Exhibit 99.1
[NYSE LOGO] [COOPER LOGO]
21062 Bake Parkway
Lake Forest, CA 92630
888-822-2600
Fax:(949) 597-0662
NEWS RELEASE
CONTACT:
Norris Battin
The Cooper Companies, Inc.
ir@coopercompanies.com
FOR IMMEDIATE RELEASE
THE COOPER COMPANIES REPORTS FIRST QUARTER 2002 RESULTS
Revenue Ahead 16 Percent to $58.1 Million
Operating Income Grows 36 Percent
EPS 61 Cents, Up 42 Percent
Conference Calls Today at 2 P.M. PST to Discuss Quarterly Earnings and Tomorrow
at 2 P.M. PST to Discuss Biocompatibles Transaction
LAKE FOREST, Calif., February 27, 2002 -- The Cooper Companies, Inc. (NYSE: COO)
today reported results for its first quarter ended January 31, 2002.
o Revenue $58.1 million, 16 percent above the first quarter of 2001.
o EPS 61 cents versus 43 cents up 42 percent; trailing twelve months
$2.62.
o Cash flow (pretax income from continuing operations plus depreciation
and amortization) per share 99 cents, up from 81 cents in the first
quarter of 2001; trailing twelve months $4.32.
Commenting on these results, chief executive officer A. Thomas Bender said, "At
CooperVision (CVI), our soft contact lens revenue--total CVI revenue less
royalty income and other miscellaneous sales--grew 19 percent worldwide during
the quarter in a market that we estimate is growing 4 to 5 percent per year.
International soft lens revenue was particularly strong, growing over 40
percent. Worldwide, CVI's line of specialty lenses including toric lenses for
astigmatism, cosmetic lenses, multifocal lenses and aspheric lenses grew 29
percent and now represents about 60 percent of our total contact lens business.
"At CooperSurgical (CSI), our women's healthcare medical device business,
revenue grew 18 percent to $16 million in the quarter. Recent acquisitions
contributed 8 percent of the growth while organic growth was 10 percent. CSI's
operating margin rose to 22 percent, and operating income nearly doubled
compared with last year's first quarter.
"Our revenue, operating income and effective tax rate were either in line with
or slightly above expectations for the quarter. Additionally, about 4 cents of
the quarter's earnings per share resulted from the sale of a portion of our
shares of common stock of Quidel Corporation (NASDAQ: QDEL). Cooper received the
Quidel shares last year in
exchange for its interest in Litmus Concepts, Inc., a developer of diagnostic
tests that CSI markets. Quidel acquired Litmus in 2001, resulting in a 3 cent
earnings per share gain in Cooper's 2001 first quarter."
Business Unit P&L Highlights ($'s millions)
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Three Months Ended January 31,
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Revenue Operating Income
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% % % Revenue % Revenue
2002 2001 Inc. 2002 2001 Inc. 2002 2001
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CVI $42.1 $36.4 16% $11.3 $9.4 20% 27% 26%
CSI 16.0 13.6 18% 3.6 1.9 92% 22% 14%
----- ------ ---- ----
Subtotal 58.1 50.0 16% 14.9 11.3 32% 26% 23%
HQ Expense - - - (1.8) (1.6) - - -
----- -----
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TOTAL $58.1 $50.0 16% $13.1 $9.7 36% 23% 19%
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Operating Highlights
CooperVision (CVI)
In the U.S., which currently accounts for more than 40 percent of the world
contact lens market and over 60 percent of CVI's sales, soft contact lens
revenue grew 9 percent. "CVI sales in the U.S. during our first fiscal quarter
showed some strength in a market for soft contact lens that declined 1 percent
during the fourth calendar quarter," said Bender.
"Our line of specialty contact lenses including toric, cosmetic, aspheric and
multifocal products grew 12 percent during the quarter in the U.S. Disposable
Planned Replacement (DPR) toric lenses, CVI's largest product line, grew 8
percent, in line with estimated market growth. All DPR products grew 14 percent
and now account for over 80 percent of CVI's U.S. business," Bender added.
Outside the U.S., CVI's first quarter soft lens revenue grew over 40 percent,
more than five times the estimated growth of that market. Soft lens revenue from
European operations was particularly strong, up 47 percent, as total toric lens
business in this sector more than doubled over last year's first quarter.
In Japan, CVI's partner, Rohto Pharmaceuticals, Inc., continued the rollout of
CVI's quarterly planned replacement spherical and toric lenses under the Rohto
iQ trade name. Rohto expects to launch their two-week spheres, torics and
aspheric lenses during the fourth quarter of 2002.
CVI's gross margin was 69 percent of revenue in the first quarter. This exceeded
expectations, but was below the 71 percent reported in last year's first
quarter. This decline reflects CVI's substantial growth outside of North America
including increasing sales to overseas distributors. While sales to distributors
have lower gross margins, they generate CVI's traditional operating margins of
about 30 percent, since CVI does not incur significant operating expenses to
produce these sales. We expect gross margins during 2002 in the 67 to 69 percent
range.
New Products
Sales of CVI's Frequency Multifocal are ahead of expectations. This product has
been placed in 450 practitioner offices to date, and CVI expects 3,000 office
placements by mid-year. CVI's line of cosmetic lenses continues to perform well
and should reach about $20 million in revenue in fiscal 2002.
Calendar Year 2001 Market Data
Independent market research data indicates that CVI continues its strong
performance in all major categories of the U.S. contact lens market. In the
calendar year 2001:
o Manufacturers' revenue for all contact lenses in the United States
declined 1 percent. CVI sales grew 11 percent during this period.
o Sales of all DPR spherical lenses declined 2 percent. Sales of CVI's DPR
spherical products grew 21 percent.
o All brands of toric contact lenses grew 5 percent and DPR brands of
torics grew 16 percent. CVI's total toric revenue grew 10 percent, twice
the rate of this market segment. CVI's DPR torics grew 14 percent.
o Overall, CVI estimates that it gained 1 share point in the U.S. contact
lens market to 9 percent. In the market for spheres, CVI's share stands
at about 5 percent, up nearly 1 share point during 2001. In the total
toric market, CVI's estimated share grew about 1.5 points to 31 percent,
and it maintained its 34 percent market share of DPR torics.
CooperSurgical (CSI)
Revenue at CSI, Cooper's women's healthcare medical device business, grew 18
percent over last year's first quarter to $16 million. While the recent
acquisitions of products from Medscand, MedAmicus and MedaSonics, contributed
significantly, CSI's organic growth continued at 10 percent. Its operating
margin was 22 percent for the quarter and operating income nearly doubled
compared with last year's first quarter.
During the quarter CSI consolidated its operations into an expanded 92,000
square foot facility in Trumbull, Connecticut, providing the space required for
its operations as it approaches its $100 million revenue objective in the next
two years. CSI expects to complete two acquisitions during the next six months.
Investment in Quidel Common Stock
In the first quarter of 2001, Quidel Corporation acquired Litmus Concepts, Inc.
(Litmus), a company that Cooper had invested in. Litmus developed diagnostic
tests that CSI markets. Cooper received Quidel shares for its interest in
Litmus. At that time Cooper recorded a pre tax gain of $719 thousand - a net
income gain of 3 cents per share - representing the amount by which the fair
market value of the Quidel shares received exceeded the carrying value of the
investment in Litmus.
In the first quarter of 2002, Cooper sold 480,000 shares of Quidel common stock
and realized a pretax gain of $1 million or a net income gain of 4 cents per
share. Without these transactions, its EPS would have been 57 cents versus 40
cents, an improvement of 42 percent over the first quarter of 2001.
Cooper currently carries 658,725 shares of Quidel's common stock on its balance
sheet at a cost of $5.40 per share. Unrealized gains and losses on these shares
are recorded on the balance sheet and are, therefore, not included in the
results of operations until they are sold. Cooper intends to sell these shares
from time to time as market conditions indicate.
New Accounting Principle and Effect on Earnings Per Share
In the first quarter of this year, Cooper adopted Statement of Financial
Accounting Standards 142, "Goodwill and Other Intangible Assets," which, among
other things, requires that goodwill no longer be amortized in determining
results of operations, but be periodically tested for impairment. The favorable
impact on the first quarter was about 4 cents. In accordance with accounting
literature governing its adoption, prior period financial statements were not
restated.
Tax Rate
The Company's effective tax rate (ETR) (income tax expense divided by pretax
income) was 29 percent for the quarter. This is the rate currently projected for
the fiscal year.
Balance Sheet Items
The Company continues to experience some difficulties following the installation
of a new enterprise reporting system at CVI. One consequence of this has been
continuing delays in invoicing customers that has resulted in an unusually high
level of Days of Sales Outstanding (DSO's) over the past two quarters.
Our most recent invoicing delays were caused by difficulties in automatically
applying cash received to the respective customer accounts. This problem has
been corrected effective with the most recent monthly closing. Cooper expects
that DSO's will return to their target level of 65 to 70 days by the end of its
second fiscal quarter.
During the past several quarters, inventory levels have trended upward with the
recent and planned introduction of several new products including CVI's new line
of cosmetic lenses and its Frequency(R) Multifocal product and the relocation
into a new CooperSurgical manufacturing and distribution facility.
Given the strong balance sheet and cash position of the Company, Management
feels that these trends will not adversely impact its operations.
Earnings Per Share
All per share amounts mentioned in this report refer to diluted per share
amounts.
First Quarter Conference Call Today at 2 p.m. PST
The Cooper Companies will hold a conference call to discuss its first quarter
results today at 2 p.m., Pacific Standard Time. To access the live call, dial
1-800-289-0436. 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 792726. 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.
Conference Call Tomorrow, February 28, at 2 p.m. PST to Discuss Biocompatibles
Transaction and Updated Guidance
Cooper expects to announce the closing of its purchase of the Eye Care Division
of Biocompatibles tomorrow and will at that time discuss its quarterly guidance
for the remainder of 2002 and the outlook for the fiscal years 2003 and 2004
reflecting the impact of the acquisition. The call will be held at 2 p.m.
Pacific Standard Time. To access the live call, dial 1-800-310-1961. 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 764978.
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, changes in tax laws,
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, 2001. 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, and Toronto. Its Web address is
www.coopervision.com. CooperSurgical, Inc., with operations in Trumbull, 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.
(FINANCIAL STATEMENTS FOLLOW)
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Income
(In thousands, except earnings per amounts)
(Unaudited)
Three Months Ended
January 31,
----------------------------
2002 2001
---------- ----------
Net sales $58,112 $49,976
Cost of sales 20,625 16,790
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Gross profit 37,487 33,186
Selling, general and administrative expense 23,215 21,415
Research and development expense 857 884
Amortization of intangibles 308 1,222
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Operating income 13,107 9,665
Interest expense 893 999
Other income, net 1,036 826
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Income before income taxes 13,250 9,492
Provision for income taxes 3,845 3,183
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Net income $ 9,405 $ 6,309
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Diluted earnings per share $ 0.61 $ 0.43
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Number of shares used to compute diluted earnings per share 15,538 14,818
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Memo:
Cash flow (income before income taxes plus depreciation
and amortization) per diluted share. Includes amounts for
depreciation of $1.8 million and $1.3 million for the three
months ended January 31, 2002 and 2001, respectively. $ 0.99 $ 0.81
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THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(In thousands)
(Unaudited)
January 31, October 31,
2002 2001
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 4,867 $ 12,928
Trade receivables, net 56,016 55,318
Marketable securities 5,006 7,982
Inventories 54,176 51,153
Deferred tax asset 17,689 17,308
Other current assets 11,227 10,516
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Total current assets 148,981 155,205
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Property, plant and equipment, net 64,519 61,028
Goodwill 130,112 131,732
Other intangibles, net 13,690 13,890
Deferred tax asset 28,830 31,246
Other assets 3,808 3,748
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$389,940 $396,849
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 27,103 $ 8,249
Other current liabilities 60,362 59,724
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Total current liabilities 87,465 67,973
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Long-term debt 36,813 60,553
Other liabilities 2,978 12,039
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Total liabilities 127,256 140,565
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Stockholders' equity 262,684 256,284
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$389,940 $396,849
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