================================================================================ 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): December 11, 1997 THE COOPER COMPANIES, INC. (Exact name of registrant as specified in its charter) 6140 Stoneridge Mall Road, Suite 590, Pleasanton, California 94588 (Address of principal executive offices) (510) 460-3600 (Registrant's telephone number, including area code) ================================================================================
Delaware 1-8597 94-2657368 (State or other jurisdiction (Commission File Number) (IRS Employer Identification No.) of incorporation) ITEM 5. OTHER EVENTS. On December 11, 1997, The Cooper Companies, Inc. (the "Company") issued a press release announcing its fourth quarter and 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 December 11, 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: December 12, 1997 STATEMENT OF DIFFERENCES The British pound sterling sign shall be expressed as ..................'L' EXHIBIT INDEX Exhibit Sequentially No. Description Numbered Page 99.1 Press Release dated December 11, 1997 of The Cooper Companies, Inc.
CONTACT: NORRIS BATTIN THE COOPER COMPANIES, INC. (888) 822-2660 OR (714) 673-4299 E-MAIL: nbattin@usa.net FOR IMMEDIATE RELEASE THIRTY PERCENT REVENUE GAINS DRIVE STRONG FOURTH QUARTER AND FISCAL YEAR RESULTS FOR THE COOPER COMPANIES OPERATING INCOME GROWS 53% IRVINE, Calif., Dec. 11, 1997 -- The Cooper Companies, Inc. (NYSE:COO) today reported results for its 1997 fourth quarter and fiscal year ended October 31, 1997. Revenue for the fourth quarter of 1997 was $40.5 million, 30% above the $31.2 million reported in the fourth quarter of 1996. For the 1997 fiscal year, revenue increased 30% to $141.5 million versus $109.1 million in fiscal 1996. Income from operations in the fourth quarter of 1997 was $8.0 million, 43% above the $5.6 million reported the fourth quarter of 1996. For fiscal 1997, income from operations rose 53% to $25.8 million from $16.8 million in 1996. Net Income Fourth quarter net income was $15.5 million or $1.02 per share in 1997 and $8.5 million or 72 cents per share in 1996. Three significant nonoperational items are included in net income: 1. Net tax benefits of $24.7 million or $1.63 per share versus $4.0 million or 34 cents per share in 1996. In the fourth quarter of 1996, the Company, following generally accepted accounting principles, began recording income tax benefits associated with its net operating loss carryforwards. The 1997 benefit is significantly higher than the 1996 benefit because the Company's results and future prospects continue to improve significantly, allowing management to record a higher level of deferred tax assets, resulting in increased tax benefits. (more, more) 2. A charge to discontinued operations of $18 million relating to a settlement made in 1993 with Medical Engineering Corporation (MEC). As part of this settlement, the Company agreed to annual payments each December through 2003. Payments due over a five-year period beginning December 1999 totaling $18 million are contingent on the Company having positive pretax income and are capped at the lower of a stated amount or 50% of that year's pretax income. With the Company anticipating increasingly favorable future results, management concluded that it is now probable that the $18 million will be due to MEC. 3. A gain of $1 million associated with retiring debt early using the proceeds of the Company's follow-on offering of 2.3 million shares of its common stock in July 1997. Excluding these three items, 1997 fourth quarter income was $7.8 million, 76% above the corresponding amount of $4.4 million reported in 1996, or 51 cents per share versus 37 cents per share in the fourth quarter of 1996, a 38% increase. The number of shares used to compute per share amounts in the fourth quarter of 1997 increased 28% to 15.2 million from 11.8 million in the 1996 fourth quarter, primarily due to the new shares issued. For fiscal 1997, the Company reported net income of $31.4 million or $2.40 per share versus $16.6 million or $1.41 per share in 1996 with 11% more shares used to calculate per share amounts. The improved results reflect solid operational growth and also the nonoperational items discussed above, including the full year net tax benefit of $26.6 million or $2.03 per share in 1997 and $4.5 million or 38 cents per share in 1996. Excluding the impact of the net tax benefits, the charge to discontinued operations and the extraordinary gain, income for fiscal 1997 increased 80% to $21.8 million, or $1.67 per share, from $12.1 million, or $1.03 per share in 1996. The per share amount increased 62%, on 11% more average shares outstanding in 1997. Operating Results Commenting on operating results, A. Thomas Bender, president and chief executive officer, said, "Each of our businesses closed out the year with impressive fourth quarter growth in revenue and operating income. For the year, our core medical device businesses each grew their revenue at a record pace with CooperVision up 31% and CooperSurgical up 44%. Hospital Group of America exceeded our expectations for 1997 top line performance, growing 23% over last year. "The quarterly operating income increase reflects our strong revenue growth combined with favorable product mix changes and manufacturing efficiencies at CooperVision and CooperSurgical and improved utilization of the HGA facilities." (more, more) Business Unit Performance P&L OPERATING HIGHLIGHTS BY BUSINESS UNIT Quarter Ended October 31, ($'s in millions) Twelve Months Ended October 31, ($'s in Millions)
Revenue Operating Income - ------------------------------------------------------- -------------------------------------------------- % % %Revenue %Revenue 1997 1996 Inc. 1997 1996 Inc. 1997 1996 ---- ----- ---- ---- ---- ---- ---- ----- CVI $19.1 $13.7 39% $6.9 $5.6 24% 36% 41% CSI 7.1 5.1 39% 0.7 0.6 13% 10% 12% HGA 14.3 12.4 15% 1.9 1.3 43% 13% 11% --------- ---- --- ---- ---- --- --- ---- Subtotal 40.5 31.2 30% 9.5 7.5 26% 23% 24% --------- ---- --- ---- ---- --- --- ---- HQ expense (1.5) (1.9) ---- ---- TOTAL $40.5 $31.2 30% $8.0 $5.6 43% 20% 18% ========= ===== === ==== ==== === === ==== Cooper Vision Shortly after the end of the 1997 fiscal year, the Company completed the acquisition of Aspect Vision Care, Ltd. of Southampton, England, a privately-held manufacturer of high-quality contact lenses sold primarily in the United Kingdom and other European countries. Cooper paid approximately 'L'30 million, or $51.0 million at the date of the closing in cash and notes, and will pay an additional amount after 3 years based on performance over that period. Aspect will operate under its current name and management as a part of CooperVision (CVI). Aspect Vision's revenues in its first full year with CooperVision are expected to be approximately $45 to $50 million. The acquisition is expected to be nondilutive during Aspect's first 12 months as part of Cooper and highly accretive in the longer term. (more, more)
Revenue Operating Income - ------------------------------------------------------- -------------------------------------------------- % % %Revenue %Revenue 1997 1996 Inc. 1997 1996 Inc. 1997 1996 ---- ----- ---- ---- ---- ---- ---- ----- CVI $64.0 $48.9 31% $23.1 $19.1 21% 36% 39% CSI 24.8 17.2 44% 2.5 1.6 49% 10% 10% HGA 52.7 43.0 23% 6.0 2.6 133% 11% 6% ------- ----- --- ------ ------ ---- --- --- Subtotal 141.5 109.1 30% 31.6 23.3 35% 22% 21% ------- ----- --- ------ ------ --- --- --- HQ expense (5.8) (6.5) ------- ------ TOTAL $141.5 $109.1 30% $25.8 $16.8 53% 18% 15% ====== ====== === ====== ====== === === === The Aspect acquisition is the second transaction completed within the last year that expands CooperVision's global reach. In January, CVI signed an agreement with Rohto Pharmaceuticals, Ltd., a leading Japanese supplier of nonprescription ophthalmic products, giving Rohto exclusive marketing rights to CooperVision's line of products when approved by the Japanese government. Continued strong growth from the Preference Toric brand led CVI's year-to-year 39% revenue gain in the fourth quarter. The products that CVI actively markets -- Hydrasoft, Preference Toric, Preference, Natural Touch and CooperFlex -- grew 46% during the year and together now represent nearly 70% of the unit's annual sales. During 1997, Preference Toric sales grew more than 70%. Sales of all CVI toric lenses increased 40% during fiscal 1997 and now represent over 50% of CVI's business. Sales of CVI's planned replacement products aimed at the fastest growing segment of the contact lens market grew 55% during the year and represent about 40% of its business. CVI's fourth quarter operating income margins declined, compared with the same period in 1996, for two reasons. First, CVI recorded a $350 thousand accrual for a potential environmental cleanup at one of its locations. Second, it incurred marketing and sales costs ahead of the expected fiscal 1998 second quarter launch of its new Frequency-55 monthly disposable sphere and toric products. CVI will enter a new customer segment with these products: practitioners who prefer to have their patients replace lenses monthly or more frequently. Cooper Surgical CSI's revenue grew 39% in the fourth quarter and 44% for fiscal 1997 due to continued strong sales of gynecological devices, especially those from the acquisitions completed over the past two years: Unimar, Inc., Marlow Surgical Technologies, and the RUMI product line. Sales of gynecology products grew 56% over 1996. Operating income increased 49% in fiscal 1997 compared with the previous year, as revenue grew faster than expenses. Also gross margins on acquired products improved due to a shift to in-house manufacturing. CSI recently announced that pending FDA clearance, it plans to introduce during the first quarter of fiscal 1998, the first in a series of new hardware and software products using digital imaging to improve the diagnosis and screening of cancer of the cervix. A formal launch event is planned for the American College of Obstetricians and Gynecologists meeting in May. Hospital Group of America HGA's fourth quarter showed continued strong growth in both revenue and operating income due largely to continued improvement at Hampton Hospital. For the year, revenue grew 23% and operating income more than doubled. Operating income margins in the fourth quarter reached 13%, and exceeded 10% for the year, above industry norms. HGA's management service division, formed earlier this year, provides psychiatric management services under seven service contracts. The division continued to aggressively pursue contracts to manage psychiatric programs throughout the country during the quarter. (more, more) In 1997, HGA operating trends continued to show rising inpatient admissions, a decline in length of stay and increases in outpatient visits consistent with the trends in the business since 1995. HOSPITAL GROUP OF AMERICA Three-Year Trend in Operating Statistics *Opened on April 2, 1997 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 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, potential foreign exchange exposure, 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, environmental clean-up costs above those already accrued, unforeseen litigation and decisions to divest businesses. Future results are also dependent on each of the Company's business units 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. (more, more)
1997 1996 1995 ----- ----- ----- Acute Admissions 6,326 5,353 4,782 Residential Admissions 54 0 0 TOTAL 6,380 5,353 4,782 Combined Length of Stay (days) 11.5 11.9 13.0 Acute Average Daily Census 187 175 171 Residential Averge Daily Census* 24 0 0 TOTAL 212 175 171 Outpatient Average Daily Visits 288 172 106 Revenue ($'s millions) $52.7 $43.0 $41.8 Operating Income ($'s millions) $6.0 $2.6 $.9 CooperVision, Inc., headquartered in Irvine, Calif., with manufacturing facilities in Huntington Beach, Calif., Rochester, N.Y., Toronto Canada and Southampton, England, 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 facilities in Delaware, Illinois, Indiana and New Jersey and satellite locations. 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. CooperFlex, Hydrasoft, Preference, Natural Touch, RUMI and Cerveillance 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 Years Ended October 31, Otober 31, 1997 1996 1997 1996 ------- ------- ------- ------ Net sales of products $ 26,161 $18,779 $ 88,769 $66,118 Net service revenue 14,324 12,457 52,704 43,013 -------- ------- -------- ------- Net operating revenue 40,485 31,236 141,473 109,131 -------- ------- -------- ------- Cost of products sold 7,913 5,659 27,325 19,911 Cost of services provided 12,376 11,071 46,538 40,235 Selling, general and administrative expense 11,124 8,090 38,337 29,717 Research and development expense 514 289 1,739 1,176 Amortization of intangibles 550 532 1,745 1,249 -------- ------- -------- ------- Income from operations 8,008 5,595 25,789 16,843 -------- ------- -------- ------- Interest expense 395 1,347 4,214 5,312 Other income, net 172 177 209 584 -------- ------- -------- ------- Income from continuing operations before income taxes 7,785 4,425 21,784 12,115 (Benefit of) income taxes (24,736) (4,048) (26,606) (4,488) --------- ------- -------- ------- Income from continuing operations before extraordinary items 32,521 8,473 48,390 16,603 Loss from sale of discontinued operations (18,000) - (18,000) - -------- ------- -------- ------- Income before extraordinary items 14,521 8,473 30,390 16,603 Extraordinary items 992 - 992 - -------- ------- -------- ------- Net income $ 15,513 $ 8,473 $ 31,382 $16,603 ======== ======= ======== ======= Earnings per share: Continuing operations before extraordinary items $ 2.14 $ 0.72 $ 3.70 $ 1.41 Discontinued operations (1.19) - (1.38) - Extraordinary items 0.07 - 0.08 - -------- ------ -------- ------- Earnings per share $ 1.02 $ 0.72 $ 2.40 $ 1.41 ======== ====== ======== ======= Number of shares used to compute earnings per share 15,169 11,820 13,071 11,761 Memo earnings per share data: Income from continuing operations before income taxes $ 0.51 $ 0.37 $ 1.67 $ 1.03 ======== ====== ======== ======= THE COOPER COMPANIES, INC. AND SUBSIDIARIES Consolidated Condensed Balance Sheets (In thousands) (Unaudited)
October 31, October 31, 1997 1996 ASSETS Current assets: Cash and cash equivalents $ 18,249 $ 6,837 Trade receivables, net 27,469 21,650 Inventories 15,096 10,363 Other current assets 7,755 3,645 -------- -------- Total current assets 68,569 42,495 -------- -------- Property, plant and equipment, net 39,523 34,674 Intangibles, net 36,698 21,468 Other assets 30,508 4,272 -------- -------- $175,298 $102,909 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term debt $ 447 $ 844 Other current liabilities 33,170 32,464 -------- -------- Total current liabilities 33,617 33,308 -------- -------- Long-term debt 9,125 47,920 Other liabilities 21,023 6,351 -------- -------- Total liabilities 63,765 87,579 -------- -------- Stockholders' equity 111,533 15,330 -------- -------- $175,298 $102,909 ======== ========