EXHIBIT 99.1
[COO LOGO] [THE COOPER COMPANIES LOGO]
NEWS RELEASE
CONTACT:
Norris Battin
The Cooper Companies, Inc.
ir@coopercompanies.com
888-822-2260
FOR IMMEDIATE RELEASE
THE COOPER COMPANIES REPORTS FOURTH QUARTER AND 2001 RESULTS
Fourth Quarter Revenue Up 17 Percent as Contact Lens Market Share
Gains Continue EPS Up 21 Percent to 76 Cents
Fiscal Year Revenue Rises 17 Percent; EPS Increases 22 Percent to $2.44
Estimated First Quarter 2002 Revenue Up 15 to 20 Percent; EPS 54 to 57 Cents
LAKE FOREST, Calif., December 11, 2001--The Cooper Companies, Inc. (NYSE: COO)
today reported results for its fourth fiscal quarter and year ended October 31,
2001.
o Fourth quarter revenue $66 million, 17 percent above fourth quarter
2000. Annual revenue $234.6 million, 17 percent above 2000.
(Revenue for all periods includes reimbursed freight expenses to
reflect adoption of Emerging Issues Task Force Issue No. 00-10,
Accounting for Shipping and Handling Costs.)
o Fourth quarter EPS 76 cents, up 21 percent. Fiscal year EPS $2.44,
up 22 percent.
o Fourth quarter cash flow (pretax income from continuing operations
plus depreciation and amortization) per share $1.28, up 19 percent
from $1.08 in fourth quarter 2000; Fiscal 2001 up 18 percent to
$4.14.
Commenting on these results, Chief Executive Officer A. Thomas Bender said,
"Despite weakening economies throughout the world, The Cooper Companies had
another strong year, continuing the consistent performance it has delivered
since 1995. CooperVision, our contact lens business, improved its market
position in the United States and in all the markets outside the United States
where it competes. CooperSurgical continued to execute successfully its strategy
of consolidating the women's healthcare medical device market.
"For fiscal 2002, we expect revenue of about $265 to $275 million, and earnings
per share ranging from $3.00 to $3.05, including an improvement of about 20
cents per share because, as a result of our adopting a new
accounting principle, we will not amortize goodwill after 2001. In the first
quarter of 2002, I expect revenue to grow 15 to 20 percent year over year with
earnings per share in the range of 54 to 57 cents.
"In 2002, I anticipate that CooperVision (CVI) will generate mid-teen percentage
growth in its worldwide core contact lens revenue. I expect continued strong
specialty lens sales in the U.S. and strong international performance,
especially in Europe and Japan, aided by several successful new product
introductions.
"CooperSurgical (CSI), our women's healthcare business, continues to strengthen
its franchise, adding six new product lines through acquisition and marketing
and technology alliances in the past 12 months. CSI revenue is now running at an
annual rate approaching $70 million and I believe that we are on track to reach
our goal of $100 million within the next two or three years. For 2002, I expect
that CSI revenue will be between $68 and $72 million."
Business Unit P&L Highlights ($'s in millions)
- ------------------------------------------------------------------------------------------------------------
Three Months Ended October 31,
- ------------------------------------------------------------------------------------------------------------
Revenue* Operating Income
- ------------------------------------------------------------------------------------------------------------
% % %Revenue %Revenue
2001 2000 Inc. 2001 2000 Inc. 2001 2000
---- ---- ---- ---- ---- ---- ---- ----
- ------------------------------------------------------------------------------------------------------------
CVI $49.7 $43.1 15% $15.8 $14.2 12% 32% 33%
CSI 16.3 13.2 24% 3.4 1.6 109% 21% 12%
----- ----- ----- -----
Subtotal 66.0 56.3 17% 19.2 15.8 22% 29% 28%
HQ Expense - - - (1.7) (1.6) - - -
----- ----- ----- -----
- ------------------------------------------------------------------------------------------------------------
TOTAL $66.0 $56.3 17% $17.5 $14.2 23% 26% 25%
===== ===== ===== =====
- ------------------------------------------------------------------------------------------------------------
Twelve Months Ended October 31,
- ------------------------------------------------------------------------------------------------------------
Revenue* Operating Income
- ------------------------------------------------------------------------------------------------------------
% % %Revenue %Revenue
2001 2000 Inc. 2001 2000 Inc. 2001 2000
---- ---- ---- ---- ---- ---- ---- ----
- ------------------------------------------------------------------------------------------------------------
CVI $176.1 $154.8 14% $51.4 $47.3 9% 29% 31%
CSI 58.5 46.4 26% 10.1 6.3 61% 17% 14%
------ ------ ----- -----
Subtotal 234.6 201.2 17% 61.5 53.6 15% 26% 27%
HQ Expense - - - (6.7) (6.7) - - -
------ ------ ----- -----
- ------------------------------------------------------------------------------------------------------------
TOTAL $234.6 $201.2 17% $54.8 $46.9 17% 23% 23%
====== ====== ===== =====
- ------------------------------------------------------------------------------------------------------------
*Revenue for all periods includes reimbursed freight expenses to reflect
adoption of Emerging Issues Task Force Issue No. 00-10, Accounting for
Shipping and Handling Costs.
Fourth Fiscal Quarter Operating Highlights
CooperVision
- ---------------------------------------------------------------------------------------------------------------------
COOPERVISION REVENUE ANALYSIS
($'s in millions)
- ---------------------------------------------------------------------------------------------------------------------
4th Quarter % % Change from % % Change
Segment 2001 Total 4th Quarter 2000 FY 2001 Total from FY 2000
- ---------------------------------------------------------------------------------------------------------------------
U.S. $31.0 62% 10% $110.9 63% 10%
O.U.S.* 17.5 35% 22% 62.3 35% 25%
----- ---- ------ ----
Core Business 48.5 97% 14% 173.2 98% 15%
OEM** 1.2 3% 76% 2.9 2% (34%)
----- ---- ------ ----
Total $49.7 100% 15% $176.1 100% 14%
===== ==== ====== ====
- ---------------------------------------------------------------------------------------------------------------------
* Outside the United States
**Original Equipment Manufacturer sales to other contact lens providers
- ---------------------------------------------------------------------------------------------------------------------
CVI's worldwide core contact lens business--all revenue except lower margin OEM
sales--grew 14 percent in the quarter. For the fiscal year, core revenue was up
15 percent--17 percent in constant currency--about three times the estimated
world market growth. CVI estimates that its market share grew about 1 point this
year to 6.3 percent of the $2.9 billion worldwide contact lens market,
approximately twice its 1997 share.
In the U.S., CVI's core revenue grew 10 percent in the fourth quarter and 10
percent for the fiscal year. Outside the U.S., core revenue grew 22 percent for
the quarter. For the fiscal year, core revenue outside the U.S. increased 25
percent--30 percent in constant currency.
Worldwide revenue for CVI's toric contact lenses, prescribed to correct
astigmatism, increased 14 percent during the quarter and 13 percent for the
year. Torics represent about 45 percent of CVI's worldwide revenue. CVI's
worldwide revenue in the largest segment of this market, disposable-planned
replacement (DPR) toric lenses, grew 25 percent over last year's fourth quarter,
and 23 percent during fiscal 2001.
CVI's worldwide sales of DPR sphere and toric products grew 22 percent during
the quarter and are 21 percent ahead of last year. They now account for 80
percent of CVI's worldwide business. U.S. revenue for these products grew 17
percent in the quarter and 16 percent for the fiscal year.
Rohto Pharmaceuticals, CVI's partner in Japan, introduced CVI's quarterly
planned replacement line of sphere and toric lenses in July. Rohto has submitted
clinical data for CVI's line of two-week disposable sphere, toric and aspheric
lenses to regulatory authorities. They expect to market these products in the
second half of 2002. European revenue growth, excluding OEM business, remained
robust-- ahead 26 percent for the quarter and 32 percent for the full year.
Cosmetic lenses
CVI's line of cosmetic lenses, Expressions in the United States and Frequency
Colors in overseas markets, continues to be well accepted by practitioners and
patients. Production is now in place to meet anticipated demand around the
world, which is expected to result in an annual run rate approaching $20 million
by the end of 2002.
The cosmetic lens market--opaque and color enhancing lenses that change the
appearance of the eye's natural color--is the second largest specialty lens
market segment behind toric lenses. CVI estimates the worldwide revenue for all
cosmetic lenses at about $250 million with the United States representing about
70 percent of the total. Disposable cosmetic lenses, the segment in which
Frequency Colors and Expressions compete, generate about $150 million worldwide.
"An important target market for cosmetic lenses," said Bender, "is the large
pool of current wearers of sphere lenses who could purchase several pairs of
cosmetic lenses to enhance the appearance of their eyes and to complement their
wardrobes."
Lens wearers who trade up to specialty products, either cosmetic or toric
lenses, receive added visual benefits, and contact lens practitioners can build
their practices by recommending them. CVI's line of cosmetic lenses are
interchangeable with the leading brands of disposable spheres so practitioners
will not have to refit current wearers who want cosmetic lenses.
In the second half of calendar 2002, CVI plans to launch Frequency Enhancements,
a tinted color product that enhances the natural color of the eye without
totally changing its appearance. "Recent market research," said Bender, "tells
us that fewer than 15 percent of women--70 percent of the market--are wearing
disposable lenses to enhance the cosmetic beauty of their eyes. This represents
a large, untapped opportunity."
New Product Update
CVI continues to address underserved market niches of the contact lens market
around the world.
In the fourth quarter, CVI introduced Frequency Multifocal, its high performance
monthly planned replacement multifocal lens in the United States. A full launch
is expected by mid 2002. "Multifocal lenses," said Bender, "are an important
niche in the U.S. contact lens market, and we believe that Frequency Multifocal
will be successful in this specialty lens area."
In November, CVI introduced Frequency Toric XR, the only monthly disposable
planned replacement lens available in the United States for astigmatic patients
requiring complex vision correction.
Independent Market Research Data
Appendix 1 below summarizes third calendar quarter 2001 independent market
research for the contact lens market compared with CVI's third calendar quarter
and calendar 9-month performance. Commenting on these results Bender said,"
Although new patient visits for contact lenses in the U.S. declined 3 percent
year over year in the third calendar quarter, they improved over the second
quarter. Through three calendar quarters, new visits grew 3 percent while total
visits declined 2 percent.
"Although manufacturers' revenue for DPR sphere lenses declined from last year,
toric lenses, especially the DPR brands, continued to grow. This is consistent
with the market's ongoing trend away from commodity lenses toward specialty
lenses.
"CVI revenue continues to grow significantly faster than the market, gaining 1
share point in the overall U. S. market and 2 share points in the U.S. toric
market during the first nine calendar months of 2001."
CVI Cost of Sales
CVI's gross margin for the fourth quarter was 70 percent compared with 66
percent in the third quarter. This improvement was primarily due to a revenue
mix shift to higher margin products and a reduction in manufacturing costs
during this quarter compared with last quarter. For the full year, CVI gross
margin was 69 percent.
For 2002, CVI expects gross margins in the range of 67 to 68 percent as
distributors in Japan, France and Germany are expected to generate a higher
percentage of CVI's total revenue. Operating margins, however, are not expected
to decline, primarily because the distributors, not CVI, are responsible for
marketing costs in their territories.
CooperSurgical
CSI, the Company's women's healthcare business, continued to execute
successfully its strategy of consolidating the women's healthcare medical device
market and supplying Ob/Gyns with products to support the widening range of
disorders that they are now diagnosing and treating.
In the past 12 months, CSI added six new product lines to its business through
acquisition and marketing and technology alliances. These include products to
help diagnose osteoporosis and cervical cancer and the cause of incontinence,
all rapidly growing market segments driven by demographic growth in the 45-64
year age range.
CSI fourth quarter revenue increased 24 percent to $16.3 million and for the
fiscal year was up 26 percent to $58.5 million. CSI's organic growth from
existing products was 10 percent in the fourth quarter of 2001 and 10 percent
for the fiscal year.
Operating margins reached 21 percent during the quarter, and are 17 percent for
the fiscal year compared with 14 percent in 2000.
"At CSI," said Bender, "we continue to target the completion of one or two
acquisitions each year and expect to achieve low double digit organic growth
annually."
Tax Rate
The Company's effective tax rate (ETR) (income tax expense divided by pretax
income) was 30 percent for the quarter and 29 percent for fiscal 2001. Cooper
expects that its ETR for 2002 will be less than 30 percent.
Earnings per Share
All per share amounts mentioned in this report refer to diluted per share
amounts.
Conference Call
The Cooper Companies will hold a conference call to discuss its fourth quarter
results today at 2 p.m., Pacific Standard Time. To access the live call, dial
1-800-231-9012. A replay will be available at 1-888-203-1112 approximately one
hour after the call ends and remain available for five days. The access code for
both calls is
471398. This call will also be broadcast live on The Cooper Companies' Web site,
www.coopercos.com and at www.bestcalls.com and www.streetevents.com.
Forward-Looking Statements
Some of the information included in this news release contains "forward-looking
statements" as defined by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include all statements regarding anticipated growth
in our revenue, anticipated market conditions and results of operations. To
identify forward-looking statements look for words like "believes," "expects,"
"may," "will," "should," "seeks," "intends," "plans," "estimates" or
"anticipates" and similar words or phrases. Discussions of strategy, plans or
intentions often contain forward-looking statements. These, and all
forward-looking statements, necessarily depend on assumptions, data or methods
that may be incorrect or imprecise.
Events, among others, that could cause actual results and future actions to
differ materially from those described in forward-looking statements include
major changes in business conditions, a major disruption in the operations of
our manufacturing facilities, new competitors or technologies, the impact of an
undetected virus on our computer systems, acquisition integration delays or
costs, foreign currency exchange exposure, investments in research and
development and other start-up projects, dilution to earnings per share from
acquisitions or issuing stock, regulatory issues, significant environmental
cleanup costs above those already accrued, litigation costs including any
related settlements, cost of business divestitures, the requirement to provide
for a significant liability or to write off a significant asset, changes in
accounting principles or estimates, and other factors described in our
Securities and Exchange Commission filings, including the "Business" section in
our Annual Report on Form 10-K for the year ended October 31, 2000. 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.
Corporate Information
The Cooper Companies, Inc. and its subsidiaries develop, manufacture and market
specialty healthcare products. Corporate offices are located in Lake Forest and
Pleasanton, Calif. A toll free interactive telephone system at 1-800-334-1986
provides stock quotes, recent press releases and financial data. The Cooper
Companies' World Wide Web address is www.coopercos.com.
CooperVision, Inc., markets a broad range of contact lenses for the vision care
market. Headquartered in Lake Forest, Calif., it manufactures in Huntington
Beach, Calif., Rochester, N.Y., Hamble, England, Helsinki and Toronto. Its Web
address is www.coopervision.com. CooperSurgical, Inc., with operations in
Trumbull and Shelton, Conn., Hollywood, Fla., Malmo, Sweden, Montreal and
Berlin, markets diagnostic products, surgical instruments and accessories for
the gynecological market. Its Web address is www.coopersurgical.com.
Trademarks of The Cooper Companies, Inc., and its affiliates are italicized.
Appendix 1
3rd Quarter Calendar 2001 and Calendar Year to Date
Cooper Vision U.S. vs. U.S. Market Indicators
Product Category % Change % Change % Change % Change % Change
- ---------------- -------- -------- - --------- --------- --------
CVI U.S. CVI U.S. U.S. Contact Lens Total Contact Lens New Contact Lens
--------- -------- ----------------- ------------------ ----------------
3rd QUARTER 2001 Revenue Market Share Manufacturers' Practitioner Visits Practitioner Visits
- ---------------- ------- ------------ -------------- ------------------- -------------------
Revenue
-------
All Contact Lenses +17 +1.5 -2 -7 -3
All Toric Lenses +17 +3.5 +5 +1 +1
DPR Toric Lenses +18 +2 +12 N/A N/A
DPR Spherical Lenses +21 +1 -3 N/A N/A
All DPR Lenses +19 +1.5 -1 N/A N/A
9 MONTHS 2001
All Contact Lenses +12 +1 -2 -2 +3
All Toric Lenses +11 +2 +4 +7 +9
DPR Toric Lenses +15 N/C +15 N/A N/A
DPR Spherical Lenses +22 +1 -2 N/A N/A
All DPR Lenses +18 +1 Flat N/A N/A
(FINANCIAL STATEMENTS FOLLOW)
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Income
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Years Ended
October 31, October 31,
------------------------ ---------------------------
2001 2000 2001 2000
----------- ----------- ------------ -----------
Net sales $ 66,049 $56,306 $234,572 $201,217
Cost of sales 22,365 18,635 81,204 68,100
--------- ------- -------- --------
Gross profit 43,684 37,671 153,368 133,117
Selling, general and administrative expense 24,084 21,693 89,770 79,324
Research and development expense 822 684 3,658 2,711
Amortization of intangibles 1,316 1,091 5,182 4,213
--------- ------- -------- --------
Operating income 17,462 14,203 54,758 46,869
Interest expense 924 931 3,738 4,744
Settlement of dispute - - - 653
Other income, net 200 182 1,108 655
--------- ------- -------- --------
Income before income taxes and cumulative
effect of change in accounting principle 16,738 13,454 52,128 42,127
Provision for income taxes 4,982 4,305 14,992 12,727
--------- ------- -------- --------
Income before cumulative effect of change in
accounting principle 11,756 9,149 37,136 29,400
Cumulative effect of change in accounting principle - - - (432)
--------- ------- -------- --------
Net income $ 11,756 $ 9,149 $ 37,136 $ 28,968
========= ======= ======== ========
Diluted earnings per share:
Income before cumulative effect of change in
accounting principle $ 0.76 $ 0.63 $ 2.44 $ 2.03
Cumulative effect of change in accounting principles - - - (0.03)
--------- ------- -------- --------
Earnings per share $ 0.76 $ 0.63 $ 2.44 $ 2.00
========= ======= ======== ========
Number of shares used to compute earnings per share 15,536 14,618 15,246 14,510
========= ======= ======== ========
Memo:
Cash flow (pretax income from continuing operations
plus depreciation and amortization) per diluted share $ 1.28 $ 1.08 $ 4.14 $ 3.51
========= ======= ======== ========
Components of diluted earnings per share from income
before cumulative effect of change in
accounting principle:
Ongoing operations $ 0.76 $ 0.63 $ 2.44 $ 2.00
Tax credits - - 0.07 0.08
Other one-time events, net - - (0.07) (0.05)
--------- ------- -------- --------
Earnings per share from income before cumulative
effect of change in accounting principle $ 0.76 $ 0.63 $ 2.44 $ 2.03
========= ======= ======== ========
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(In thousands)
(Unaudited)
October 31,
---------------------------------
2001 2000
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 12,928 $ 14,608
Trade receivables, net 55,318 33,058
Marketable securities 7,982 -
Inventories 51,153 38,219
Deferred tax asset 17,308 17,800
Other current assets 10,516 9,000
-------- --------
Total current assets 155,205 112,685
-------- --------
Property, plant and equipment, net 61,028 47,933
Intangibles, net 145,622 110,854
Deferred tax asset 31,246 42,979
Other assets 3,748 8,114
-------- --------
$396,849 $322,565
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 8,249 $ 8,094
Other current liabilities 59,724 57,181
-------- --------
Total current liabilities 67,973 65,275
-------- --------
Long-term debt 60,553 40,257
Other liabilities 12,039 18,595
-------- --------
Total liabilities 140,565 124,127
-------- --------
Stockholders' equity 256,284 198,438
-------- --------
$396,849 $322,565
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