<PAGE>
<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarterly Period Ended July 31, 1996
( ) Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the transition period from ___________ to ___________
Commission File Number 1-8597
The Cooper Companies, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 94-2657368
- -------------------------------- ----------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
6140 Stoneridge Mall Rd., Suite 590, Pleasanton, CA 94588
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(510) 460-3600
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---- ----
Indicate the number of shares outstanding of each of issuer's classes of common
stock, as of the latest practicable date.
Common Stock, $.10 par value 11,661,833 Shares
- -------------------------------------- ---------------------------------
Class Outstanding at
August 28, 1996
<PAGE>
<PAGE>
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
INDEX
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Statement of
Income - Three and Nine Months
Ended July 31, 1996 and 1995 3
Consolidated Condensed Balance Sheet -
July 31, 1996 and October 31, 1995 4
Consolidated Condensed Statement
of Cash Flows - Nine Months Ended
July 31, 1996 and 1995 5
Notes to Consolidated Condensed
Financial Statements 6 - 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8 - 14
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 15
Signature 16
Index of Exhibits
2
<PAGE>
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Statement of Income
(In thousands, except per share figures)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
July 31, July 31,
----------------------- ------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales of products $18,001 $14,751 $47,339 $40,323
Net service revenue 10,870 10,498 30,556 31,930
------- ------- ------- -------
Net operating revenue 28,871 25,249 77,895 72,253
------- ------- ------- -------
Cost of products sold 5,507 4,628 14,252 12,939
Cost of services provided 10,027 10,110 29,164 30,477
Selling, general and admin-
istrative expense 7,283 6,744 21,627 20,275
Research and development
expense 294 632 887 2,507
Amortization of intangibles 286 211 717 633
------- ------- ------- -------
Income from operations 5,474 2,924 11,248 5,422
------- ------- ------- -------
Credits from settlements of
disputes, net - 1,031 223 1,499
Interest expense 1,403 1,192 3,965 3,472
Other income, net 2 142 184 442
------- ------- ------- -------
Income before income taxes 4,073 2,905 7,690 3,891
Provision for (benefit of)
income taxes (596) 85 (440) 191
------- ------- ------- -------
Net income $ 4,669 $ 2,820 $ 8,130 $ 3,700
======= ======= ======= =======
Earnings per share $ 0.40 $ 0.24 $ 0.69 $ 0.32
======= ======= ======= =======
Average number of common
shares used to compute
earnings per share 11,793 11,589 11,741 11,580
======= ======= ======= =======
</TABLE>
See accompanying notes.
3
<PAGE>
<PAGE>
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
July 31, October 31,
1996 1995
--------- -------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 3,143 $ 11,207
Trade receivables, net 21,519 17,717
Inventories 10,196 9,570
Other current assets 2,685 2,734
-------- --------
Total current assets 37,543 41,228
-------- --------
Property, plant and equipment at cost 48,282 46,597
Less, accumulated depreciation and
amortization 14,112 12,535
-------- --------
34,170 34,062
-------- --------
Goodwill and other intangibles, net 21,676 14,933
Other assets 1,570 1,769
-------- --------
$ 94,959 $ 91,992
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Borrowings under line of credit $ 845 $ 1,025
Current installments of long-term debt 794 2,288
Accounts payable 8,809 5,730
Employee compensation, benefits and
severance 5,150 6,978
Other accrued liabilities 8,920 13,596
Income taxes payable 9,433 9,996
-------- --------
Total current liabilities 33,951 39,613
-------- --------
Long-term debt 48,136 43,490
Other noncurrent liabilities 6,362 10,638
-------- --------
Total liabilities 88,449 93,741
-------- --------
Stockholders' equity (deficit):
Common stock, $.10 par value 1,166 1,158
Additional paid-in capital 183,977 183,840
Translation adjustments (349) (333)
Accumulated deficit (178,284) (186,414)
-------- --------
Total stockholders' equity (deficit) 6,510 ( 1,749)
-------- --------
$ 94,959 $ 91,992
========= =========
</TABLE>
See accompanying notes.
4
<PAGE>
<PAGE>
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Statement of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
July 31,
1996 1995
---------- ---------
<S> <C> <C>
Net cash used by operating activities $ (2,094) $ (1,651)
-------- --------
Cash flows from investing activities:
Sales of assets and businesses 58 145
Acquisitions (3,796) (614)
Proceeds from Progressions Settlement,
recorded as a reduction to goodwill 224 -
Sales of temporary investments 31 37
Purchases of property, plant and
equipment (1,958) (1,450)
-------- --------
Net cash used by investing activities (5,441) (1,882)
-------- --------
Cash flows from financing activities:
Proceeds from (repayments of) line
of credit, net (180) 2,885
Proceeds from long-term note 1,320 -
Payments of current installments of
long-term debt (1,768) (960)
Proceeds from restricted stock and
exercise of warrants and options 99 74
-------- --------
Net cash provided (used) by financing
activities (529) 1,999
-------- --------
Net decrease in cash and cash equivalents (8,064) (1,534)
Cash and cash equivalents - beginning of
period 11,207 10,320
-------- --------
Cash and cash equivalents - end of period $ 3,143 $ 8,786
======== ========
Cash paid for:
Interest $ 3,393 $ 3,237
======== ========
Income taxes $ 123 $ 230
======== ========
</TABLE>
Supplemental schedule of noncash investing and financing activities: In April
1996, the Company purchased certain assets and assumed certain liabilities of
Unimar, Inc., by paying $4 million in cash and issuing $4 million of notes for
the balance.
See accompanying notes.
5
<PAGE>
<PAGE>
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
(Unaudited)
Note 1. General
The Cooper Companies, Inc., (together with its subsidiaries, the "Company")
develops, manufactures and markets healthcare products, including a range of
contact lenses and diagnostic and surgical instruments and accessories. The
Company also provides healthcare services through the ownership of psychiatric
facilities, by providing outpatient and other ancillary services and, through
May 1995, managing other psychiatric facilities.
During interim periods, the Company follows the accounting policies set forth in
its Annual Report on Form 10-K filed with the Securities and Exchange
Commission. Readers are encouraged to refer to the Company's Form 10-K for the
fiscal year ended October 31, 1995 when reviewing this Form 10-Q. Quarterly
results reported herein are not necessarily indicative of results to be expected
for other quarters.
In the opinion of management, the accompanying unaudited consolidated condensed
financial statements contain all adjustments necessary to present fairly the
Company's consolidated financial position as of July 31, 1996 and October 31,
1995 and the consolidated results of its operations for the three- and
nine-month periods ended July 31, 1996 and 1995, and its consolidated cash flows
for the nine months ended July 31, 1996 and 1995. With the exception of certain
adjustments discussed in Part I, Item 2 under "Selling, General and
Administrative Expense," Settlement of Disputes, Net" and "Provision For
(Benefit of) Income Taxes" such adjustments consist only of normal and recurring
adjustments.
Note 2. Inventories
Inventories are stated at the lower of cost, determined on a first in, first out
or average cost basis, or market.
The components of inventories are as follows:
<TABLE>
<CAPTION>
July 31, October 31,
1996 1995
--------- ------------
(In thousands)
<S> <C> <C>
Raw materials $ 2,132 $ 2,212
Work-in-process 1,028 1,114
Finished goods 7,036 6,244
------- -------
$10,196 $ 9,570
======= =======
</TABLE>
6
<PAGE>
<PAGE>
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
(Unaudited)
Note 3. Long-Term Debt
Long-term debt consists of the following:
<TABLE>
<CAPTION>
July 31, October 31,
1996 1995
--------- -----------
(In thousands)
<S> <C> <C>
10% Senior Subordinated
Secured Notes due 2003 $24,412 $24,816
10-5/8% Convertible Sub-
ordinated Reset Debentures
due 2005 9,219 9,215
HGA term loan 10,842 9,889
HGA Industrial Revenue Bonds - 1,458
12% Notes for Unimar Acquisition
due April 1999 ("Unimar
Notes") 4,000 -
Capitalized leases 457 400
------- -------
48,930 45,778
Less, current installments 794 2,288
------- -------
$48,136 $43,490
======= =======
</TABLE>
The outstanding principle of the HGA Industrial Revenue Bonds of $1.3 million
was repaid on December 29, 1995, and the amount was rolled into the HGA loan due
August 1997. In April 1999, the Company may, at its option, extinguish $800,000
principal amount of Unimar Notes plus unpaid interest by issuing shares of its
common stock valued at the then fair market value per share. The Company is
currently finalizing documentation with its lender to amend the provisions of
the HGA term loan. (See Item 2 herein under Capital Resources and Liquidity.)
Note 4. Acquisitions
In April 1996, the Company acquired Unimar, Inc., a leading provider of
specialized disposable medical devices for gynecology, for $8 million in cash
and notes. Sales of Unimar products totaling $1.9 million were included in the
Company's results for the nine months ended July 31, 1996. Goodwill on the
purchase has initially been recorded in the amount of $7.5 million, which is
being amortized over 20 years. As part of the acquisition, the Company granted a
warrant to purchase 83,333 shares of the Company's common stock at $11.375 per
share. The exercisable period of the warrant is from April 11, 1999 to June 10,
1999. The number of shares and the exercise price per share are subject to
adjustment as provided in the warrant.
7
<PAGE>
<PAGE>
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
References to Note numbers below are references to the Notes to Consolidated
Condensed Financial Statements of the Company located
in Item 1. herein.
Results of Operations
Three and Nine Months Ended July 31, 1996 Compared with Three and Nine Months
Ended July 31, 1995.
Net Sales of Products: Net sales of products increased by $3.3 million or 22%
and $7.0 million or 17% for the three and nine months ended July 31, 1996,
respectively.
<TABLE>
<CAPTION>
(Dollars in 000's)
Three Months Ended Nine Months Ended
July 31, July 31,
----------------------------------- -----------------------------------
1996 1995 % Increase 1996 1995 % Increase
---- ---- ---------- ---- ---- -----------
<S> <C> <C> <C> <C> <C> <C>
CVI* $12,963 $11,481 13% $35,191 $30,833 14%
CSI** 5,038 3,270 54% 12,148 9,474 28%
CVP*** - - N/A - 16 N/A
------- ------- ------- -------
$18,001 $14,751 22% $47,339 $40,323 17%
======= ======= ======= =======
</TABLE>
* CVI = CooperVision, Inc.
** CSI = CooperSurgical, Inc.
*** CVP = CooperVision Pharmaceuticals, Inc.
Net sales of CVI increased both domestically and in Canada. The primary
contributors to the growth included increased sales of the Preference'r'
spherical and Preference Toric'tm' product lines, which grew approximately 89%
in the aggregate over the comparable nine-month period. Sales of toric lenses to
correct astigmatism, CVI's leading product group, have grown by 35% year to year
and now account for approximately one-half of its sales. CVI recently announced
plans to double the capacity of its Scottsville, New York, facility, where
Preference Toric'tm' lenses are manufactured. These increases were partially
offset by anticipated decreases in sales of more mature product lines.
Net sales of CSI increased 28% in the first nine months of fiscal 1996 vs. the
first nine months of fiscal 1995. Its gynecology product lines (which include
LEEP'tm' instruments) grew by approximately 43%. The increase was primarily due
to increases in sales of LEEP'tm' instruments which grew 10% and sales of Unimar
and Blairden products which were acquired in April 1996 and June 1995,
respectively. The increased sales of gynecology products were partially offset
by reduced sales of nonstrategic products. CSI's sales mix continued to shift
toward its gynecology product line, which now accounts for approximately 90% of
its sales.
8
<PAGE>
<PAGE>
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Net Service Revenue: Hospital Group of America, Inc.'s ("HGA") net service
revenue consists of the following:
<TABLE>
<CAPTION>
(Dollars in 000's)
Three Months Ended Nine Months Ended
July 31, July 31,
----------------------------------- ----------------------------------
% Incr. % Incr.
1996 1995 (Decrease) 1996 1995 (Decrease)
---- ---- --------- ---- ---- ---------
<S> <C> <C> <C> <C> <C> <C>
Net patient
revenue $10,870 $10,347 5% $30,556 $30,779 (1%)
Management
fees - 151 - - 1,151 -
------- ------- ------- -------
$10,870 $10,498 4% $30,556 $31,930 (4%)
======= ======= ======= =======
</TABLE>
Net patient revenue increased by $523 thousand, or 5%, in the third quarter 1996
vs. the third quarter 1995 and was virtually flat for the comparable nine-month
periods. Revenue continues to be pressured by the current industry trend towards
increased managed care, which results in decreased daily rates and declines in
average lengths of stay. Management has mitigated those pressures by increasing
the number of admissions to its hospitals, and by increasing outpatient and
other ancillary services. Late in the first quarter 1996, a transition of the
medical staff began at Hampton Hospital as a result of the settlement of a
dispute with a physician group that formerly staffed it. Before the changeover
period, Hampton's revenue declined significantly. In the second and third
quarters of fiscal 1996, revenue at Hampton has improved from the comparable
periods in fiscal 1995. Management fees in 1995 resulted from a contract to
manage three psychiatric facilities. The contract expired in May 1995.
Cost of Products Sold: Gross profit (net sales of products less cost of products
sold) as a percentage of net sales of products ("margin") was as follows:
<TABLE>
<CAPTION>
Margin % Margin %
Three Months Ended Nine Months Ended
July 31, July 31,
-------------------- ------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
CVI 77 73 76 73
CSI 51 53 51 52
Consolidated 69 69 70 68
</TABLE>
Margin for CVI has increased due to production efficiencies, including those
associated with higher production volumes, and a favorable product mix,
reflecting the growth in sales of toric contact lenses, which have higher
margins. Margin at CSI for the
9
<PAGE>
<PAGE>
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
third quarter of 1996 was softened by the inclusion of sales of Unimar products,
which initially are generating lower margins. The Company expects that margins
on Unimar products will improve in the future, as production efficiencies are
implemented.
Cost of Services Provided: Cost of services provided represents all of the costs
(other than financing costs and amortization of intangibles) incurred by HGA in
generating net service revenue. The result of subtracting cost of services
provided from net service revenue is a profit of $843 thousand, or 8%, of net
service revenue in the third quarter of 1996 and $1.4 million, or 5%, in the
first nine months of 1996. The corresponding profits were $388 thousand, or 4%
of net service revenue, and $1.5 million, or 5%, in the three- and nine-month
periods ended July 31, 1995, respectively. The flat percentage of profit for the
nine months ended July 31, 1996, consists of a reduction in revenue explained
above, partially offset by a $1.3 million reduction in cost of services
provided.
Selling, General and Administrative Expense: Selling, general and
administrative (SG&A) expenses by business unit and corporate were as follows:
<TABLE>
<CAPTION>
(Dollars in 000's)
Three Months Ended Nine Months Ended
July 31, July 31,
----------------------------- ---------------------------------
% Incr. % Incr.
1996 1995 (Decr.) 1996 1995 (Decr.)
---- ---- ------- ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
CVI $ 4,051 $ 4,010 1% $12,567 $11,828 6%
CSI 1,804 1,453 24% 4,518 4,132 9%
CVP - 27 N/A - 64 N/A
Corporate/
Other 1,428 1,254 14% 4,542 4,251 7%
------- ------- ------- -------
$ 7,283 $ 6,744 8% $21,627 $20,275 7%
======= ======= ======= =======
</TABLE>
SG&A for the three- and nine-month periods has increased 8% and 7% from the
prior year's three- and nine-month periods, respectively, largely as a result of
the higher costs associated with higher sales of products, including incremental
costs in 1996 associated with the newly acquired Unimar business. In addition,
the Company incurred nonrecurring SG&A charges for severance and similar items
in the third quarter of 1996 in the amount of approximately $250 thousand. The
effect of these increases was partially mitigated by credits recorded to SG&A in
the third quarter of 1996 by CVI and Corporate in the amounts of $200 thousand
and $300 thousand, respectively. The credits resulted from decreases to certain
accruals for product liability no longer required.
10
<PAGE>
<PAGE>
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Research and Development Expense: Research and development expense was $294
thousand and $887 thousand for the three and nine months ended July 31, 1996,
respectively. The comparable prior year research and development expense was
$632 thousand and $2.5 million, respectively. The decreases are primarily
attributable to the Company's decision to discontinue development activity
related to CVP's calcium channel blocker, CalOptic(tm). A $389 thousand decrease
at CSI over the comparable nine-month periods is primarily related to the
discontinuation in May 1995 of the development and evaluation of a thermal
endometrial ablation technology.
The Company currently anticipates that the level of spending on research and
development has stabilized. The Company focuses on acquiring products which will
be marketable immediately or in the short-term, rather than funding longer-term,
higher risk research and development projects.
Income From Operations: As a result of the variances discussed above, income
from operations improved by $2.6 million or 87% and $5.8 million or 107% for the
three and nine months, respectively. Income (loss) from operations by business
unit and corporate was as follows:
<TABLE>
<CAPTION>
(Dollars in 000's)
Three Months Ended Nine Months Ended
July 31, July 31,
----------------------------- ----------------------------------
Incr. Incr.
1996 1995 (Decr.) 1996 1995 (Decr.)
---- ---- ------- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C>
CVI $ 5,625 $ 4,078 $ 1,547 $13,505 $ 9,738 $ 3,767
CVP (6) (343) 337 (17) (1,226) 1,209
CSI 491 106 385 1,064 (138) 1,202
HGA 792 336 456 1,238 1,292 (54)
Corporate/
Other (1,428) (1,253) (175) (4,542) (4,244) (298)
------ ------ ---- ------ ------ ----
$ 5,474 $ 2,924 $ 2,550 $11,248 $ 5,422 $ 5,826
======= ======= ======= ======= ======= =======
</TABLE>
Settlement of Disputes: In the first nine months of 1996, the Company recorded a
credit to income of $223 thousand related to the agreement which settled cross
claims between HGA and Progressions Health Systems, Inc. ("Progressions")
related to purchase price adjustments (which were credited to goodwill) and
other disputes. Pursuant to this agreement, HGA received $447 thousand in the
first nine months of 1996 of which $223 thousand has been credited to settlement
of disputes. In the first nine months of 1995, the Company recorded a credit of
$1.5 million resulting from 1) adjustments to certain estimated accruals for
disputes no longer required and 2) the receipt of a payment of approximately
$900 thousand from one of its insurers settling a claim for litigation expenses
and settlements of litigation involving previous management of the Company and
3) the recording of a portion of the settlement of certain other disputes.
11
<PAGE>
<PAGE>
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Interest Expense: The increase in interest expense for the three- and nine-month
periods ended July 31, 1996 over the comparable 1995 periods is primarily
related to:
1. Interest on the line of credit at CVI on which the Company did
not draw funds until the second quarter of 1995; and
2. Accreted interest related to the settlement of a dispute.
Provision for (Benefit of) Income Taxes: Tax provisions for all periods
presented reflect primarily state income and franchise taxes. The net benefit of
$596 thousand for the third quarter of fiscal 1996 includes a benefit of $615
thousand related to the reversal of tax accruals no longer required as a result
of the successful resolution of a state tax dispute.
Earnings Per Share: Earnings per share are based on the weighted average number
of common and common equivalent shares outstanding during the respective
periods.
Capital Resources & Liquidity
The Company's financial strength is continuing to improve significantly. Through
the first nine months of fiscal 1996, the Company has generated $11.2 million of
operating income (more than twice the amount generated in the comparable 1995
period) and improved shareholders' equity by $8.3 million to $6.5 million from a
deficit of $1.7 million. In addition, the Company is finalizing documentation
with its lender to amend its $11 million of HGA debt. Among other things, the
Company expects that the interest rate on this debt will be reduced by two
percentage points effective at the beginning of fiscal 1997. A rate reduction of
one percentage point has also been effected under CooperVision's $8 million line
of credit, which, at July 31, 1996, had $845 thousand in advances outstanding.
Operating cash flow has improved steadily following the first quarter's
traditionally low levels:
Operating cash flow (000's)
Fiscal quarter ended:
January 31, 1996 $(7,834)
April 30, 1996 476
July 31, 1996 5,264
-------
Nine month to July 31, 1996 $(2,094)
=======
The primary uses of cash in operating activities during the nine-month period
included net payments of $4.9 million associated with the settlement of certain
disputes, payments totaling $2.0 million
12
<PAGE>
<PAGE>
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
to fund fiscal 1995 entitlements under the Company's annual bonus plans and
increased investments in receivables and inventory of approximately $3.3 million
in the aggregate. Of the $3.0 million increase in receivables, $2.0 million
occurred at HGA. A shift in payor mix resulted in a larger percentage of revenue
being generated from typically slower-paying state agencies. Approximately $859
thousand has been paid in the first nine months of 1996 related to restructuring
costs accrued in fiscal 1995. The $278 thousand increase in inventory, which
occurred primarily at CVI, was required to provide adequate inventory levels for
anticipated increased sales of existing products in succeeding quarters and the
future launch of new products. The Company acquired Unimar, Inc. in April 1996
for $8 million in cash and notes. Net cash of $3.6 million was invested, and $4
million of notes due in three years bearing interest of 12% were issued. The
cash was obtained through cash on hand and a draw down on the line of credit.
The Unimar product line contributed revenue of $1.9 million since being acquired
in mid-April 1996. The Company currently anticipates that operating cash flows
of its existing businesses will be positive for the remaining three months of
fiscal 1996, and that cash requirements for operating activities and the
repayment of the line of credit will be met through cash generated by its
established operating businesses.
The Company is evaluating other acquisition opportunities which, if consummated,
would be funded by a combination of cash then on hand, financing vehicles now in
place and other methods of raising additional capital, currently being explored.
Fiscal Year 1996 Business Outlook: The following statements and any mention of
them above are based on current expectations that contain a number of risks and
uncertainties. These statements are forward-looking and actual results may
differ materially. Factors that could cause or contribute to such differences
include: major changes in business conditions and the economy in general, new
competitive inroads, changes in governmental medical reimbursement programs,
unforeseen litigation, changes in interest rates, any decision to divest certain
businesses and the cost of acquisition activity, particularly in the event of a
large acquisition that is not ultimately completed.
The Company anticipates that its earnings per share for fiscal 1996 will range
from $1.30 to $1.35 per share, which includes an anticipated beneficial effect
of a deferred tax benefit of 30 cents per share (assuming it achieves its
current projection for earnings before taxes), and its revenue will achieve
double-digit growth based mainly on these expectations:
CooperVision sales will grow at mid-teens percentages during fiscal 1996 as it
continues to gain significant market share in the toric segment of the global
contact lens market.
13
<PAGE>
<PAGE>
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
CooperSurgical will benefit from its second quarter of 1996 acquisition of
Unimar, and income from operations will reach 10% of sales in the combined
businesses for the full year.
HGA will outperform its 1995 operating results based on the turnaround at
Hampton Hospital and the addition of its new outpatient clinics.
14
<PAGE>
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description
------ -----------
11 Calculation of Earnings Per Share.
27 Financial Data Schedule.
(b) The Company filed the following report on Form 8-K during the period from
February 1, 1996 to April 30, 1996.
Date
of Report Item Reported
- --------- -------------
May 30, 1996 Item 5. Other Events.
June 28, 1996 Item 5. Other Events.
15
<PAGE>
<PAGE>
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 thereunto duly authorized.
The Cooper Companies, Inc.
------------------------------------
(Registrant)
Date: August 30, 1996 /s/ Robert S. Weiss
------------------------------------
Executive Vice President, Treasurer
and Chief Financial Officer
16
<PAGE>
<PAGE>
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Index of Exhibits
Exhibit No. Page No.
- ---------- -------
11 Calculation of Earnings Per Share.
27 Financial Data Schedule.
17
STATEMENT OF DIFFERENCES
The registered mark symbol shall be expressed as ......... 'r'
The trademark symbol shall be expressed as ............... 'tm'
<PAGE>
<PAGE>
Exhibit 11
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Calculation of Earnings Per Share
(In thousands, except per share figures)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
July 31, July 31,
------------------- -----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary:
- ---------
Net income $ 4,669 $ 2,820 $ 8,130 $ 3,700
======== ======== ======== ========
Weighted average
number of common
shares outstanding 11,657 11,385 11,639 11,373
Contingently issuable
shares 136 204 102 207
-------- -------- -------- --------
Weighted average
number of common and
common equivalent
shares outstanding for
earnings per share 11,793 11,589 11,741 11,580
======== ======== ======== ========
Earnings per share $ .40 $ .24 $ .69 $ .32
======== ======== ======== ========
Fully Diluted:
- --------------
Net income $ 4,669 $ 2,820 $ 8,130 $ 3,700
======== ======== ======== ========
Weighted average
number of common
shares outstanding 11,657 11,385 11,639 11,373
Contingently issuable
shares 168 276 154 207
-------- -------- -------- --------
Weighted average
number of common and
common equivalent
shares outstanding for
earnings per share 11,825 11,661 11,793 11,580
======== ======== ======== ========
Earnings per share $ .39 $ .24 $ .69 $ .32
======== ======== ======== ========
</TABLE>
18
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> JUL-31-1996
<CASH> 3,143
<SECURITIES> 0
<RECEIVABLES> 23,646
<ALLOWANCES> 2,127
<INVENTORY> 10,196
<CURRENT-ASSETS> 37,543
<PP&E> 48,282
<DEPRECIATION> 14,112
<TOTAL-ASSETS> 94,959
<CURRENT-LIABILITIES> 33,951
<BONDS> 48,136
<COMMON> 1,166
0
0
<OTHER-SE> 5,344
<TOTAL-LIABILITY-AND-EQUITY> 94,959
<SALES> 47,339
<TOTAL-REVENUES> 77,895
<CGS> 14,252
<TOTAL-COSTS> 43,416
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,965
<INCOME-PRETAX> 7,690
<INCOME-TAX> (440)
<INCOME-CONTINUING> 8,130
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,130
<EPS-PRIMARY> .69
<EPS-DILUTED> .69
<PAGE>
