   ..................   $48,086     $21,965      $ 8,953       $  12,988        $ 91,992
                                           ========    ========     =======       =========        ========
Depreciation Expense  ..................   $ 1,443     $   863      $   288       $     110        $  2,704
                                           ========    ========     =======       =========        ========
Amortization Expense  ..................   $   205     $   448      $   317       $      22        $    992
                                           ========    ========     =======       =========        ========
Capital Expenditures  ..................   $   335     $ 1,449      $   267       $     134        $  2,185
                                           ========    ========     =======       =========        ========
1994
- ----
Net revenue from non affiliates   ......   $44,611     $37,793      $12,847       $     394        $ 95,645
                                           ========    ========     =======       =========        ========
Operating income (loss)  ...............   $ 3,321     $11,963      $  (932)      $ (13,929)       $    423
                                           ========    ========     =======       =========        ========
Investment income (loss), net  .........                                                               (153)
Settlement of disputes, net    .........                                                             (4,950)
Debt restructuring costs    ............                                                               (340)
Gain on sale of assets and businesses,
 net   .................................                                                                214
Other income (expense), net    .........                                                                 42
Interest expense   .....................                                                             (4,533)
                                                                                                   --------
Loss before income taxes    ............                                                           $ (9,297)
                                                                                                   ========
Identifiable assets   ..................   $50,522     $22,814      $ 9,289       $  12,433        $ 95,058
                                           ========    ========     =======       =========        ========
Depreciation expense  ..................   $ 1,387     $ 1,025      $   339       $     119        $  2,870
                                           ========    ========     =======       =========        ========
Amortization expense  ..................   $   205     $   448      $   302       $      22        $    977
                                           ========    ========     =======       =========        ========
Capital expenditures  ..................   $   338     $   524      $    58       $      18        $    938
                                           ========    ========     =======       =========        ========
</TABLE>


                                      F-33

<PAGE>

PROSPECTUS


[GRAPHIC OMITTED]

- --------------------------------------------------------------------------------
 2,500,000 Shares
 Common Stock

- --------------------------------------------------------------------------------
 
 The Cooper Companies, Inc. (the "Company"), directly or through agents,
 dealers or underwriters designated from time to time, may offer, issue and
 sell, in one or more series or issuances, up to an aggregate of 2,500,000
 shares of its common stock, $.10 par value per share ("Common Stock"),
 together with the Rights ("Rights") to acquire the Company's Series A Junior
 Participating Preferred Stock that are attached to and trade with the Common
 Stock. The Common Stock and the Rights are herein collectively referred to as
 the "Securities". The Securities may be offered in amounts, at prices and on
 terms to be set forth in one or more supplements to this Prospectus (each a
 "Prospectus Supplement").


 The Common Stock is listed on the New York Stock Exchange, Inc. (the "NYSE")
 and the Pacific Exchange, Inc. (the "PCX") under the symbol "COO." On June 27,
 1997 the last reported sale price for the Common Stock as reported on the NYSE
 Composite Tape was $22 9/16 per share.


 For information concerning certain factors which should be considered by
 prospective investors, see "Risk Factors" commencing on page 3.


 THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
 EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
 OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
 THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.


                          -------------------------


 The Securities may be offered by the Company directly to one or more
 purchasers, through agents designated from time to time by the Company, to or
 through underwriters or dealers or through a combination of such methods. If
 any agents, dealers or underwriters are involved in the sale of any of the
 Securities, the names of such agents, dealers or underwriters, and any
 applicable purchase price, fee, commission or discount arrangement between or
 among them, will be set forth, or will be calculable from the information set
 forth, in the Prospectus Supplement. See "Plan of Distribution." This
 Prospectus may not be used to consummate sales of Securities without delivery
 of a Prospectus Supplement describing the method and terms of the offering of
 such Securities.




 The date of this Prospectus is June 30, 1997.

<PAGE>

                             AVAILABLE INFORMATION

     The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (including all amendments
thereto, the "Registration Statement") with respect to the Securities. As
permitted by the rules and regulations of the Commission, this Prospectus does
not contain all of the information set forth in the Registration Statement and
the exhibits and schedules thereto. For further information about the Company
and the Securities, please refer to the Registration Statement and the exhibits
thereto, which may be examined without charge at the public reference
facilities maintained by the Commission at Room 1204, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and copies of which may be obtained
from the Commission upon payment of the prescribed fees. Statements contained
in this Prospectus as to the contents of any agreement or other document
referred to herein or therein are qualified by reference to the copy of such
agreement or other document filed as an exhibit to the Registration Statement
or such other document, each such statement being qualified in all respects by
such reference.

     The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. The Registration Statement, the exhibits and schedules forming a
part thereof and the reports, proxy statements and other information filed by
the Company with the Commission in accordance with the Exchange Act can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1204, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and 7
World Trade Center, Suite 1300, New York, New York 10048. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission maintains a web site that contains reports, proxy and information
statements and other information regarding registrants who file with the
Commission and certain of the Company's filings are available at such web site:
http://www.sec.gov. In addition, the Common Stock is listed on the NYSE and the
PCX and such information can be inspected at the offices of the NYSE, 20 Broad
Street, New York, New York 10005, and the PCX, 301 Pine Street, San Francisco,
California 94104.


               INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

     The following documents filed by the Company under the Exchange Act with
the Commission are incorporated herein by reference.

   (a) Annual Report on Form 10-K for the fiscal year ended October 31, 1996
       (the "1996 10-K");

   (b) The portions of the Company's 1996 Annual Report to Stockholders that
       have been incorporated by reference into the 1996 10-K;

   (c) The portions of the Company's Proxy Statement for its Annual Meeting of
       Stockholders held March 25, 1997 that have been incorporated by reference
       into the 1996 10-K;

   (d) Quarterly Report on Form 10-Q for the quarter ended January 31, 1997;

   (e) Quarterly Report on Form 10-Q for the quarter ended April 30, 1997;

   (f) Current Reports on Forms 8-K dated December 12, 1996, January 10,
       1997, January 30, 1997, February 10, 1997, February 25, 1997, March 18,
       1997, March 26, 1997, April 7, 1997, May 21, 1997 and June 2, 1997; and

   (g) The description of the Company's Common Stock contained in the
       Company's Registration Statement on Form 8-A filed on October 28, 1983
       and the description of the Company's Rights contained in the Company's
       Registration Statement on Form 8-A filed on November 12, 1987.

     All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Securities offered hereby shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof from


                                       2

<PAGE>

the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any subsequently filed document which also
is or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.

     A copy of any or all of the documents incorporated or deemed to be
incorporated herein by reference (other than exhibits to such documents which
are not specifically incorporated by reference therein) will be provided
without charge to any person to whom a copy of this Prospectus is delivered,
upon written or oral request. Copies of this Prospectus, as amended or
supplemented from time to time, and any other documents (or parts of documents)
that constitute part of this Prospectus under Section 10(a) of the Securities
Act of 1933, as amended (the "Securities Act"), will also be provided without
charge to each such person, upon written or oral request. Requests for such
copies should be addressed to the Vice President of Legal Affairs of the
Company, 6140 Stoneridge Mall Road, Suite 590, Pleasanton, California 94588
(telephone number: (510) 460-3600).


                          FORWARD-LOOKING STATEMENTS

     This Prospectus and the documents incorporated by reference herein contain
forward-looking statements within the meanings of Section 27A of the Securities
Act and Section 21E of the Exchange Act, which statements involve risks and
uncertainties. Actual results could differ materially from these statements as
a result of certain factors, including major changes in business conditions and
the economy in general, loss of key members of senior management, new
competitive inroads, costs to integrate acquisitions, dilution to earnings
and/or earnings per share associated with acquisitions and/or stock issuances,
decisions to invest in research and development projects, regulatory issues,
unexpected changes in reimbursement rates and payor mix, unforeseen litigation,
costs associated with potential debt restructuring, decisions to divest
businesses and the cost of acquisition activity, particularly if a large
acquisition is not completed. Future results are also dependent on each
business unit meeting specific objectives.


                                  THE COMPANY

     The Company, through its primary subsidiaries (CooperVision, Inc.,
CooperSurgical, Inc. and Hospital Group of America, Inc.), develops,
manufactures and markets healthcare products, including a range of contact
lenses and diagnostic and surgical instruments, equipment, accessories and
devices and provides healthcare services through the ownership and operation of
certain psychiatric facilities. The principal executive offices of the Company
are located at 6140 Stoneridge Mall Road, Suite 590, Pleasanton, California
94588, (510) 460-3600.


                                  RISK FACTORS

Price Volatility and Shares Available for Future Sale


     The market price of the Common Stock may be subject to significant
fluctuations in response to, among other things, the factors discussed above
under "Forward-Looking Statements," variations in quarterly operating results,
failure to meet published estimates of, or changes in earnings estimates by,
the Company or securities analysts, and other factors. In addition, the
securities markets have experienced significant price and volume fluctuations
from time to time in recent years that have often been unrelated or
disproportionate to the operating performance of particular companies. These
broad fluctuations could affect the market price of the Common Stock.

     The Company has outstanding options to purchase approximately 770,000
shares of Common Stock, approximately 480,000 of which are currently
exercisable. If these options are exercised, the issuance of such shares of
Common Stock would dilute the proportionate voting power and equity interests
of the holders of Common Stock offered hereby. In addition, sales of
substantial amounts of


                                       3

<PAGE>

Common Stock, including the sale by the Company of all or a substantial portion
of the shares of Common Stock registered hereunder, or the sale by Cooper Life
Sciences ("CLS") of all or a substantial portion of the approximately 1,400,000
shares of Common Stock it beneficially owns (which are registered for resale on
a registration statement under the Securities Act), or the perception that such
sales could occur, could adversely affect prevailing market prices for the
Common Stock.


Significant Stockholder

     CLS currently owns 11.5% of the Company's issued and outstanding shares of
Common Stock. In addition, pursuant to a settlement agreement with the Company
entered into on June 14, 1993, CLS has the right to designate two of the eight
members of the Company's Board of Directors so long as CLS owns at least
800,000 shares of Common Stock, and one director so long as CLS owns at least
333,333 shares of Common Stock. A third member of the Company's Board of
Directors, Moses Marx, owns a majority of the outstanding stock of CLS. By
virtue of their representation on the Company's Board of Directors and CLS'
significant ownership of Common Stock, CLS and Mr. Marx may have significant
influence over the affairs of the Company.


                                USE OF PROCEEDS

     Except as otherwise provided in the applicable Prospectus Supplement, the
net proceeds from the sale of the Securities will be used for general corporate
purposes, which may include but are not limited to working capital, capital
expenditures, repayment or refinancing of indebtedness and acquisitions. When a
particular series of Securities is offered, the applicable Prospectus
Supplement will set forth the Company's intended use for the net proceeds
received from the sale of such Securities. Pending the application of the net
proceeds, the Company expects to invest the proceeds in short-term, interest-
bearing instruments or other investment-grade securities.


                             PLAN OF DISTRIBUTION

     The Company may sell the Securities to one or more underwriters for public
offering and sale by them and may also sell the Securities to investors
directly or through agents. Any such underwriter, dealer or agent involved in
the offer and sale of the Securities will be named in the applicable Prospectus
Supplement. The Company has reserved the right to sell the Securities directly
to investors on its own behalf in those jurisdictions where and in such manner
as it is authorized to do so.

     The distribution of the Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices. Sales of the Securities
offered hereby may be effected from time to time in one or more transactions on
the NYSE or the PCX or in negotiated transactions or a combination of such
methods. The Company may also, from time to time, authorize dealers, acting as
the Company's agents, to offer and sell the Securities upon the terms and
conditions as are set forth in the applicable Prospectus Supplement. In
connection with the sale of the Securities, underwriters may receive
compensation from the Company in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of the Securities
for whom they may act as agent. Underwriters may sell the Securities to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agent. Any such underwriter,
dealer or agent will be identified, and any such compensation received from the
Company will be described, in the applicable Prospectus Supplement. Unless
otherwise indicated in a Prospectus Supplement, an agent will be acting on a
best efforts basis and a dealer will purchase Securities as a principal and may
then resell such Securities at varying prices to be determined by the dealer.

     Any underwriting compensation paid by the Company to underwriters or
agents in connection with the offering of the Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the applicable Prospectus Supplement. Dealers and agents
participating in the distribution of the Securities may be deemed to be
underwriters, and any discounts


                                       4

<PAGE>

and commissions received by them and any profit realized by them on resale of
the Securities may be deemed to be underwriting discounts and commissions.
Underwriters, dealers and agents may be entitled, under agreements entered into
with the Company, to indemnification against and contribution toward certain
civil liabilities, including liabilities under the Securities Act, and to
reimbursement by the Company for certain expenses.

     To facilitate an offering of a series of Securities, certain persons
participating in any such offering may engage in transactions that stabilize,
maintain, or otherwise affect the price of the Securities. This may include
over-allotments or short sales of the Securities, which involve the sale by
persons participating in the offering of more Securities than have been sold to
them by the Company. In such circumstances, such persons would cover such
over-allotments or short positions by purchasing Securities in the open market
or by exercising the over-allotment option, if any, granted to such persons. In
addition, such persons may stabilize or maintain the price of the Securities by
bidding for or purchasing Securities in the open market or by imposing penalty
bids, whereby selling concessions allowed to dealers participating in any such
offering may be reclaimed if the Securities sold by them are repurchased in
connection with stabilization transactions. The effect of these transactions
may be to stabilize or maintain the market price of the Securities at a level
above that which might otherwise prevail in the open market. Such transactions,
if commenced, may be discontinued at any time.

     Certain of the underwriters, dealers or agents and their associates may
engage in transactions with and perform services for the Company in the
ordinary course of business.


                                 LEGAL MATTERS

     Certain legal matters with respect to the Securities offered hereby will
be passed upon for the Company by Latham & Watkins, New York, New York. Certain
legal matters will be passed upon for any agents or underwriters by counsel for
such agents or underwriters identified in the applicable Prospectus Supplement.
Certain members of Latham & Watkins own shares of Common Stock totaling less
than 1% of the outstanding shares of Common Stock.


                                    EXPERTS

     The consolidated financial statements and schedule of The Cooper
Companies, Inc. and subsidiaries, the consolidated financial statements and
schedule of Hospital Group of America, Inc. and subsidiaries and the financial
statements and schedule of CooperSurgical, Inc. as of October 31, 1996 and 1995
and for each of the years in the three-year period ended October 31, 1996, have
been incorporated by reference herein and in the Registration Statement in
reliance upon the reports of KPMG Peat Marwick LLP, independent certified
public accountants, incorporated by reference herein, and upon the authority of
said firm as experts in accounting and auditing.


                                       5

<PAGE>

- --------------------------------------------------------------------------------
   No dealer, salesperson or any other person has been authorized to give any
   information or to make any representations not contained or incorporated by
   reference in this Prospectus Supplement and in the Prospectus in connection
   with the offering herein contained, and, if given or made, such information
   or representations must not be relied upon as having been authorized by the
   Company or the Underwriters. Neither this Prospectus Supplement nor the
   Prospectus constitutes an offer to sell, or a solicitation of an offer to
   buy, the securities offered hereby in any jurisdiction where, or to any
   person to whom, it is unlawful to make such offer or solicitation. Neither
   the delivery of this Prospectus Supplement or the Prospectus nor any sale
   made hereafter shall, under any circumstances, create any implications that
   the information contained herein is correct as of any date subsequent to
   the date hereof.


- --------------------------------------------------------------------------------
 
                              TABLE OF CONTENTS



                                                  Page
                                                  -----
               Prospectus Supplement
  Prospectus Supplement Summary    ............    S-3
  Statements Regarding Prior Projections;
     Forward-Looking Statements    ............    S-9
  Risk Factors   ..............................    S-10
  Recent Developments  ........................    S-14
  Use of Proceeds   ...........................    S-14
  Capitalization    ...........................    S-15
  Price Range of Common Stock
     and Dividends  ...........................    S-16
  Selected Consolidated Financial Data   ......    S-17
  Management's Discussion of Financial 
    Condition and Results of Operations  ......    S-19
  Business    .................................    S-28
  Management  .................................    S-42
  Underwriting   ..............................    S-45
  Legal Matters  ..............................    S-46
  Index to Consolidated Financial
     Statements  ..............................    F-1
                   Prospectus
  Available Information   .....................    2
  Incorporation of Certain Information by 
    Reference    ..............................    2
  Forward-Looking Statements    ...............    3
  The Company    ..............................    3
  Risk Factors   ..............................    3
  Use of Proceeds   ...........................    4
  Plan of Distribution    .....................    4
  Legal Matters  ..............................    5
  Experts  ....................................    5


<PAGE>


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  [GRAPHIC OMITTED]








   2,000,000 Shares





    Common Stock










    Deutsche Morgan Grenfell

    PaineWebber Incorporated








    PROSPECTUS SUPPLEMENT
            , 1997