The Cooper Companies Announces Second Quarter 2013 Results
The Cooper Companies Announces Second Quarter 2013 Results
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Revenue increased 11% year-over-year to
$384.0 million .CooperVision (CVI) revenue up 7% to$309.3 million , up 11% in constant currency, andCooperSurgical (CSI) revenue up 32% to$74.7 million .
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GAAP earnings per share (EPS)
$1.52 , up40 cents or 36% from last year's second quarter.
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Non-GAAP EPS
$1.50 , up38 cents or 34% from last year's second quarter. See "Reconciliation of Non-GAAP EPS to GAAP EPS" below.
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Second quarter free cash flow
$77.4 million .
Commenting on the results,
Second Quarter GAAP Operating Highlights
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Revenue
$384.0 million , up 11% from last year's second quarter, 15% in constant currency.
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Gross margin 66% compared with 64% in last year's second quarter. The increase was primarily the result of a lower royalty payment on silicone hydrogel lens sales, product mix, and increased manufacturing efficiencies, partially offset by lower revenue due to currency, primarily the Yen.
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Operating margin 21% compared with 19% in last year's second quarter. The increase was the result of higher gross margins.
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Depreciation
$23.4 million , up 9% from last year's second quarter. Amortization$7.5 million , up 43% from last year's second quarter, primarily related to intangible assets from the acquisition of Origio inJuly 2012 .
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Total debt decreased
$87.5 million in the quarter to$320.5 million . Interest expense$2.4 million compared with$3.1 million in last year's second quarter.
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Cash provided by operations
$114.9 million , capital expenditures$38.2 million and insurance recovery of$0.7 million resulted in free cash flow$77.4 million .
Second Quarter CooperVision GAAP Operating Highlights
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Revenue
$309.3 million , up 7% from last year's second quarter, 11% in constant currency.
- Revenue by category:
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% |
- Revenue by geography:
Constant Currency | ||||
(In millions) | % of CVI Revenue | %chg | %chg | |
2Q13 | 2Q13 | y/y | y/y | |
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$ 136.5 | 44% | 12% | 12% |
EMEA | 104.8 | 34% | 7% | 8% |
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68.0 | 22% | --% | 13% |
Total | $ 309.3 | 100% | 7% | 11% |
- Selected revenue by material:
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% |
- Gross margin 67% compared with 63% in last year's second quarter. The increase was primarily the result of a lower royalty payment on silicone hydrogel sales, product mix, and increased manufacturing efficiencies, partially offset by lower revenue due to currency, primarily the Yen.
Second Quarter CooperSurgical GAAP Operating Highlights
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Revenue
$74.7 million , up 32% from last year's second quarter, driven by the acquisition of Origio in July 2012.
- Revenue by category:
(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% |
- Gross margin 65% compared with 68% in last year's second quarter. The decrease was primarily the result of lower margins associated with the acquisition of Origio.
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 |
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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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Guidance assumes constant currency at the date of issuance and excludes the financial impact for the proposed sale of Aime announced
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
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 |
Six Months Ended |
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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 |
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$ (0.27) |
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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 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
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) | ||
April 30, | October 31, | |
2013 | 2012 | |
ASSETS | ||
Current assets: | ||
Cash and cash equivalents |
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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 |
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LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current liabilities: | ||
Short-term debt |
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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 |
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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 |
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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 |
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Diluted earnings per share attributable to Cooper stockholders |
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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.
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:Source:Kim Duncan Senior Director, Investor Relations ir@cooperco.com
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