The Cooper Companies Announces First Quarter 2011 Results
The Cooper Companies Announces First Quarter 2011 Results
-
Revenue increased 13% year-over-year to
$293.2 million . CooperVision (CVI) revenue up 13% to$243.6 million and CooperSurgical (CSI) revenue up 12% to$49.6 million . -
GAAP earnings per share (EPS)
96 cents , up52 cents or 118% from last year's first quarter. -
Non-GAAP EPS
85 cents . See "Reconciliation of Non-GAAP EPS to GAAP EPS" shown below. -
Free cash flow
$44.1 million .
Commenting on the results,
First Quarter GAAP Operating Highlights
-
Revenue
$293.2 million , 13% above first quarter 2010, 12% in constant currency. - Gross margin 60% compared with 58% in last year's first quarter. The improvement in gross margin was largely a result of manufacturing efficiency improvements and product mix within both CVI and CSI, offset in part by costs associated with the 2009 CVI manufacturing restructuring plan.
-
Operating margin 19% compared with 14% in last year's first quarter. The improvement was driven by gross margin improvements and a one-time gain of
$6.1 million related to the settlement of a preexisting agreement related to the acquisition of certain assets of Aime. -
Depreciation and amortization expense
$22.9 million , consistent with last year's first quarter. -
Interest expense
$7.0 million compared with$10.2 million in last year's first quarter. Interest expense decreased as a result of lower average debt. -
Total debt decreased
$8.9 million to$602.2 million . -
Cash provided by operations
$72.9 million and capital expenditures$28.8 million resulted in free cash flow of$44.1 million . -
On
January 12, 2011 , closed a new$1.0 billion five-year senior unsecured credit facility ($750.0 million revolving line of credit and$250.0 million delayed draw term loan) which replaced the existing$650.0 million revolver. At the same time, called for the redemption of all$339.0 million of outstanding 7.125% senior notes due 2015. Subsequently, onFebruary 15, 2011 , redeemed all senior notes. -
On
December 1, 2010 , closed the acquisition of certain assets of Aime for a purchase price of approximately$31.4 million .
First Quarter CooperVision (CVI) GAAP Operating Highlights
-
Revenue
$243.6 million , up 13% from last year's first quarter, 12% in constant currency. Revenue includes$5.4 million from the Aime acquisition. - Revenue by category:
(In millions) 1Q11 |
% of CVI Revenue 1Q11 |
%chg y/y |
Constant Currency %chg y/y |
|
Toric | $ 75.8 | 31% | 19% | 21% |
Multifocal | 16.6 | 7% | -- | 2% |
Single-use sphere | 52.9 | 22% | 13% | 8% |
Non single-use sphere, other | 98.3 | 40% | 11% | 9% |
Total | $ 243.6 | 100% | 13% | 12% |
- Revenue by geography:
(In millions) 1Q11 |
% of CVI Revenue 1Q11 |
%chg y/y |
Constant Currency %chg y/y |
|
Americas | $ 96.2 | 40% | 12% | 11% |
EMEA | 90.7 | 37% | 7% | 11% |
Asia Pacific | 56.7 | 23% | 25% | 15% |
Total | $ 243.6 | 100% | 13% | 12% |
- Selected revenue by material:
(In millions) 1Q11 |
% of CVI Revenue 1Q11 |
%chg y/y |
Constant Currency %chg y/y |
|
Proclear | $ 66.5 | 27% | 7% | 9% |
Silicone hydrogel | $ 62.6 | 26% | 53% | 56% |
- Gross margin 59% compared with 57% in the first quarter of 2010. The improvement in gross margin was largely a result of manufacturing efficiency improvements and product mix, offset in part by costs associated with the 2009 CVI manufacturing restructuring plan.
First Quarter CooperSurgical (CSI) GAAP Operating Highlights
-
Revenue
$49.6 million , up 12% from last year's first quarter, up 7% excluding acquisitions. - Revenue by category:
(In millions) 1Q11 |
% of CSI Revenue 1Q11 |
%chg y/y |
|
Office, other | $ 27.8 | 56% | 6% |
Surgical procedures | 18.4 | 37% | 23% |
Fertility | 3.4 | 7% | 10% |
Total | $ 49.6 | 100% | 12% |
- Gross margin 64%, up from 61% in last year's first quarter. The improvement in gross margin was largely a result of manufacturing efficiency improvements and product mix.
2011 Guidance
The Company amends its full-year 2011 guidance. Guidance is summarized as follows:
FY11 Guidance Old |
FY11 Guidance New |
|
Revenues (In millions) | ||
Total | $1,250 - $1,280 | $1,265 - $1,290 |
CVI | $1,055 - $1,075 | $1,070 - $1,085 |
CSI | $195 - $205 | $195 - $205 |
EPS | ||
GAAP | $3.25 - $3.45 | $3.60 - $3.80 |
Non-GAAP* | $3.30 - $3.50 | $3.70 - $3.90 |
Free Cash Flow (In millions) | $160 - $190 | $180 - $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. As indicated in the table below, 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. 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 first quarter of 2011 excludes a related net gain of
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
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 January 31, | |||
2011 GAAP | Adjustments | 2011 Non-GAAP | |
Operating income | $ 54,793 | $ (3,974) | $ 50,819 |
Income before income taxes | $ 47,108 | $ (3,974) | $ 43,134 |
Provision for income taxes | $ 1,813 | $ 1,094 | $ 2,907 |
Net income | $ 45,295 | $ (5,068) | $ 40,227 |
Diluted EPS | $ 0.96 | $ (0.11) | $ 0.85 |
Fiscal 2011 EPS Guidance | |||
2011 GAAP | Adjustments | 2011 Non-GAAP | |
Diluted EPS | $3.60 - $3.80 | $0.10 | $3.70 - $3.90 |
Conference Call and Webcast
The Company will host a conference call today at
About
CooperVision (www.coopervision.com) develops, manufactures and markets a broad range of 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. Headquartered in
CooperSurgical (www.coopersurgical.com) develops, manufactures and markets medical devices, diagnostic products and surgical instruments and accessories used primarily by gynecologists and obstetricians. CooperSurgical is a leader in the U.S. OB-GYN market, and its major manufacturing and distribution facilities are located in
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
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) | ||
January 31, 2011 |
October 31, 2010 |
|
ASSETS | ||
Current assets: | ||
Cash and cash equivalents | $ 3,320 | $ 3,573 |
Trade receivables, net | 189,462 | 197,490 |
Inventories | 239,996 | 227,902 |
Deferred tax assets | 27,002 | 28,828 |
Other current assets | 43,563 | 33,547 |
Total current assets | 503,343 | 491,340 |
Property, plant and equipment, net | 595,825 | 593,887 |
Goodwill | 1,268,734 | 1,261,976 |
Other intangibles, net | 130,380 | 114,177 |
Deferred tax assets | 25,489 | 23,072 |
Other assets | 48,167 | 40,566 |
$ 2,571,938 | $ 2,525,018 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current liabilities: | ||
Short-term debt | $ 15,486 | $ 19,159 |
Other current liabilities | 170,588 | 180,361 |
Total current liabilities | 186,074 | 199,520 |
Long-term debt | 586,724 | 591,977 |
Other liabilities | 56,639 | 46,543 |
Deferred tax liabilities | 20,202 | 20,202 |
Total liabilities | 849,639 | 858,242 |
Stockholders' equity | 1,722,299 | 1,666,776 |
$ 2,571,938 | $ 2,525,018 |
THE COOPER COMPANIES, INC. AND SUBSIDIARIES | ||
Consolidated Statements of Income | ||
(In thousands, except earnings per share amounts) | ||
(Unaudited) | ||
Three Months Ended January 31, |
||
2011 | 2010 | |
Net sales | $ 293,229 | $ 260,258 |
Cost of sales | 116,623 | 110,495 |
Gross profit | 176,606 | 149,763 |
Selling, general and administrative expense | 113,453 | 100,578 |
Research and development expense | 9,727 | 7,626 |
Restructuring costs | 0 | 363 |
Gain on settlement of pre-existing relationship | 6,080 | 0 |
Amortization of intangibles | 4,713 | 4,217 |
Operating income | 54,793 | 36,979 |
Interest expense | 6,951 | 10,225 |
Other expense, net | 734 | 2,328 |
Income before income taxes | 47,108 | 24,426 |
Provision for income taxes | 1,813 | 4,003 |
Net income | $ 45,295 | $ 20,423 |
Diluted earnings per share | $ 0.96 | $ 0.44 |
Number of shares used to compute earnings per share | 47,391 | 46,123 |
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 4Q10 | Calendar 2010 | |||||
Market |
Market Change |
CVI Change |
Market |
Market Change |
CVI Change |
|
Sales by Category | ||||||
Spheres | $ 1,188 | 4% | 12% | $ 4,912 | 4% | 9% |
Torics | 285 | 8% | 16% | 1,188 | 10% | 16% |
Multifocal | 76 | 14% | 2% | 305 | 18% | 2% |
WW Soft Contact Lenses | $ 1,549 | 5% | 12% | $ 6,405 | 5% | 10% |
Sales by Modality | ||||||
Single Use | $ 558 | 5% | 13% | $ 2,265 | 8% | 11% |
Other | 991 | 5% | 12% | 4,140 | 4% | 10% |
WW Soft Contact Lenses | $ 1,549 | 5% | 12% | $ 6,405 | 5% | 10% |
Sales by Material | ||||||
Hydrogel | $ 917 | (3%) | (1%) | $ 3,821 | (3%) | (4%) |
Silicone Hydrogel | 632 | 19% | 72% | 2,584 | 20% | 95% |
WW Soft Contact Lenses | $ 1,549 | 5% | 12% | $ 6,405 | 5% | 10% |
Sales by Geography | ||||||
Americas | $ 579 | 9% | 16% | $ 2,486 | 7% | 13% |
EMEA | 485 | 7% | 11% | 1,964 | 6% | 12% |
Asia Pacific | 485 | (1%) | 5% | 1,955 | 2% | 3% |
WW Soft Contact Lenses | $ 1,549 | 5% | 12% | $ 6,405 | 5% | 10% |
United States | $ 489 | 10% | 18% | $ 2,137 | 7% | 13% |
International | 1,060 | 3% | 9% | 4,268 | 5% | 9% |
WW Soft Contact Lenses | $ 1,549 | 5% | 12% | $ 6,405 | 5% | 10% |
COO-E
CONTACT:Source:Albert G. White, III VP, Investor Relations and TreasurerKim Duncan Director, Investor Relations 925-460-3663 ir@coopercompanies.com
News Provided by Acquire Media