SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 27, 1997 THE COOPER COMPANIES, INC. (Exact name of registrant as specified in its charter) Delaware 1-8597 94-2657368 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 6140 Stoneridge Mall Road, Suite 590, Pleasanton, California 94588 (Address of principal executive offices) (510) 460-3600 (Registrant's telephone number, including area code) ITEM 5. Other Events. On August 27, 1997, The Cooper Companies, Inc. (the "Company") issued a press release announcing its third quarter fiscal year 1997 financial results. This release is filed as an exhibit hereto and is incorporated by reference herein. ITEM 7. Financial Statements and Exhibits. (c) Exhibits. Exhibit No. Description 99.1 Press Release dated August 27, 1997 of The Cooper Companies, Inc. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE COOPER COMPANIES, INC. By /s/ Stephen C. Whiteford Stephen C. Whiteford Vice President and Corporate Controller (Principal Accounting Officer) Dated: August 27, 1997 EXHIBIT INDEX Exhibit Sequentially No. Description Numbered Page 99.1 Press Release dated August 27, 1997 of The Cooper Companies, Inc.
CONTACT: Norris Battin The Cooper Companies, Inc. 888-822-2660 714-673-4299 FOR IMMEDIATE RELEASE COOPER COMPANIES DELIVERS STRONG THIRD QUARTER: REVENUE AND OPERATING INCOME INCREASE 35%; EPS 55 CENTS VERSUS 40 CENTS IRVINE, Calif., August 27, 1997 - The Cooper Companies, Inc. (NYSE: COO) today reported financial results for the third quarter of fiscal 1997. For the three months ended July 31, 1997, the Company reported net income of $7.2 million, or 55 cents per share, including 8 cents per share of net tax benefits, up 54% from $4.7 million, or 40 cents per share, in the third quarter of 1996 including net tax benefits of 5 cents per share. Operating income increased 35% from $5.5 million in the 1996 quarter to $7.4 million in 1997. Revenue increased 35% to $38.9 million. In the first three quarters of fiscal 1997, the Company generated net income of $15.9 million, or $1.28 per share, up 95% from $8.1 million, or 69 cents per share, in the comparable 1996 period. The 1997 results include net tax benefits of 15 cents per share compared with 4 cents per share in the 1996 period. Nine-month operating income increased 58% from $11.2 million in 1996 to $17.8 million in 1997. Nine-month revenue increased 30% to $101.0 million. Commenting on the third quarter's results, A. Thomas Bender, president and chief executive officer, said, "Each of our operating businesses delivered solid revenue growth more, more compared with last year's third quarter. Sales at CooperVision (CVI), the specialty contact lens business, grew 37% for the quarter and are ahead by 28% year to date, driven by strong sales of toric lenses to correct astigmatism. "Sales at CooperSurgical (CSI), the gynecology products business, increased 42% and are up 46% for the nine-month period reflecting the favorable effect of recent acquisitions and internally developed new products. Revenue at Hospital Group of America (HGA), Cooper's mental health services business, grew 29% in the third quarter and is up 26% year to date, with total outpatient visits strongly favorable to last year, and Hampton Hospital's results much improved, now that HGA's own clinical service management is in place." Business Unit Performance P&L OPERATING HIGHLIGHTS BY BUSINESS UNIT Quarter Ended July 31, ($'s in Millions) Nine Months Ended July 31, ($'s in Millions)
Revenue Operating Income ------------------------- ------------------------------------------------ % % % Revenue % Revenue 1997 1996 Inc. 1997 1996 Inc. 1997 1996 ---- ---- ---- ---- ---- ---- ---- ---- CVI $17.8 $13.0 37% $6.2 $5.6 11% 35% 43% CSI 7.1 5.0 42% 0.9 0.5 81% 12% 10% HGA 14.0 10.9 29% 1.8 0.8 133% 13% 7% ------ ----- --- --- --- ---- --- -- Subtotal 38.9 28.9 35% 8.9 6.9 30% 23% 24% ------ ------ --- --- --- ---- --- --- HQ expense (1.5) (1.4) ---- ---- TOTAL $38.9 $28.9 35% $7.4 $5.5 35% 19% 19% ===== ===== === ===== ==== ==== === === more, more
Revenue Operating Income -------------------------- ----------------------------------------------- % % % Revenue % Revenue 1997 1996 Inc. 1997 1996 Inc. 1997 1996 ---- ---- ---- ---- ---- ---- ---- ---- CVI $44.9 $35.2 28% $16.2 $13.5 20% 36% 38% CSI 17.7 12.1 46% 1.8 1.1 68% 10% 9% HGA 38.4 30.6 26% 4.1 1.2 230% 11% 4% ------- ------- --- ------- ------- ---- --- -- Subtotal 101.0 77.9 30% 22.1 15.8 40% 22% 20% ------- ------- --- ------- ------- ---- --- --- HQ expense (4.3) (4.6) ------- ------- TOTAL $101.0 $77.9 30% $17.8 $11.2 58% 18% 14% ====== ===== === ======= ======= ==== === === CooperVision CooperVision's third quarter reflected continuing successful execution of its strategy to strengthen its position in the specialty contact lens market. New products developed internally since fiscal 1995 have generated more than 25% of CVI's sales in the first nine months of 1997. During the third quarter, CVI introduced a new planned replacement spherical lens in the United States and Canada. CVI expects to introduce three new specialty products into domestic market segments it does not currently serve in the 1998 fiscal year. Sales of contact lenses outside North America have more than doubled year to date. For the nine-month period, sales of toric lenses to correct astigmatism have increased 39%, representing over 50% of CVI's business. The products that CVI most actively markets, Hydrasoft, Preference Toric, Preference and Natural Touch, have grown 42% year to date and together represent nearly 70% of the unit's nine-month sales. CooperSurgical CooperSurgical continued to show strong results as sales grew 42% and operating income rose 81% during the third quarter. These increases reflect the acquisitions of Unimar, Inc. and Marlow Surgical Technologies, Inc., as well as sales increases of the RUMI line of products and sales of internally developed new products. Year to date, CSI sales have increased 46% with operating income ahead 68%. The integration of Marlow Surgical Technologies, Inc., acquired in April, has been completed. Marlow develops and markets surgical products and disposable products for reproductive medicine. Since its acquisition in April, Marlow has contributed approximately $2.4 million in sales. more, more Hospital Group of America HOSPITAL GROUP OF AMERICA SELECTED STATISTICAL INFORMATION *Midwest Center for Youth and Families opened in April 1997 adding 50-bed capacity. Revenue at HGA increased 29% for the third quarter and is ahead 26% year to date. Operating income more than doubled during the quarter and more than trebled through nine months. Operating statistics for the quarter reflect increases in both inpatient and outpatient days with average length of stay stabilizing. The growth in outpatient volume contributes to improvement in HGA's operating margin as staff and facilities charges are proportionately less than inpatient care. Incremental operating margins approach 20% of net revenue. Results at HGA's Hampton Hospital continue to improve as a result of HGA assuming management of its clinical services late in last year's first quarter. In April, HGA opened the Midwest Center for Youth and Families, a 50-bed residential treatment facility in Kouts, Indiana. The Kouts facility, which is currently operating profitability at about 64% of capacity, extends HGA's continuum of care to include inpatient, outpatient, day, educational and residential treatment programs positioning HGA to better compete for managed care business. more, more
3 Months Ended July 31, 9 Months Ended July 31, ----------------------- ------------------------ 1997 1996 % Chg 1997 1996 % Chg ---- ---- ----- ---- ---- ----- Licensed inpatient beds 319* 269 19% 319* 269 19% Inpatient admissions 1,616 1,373 18% 4,711 3,847 22% Total inpatient days 20,392 15,932 28% 55,669 46,279 20% Average length of stay (days) 11.6 11.6 0% 11.4 12.2 -7% Total outpatient visits 20,930 11,884 76% 54,081 34,476 57% HGA's management services division, which manages a variety of behavioral health programs for acute care hospitals, has entered into or renewed five contracts with two providers through the first nine months of the fiscal year. In June, MeadowWood Hospital announced plans to establish a psychiatric evaluation and treatment program for older adults in collaboration with Christiana Care (formerly known as Medical Center of Delaware). During the third quarter, the Company raised $51.2 million in a public offering of 2.3 million shares of its common stock. The offering was underwritten by Deutsche Morgan Grenfell and PaineWebber Incorporated. As indicated in the prospectus, the Company is using the proceeds to repay outstanding indebtedness. Since the follow-on offering, the Company has repaid approximately $22 million of debt (approximately $12 million of which was repaid in the third quarter) and has called for redemption on September 1, 1997, all $21.9 million principal amount of its 10% Senior Subordinated Secured Notes due 2003. Following these repayments, the Company's debt will be reduced to approximately $9.1 million. As previously announced, the Company expects to complete a $50 million secured revolving credit facility in its fourth fiscal quarter. The facility would have a term of five years, with borrowings having interest rates ranging from 0.5% to 2.25% over the London Interbank Offered Rates (LIBOR) depending on certain financial ratios. The thirty day LIBOR was 5 5/8% on August 25, 1997. The Company intends to use this debt financing to fund acquisitions and for general corporate purposes. Statements in this press release that are not based on historical fact may be "forward- looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terminology such as "may", "will", "expect", "estimate", "anticipate", "continue" or similar terms. Certain statements in the Company's periodic and other filings with the Securities and Exchange Commission, including all the statements under the headings "Risk Factors" and "Recent Developments" in the Prospectus and Prospectus Supplement for shares of the Company's common stock attached as an exhibit to a Form 8-K filed July 23, 1997, constitute cautionary statements identifying more, more important factors that could cause actual results to differ materially from those contained in the forward-looking statements. Additional factors that could cause or contribute to differences include: major changes in business conditions and the economy in general; loss of key members of senior management; new competitive inroads; costs to integrate acquisitions; decisions to invest in research and development projects; dilution to earnings per share associated with acquisitions or stock issuance; regulatory issues; unexpected changes in reimbursement rates and payor mix; costs associated with debt restructuring; unforeseen litigation and decisions to divest businesses. Future results are also dependent on each subsidiary of the Company meeting specific objectives. The Cooper Companies, Inc. and its subsidiaries develop, manufacture and market specialty healthcare products and services. Corporate offices are located in Irvine and Pleasanton, Calif. CooperVision, Inc., headquartered in Irvine, Calif., with manufacturing facilities in Huntington Beach, Calif., Rochester, N. Y., and Toronto, markets a broad range of contact lenses for the vision care market. CooperSurgical, Inc., headquartered in Shelton, Conn., markets diagnostic and surgical instruments, equipment and accessories for the gynecological market. Hospital Group of America, Inc. provides psychiatric services through hospitals in New Jersey, Delaware, Illinois and Indiana and satellite locations near these facilities. NOTE: A toll free interactive telephone system at 1-800-334-1986 provides stock quotes, recent press releases and financial data. The Company's Internet address is www.coopercos.com. Hydrasoft, Preference, Natural Touch and RUMI are trademarks of The Cooper Companies, Inc., its subsidiaries or affiliates. [FINANCIALS FOLLOW] more, more THE COOPER COMPANIES, INC. AND SUBSIDIARIES Consolidated Condensed Statements of Income (In thousands, except per share figures) (Unaudited) more, more
Three Months Ended Nine Months Ended July 31, July 31, ------------------------ ------------------------ 1997 1996 1997 1996 ------ ------ ------ ----- Net sales of products $24,951 $18,001 $ 62,608 $47,339 Net service revenue 13,998 10,870 38,380 30,556 -------- -------- --------- -------- Net operating revenue 38,949 28,871 100,988 77,895 -------- -------- -------- -------- Cost of products sold 8,277 5,507 19,412 14,252 Cost of services provided 12,107 10,027 34,162 29,164 Selling, general and admin- istrative expense 10,173 7,283 27,213 21,627 Research and development expense 487 294 1,225 887 Amortization of intangibles 503 286 1,195 717 --------- ---------- ---------- ---------- Income from operations 7,402 5,474 17,781 11,248 --------- ---------- --------- -------- Interest expense 1,335 1,403 3,819 3,965 Other income, net 94 2 37 407 --------- ---------- ---------- ---------- Income before income taxes 6,161 4,073 13,999 7,690 (Benefit of) income taxes (1,025) (596) (1,870) (440) -------- --------- ---------- ---------- Net income $ 7,186 $ 4,669 $ 15,869 $ 8,130 ======== ========= ========== ========== Earnings per share $ 0.55 $ 0.40 $ 1.28 $ 0.69 ======== ======== ========== ========= Number of shares used to compute earnings per share 12,981 11,793 12,365 11,741 ====== ====== ====== ====== THE COOPER COMPANIES, INC. AND SUBSIDIARIES Consolidated Condensed Balance Sheets (In thousands) (Unaudited) # # # #
July 31, October 31, 1997 1996 ---------- --------- ASSETS Current assets: Cash and cash equivalents $ 43,291 $ 6,837 Trade receivables, net 27,329 21,650 Inventories 13,871 10,363 Other current assets 4,625 3,645 ---------- ------------ Total current assets 89,116 42,495 ---------- ------------ Property, plant and equipment, net 38,487 34,674 Intangibles, net 37,246 21,468 Other assets 8,808 4,272 ---------- ------------ $173,657 $102,909 ========== ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term debt $ 34,407 $ 844 Other current liabilities 31,867 32,464 ---------- ------------ Total current liabilities 66,274 33,308 ---------- ------------ Long-term debt 8,841 47,920 Other liabilities 2,845 6,351 ---------- ------------ Total liabilities 77,960 87,579 ---------- ------------ Stockholders' equity 95,697 15,330 ---------- ------------ $173,657 $102,909 ========== ============