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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): February 23, 2000
THE COOPER COMPANIES, INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware 1-8597 94-2657368
(State or other jurisdiction (Commission File Number) (IRS Employer Identification No.)
of incorporation)
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6140 Stoneridge Mall Road, Suite 590, Pleasanton, California 94588
(Address of principal executive offices)
(925) 460-3600
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On February 23, 2000, The Cooper Companies, Inc. issued a press release
announcing its first quarter fiscal year 2000 financial results. This release is
filed as an exhibit hereto and is incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
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Exhibit
No. Description
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<S> <C>
99.1 Press Release dated February 23, 2000 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
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Stephen C. Whiteford
Vice President and
Corporate Controller
(Principal Accounting Officer)
Dated: February 25, 2000
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EXHIBIT INDEX
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Exhibit Sequentially
No. Description Numbered Page
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99.1 Press Release dated February 23, 2000 of The Cooper
Companies, Inc.
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CONTACT:
Norris Battin
[email protected]
FOR IMMEDIATE RELEASE
THE COOPER COMPANIES REPORTS FIRST QUARTER 2000 RESULTS
TORIC CONTACT LENS REVENUE DRIVES STRONG TOP LINE GROWTH AT COOPERVISION
COOPERSURGICAL CONTINUES WOMEN'S HEALTHCARE MARKET CONSOLIDATION
LAKE FOREST, Calif., Feb. 23, 2000 -- The Cooper Companies, Inc. (NYSE/PCX: COO)
today reported results for its fiscal first quarter ended January 31, 2000:
Revenue $40.4 million, 16 percent above first quarter 1999.
Earnings per share from continuing operations 34 cents versus 18 cents
in first quarter 1999, an 89 percent increase. Trailing twelve months'
earnings per share $1.70.
Cash flow per share (pretax income from continuing operations plus
depreciation and amortization) 65 cents, up from 40 cents in first
quarter 1999. Trailing twelve-month cash flow per share $3.08.
Commenting on Cooper's first quarter results, A. Thomas Bender, chief executive
officer said, "At CooperVision (CVI), our contact lens business, U.S. revenue
growth was particularly strong, up 26 percent, with our toric lenses that
correct astigmatism leading the way, up 28 percent to $13.3 million.
"Globally, we continue to gain significant market share as CVI grew its
worldwide core business 18 percent, more than three times the estimated growth
of the worldwide contact lens market. Consistent double-digit revenue growth and
penetration in high value added markets differentiates CVI from the other
players in the market.
"At CooperSurgical (CSI), our women's healthcare medical device business, we
completed the acquisitions of products from BEI Medical Systems, Inc. and
Leisegang Medical, Inc. With these acquisitions, we expect CSI's annualized
revenue to approach $50 million, giving it significant scale. CSI revenue
increased 17 percent in the quarter with operating income up 67 percent.
Operating margin grew to 17 percent, and we expect to approach 20 percent by
year end, after we have completed the integration of Leisegang."
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BUSINESS UNIT P&L HIGHLIGHTS ($'S MILLIONS)
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THREE MONTHS ENDED JANUARY 31, 2000
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Revenue Operating Income
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% % %Revenue %Revenue
2000 1999 Inc. 2000 1999 Inc. 2000 1999
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CVI $32.0 $27.8 15% $8.3 $6.2 34% 26% 22%
CSI 8.4 7.2 17% 1.4 .9 67% 17% 12%
--- --- --- --
Subtotal 40.4 35.0 16% 9.7 7.1 38% 24% 20%
HQ Expense - - (1.5) (1.2) N/A
---- ----
TOTAL $40.4 $35.0 16% $8.2 $5.9 40% 20% 17%
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COOPERVISION (CVI) FIRST QUARTER 2000 PERFORMANCE HIGHLIGHTS
REVENUE ANALYSIS ($'S MILLIONS)
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Segment Q1 2000 % Total Revenue Growth vs.
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Q1 1999
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U.S. $20.2 63% 26%
International 10.5 33% 5%
----- ---
CORE BUSINESS 30.7 96% 18%
OEM 1.3 4 (28%)
----- ---
Total $32.0 100% 15%
===== ===
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CVI's worldwide core contact lens business--all revenue except our lower margin
OEM sales to other contact lens manufacturers--grew 18 percent in the fiscal
first quarter. Revenue in the U.S., approximately two-thirds of our worldwide
core contact lens business, grew a healthy 26 percent as the disposable-planned
replacement (DPR) sphere and toric product lines together grew a robust 42
percent.
International core revenue--sales in countries outside the United States plus
exports from the U.S.--grew 5 percent during the quarter. Sales to other contact
lens manufacturers declined as expected, off 28 percent from last year's first
quarter.
"Although we experienced slower sales growth in our markets outside of North
America this quarter," Bender added. "I expect double-digit growth overseas for
the remainder of the year the year, because EXCEL toric and our new value added
spherical lens products have now been introduced in most major markets."
CooperVision's gross margin improved to 69 percent in the first quarter of 2000
from 63 percent in the first quarter of 1999, a function of favorable sales mix
and ongoing manufacturing efficiencies.
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"We believe," said Bender, "that CVI extended its U.S. toric market leadership
during the first quarter and that we have more than 30 percent of that market.
CVI's total U.S. toric lens business grew 28 percent in the first fiscal quarter
while the toric market was growing only about 5 percent."
During the first fiscal quarter, sales of CVI's disposable-planned replacement
(DPR) torics grew 36 percent in the U.S. as Preference Toric, CVI's premium
toric brand, and Frequency 55 Toric, positioned at a lower price point, together
showed strong results.
CVI's spherical DPR products in the U.S., especially Frequency 55 sphere, also
performed well in the current quarter. Their revenue grew about $1.7 million
year to year, nearly matching the growth most recently reported by the second
strongest competitor in the market.
Together, CVI's DPR spheres and torics grew 48 percent during the fourth
calendar quarter audit period and now account for over 70 percent of CVI's U.S.
business.
In Japan, CVI's partner, Rohto Pharmaceuticals, Inc., continued to roll out
CVI's conventional spherical and toric lenses under the Rohto i.Q trade name.
Rohto has submitted a lens material that will allow lenses to be replaced
quarterly (equivalent to the Preference product line in the U.S.) to Japanese
regulatory authorities and anticipates late 2000 introduction of this product.
Clinical trials continue in Japan on the two-week Frequency material. Rohto
expects to launch Frequency spheres, torics and the new aspheric lenses during
2001.
NEW PRODUCTS
During the first quarter, CVI continued to introduce Frequency Aspheric in the
U.S. The optical properties of this lens help improve visual acuity in low light
situations and correct low degrees of astigmatism without the need for a toric
lens. "This product is exceeding expectations," said Bender, "and we are excited
about its prospects. We believe that many practitioners and optical chains will
switch from traditional commodity disposable spheres to Frequency Aspheric and
other value added disposable products."
CVI also recently introduced Encore, its cast molded toric lens that will
compete in the disposable (two-week) toric segment. In March, four major optical
chains will introduce Encore into about 1,500 retail outlets.
"Our analysis of the two-week disposable toric segment where Encore will
compete, "said Bender," indicates that the two competitive brands now in that
space generated revenue of about $5.6 million during most recent quarterly audit
period, achieving toric market penetration of about 13 percent. For the full
calendar year, their combined market share was about 8 percent, up from about 3
percent in 1998. We believe that Encore will be a very strong entry into this
segment."
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CVI continues clinical trials on a high performance monthly planned replacement
bifocal lens. "Any bifocal product we introduce," Bender noted, "must first
hurdle our stringent performance requirements. We must see a high level of
success in patients who have been wearing the product for six months or longer."
Commenting on CVI's outlook for fiscal 2000 Bender said, "The strength of our
disposable-planned replacement sphere and toric business, coupled with the U.S.
introduction of Encore and the introduction of our toric products in Europe
should enable us to achieve revenue growth in the high teens range for the
year."
COOPERVISION'S PERFORMANCE IN THE 1999 U. S. CONTACT LENS MARKET
The U.S. Contact Lens Market and CooperVision
Revenue Growth and Market Shares Estimates by Market Segment
Calendar Year 1999(1)
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(Dollars in millions, growth percentage changes 1999 versus 1998)
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Market Segment Market Value CVI CVI Market CVI Market Share
Value Growth Revenue Market Point Change
Growth Share
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DPR(2) Spheres $739.9 1% 35% 2% +.6
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Total Spheres $863.7 -2% 9% 4% +.3
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DPR Torics $113.9 21% 41% 34% +4.7
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Total Torics $193.1 5% 27% 28% +5.0
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Total U. S. Contact Lenses $1,091.1 2% 20% 8% +1.2
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(1)Source: independent market research data and CooperVision revenue for
calendar 1999.
(2)Disposable-Planned Replacement
Market research data for calendar 1999 indicates that the total U.S. contact
lens market grew 2 percent, generating approximately $22 million of incremental
revenue. CooperVision captured about $14 million of this, nearly 64 percent of
the growth.
Total spherical lenses declined 2 percent, while total toric lenses, CVI's major
U.S. product line, increased 5 percent and now represent 18 percent of the total
contact lens market. In the rapidly growing disposable-planned replacement (DPR)
toric lens segment, up 21 percent during 1999, CVI gained 4.7 share points and
now holds over one-third of the this market, as CVI's revenue here increased 41
percent. CVI believes that it is the leading supplier of toric contact lenses
in the U.S.
U.S. sales of all DPR lenses--torics and spheres together--grew about 7 percent
in 1999. CVI's revenue for these products grew 39 percent during the calendar
year. DPR lenses now represent over 75 percent of its worldwide revenue.
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In 1999, CVI's market share grew in every major U.S. and Canadian market segment
where it competes. CVI estimates that its U.S. contact lens market share is now
about 8 percent, with most of its growth coming from highly differentiated, high
margin products in fast growing market segments.
CVI OUTSIDE THE U.S.
During the first quarter, CVI's Canadian, Italian and Scandinavian business
units performed well and the roll out of new products continues in Europe. These
include CVI's line of toric lenses, the Frequency Aspheric lens and Frequency 55
UV, which contains an ultra violet light-blocking agent. In November, CVI
introduced its cast molded toric product--called Frequency EXCEL--in Europe.
EXCEL is now available in every European market except France, where we
anticipate an April introduction. We estimate that during 1999 we held our share
of the European market and anticipate improved share as we expand the launch of
our toric lens products.
COOPERSURGICAL (CSI)
Revenue at CSI, Cooper's women's healthcare medical device business, grew 17
percent over the comparable quarter in 1999 to $8.4 million with an operating
margin of 17 percent, up from 12 percent in last year's first quarter.
CSI continues to execute its market consolidation strategy and believes that it
is the largest player in the in-office gynecological device segment. At the end
of January, CSI completed the acquisition of Leisegang Medical, Inc., its second
acquisition in the past two months. CSI has completed the integration of the
products acquired in December from BEI Medical Systems Corporation--well-known
brands of uterine manipulators and other niche products for the gynecologist's
office.
Sales of the FemExam pH and Amines TestCard System--a rapid, economical point of
care diagnostic test used to help determine if a vaginal infection is bacterial
or fungal--are meeting expectations following the recent receipt of
reimbursement codes and guidelines from the Health Care Financing Administration
and the marketing alliances announced last year.
For calendar 2000, CSI expects revenue to approach $50 million with an operating
margin of about 20 percent by year end, after we complete the integration of
Leisegang.
REPORTING ON THE COSTS OF START-UP ACTIVITIES
In April 1998, The American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 98-5, "Reporting on the Cost of Start-up
Activities." The SOP broadly defines start-up activities and requires companies
to expense them as incurred, effective for fiscal years beginning after December
15, 1998. Cooper has, as required, adopted the SOP in the first quarter of
fiscal year 2000 and reported an after tax charge of $432,000 as a cumulative
effect of a change in accounting principles. Our previous policy had been to
defer start-up activities and amortize them over future periods.
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EARNINGS PER SHARE
All per share amounts in this report are diluted per share amounts.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" as defined in the
Private Securities Litigation Reform Act of 1995. To identify forward-looking
statements, look for words like "believes," "expects," "may," "will," "should,"
"seeks," "approximately," "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 the forward-looking
statements include major changes in business conditions and the economy, loss of
key senior management, major disruptions in the operations of Cooper's
manufacturing facilities, new competitors or technologies, the impact of an
undetected virus on our computer systems, acquisition integration 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, and other
factors described in Cooper's Securities and Exchange Commission filings,
including the "Business" section in our Annual Report on Form 10-K for the year
ended October 31, 1999.
Cooper cautions investors not to rely unduly on forward-looking statements. They
reflect our analysis only on their stated date or the date of this press
release.
The Cooper Companies, Inc. and its subsidiaries develop, manufacture and market
specialty healthcare products. CooperVision, Inc., headquartered in Lake Forest,
Calif., with manufacturing facilities in Huntington Beach, Calif., Rochester,
N.Y., Toronto, Canada and Hamble, England, markets a broad range of contact
lenses for the vision care market. CooperSurgical, Inc., headquartered in
Shelton, Conn., with manufacturing facilities in Berlin, Germany and near
Montreal, Canada, markets diagnostic products, surgical instruments and
accessories for the gynecological market. 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.
Cooper's web address is www.coopercos.com.
Frequency Excel'TM', Encore'TM', FemExam'r' pH and Amines TestCard'TM' System,
Frequency'r' and Preference'r' are trademarks of The Cooper Companies, Inc., its
subsidiaries or affiliates.
[FINANCIAL STATEMENTS FOLLOW]
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THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Income
(In thousands, except earnings per share)
(Unaudited)
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Three Months Ended
January 31,
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2000 1999
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Net sales $40,404 $34,959
Cost of sales 13,772 13,416
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Gross profit 26,632 21,543
Selling, general and administrative expense 16,764 14,222
Research and development expense 648 461
Amortization of intangibles 980 957
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Income from operations 8,240 5,903
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Interest expense 1,381 1,849
Other income, net 400 34
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Income from continuing operations before income taxes 7,259 4,088
Provision for income taxes 2,432 1,447
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Income from continuing operations 4,827 2,641
Discontinued operations -- 1,258
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Income before cumulative effect of change in accounting principles 4,827 3,899
Cumulative effect of change in accounting principles (432) --
-------- --------
Net income $ 4,395 $ 3,899
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Diluted earnings per share:
Continuing operations $ 0.34 $ 0.18
Discontinued operations -- 0.09
Cumulative effect of change in accounting principles (0.03) --
-------- --------
Earnings per share $ 0.31 $ 0.27
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Number of shares used to compute earnings per share 14,359 14,668
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THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(In thousands)
(Unaudited)
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January 31, October 31,
2000 1999
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ASSETS
Current assets:
Cash and cash equivalents $ 2,682 $ 20,922
Trade receivables, net 28,513 26,792
Inventories 40,208 33,430
Deferred tax asset 14,301 11,638
Other current assets 6,970 7,679
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Total current assets 92,674 100,461
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Property, plant and equipment, net 42,211 40,319
Intangibles, net 95,056 80,518
Deferred tax asset 52,414 56,519
Other assets 7,579 8,056
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$289,934 $285,873
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 5,128 $ 4,888
Other current liabilities 39,386 37,008
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Total current liabilities 44,514 41,896
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Long-term debt 57,455 57,067
Other liabilities 19,642 22,767
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Total liabilities 121,611 121,730
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Stockholders' equity 168,323 164,143
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$ 289,934 $285,873
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STATEMENT OF DIFFERENCES
The trademark symbol shall be expressed as..............................'TM'
The registered trademark symbol shall be expressed as...................'r'
