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[LOGO] [LOGO]
NEWS RELEASE
CONTACT:
NORRIS BATTIN
THE COOPER COMPANIES, INC.
[email protected]
FOR IMMEDIATE RELEASE
THE COOPER COMPANIES REPORTS FISCAL FOURTH QUARTER AND 2000 RESULTS
FOURTH QUARTER REVENUE GROWS 22 PERCENT AS CONTACT LENS UNIT CONTINUES TO
OUTPACE THE MARKET EARNINGS PER SHARE FROM CONTINUING OPERATIONS GROWS
19 PERCENT TO 63 CENTS
FULL YEAR 2000 REVENUE GROWS 19 PERCENT; EPS FROM CONTINUING OPERATIONS UP
32 PERCENT TO $2.03
ESTIMATED FIRST QUARTER 2001 REVENUE UP 20 PERCENT TO 24 PERCENT; EPS
40 CENTS TO 43 CENTS
LAKE FOREST, Calif., December 12, 2000-- The Cooper Companies, Inc. (NYSE: COO)
today reported results for its fourth fiscal quarter and year ended October 31,
2000:
o Fourth quarter revenue $55.2 million, 22 percent above fourth
quarter 1999 (24 percent in constant currency.) Annual revenue
$197.3 million, 19 percent above 1999 (21 percent in constant
currency.)
o Fourth quarter EPS from continuing operations 63 cents versus 53
cents, up 19 percent. Fiscal year $2.03 (including a net credit
of 3 cents for one-time items) versus $1.54, up 32 percent.
o Fourth quarter cash flow (pretax income from continuing
operations plus depreciation and amortization) per share $1.08,
up 17 percent from 92 cents in fourth quarter 1999; Fiscal 2000
up 24 percent to $3.51.
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Commenting on these results, A. Thomas Bender, chief executive officer said,
"This was another year of solid performance for The Cooper Companies. At
CooperVision (CVI), our contact lens unit, worldwide core contact lens
business--all revenue except our lower margin OEM sales to other contact lens
manufacturers--grew 17 percent during the quarter and 16 percent during the
fiscal year despite the weakening of the pound sterling and the euro. In
constant currency, our growth was 20 percent in the fourth quarter and 18
percent for the year in a worldwide contact lens market that's growing 5 percent
to 7 percent per year.
"Sales of our contact lens products in the U.S. grew 14 percent in the fourth
quarter and 18 percent during the fiscal year. For the first nine-months of
2000, the U.S. contact lens market grew 3 percent, and CVI's market share grew
nearly one point to about 8.5 percent. In constant currency, sales outside of
the U.S. grew 30 percent in the fourth quarter and 18 percent for the full year.
"CVI's largest product line, toric lenses used to correct astigmatism, grew 13
percent in the U.S. in the fourth quarter. For the fiscal year, U.S. toric lens
sales grew 19 percent, sharply ahead of the 8 percent growth reported for the
nine-month U.S. toric lens market. Globally, CVI's toric lenses grew 20% during
fiscal 2000."
At CooperSurgical (CSI), the Company's women's healthcare medical device unit,
revenue increased 69 percent in the fourth quarter and 55 percent during the
fiscal year primarily reflecting the acquisitions earlier in the year of
products from BEI Medical Systems, Inc. and Leisegang Medical, Inc. Without
these acquisitions, CSI grew 4 percent during the year.
BUSINESS UNIT P&L HIGHLIGHTS ($'S IN MILLIONS)
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<CAPTION>
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THREE MONTHS ENDED OCTOBER 31,
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Revenue Operating Income
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% % %Revenue %Revenue
2000 1999 Inc. 2000 1999 Inc. 2000 1999
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
CVI $42.3 $37.6 13% $14.2 $12.9 10% 34% 34%
CSI 12.9 7.6 69% 1.6 1.3 27% 13% 17%
------ ------ ------- -------
Subtotal 55.2 45.2 22% 15.8 14.2 11% 29% 31%
HQ Expense (1.6) (1.8) N/A - -
-------- -------
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TOTAL $55.2 $45.2 22% $14.2 $12.4 15% 26% 27%
===== ===== ===== ===== ===
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TWELVE MONTHS ENDED OCTOBER 31,
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Revenue Operating Income
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% % %Revenue %Revenue
2000 1999 Inc. 2000 1999 Inc. 2000 1999
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CVI $151.8 $136.0 12% $47.3 $40.8 16% 31% 30%
CSI 45.5 29.3 55% 6.3 4.3 45% 14% 15%
-------- -------- -------- ------
Subtotal 197.3 165.3 19% 53.6 45.1 19% 27% 27%
HQ Expense - (6.7) (6.3) N/A - -
--------- --------
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TOTAL $197.3 $165.3 19% $46.9 $38.8 21% 24% 23%
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FOURTH QUARTER OPERATING HIGHLIGHTS
CooperVision Revenue and Market Share
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COOPERVISION REVENUE ANALYSIS
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Segment 4th Quarter 2000 % % Change from FY 2000 % % Change from
Total 4th Quarter 1999 Total FY 1999
------------------- ------------------ --------- ------------------- ------------- --------- -------------------
<S> <C> <C> <C> <C> <C> <C>
U.S. $27.3 64% 14% $ 97.8 64% 18%
International 14.3 34% 22% 49.6 33% 11%
----- ---- ------ ----
Core Business 41.6 98% 17% 147.4 97% 16%
OEM .7 2% (64%) 4.4 3% (49%)
----- ---- ------ ----
Total $42.3 100% 13% $151.8 100% 12%
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"CVI's fourth quarter and full-year core revenue growth, 20 percent and 18
percent, respectively in constant currency, was in line with our guidance," said
Bender. "This is more than three times the estimated growth of the worldwide
contact lens market during the first nine months of the calendar year,
continuing the consistent performance that CVI has delivered all year. Although
the weakness in the pound sterling and the euro has negatively impacted our
contact lens revenue, operating income has been virtually unaffected due to the
large amount of manufacturing we conduct in the U.K."
During the third calendar quarter, the latest market data audit period, the U.S.
contact lens market grew 4 percent and is up 3 percent through nine months. The
largest segment of the market, the disposable and planned replacement toric and
sphere products that account for 75 percent of the market's revenue, grew 6
percent during the quarter and 6 percent through September. Disposable planned
replacement toric lenses grew 21 percent for the quarter and 27 percent for the
nine months, and disposable planned replacement spheres were up 3 percent for
the quarter and 2 percent through September.
CVI's U.S. disposable and planned replacement brands of toric contact lenses
grew 21 percent over last year's fourth quarter and 32 percent for the fiscal
year. Frequency 55 Toric, CVI's cast molded toric and Preference Toric, CVI's
premium toric brand, showed strong results during the quarter. CVI now holds 34
percent of the U.S. disposable and planned replacement toric market--the fastest
growing segment of the U.S. contact lens market--and 31 percent of the total
U.S. toric market, a 2 share points improvement over 1999.
CVI's spherical disposable and planned replacement sphere products in the U.S.,
especially Frequency 55 Sphere and Frequency Aspheric, grew 30 percent during
the fiscal quarter, and finished the fiscal year 39 percent ahead.
In the U.S., all of CVI's disposable and planned replacement products--torics
and spheres together--grew 24 percent during the quarter and 34 percent for the
fiscal year. Worldwide, they were ahead 16 percent during the
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quarter and 14 percent for the fiscal year. They accounted for more than
three-quarters of CVI's business during both periods.
International revenue--sales in countries outside the United States plus exports
from the U.S.--grew 22 percent during the quarter, 30 percent in constant
currency. "Growth overseas accelerated during the quarter," said Bender. "We
have introduced XCEL Toric and our new value added aspheric and cosmetic lens
products in all major European markets. I expect that they will drive improved
revenue as they did this quarter."
In Japan, CVI's partner, Rohto Pharmaceuticals, Inc., markets CVI's conventional
spherical and toric lenses under the Rohto i Q trade name. Rohto has submitted a
lens material designed for quarterly replacement to Japanese regulatory
authorities and anticipates mid-2001 introduction of this product. Clinical
trials continue in Japan on the two-week Frequency material. Rohto expects to
launch Frequency spheres, torics and aspheric lenses during 2002.
"These results underscore CVI's position as a leading specialty contact lens
company that is well differentiated from its larger competitors, whose product
lines are dominated by mature and declining commodity contact lens products,"
said Bender. "Value added specialty lenses such as toric and cosmetic lenses,
continue to grow at the expense of commodity disposable spherical products, and
CVI has been a leader in this transition."
CVI's gross margin improved to 70 percent in the fourth quarter of 2000 from 68
percent in the comparable 1999 quarter. Year to year, CVI's gross margin
improved from 66 percent to 69 percent. "I expect," said Bender, "that gross
margins during 2001 will also be in the 70% range due to the continuing sales
mix shift to our branded toric lenses and ongoing manufacturing efficiencies,
particularly at our U.K. manufacturing facility."
New Products
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Frequency Aspheric, introduced in the U.S. during the first quarter, continues
to exceed expectations. The optical properties of this lens improve visual
acuity in low light situations and correct low levels of astigmatism where toric
lenses are not indicated. "We believe," said Bender, "that the market will
continue to trade up from commodity disposable spheres to value added products
such as Frequency Aspheric."
During the first quarter of 2001, CVI will expand the parameter range of CV
EncoreToric, its cast molded product in the two-week disposable market. CVI is
the only company that competes in all segments of the disposable planned
replacement toric market with products in the two-week, monthly and quarterly
replacement segments.
In May, CVI introduced Frequency Colors, a new line of disposable cosmetic
lenses, into major European markets. Initial performance is strong. The North
American launch is scheduled early in 2001. Cosmetic lenses, opaque lenses and
color enhancing lenses change the appearance of the eye's natural color. These
lenses are worn by patients who need vision correction as well as by fashion
conscious people with normal
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vision. The cosmetic contact lens market, about $250 million worldwide, is the
second fastest growing sector of the specialty lens market behind toric lenses.
CVI continues clinical trials on a high performance monthly planned replacement
bifocal lens.
CooperSurgical
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Revenue at CSI, Cooper's women's healthcare medical device unit, grew 69 percent
over the comparable quarter in 1999 and 55 percent to $45.5 million for the
fiscal year, due primarily to the recent acquisitions of products from BEI
Medical Systems, Inc. and Leisegang Medical, Inc.
In October, CSI purchased MedaSonics, Inc., which sells a line of handheld and
compact Doppler ultrasound systems used in obstetrics and gynecology, cardiology
and other medical specialties. In November, CSI announced an exclusive
distribution agreement with Norland Medical Systems, Inc. to distribute a line
of bone measurement systems used in the evaluation of osteoporosis, a condition
that affects 22 million American women. Effective treatment is available when
the disease is detected early.
CSI's operating income for the fourth quarter grew 27 percent to $1.6 million
with operating margins of 13 percent. For the fiscal year, operating margins
reached 14 percent, and grew 45 percent over fiscal 1999. As we complete the
expansion of our Shelton, Connecticut facility, we expect to finish the
integration of Leisegang early in the first Quarter of 2001, and expect the
operating margin for CSI to approach 20 percent for the full year.
CSI continues to execute its market consolidation strategy and believes that it
is the largest competitor in the in-office gynecological device segment of the
women's healthcare market.
Earnings Per Share
------------------
All per share amounts mentioned in this report refer to diluted per share
amounts.
Estimated Results Going Forward
-------------------------------
The Company estimates that earnings per share from continuing operations for its
first fiscal quarter ending January 31, 2001 will range from 40 cents to 43
cents and that revenue will increase between 20 percent and 24 percent over the
first quarter of 2000. For fiscal 2001, the Company estimates that earnings per
share from continuing operations will range between $2.36 and $2.42 with revenue
increasing between 16 percent and 21 percent over the previous year.
Conference Call
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The Cooper Companies will hold a conference call to discuss its fourth quarter
results today at 1:30 PM Pacific Standard Time. To access the live call, dial
1-800-289-0437. A replay will be available approximately one hour after the call
ends at 1-888-203-1112 and remain available for five days. The
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access code for both calls is 447812. This call will also be broadcast live on
The Cooper Companies' web site, www.coopercos.com and at www.vcall.com,
www.bestcalls.com and www.streetevents.com.
Forward-Looking Statements
--------------------------
Some of the information included in this news release contains "forward-looking
statements" as defined by the Private Securities Litigation Reform Act of 1995.
The forward-looking statements include certain statements pertaining to our
(including our subsidiaries') capital resources, performance and results of
operations. In addition, all statements regarding anticipated growth in our
revenue, and anticipated market conditions and results of operations are
forward-looking statements. To identify forward-looking statements look for
words like "believes," "expects," "may," "will," "should," "seeks," "intends,"
"plans," "estimates" or "anticipates" and similar words or phrases. Discussions
of strategy, plans or intentions often contain forward-looking statements.
These, and all forward-looking statements, necessarily depend on assumptions,
data or methods that may be incorrect or imprecise.
Events, among others, that could cause actual results and future actions to
differ materially from those described by or contemplated in forward-looking
statements include major changes in business conditions, major disruption in the
operations of our manufacturing facilities, new competitors or technologies, the
impact of an undetected virus on our computer systems, acquisition integration
delays or costs, foreign currency exchange exposure, investments in research and
development and other start-up projects, dilution to earnings per share from
acquisitions or issuing stock, regulatory issues, significant environmental
cleanup costs above those already accrued, litigation costs, costs of business
divestitures, the requirement to provide for a significant liability or to write
off a significant asset, changes in accounting principles or estimates, and
other factors described in our Securities and Exchange Commission filings,
including the "Business" section in our Annual report on Form 10-K for the year
ended October 31, 1999. We caution investors not to rely on forward-looking
statements. They reflect our analysis only on their stated date or the date of
this news release. We disclaim any intent to update these forward-looking
statements.
INTERNET ADDRESSES
The Internet addresses in this release are for informational purposes only and
not intended for use as hyperlinks. Nothing in any of these addresses is a part
of this news release.
The Cooper Companies, Inc. and its subsidiaries develop, manufacture and market
specialty healthcare products. Corporate offices are located in Lake Forest and
Pleasanton, Calif. A toll free interactive telephone system at 1-800-334-1986
provides stock quotes, recent press releases and financial data. The Cooper
Companies' World Wide Web address is www.coopercos.com.
CooperVision, Inc., markets a broad range of contact lenses for the vision care
market. Headquartered in Lake Forest, Calif., it manufactures in Huntington
Beach, Calif., Rochester, N.Y., Hamble, England and
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Toronto. Its Web address is www.coopervision.com. CooperSurgical, Inc., with
operations in Shelton, Conn., Montreal and Berlin, markets diagnostic products,
surgical instruments and accessories used primarily by gynecologists and
obstetricians. Its Web address is www.coopersurgical.com.
CV EncoreToric'TM' and XCEL'TM' are trademarks of The Cooper Companies, Inc.
and/or its affiliates and subsidiaries. Preference'r' and Frequency'r' are
registered trademarks of The Cooper Companies, Inc. and/or its affiliates and
subsidiaries.
(FINANCIAL STATEMENTS FOLLOW)
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THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Income
(In thousands, except per share figures)
(Unaudited)
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Three Months Ended Years Ended
October 31, October 31,
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2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Net sales $ 55,236 $ 45,222 $197,317 $165,328
Cost of sales 18,635 15,303 68,100 59,009
---------- ---------- ---------- ----------
Gross profit 36,601 29,919 129,217 106,319
Selling, general and administrative expense 20,623 15,922 75,424 61,734
Research and development expense 684 676 2,711 1,977
Amortization of intangibles 1,091 931 4,213 3,797
---------- ---------- ---------- ----------
Income from operations 14,203 12,390 46,869 38,811
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Interest expense 931 1,397 4,744 6,330
Settlement of disputes - - 653 -
Other income, net 182 106 655 231
---------- ---------- ---------- ----------
Income from continuing operations before income taxes 13,454 11,099 42,127 32,712
Provision for income taxes 4,305 3,579 12,727 10,711
---------- ---------- ---------- ----------
Income from continuing operations 9,149 7,520 29,400 22,001
Discontinued operations - - - 3,099
---------- ---------- ---------- ----------
Cumulative effect of change in accounting principles - - (432) -
Net income $ 9,149 $ 7,520 $ 28,968 $ 25,100
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Diluted earnings per share:
Continuing operations $ 0.63 $ 0.53 $ 2.03 $ 1.54
Discontinued operations - - - 0.21
Cumulative effect of change in accounting principles - - (0.03) -
---------- ---------- ---------- ----------
Earnings per share $ 0.63 $ 0.53 $ 2.00 $ 1.75
========== ========== ========== ==========
Number of shares used to compute earnings per share 14,618 14,299 14,510 14,312
========== ========== ========== ==========
Memo:
Cash flow (pretax income from continuing operations
plus depreciation and amortization) per diluted share $ 1.08 $ 0.92 $ 3.51 $ 2.82
========== ========== ========== ==========
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THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
October 31, October 31,
2000 1999
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ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 14,608 $ 20,922
Trade receivables, net 33,058 26,792
Inventories 38,219 33,430
Deferred tax asset 17,800 11,638
Other current assets 9,000 7,679
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Total current assets 112,685 100,461
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Property, plant and equipment, net 47,933 40,319
Intangibles, net 110,854 80,518
Deferred tax asset 42,979 56,519
Other assets 8,114 8,056
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$322,565 $285,873
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 8,094 $ 4,888
Other current liabilities 56,744 37,008
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Total current liabilities 64,838 41,896
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Long-term debt 40,257 57,067
Other liabilities 18,595 22,767
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Total liabilities 123,690 121,730
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Stockholders' equity 198,875 164,143
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$322,565 $285,873
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