updated 3/3/2011 4:17:45 PM ET 2011-03-03T21:17:45

PLEASANTON, Calif., March 3, 2011 (GLOBE NEWSWIRE) -- The Cooper Companies, Inc. (NYSE:COO) today announced financial results for the fiscal first quarter ended January 31, 2011.

  • 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, up 52 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, Robert S. Weiss, Cooper's president and chief executive officer said, "I am very pleased with the strong start to our fiscal year. We accomplished a lot this quarter including CVI's acquisition of certain assets of Asahikasei Aime Co., Ltd. ("Aime") and the refinancing of our senior credit facilities. We also continued to grow revenue and improve margins. We are increasing our guidance for the year and remain confident in our ability to generate strong operating 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, on February 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 $5.1 million or 11 cents per share. Fiscal 2011 guidance excludes costs related to the 2009 CooperVision manufacturing restructuring plan, items related to acquisitions and costs related to the redemption of our senior notes.

    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 $23.1 million. We recognized $1.9 million in fiscal 2011, $16.1 million in fiscal 2010 and $5.1 million in fiscal 2009. The acquisition costs, principally legal and other due diligence costs, are primarily recorded in selling, general and administrative expense. We separately reported the one-time gain on settlement of a preexisting relationship related to the acquisition of certain assets from Aime of $6.1 million in operating income. We believe it is useful for investors to understand the effects of these restructuring costs and acquisition items on our total operating results. 

    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 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 5:00 p.m. ET to discuss its first quarter 2011 financial results. The dial in number in the United States is +1-866-783-2138 and outside the United States is +1-857-350-1597. The passcode is 41881151. There will be a replay available approximately two hours after the call ends until Thursday, March 10, 2011. 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 14316881. This call will be broadcast live on our website at www.coopercos.com  and at www.streetevents.com . A transcript will be available on our website following the conference call. 

    About The Cooper Companies

    The Cooper Companies, Inc. ( www.coopercos.com ) is a global medical products company that serves the specialty healthcare market through its CooperVision and CooperSurgical business units. Corporate offices are in Pleasanton, CA.

    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 Pleasanton, CA, it manufactures in: Hamble and Hampshire, UK; Juana Diaz, Puerto Rico; and Scottsville, NY.

    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 Trumbull, CT; Pasadena, CA; and Stafford, TX.

    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 United States and international credit markets that may adversely affect the Company's or its customers' ability to meet future liquidity needs; limitations on sales following new product introductions due to poor market acceptance; new competitors, product innovations or technologies; 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; the impact of acquisitions or divestitures on revenues, earnings or margins; losses arising from future litigation, including the risk of adverse decisions or settlements related to litigation, or product recalls; interest rate and foreign currency exchange rate fluctuations; 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, 2010, 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)
         
      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: Albert G. White, III
             VP, Investor Relations and Treasurer
             
             Kim Duncan
             Director, Investor Relations
             925-460-3663
             ir@coopercompanies.com

    © Copyright 2012, GlobeNewswire, Inc. All Rights Reserved

    Discuss:

    Discussion comments

    ,

    Most active discussions

    1. votes comments
    2. votes comments
    3. votes comments
    4. votes comments

    Data: Latest rates in the US

    Home equity rates View rates in your area
    Home equity type Today +/- Chart
    $30K HELOC FICO 4.71%
    $30K home equity loan FICO 5.26%
    $75K home equity loan FICO 4.70%
    Credit card rates View more rates
    Card type Today +/- Last Week
    Low Interest Cards 13.42%
    13.42%
    Cash Back Cards 17.94%
    17.94%
    Rewards Cards 17.14%
    17.14%
    Source: Bankrate.com