The Cooper Companies, Inc.
Jun 2, 2011

The Cooper Companies Announces Second Quarter 2011 Results

PLEASANTON, Calif., June 2, 2011 (GLOBE NEWSWIRE) -- The Cooper Companies, Inc. (NYSE:COO) today announced financial results for the fiscal second quarter ended April 30, 2011.

Commenting on the results, Robert S. Weiss, Cooper's president and chief executive officer said, "I'm very pleased with our second quarter results. Both our vision and surgical businesses posted solid revenue and margin growth, and we remain on track to achieve our long-term objectives. Our fiscal 2011 strategy remains to invest in the business and look for strategic acquisitions, and we continue to evaluate ways to grow our businesses in underpenetrated geographic regions, such as the BRIC countries. We're raising fiscal 2011 guidance, and we believe our businesses are well positioned for future growth."

Second Quarter GAAP Operating Highlights

Second Quarter CooperVision (CVI) GAAP Operating Highlights

        Constant Currency
  (In millions) % of CVI Revenue %chg %chg
  2Q11 2Q11 y/y y/y
Toric  $ 84.9 31% 14% 11%
Multifocal  18.1 7% -1% -3%
Single-use sphere  58.9 21% 17% 8%
Non single-use sphere, other  113.4 41% 15% 8%
Total  $ 275.3 100% 14% 8%
        Constant Currency
   (In millions)  % of CVI Revenue %chg %chg
   2Q11  2Q11 y/y y/y
Americas  $ 117.3 43% 6% 6%
EMEA  97.2 35% 12% 5%
Asia Pacific  60.8 22% 34% 19%
Total  $ 275.3 100% 14% 8%
        Constant Currency
   (In millions)  % of CVI Revenue %chg %chg
   2Q11  2Q11 y/y y/y
         
Proclear®  $ 74.3 27% 7% 3%
Silicone hydrogel  $ 80.5 29% 49% 45%

Second Quarter CooperSurgical (CSI) GAAP Operating Highlights

  (In millions) % of CSI Revenue %chg
  2Q11 2Q11 y/y
Office, other  $ 28.3 57% 1%
Surgical procedures  18.0 36% 16%
Fertility  3.7 7% 11%
Total  $ 50.0 100% 6%

2011 Guidance

The Company amends its full-year fiscal 2011 guidance. Guidance is summarized as follows:

  FY11 Guidance FY11 Guidance
  Old New
Revenues (In millions)    
Total $1,265 -- $1,290 $1,280 -- $1,300
CVI $1,070 -- $1,085 $1,080 -- $1,095
CSI $195 -- $205 $200 -- $205
EPS    
GAAP $3.60 -- $3.80 $3.90 -- $4.05
Non-GAAP* $3.70 -- $3.90 $4.00 -- $4.15
Free Cash Flow (In millions) $180 -- $210 $190 -- $210 

* Excludes the impact of the 2009 CVI manufacturing restructuring plan, items related to acquisitions and costs related to the redemption of our senior notes.  See "Reconciliation of Non-GAAP EPS to GAAP EPS" below.

Reconciliation of Non-GAAP EPS to GAAP EPS

To supplement our financial results and guidance presented on a GAAP basis, we use non-GAAP measures that we believe are helpful in understanding our results. The non-GAAP measures exclude restructuring costs and costs related to acquisitions, including the one-time gain on settlement of a preexisting relationship related to the acquisition of certain assets from Aime, and the redemption cost associated with the extinguishment of our senior notes on February 15, 2011. We exclude these items because we do not consider them reflective of our ongoing operating performance. Our non-GAAP financial results and guidance are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements and guidance prepared in accordance with GAAP. Management uses supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the factors management uses in planning and forecasting for future periods.

Non-GAAP net income and diluted EPS for the fiscal second quarter of 2011 excludes $16.5 million or 29 cents per share related to the extinguishment of senior notes.  Fiscal 2011 guidance excludes costs related to the 2009 CooperVision manufacturing restructuring plan, items related to acquisitions and costs related to the redemption of our senior notes.

The restructuring costs, primarily severance and costs associated with assets related to the closure of the Norfolk manufacturing plant, are recorded primarily in cost of sales. We completed the restructuring plan in the fiscal first quarter of 2011 and recognized total pre-tax restructuring charges under this plan of $23.1 million. We recognized $1.9 million in fiscal 2011, $16.1 million in fiscal 2010 and $5.1 million in fiscal 2009. In our fiscal first quarter 2011, we separately reported the one-time gain on settlement of a preexisting relationship related to the acquisition of certain assets from Aime of $6.1 million in operating income. Also in our fiscal first quarter 2011, acquisition costs of $0.2 million, principally legal and other due diligence costs, were primarily recorded in selling, general and administrative expense. We believe it is useful for investors to understand the effects of these restructuring costs and acquisition items on our total operating results. 

We also report revenue growth using the non-GAAP financial measure of constant currency revenue. Management presents and refers to constant currency information so that revenue results may be evaluated excluding the effect of foreign currency rate fluctuations. To present this information, current period revenue for entities reporting in currencies other than United States dollars are converted into United States dollars at the average foreign exchange rates for the corresponding period in the prior year.

   
  Three Months Ended April 30,
  2011 GAAP  Adjustments  2011 Non-GAAP
       
Operating income  $ 60,256  $ --   $ 60,256
Income before income taxes  $ 39,720  $ 16,487  $ 56,207
Provision for income taxes  $ 4,360  $ 2,816  $ 7,176
Net income  $ 35,360  $ 13,671  $ 49,031
       
Diluted EPS  $ 0.73  $ 0.29  $ 1.02
       
  Fiscal 2011 EPS Guidance
  2011 GAAP  Adjustments  2011 Non-GAAP
       
Diluted EPS $3.90 -- $4.05 $0.10 $4.00 -- $4.15

 Conference Call and Webcast  

The Company will host a conference call today at 5:00 p.m. ET to discuss its second quarter 2011 financial results. The dial in number in the United States is +1-866-510-0705 and outside the United States is +1-617-597-5363. The passcode is 12679256. There will be a replay available approximately two hours after the call ends until Thursday, June 9, 2011. 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 19595795. 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 following the conference call. 

About The Cooper Companies

The Cooper Companies, Inc. ("Cooper") is a global medical device company publicly traded on the NYSE Euronext (NYSE:COO). Cooper is dedicated to serving the needs of the healthcare professional, improving the quality of life for its employees and customers and providing market leading products. Cooper's commitment to health and wellness is reflected through its corporate culture and global initiatives to promote healthy life choices for its employees. Cooper operates through two business units, CooperVision and CooperSurgical. CooperVision brings a refreshing perspective on vision care with a commitment to crafting quality lenses for contact lens wearers and providing focused practitioner support.   CooperSurgical focuses on supplying women's health clinicians with market leading products and treatment options to improve the delivery of healthcare to women.   Both companies provide superior product range and quality, along with friendly customer service and a drive to continually innovate. Cooper and CooperVision are headquartered in Pleasanton, CA, and CooperSurgical is headquartered in Trumbull, CT.

Forward-Looking Statements               

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

Among the factors that could cause our actual results and future actions to differ materially from those described in forward-looking statements are: adverse changes in the global or regional general business, political and economic conditions due to the current global economic downturn, including the impact of continuing uncertainty and instability of United States and international credit markets that may adversely affect the Company's or its customers' ability to meet future liquidity needs; limitations on sales following new product introductions due to poor market acceptance; 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 from future litigation, including the risk of adverse decisions or settlements related to litigation, or product recalls; interest rate and foreign currency exchange rate fluctuations; the requirement to provide for a significant liability or to write off, or accelerate depreciation on, a significant asset, including goodwill; changes in United States and foreign government regulations of the retail optical industry and of the healthcare industry generally; changes in tax laws or their interpretation and changes in effective tax rates; dilution to earnings per share from acquisitions or issuing stock 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, 2010, 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)
 
   April 30,  October 31,
  2011 2010
 
ASSETS
     
Current assets:    
Cash and cash equivalents $8,430 $3,573
Trade receivables, net 203,764 197,490
Inventories 249,382 227,902
Deferred tax assets 28,989 28,828
Other current assets 47,870 33,547
Total current assets 538,435 491,340
Property, plant and equipment, net 606,005 593,887
Goodwill 1,277,904 1,261,976
Other intangibles, net 127,949 114,177
Deferred tax assets 29,730 23,072
Other assets 45,169 40,566
  $2,625,192 $2,525,018
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities:    
Short-term debt $29,097 $19,159
Other current liabilities 177,053 180,361
Total current liabilities 206,150 199,520
Long-term debt 524,118 591,977
Other liabilities 63,640 46,543
Deferred tax liabilities 20,958 20,202
Total liabilities 814,866 858,242
Stockholders' equity 1,810,326 1,666,776
  $2,625,192 $2,525,018
 
 
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Income
(In thousands, except earnings per share amounts)
(Unaudited)
 
   Three Months Ended  Six Months Ended
   April 30,   April 30,
  2011 2010 2011 2010
Net sales  $325,301 $289,271 $618,530 $549,530
Cost of sales 123,539 125,778 240,162 236,274
Gross profit 201,762 163,493 378,368 313,256
Selling, general and administrative expense 126,382 111,340 239,835 211,918
Research and development expense 10,390 8,573 20,117 16,200
Restructuring costs -- 47 -- 410
Gain on settlement of preexisting relationship -- -- 6,080 --
Amortization of intangibles 4,734 4,499 9,447 8,716
Operating income 60,256 39,034 115,049 76,012
Interest expense 4,268 9,730 11,219 19,955
Loss on extinguishment of debt 16,487 -- 16,487 --
Litigation settlement charge -- 27,000 -- 27,000
Other income (expense), net 219 168 (514) (2,159)
Income before income taxes 39,720 2,472 86,829 26,898
Provision for (benefit from) income taxes 4,360 (1,984) 6,174 2,020
Net income $35,360 $4,456 $80,655 $24,878
         
Diluted earnings per share $0.73 $0.10 $1.69 $0.54
         
Number of shares used to compute earnings per share 48,239 46,367 47,807 46,197

Soft Contact Lens Revenue Update

Worldwide Market vs. CooperVision (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. This data is compiled using gross product sales at foreign exchange rates set by CLI.  It therefore excludes items such as discounts, rebates, currency hedges and freight reimbursements.

Worldwide Manufacturers' Soft Contact Lens Revenue
(U.S. dollars in millions; constant currency; unaudited)
     
  Calendar 1Q11 Calendar 2010
    Market CVI   Market CVI
  Market Change Change Market Change Change
Sales by Category            
Spheres  $ 1,304 5% 2%  $ 5,081 4% 9%
Torics  319 7% 11%  1,207 10% 16%
Multifocal  77 5%  (6%)  306 19% 2%
WW Soft Contact Lenses  $ 1,700 5% 4%  $ 6,594 5% 10%
             
Sales by Modality            
Single Use  $ 615 10% 7%  $ 2,369 8% 11%
Other  1,085 2% 3%  4,225 4% 10%
WW Soft Contact Lenses  $ 1,700 5% 4%  $ 6,594 5% 10%
             
Sales by Material            
Hydrogel  $ 982  (1%)  (7%)  $ 3,961  (3%)  (4%)
Silicone Hydrogel  718 14% 44%  2,633 21% 95%
WW Soft Contact Lenses  $ 1,700 5% 4%  $ 6,594 5% 10%
             
Sales by Geography            
Americas   $ 659 3% 2%  $ 2,506 7% 13%
EMEA  491 7% 5%  1,907 7% 11%
Asia Pacific   550 6% 6%  2,181 2% 3%
WW Soft Contact Lenses  $ 1,700 5% 4%  $ 6,594 5% 10%
             
United States  $ 568 3% 3%  $ 2,138 7% 13%
International  1,132 6% 5%  4,456 5% 8%
WW Soft Contact Lenses  $ 1,700 5% 4%  $ 6,594 5% 10%

COO-E

CONTACT: Albert G. White, III

         VP, Investor Relations and Treasurer



         Kim Duncan

         Director, Investor Relations

         925-460-3663

         ir@coopercompanies.com
Source: The Cooper Companies, Inc.

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