The Cooper Companies, Inc.
Dec 9, 2008

The Cooper Companies Announces Fourth Quarter and Full Year 2008 Results

PLEASANTON, Calif., Dec. 9, 2008 (GLOBE NEWSWIRE) -- The Cooper Companies, Inc. (NYSE:COO) today announced financial results for the fiscal fourth quarter and full year ended October 31, 2008.

-- Fourth quarter 2008 revenue increased 6% year-over-year to $268.8 million. Fiscal 2008 revenue increased 12% to a record $1,063.2 million.





-- Fourth quarter 2008 CooperVision (CVI) revenue up 6% to $224.1 million, and CooperSurgical (CSI) revenue up 7% to $44.7 million. Fiscal 2008 CVI revenue up 12% to $894.8 million, and CSI revenue up 9% to $168.4 million.





-- Fourth quarter 2008 GAAP earnings per share (EPS) 65 cents, versus a loss of 54 cents in last year's fourth quarter. Fiscal 2008 GAAP EPS $1.43, versus a loss of 25 cents in fiscal 2007.



-- Fourth quarter cash flow from operations $41.0 million and capital expenditures $22.6 million resulted in free cash flow of $18.4 million. Total debt decreased $23.0 million

to $904.8 million, with $511.4 million drawn on the $650.0 million revolving line of credit.



-- Fiscal 2009 revenue guidance of $1,030 million to $1,100 million and GAAP EPS of $2.16 to $2.36.

Commenting on the results, Robert S. Weiss, Cooper's president and chief executive officer said, "We are very pleased with our solid fourth quarter results considering the negative impact of the global economic downturn in October. As we enter fiscal 2009, we expect the contact lens market to remain soft, but improve as the year progresses. CooperVision's business will be strengthened by the planned introduction of two new products in the first calendar quarter of 2009, Biofinity® toric and Proclear® 1 Day in Japan, along with Avaira toric, which we expect to launch by the end of calendar 2009. We are proactively managing the business by focusing on improving earnings, generating cash flow and gaining market share. This focus should help us remain competitive throughout this downturn and continue to outperform the market. I am confident in the strength of our business today driven by market-leading products, cost control discipline and a strong capital structure."



Fourth Quarter Operating Highlights

-- Revenue $268.8 million, 6% above fourth quarter 2007, 6% in constant currency.



-- Gross margin 60% compared with 46% in last year's fourth quarter (or 61% in last year's fourth quarter excluding costs considered unrelated to core operating performance as shown below in "Unaudited Reconciliation and Explanation of Non-GAAP to GAAP Operating Results").





-- Operating margin 18% compared with negative 2% in last year's fourth quarter (or unchanged from last year's fourth quarter excluding costs considered unrelated to core operating performance).



-- Depreciation and amortization expense $19.8 million.

Fourth Quarter CVI Operating Highlights





-- Revenue $224.1 million, up 6% from last year's fourth quarter, 6% in constant currency.



-- Revenue by segment:

                                                            Constant
                          (In         % of CVI              Currency
                       thousands)     Revenue       %chg      %chg
                          4Q08          4Q08         y/y       y/y
                        --------      --------     ------   --------
 Specialty
   Toric                $ 71,903         32%        n/c         2%
   Multifocal             14,617          6%         20%       21%
   Cosmetic                3,556          2%        -10%       -5%
                        --------      --------
 Total specialty          90,076         40%          3%        4%
 Single-use sphere        44,675         20%         37%       32%
 Non single-use sphere,
  other                   89,334         40%         -3%       -1%
                        --------      --------
 Total                  $224,085         100%         6%        6%
                        ========      ========

  -- Revenue by geography:
                                                            Constant
                          (In         % of CVI              Currency
                       thousands)     Revenue       %chg      %chg
                          4Q08          4Q08         y/y       y/y
                        --------      --------     ------   --------
 Americas               $ 99,565         44%          1%        2%
 Europe                   82,940         37%          3%        7%
 Asia-Pacific             41,580         19%         25%       19%
                        --------      --------
 Total                  $224,085         100%         6%        6%
                        ========      ========

  -- Revenue by product                                     Constant
                          (In         % of CVI              Currency
                       thousands)     Revenue       %chg      %chg
                          4Q08          4Q08         y/y       y/y
                        --------      --------     ------   --------
 Proclear               $ 61,749         28%         18%       21%
 Biofinity              $ 14,623          7%        195%      200%
 Avaira                   $3,712          2%        n/a       n/a

  -- Gross margin 61% compared with 44% in the fourth quarter of
     2007 (or unchanged from last year's fourth quarter  excluding
     costs considered unrelated to core operating  performance).

  -- Operating margin 20% compared with negative 3% in the fourth
     quarter of 2007 (or unchanged from last year's fourth quarter
     excluding costs considered unrelated to core operating
     performance).

Fourth Quarter CSI Operating Highlights


  -- Revenue $44.7 million, up 7% from last year's fourth quarter,
     all of which was organic growth.

  -- Sales of products marketed directly to hospitals grew 18%
     year-over-year to $13.4 million in the fourth quarter and
     represent 30% of CSI's total revenue.

  -- Gross margin 59%, up from 58% in the fourth quarter of 2007
     (or unchanged from last year's fourth quarter excluding costs
     considered unrelated to core operating performance).

  -- Operating margin 22%, up from 21% in the fourth quarter of
     2007 (or 19% in last year's fourth quarter excluding costs
     considered unrelated to core operating performance).

Fiscal Year 2008 Operating Highlights


  -- Record revenue $1,063.2 million, up 12% from fiscal 2007,
     8% in constant currency.

  -- CVI revenue $894.8 million, up 12% from fiscal 2007, and CSI
     revenue $168.4 million, up 9% from fiscal 2007.

  -- GAAP EPS $1.43 vs. loss of 25 cents in fiscal 2007. Non-GAAP
     EPS of $2.26 vs. $2.12 in fiscal 2007.

  -- Depreciation and amortization expense $82.2 million.

2009 Guidance

The Company is targeting fiscal 2009 revenue in the range of $1,030 million to $1,100 million, representing a negative 3% to positive 3% change over fiscal 2008, and includes CVI revenue of $865 million to $925 million and CSI revenue of $165 million to $175 million. GAAP EPS for fiscal 2009 is targeted in the range of $2.16 to $2.36.

Conference Call and Webcast

Cooper will host a conference call today at 5:00 p.m. ET to discuss its fourth quarter and full year 2008 financial results. The dial in number in the United States is +1-866-396-2384 and outside the United States is +1-617-847-8711. The passcode is 46789867. There will be a replay available approximately one hour after the call ends until Tuesday, December 16, 2008. The replay number in the United States is +1-888-286-8010 and outside the United States is +1-617-801-6888. The replay passcode is 99264741. This call will be broadcast live on our website at www.coopercos.com and at www.streetevents.com. A transcript will be available on our website within 24 hours after the conference call.

About The Cooper Companies

The Cooper Companies, Inc. manufactures and markets specialty healthcare products through its CooperVision and CooperSurgical units. Corporate offices are located in Pleasanton, CA. For more information, visit www.coopercos.com, or dial our toll free interactive telephone system at 1-800-334-1986 for stock quotes, recent press releases and financial data.



CooperVision develops, manufactures and markets a broad range of soft contact lenses for the worldwide vision correction market. Dedicated to enhancing the contact lens experience for practitioners and patients, CooperVision specializes in lenses for astigmatism, presbyopia and ocular dryness. CooperVision manufactures a full array of monthly, two-week and daily disposable contact lenses featuring advanced materials and optics. Headquartered in Pleasanton, CA, it manufactures in Juana Diaz, Puerto Rico; Norfolk, VA; Rochester, NY; Adelaide, Australia; Hamble and Hampshire, England; and Madrid, Spain. For more information, visit www.coopervision.com.

CooperSurgical develops, manufactures and markets medical devices, diagnostic products and surgical instruments and accessories used primarily by gynecologists and obstetricians. Its major manufacturing and distribution facilities are in Trumbull, CT, and Stafford, Texas. For more information, visit www.coopersurgical.com.

The information on Cooper's Web sites and its interactive telephone system are not part of this news release.

Forward-Looking Statements

This news release contains "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995. Statements relating to plans, prospects, goals, strategies, future actions, events or performance and other statements which are other than statements of historical fact, including all statements regarding anticipated growth in our revenue, planned product launches and expected results of operations and integration of any acquisition are forward-looking. To identify these statements look for words like "believes," "expects," "may," "will," "should," "could," "seeks," "intends," "plans," "estimates" or "anticipates" and similar words or phrases. Forward-looking statements necessarily depend on assumptions, data or methods that may be incorrect or imprecise and are subject to risks and uncertainties.



Among the factors that could cause our actual results and future actions to differ materially from those described in forward-looking statements are: adverse changes in global or regional general business, political and economic conditions due to the current global economic downturn, including the impact of continuing uncertainty and instability of U.S. and international credit markets that may adversely affect the Company's or its customers' ability to meet future liquidity needs; the requirement to provide for a significant liability or to write off a significant asset, including impaired goodwill as a result of recent declines in the price of the Company's common stock or other events; failures to launch, or significant delays in introducing new products, or limitations on sales following introduction due to poor market acceptance or manufacturing constraints (including failures to develop and implement improvements to manufacturing processes for new products); failures to receive or delays in receiving U.S. or foreign regulatory approvals for products; new competitors, product innovations or technologies; a major disruption in the operations of our manufacturing, research and development or distribution facilities due to technological problems, natural disasters or other causes; disruptions in supplies of raw materials, particularly components used to manufacture our silicone hydrogel lenses; the impact of acquisitions or divestitures on revenues, earnings or margins; losses arising for pending or future litigation or product recalls; interest rate and foreign currency exchange rate fluctuations; changes in U.S. and foreign government regulation of the retail optical industry and of the healthcare industry generally; changes in tax laws or their interpretation and changes in effective tax rates; changes in the Company's expected utilization of recognized net operating loss carryforwards and other events described in our Securities and Exchange Commission filings, including the "Business" and "Risk Factors" sections in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2007, as such Risk Factors may be updated in quarterly filings.

We caution investors that forward-looking statements reflect our analysis only on their stated date. We disclaim any intent to update them except as required by law.


              THE COOPER COMPANIES, INC. AND SUBSIDIARIES
                 Consolidated Condensed Balance Sheets
                 -------------------------------------
                            (In thousands)
                              (Unaudited)

                                    October 31,         October 31,
                                       2008                2007
                                   ------------        ------------

                                ASSETS

 Current assets:
   Cash and cash equivalents       $      1,944        $      3,226
   Trade receivables, net               159,158             164,493
   Inventories                          283,454             267,914
   Deferred tax asset                    26,337              23,395
   Other current assets                  55,139              58,494
                                   ------------        ------------
     Total current assets               526,032             517,522
                                   ------------        ------------
 Property, plant and equipment,
  net                                   602,654             604,530
 Goodwill                             1,251,699           1,289,584
 Other intangibles, net                 130,587             145,833
 Deferred tax asset                      25,645              20,015
 Other assets                            50,999              18,685
                                   ------------        ------------
                                   $  2,587,616        $  2,596,169
                                   ============        ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

 Current liabilities:
   Short-term debt                 $     43,013        $     46,514
   Other current liabilities            212,394             239,966
                                   ------------        ------------
     Total current liabilities          255,407             286,480
                                   ------------        ------------
 Long-term debt                         861,781             830,116
 Other liabilities                       38,156               9,408
 Deferred tax liabilities                15,196              10,678
                                   ------------        ------------
     Total liabilities                1,170,540           1,136,682
                                   ------------        ------------
 Stockholders' equity                 1,417,076           1,459,487
                                   ------------        ------------
                                   $  2,587,616        $  2,596,169
                                   ============        ============


              THE COOPER COMPANIES, INC. AND SUBSIDIARIES
            Consolidated Condensed Statements of Operations
            -----------------------------------------------
               (In thousands, except per share amounts)
                              (Unaudited)

                    Three Months Ended              Year Ended
                        October 31,                 October 31,
                 ------------------------    ------------------------
                    2008          2007          2008          2007
                 ----------    ----------    ----------    ----------
 Net sales       $  268,809    $  253,824    $1,063,176    $  950,641
 Cost of sales      106,765       136,584       453,146       431,110
                 ----------    ----------    ----------    ----------
 Gross profit       162,044       117,240       610,030       519,531
 Selling,
  general and
  administrative
  expense           101,255       104,973       429,304       407,951
 Research and
  development
  expense             9,190         9,277        35,468        39,858
 Restructuring
  costs                  --         2,896         1,521         9,674
 Amortization
  of intangibles      4,097         4,191        16,774        16,194
                 ----------    ----------    ----------    ----------
 Operating
  income (loss)      47,502        (4,097)      126,963        45,854
 Interest
  expense            12,342        10,888        50,784        42,683
 Other (loss)
  income, net        (1,902)       (3,839)           28        (2,499)
                 ----------    ----------    ----------    ----------
 Income (loss)
  before income
  taxes              33,258       (18,824)       76,207           672
 Provision for
  income taxes        3,779         5,370        10,731        11,864
                 ----------    ----------    ----------    ----------
 Net income
  (loss)             29,479       (24,194)       65,476       (11,192)
 Add interest
  charge
  applicable to
  convertible
  debt, net of
  tax                    --            --         1,394            --
                 ----------    ----------    ----------    ----------
 Income
  (loss) for
  calculating
  earnings
  per share      $   29,479    $  (24,194)   $   66,870    $  (11,192)
                 ==========    ==========    ==========    ==========

 Diluted
  earnings
  (loss) per
  share          $     0.65    $    (0.54)   $     1.43    $    (0.25)
                 ==========    ==========    ==========    ==========

 Number of
  shares used to
  compute
  earnings per
  share              45,102        44,835        46,844        44,707
                 ==========    ==========    ==========    ==========


 Unaudited Reconciliation and Explanation of Non-GAAP to GAAP
 ------------------------------------------------------------
 Operating Results (In thousands, except per share amounts)
 ----------------------------------------------------------

 Listed below are the items included in net income that management
 excludes in computing non-GAAP financial measures as described below
 the table.

              THE COOPER COMPANIES, INC. AND SUBSIDIARIES
        Reconciliation of Non-GAAP Earnings to GAAP Net Income
        ------------------------------------------------------

                         Three Months Ended           Year Ended
                            October 31,              October 31,
                        --------------------    --------------------
                          2008        2007        2008        2007
                        --------    --------    --------    --------
 GAAP net income (loss) $ 29,479    $(24,194)   $ 65,476    $(11,192)
 Non-GAAP adjustments:
 Production start-up
  and restructuring
  costs in cost
  of sales                    --      37,017      27,063      70,670
 Distribution center
  rationalization
  and restructuring
  costs in SGA                --       1,465       1,938      14,186
 Intellectual property
  litigation expenses
  in SGA                      --       4,727       3,364      10,325
 Production start-up
  costs in SGA                --       2,436       3,556       6,857
 Acquired in-process
  R&D                         --          --          --       7,254
 Other restructuring
  costs in operating
  expenses                    --       2,893       2,535       8,868
 Write-off of deferred
  financing costs             --          --       2,955         882
 Income tax effect            --         233      (2,514)     (8,858)
                        --------    --------    --------    --------
                              --      48,771      38,897     110,184
                        --------    --------    --------    --------
 Non-GAAP net income    $ 29,479    $ 24,577    $104,373    $ 98,992
                        ========    ========    ========    ========

 Add interest charge
  applicable to
  convertible debt            --         523       1,394       2,092
                        --------    --------    --------    --------

 Income for calculating
  diluted earnings
  per share             $ 29,479    $ 25,100    $105,767    $101,084
                        ========    ========    ========    ========

 Diluted earnings
  per share             $   0.65    $   0.53    $   2.26    $   2.12
                        ========    ========    ========    ========

 Number of shares used
  to compute earnings
  per share               45,102      47,666      46,844      47,582
                        ========    ========    ========    ========


Explanation of Non-GAAP Measures

In addition to results in accordance with GAAP, Cooper management also considers non-GAAP operating results as important supplemental financial measures in evaluating its core operating results and in making operating decisions. While management did not report non-GAAP operating results for the fiscal fourth quarter in 2008, it has referred to prior reported non-GAAP operating results in this release for comparative purposes.

Non-GAAP operating results and guidance exclude from GAAP operating items that management does not consider part of core operating performance. Management has used these non-GAAP operating results to compare actual operating results to its business plans, calculate debt compliance covenants, allocate resources and evaluate potential acquisitions. Management believes that presenting these non-GAAP operating results allows investors, as well as management, to evaluate operating results from one period to another on a comparable basis.

Specific items that Cooper excludes from its GAAP results when evaluating core operational performance are:


 -- Acquisition and restructuring expenses consisting of

    - Restructuring and integration expenses related primarily to
      the integration of Ocular Sciences, Inc. (Ocular) into
      CooperVision, Inc., which were charged to cost of sales and
      operating expense. They consisted of costs to integrate
      duplicate facilities, streamline manufacturing and distribution
      practices and integrate sales, marketing and administrative
      functions.

    - Manufacturing and distribution rationalization and start-up
      costs. They consisted of costs to:

      * Develop new manufacturing technologies, specifically
        silicone hydrogel manufacturing.

      * Restructure manufacturing locations and platforms.

      * Eliminate duplicate distribution locations (products are
        stored and shipped from several locations while central
        warehouses are completed).

      We adjusted for these costs because once the specific
      integration activities have been completed and new technology
      and manufacturing techniques have been applied, the costs are
      eliminated.

    - Acquired in-process R&D charges. These charges are subject to
      a formal appraisal process that may take up to twelve months
      to complete following a transaction. Management adjusts for
      these expenses because they are not known when evaluating
      forecasted performance of the acquired business.

 -- Expenses associated with certain intellectual property litigation

    Cooper had filed suits claiming patent infringement against a
    competitor to protect its intellectual property and sought a
    declaratory judgment that a CVI product does not infringe any
    valid and enforceable claims of the competitors' patents. These
    cases have not historically been part of Cooper's normal
    operations. As previously announced, the intellectual property
    suits with this competitor have now been settled.

None of the items listed occurred in the fiscal fourth quarter 2008 and not all the items listed occurred in the fiscal fourth quarter of 2007. Specific amounts for the items in the fiscal fourth quarter of 2007 are set forth in the table above. For fiscal 2008, the Company no longer excludes share-based compensation expense in its non-GAAP operating results as share-based compensation is now comparable over a three-year period.

Operating results adjusted for these items should not be considered alternatives to any performance measures derived in accordance with GAAP. We present them because we consider their disclosure an important supplemental measure of performance. In evaluating Cooper's non-GAAP operating results and guidance, investors are cautioned that in future periods Cooper expects to incur expenses similar to those for which adjustments are made in the presentation of non-GAAP operating results. Presentation of non-GAAP operating results and guidance should not be construed as an indication that future results will be unaffected by similar items or nonrecurring or unusual charges.

Cooper's non-GAAP operating results have limitations as an analytical tool, including that they do not reflect the cost of:



-- The Ocular integration, and the integration and restructuring of other acquisitions.



-- New manufacturing technologies, specifically silicone hydrogel manufacturing, and the phase out of product lines and manufacturing platforms that are being eliminated.



-- Intellectual property litigation, which we expect to be significant but are difficult to forecast.



In addition, non-GAAP operating results may not be useful when comparing Cooper to other companies that may calculate these measures differently. Moreover, the impact of many of the items excluded (particularly litigation and restructuring) on guidance is difficult to quantify because of significant uncertainty in timing and the range of possible outcomes. These items could be material.



Cooper compensates for these limitations by relying primarily on GAAP operating results and supplementing these with non-GAAP operating results.



Soft Contact Lens Revenue Update: Third Calendar Quarter 2008 CVI Revenue in Constant Currency vs. the Worldwide Market in Constant Currency



The data below is extracted from a compilation of industry participants' revenue by the Contact Lens Institute (CLI), an independent market research firm.




 CooperVision vs. Worldwide Manufacturers' Soft Lens Revenue
 (U.S. dollars in millions; constant currency; unaudited)

                            CYQ3 2008               CYQ3
                             Cooper        %        2008         %
                             Vision      Change    Market      Change
                            ---------    -----    ---------    -----
   Single-Use Spherical
    Lenses                   $     48      35%    $     509      11%
   Spherical Lenses (ex
    single-use)                    94       5%          594       2%
                            ---------             ---------
 Total Spheres                    142      14%        1,103       6%
                            ---------             ---------
   Torics                          78       5%          265      10%
   Cosmetic                         3       3%           69      --
   Multifocal                      15      23%           52      14%
                            ---------             ---------
 Specialty Lenses                  96       7%          386       9%
                            ---------             ---------
 Soft Contact Lenses        $     238      11%    $   1,489       7%
                            =========             =========
   Total Silicone
    Hydrogel                $      17     301%    $     473      25%

   Americas Region          $     102       9%    $     592       7%
   European Region                 93      12%          456       8%
   Asia Pacific Region             43      16%          441       5%
                            ---------             ---------
 Worldwide Soft Contact
  Lenses                    $     238      11%    $   1,489       7%
                            =========             =========

   United States            $      87       8%    $     515       8%
   International                  151      13%          974       6%
                            ---------             ---------
 Worldwide Soft Contact
  Lenses                    $     238      11%    $   1,489       7%
                            =========             =========

Based upon Health Product Research (HPR), which reports on a statistical sampling of practitioners each quarter, management calculated that silicone hydrogel lenses accounted for 49% of total patient visits and 54% of new patient visits to contact lens practitioners in the United States during the third calendar quarter of 2008. Silicone hydrogel toric lenses accounted for 51% of total toric patient visits and 56% of new toric patient visits in the United States in the third calendar quarter of 2008.



CONTACT:
The Cooper Companies, Inc.
Albert G. White, III, VP, Investor Relations and Treasurer
Kim Duncan, Director, Investor Relations 925-460-3663
ir@coopercompanies.com
www.coopercos.com