<PAGE>
[THE COOPER COMPANIES LETTERHEAD]
NEWS RELEASE
CONTACT:
NORRIS BATTIN
THE COOPER COMPANIES, INC.
[email protected]
FOR IMMEDIATE RELEASE
THE COOPER COMPANIES REPORTS SECOND QUARTER RESULTS
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REVENUE GROWS 22 PERCENT; EPS 47 CENTS VS 38 CENTS
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LAKE FOREST, Calif., May 25, 2000--The Cooper Companies, Inc. (NYSE/PCX: COO)
today reported results for its second fiscal quarter ended April 30, 2000.
Revenue $51 million, 22 percent above second quarter 1999.
Earnings per share 47 cents versus 38 cents in second quarter 1999, a
24 percent increase; trailing twelve months $1.80.
Cash flow per share (pretax income from continuing operations plus
depreciation and amortization) 86 cents, up 23 percent from 70 cents
in second quarter 1999; trailing twelve-months $3.23.
Commenting on these results, A. Thomas Bender, chief executive officer said, "At
CooperVision (CVI), our U.S. contact lens business grew 21 percent, more than
four times the estimated growth of the U.S. contact lens market during the first
calendar quarter. CVI's toric lenses, used to correct astigmatism, grew 22
percent in the U.S., sharply ahead of the 12 percent growth reported for the
U.S. toric market. CVI's worldwide core contact lens business--all revenue
except our lower margin OEM sales to other contact lens manufacturers--grew 16
percent, and we continue to grow about three times the estimated world market
growth.
"At CooperSurgical (CSI), our women's healthcare medical device business,
revenue increased 78 percent in the second quarter reflecting primarily the
recent acquisitions of products from BEI Medical Systems, Inc. and Leisegang
Medical, Inc. Excluding these acquisitions, our women's healthcare business grew
9 percent. Operating income grew 85 percent with an operating margin of 13
percent. We expect CSI's operating margin to approach 20 percent by year-end,
after we have completed the integration of Leisegang."
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BUSINESS UNIT P&L HIGHLIGHTS ($'S IN MILLIONS)
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THREE MONTHS ENDED APRIL 30,
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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 $38.3 $34.7 10% $11.4 $10.3 11% 30% 30%
CSI 12.5 7.0 78% 1.7 .9 85% 13% 13%
----- ----- ----- ----
Subtotal 50.8 41.7 22% 13.1 11.2 17% 26% 27%
HQ Expense -- (1.7) (1.6) --
----- -----
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TOTAL $50.8 $41.7 22% $11.4 $9.6 18% 22% 23%
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<TABLE>
<CAPTION>
SIX MONTHS ENDED APRIL 30,
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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 $70.2 $62.5 12% $19.8 $16.5 20% 28% 26%
CSI 21.0 14.2 47% 3.1 1.7 76% 15% 12%
---- ---- ----- -----
Subtotal 91.2 76.7 19% 22.9 18.2 25% 25% 24%
HQ Expense -- -- (3.3) --
-----
(2.7)
-----
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TOTAL $91.2 $76.7 19% $19.6 $15.5 26% 22% 20%
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</TABLE>
SECOND QUARTER OPERATING HIGHLIGHTS
COOPERVISION REVENUE AND MARKET SHARE
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COOPERVISION REVENUE ANALYSIS
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Segment Second Quarter % Total % Change Six % Total % Change from
2000 from Months Six Months
Second 2000 1999
Quarter 1999
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<S> <C> <C> <C> <C> <C> <C>
U.S. $24.9 65 21% $45.0 64 23%
International 11.6 30 7% 22.1 32 6%
----- -- ----- ---
Core Business 36.5 95 16% 67.1 96 17%
OEM 1.8 5 -46% 3.1 4 -40%
----- --- ----- ---
Total $38.3 100 10% $70.2 100 12%
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"CVI's 16 percent core revenue growth in the second quarter was in line with our
expectations," said Bender, "and I continue to expect fiscal 2000 full year
revenue growth in the 15 to 20 percent range. In North America, which represents
almost 75% of our business, I expect 20 percent growth. Outside North
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America, growth should accelerate to the mid teens as we continue to introduce
new spherical, aspheric, cosmetic and toric products."
The largest segment of CVI's U.S. business, disposable-planned replacement (DPR)
brands of toric contact lenses, grew 36 percent over last year's second quarter,
about the same rate of growth as the market.
During the second quarter, CVI introduced Encore Toric, its two-week disposable
cast molded toric lens. Preference Toric, CVI's premium toric brand, and
Frequency 55 Toric, positioned at a lower price point, together showed strong
results. CVI holds 33% of the U.S. DPR toric market--the fastest growing segment
of the U. S. contact lens market--and 30 percent of the total U.S. toric market,
a 3-point share gain since last year at this time. "With the recent gains in our
toric revenue and market share in North America and the successful rollout of
torics in Europe, we believe we are now the world's leading manufacturer of
toric lenses," said Bender.
CVI's spherical DPR products in the U.S., especially Frequency 55 Sphere and
Frequency Aspheric, also performed well in the current quarter, up 54 percent in
a market segment that grew 6 percent. CVI believes that its incremental revenue
in the U.S. spherical segment during the quarter is at least equal to that of
any of its competitors. Together, CVI's DPR spheres and torics now account for
nearly 75% percent of its U.S. business. During the quarter, revenue for these
products grew 42 percent while the total DPR market grew 10 percent.
International revenue--sales in countries outside the United States plus exports
from the U.S.--grew 7 percent during the quarter, 12 percent when adjusted for
currency fluctuations. "Although we experienced slower sales growth in our
markets outside of North America this quarter," Bender said "we did see some
improvement, especially in Europe, and I expect growth overseas to accelerate
during the second half of the year. XCEL Toric and our new value added aspheric
and cosmetic lens products have now been introduced in most major European
markets and should drive improved revenue."
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 to Japanese regulatory authorities a lens material designed
for quarterly replacement (equivalent to CVI's Preference product line in the
U.S.) 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 aspheric lenses during 2001 with an increasing
contribution to CVI's operating income late in that year.
CooperVision's gross margin improved to 68 percent in the second quarter of 2000
from 65 percent in the comparable 1999 quarter due to favorable sales mix and
ongoing manufacturing efficiencies.
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NEW PRODUCTS
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Frequency Aspheric, introduced in the U.S. earlier this year, is exceeding
expectations. The optical properties of this lens can help improve visual acuity
in low light situations and correct mild astigmatism. "We believe," said Bender,
"that many practitioners and optical chains will continue to exchange commodity
disposable spheres for value added products such as Frequency Aspheric. I am
also pleased with the initial acceptance of Encore Toric, our cast molded
product that competes in the two-week disposable market."
In May, CVI introduced Frequency Colors, a new line of disposable cosmetic
lenses, into major European markets. The North American launch is scheduled for
the fall. Cosmetic lenses, frequently called opaque lenses, change or enhance
the appearance of the eye's natural color. Patients who need vision correction
wear these lenses as do those with normal vision who want to look fashionable.
The cosmetic contact lens market, about $300 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. "Any bifocal product we introduce," Bender noted, "must first
hurdle our stringent performance requirements. We must see a high level of
success well beyond the early wearing period. If this lens meets our standards,
we expect to introduce it late in the calendar year."
COOPERSURGICAL
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Revenue at CSI, Cooper's women's healthcare medical device business, grew 78
percent over the comparable quarter in 1999 due primarily to the recent
acquisitions of products from BEI Medical Systems, Inc. and Leisegang Medical,
Inc. Without these acquisitions, revenue of our women's healthcare products
increased 9 percent due to the continuing growth of the FemExam pH and Amines
TestCard System and the Cerveillance Digital Colposcope line. Operating income
for the second quarter grew 85 percent to $1.7 million with operating margins of
13 percent. CSI continues to execute its market consolidation strategy and
believes that it is the largest competitor in the in-office gynecological device
segment.
For calendar 2000, CSI expects revenue to approach $50 million with operating
margins approaching 20 percent by year-end, after the complete integration of
Leisegang.
REPORTING ON THE COST 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.
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Cooper has, as required, adopted the SOP in the first quarter of fiscal year
2000, reporting 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.
EARNINGS PER SHARE
All per share amounts mentioned in this report refer to diluted per share
amounts from continuing operations.
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.
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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 Toronto. Its Web address is
www.coopervision.com. CooperSurgical, Inc., with operations in Shelton, Conn.,
Boca Raton, Fla., Montreal and Berlin, markets diagnostic products, surgical
instruments and accessories for the gynecological market. Its Web address is
www.coopersurgical.com.
Cerveillance'r', Encore'TM', XCEL'TM', Frequency'r', FemExam pH and Amines
TestCard System and Preference'r' are trademarks of the Cooper Companies, Inc.,
its subsidiaries or affiliates.
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THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Income
(In thousands, except earnings per share)
(Unaudited)
<TABLE>
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Three Months Ended Six Months Ended
April 30, April 30,
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2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Net sales $50,769 $41,743 $91,173 $76,702
Cost of sales 18,285 15,174 32,057 28,590
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Gross profit 32,484 26,569 59,116 48,112
Selling, general and administrative expense 19,320 15,549 36,084 29,771
Research and development expense 676 442 1,324 903
Amortization of intangibles 1,111 955 2,091 1,912
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Income from operations 11,377 9,623 19,617 15,526
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Interest expense 1,268 1,762 2,649 3,611
Other income, net 60 37 460 71
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Income from continuing operations before
income taxes 10,169 7,898 17,428 11,986
Provision for income taxes 3,406 2,604 5,838 4,051
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Income from continuing operations 6,763 5,294 11,590 7,935
Discontinued operations -- 1,841 -- 3,099
Cumulative effect of change in accounting
principles -- -- (432) --
------- ------- ------- -------
Net income $ 6,763 $ 7,135 $11,158 $11,034
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Diluted earnings per share:
Continuing operations $ 0.47 $ 0.38 $ 0.80 $ 0.55
Discontinued operations -- 0.13 -- 0.22
Cumulative effect of change in accounting
principles -- -- (0.03) --
------- ------- ------- -------
Earnings per share $ 0.47 $ 0.51 $ 0.77 $ 0.77
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Number of shares used to compute earnings
per share 14,438 14,071 14,399 14,378
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Memo diluted per share data from continuing operations:
Cash flow(1) $ 0.86 $ 0.70 $ 1.50 $ 1.09
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(1) Pretax income plus depreciation and amortization.
(more, more)
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THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
April 30, October 31,
2000 1999
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<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 4,747 $ 20,922
Trade receivables, net 31,476 26,792
Inventories 38,283 33,430
Deferred tax assets 17,541 11,638
Other current assets 7,568 7,679
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Total current assets 99,615 100,461
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Property, plant and equipment, net 43,913 40,319
Intangibles, net 94,583 80,518
Deferred tax asset 47,641 56,519
Other assets 7,662 8,056
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$293,414 $285,873
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 4,862 $ 4,888
Other current liabilities 43,085 37,008
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Total current liabilities 47,947 41,896
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Long-term debt 52,209 57,067
Other liabilities 18,909 22,767
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Total liabilities 119,065 121,730
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Stockholders' equity 174,349 164,143
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$293,414 $285,873
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