The Cooper Companies, Inc.
Sep 5, 2013

The Cooper Companies Announces Third Quarter 2013 Results

PLEASANTON, Calif., Sept. 5, 2013 (GLOBE NEWSWIRE) -- The Cooper Companies, Inc. (NYSE:COO) today announced financial results for the fiscal third quarter ended July 31, 2013.

Commenting on the results, Robert S. Weiss, Cooper's president and chief executive officer said, "I am pleased to report another strong quarter for the Company. We continued to gain market share within CVI, CSI posted solid revenue growth driven by fertility, and we generated strong EPS and significant free cash flow. We remain encouraged by our business trends and believe we are well positioned to deliver strong operating results to finish our fiscal year."

Third Quarter GAAP Operating Highlights

Third Quarter CooperVision GAAP Operating Highlights

        Constant Currency
  (In millions) % of CVI Revenue %chg %chg
  3Q13 3Q13 y/y y/y
Toric  $ 101.5 31% 7% 8%
Multifocal  33.1 10% 33% 32%
Single-use sphere  70.7 21% -1% 9%
Non single-use sphere, other  125.2 38% 2% 4%
Total  $ 330.5 100% 5% 9%
        Constant Currency
   (In millions)  % of CVI Revenue %chg %chg
   3Q13  3Q13 y/y y/y
Americas  $ 143.0 43% 9% 9%
EMEA  118.4 36% 11% 8%
Asia Pacific  69.1 21% -9% 8%
Total  $ 330.5 100% 5% 9%
        Constant Currency
   (In millions)  % of CVI Revenue %chg %chg
   3Q13  3Q13 y/y y/y
         
Silicone hydrogel  $ 143.0 43% 21% 22%
Proclear®  $ 86.0 26% 9% 11%

Third Quarter CooperSurgical GAAP Operating Highlights

  (In millions) % of CSI Revenue %chg
  3Q13 3Q13 y/y
Office and surgical procedures  $ 54.0 66% 0%
Fertility  27.5 34% 180%
Total  $ 81.5 100% 27%

2013 Guidance

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

  FY13 Guidance FY13 Guidance 4Q13 Guidance
  Old New New
Revenues (In millions)      
Total $1,575 - $1,605 $1,586 - $1,601 $410 - $425
CVI $1,260 - $1,280 $1,271 - $1,281 $330 - $340
CSI $315 - $325 $315 - $320 $80 - $85
EPS      
GAAP $6.42 - $6.52 $6.57 - $6.62 $1.76 - $1.81
Non-GAAP $6.15 - $6.25 $6.23 - $6.28 $1.76 - $1.81
Free Cash Flow (In millions) $170 - $200 $180 - $210 $19 - $49

Guidance assumes constant currency at the date of issuance and excludes the financial impact for the proposed sale of Aime announced on 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 third quarter of 2013 non-GAAP results include $2.5 million for income tax benefits arising from the 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 July 31, Nine Months Ended July 31,
  2013 GAAP  Adjustments  2013 Non-GAAP 2013 GAAP  Adjustments  2013 Non-GAAP
             
Operating income  $ 93,608  $ --   $ 93,608  $ 243,902  $ 625  $ 244,527
Income before income taxes  $ 91,264  $ --   $ 91,264  $ 251,179  $ (13,458)  $ 237,721
Provision for income taxes  $ 2,072  $ 2,482  $ 4,554  $ 11,585  $ 3,522  $ 15,107
Net income attributable to Cooper stockholders  $ 88,951  $ (2,482)  $ 86,469  $ 238,754  $ (16,979)  $ 221,775
Diluted EPS attributable to Cooper stockholders  $ 1.79  $ (0.05)  $ 1.74  $ 4.81  $ (0.34)  $ 4.47
 
         
  Fiscal 2013 EPS Guidance  
  2013 GAAP  Adjustments  2013 Non-GAAP      
             
Diluted EPS $6.57 - $6.62 ($0.34) $6.23 - $6.28      

Conference Call and Webcast

The Company will host a conference call today at 5:00 PM ET to discuss its fiscal third quarter 2013 financial results and current corporate developments. The dial in number in the United States is +1-800-901-5213 and outside the United States is +1-617-786-2962. The passcode is 29370561. There will be a replay available approximately two hours after the call ends until Thursday, September 12, 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 23413821. 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 over 8,000 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)
 
 
  July 31, October 31,
  2013 2012
     
ASSETS
     
Current assets:    
Cash and cash equivalents  $ 25,482  $ 12,840
Trade receivables, net  247,296  234,297
Inventories  339,908  320,199
Deferred tax assets  40,008  39,417
Other current assets  53,313  51,107
Total current assets  706,007  657,860
Property, plant and equipment, net  654,100  640,255
Goodwill  1,378,679  1,370,247
Other intangibles, net  203,398  214,783
Deferred tax assets  17,021  14,434
Other assets  47,703  43,805
   $ 3,006,908  $ 2,941,384
     
     
LIABILITIES AND STOCKHOLDERS' EQUITY
     
Current liabilities:    
Short-term debt  $ 28,338  $ 25,284
Other current liabilities  220,948  237,268
Total current liabilities  249,286  262,552
Long-term debt  215,291  348,422
Deferred tax liabilities  23,298  30,971
Other liabilities  81,391  86,281
Total liabilities  569,266  728,226
Total Cooper stockholders' equity  2,415,522  2,192,751
Noncontrolling interests  22,120  20,407
Stockholders' equity  2,437,642  2,213,158
   $ 3,006,908  $ 2,941,384
     
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except earnings per share amounts)
(Unaudited)
 
 
  Three Months Ended Nine Months Ended
  July 31, July 31,
  2013 2012 2013 2012
Net sales   $ 411,993  $ 378,186  $ 1,175,873  $ 1,048,835
Cost of sales  143,719  138,089  412,923  377,589
Gross profit  268,274  240,097  762,950  671,246
Selling, general and administrative expense  152,141  143,830  453,487  412,540
Research and development expense  14,865  13,156  43,008  37,611
Amortization of intangibles  7,660  5,861  22,553  16,677
Operating income  93,608  77,250  243,902  204,418
Interest expense  2,258  2,315  7,268  9,049
Gain on insurance proceeds  --   --   14,084  -- 
Loss on extinguishment of debt  --   1,404  --   1,404
Other (expense) income, net  (86)  (2,144)  461  (1,152)
Income before income taxes  91,264  71,387  251,179  192,813
Provision for income taxes  2,072  4,433  11,585  16,315
Net income  89,192  66,954  239,594  176,498
Less: income attributable to noncontrolling interests  241  79  840  79
Net income attributable to Cooper stockholders  $ 88,951  $ 66,875  $ 238,754  $ 176,419
Diluted earnings per share attributable to Cooper stockholders  $ 1.79  $ 1.36  $ 4.81  $ 3.60
         
Number of shares used to compute earnings per share attributable to Cooper stockholders  49,754  49,302  49,623  49,069
         

Soft Contact Lens Revenue Update

Worldwide Manufacturers' Soft Contact Lens Revenue
(U.S. dollars in millions; constant currency; unaudited)
 
     
  Calendar 2Q13 Trailing Twelve Months 2013
    Market CVI   Market CVI
  Market Change Change Market Change Change
Sales by Modality            
Single-use  $ 770 9% 15%  $ 2,920 9% 17%
Other  1,100 2% 8%  4,330 1% 9%
WW Soft Contact Lenses  $ 1,870 4% 10%  $ 7,250 4% 11%
             
             
Sales by Geography            
Americas   $ 740 4% 11%  $ 2,850 5% 11%
EMEA  540 4% 8%  2,050 3% 8%
Asia Pacific   590 5% 10%  2,350 4% 15%
WW Soft Contact Lenses  $ 1,870 4% 10%  $ 7,250 4% 11%
 
Source: Management estimates and independent market research

COO-E

CONTACT: Kim Duncan

         Senior Director, Investor Relations

         ir@cooperco.com

         925-460-3663

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Source: The Cooper Companies, Inc.

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