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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)
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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.
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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
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EXHIBIT INDEX
Exhibit Sequentially
No. Description Numbered Page
99.1 Press Release dated August 27, 1997 of The Cooper
Companies, Inc.
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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 $101.0 million.
Commenting on the third quarter's results, A. Thomas Bender, president
and chief executive officer, said, "Each of our operating businesses delivered
solid revenue growth
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compared with last year's third quarter. Sales at CooperVision (CVI),
the specialty contact lens business, grew 37% for the quarter and are ahead by
28% year to date, driven by strong sales of toric lenses to correct astigmatism.
"Sales at CooperSurgical (CSI), the gynecology products business,
increased 42% and are up 46% for the nine-month period reflecting the favorable
effect of recent acquisitions and internally developed new products. Revenue at
Hospital Group of America (HGA), Cooper's mental health services business, grew
29% in the third quarter and is up 26% year to date, with total outpatient
visits strongly favorable to last year, and Hampton Hospital's results much
improved, now that HGA's own clinical service management is in place."
Business Unit Performance
P&L OPERATING HIGHLIGHTS BY BUSINESS UNIT
Quarter Ended July 31,
($'s in Millions)
<TABLE>
<CAPTION>
Revenue Operating Income
------------------------- ------------------------------------------------
% % % Revenue % Revenue
1997 1996 Inc. 1997 1996 Inc. 1997 1996
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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 $5.5 35% 19% 19%
===== ===== === ===== ==== ==== === ===
</TABLE>
Nine Months Ended July 31,
($'s in Millions)
<TABLE>
<CAPTION>
Revenue Operating Income
-------------------------- -----------------------------------------------
% % % Revenue % Revenue
1997 1996 Inc. 1997 1996 Inc. 1997 1996
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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%
====== ===== === ======= ======= ==== === ===
</TABLE>
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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.
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Hospital Group of America
HOSPITAL GROUP OF AMERICA
SELECTED STATISTICAL INFORMATION
<TABLE>
<CAPTION>
3 Months Ended July 31, 9 Months Ended July 31,
----------------------- ------------------------
1997 1996 % Chg 1997 1996 % Chg
---- ---- ----- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
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%
</TABLE>
*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.
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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
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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]
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THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Income
(In thousands, except per share figures)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
July 31, July 31,
------------------------ ------------------------
1997 1996 1997 1996
------ ------ ------ -----
<S> <C> <C> <C> <C>
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
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</TABLE>
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THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
July 31, October 31,
1997 1996
---------- ---------
ASSETS
<S> <C> <C>
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
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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
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Long-term debt 8,841 47,920
Other liabilities 2,845 6,351
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Total liabilities 77,960 87,579
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Stockholders' equity 95,697 15,330
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$173,657 $102,909
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