The Cooper Companies Announces Record Fourth Quarter and Full Year 2011 Results
The Cooper Companies Announces Record Fourth Quarter and Full Year 2011 Results
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Fourth quarter revenue increased 15% year-over-year to
$360.9 million . Fiscal 2011 revenue increased 15% to$1,330.8 million . -
Fourth quarter GAAP earnings per share (EPS)
$1.15 , up12 cents or 12% from last year's fourth quarter. Fiscal 2011 GAAP EPS$3.63 , up 49% from fiscal 2010. -
Fourth quarter non-GAAP EPS
$1.46 . Fiscal 2011 non-GAAP EPS$4.50 . See "Reconciliation of Non-GAAP EPS to GAAP EPS" below. -
Fourth quarter free cash flow
$78.5 million . Fiscal 2011 free cash flow$232.6 million .
Commenting on the results,
Fourth Quarter Operating Highlights
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Revenue
$360.9 million , 15% above fourth quarter 2010, 12% in constant currency. -
Gross margin 62% compared with 60% in last year's fourth quarter. The improvement was the result of increased manufacturing efficiencies and product mix partially offset by a
$6.0 million reserve for inventory and return provisions associated with the Avaira recall. Excluding this reserve, gross margin would have been 63%. -
Operating margin 18% compared with 20% in last year's fourth quarter. The decrease was primarily the result of a
$10.0 million one-time charge related to the settlement of the Rembrandt patent litigation, as well as the aforementioned Avaira recall reserve. Excluding these items, operating margin would have been 23%. -
Depreciation and amortization expense
$26.3 million . -
Interest expense
$2.9 million or 1% of sales compared with$8.0 million or 3% of sales in last year's fourth quarter. -
Total debt decreased
$64.8 million to$380.4 million . -
Cash provided by operations
$111.0 million and capital expenditures$32.5 million resulted in free cash flow of$78.5 million .
Fourth Quarter CooperVision (CVI) Operating Highlights
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Revenue
$304.0 million , up 15% from last year's fourth quarter, 11% in constant currency. - Revenue by category:
Constant Currency | ||||
(In millions) | % of CVI Revenue | %chg | %chg | |
4Q11 | 4Q11 | y/y | y/y | |
Toric | $ 89.8 | 29% | 15% | 12% |
Multifocal | 20.4 | 7% | 12% | 10% |
Single-use sphere | 67.1 | 22% | 19% | 12% |
Non single-use sphere, other | 126.7 | 42% | 15% | 11% |
Total | $ 304.0 | 100% | 15% | 11% |
- Revenue by geography:
Constant Currency | ||||
(In millions) | % of CVI Revenue | %chg | %chg | |
4Q11 | 4Q11 | y/y | y/y | |
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$ 136.3 | 45% | 10% | 10% |
EMEA | 98.2 | 32% | 8% | 4% |
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69.5 | 23% | 44% | 29% |
Total | $ 304.0 | 100% | 15% | 11% |
- Selected revenue by material:
Constant Currency | ||||
(In millions) | % of CVI Revenue | %chg | %chg | |
4Q11 | 4Q11 | y/y | y/y | |
Proclear® | $ 79.5 | 26% | 9% | 6% |
Silicone hydrogel | $ 102.7 | 34% | 41% | 39% |
- Gross margin 61% compared with 59% in last year's fourth quarter. The improvement was the result of increased manufacturing efficiencies and product mix, partially offset by a reserve for costs associated with the Avaira recall. Excluding this reserve, gross margin in the fourth quarter 2011 would have been 63%.
Fourth Quarter CooperSurgical (CSI) Operating Highlights
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Revenue
$56.9 million , up 14% from last year's fourth quarter, up 8% excluding acquisitions. - Revenue by category:
(In millions) | % of CSI Revenue | %chg | |
4Q11 | 4Q11 | y/y | |
Office, other | $ 32.3 | 57% | 8% |
Surgical procedures | 20.7 | 36% | 24% |
Fertility | 3.9 | 7% | 10% |
Total | $ 56.9 | 100% | 14% |
- Gross margin 65% consistent with last year's fourth quarter.
Fiscal Year 2011 Operating Highlights
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Revenue
$1,330.8 million , up 15% from fiscal 2010, 11% in constant currency. -
CVI revenue
$1,121.1 million , up 16% from fiscal 2010, and CSI revenue$209.7 million , up 12% from fiscal 2010. - Gross margin 60% compared with 58% in fiscal 2010.
- Operating margin 17% compared with 16% in fiscal 2010.
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Depreciation and amortization expense
$98.1 million . -
Interest expense
$17.3 million or 1% of sales vs.$36.7 million or 3% of sales in fiscal 2010. -
Cash provided by operations
$336.3 million and capital expenditures$103.7 million resulted in free cash flow of$232.6 million .
2012 Guidance
The Company initiated its full-year 2012 guidance. Guidance is summarized as follows:
FY12 Guidance | |
Revenues (In millions) | |
Total |
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CVI |
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CSI |
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EPS | |
GAAP |
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Non-GAAP |
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Free |
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Recent Developments with the
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The
FDA has completed inspections on 2 of our 3 manufacturing facilities (Puerto Rico and NY) and no observations were received (no Form 483). We expect theFDA to inspect ourUK facilities as well, although we are not aware of the timing at this point. -
The
FDA has also completed an inspection of our US distribution center located in West Henrietta, NY. We received a Form 483 with five observations and subsequently, onDecember 7, 2011 , we received a Warning Letter from theFDA . The observations are related to labeling and packaging and are not product specific. We are working closely with theFDA to resolve these observations.
The Cooper Companies Management Changes
As previously announced on
Reconciliation of Non-GAAP EPS to GAAP EPS
To supplement our financial results presented on a GAAP basis, we use non-GAAP measures that we believe are helpful in understanding our results. The non-GAAP measures exclude inventory and return provisions related to the recall of certain lots of Avaira® Toric and Avaira® Sphere contact lenses, a one-time charge to settle the Rembrandt patent lawsuit, costs related to acquisitions, restructuring costs and the redemption cost associated with the extinguishment of our senior notes on
In the fiscal fourth quarter of 2011, our non-GAAP results excluded a total of
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
Three Months Ended |
Twelve Months Ended |
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2011 GAAP | Adjustments | 2011 Non-GAAP | 2011 GAAP | Adjustments | 2011 Non-GAAP | |
Gross profit | $ 223,633 | $ 6,014 | $ 229,647 | $ 804,804 | $ 22,056 | $ 826,860 |
Operating income | $ 66,621 | $ 16,167 | $ 82,788 | $ 227,556 | $ 32,454 | $ 260,010 |
Income before income taxes | $ 62,880 | $ 16,167 | $ 79,047 | $ 192,764 | $ 48,941 | $ 241,705 |
Provision for income taxes | $ 6,242 | $ 895 | $ 7,137 | $ 17,334 | $ 6,997 | $ 24,331 |
Net income | $ 56,638 | $ 15,272 | $ 71,910 | $ 175,430 | $ 41,944 | $ 217,374 |
Diluted EPS | $ 1.15 | $ 0.31 | $ 1.46 | $ 3.63 | $ 0.87 | $ 4.50 |
Conference Call and Webcast
The Company will host a conference call today at
About
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 our 2012 Guidance and 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
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.
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Consolidated Condensed Balance Sheets | ||
(In thousands) | ||
(Unaudited) | ||
October 31, |
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2011 | 2010 | |
ASSETS | ||
Current assets: | ||
Cash and cash equivalents |
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Trade receivables, net | 214,779 | 197,490 |
Inventories | 253,584 | 227,902 |
Deferred tax assets | 33,684 | 28,828 |
Other current assets | 33,125 | 33,547 |
Total current assets | 540,347 | 491,340 |
Property, plant and equipment, net | 609,205 | 593,887 |
Goodwill | 1,276,567 | 1,261,976 |
Other intangibles, net | 128,341 | 114,177 |
Deferred tax assets | 21,828 | 23,072 |
Other assets | 48,230 | 40,566 |
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LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current liabilities: | ||
Short-term debt |
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Other current liabilities | 214,227 | 180,361 |
Total current liabilities | 267,206 | 199,520 |
Long-term debt | 327,453 | 591,977 |
Other liabilities | 72,244 | 46,543 |
Deferred tax liabilities | 20,127 | 20,202 |
Total liabilities | 687,030 | 858,242 |
Stockholders' equity | 1,937,488 | 1,666,776 |
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Consolidated Condensed Statements of Income | ||||
(In thousands, except earnings per share amounts) | ||||
(Unaudited) | ||||
Three Months Ended | Year Ended | |||
October 31, | October 31, | |||
2011 | 2010 | 2011 | 2010 | |
Net sales |
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Cost of sales | 137,275 | 125,871 | 526,031 | 481,794 |
Gross profit | 223,633 | 187,481 | 804,804 | 676,723 |
Selling, general and administrative expense | 139,685 | 109,874 | 513,138 | 433,057 |
Research and development expense | 11,738 | 10,486 | 43,581 | 35,274 |
Restructuring costs | -- | -- | -- | 424 |
Amortization of intangibles | 5,589 | 4,617 | 20,529 | 18,056 |
Operating income | 66,621 | 62,504 | 227,556 | 189,912 |
Interest expense | 2,906 | 7,984 | 17,342 | 36,668 |
Loss on extinguishment of debt | -- | -- | 16,487 | -- |
Litigation settlement charges | -- | 750 | -- | 27,750 |
Other (expense) income, net | (835) | 106 | (963) | (1,068) |
Income before income taxes | 62,880 | 53,876 | 192,764 | 124,426 |
Provision for income taxes | 6,242 | 5,678 | 17,334 | 11,623 |
Net income |
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Diluted earnings per share |
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Number of shares used to compute earnings per share | 49,184 | 46,827 | 48,309 | 46,505 |
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 3Q11 | Trailing Twelve Months 2011 | |||||
Market | CVI | Market | CVI | |||
Market | Change | Change | Market | Change | Change | |
Sales by Category | ||||||
Spheres | $ 1,342 | 1% | 5% | $ 5,201 | 3% | 7% |
Torics | 341 | 7% | 7% | 1,273 | 8% | 11% |
Multifocal | 82 | 6% | 4% | 319 | 8% | 0% |
WW Soft Contact Lenses | $ 1,765 | 3% | 5% | $ 6,793 | 4% | 8% |
Sales by Modality | ||||||
Single Use | $ 675 | 8% | 9% | $ 2,524 | 8% | 10% |
Other | 1,090 | (0%) | 4% | 4,269 | 2% | 7% |
WW Soft Contact Lenses | $ 1,765 | 3% | 5% | $ 6,793 | 4% | 8% |
Sales by Material | ||||||
Hydrogel | $ 1,004 | (1%) | (5%) | $ 3,934 | (1%) | (4%) |
Silicone Hydrogel | 761 | 9% | 37% | 2,859 | 13% | 47% |
WW Soft Contact Lenses | $ 1,765 | 3% | 5% | $ 6,793 | 4% | 8% |
Sales by Geography | ||||||
Americas | $ 673 | 2% | 4% | $ 2,579 | 5% | 7% |
EMEA | 504 | 2% | 5% | 1,972 | 5% | 8% |
Asia Pacific | 588 | 4% | 11% | 2,242 | 2% | 8% |
WW Soft Contact Lenses | $ 1,765 | 3% | 5% | $ 6,793 | 4% | 8% |
United States | $ 579 | 3% | 4% | $ 2,206 | 5% | 8% |
International | 1,186 | 3% | 6% | 4,587 | 4% | 7% |
WW Soft Contact Lenses | $ 1,765 | 3% | 5% | $ 6,793 | 4% | 8% |
COO-E
CONTACT:Source:Kim Duncan Director, Investor Relations ir@cooperco.com 925-460-3663 www.coopercos.com
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