The Cooper Companies, Inc.
Jun 6, 2013

The Cooper Companies Announces Second Quarter 2013 Results

PLEASANTON, Calif., June 6, 2013 (GLOBE NEWSWIRE) -- The Cooper Companies, Inc. (NYSE:COO) today announced financial results for the fiscal second quarter ended April 30, 2013.

Commenting on the results, Robert S. Weiss, Cooper's president and chief executive officer said, "I am enthused by our performance as we continue executing on our long-range strategies that lead to gaining market share and improving our operating margin. Our silicone hydrogel family of lenses continues to show strong growth and we recently announced the launch of MyDay, our branded single-use silicone hydrogel lens, with a goal of continuing this momentum for many years to come."

Second Quarter GAAP Operating Highlights

Second Quarter CooperVision GAAP Operating Highlights

        Constant Currency
  (In millions) % of CVI Revenue %chg %chg
  2Q13 2Q13 y/y y/y
Toric  $ 96.7 31% 8% 10%
Multifocal  29.7 10% 33% 34%
Single-use sphere  63.7 21% 2% 11%
Non single-use sphere, other  119.2 38% 5% 8%
Total  $ 309.3 100% 7% 11%
        Constant Currency
   (In millions)  % of CVI Revenue %chg %chg
   2Q13  2Q13 y/y y/y
Americas  $ 136.5 44% 12% 12%
EMEA  104.8 34% 7% 8%
Asia Pacific  68.0 22% --% 13%
Total  $ 309.3 100% 7% 11%
        Constant Currency
   (In millions)  % of CVI Revenue %chg %chg
   2Q13  2Q13 y/y y/y
         
Silicone hydrogel  $ 133.5 43% 29% 31%
Proclear®  $ 77.3 25% 8% 11%

Second Quarter CooperSurgical GAAP Operating Highlights

  (In millions) % of CSI Revenue %chg
  2Q13 2Q13 y/y
Office, other  $ 28.7 38% -6%
Surgical procedures  21.3 29% -3%
Fertility  24.7 33% 527%
Total  $ 74.7 100% 32%

2013 Guidance

The Company revises its full year fiscal 2013 guidance. Guidance is summarized as follows:

  FY13 Guidance FY13 Guidance
  Old New
Revenues (In millions)    
Total $1,575 - $1,625 $1,575 - $1,605
CVI $1,260 - $1,290 $1,260 - $1,280
CSI $315 - $335 $315 - $325
EPS    
GAAP $6.22 - $6.37 $6.42 - $6.52
Non-GAAP $5.95 - $6.10 $6.15 - $6.25
Free Cash Flow (In millions) $170 - $200 $170 - $200

Guidance assumes constant currency at the date of issuance and excludes the financial impact for the proposed sale of Aime announced May 31, 2013.

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 insurance proceeds related to a business interruption claim and costs related to acquisitions. 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.

In the fiscal first quarter of 2013, our non-GAAP results exclude $0.6 million of costs related to the acquisition of Origio recorded in selling, general and administrative expense and $14.1 million in business interruption insurance proceeds. Our fiscal second quarter of 2013 non-GAAP results include the $0.9 million income tax benefit that arises from the impact of the above adjustments to the related projected fiscal year effective tax rate. 

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,   Six Months Ended April 30,
  2013 GAAP  Adjustments  2013 Non-GAAP   2013 GAAP  Adjustments  2013 Non-GAAP
               
Operating income  $ 81,473  $ --   $ 81,473    $ 150,293  $ 626  $ 150,919
Income before income taxes  $ 78,940  $ --   $ 78,940    $ 159,916  $ (13,459)  $ 146,457
Provision for income taxes  $ 3,473  $ 868  $ 4,341    $ 9,515  $ 1,038  $ 10,553
Net income attributable to Cooper Stockholders  $ 75,136  $ (868)  $ 74,268    $ 149,803  $ (14,497)  $ 135,306
Diluted EPS attributable to Cooper stockholders  $ 1.52  $ (0.02)  $ 1.50    $ 3.02  $ (0.29)  $ 2.73
               
       
  Fiscal 2013 EPS Guidance    
  2013 GAAP  Adjustments  2013 Non-GAAP        
               
Diluted EPS $6.42 - $6.52  $ (0.27) $6.15 - $6.25        

Conference Call and Webcast

The Company will host a conference call today at 5:00 PM ET to discuss its fiscal second quarter 2013 financial results and current corporate developments. The dial in number in the United States is +1-800-591-6942 and outside the United States is +1-617-614-4909. The passcode is 17608162. There will be a replay available approximately two hours after the call ends until Thursday, June 13, 2013.  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 77555127. This call will also be broadcast live at http://investor.coopercos.com and a transcript will be available 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 being A Quality of Life Company™ with a focus on delivering shareholder value. Cooper operates through two business units, CooperVision and CooperSurgical. CooperVision brings a refreshing perspective on vision care with a commitment to crafting a wide range of high-quality products 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. Headquartered in Pleasanton, CA, Cooper has approximately 7,800 employees with products sold in over 100 countries. For more information, please visit www.coopercos.com.

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 2013 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 certain European Union countries that could adversely affect our global markets; foreign currency exchange rate and interest rate fluctuations including the risk of further declines in the value of the yen and the euro that would decrease our revenues and earnings; acquisition integration delays or costs or the requirement to record significant adjustments to the preliminary fair value of assets acquired and liabilities assumed within the measurement period; 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; legal costs, insurance expenses, settlement costs and the risk of an adverse decision or settlement related to product liability, patent or other litigation; limitations on sales following new product introductions due to poor market acceptance; new competitors, product innovations or technologies; the impact of acquisitions or divestitures on revenues, earnings or margins; 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, 2012, 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,
  2013 2012
 
ASSETS
 
Current assets:    
Cash and cash equivalents $14,441 $12,840
Trade receivables, net 224,489 234,297
Inventories 339,323 320,199
Deferred tax assets 37,364 39,417
Other current assets 60,171 51,107
Total current assets 675,788 657,860
Property, plant and equipment, net 636,882 640,255
Goodwill 1,381,777 1,370,247
Other intangibles, net 210,623 214,783
Deferred tax assets 13,944 14,434
Other assets 47,718 43,805
  $2,966,732 $2,941,384
     
LIABILITIES AND STOCKHOLDERS' EQUITY
     
Current liabilities:    
Short-term debt $28,955 $25,284
Other current liabilities 199,964 237,268
Total current liabilities 228,919 262,552
Long-term debt 291,549 348,422
Deferred tax liabilities 26,346 30,971
Other liabilities 83,422 86,281
Total liabilities 630,236 728,226
Total Cooper stockholders' equity 2,314,197 2,192,751
Noncontrolling interests 22,299 20,407
Stockholders' equity 2,336,496 2,213,158
  $2,966,732 $2,941,384
     
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except earnings per share amounts)
(Unaudited)
         
   Three Months Ended  Six Months Ended
   April 30,   April 30,
  2013 2012 2013 2012
Net sales  $384,041 $344,589 $763,880 $670,649
Cost of sales 129,862 123,893 269,203 239,500
Gross profit 254,179 220,696 494,677 431,149
Selling, general and administrative expense 150,693 136,962 301,346 268,710
Research and development expense 14,490 13,031 28,143 24,455
Amortization of intangibles 7,523 5,263 14,895 10,816
Operating income 81,473 65,440 150,293 127,168
Interest expense 2,444 3,071 5,010 6,733
Gain on insurance proceeds -- -- 14,084 --
Other (expense) income, net (89) 310 549 992
Income before income taxes 78,940 62,679 159,916 121,427
Provision for income taxes 3,473 7,758 9,515 11,883
Net income 75,467 54,921 150,401 109,544
Less: income attributable to noncontrolling Interests 331  -- 598  --
Net income attributable to Cooper stockholders $75,136 $54,921 $149,803 $109,544
         
Diluted earnings per share attributable to Cooper stockholders $1.52 $1.12 $3.02 $2.24
         
Number of shares used to compute earnings per share attributable to Cooper stockholders 49,478 49,007 49,555 48,941
         

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.

       
  Calendar 1Q13   Trailing Twelve Months 2013
    Market CVI     Market CVI
  Market Change Change   Market Change Change
Sales by Modality              
 Single-use  $ 715 9% 18%    $ 2,863 10% 16%
 Other  1,114 0% 10%    4,315 1% 9%
 WW Soft Contact Lenses  $ 1,829 4% 12%    $ 7,178 4% 11%
               
               
Sales by Geography              
 Americas   $ 760 6% 13%    $ 2,830 6% 11%
 EMEA  501 2% 7%    2,031 2% 7%
 Asia Pacific   568 2% 16%    2,317 4% 17%
 WW Soft Contact Lenses  $ 1,829 4% 12%    $ 7,178 4% 11%
               
 United States  $ 667 6% 13%    $ 2,451 6% 11%
 International  1,162 3% 11%    4,727 3% 11%
 WW Soft Contact Lenses  $ 1,829 4% 12%    $ 7,178 4% 11%


COO-E

CONTACT: Kim Duncan

         Senior Director, Investor Relations

         ir@cooperco.com

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Source: The Cooper Companies, Inc.

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