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The Cooper Companies Announces Third Quarter 2012 Results

Stocks in this article: COO

PLEASANTON, Calif., Sept. 6, 2012 (GLOBE NEWSWIRE) -- The Cooper Companies, Inc. (NYSE:COO) today announced financial results for the fiscal third quarter ended July 31, 2012.

  • Revenue increased 8% year-over-year to $378.2 million. CooperVision (CVI) revenue up 5% to $314.2 million and CooperSurgical (CSI) revenue up 20% to $64.0 million.
  • GAAP earnings per share (EPS) $1.36, up 46 cents or 51% from last year's third quarter.
  • Non-GAAP EPS $1.45, up 30 cents from last year's third quarter. See "Reconciliation of Non-GAAP EPS to GAAP EPS" below.
  • Free cash flow $62.9 million.

Commenting on the results, Robert S. Weiss, Cooper's president and chief executive officer said, "I'm very proud of the progress we made this quarter. We continued to execute on our long-range objectives with CooperVision gaining market share and CooperSurgical posting another strong quarter. We also closed on the acquisition of Origio, the leading global in-vitro fertilization (IVF) medical device company. Our business continues to perform well and we remain optimistic about continuing to deliver strong results."

Third Quarter GAAP Operating Highlights

  • Revenue $378.2 million, 8% above third quarter 2011, 9% excluding currency and acquisitions.
  • Gross margin 63% compared with 58% in last year's third quarter. The improvement was the result of improved margins at both CooperVision and CooperSurgical, and the $14.2 million Avaira ® recall reserve for inventory and return provisions in last year's third quarter.
  • Operating margin 20% compared with 15% in last year's third quarter. The improvement was primarily the result of gross margin improvements.
  • Depreciation $21.9 million, up 10% from last year's third quarter. Amortization $5.9 million, up 7% from last year's third quarter primarily related to additional amortization from the acquisition of Origio.
  • Total debt increased $160.8 million from April 30, 2012, to $480.1 million due mainly to the Origio acquisition. Interest expense was $2.3 million compared with $3.2 million in last year's third quarter. Excluding a $0.4 million gain associated with the Origio acquisition, interest expense would have been $2.7 million.
  • Cash provided by operations $78.1 million, capital expenditures $24.1 million, insurance recovery $1.9 million and excluding Origio related costs of $7.0 million, free cash flow $62.9 million. 

Third Quarter CooperVision GAAP Operating Highlights

  • Revenue $314.2 million, up 5% from last year's third quarter, 10% in constant currency.  
  • Revenue by category:  
        Constant Currency
  (In millions) % of CVI Revenue %chg %chg
  3Q12 3Q12 y/y y/y
Toric  $ 94.7 30% 7% 12%
Multifocal  24.8 8% 26% 33%
Single-use sphere  71.7 23% 11% 13%
Non single-use sphere, other  123.0 39% -2% 3%
Total  $ 314.2 100% 5% 10%
  • Revenue by geography:
        Constant Currency
   (In millions)  % of CVI Revenue %chg %chg
   3Q12  3Q12 y/y y/y
Americas  $ 131.3 42% 10% 11%
EMEA  106.5 34% -5% 6%
Asia Pacific  76.4 24% 16% 16%
Total  $ 314.2 100% 5% 10%
  • Selected revenue by material:
        Constant Currency
   (In millions)  % of CVI Revenue %chg %chg
   3Q12  3Q12 y/y y/y
Silicone hydrogel  $ 117.9 38% 28% 35%
Proclear®  $ 79.0 25% -2% 3%
  • Gross margin 63% compared with 56% in the third quarter of 2011. The improvement was the result of the $14.2 million Avaira ® recall reserve for inventory and return provisions in last year's third quarter as well as increased manufacturing efficiencies and favorable product mix, primarily from a shift to higher margin silicone hydrogel products.

Third Quarter CooperSurgical GAAP Operating Highlights

  • Revenue $64.0 million, up 20% from last year's third quarter. Revenue includes $5.6 million from the Origio acquisition and was up 6% excluding acquisitions.  
  • Revenue by category:
  (In millions) % of CSI Revenue %chg
  3Q12 3Q12 y/y
Office, other  $ 30.8 48% 7%
Surgical procedures  23.7 37% 16%
Fertility  9.5 15% 149%
Total  $ 64.0 100% 20%
  • Gross margin 67%, up from 65% in last year's third quarter. The improvement in gross margin was largely a result of manufacturing efficiency improvements and favorable product mix resulting primarily from a shift to higher margin products used in surgical procedures. This was slightly offset by lower gross margins from Origio. 

Other Items

  • On May 31, 2012, entered into an amendment to our senior unsecured revolving line of credit. Facility increased to $1.0 billion from $750.0 million, and the $234.4 million term loan was fully repaid using the new revolving facility. The facility offers additional availability, lower interest rates and extends the maturity date to May 31, 2017, from January 12, 2016. 
  • On July 11, 2012, completed the voluntary tender offer for Origio, a leading global in-vitro fertilization (IVF) medical device company based in Denmark. 
  • During the quarter, repurchased approximately 321,000 shares for $25.0 million. Fiscal year-to-date repurchases now total approximately 984,000 shares for $71.1 million.

2012 Guidance

The Company revises its full-year fiscal 2012 revenue and EPS guidance. Guidance is summarized as follows:

  2012 Guidance 2012 Guidance 4Q12 Guidance
  Old New New
Revenues (In millions)      
Total $1,400--$1,440 $1,439--$1,449 $390--$400
CooperVision $1,175--$1,205 $1,186--$1,191 $315--$320
CooperSurgical $225--$235 $253--$258 $75--$80
GAAP $4.88--$5.13 $5.10--$5.15 $1.50--$1.55
Non-GAAP $4.90--$5.15 $5.19--$5.24 $1.50--$1.55
Free Cash Flow (In millions) $200--$230 $210--$230 $63--$83

Guidance assumes constant currency at the date of issuance and no pending acquisitions. See "Reconciliation of Non-GAAP EPS to GAAP EPS" below.

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