<PAGE>
Exhibit 99.2
[LOGO] [LETTERHEAD OF THE COOPER COMPANIES]
NEWS RELEASE
CONTACT:
NORRIS BATTIN
THE COOPER COMPANIES, INC.
[email protected]
FOR IMMEDIATE RELEASE
<TABLE>
<S> <C>
THE COOPER COMPANIES REPORTS THIRD QUARTER RESULTS
REVENUE GROWS 17 PERCENT--CONTACT LENS PERFORMANCE WELL AHEAD OF MARKET GROWTH
NET INCOME FROM ONGOING OPERATIONS UP 26 PERCENT
EARNINGS PER SHARE GROWS 22 PERCENT
ESTIMATED FOURTH QUARTER REVENUE UP 17 PERCENT TO 21 PERCENT WITH EPS 61 CENTS TO 63 CENTS
</TABLE>
LAKE FOREST, Calif., August 30, 2000-- The Cooper Companies, Inc. (NYSE: COO)
today reported results for its third fiscal quarter ended July 31, 2000:
Revenue $51 million, 17 percent above third quarter 1999; up 19 percent at
constant currency rates.
EPS from ongoing operations 56 cents versus 46 cents, up 22 percent;
trailing twelve months $1.90.
Reported earnings per share 59 cents versus 46 cents in third quarter 1999.
About 8 cents per share resulted from a favorable settlement of an income
tax dispute; one-time charges, principally the settlement of a dispute with
a German distributor, reduced EPS by about 5 cents.
Cash flow (pretax income from continuing operations plus depreciation and
amortization) per share 92 cents, up 14 percent from 81 cents in third
quarter 1999; trailing twelve-months $3.34.
Commenting on these results, A. Thomas Bender, chief executive officer said, "At
CooperVision (CVI), third quarter sales of our contact lens products in the U.S.
grew 15 percent, and are up 20 percent year to date in a market that grew 2
percent versus the first six months of 1999. CVI's toric lenses, used to correct
astigmatism, grew 17 percent in the U.S., sharply ahead of the 6 percent growth
reported for the
<PAGE>
U.S. toric lens market. CVI's worldwide core contact lens business--all
revenue except our lower margin OEM sales to other contact lens
manufacturers--grew 15 percent in constant currency.
"These results underscore CVI's position as a leading specialty contact lens
company that is well differentiated from our larger competitors, whose product
lines are dominated by mature and declining commodity contact lens products.
During the last four years, the contact lens market has undergone two major
transitions. First, patients have moved to disposable modalities from annually
replaced products. Second, value added specialty lenses such as toric and
cosmetic lenses, are growing at the expense of commodity disposable spherical
products. CVI has been a leader in these transitions."
Bender added that at CooperSurgical (CSI), the Company's women's healthcare
medical device business, revenue increased 56 percent in the third quarter
primarily because of the acquisitions earlier in the year of products from BEI
Medical Systems, Inc. and Leisegang Medical, Inc. Operating income grew 20
percent with an operating margin of 15 percent, excluding the effect of a $150
thousand one-time charge.
"We expect," said Bender, "that CSI's operating margin will approach 20 percent
by year-end, when we have fully integrated the Leisegang business."
BUSINESS UNIT P&L HIGHLIGHTS ($'S IN MILLIONS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JULY 31,
--------------------------------------------------------------------------------------------------------------
Revenue Operating Income
--------------------------------------------------------------------------------------------------------------
% % %Revenue %Revenue
2000 1999 Inc. 2000 1999 Inc. 2000 1999
---- ---- ---- ---- ---- ---- ---- ----
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CVI $39.3 $35.9 9% $13.3 $11.4 17% 34% 32%
CSI 11.6 7.5 56% 1.6 1.3 20% 13% 17%
----- ----- ----- -----
Subtotal 50.9 43.4 17% 14.9 12.7 18% 29% 29%
HQ Expense (1.9) (1.8) N/A - -
----- ------
--------------------------------------------------------------------------------------------------------------
TOTAL $50.9 $43.4 17% $13.0 $10.9 20% 26% 25%
===== ===== ===== ====== ===
--------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED JULY 31,
--------------------------------------------------------------------------------------------------------------
Revenue Operating Income
--------------------------------------------------------------------------------------------------------------
% % %Revenue %Revenue
2000 1999 Inc. 2000 1999 Inc. 2000 1999
---- ---- ---- ---- ---- ---- ---- ----
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CVI $109.5 $98.4 11% $33.1 $27.9 19% 30% 28%
CSI 32.6 21.7 50% 4.7 3.0 52% 14% 14%
------ ----- ----- ------
Subtotal 142.1 120.1 18% 37.8 30.9 22% 27% 26%
HQ Expense - (5.1) (4.5) N/A - -
------ ------
--------------------------------------------------------------------------------------------------------------
TOTAL $142.1 $120.1 18% $32.7 $26.4 24% 23% 22%
====== ====== ===== ======
--------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
THIRD QUARTER OPERATING HIGHLIGHTS
CooperVision Revenue and Market Share
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
COOPERVISION REVENUE ANALYSIS
----------------------------------------------------------------------------------------------------------------
Segment Third Quarter % Change from Nine Months % Total % Change from
2000 % Total Third Quarter 2000 Nine Months
1999 1999
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
U.S. $25.4 65% 15% $70.5 65% 20%
International 13.2 33% 9% 35.3 32% 7%
------ ---- ------ ----
Core Business 38.6 98% 13% 105.8 97% 15%
OEM .7 2% (62%) 3.7 3% (45%)
-------- ----- ------ ----
Total $39.3 100% 9% $109.5 100% 11%
===== ==== ====== ====
----------------------------------------------------------------------------------------------------------------
</TABLE>
"CVI's third quarter core revenue growth, 15 percent at constant currency rates,
was in line with our expectations," said Bender, "and I continue to expect
fiscal 2000 full-year core revenue growth in the 15 to 20 percent range. Our
estimates indicate that this is about three times the growth of the worldwide
contact lens market through the first six months of the calendar year,
continuing a performance that CVI has delivered consistently since 1997.
"In North America, which represents about three-quarters of our business, I
expect about 20 percent growth. Outside North America, growth should continue to
accelerate as we introduce new toric, spherical, aspheric and cosmetic products
and as year over year weakness in the pound sterling and the euro levels off.
While 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."
The largest segment of CVI's U.S. business, disposable and planned replacement
brands of toric contact lenses, grew 32 percent over last year's third quarter,
ahead of the market's 26 percent growth in the second calendar quarter.
Preference Toric, CVI's premium toric brand, Frequency 55 Toric, and Encore
Toric, its two-week disposable cast molded toric lens, showed strong results
during the quarter. CVI 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 30 percent of the total U.S. toric market. "This quarter we extended
our position as the world's leading manufacturer of toric lenses as we gained
nearly 3 share points in the U.S., and our European toric revenue nearly
quadrupled," said Bender.
CVI's spherical disposable and planned replacement products in the U.S.,
especially Frequency 55 Sphere and Frequency Aspheric, also performed well in
the current quarter, with sales up 26 percent
<PAGE>
versus a 2 percent decline in the disposable and planned replacement spherical
market segment. During the fiscal quarter, CVI's revenue for disposable and
planned replacement spheres and torics together grew 30 percent in the U.S.
while the total disposable and planned replacement market grew 2 percent in the
second calendar quarter. CVI's disposable and planned replacement spheres and
torics now account for more than three-quarters of its U.S. business.
International revenue--sales in countries outside the United States plus exports
from the U.S.-- grew 9 percent during the quarter, 15 percent when adjusted for
currency fluctuations. "Although we experienced slower sales growth in our
markets outside of North America again this quarter," Bender said, "we did see
some improvement on the Continent and in the U.K., and I expect growth overseas
to accelerate going forward. XCEL Toric and our new value added aspheric and
cosmetic lens products have now been introduced in most major European markets,
and I expect that they will drive improved revenue. "During the quarter, about 4
cents per share was charged against earnings to settle a dispute with a German
distributor.
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 early in 2002 contributing to
CVI's operating income beginning late in 2001.
CVI's gross margin improved to 69 percent in the third quarter of 2000 from 67
percent in the comparable 1999 quarter and from 68 percent in the second quarter
of 2000. "I expect," said Bender, "that gross margins going forward will 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
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 amounts of astigmatism where
toric lenses are not indicated. "We believe," said Bender, "that many
practitioners and optical chains will continue to trade up from commodity
disposable spheres to value added products such as Frequency Aspheric. I am also
pleased with the initial acceptance of Encore Toric, the cast molded product we
launched in the second quarter 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
this fall. Cosmetic lenses, opaque lenses and color enhancing lenses change 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
<PAGE>
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."
CooperSurgical
Revenue at CSI, Cooper's women's healthcare medical device business, grew 56
percent over the comparable quarter in 1999 due primarily to the recent
acquisitions of products from BEI Medical Systems, Inc. and Leisegang Medical,
Inc. Both the FemExam pH and Amines TestCard System--now averaging 30 percent
sequential quarterly revenue growth--and the Cerveillance Digital Colposcope
line--which now generates more than $2.5 million in annual revenue--continued
their strong performance.
CSI operating income for the third quarter grew 20 percent to $1.6 million with
operating margins of 13 percent. Expenses for the American College of Obstetrics
and Gynecology meeting and costs related to a terminated acquisition raised
operating expenses by about $485 thousand in the quarter. CSI continues to
execute its market consolidation strategy and believes that it is the largest
competitor in the in-office gynecological device segment.
LOWER TAX RATE
During the quarter, we paid about $3 million to settle a long-standing dispute
with the California Franchise Tax Board (FTB) for fiscal years 1982 through
1985. This was substantially lower than the provision for the FTB claim in our
financial statements, which was based on amounts claimed by the FTB and our
assessment of the risk at that time. Reversing the amount no longer required
reduced our estimated effective tax rate for the third quarter to about 23
percent and contributed about 8 cents per share to third quarter earnings. Given
this, we now estimate that our effective tax rate for full fiscal year 2000 will
be about 30 percent. Our outlook for fiscal 2001 is about 33 percent.
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
fourth fiscal quarter ending October 31, 2000 will range between 61 cents and 63
cents and that revenue will increase between 17 percent and 21 percent over the
previous fourth quarter. For the fiscal year 2000, the Company estimates that
earnings per share will range between $1.98 and $2.00 with revenue growing
between 18 percent and 20 percent.
<PAGE>
For fiscal 2001, the Company estimates that earnings per share from continuing
operations will range between $2.35 and $2.45 with revenue increasing between 16
percent and 21 percent over the previous year.
DIVIDEND
Consistent with its plan to pay annual dividends of 8 cents per share, Cooper
declared a quarterly dividend of 2 cents per share payable on October 5, 2000 to
stockholders of record on September 15, 2000.
CONFERENCE CALL
The Cooper Companies will hold a conference call to discuss its third quarter
results today at 1:30 PM Pacific Daylight Time. To access the live call, dial
1-800-289-0436. A replay will be available approximately one hour after the call
ends at 1-888-203-1112 and remain available for five days. The access code for
both the live and the replay calls is 713380. 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
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 readers not to rely on forward-looking
statements. They reflect our analysis only on their stated date or the date of
this press release. The Company disclaims any intent or obligation to update
these forward-looking statements.
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
<PAGE>
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 used primarily by gynecologists and obstetricians.
Its Web address is www.coopersurgical.com.
Encore Toric'TM' and XCEL'TM' are trademarks of the Cooper Companies, Inc.
and/or its affiliates and subsidiaries. Preference'r', Frequency'r' and
Cerveillance'r' are registered trademarks of The Cooper Companies, Inc. and/or
its affiliates and subsidiaries. FemExam'r'pH and Amines TestCard System is a
registered trademark of Litmus Concepts, Inc.
(FINANCIAL STATEMENTS FOLLOW)
<PAGE>
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,
-------------------- ----------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $50,908 $43,404 $142,081 $120,106
Cost of sales 17,408 15,116 49,465 43,706
------- ------- -------- --------
Gross profit 33,500 28,288 92,616 76,400
Selling, general and administrative expense 18,717 16,041 54,801 45,812
Research and development expense 703 398 2,027 1,301
Amortization of intangibles 1,031 954 3,122 2,866
------- ------- -------- --------
Income from operations 13,049 10,895 32,666 26,421
------- ------- -------- --------
Interest expense 1,164 1,322 3,813 4,933
Settlement of disputes 653 -- 653 --
Other income, net 13 54 473 125
------- ------- -------- --------
Income from continuing operations before income taxes 11,245 9,627 28,673 21,613
Provision for income taxes 2,584 3,081 8,422 7,132
------- ------- -------- --------
Income from continuing operations 8,661 6,546 20,251 14,481
Discontinued operations -- -- -- 3,099
Cumulative effect of change in accounting principle -- -- (432) --
------- ------- -------- --------
Net income $ 8,661 $ 6,546 $ 19,819 $ 17,580
------- ------- -------- --------
Diluted earnings per share:
Continuing operations $ 0.59 $ 0.46 $ 1.40 $ 1.01
Discontinued operations -- -- -- 0.22
Cumulative effect of change in accounting principle -- -- (0.03) --
------- ------- -------- --------
Earnings per share $ 0.59 $ 0.46 $ 1.37 $ 1.23
------- ------- -------- --------
Number of shares used to compute earnings per share 14,596 14,194 14,471 14,318
------- ------- -------- --------
Memo:
Cash flow (pretax income from continuing operations
plus depreciation and amortization) per diluted share $ 0.92 $ 0.81 $ 2.42 $ 1.90
------- ------- -------- --------
Components of diluted earnings per share from continuing
operations:
From ongoing operations $ 0.56 $ 0.46 $ 1.37 $ 1.01
Tax credit from settlement with Franchise Tax Board 0.08 -- 0.08 --
Other one-time events (0.05) -- (0.05) --
------- ------- -------- --------
Earnings per share from continuing operations $ 0.59 $ 0.46 $ 1.40 $ 1.01
------- ------- -------- --------
</TABLE>
<PAGE>
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
July 31, October 31,
2000 1999
---- ----
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 9,428 $ 20,922
Trade receivables, net 30,628 26,792
Inventories 38,098 33,430
Deferred tax asset 17,798 11,638
Other current assets 8,807 7,679
-------- --------
Total current assets 104,759 100,461
-------- --------
Property, plant and equipment, net 46,655 40,319
Intangibles, net 93,320 80,518
Deferred tax asset 44,203 56,519
Other assets 7,580 8,056
-------- --------
$296,517 $285,873
-------- --------
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C>
Current liabilities:
Short-term debt $ 7,188 $ 4,888
Other current liabilities 39,002 37,008
-------- --------
Total current liabilities 46,190 41,896
-------- --------
Long-term debt 46,193 57,067
Other liabilities 19,960 22,767
-------- --------
Total liabilities 112,343 121,730
-------- --------
Stockholders' equity 184,174 164,143
-------- --------
$296,517 $285,873
-------- --------
</TABLE>
