UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended January 31, ~~2023~~2024


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number 1-8597

The Cooper Companies, Inc.

(Exact name of registrant as specified in its charter)


Delaware			94-2657368
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

6101 Bollinger Canyon Road, Suite 500,

San Ramon, California 94583

(Address of principal executive offices) (Zip Code)

(925) 460-3600

(Registrant’s telephone number, including area ~~code (925) 460-3600~~code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $.10 par value

COO

~~The New York Stock Exchange~~Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ☒

On February ~~24, 2023, 49,455,664~~23, 2024, 198,756,284 shares of Common Stock, $0.10 par value, were outstanding.

INDEX


		Page No.
PART I.	FINANCIAL INFORMATION

Item 1.	Unaudited Financial Statements

	Consolidated Condensed Statements of Income and Comprehensive Income	3

	Consolidated Condensed Balance Sheets	4

	Consolidated Condensed Statements of Stockholders' Equity	5

	Consolidated Condensed Statements of Cash Flows	6

	Notes to Consolidated Condensed Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1614

Item 3.	Quantitative and Qualitative Disclosure About Market Risk	2624

Item 4.	Controls and Procedures	2624

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	2725

Item 1A.	Risk Factors	2725

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2725

Item 3.	Defaults Upon Senior Securities	2725

Item 4.	Mine Safety Disclosures	2725

Item 5.	Other Information	2725

Item 6.	Exhibits	2826

Signatures		2927

PART I. FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Consolidated Condensed Statements of Income and Comprehensive Income

Three ~~Months Ended~~months ended January 31,

(In millions, except for earnings per share)

(Unaudited)

2023

2022

Net sales

858.5

787.2

Net sales

Cost of sales

300.0

268.8

Gross profit

558.5

518.4

Gross profit

Selling, general and administrative expense

330.9

319.1

Research and development expense

31.6

26.2

Research and development expense

Amortization of intangibles

46.5

42.3

Operating income

149.5

130.8

Operating income

Interest expense

26.1

6.6

Other expense, net

1.3

2.3

Other expense, net

Income before income taxes

122.1

121.9

Provision for income taxes (Note 6)

37.5

26.6

Provision for income taxes (Note 6)

Net income

84.6

95.3

Earnings per share (Note 7):

Earnings per share (Note 7)*:

Basic

1.71

1.93

Diluted

1.70

1.91

Number of shares used to compute earnings per share:

Diluted

Number of shares used to compute earnings per share*:

Basic

49.4

Diluted

49.7

49.9

Diluted

Other comprehensive income, net of tax:

Cash flow hedges

(21.0)

13.3

Cash flow hedges

Foreign currency translation adjustment

84.0

(49.2)

Comprehensive income

147.6

59.4

Comprehensive income

*All periods presented have been adjusted to reflect the four-for-one stock split effected on February 16, 2024. Refer to Note 1. General for further information.

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Consolidated Condensed Balance Sheets

(In millions, unaudited)


		January 31, 2023		October 31, 2022
	January 31, 2024						January 31, 2024	October 31, 2023
ASSETS	ASSETS
Current assets:	Current assets:
Current assets:
Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	118.2	$	138.2
Trade accounts receivable, net of allowance for credit losses of $24.7 at January 31, 2023, and $20.7 at October 31, 2022		581.8		557.8
Cash and cash equivalents
Cash and cash equivalents
Trade accounts receivable, net of allowance for credit losses of $34.7 at January 31, 2024, and $31.3 at October 31, 2023
Inventories (Note 3)	Inventories (Note 3)	659.1		628.7
Prepaid expense and other current assets	Prepaid expense and other current assets	218.4		208.9

Total current assets
Total current assets
Total current assets	Total current assets	1,577.5		1,533.6
Property, plant and equipment, net	Property, plant and equipment, net	1,464.0		1,432.9
Goodwill	Goodwill	3,672.3		3,609.7
Other intangibles, net (Note 4)	Other intangibles, net (Note 4)	1,863.4		1,885.1
Deferred tax assets	Deferred tax assets	2,415.1		2,443.1
Other assets	Other assets	568.8		587.9
Total assets	Total assets	$	11,561.1	$	11,492.3
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:
Current liabilities:
Current liabilities:
Short-term debt (Note 5)
Short-term debt (Note 5)
Short-term debt (Note 5)	Short-term debt (Note 5)	$	68.1	$	412.6
Accounts payable	Accounts payable	224.1		248.8
Employee compensation and benefits	Employee compensation and benefits	167.2		152.1
Deferred revenue	Deferred revenue	106.4		93.6
Other current liabilities	Other current liabilities	350.0		373.1

Total current liabilities	Total current liabilities	915.8		1,280.2
Total current liabilities
Total current liabilities
Long-term debt (Note 5)	Long-term debt (Note 5)	2,627.3		2,350.8
Deferred tax liabilities	Deferred tax liabilities	144.3		149.9
Long-term tax payable	Long-term tax payable	112.4		113.2
Deferred revenue	Deferred revenue	195.1		198.3
Accrued pension liability and other		230.5		225.2
Other liabilities
Total liabilities	Total liabilities	$	4,225.4	$	4,317.6
Contingencies (Note 10)	Contingencies (Note 10)					Contingencies (Note 10)
Stockholders’ equity:
Stockholders’ equity*:
Preferred stock, $10 cents par value, 1.0 shares authorized, zero shares issued or outstanding	Preferred stock, $10 cents par value, 1.0 shares authorized, zero shares issued or outstanding	—		—
Common stock, $10 cents par value, 120.0 shares authorized, 53.9 issued and 49.4 outstanding at January 31, 2023, and 53.8 issued and 49.3 outstanding at October 31, 2022		5.4		5.4
Preferred stock, $10 cents par value, 1.0 shares authorized, zero shares issued or outstanding
Preferred stock, $10 cents par value, 1.0 shares authorized, zero shares issued or outstanding
Common stock, $10 cents par value, 480.0 shares authorized, 216.4 issued and 198.7 outstanding at January 31, 2024, and 215.8 issued and 198.1 outstanding at October 31, 2023
Additional paid-in capital	Additional paid-in capital	1,779.2		1,765.5
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(403.8)		(466.8)
Retained earnings	Retained earnings	6,668.0		6,584.9
Treasury stock at cost: 4.5 shares at January 31, 2023, and 4.5 shares at October 31, 2022		(713.3)		(714.5)
Treasury stock at cost: 17.7 shares at January 31, 2024, and 17.7 shares at October 31, 2023
Total Cooper stockholders’ equity	Total Cooper stockholders’ equity	7,335.5		7,174.5
Noncontrolling interests	Noncontrolling interests	0.2		0.2
Stockholders’ equity (Note 9)	Stockholders’ equity (Note 9)	7,335.7		7,174.7
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	11,561.1	$	11,492.3

*All periods presented have been adjusted to reflect the four-for-one stock split effected on February 16, 2024. Refer to Note 1. General for further information.

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Consolidated Condensed Statements of Stockholders' Equity

(In millions, unaudited)


		Common Shares			Treasury Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Treasury Stock		Noncontrolling Interests		Total Stockholders' Equity		Common Shares			Treasury Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss	Retained Earnings		Treasury Stock		Noncontrolling Interests		Total Stockholders' Equity
		Shares	Amount		Shares	Amount
Balance at November 1, 2021		49.3	$	5.0	4.4	$	0.4	$	1,715.2	$	(341.3)	$	6,202.1	$	(639.6)	$	0.2	$	6,942.0
	Shares																				Shares	Amount		Shares	Amount		Treasury Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock	Noncontrolling Interests	Total Stockholders' Equity
Balance at November 1, 2022*
Net income	Net income	—	—		—	—		—		—		95.3		—		—		95.3
Other comprehensive income, net of tax	Other comprehensive income, net of tax	—	—		—	—		—		(35.9)		—		—		—		(35.9)
Issuance of common stock for stock plans, net and employee stock purchase plan	Issuance of common stock for stock plans, net and employee stock purchase plan	0.1	—		—	—		(8.8)		—		—		0.7		—		(8.1)
Dividends on common stock ($0.03 per share)	Dividends on common stock ($0.03 per share)	—	—		—	—		—		—		(1.5)		—		—		(1.5)
Share-based compensation expense	Share-based compensation expense	—	—		—	—		12.8		—		—		—		—		12.8
Stock repurchase		(0.2)	—		0.2	—		—		—		—		(78.5)		—		(78.5)
Balance at January 31, 2022		49.2	$	5.0	4.6	$	0.4	$	1,719.2	$	(377.2)	$	6,295.9	$	(717.4)	$	0.2	$	6,926.1

Balance at January 31, 2023*
Balance at January 31, 2023*
Balance at January 31, 2023*


Balance at November 1, 2022		49.3	$	5.0	4.5	$	0.4	$	1,765.5	$	(466.8)	$	6,584.9	$	(714.5)	$	0.2	$	7,174.7
Balance at November 1, 2023*

Balance at November 1, 2023*

Balance at November 1, 2023*
Net income	Net income	—	—		—	—		—		—		84.6		—		—		84.6
Other comprehensive income, net of tax	Other comprehensive income, net of tax	—	—		—	—		—		63.0		—		—		—		63.0
Issuance of common stock for stock plans, net and employee stock purchase plan	Issuance of common stock for stock plans, net and employee stock purchase plan	0.1	—		—	—		(2.5)		—		—		1.2		—		(1.3)
Dividends on common stock ($0.03 per share)		—	—		—	—		—		—		(1.5)		—		—		(1.5)

Share-based compensation expense	Share-based compensation expense	—	—		—	—		16.2		—		—		—		—		16.2
Balance at January 31, 2023		49.4	$	5.0	4.5	$	0.4	$	1,779.2	$	(403.8)	$	6,668.0	$	(713.3)	$	0.2	$	7,335.7
Share-based compensation expense
Share-based compensation expense
Balance at January 31, 2024*

*All periods presented have been adjusted to reflect the four-for-one stock split effected on February 16, 2024. Refer to Note 1. General for further information.

The accompanying notes are an integral part of these Consolidated Condensed Financial ~~Statements~~.Statements.

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Consolidated Condensed Statements of Cash Flows

Three Months Ended January 31,

(In millions, unaudited)


		2023		2022
	2024					2024	2023
Cash flows from operating activities:	Cash flows from operating activities:
Net income
Net income
Net income	Net income	$	84.6	$	95.3
Depreciation and amortization	Depreciation and amortization	89.7		82.0

Change in fair value of contingent consideration	Change in fair value of contingent consideration	(31.8)		—
Change in fair value of contingent consideration
Change in fair value of contingent consideration
Net changes in operating capital	Net changes in operating capital	(28.0)		6.2

Other non-cash items
Other non-cash items
Other non-cash items	Other non-cash items	52.1		(17.5)
Net cash provided by operating activities	Net cash provided by operating activities	166.6		166.0
Cash flows from investing activities:	Cash flows from investing activities:
Purchases of property, plant and equipment	Purchases of property, plant and equipment	(83.0)		(57.1)
Purchases of property, plant and equipment
Purchases of property, plant and equipment
Acquisitions of businesses and assets, net of cash acquired, and other	Acquisitions of businesses and assets, net of cash acquired, and other	(30.3)		(1,612.2)

Net cash used in investing activities	Net cash used in investing activities	(113.3)		(1,669.3)
Net cash used in investing activities
Net cash used in investing activities
Cash flows from financing activities:	Cash flows from financing activities:
Proceeds from long-term debt, net of issuance costs	Proceeds from long-term debt, net of issuance costs	702.0		1,499.5
Proceeds from long-term debt, net of issuance costs
Proceeds from long-term debt, net of issuance costs
Repayments of long-term debt	Repayments of long-term debt	(426.3)		(548.6)
Net (repayments of) proceeds from short-term debt		(351.7)		830.4
Net payments related to share-based compensation awards		(3.4)		(10.8)
Net proceeds from (repayments of) short-term debt
Net proceeds (payments) related to share-based compensation awards

Repurchase of common stock		—		(78.5)

Issuance of common stock for employee stock purchase plan	Issuance of common stock for employee stock purchase plan	1.8		1.6

Net cash (used in) provided by financing activities		(77.6)		1,693.6
Issuance of common stock for employee stock purchase plan

Issuance of common stock for employee stock purchase plan

Net cash provided by (used in) financing activities
Net cash provided by (used in) financing activities
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	4.2		(3.7)
Net (decrease) increase in cash, cash equivalents, restricted cash, and cash held for sale		(20.1)		186.6
Cash, cash equivalents, restricted cash, and cash held for sale at beginning of period		138.6		96.6
Cash, cash equivalents, restricted cash, and cash held for sale at end of period		$	118.5	$	283.2
Net increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at beginning of period
Cash, cash equivalents, and restricted cash at end of period
Reconciliation of cash flow information:	Reconciliation of cash flow information:
Cash and cash equivalents	Cash and cash equivalents	$	118.2	$	280.7
Cash and cash equivalents
Cash and cash equivalents
Restricted cash included in other current assets	Restricted cash included in other current assets	0.3		2.2
Cash held for sale		—		0.3
Total cash, cash equivalents, restricted cash, and cash held for sale		$	118.5	$	283.2

Total cash, cash equivalents, and restricted cash
Total cash, cash equivalents, and restricted cash
Total cash, cash equivalents, and restricted cash

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements

(Unaudited)

Note 1. General

The accompanying Consolidated Condensed Financial Statements of The Cooper Companies, Inc. and its subsidiaries have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) for interim financial information and with the requirements of Regulation S-X, Rule 10-01 for financial statements required to be filed as a part of this Quarterly Report on Form 10-Q. Unless the context requires otherwise, terms "the Company", "we", "us", and "our" are used to refer collectively to The Cooper Companies, Inc. and its subsidiaries.

The accompanying Consolidated Condensed Financial Statements and related notes are unaudited and should be read in conjunction with the audited Consolidated Financial Statements of the Company and related notes as contained in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, ~~2022.~~2023. The Consolidated Condensed Financial Statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair presentation of the results for the interim periods presented.

Accounting Policies

There have been no material changes to our significant accounting policies1 described in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2022.~~2023.

Estimates

The preparation of Consolidated Condensed Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of net sales and expenses during the reporting period. Actual results could differ from those estimates. The Company continually monitors and evaluates the estimates used as additional information becomes available. Adjustments will be made to these provisions periodically to reflect new facts and circumstances that may indicate that historical experience may not be indicative of current and/or future results.

~~Accounting Pronouncements Recently Adopted~~Stock Split

~~In November 2021,~~On February 16, 2024, the ~~FASB issued ASU 2021-10,~~ ~~Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance~~Company effected a four-for-one stock split of its outstanding shares of common stock. The par value of the common stock remains at $0.10 cents per share. Accordingly, an amount equal to the par value of the increased shares resulting from the stock split was reclassified from "Additional paid-in capital" to "Common stock". ~~This update requires annual disclosures about transactions with a government that are accounted~~All share and per share information has been retroactively adjusted to reflect the stock split for by applying a grant or contribution accounting model by analogy. This standard is effective for fiscal years beginning after December 15, 2021 and should be applied either prospectively or retrospectively. Early adoption is permitted. The Company adopted this guidance prospectively on November 1, 2022, and it did not have a material impact on the Consolidated Condensed Financial Statements.

all periods presented.

Accounting Pronouncements Issued But Not Yet Adopted

In ~~March 2020,~~December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires public entities to disclose specific categories in the effective tax rate reconciliation and additional information for reconciling items that exceed a quantitative threshold. The guidance also requires all disaggregated information pertaining to taxes paid, net of refunds received, for federal, state and foreign income taxes. The new guidance is effective for fiscal years beginning after December 15, 2024, with the option to apply prospectively or retrospectively. Early adoption is permitted. We are currently evaluating the impact that the adoption of this guidance will have on our consolidated financial statements and disclosures.

In November 2023, the FASB issued ASU ~~2020-04,~~2023-07, ~~Reference~~Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures~~RateReform~~ (~~Topic848~~): ~~Facilitation~~, which enhances the disclosures required for operating segments in our annual and interim consolidated financial statements. The ASU is effective for us beginning on November 1, 2024, and will be applied retrospectively. Early adoption is permitted. We are currently evaluating the impact of ~~the Effects of Reference Rate Reform~~adopting this ASU on ~~Financial Reporting~~our consolidated financial statements and ~~subsequent amendment to the initial guidance: ASU 2021-01,~~ ~~Reference Rate Reform (Topic 848): Scope~~ (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In December 2022, the FASB issued ASU 2022-06, ~~Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. ASU 2022-06 defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024~~. Effective February 1, 2023, the Company transitioned its credit agreements from LIBOR to the Secured Overnight Financing Rate ("SOFR"). The Company plans to adopt the guidance prospectively in the second quarter of fiscal 2023 and does not expect it to have a material impact on the Company's financial position.disclosures.

~~No other recently issued accounting pronouncements had or are expected to have a material impact on the Company's Consolidated Condensed Financial Statements.~~

Note 2. Acquisitions and Joint Venture

All acquisitions were funded by cash generated from operations or facility borrowings.

For business acquisitions, the Company recorded tangible and intangible assets acquired and liabilities assumed at their fair values as of the applicable date of acquisition. For asset acquisitions, the Company recorded tangible and intangible assets acquired and liabilities assumed at their estimated and relative fair values as of the applicable date of acquisition.

On November 1, ~~2022, CooperVision~~2023, CooperSurgical completed the acquisition of ~~a privately-held U.S.-based company that provides a broad portfolio of technologically advanced contact lens products, including scleral~~select Cook Medical assets focused primarily on the obstetrics, doppler monitoring, and ~~hybrid lenses.~~gynecology surgery markets. The purchase price of the acquisition was $300.0 million, with $200.0 million paid at closing and two cash payments of $50.0 million each to be paid on November 1, 2024 and November 1, 2025. The present value of the acquisition purchase price was $291.6 million, which is included in the Company's balance sheet. Based upon preliminary valuations, assets acquired primarily comprised of $157.9 million of technologies, $26.6 million of

1To further clarify the policy detailed in our Annual Report on Form 10-K for the fiscal year ended October 31, 2023, the current portion of the deferred revenue balances at the beginning of each period presented were generally fully recognized in a ratable manner in the subsequent 12-month period. We recognized revenue of approximately $31.0 million and $23.0 million for the three months ended January 31, 2024, and 2023, respectively, that was included in the deferred revenue balance at October 31, 2023 and October 31, 2022.

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements

(Unaudited)

~~acquisition was $33.0 million. Based upon preliminary valuations, assets acquired primarily comprised of $12.6 million of~~ customer relationship related intangibles, ~~$7.6 million of technology,~~ and ~~$13.1~~$107.2 million of goodwill. The goodwill is ~~not~~ deductible for tax purposes. The purchase price allocation is preliminary, and the Company is in the process of finalizing ~~information primarily related to the effect on taxes and the corresponding impact on goodwill.~~

Refer to "Joint Venture" below for details on formation of a joint venture with Essilor International and related activities that occurred in fiscal year 2022 following the acquisition of SightGlass Vision, Inc. (SGV) in fiscal year 2021.

~~On April 6, 2022, CooperSurgical entered into an asset~~ purchase agreement to acquire Cook Medical's Reproductive Health business, a manufacturer of minimally invasive medical devices focused on the fertility, obstetrics and gynecology markets. The aggregate consideration is $875.0 million in cash, with $675.0 million payable at the closing and the remaining $200.0 million payable in $50.0 million installments following each of the first, second, third and fourth anniversaries of the closing. The transaction is subject to customary closing conditions, such as receipt of required regulatory approvals.

~~Generate Life Sciences~~®

On December 17, 2021, CooperSurgical completed the acquisition of 100% of the equity interests in Generate Life Sciences (Generate), a privately held leading provider of donor egg and sperm for fertility treatments, fertility cryopreservation services and newborn stem cell storage (cord blood & cord tissue), and paid an aggregate purchase consideration of approximately $1.663 billion, reflecting working capital, and other adjustments. The cash consideration was funded through a combination of $1.5 billion in proceeds from the issuance of a senior unsecured term loan and available cash on hand.

~~The following table summarizes the fair values of assets acquired and liabilities assumed as of the acquisition date:~~


~~(In millions)~~
~~Current assets:~~
~~Cash and cash equivalents~~	~~58.6~~
~~Trade accounts receivable, net~~	~~18.1~~
~~Inventories~~	~~3.3~~
~~Prepaid expense and other current assets~~	~~33.1~~
~~Total current assets~~	~~113.1~~
~~Property, plant and equipment~~	~~42.6~~
~~Goodwill~~	~~1,173.9~~
~~Customer relationships~~	~~718.3~~
~~Trademarks~~	~~54.9~~

~~Other assets~~	~~21.5~~
~~Total assets acquired~~	$	~~2,124.3~~

~~Current liabilities:~~
~~Accounts payable~~	$	~~12.6~~
~~Employee compensation and benefits~~	~~12.3~~
~~Deferred revenue~~	~~71.4~~
~~Other current liabilities~~	~~11.6~~
~~Total current liabilities~~	~~107.9~~
~~Deferred tax liabilities~~	~~144.3~~
~~Lease liabilities~~	~~16.6~~
~~Deferred revenue~~	~~188.8~~
~~Other long-term liabilities~~	~~3.6~~
~~Total liabilities assumed~~	$	~~461.2~~

~~Total purchase price~~	$	~~1,663.1~~

Customer relationships will be amortized over 20 years and trademarks will be amortized over 15 years. Goodwill is primarily attributable to assembled workforce and expected synergies to be achieved. The goodwill is not deductible for tax purposes.

~~THE COOPER COMPANIES, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Condensed Financial Statements~~

~~(Unaudited)~~

The transaction costs associated with the acquisition consisted primarily of legal, regulatory and financial advisory fees, which were expensed as incurred as selling, general and administrative expense.accounting information.

Joint Venture

On January 19, 2021, CooperVision acquired all of the remaining equity interests of SGV, a privately-held medical device company that developed spectacle lenses for myopia management. The transaction included potential payments of future consideration that were contingent upon the achievement of the regulatory approval milestone (the regulatory approval payment) and the acquired business reaching certain revenue thresholds over a specified period (the revenue pa~~yments). The undiscounted range of the contingent consideration was zero to $139.1 million payable to the other former equity interest owners.~~

In March 2022, the entities amended the terms of the contingent consideration, which resulted in CooperVision paying $42.9 million to the former equity interest owners in exchange for the elimination of the revenue payments. CooperVision recognized a net gain of $12.2 million during fiscal 2022.

~~Further,~~ CooperVision and Essilor International SAS (Essilor) executed ~~the~~a Contribution Agreement and a Stock Purchase Agreement (the “Agreements”) in March ~~2022.~~2022 to form a joint venture in SightGlass Vision, Inc. (SGV), which is a medical device company developing spectacle lenses for myopia management. Essilor paid CooperVision $52.1 million in exchange for a 50% interest in SGV and their proportionate share of the revenue payments. As part of the Agreements, each party contributed their interest in SGV and $10 million in ~~cash~~cash. Prior to ~~form a new joint venture.~~March 2022, CooperVision ~~then remeasured the fair value~~owned 100% of ~~its retained equity investment in the joint venture at $90.0 million which resulted in a $56.9 million gain in Other (income) expense on deconsolidation of SGV in fiscal 2022.~~SGV.

As of January 31, 2023, CooperVision determined that approval would not be achieved within the timeline set forth in the contractual terms of the regulatory approval payment and released the remaining $31.8 million contingent consideration liability.

~~Additional~~Further information regarding the joint venture is included in ~~our~~the notes to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2022.~~

~~Contingent Consideration~~2023.

~~The following table provides a reconciliation of the beginning and ending balances of contingent consideration:~~

Period Ended January 31, Three Months
(In millions) 2023 2022
Beginning balance $ 33.4 $ 97.4
Purchase price contingent consideration — —
Payments — —
Change in fair value (31.8) 3.5
Ending balance $ 1.6 $ 100.9

Note 3. Inventories


(In millions)	(In millions)	January 31, 2023		October 31, 2022		(In millions)	January 31, 2024	October 31, 2023
Raw materials	Raw materials	$	191.6	$	173.7
Work-in-process	Work-in-process	18.1		15.2
Finished goods	Finished goods	449.4		439.8
Total inventories	Total inventories	$	659.1	$	628.7

~~THE COOPER COMPANIES, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Condensed Financial Statements~~

~~(Unaudited)~~

Note 4. Intangible Assets

Intangible assets consisted of the following:


		January 31, 2023				October 31, 2022
(In millions)	(In millions)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization		Weighted Average Amortization Period (in years)
(In millions)
(In millions)													Gross Carrying Amount					Accumulated Amortization							Gross Carrying Amount						Accumulated Amortization						Weighted-Average Amortization Period (in years)

Intangible assets with definite lives:	Intangible assets with definite lives:
Intangible assets with definite lives:
Intangible assets with definite lives:
Customer relationships
Customer relationships
Customer relationships	Customer relationships	$	1,110.4	$	304.1	$	1,092.7	$	287.0	19	$	1,125.6		$		$	358.3			$			$	1,099.2		$			$	345.8		19					19
Composite intangible asset	Composite intangible asset	1,061.9		371.7		1,061.9		354.0		15	Composite intangible asset		1,061.9		442.5				442.5			1,061.9				1,061.9		424.8					424.8			15			15
Technology	Technology	512.9		327.3		504.1		317.5		12	Technology		652.7		348.3				348.3			494.5				494.5		335.4					335.4			11			11
Trademarks	Trademarks	210.9		66.3		209.6		62.4		15	Trademarks		204.5		79.8				79.8			208.9				208.9		81.1					81.1			15			15
License and distribution rights and other	License and distribution rights and other	50.7		24.8		50.7		23.8		10	License and distribution rights and other		47.8		24.8				24.8			51.6				51.6		28.0					28.0			11			11
		2,946.8		$	1,094.2	2,919.0		$	1,044.7	16
	3,092.5														3,092.5						$	1,253.7					2,916.1							$	1,215.1			16
Less: accumulated amortization and translation	Less: accumulated amortization and translation	1,094.2				1,044.7
Intangible assets with definite lives, net	Intangible assets with definite lives, net	1,852.6				1,874.3
Intangible assets with definite lives, net
Intangible assets with definite lives, net
Intangible assets with indefinite lives, net (1)
Intangible assets with indefinite lives, net (1)
Intangible assets with indefinite lives, net (1)	Intangible assets with indefinite lives, net (1)	10.8				10.8
Total other intangibles, net	Total other intangibles, net	$	1,863.4			$	1,885.1
Total other intangibles, net
Total other intangibles, net

(1) Intangible assets with indefinite lives include technology and trademarks.

Balances include foreign currency translation adjustments.

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements

(Unaudited)

As of January 31, ~~2023,~~2024, the estimate of future amortization expenses for intangible assets with definite lives is as follows:


Fiscal Years:	Fiscal Years:	(In millions)		Fiscal Years:	(In millions)
Remainder of 2023		$	139.2
2024		181.4
Remainder of 2024
2025	2025	171.5
2026	2026	164.0
2027	2027	149.0
2028
Thereafter	Thereafter	1,047.5
Total remaining amortization for intangible assets with definite lives	Total remaining amortization for intangible assets with definite lives	$	1,852.6

There was no impairment of goodwill or intangible assets recorded in the three months ended January 31, ~~2023.~~2024.

Note 5. Financing Arrangements

The Company had outstanding debt as follows:

~~THE COOPER COMPANIES, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Condensed Financial Statements~~

~~(Unaudited)~~


(In millions)	(In millions)	January 31, 2023		October 31, 2022		(In millions)	January 31, 2024	October 31, 2023
Overdraft and other credit facilities		$	51.6	$	57.7
Term loans		—		338.0

Short-term debt, excluding financing leases

Short-term debt, excluding financing leases

Short-term debt, excluding financing leases	Short-term debt, excluding financing leases	51.6		395.7
Financing lease liabilities	Financing lease liabilities	16.5		16.9
Short-term debt	Short-term debt	$	68.1	$	412.6

Revolving credit
Revolving credit
Revolving credit	Revolving credit	$	276.5	$	—
Term loans	Term loans	2,350.0		2,350.0
Other	Other	0.1		0.2
Less: unamortized debt issuance cost	Less: unamortized debt issuance cost	(2.9)		(3.1)
Long-term debt, excluding financing leases	Long-term debt, excluding financing leases	2,623.7		2,347.1
Financing lease liabilities	Financing lease liabilities	3.6		3.7
Long-term debt	Long-term debt	$	2,627.3	$	2,350.8
Total debt	Total debt	$	2,695.4	$	2,763.4

Additional information regarding our indebtedness is included in our notes to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2022,~~2023, which was filed with the Securities and Exchange Commission on December ~~9, 2022.~~8, 2023. The carrying value of the Company's revolving credit facility and term loans approximates fair value based on current market rates (Level 2). As of January 31, ~~2023,~~2024, the Company was in compliance with all debt covenants. On February 1, 2023, the Company amended its credit agreements to transition the interest rates applicable to the loans denominated in U.S. Dollars from LIBOR to SOFR, as defined in the credit agreements.

~~2021~~ Term Loan Agreement on December 17, 2021

On December 17, 2021, the Company entered into a Term Loan Agreement (the 2021 Credit Agreement) by and among the Company, the lenders from time to time party thereto, and PNC Bank, National Association, as administrative agent. The 2021 Credit Agreement provides for a term loan facility (the 2021 Term Loan Facility) in an aggregate principal amount of $1.5 billion, which, unless terminated earlier, matures on December 17, 2026. ~~The Company used the proceeds to fund the acquisition of Generate. Refer to Note 2. Acquisitions and Joint Venture for more details.~~

On January 31, ~~2023,~~2024, the Company had $1.5 billion outstanding under the 2021 Term Loan Facility and the ~~weighted average~~ interest rate was ~~5.04%~~6.45%.

~~2021 364-Day Term Loan Agreement~~

On November 2, 2021, the Company entered into a 364-day, $840.0 million, term loan agreement by and among the Company, the lenders party thereto and The Bank of Nova Scotia, as administrative agent, which matured on November 1, 2022. The Company used part of the funds to partially repay outstanding borrowings under the 2020 Revolving Credit Facility and for general corporate purposes. The loan was fully repaid by the maturity date.

~~2020~~ Revolving Credit and Term Loan Agreement on April 1, 2020

On April 1, 2020, the Company entered into a Revolving Credit and Term Loan Agreement (the 2020 Credit Agreement), among the Company, CooperVision International Holding Company, LP, CooperSurgical Netherlands B.V., CooperVision Holding Kft, the lenders from time to time party thereto, and KeyBank National Association, as administrative agent. The 2020 Credit Agreement provides for (a) a multicurrency revolving credit facility (the 2020 Revolving Credit Facility) in an aggregate principal amount of $1.29 billion and (b) a term loan facility (the 2020 Term Loan Facility) in an aggregate principal amount of $850.0

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements

(Unaudited)

million, each of which, unless terminated earlier, mature on April 1, 2025. The Company has an uncommitted option to increase the revolving credit facility or establish a new term loan in an aggregate amount up to $1.605 billion.

On January 31, ~~2023,~~2024, the Company had $850.0 million outstanding under the 2020 Term Loan Facility and ~~$276.5~~$375.0 million outstanding under the 2020 Revolving Credit Facility. The interest rate on the 2020 Term Loan Facility and the weighted-average interest rate on the 2020 Revolving Credit Facility was ~~5.37%~~6.45% at January 31, ~~2023.~~2024.

~~THE COOPER COMPANIES, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Condensed Financial Statements~~

~~(Unaudited)~~

Note 6. Income Taxes

The effective tax rates for the three months ended January 31, ~~2023~~2024, and January 31, ~~2022~~2023, were ~~30.7%~~32.4% and ~~21.8%~~30.7%, respectively. The increase was primarily due to changes in the geographic composition of pre-tax earnings and an increase in the UK statutory tax rate from 19% to 25%, ~~and capitalization of research and experimental expenditures for fiscal 2023 as required~~partially offset by ~~the 2017 Tax Cuts and Jobs Act.~~an increase in excess tax benefits from share-based compensation.

Note 7. Earnings Per Share

Period Ended January 31,

Three Months

Period Ended January 31,

(In millions, except per share amounts)

2023

2022

Net income

84.6

95.3

Net income

Basic:

Weighted average common shares

49.4

Basic:

Weighted-average common shares

Basic earnings per share

1.71

1.93

Diluted:

Weighted average common shares

49.4

Diluted:

Weighted-average common shares

Effect of dilutive stock plans

0.3

0.5

Diluted weighted average common shares

49.7

49.9

Effect of dilutive stock plans

Diluted weighted-average common shares

Diluted earnings per share

1.70

1.91

Diluted earnings per share

The following table sets forth stock options to purchase our common stock and restricted stock units that were not included in the diluted earnings per share calculation because their effect would have been antidilutive for the periods presented:

Period Ended January 31,

Three Months

Period Ended January 31,

(In thousands, except exercise prices)

2023

2022

Stock option shares excluded

514

224

Stock option shares excluded

Exercise prices

$300.12 - $406.17

$345.74 - $406.17

Restricted stock units excluded

213

—

Restricted stock units excluded

Note 8. Share-Based Compensation

The Company has several stock plans that are described in the Company’s Annual Report on Form 10‑K for the fiscal year ended October 31, ~~2022. Compensation~~2023. The compensation expense and ~~the~~ related income tax benefit recognized in our Consolidated Condensed Statements of Income and Comprehensive Income for share-based awards, including the Employee Stock Purchase Plan, were as follows:

Period Ended January 31,

Three Months

Period Ended January 31,

(In millions)

2023

2022

Selling, general and administrative expense

14.4

11.5

Selling, general and administrative expense

Cost of sales

1.1

1.3

Research and development expense

0.8

Research and development expense

Total share-based compensation expense

16.3

13.6

Related income tax benefit

1.7

1.6

Related income tax benefit

1210

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements

(Unaudited)

Note 9. Stockholders' Equity

Analysis of Changes in Accumulated Other Comprehensive ~~Income:~~Loss:

(In millions) Foreign Currency Translation Adjustment Minimum Pension Liability Derivative Instruments Total
Balance at October 31, 2021 $ (320.3) $ (34.1) $ 13.1 $ (341.3)
Gross change in value (49.2) — 17.6 (31.6)
Tax effect — — (4.3) (4.3)
Balance at January 31, 2022 $ (369.5) $ (34.1) $ 26.4 $ (377.2)


(In millions)										(In millions)	Foreign Currency Translation Adjustment	Minimum Pension Liability	Derivative Instruments	Total
Balance at October 31, 2022	Balance at October 31, 2022	$	(555.0)	$	(6.2)	$	94.4	$	(466.8)
Gross change in value	Gross change in value	84.0		—		(27.8)		56.2
Tax effect	Tax effect	—		—		6.8		6.8
Balance at January 31, 2023	Balance at January 31, 2023	$	(471.0)	$	(6.2)	$	73.4	$	(403.8)

Balance at October 31, 2023
Balance at October 31, 2023
Balance at October 31, 2023
Gross change in value
Tax effect
Balance at January 31, 2024

Share Repurchases

In ~~December 2011,~~March 2017, the ~~Company's Board of Directors authorized~~authorization under the 2012 Share Repurchase Program ~~and through subsequent amendments, the most recent being in March 2017, the total repurchase authorization~~ was increased ~~from $500.0 million~~ to $1.0 billion ofby the Company's ~~common stock.~~Board of Directors. As of January 31, ~~2023,~~2024, $256.4 million remains authorized for ~~repurchase under the 2012 Share Repurchase Program.~~repurchase.

During the three months ended January 31, 2024, and 2023, there ~~was~~were no share ~~repurchase under the 2012 Share Repurchase Program. During the three months ended January 31, 2022, the Company repurchased~~ ~~191.2 thousand~~ ~~shares of its common stock for~~ ~~$78.5 million, at an average purchase price of~~ ~~$410.41~~ ~~per share.~~repurchases.

Dividends

In December 2023, the Company's Board of Directors decided to end the declaration of the semiannual dividend.

The Company paid a semiannual dividend of approximately $1.5 million or 3 cents per share, on February 10, 2023, to stockholders of record on January 23, 2023. ~~The Company paid a semiannual dividend of approximately $1.5 million or 3 cents per share,~~ on ~~February 9, 2022, to stockholders of record on January 21, 2022.~~

Note 10. Contingencies and Commitments

The Company is involved in various lawsuits, claims and other legal matters from time to time that arise in the ordinary course of conducting business, including matters involving our products, intellectual property, supplier relationships, distributors, competitor relationships, employees and other matters. The Company does not believe that the ultimate resolution of these proceedings or claims pending against it could have a material adverse effect on its financial condition or results of operations. At each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, Contingencies. Legal fees are expensed as incurred.

As of January 31, 2024, the Company entered into an additional lease that has not yet commenced in order to expand capacity. The undiscounted lease payments are estimated at $73.0 million for a lease that will commence beginning in fiscal 2025 for a term of 25 years.

Note 11. Business Segment Information

The following tables present revenue and other financial information by reportable segment:

1311

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements

(Unaudited)

Segment information:

Period Ended January 31,

Three Months

Period Ended January 31,

(In millions)

2023

2022

CooperVision net sales by category:

Toric lens

189.8

182.2

Multifocal lens

71.8

65.8

Single-use sphere lens

168.3

167.0

Non single-use sphere, other

151.4

146.5

CooperVision net sales by category:

Toric and multifocal

Sphere, other

Total CooperVision net sales

581.3

561.5

CooperSurgical net sales by category:

Office and surgical

165.2

128.9

Fertility

112.0

96.8

Fertility

CooperSurgical net sales

277.2

225.7

Total net sales

858.5

787.2

Total net sales

Operating income (loss):

CooperVision

160.1

127.4

CooperVision

CooperSurgical

5.8

15.6

Corporate

(16.4)

(12.2)

Corporate

Total operating income

149.5

130.8

Total operating income

Interest expense

26.1

6.6

Other expense, net

1.3

2.3

Other expense, net

Income before income taxes

122.1

121.9

Income before income taxes

(In millions)

January 31, 2023

October 31, 2022

(In millions)

January 31, 2024

October 31, 2023

Total identifiable assets:

CooperVision

6,945.7

6,778.9

CooperVision

CooperSurgical

4,333.9

4,407.8

Corporate

281.5

305.6

Total

11,561.1

11,492.3

Geographic information:

Period Ended January 31,

Three Months

Period Ended January 31,

(In millions)

2023

2022

Net sales to unaffiliated customers by country of domicile:

United States

434.8

365.3

Europe

248.2

250.4

Europe

Rest of world

175.5

171.5

Total

858.5

787.2

Total

(In millions)

January 31, 2023

October 31, 2022

(In millions)

January 31, 2024

October 31, 2023

Net property, plant and equipment by country of domicile:

United States

871.3

856.1

United States

Europe

325.3

310.8

Rest of world

267.4

266.0

Total

1,464.0

1,432.9

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements

(Unaudited)

Note 12. Financial Derivatives and Hedging

As of January 31, 2024, the notional amount of outstanding foreign currency forward contracts was $59.3 million. The resulting impact on our Consolidated Financial Statements from currency hedging activities was not significant for the three months ended January 31, 2024, and January 31, 2023.

~~On April 6, 2020,~~As of January 31, 2024, the Company ~~entered into six~~has 8 interest rate swap contracts which were used to hedge its exposure to changes in cash flows associated with its variable rate debt and were designated as derivatives in a cash flow hedge. The payment streams were based on a total notional amount of $1.5 billion at the inception of the contracts. As of January 31, 2023, three of the six interest rate swap contracts have matured and the outstanding contractsthat have a total notional amount of ~~$1.0~~$1.6 billion and remaining maturities of ~~five~~four years or less. ~~The Company did not have any cross-currency swaps or foreign currency forward contracts as of January 31, 2023.~~

The interest rate swap contracts are fair valued by netting discounted future fixed cash payments and the discounted expected variable cash receipts, which are estimated based on observable market interest rate curves (Level 2). The cumulative pre-tax impact of the gain on derivatives designated for hedge accounting recognized in accumulated other comprehensive income was $96.7 million ($73.4 million, net of tax) as of January 31, 2023, and $34.8 million ($26.4 million, net of tax) as of ~~January 31, 2022. The fair value of derivative instruments are classified in "Other non-current assets" on our Consolidated Condensed Balance Sheets.~~

The following table summarizes the amounts recognized with respect to our derivative instruments within the accompanying Consolidated Condensed Statements of Income and Comprehensive Income:

Period Ended January 31,

Three Months

Period Ended January 31,

(In millions)

2023

2022

Derivatives designated as cash flow hedges

Location of (Gain)/Loss Recognized on Derivatives

Derivatives designated as cash flow hedges

Interest rate swap contracts

Interest (income) expense

(8.3)

1.9

Interest rate swap contracts

The cumulative pre-tax impact of the gain on derivatives designated for hedge accounting is recognized in "Accumulated other comprehensive loss". The following table details the changes in the cumulative pre-tax impact of the gain on derivatives designated for hedge accounting:


Period Ended January 31,	Three Months
(In millions)	2024		2023
Beginning balance gain	$	115.1	$	124.5
Amount recognized in accumulated other comprehensive income on interest rate swap contracts, gross	(23.2)		(19.5)
Amount reclassified from accumulated other comprehensive income into earnings, gross	(13.6)		(8.3)
Ending balance gain	$	78.3	$	96.7

The amount recognized in other comprehensive income on interest rate swap contracts was $(18.0) million and $(14.8) million, net of tax, for the three months ended January 31, 2024, and 2023, respectively.

The amount reclassified from other comprehensive income into earnings was $(10.0) million and $(6.2) million, net of tax, for the three months ended January 31, 2024, and 2023, respectively.

Refer to Note 9. Stockholders' Equity for amounts presented net of the related tax impact in "Accumulated other comprehensive loss."

The Company expects th~~at $38.1~~at $(42.7) million ~~recorded~~recorded as a component of ~~accumulated~~"Accumulated other comprehensive ~~loss~~loss" will be realized in the Consolidated Condensed Statements of ~~Income and Comprehensive~~ Income over the next twelve months and the amount will vary depending on prevailing interest rates.

~~The following table details the changes in accumulated other comprehensive income:~~

Period Ended January 31, Three Months
(In millions) 2023 2022
Beginning balance gain $ 124.5 $ 17.2
Amount recognized in other comprehensive income on interest rate swap contracts, gross ($(14.8) million, net of tax and $11.9 million, net of tax, respectively) (19.5) 15.7
Amount reclassified from other comprehensive income into earnings, gross ($(6.2) million, net of tax and $1.4 million, net of tax, respectively) (8.3) 1.9
Ending balance gain $ 96.7 $ 34.8

1513

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of Financial Condition

and Results of Operations

Note numbers refer to “Notes to Consolidated Condensed Financial Statements” in Item 1. Unaudited Financial Statements.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These include statements relating to plans, prospects, goals, strategies, future actions, events or performance and other statements which are other than statements of historical fact, including: statements regarding the expected ~~impacts~~impact of global macroeconomic ~~health and political conditions;~~conditions, and statements regarding acquisitions (including the acquired companies' financial ~~positions, our~~position, market position, ~~based on acquisitions,~~ product development and business ~~strategies, anticipated~~strategy, expected cost synergies, expected timing and benefits of ~~pending transactions, and integration of acquired~~the transaction, difficulties in integrating entities or operations, as well as estimates of our and the acquired entities' future expenses, sales and earnings per share) that are forward-looking. In addition, all statements regarding anticipated growth in our ~~revenues,~~net sales, anticipated effects of any product recalls, anticipated market conditions, planned product launches, restructuring or business transition expectations, regulatory plans, and expected results of operations and integration of any acquisition are forward-looking. To identify these statements, look for words like “believes,” “outlook,” “probable,” “expects,” “may,” “will,” “should,” “could,” “seeks,” “intends,” “plans,” “estimates” or “anticipates” and similar words or phrases. Forward-looking statements necessarily depend on assumptions, data or methods that may be incorrect or imprecise and are subject to risks and uncertainties. Among the factors that could cause our actual results and future actions to differ materially from those described in forward-looking statements are:

•Adverse changes in the global or regional general business, political and economic conditions, including the impact of continuing uncertainty and instability of certain countries, man-made or natural disasters and pandemic conditions, that could adversely affect our global markets, and the potential adverse economic impact and related uncertainty caused by these items.

•The impact of international conflicts, such as Russia's invasion of Ukraine, and the global response to ~~this invasion~~international conflicts on the global economy, European economy, financial markets, energy markets, currency rates and our ability to supply product to, or through, affected countries.

•Our substantial and expanding international operations and the challenges of managing an organization spread throughout multiple countries and complying with a variety of legal, compliance and regulatory requirements.

•Foreign currency exchange rate and interest rate fluctuations including the risk of fluctuations in the value of foreign currencies or interest rates that would decrease our net sales and earnings.

•Our existing and future variable rate indebtedness and associated interest expense is impacted by rate increases, which could adversely affect our financial health or limit our ability to borrow additional funds.

•Changes in tax laws, examinations by tax authorities, and changes in our geographic composition of income.

•Acquisition-related adverse effects including the failure to successfully achieve the anticipated net sales, margins and earnings benefits of acquisitions, integration delays or costs and the requirement to record significant adjustments to the preliminary fair value of assets acquired and liabilities assumed within the measurement period, required regulatory approvals for an acquisition not being obtained or being delayed or subject to conditions that are not anticipated, adverse impacts of changes to accounting controls and reporting procedures, contingent liabilities or indemnification obligations, increased leverage and lack of access to available financing (including financing for the acquisition or refinancing of debt owed by us on a timely basis and on reasonable terms).

•Compliance costs and potential liability in connection with U.S. and foreign laws and health care regulations pertaining to privacy and security of personal information, such as HIPAA and the California Consumer Privacy Act (CCPA) in the U.S. and the General Data Protection Regulation (GDPR) requirements in Europe, including but not limited to those resulting from data security breaches.

•A major disruption in the operations of our manufacturing, accounting and financial reporting, research and development, distribution facilities or raw material supply chain due to challenges associated with integration of acquisitions, man-made or natural disasters, pandemic conditions, cybersecurity incidents or other causes.

•A major disruption in the operations of our manufacturing, accounting and financial reporting, research and development or distribution facilities due to technological problems, including any related to our information systems maintenance, enhancements or new system deployments, integrations or upgrades.

•Market consolidation of large customers globally through mergers or acquisitions resulting in a larger proportion or concentration of our business being derived from fewer customers.

•Disruptions in supplies of raw materials, particularly components used to manufacture our silicone hydrogel lenses.

•New U.S. and foreign government laws and regulations, and changes in existing laws, regulations and enforcement guidance, which affect areas of our operations including, but not limited to, those affecting the health care industry, including the contact lens industry specifically and the medical device or pharmaceutical industries generally, including ~~but not limited to the EU Medical Devices Regulation (MDR) and the EU In Vitro Diagnostic Medical Devices Regulation (IVDR).~~

1614

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of Financial Condition

and Results of Operations

but not limited to the EU Medical Devices Regulation (MDR) and the EU In Vitro Diagnostic Medical Devices Regulation (IVDR).

•Legal costs, insurance expenses, settlement costs and the risk of an adverse decision, prohibitive injunction or settlement related to product liability, patent infringement, contractual disputes, or other litigation.

•Limitations on sales following product introductions due to poor market acceptance.

•New competitors, product innovations or technologies, including but not limited to, technological advances by competitors, new products and patents attained by competitors, and competitors' expansion through acquisitions.

•Reduced sales, loss of customers and costs and expenses related to product recalls and warning letters.

•Failure to receive, or delays in receiving, regulatory approvals or certifications for products.

•Failure of our customers and end users to obtain adequate coverage and reimbursement from third-party payers for our products and services.

•The requirement to provide for a significant liability or to write off, or accelerate depreciation on, a significant asset, including goodwill, other intangible assets and idle manufacturing facilities and equipment.

•The success of our research and development activities and other start-up projects.

•Dilution to earnings per share from acquisitions or issuing stock.

•Impact and costs incurred from changes in accounting standards and policies.

•Risks related to environmental laws and requirements applicable to our facilities, products or manufacturing processes, including evolving regulations regarding the use of hazardous substances or chemicals in our products.

•Risks related to environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability.

•Other events described in our Securities and Exchange Commission filings, including the “Business” and “Risk Factors” sections in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2022,~~2023, as such Risk Factors may be updated in quarterly filings including updates made in this filing.

We caution investors that forward-looking statements reflect our analysis only on their stated date. We disclaim any intent to update them except as required by law.

1715

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of Financial Condition

and Results of Operations

Results of Operations

In this section, we discuss the results of our operations for the first quarter of fiscal ~~2023~~2024 ended January 31, ~~2023, and compare them~~2024, compared with the same period of fiscal ~~2022.~~2023. We ~~also~~ discuss our cash flows and current financial condition under “Capital Resources and Liquidity.” Within the tables presented, percentages are calculated based on the underlying whole-dollar amounts and, therefore, may not recalculate exactly from the rounded numbers used for disclosure purposes.

Outlook

We are optimistic about the long-term prospects for the worldwide contact lens and general health care markets, and the resilience of and growth prospects for our businesses and products. However, we face significant risks and uncertainties in our global operating ~~environment.~~environment as further described in the Part II, Item 1A "Risk Factors" herein. These risks include uncertain global and regional business, political and economic conditions, including but not limited to those associated with man-made or natural disasters, pandemic conditions, inflation, foreign exchange rate fluctuations, regulatory developments, supply chain disruptions, and escalating global trade barriers. ~~For more information on the risks associated with our global operating environment, refer to Part II, Item 1A "Risk Factors" herein.~~ These risks and uncertainties have adversely affected our sales, cash flow and performance in the past and ~~are likely to~~could further adversely affect our future sales, cash flow and performance.

~~Global Market and Economic Conditions~~ - Over the last few years in the U.S. and globally, market and economic conditions have been challenging, particularly in light of the COVID-19 pandemic. Foreign countries, in particular the Euro zone, have experienced recessionary pressures and face continued concerns about the systemic impacts of adverse economic conditions and geopolitical issues. In addition, changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, the war in Ukraine, and steps taken by governments and central banks, particularly in response to the COVID-19 pandemic, as well as other stimulus and spending programs, have led to higher inflation, which is likely to lead to an increase in costs and may cause changes in fiscal and monetary policy, including increased interest rates. In a higher inflationary environment, we may be unable to raise the prices of our products and services sufficiently to keep up with the increase in our costs. These market and economic conditions could have a material adverse effect on our results of operations and financial condition.

CooperVision - We compete in the worldwide contact lens market with our spherical, toric, multifocal, and toric multifocal contact lenses offered in ~~a variety of~~ materials ~~including using~~like silicone hydrogel Aquaform® ~~technology and PC Technology™.~~ technology. We believe that there will be lower contact lens wearer dropout rates as technology improves and enhances the wearing experience through a combination of improved designs and materials and the growth of preferred modalities such as single-use and monthly wearing options. CooperVision also competes in the myopia management and specialty eye care contact lens markets with myopia management contact lenses using its ~~ActivControl®~~ActivControl technology and with products such as orthokeratology (ortho-k) and scleral lenses. ~~In November 2019,~~ CooperVision ~~received~~has U.S. Food and Drug Administration (FDA) approval for its MiSight® 1 day lens, which is the first and only FDA-approved product indicated to slow the progression of myopia in children with treatment initiated between the ages of ~~8-12 and became available in the United States during fiscal 2020. In August 2021,~~8-12. Further, CooperVision ~~received~~has Chinese National Medical Products Administration (NMPA) approval for its MiSight® 1 day lens for use in China. CooperVision is focused on greater worldwide market penetration using recently introduced products, and we continue to expand our presence in existing and emerging markets, including through acquisitions.

Our ability to compete successfully with a full range of silicone hydrogel products is an important factor to achieving our desired future levels of sales growth and profitability. CooperVision manufactures and markets a wide variety of silicone hydrogel contact lenses. Our single-use silicone hydrogel product franchises, clariti, MyDay® and MyDay®, Energys remain a focus as we expect increasing demand for these products, as well as future single-use products, as the global contact lens market continues to shift to this modality. Outside of single-use, the Biofinity® and Avaira Vitality® product families comprise our focus in the FRP, or frequent replacement product, market which encompasses the monthly and ~~2-week~~two-week modalities. Included in this segment are unique products such as Biofinity Energys,®, which helps individuals with digital eye fatigue.

CooperSurgical - Our CooperSurgical business competes in the ~~general~~fertility and women's health care market ~~with a commitment to advancing the health of women, babies and families~~ through its diversified portfolio of products and services, including fertility products and services, medical devices, ~~fertility, genomics, diagnostics,~~ cryostorage ~~contraception and healthcare technology services~~ (such as cord blood and cord tissue ~~storage~~storage) and ~~genomic testing).~~contraception. CooperSurgical has established its market presence and distribution system by developing products and acquiring companies, products and services that complement its business model.

~~THE COOPER COMPANIES, INC. AND SUBSIDIARIES~~

~~Item 2. Management’s Discussion and Analysis of Financial Condition~~

~~and Results of Operations~~

Competitive factors in the segments in which CooperSurgical competes include technological and scientific advances, product quality and availability, price and customer service (including response time and effective communication of product information to physicians, consumers, fertility clinics and hospitals).

We protect our products through patents and trademark registrations, both in the United States and in international markets. We monitor competitive products trademark use worldwide and, when determined appropriate, we have enforced and plan to continue to enforce and defend our patent and trademark rights. We also rely upon trade secrets, licenses, technical know-how and continuing technological innovation to develop and maintain our competitive position.

CooperVision, CooperSurgical, and other trade names, trademarks or service marks of Cooper and its subsidiaries appearing in this report are the property of Cooper and its subsidiaries. Trade names, trademarks and service marks of the other companies appearing in this report are the property of their respective holders.

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of Financial Condition

and Results of Operations

Net Sales

CooperVision Net Sales

The contact lens market has two major product categories:

•~~Spherical lenses including lenses that correct near- and farsightedness uncomplicated by more complex visual defects; and~~

•Toric and multifocal lenses including lenses that, in addition to correcting near- and farsightedness, address more complex visual defects such as astigmatism and presbyopia by adding optical properties of cylinder and axis, which correct for irregularities in the shape of the ~~cornea.~~cornea; and

•Spherical lenses, including lenses that correct near- and farsightedness uncomplicated by more complex visual defects, myopia management lenses, which slow the progression of and correct myopia in age-appropriate children, and other specialty lenses.

CooperVision Net Sales by Category

~~Single-use spheres~~ ~~– This includes Biomedics 1 day, clariti 1 day, MyDay, MiSight and Proclear 1 day~~

~~Toric~~ ~~– This includes Avaira Vitality toric, Biomedics toric, Biofinity toric, clariti 1 day toric, MyDay toric and Proclear toric~~

~~Multifocal~~ ~~– This includes Biofinity multifocal, Biofinity toric multifocal, clariti 1 day multifocal, MyDay multifocal and Proclear 1 day multifocal~~

~~Non single-use sphere, other~~ – This includes our Avaira Vitality spheres, frequent replacement product (FRP) lens portfolio (Biofinity spheres, Biofinity Energys, Biomedics, Proclear spheres, clariti spheres), ortho-k, scleral and custom lenses, contact lens solutions and other



Three Months Ended January 31,					2024 vs 2023 % Change
($ in millions)	2024		2023
Toric and multifocal	$	297.3	$	261.6	14	%
Sphere, other	324.2		319.7		1	%


	$	621.5	$	581.3	7	%

1917

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of Financial Condition

and Results of Operations

Three Months Ended January 31, 2023 vs 2022
% Change
($ in millions) 2023 2022
Toric $ 189.8 $ 182.2 4 %
Multifocal 71.8 65.8 9 %
Single-use spheres 168.3 167.0 1 %
Non single-use sphere, other 151.4 146.5 3 %
$ 581.3 $ 561.5 4 %

In the three months ended January 31, ~~2023,~~2024, the growth experienced across ~~all~~most categories was ~~partially offset~~positively impacted by ~~unfavorable~~favorable foreign exchange rate fluctuations ~~which approximated $43.4~~of approximately $4.4 million.

•Toric and multifocal ~~lenses~~ grew primarily through the success of MyDay and Biofinity.

•~~Single-use sphere lenses~~Sphere, other grew primarily through MyDay ~~clariti~~ and MiSight lenses.

•~~Non single-use sphere lenses grew primarily through Biofinity and ortho-k.~~

•"Other" products ~~primarily include lens care which~~ represented approximately 1% of net sales in the three months ended January 31, 2024, and 2023, ~~and 2022.~~

•~~Total silicone hydrogel products increased by 4% in the three months ended January 31, 2023, representing 79% of net sales, compared to 78% in the three months ended January 31, 2022.~~respectively.

CooperVision Net Sales by Geography

CooperVision competes in the worldwide soft contact lens market and services in three primary regions: the Americas, EMEA (Europe, Middle East and Africa) and Asia Pacific.


Period Ended January 31,	Period Ended January 31,	Three Months

Period Ended January 31,

Period Ended January 31,
($ in millions)
($ in millions)
($ in millions)	($ in millions)	2023		2022		2023 vs 2022 % Change
Americas	Americas	$	241.4	$	215.5	12	%
Americas
Americas
EMEA
EMEA
EMEA	EMEA	214.4		213.5		—	%
Asia Pacific	Asia Pacific	125.5		132.5		(5)	%
		$	581.3	$	561.5	4	%
Asia Pacific
Asia Pacific
		$
		$
		$

CooperVision's growth in net sales across all regions was primarily attributable to market gains of silicone hydrogel contact lenses. Refer to CooperVision Net Sales by Category above for further discussion.

CooperSurgical Net Sales by Category

CooperSurgical supplies the ~~family health~~fertility and women's health care market with a diversified portfolio of products and services. Our office and surgical offerings include products that facilitate surgical and non-surgical procedures that are commonly performed primarily by obstetricians and gynecologists in hospitals, surgical centers, fertility clinics and medical offices. Fertility offerings include highly specialized products and services that target the IVF process, including diagnostics testing with a goal to make fertility treatment safer, more efficient and convenient.

The chart below shows the percentage of net sales of office and surgical and fertility.

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of Financial Condition

and Results of Operations

~~Office/Surgical~~Office and surgical – This includes ~~Endosee endometrial imaging products, Fetal Pillow cephalic elevation~~medical devices, for use in Cesarean sections, illuminated speculum products, Lone Star retractor systems, loop electrosurgical excision procedure (LEEP) products, Mara water ablation systems, newborn stem cell storage, PARAGARD contraceptive IUDs, point-of-care productscryostorage (such as cord blood and ~~uterine positioning products.~~cord tissue storage), and contraception.

Fertility – ~~Our significant fertility products and services include cryostorage, donor gamete services,~~This includes fertility consumables and equipment, donor gamete services, and genomic services (including ~~preimplantation~~ genetic testing).


Three Months Ended January 31,	Three Months Ended January 31,					2023 vs 2022 % Change

Three Months Ended January 31,

Three Months Ended January 31,
($ in millions)
($ in millions)
($ in millions)	($ in millions)	2023		2022			2023 vs 2022 % Change
Office and surgical	Office and surgical	$	165.2	$	128.9
Office and surgical
Office and surgical
Fertility	Fertility	112.0		96.8		16		%
		$	277.2	$	225.7	23	%
Fertility
Fertility
		$
		$
		$

In the three months ended January 31, ~~2023, the~~2024, office and surgical net sales ~~increase in both categories was~~increased primarily due to the addition of ~~Generate.~~ Cook Medical on November 1, 2023, and an increase in revenue from products such as Uterine Manipulators and Paragard. Fertility net sales increased due to an increase in revenue from consumable products and genomic services.

The ~~increase~~above growth experienced across all categories was ~~slightly~~partially offset by unfavorable foreign exchange rate fluctuations ~~which approximated $7.8 million.~~of approximately $2.7 million for the three months ended January 31, 2024.

Gross Margin

Consolidated gross margin ~~decreased~~increased in the three months ended January 31, 2024, to 67% compared to 65% in the three months ended January 31, 2023, ~~to 65% compared to 66%~~primarily driven by efficiency gains and price.

Selling, General and Administrative (SGA) Expenses



Three Months Ended January 31,									2024 vs 2023 % Change
($ in millions)	2024		% Net Sales		2023		% Net Sales
CooperVision	$	220.8	36	%	$	187.3	32	%	18	%
CooperSurgical	134.4		43	%	127.2		46	%	6	%
Corporate	25.7		—		16.4		—		57	%
	$	380.9	41	%	$	330.9	39	%	15	%

CooperVision's SGA expenses increased in the three months ended January 31, ~~2022, primarily driven by unfavorable currency.~~

~~Selling, General and Administrative Expense (SGA)~~

Three Months Ended January 31, 2023 vs 2022
% Change
($ in millions) 2023 % Net Sales 2022 % Net Sales
CooperVision $ 187.3 32 % $ 210.8 38 % (11) %
CooperSurgical 127.2 46 % 96.1 43 % 32 %
Corporate 16.4 — 12.2 — 34 %
$ 330.9 39 % $ 319.1 41 % 4 %

~~CooperVision's SGA decreased in the three months ended January 31, 2023~~2024, compared to the three months ended January 31, ~~2022,~~2023, primarily due to ~~the~~ $31.8 million release of contingent consideration liability associated with SightGlass Vision's regulatory approval ~~milestone.~~milestone in the three months ended January 31, 2023.

CooperSurgical's SGA expenses increased in the three months ended January 31, ~~2023~~2024, compared to the three months ended January 31, ~~2022,~~2023, primarily due to ~~the addition of Generate's SGA and~~ acquisition and integration expenses.

Corporate SGA expenses increased in the three months ended January 31, 2024, compared to the three months ended January 31, 2023, primarily due to share-based compensation related expenses.

Research and Development (R&D) Expenses



Three Months Ended January 31,									2024 vs 2023 % Change
($ in millions)	2024		% Net Sales		2023		% Net Sales
CooperVision	$	20.7	3	%	$	16.7	3	%	24	%
CooperSurgical	18.8		6	%	14.9		5	%	27	%
	$	39.5	4	%	$	31.6	4	%	26	%

CooperVision's R&D expenses increased in the three months ended January 31, 2024, compared to the three months ended January 31, 2023, primarily due to myopia management programs and timing of R&D projects. CooperVision's R&D activities are primarily focused on the development of contact lenses, manufacturing technology and process enhancements.

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of Financial Condition

and Results of Operations

~~Corporate SGA~~CooperSurgical's R&D expenses increased in the three months ended January 31, ~~2023~~2024, compared to the three months ended January 31, ~~2022, primarily~~2023, mainly due to ~~share-based compensation related expenses.~~

~~Research~~project spend and ~~Development Expense (R&D)~~

Three Months Ended January 31, 2023 vs 2022
% Change
($ in millions) 2023 % Net Sales 2022 % Net Sales
CooperVision $ 16.7 3 % $ 16.1 3 % 4 %
CooperSurgical 14.9 5 % 10.1 4 % 47 %
$ 31.6 4 % $ 26.2 3 % 20 %

CooperVision's R&D expense for the three months ended January 31, 2023 remained relatively flat year over year. CooperVision's R&D activities are primarily focused on the development of contact lenses, manufacturing technology and process enhancements.

~~CooperSurgical's R&D expense increased in the three months ended January 31, 2023 compared to the three months ended January 31, 2022, mainly due to~~ European Medical Device Regulation costs. CooperSurgical's R&D activities are focused on developing and refining diagnostic and therapeutic products including medical interventions, surgical devices and fertility solutions.

Amortization Expense


Three Months Ended January 31,	Three Months Ended January 31,									2023 vs 2022 % Change
Three Months Ended January 31,
Three Months Ended January 31,																																					2024 vs 2023 % Change
($ in millions)	($ in millions)	2023		% Net Sales		2022		% Net Sales			2023 vs 2022 % Change
CooperVision	CooperVision	$	8.4	1	%	$	8.2	1	%
CooperVision
CooperVision													$	7.7			1		%			$	8.4				1	%				(8)	%
CooperSurgical	CooperSurgical	38.1		14	%	34.1		15	%	12	%	CooperSurgical	42.6			14		14		%			38.1			14		14		%			11		%
	$														$	50.3				5	%			$	46.5				5		%			8		%
		$	46.5	5	%	$	42.3	5	%	10	%

CooperVision's amortization expense for the three months ended January 31, ~~2023~~2024, remained relatively flat year over year. CooperSurgical's amortization expense increased in the three months ended January 31, ~~2023~~2024, compared to the three months ended January 31, ~~2022,~~2023, primarily due to the amortization of intangible assets ~~newly~~recently acquired through acquisitions.

Operating Income


Three Months Ended January 31,	Three Months Ended January 31,									2023 vs 2022 % Change
Three Months Ended January 31,
Three Months Ended January 31,																																										2024 vs 2023 % Change
($ in millions)	($ in millions)	2023		% Net Sales		2022		% Net Sales			2023 vs 2022 % Change
CooperVision
CooperVision
CooperVision	CooperVision	$	160.1	28	%	$	127.4	23	%	26	%	$	154.8		25			25	%			$	160.1			28				28	%					(3)	%
CooperSurgical	CooperSurgical	5.8		2	%	15.6		7	%	(63)	%	CooperSurgical		24.0			8		8	%				5.8				2			2		%				311		%
Corporate	Corporate	(16.4)		—		(12.2)		—		34	%	Corporate		(25.7)			—		—		(16.4)				(16.4)				—			—			57				57		%
	$															$	153.1			16	%					$	149.5					17		%				2		%
		$	149.5	17	%	$	130.8	17	%	14	%

CooperVision's operating income decreased in the three months ended January 31, 2024, compared to the three months ended January 31, 2023, primarily due to a net increase in operating expenses, partially offset by an increase in net sales.

CooperSurgical's operating income increased in the three months ended January 31, ~~2023~~2024, compared to the three months ended January 31, ~~2022,~~2023, primarily due to an increase in net sales, partially offset by a net ~~changes~~increase in operating expenses.

CooperSurgical's operating income decreased in the three months ended January 31, 2023 compared to the three months ended January 31, 2022, primarily due to an increase in SGA and amortization expenses, partially offset by an increase in net sales.

Corporate operating loss increased in the three months ended January 31, ~~2023~~2024, compared to the three months ended January 31, ~~2022,~~2023, primarily due to higher share-based compensation ~~expense.~~expenses.

Interest Expense

~~On a consolidated basis, operating income~~



Three Months Ended January 31,									2024 vs 2023 % Change
($ in millions)	2024		% Net Sales		2023		% Net Sales
Interest expense	$	29.9	3	%	$	26.1	3	%	15	%

Interest expense increased induring the three months ended January 31, ~~2023~~2024, compared to the three months ended January 31, ~~2022,~~2023, primarily due ~~an increase in consolidated net sales.~~to higher interest rates.

Other Expense, Net


Period Ended January 31,	Three Months
($ in millions)	2024		2023

Foreign exchange loss (gain)	$	1.2	$	(1.0)
Other expense, net	2.0		2.3
	$	3.2	$	1.3

2220

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of Financial Condition

and Results of Operations

~~Interest Expense~~

Three Months Ended January 31, 2023 vs 2022
% Change
($ in millions) 2023 % Net Sales 2022 % Net Sales
Interest expense $ 26.1 3 % $ 6.6 1 % 295 %

Interest expense increased during the three months ended January 31, 2023 compared to the three months ended January 31, 2022, primarily due to higher average debt balances and higher interest rates.

~~Other Expense (Income), Net~~

Period Ended January 31, Three Months
($ in millions) 2023 2022
Foreign exchange (gain) loss (1.0) 3.3
Other expense (income), net 2.3 (1.0)
$ 1.3 $ 2.3

Foreign exchange ~~gain~~loss is primarily associated with the ~~relative~~ weakening of the USU.S. dollar against foreign currencies and the effect on intercompany receivables during the three months ended January 31, ~~2023.~~2024.

Other expense, ~~(income),~~ net ~~increased~~was relatively flat in the three months ended January 31, ~~2023~~2024, compared to the three months ended January 31, ~~2022, primarily due to loss on minority investments, partially offset by defined benefit plan related income.~~2023.

Provision for Income Taxes

2321

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of Financial Condition

and Results of Operations

Capital Resources and Liquidity

Working capital on January 31, ~~2023~~2024, and October 31, ~~2022,~~2023, was ~~$661.7~~$829.0 million and ~~$253.4~~$735.9 million, respectively. The increase in working capital was primarily due to ~~repayment~~an increase in trade accounts receivable mainly due to higher sales and timing of ~~the 364-day term loan during the first three months of fiscal 2023. See Note 5. Financing Arrangements for further information.~~

collections, and an increase in prepaid expenses and other current assets.

Cash Flow


($ in millions)	($ in millions)	January 31, 2023		January 31, 2022		($ in millions)	January 31, 2024	January 31, 2023
Operating activities	Operating activities	$	166.6	$	166.0
Investing activities	Investing activities	(113.3)		(1,669.3)
Financing activities	Financing activities	(77.6)		1,693.6
Effect of exchange rate changes on cash, cash equivalents, restricted cash	Effect of exchange rate changes on cash, cash equivalents, restricted cash	4.2		(3.7)
Net (decrease) increase in cash, cash equivalents, restricted cash and cash held for sale		$	(20.1)	$	186.6
Net increase (decrease) in cash, cash equivalents, restricted cash

Operating Cash Flow

Cash provided by operating activities in the first three months of fiscal ~~2023 remains flat~~2024 decreased compared to the first three months of fiscal ~~2022,~~2023, primarily due to net changes in ~~other non-cash items,~~operating capital, including a decrease in accounts payable, partially offset by ~~the net cash flow from changes in operating capital and~~ the $31.8 million release of contingent consideration liability associated with ~~SGV's~~SightGlass Vision's regulatory approval ~~milestone.~~milestone in the first three months of fiscal 2023.

Investing Cash Flow

Cash used in investing activities in the first three months of fiscal ~~2023 was lower than cash used in~~2024 increased compared to the first three months of fiscal ~~2022,~~2023, primarily attributable to ~~$1.6 billion~~$200.0 million cash paid ~~net of cash acquired,~~ for the ~~Generate~~Cook Medical acquisition in the first three months of fiscal ~~2022. Refer to Note 2. Acquisitions~~2024 and ~~Joint Venture for further information.~~an increase in purchases of property, plant and equipment.

Financing Cash Flow

Cash provided by financing activities in the first three months of fiscal 2024 was primarily attributable to $200.0 million drawn on the revolving credit to pay for the Cook Medical acquisition.

Cash used in financing activities in the first three months of fiscal 2023 was primarily due to repayments of $338.0 million on the 2021 364-day term loan, partially offset by $276.5 million of funds drawn on the 2020 revolving credit.

Cash provided by financing activities in the first three months of fiscal 2022 was primarily due to funds received from the 2021 term loan facility ($1.5 billion) and the 2021 364-day term loan facility ($840.0 million), partially offset by $546.1 million repayments of the 2021 revolving credit and $78.5 million repurchases of common stock.

~~Refer to Note 5. Financing Arrangements for further information.~~

The following is a summary of the maximum commitments and the net amounts available to us under different credit facilities as of January 31, ~~2023:~~2024:


(In millions)	(In millions)	Facility Limit		Outstanding Borrowings		Outstanding Letters of Credit		Total Amount Available		Maturity Date	(In millions)			Facility Limit					Outstanding Borrowings						Outstanding Letters of Credit					Total Amount Available				Maturity Date

Revolving Credit:	Revolving Credit:
Revolving Credit:
Revolving Credit:
2020 Revolving Credit
2020 Revolving Credit
2020 Revolving Credit	2020 Revolving Credit	$	1,290.0	$	276.5	$	1.4	$	1,012.1	April 1, 2025		$	1,290.0		$		$	375.0			$		$	2.4		$		$	912.6		April 1, 2025			April 1, 2025
Term loan:	Term loan:
2020 Term Loan	2020 Term Loan	850.0		850.0		n/a		—		April 1, 2025
2020 Term Loan
2020 Term Loan														850.0					850.0						n/a					—				April 1, 2025
2021 Term Loan	2021 Term Loan	1,500.0		1,500.0		n/a		—		December 17, 2026	2021 Term Loan			1,500.0		1,500.0				1,500.0		n/a					n/a					—	December 17, 2026		December 17, 2026
Total	Total	$	3,640.0	$	2,626.5	$	1.4	$	1,012.1

As of January 31, ~~2023,~~2024, the Company was in compliance with all debt covenants. See Note 5. Financing Arrangements of the Consolidated Condensed Financial Statements for ~~additional~~further information.

~~THE COOPER COMPANIES, INC. AND SUBSIDIARIES~~

~~Item 2. Management’s Discussion and Analysis of Financial Condition~~

~~and Results of Operations~~

Considering recent market conditions, ~~and the COVID-19 pandemic crisis,~~ we have re-evaluated our operating cash flows and cash requirements and continue to believe that current cash, cash equivalents, future cash flow from operating activities and cash available under our 2020 Credit Agreement will be sufficient to meet our anticipated cash needs, including working capital needs, capital expenditures and contractual obligations for at least 12 months from the issuance date of the Consolidated Condensed Financial Statements included

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of Financial Condition

and Results of Operations

in this quarterly report. To the extent additional funds are necessary to meet our liquidity needs such as ~~that~~ for acquisitions, share repurchases ~~cash dividends~~ or other activities as we execute our business strategy, we anticipate that additional funds ~~will~~could be obtained through the incurrence of additional indebtedness, additional equity financings or a combination of these potential sources of funds; however, such financing may not be available on favorable terms, or at all.

Share Repurchase

In ~~December 2011, our Board of Directors authorized the 2012 Share Repurchase Program and through subsequent amendments, the most recent in~~ March 2017, the ~~total repurchase~~ authorization ~~was increased from $500.0 million to $1.0 billion of the Company's common stock. The program has no expiration date and may be discontinued at any time. Purchases~~ under the 2012 Share Repurchase Program ~~are subject~~was increased to ~~a review~~$1.0 billion by the Company's Board of ~~the circumstances in place at the time and may be made from time to time as permitted by securities laws and other legal requirements.~~Directors. As of January 31, ~~2023,~~2024, $256.4 million remains authorized for ~~repurchase under the 2012 Share Repurchase Program.~~repurchase.

During the three months ended January 31, 2024, and 2023, there ~~was~~were no share ~~repurchase under the 2012 Share Repurchase Program.~~repurchases.

Dividends

~~We paid~~In December 2023, the Company's Board of Directors decided to end the declaration of the semiannual dividend.

Stock Split

On February 16, 2024, the Company effected a ~~semiannual dividend~~four-for-one stock split of ~~approximately $1.5 million or 3~~its outstanding shares of common stock. All share and per share information has been retroactively adjusted to reflect the stock split for all periods presented. The par value of the common stock remains $0.10 cents per ~~share,~~ ~~on February 9, 2023, to stockholders of record on January 20, 2023.~~

~~Transition from LIBOR~~

The UK’s Financial Conduct Authority (FCA), which regulates the London Interbank Offered Rate (LIBOR), announced in July 2017 that it will no longer persuade or require banks to submit rates for LIBOR after 2021. In March 2021, the FCA confirmed its intention to stop requiring banks to submit rates required to calculate LIBOR after 2021. However, for U.S. dollar-denominated (USD) LIBOR, only one-week and two-month USD LIBOR will cease to be published after 2021, and all remaining USD LIBOR tenors will continue being published until June 2023. Further, in March 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-04, ~~Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting~~. This guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. Effective February 1, 2023, the Company transitioned its credit agreements from LIBOR to the Secured Overnight Financing Rate ("SOFR"). While the notional value of agreements potentially indexed to LIBOR is material, we do not expect a material impact on our financial statements related to this transition.share.

Estimates and Critical Accounting Policies

Information regarding estimates and critical accounting policies is included in Management's Discussion and Analysis onin our Form 10-K for the fiscal year ended October 31, ~~2022.~~2023. There have been no material changes in our policies2 from those previously discussed in our Form 10-K for the fiscal year ended October 31, ~~2022.~~2023.

Accounting Pronouncements

Information regarding new accounting pronouncements is included in Note 1. General of the Consolidated Condensed Financial Statements of this Quarterly Report on Form 10-Q.

~~Trademarks~~

~~ActivControl~~®,2 ~~Aquaform~~®~~, Avaira Vitality~~®,~~Biofinity~~®~~, Biofinity Energys~~®~~, Biomedics~~®~~, Proclear~~®~~, MyDay~~® ~~and MiSight~~®~~are~~ ~~registered trademarks~~To further clarify the policy detailed in our Annual Report on Form 10-K for the fiscal year ended October 31, 2023, the current portion of ~~The Cooper Companies, Inc., its affiliates and/or subsidiaries. PC Technology™ is~~the deferred revenue balances at the beginning of each period presented were generally fully recognized in a ~~trademark of The Cooper Companies, Inc., its affiliates and/or subsidiaries. The clariti~~® ~~mark is a registered trademark of The Cooper Companies, Inc., its affiliates and/or subsidiaries worldwide except~~ratable manner in the ~~United States where~~subsequent 12-month period. We recognized revenue of approximately $31.0 million and $23.0 million for the ~~use of clariti~~® ~~is licensed.~~ ~~Endosee~~®~~, Insorb~~®~~, Paragard~~®~~, Mara~~®~~, Fetal Pillow~~®three months ended January 31, 2024, and ~~Generate Life Sciences~~®~~are registered trademarks of CooperSurgical, Inc, its affiliates and/or subsidiaries.~~2023, respectively, that was included in the deferred revenue balance at October 31, 2023 and October 31, 2022.

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THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Item 3. Quantitative and Qualitative Disclosure About Market Risk

We are exposed to market risks that relate principally to changes in interest rates and foreign currency fluctuations. We do not enter into derivative financial instrument transactions for speculative purposes.

Foreign Currency Exchange Risk

We operate multiple foreign subsidiaries that manufacture and market our products worldwide. As a result, our earnings, cash flow and financial position are exposed to foreign currency risk from foreign currency denominated receivables and payables, sales transactions, capital expenditures and net investment in certain foreign operations. Most of our operations outside the United States have their local currency as their functional currency. We ~~are exposed~~have exposure to ~~risks caused by changes in~~multiple foreign ~~exchange, principally our~~currencies, including, among others, the British pound, ~~sterling, euro~~Euro and Japanese ~~yen denominated debt and receivables denominated in currencies other than the United States dollar, and from operations in other foreign currencies.~~yen. We ~~did not~~ have ~~any cross-currency swaps or~~taken steps to minimize our balance sheet exposure by entering into foreign currency forward contracts asto minimize the short-term impact of foreign currency exchange rate fluctuations on certain trade and intercompany receivables and payables.

At January 31, ~~2023.~~2024, a uniform hypothetical 10% increase or decrease in the foreign currency exchange rates in comparison to the value of the U.S. dollar would have resulted in a corresponding increase or decrease of approximately $29.9 million in operating income for the fiscal quarter ended January 31, 2024. See Note 12. Financial Derivatives and Hedging of the Consolidated Condensed Financial Statements for further information.

Interest Rate Risk

We are exposed to risks associated with changes in interest rates, as the interest rates on our revolving lines of credit and term loans may vary with the federal funds rate and ~~SOFR (and, previously, LIBOR).~~SOFR. As of January 31, ~~2023,~~2024, we had outstanding debt for an aggregate carrying amount of ~~$2.7~~$2.8 billion. We have entered, and in the future may enter, into interest rate swaps to manage interest rate risk. ~~Effective February 1, 2023, the interest rate on our credit agreements was converted from LIBOR to SOFR.~~

Our ultimate realized gain or loss with respect to interest rate fluctuations will depend on interest rates, the exposures that arise during the period and our hedging strategies at that time. As an example, if interest rates were to increase or decrease by 1% or 100 basis points, the quarterly interest expense would not have ~~increased or decreased by approximately $4.5 million~~a material impact, based on average debt outstanding, after consideration of our interest rate swap contracts, during the first quarter of fiscal ~~2023.~~2024. See Note 5. Financing Arrangements of the Consolidated Condensed Financial Statements for ~~additional~~further information.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on management’s evaluation (with the participation of our Chief Executive Officer (our Principal Executive Officer) and Chief Financial Officer (our Principal Financial Officer)), as of the end of the period covered by this report, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, (the Exchange Act)) are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during our first quarter of fiscal ~~2023,~~2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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THE COOPER COMPANIES, INC. AND SUBSIDIARIES

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

Information regarding legal proceedings is included in Note 10. Contingencies of the Consolidated Condensed Financial Statements of this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

Our business faces significant risks. These risks include those described below and may include additional risks and uncertainties not presently known to us or that we currently deem immaterial. Our business, financial condition and results of operations could be materially adversely affected by any of these risks, and the trading prices of our common stock could decline by virtue of these risks. These risks should be read in conjunction with the other information in this report.

Risk factors describing the major risks to our business can be found under Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2022.~~2023. There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2022~~2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~Issuer Purchases of Equity Securities~~

~~The share repurchase program~~In March 2017, the authorization under the 2012 Stock Repurchase Program was ~~approved~~increased to $1.0 billion by the ~~Company’s~~Company's Board of Directors in December 2011 (the 2012 Share Repurchase Program). The program as amended in December 2012, December 2013 and March 2017 provides authorization to repurchase up to a total of $1.0 billion of the Company’s common stock.Directors. As of January 31, ~~2023,~~2024, $256.4 million remains authorized for ~~repurchase under the 2012 Share Repurchase Program.~~repurchase.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~None.~~During the three months ended January 31, 2024, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

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THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Item 6. Exhibits

Incorporated by Reference

Exhibit

Number

Description of Document

~~Description~~Form

Exhibit

Filing Date/
Period End
Date

~~10.1~~3.1

~~Amendment No.1, dated as~~A mendment to Second Rest ated Certificate of ~~February 1, 2023, to the Term Loan Agreement, dated as of December 17, 2021, by and among The Cooper Companies, Inc. and PNC Bank, National Association, as the administrative agent~~.

~~10.2~~

~~Amendment No. 3, dated as of February 1, 2023, to the Revolving Credit and Term Loan Agreement, dated as of April 1, 2020, by and among the Company, CooperVision International Limited,~~ ~~and~~ ~~CooperSurgical Holdings Limited, the~~ ~~borrowers~~ ~~party thereto, and KeyBank National Association, as administrative agent.~~Incorporation

~~10.3~~

~~The Cooper Companies, Inc. 2023 Incentive Payment Plan, incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed on December 19, 2022~~

31.1

Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

31.2

Certification of the Chief Financial Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

32.1

Certification of the Chief Executive Officer, pursuant to 18 U.S.C. Section 1350

32.2

Certification of the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350

101.1

The following materials from the Company's Quarterly Report on Form 10-Q for the three months period ended January 31, ~~2023~~2024 formatted in Inline XBRL (Extensible Business Reporting Language): (i) Consolidated Condensed Statements of Income and Comprehensive Income, (ii) Consolidated Condensed Balance Sheets, (iii) Consolidated Condensed Statements of Stockholders' Equity, (iv) Consolidated Condensed Statements of Cash Flows and (v) related Notes to Consolidated Condensed Financial Statements.

104.1

Cover Page Interactive Data File (embedded within the Inline XBRL document)

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THE COOPER COMPANIES, INC. AND SUBSIDIARIES

SIGNATURES

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 thereunto duly authorized.


			The Cooper Companies, Inc.
			(Registrant)

Date: March ~~3, 2023~~1, 2024			/s/ Brian G. Andrews
			Brian G. Andrews
			Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)



Date: March ~~3, 2023~~1, 2024			/s/ Agostino Ricupati
			Agostino Ricupati
			Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)

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