COO - Earnings call transcript Q4 2017 | The Cooper Companies, Inc.

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Operator

Good day ladies and gentlemen and welcome to the Q4, 2017, The Cooper Companies Inc. Earnings Conference Call. At this time, all participants are in a listen-only-mode. Later we will conduct the Question-and-Answer Session and instructions will follow at that time. [Operator Instructions]. this is reminder recorded. a as conference being call And introduce now for And would to your now I like host today's conference. Ms. Kim of Investor President Duncan, Vice Relations. begin. may you Ma'am,

Kim Duncan

Good quarter Companies afternoon. The earnings conference call. And fourth to welcome XXXX Cooper

call, release with the earnings remaining today's in then Q&A. for guidance along we results the the During included discuss the time and updated use will

and Our Al White, and presenters Executive Chief Officer. Chief Strategy Officer; on today's Weiss, call Financial are Officer Bob Chief

call to guidance, integration Before forward-looking market is regarding we this would failure you and contained share conditions like of including per remind anticipated or their begin, and to revenue all and operations, acquisitions or regulatory statements, that anticipated I achieve any statements results earnings of other benefits.

Form or and set statements and or Cooper's maybe SEC differ remarks. our now, uncertainties. additional cooperco.com. Company XXX-XXX-XXXX Statements in data e-mail methods following materially results today's risks you any opening in all our of and on turn our website the those I'll filings, call ir@cooperco.com. Forward-looking Should that have including are Investor are forward-looking the that to at future described statements release Bob please imprecise, are could cause caption and to the earnings Forward-Looking his call, forth for from line are call the Events under questions actual our to which at described And on available incorrect subject or of depend XX-K, actions assumptions, in over

Bob Weiss

and and we've strong share proud cash fiscal revenues, for This was I'm and of free Welcome we the believe set year quarter call. year accomplished afternoon flow. the full XXXX everyone. good and were exciting record and conference everything team earnings finished XXXX. with Kim the and to you, Thank per an fourth

growth CooperVision per posted very non-GAAP and For reported the up million. $XXX in X% X% revenue up of forma. pro revenues $XXX currency. constant forma. XX% million, strong flow drove free pro posted fourth X% growth cash X% of as was $XXX $X.XX, pro drove Daily CooperSurgical hydrogel as X% earnings up we million XX% reported XX% or reported, up consolidated up was $XXX million XX% share up lenses forma. year-over-year, in Fertility up up silicone revenues quarter quarter up

was Moving by to the hurricane this time, some a the The the than growth tough continued in disruptions. Americas XX% the negative There and set roughly Regardless during revenue and we're forma. our X%. share pro [a indicating the was solid growth from details lion's] grew October. impacts grew hurricanes estimate By weakness Geography for share. total grew in EMEA quarter taking solid the to be Americas at Americas CooperVision, X%, some million September which $X and saw August, followed comps Asia-Pacific we all in X% given or better

hydrogel daily Asia-Pac, Regarding continued both continued silicone lenses bodes different Clariti Biofinity and in especially led both continue on have which in regions considering space growth. EMEA diversified basis, well solid driven space. by share MyDay in comps the for revenues and and the geographic seeing Overall by monthly and the our quarters

launch have similar we setting incredibly in sets prove daily MyDay well due has approach Toric are Toric the MyDay to expect to response very exceeding been design continues our the a and a Our soon. with hydrogel recently market successful, geographically offerings space come U.S. received U.S. we within [customable] expanding tiered the the and with silicone full internationally started

Toric, and a products hydrogel one-day Clariti the continued to extremely silicone offering. well perform with family as Our the only multifocal sphere,

the our the to family focus world, perform remained of diversified forma. very slightly transitioning well Biofinity continued Biofinity products, grow associated other job hurricane our a with around Vitality experience impact we to and with as of fiscal year. minimal. completing that our challenge to X% our We Avaira upgraded some team to Avaira Avaira on responding this the to the did lenses did by in growth with Moving combined phenomenal Avaira wearers pro declined end Puerto and lens anticipate disruption which Rico, but

Turning the in categories, rollout Clariti grew Europe. with remain forma Biofinity we along X% and MyDay driven Torics in global to Toric pro product leader the which by of

that continue growth will in forma with addition Biofinity. Toric Clariti overall grow from the in strong faster the portfolio strength share will believe, we Toric than the and the of given X% Multifocals We coming market MyDay to market and pro our U.S. grew in

use with global EMEA QX single faster market grew grew CooperVision up and X% for up the X%. lens X%. X% X% lenses market grew while with X%, is the lenses up also was quarter to and up CDI and Turning the finally calendar good X%. This market, By market market market up Overall, use the the single than XX% versus The up for market the modality the X% contact market up X%. grew growing we QX Americas versus not versus grew CooperVision Asia-Pacific the included XX% XX% market.

last throughout was comps. In had more particular, comp. X% it year X% third On growing XX-month basis, against world easy at if market the versus more market trailing the especially share was was took the EPS up America the difficult the quarter. we down top Although, for a X% CooperVision X%.

than these we our offering, to geographic areas, expansion label continue still to wider the trade-up growing are to such XX% use growth expect expansion shift along hydrogel by the the we and and the with continuing base. improve dailies given lenses, market. targeting as specialty faster continuing forward, Going a technology of in Avaira market silicone the And private lenses, of broad strength driven

our Procornea, Paragon Regarding other CooperVision ortho-k business of acquisition Xst with a nice lenses. us to August. developed the a have platform Myopia contact particular that follows lens connected our space. with allows This the we activity, another management Sciences well specialty and we a remain acquired for in technology focus specialty Vision acquisition we of has Paragon leaders MiSight with a leader of December company million. with ensure specialty we completed In approximately $XX -- recent acquisition opinion the on combination in lens product, on

the we acquisitions. strong growth XX% starting nice a CooperSurgical, driven by a revenues the organic disruptions pro behind or of to forma was the Fertility quarter, On as way strength and XX% get $XXX reported we QX It X% up with to leading are seeing up us. Infertility of million XX% Moving with pro integration forma. basis, were

growth the genetic is strong before, mentioned I we within As testing fertility leader a dynamics. which are in medical market with devices long-term space and global global

for and X% the strength business and by surgical the scope quarter other grew offset hipster in with our [indices] lines. office weakness product disposals Our [ph]

acquisition U.S. IUD is lasting of free X, from CooperSurgical activity, Teva, market on The for on free $X.X hormone PARAGARD billion. IUD important. November our completed closed long we and was that hormone Regarding only the the is approximately it's especially fact PARAGARD recently irreversible. the is

have cancer a may released of there New women here. distinction. you appreciation of the the of higher Medicine major a very in England hormones you my showing that pills finally, this bullish get into of heard breast yesterday as our to I risk story using will I potential express release details, across face financial Journal their was work product a I'm and am for control very a within As but CooperSurgical. non-hormonal IUDs under option as tell, Using as used aware over XX-year PARAGARD hormonal than ensure want completed about country millions only and hard contraception. has the to And IUD resources following women. PARAGARD the study in and and women can is was and the women U.S., million strategic about excited X.X -- period growth have to important This now CooperSurgical PARAGARD I given who the never dedication. experience fit employees birth are

possible without to that in post thank turn through We to dedication I'd with the over was Rico them. And Maria especially this Puerto something it record to employees special. and perseverance I'll like Al. results and continue whose hurricane wouldn't

Al White

so covered focus afternoon, earnings the of refer a will Bob of guidance. so you, release GAAP please me my Thank Bob the revenues to reconciliation a and today's on of to for good results. rest and be on non-GAAP full financials Most commentary let non-GAAP basis, everyone.

on Transfer Catheter opportunity For within product manufacturing and year mix and and should legacy nicely and begin was last coming from XX.X% portion from CooperVision's gross a costs up gross margins consolidate by the Also to year. write-offs CooperSurgical's this made primarily driven global recently provide gross future. hiring consolidated pricing of XX.X% margin and to near in was progress up currency in our quarter existing reduce very XX.X% driven margins gains. lower an were products. employees XX.X% last XX.X%, certain and inventory lot purchased charges genomic we nice XX.X% CooperSurgical the the manufacturing. Costa from margin last of to year of production down years. Wallace Rica a plan We upgrading the facility facility a key This in significant by improve

expenses consolidated and growth throughout driven quarter grew than the in by company X% distribution. operating was the to less force expenses, to including sales Expense the Moving slightly investments revenue. additions

force while sales the around also distribution. including hiring selectively our world, by to our enhance infrastructure to continue continuing We upgrade

operating million CapEx. XX by supported by and leverage. Below cash with by CooperVision August roughly Moving rate year. XX.X% cash improvement from offset of margins million Well, income, an growing step XXX in an cash to X.X CooperSurgical gross operating of roughly of comprised loss $X.XX interest tax XX.X% effective XX XX.X in XX.X% We balances of million our Both we with roughly acquisition of last X.X%. with shares operating flow by XX.X% driven in income, outstanding. report reported cash to and improvement. to October. of of strong million operating operating million generation decline expense debt and XX.X% I’ll a X.X FX million Non-GAAP operating million margin increase flow, stock improved businesses grew driven EPS X.XXX free to XX.X% flow was we million average XX expense, buybacks of XXX Procornea improving margin XX.X% to Total by posted billion

and EPS free up results, full X% million, forma. X% up up strong up revenues fiscal pro XX% XXX.X Non-GAAP cash CooperVision X.XXX were billion, or forma and Regarding or were very consolidated was or XX% XXXX million. revenues CooperSurgical’s at forma. XXX were X% pro $X.XX, revenues was flow year pro billion, X% X% X.XXX

to the purposes and let new recent moving acquisition. Xst, loan, The term greater funding facility we senior our that reduce revolver fund our PARAGARD reminder November the XXXX. X, X-year matures $X.XXX acquisition corporate generate unsecured which Paragon to me billion including guidance, the allowing for announce flexibility November borrowing a used of Before quickly was

billion X.XX XXXX, of which to billion, reported X% consolidated guiding fiscal as at to is XXX to or X.XX forma we’re roughly the CooperVision comprised XX% as X% million growth. coming to entirely at And fiscal or growth to which revenues expected with higher growth Moving roughly X% X% X.XX million reported of to to pro billion growth. X.XX XXX impact is due guidance a revenue CooperSurgical originally PARAGARD, CooperSurgical assumes million X% pro channel than to negative of forma roughly XX% lower to inventory. $XXX than expected slightly in QX billion XX%

but quarterly help We’re guidance, this. the now providing model detailed

of for roughly Note, we to We QX, $XXX month in that. also revenues activity the before the decline expect QX in This to increase roughly This related channel year-over-year million XX%. $XXX month being equates PARAGARD to Subsequent to in the significantly to around to England the during New expect XX a consolidated any higher in $X.XX XX% inventory CooperSurgical million QX still but accretion XXX per million which digit driven do of consolidated we October, would included $XX.XX XX upper price the share Journal September, resulted unusual Medicine. for million a meet price mentioned closed and we the million growth growth. to of to that of earnings basis, acquisition. with for range upside the roughly unexpectedly be is which QX be million on PARAGARD PARAGARD not based of unit in outstanding. up from study on our EPS $X.XX PARAGARD shares non-GAAP XX.X and single We including of new targeted $XX.XX potential we expect a underlying expect to Bob have by to increase XX% exceed or full year the

Moving the P&L. to within details

million, negative $X XX%. We expected expect Interest this PARAGARD expense acquisitions XX% this improve be tax only which of from around around to and the X.X% the to medical improve month. Operating a pharmaceutical to product. domestic which from XXXX point tax impacts our is to and device XX-basis beginning margins the $XX a is business impact CooperSurgical includes rate the fiscal treated increase excise in expected of the margins excluding assumption debt and Paragon around January. are includes This to as gross Paragard, million reintroduction additional

obviously Regarding Senate taxes, tax bills that the commentary my activity so legislation with there add based me a pending let could of several is at that House is change caveat materially. unfinished on lot a and

our of would reform Given for comparability October, from for year non-GAAP results. my still in be our in Repeating our assuming we types said, Having previously tax the mid-teens parts, see disclaimer provisions items one-time as that charges material tax we're not in reform to risk that of rate year-over-year beyond and exclude repatriation tax of minimum us proposed income. fiscal fiscal to we provisions these impact tax being deferred fiscal That fiscal moving the until the P&L said few fiscal effective the with there on end such us mandatory clear is our many EPS 'XX, is XXXX XXXX, of allow lot of of foreign that, XX% earnings. rate from the to being XXXX currently include effective will an effective guidance. a proposed the would a does tax most so

we manufacturing our we fiscal lower and but the results. financial in guidance, with global hurricane is carryover be our team tax saying, market with businesses this expect The CapEx while to unknown focused me Lastly matters, due that, excluding million. higher around year $XXX delivering With cash in dealt to mostly from expected than let Rico. on due by Puerto QX flow remain CapEx as similar from on conclude consistent impact share to XXXX any free spending solid expanding gaining to

it results step another for to we look reporting this were direction And and through and that hand fiscal back year quarter that work the forward with operator we as This in to XXXX. I'll questions.

Operator

Instructions]. [Operator

comes first BMO with of from Wuensch line question the Markets. Joanne Our Capital

Your now line open. is

Joanne Wuensch

please how would go corporate have please? at potential I have a your tax don’t back you Could think the walk look and that X%, how to understand a taken But rate I us corporate the all tax for sorry. taxes years just the little stays of rate bit lower through that level the fully X%, at impact XX% over type we more to taxes, impact you? level. of completely through walk

Al White

Yes.

fiscal most on comments So, that. look right couple that if we at first the again we’re this of now impact. all, at, look If of tax we coming ’XX of won’t reform fiscal in year,

full So, if provision where that’s the at somewhere start what and of say and the in mid-teens. we that’s the look what look at is talking you fiscal beyond tax and we’re impact okay, about changes XXXX

associated U.S. we XX% then it, year. the with look fairly positive. other are that So, which the that XX% number. actually us let’s with the in so just that the take And say PARAGARD our positive working the a been ’XX is a we positive U.S. a under move up mind taxes income tax has that, rate you have significant towards associated keeping this a changes tax Because to PARAGARD, for higher had in PARAGARD where past scenario up business. up CooperSurgical and If we loses is and at obviously

where is there, in on the imagine into you measures lot taxes based up. I flow, out know of we this see goes that’s can kind But So as a the coming that that’s mean you at time there as are that. that point

Joanne Wuensch

you the Paragon. contribution of revenue a an strategy and the please you acquisitions have Okay. two is what from those require year little us for next give you. of And Procornea question, as idea and products? those Could with bit acquired my follow-up Thank

Al White

Yes.

it’s of lens business very part and we’re our nice. that’s specialty out be that So up building to turning

nice it’s If those growing you around specialty not you upper a my if million businesses double-digit those XX that revenues if single-digit two business. sight, combined in is or at with business lens and very least roll

it So, very more right be in years excited the growing management business small with can myopia nicely, the important. now. pretty important part that, But relatively we’re about becoming it’s of coming

Operator

question And of Biegelsen with from comes the our line Larry next Fargo. Wells

is open. now Your line

Larry Biegelsen

Americas then and on one and One the guidance. on revenue just and FX

the with you the Americas, if calendar even little for I soft a Americas think bit starting relative market whether to Just and in adjust was the QX.

guidance. So, XXXX. that on U.S.? EPS the estimate the taking the Bob FX in benefit accurate think then how is questions to falling any Thanks for that, the help can just bottom-line? MyDay and fiscal what’s going is the on and re-launching Is in why $X.XX about in color Americas there much that you We to directionally guys. And of

Bob Weiss

Yes. to comps, in Toric the us. first a including early Yes, on one Larry, strong the coming Americas. of answer XXXX the pretty due looking going course, about question the When part is of be to comps soft. market on MyDay overall the the certainly was for the talk the we out easy is Americas to plus

year, was So, X% the compared which to for X% prior us. down

was year plus prior Our a X%.

from slight X% we uptake. up to went a X% So,

a comp period, weather. and timeframe. had And had million So, the although about overall X big as hurricane more million that’s implications into probably is that we October X of we of I during of part it chunk and think a we course, mentioned, good both some the then rolled of the

Al White

earnings in on when reported And currency, September. we

currency expected around ‘XX in fiscal We be to positive Larry. in $X.XX

as in though, just we’ve have impact we indicated to this a in currency closer positive rates we run quarter, $X.XX. from got actually ’XX, you we there fiscal the when As holding the

it decent back a came So, amount.

£X.XX. Now €X.XX, that a includes ¥X.XX,

than a low-double-digit bit even given lost $X.XX, we we today, PARAGARD. still more guidance a excluding obviously although a So, September good from $X.XX, for to little

Operator

Jeff Johnson Baird. line next Robert question our of comes with And from the

open. line is now Your

Jeff Johnson

Larry’s market. up maybe on So following on yes, the question one U.S.

I the us lot think, October maybe heard to a a the in U.S. strong quarter close for wasn’t that of guys you real

monthly very in Bob and we I definitely distributor give sources [help] you in often. I the that of know the some October referenced hearing don’t have business But weaker of own Just updates market through you in were October, think itself. wondering, since seen maybe your and U.S. the September market about just what both you your

and Just early of November how December is trending? part

Bob Weiss

we we’ve obviously, when referenced it. November, looked that at our guidance So overall Al dealt

are, where of So, we we’re feeling good about we’re going. where

about felt the on We was eye good gaining we the little what the, market on also what even of market on sold Then share. activity into market we a of we from view eye the point eye on though, felt lighter. were saw activity still we based was

you normal it overall X% average whether or period. the of not the over to growth a market course market multi-year which compare of kind of the So, above or that the is give, the

we to on if X, growing the X look is the probably So, Americas the X a on little should X at X market X to midpoint high the grow midpoints as X average, side.

X.X to XX-month trailing way have market gain We X%, is X%. still I the market. think north or a market share, been the market were the we basis times on look at was of to the overall for best continue we Americas growing the

the in of So, market. excited the kind of we course, the path, we coming on moving are about planned on down average, and MyDay Toric we’re

Jeff Johnson

or fiscal there fiscal Understood. in that for just rate of well? And in is any maybe XX% DPT kind year the UK to just tax driven question, XX% follow-up rate tax ’XX. Is in reform then this there I’ll guidance U.S. tax as rate change tax one going rate

Al White

tax reform. U.S.

Jeff Johnson

this the you investigation say can on Anything at Okay. point? UK

Al White

point, no. this we you update that's as update with. firm something you guys have soon We’ll to as, as Nothing at

Bob Weiss

end going built there the is impact onetime gets I rate thing it of the the going a would events. may up way add But forward, plays into that Probably mid-teens forward that course only out. to

extent your rates the duplicate they don't go to up, So, offshore rate U.S. increase.

Operator

Stifel. next question line of the Jon And Block you. our Thank comes from with

Your open. line is now

Jon Block

guys. both I'll upfront. ask Great thanks afternoon, good

the lot first use the First there tough in on color going of where on. comment guidance. sales 'XX. into XQ X% is Al your are of can is growth this can fiscal shift just that with just do then then to initiative? date us for returns that you there actually if fiscal time second single more single adverse given Bob, you the Thanks you initiative and with How comp. and continuing was But weather And to and a guys. I fiscal the the been 'XX tell quarter adding believe And reps, since digits maybe with

Bob Weiss

expanding on of we'll continue that. our of So, are build out so we've done seeing good And force good to that. job results we sales

I but not trend the aggressive do more is use in north women's indicative line. of had across we X.X does market again and the that the once that. U.S. growth only that on healthcare X% of now being make up and to tougher expansion times side. overall, We the of of still ripple down one market the course, expansion quarter The in a the is single think growth make. not into X% a quarter continue And course will comps worldwide,

So and or using market think MyDay that's at and the into more the of rolling whole world. the in being of the importantly XX% market gained quarter, which about which for factor market, market. the be course that is X% the flat. up in biggest other then XX% market for the single up else really up driving spot you year, in everything And being the is out will as OneDay sweet Toric When is whole Toric and the

the the the and in all gain buckets. We single are other driver continue growth use in to the we of market bucket, share

So, the of is to in a clarity and the that silicon good we catalyst products MyDay profile hydrogel OneDay have. course

Operator

Guggenheim. our And Chris line question from you. comes the of Thank next Pasquale,

open. now is line Your

Chris Pasquale

tougher for margin trend than were the had for And Al just Coopers lines. that Can quarter it thinking performing the can one you the in the environment growth time and time all that of XQ impact to for currency Bob, the the for several some first Al give then three of your that certainly about top outperformance are comment towards in years. you and a seems And maybe rates level. with to high at clarification deal how like in been was is one contract? you've accustomed looking just first, on three Bob. could the competitive some you This underlying pretty in bottom at competitors. potential us course Thanks. and both major

Bob Weiss

I'll jump on the come the latter other. I first question and will back on

competitors I'm as looking are to the at the we’ve overall midpoint move overall if not up arena, market we to X% as Basically, expect X totally far long As our to market. the guided going plus we at looking to continue the does complain about as the that and There the frequently share. year We over pointed backing. market years analysts gain competitors follow the with example is, the year fact used two of some I our the when comps X%. this as was X%, only that, for was -- prior out year grew easy many prior growing.

more X the last if X been trailing a midpoint backing overall two market months So, X growing that’s I X has this look year, years year on indicative. XX at

is think, little of if well that bit stays X market momentum forward, we share. there gain the So, a but with the X, we’ll to do because continue going anomalous in

Al White

And million was $X.XX. positive if our guidance. and when $X will, impact impact The you currency was net gave was expectations, quickly QX basically around top-line then around we the EPS

Operator

the line from question next our comes Jefferies. Anthony with Petrone of And

Your now line open. is

Anthony Petrone

in discounting to before dailies Just that update product that and category? in that versus just you into market. How on CooperVision where of and fiscal reached in then market And would one maybe go Thanks. on ’XX. indexed trending an silicone give is in you be of the my to Where two hydrogel cycle is rates had level [stand] quarter. long the sort questions head on maybe as on pricing specifically

Bob Weiss

discounting industry, trading was to pricing, the as price of at and XX up. fair on amount overlay we On the course trading a up, of there last been master months. that, a increases and an Sure. trading industry's up And

in that the trying a there four The to lot now discounting, lot as for On you see from a been focused the row one will to day. A and is so last being that future. to the but is on of working the into side, strategy well get a as markets overall flip we of convert rebating. growth has of much day drivers can the in the one years continue not

So, the fact incentivize if going XXX% to rebates two-week into trade incentivize two-week, that non-compliant to is XXX% there room up trade make is you get were a switch. the level. of at Today still that’s which step to and up, up a rebating in to space, oasis or lot the manufacturing XXX% oasis there there space the one-day for revenue to to to from incentives are one-day discounts to transition one-day

revenue where, So, that, day generated now day. trade point is rebates the to there generated up hit we there all day, give non-one even had more And is flip if we by all day. we revenue by one and then

the overall revenue is million XX% day, we hydrogel market and use market was driver up XXX to lenses. in now the quarter. use for and silicone we OneDay silicon in XX one example phase we course, the overall whereas XX% XX% billion of for And last XX% non-single doing, for quarter year-over-year single XX% How market. you’ve up were use so is of hydrogels the this continue our year-over-year, up So, the are only were in numbers, the last single months up use past seen single within of be the $X.X Cooper particularly

market gains only we roll will that well. there’s further Toric and left of So, a enhance it share think the out as MyDay of in legs lot

Operator

Thank comes of our with line William next question Brian you. from And Weinstein the Blair.

Your line is now open.

Andrew Brackmann

got Al, a for I question have for Hi guys this on is Brian you. Andrew actually today. Brackmann

about quarter? the spend you whether are in a to going those On said investments. status you you on guys and give Thanks. EPS magnitude us QX the cost those of in you update that expected worth $X.XX that of little Can

Al White

magnitude that and Yes, we kind those on will that we about would to bit that we ‘XX. the talked of in script investments a were be in to the clear through expecting little continue up and said be fiscal Bob follow what

we that business said guidance give incremental in that will the for that we fiscal in expansion, several investment, we to force through ‘XX. will do we we at sales doing look doing infrastructure the we would when So, you what quarters if and investing be are respect

Operator

Thank from Raymond you. John And our James. next question with the of comes Hsu line

is Your now open. line

John Hsu

the Thanks guys. question. taking Hey for

quick a you competitive the looks a Can on like been in talk it Just what’s little has on year. that going growth bit to or this one choppy multifocal factors up space? multifocals,

Bob Weiss

date the great back. when back to leading the to largest out sort that’s were turn we century became of had then it. and multifocals multifocals of our the the We say in Yes, player the Alcon kind we and the for it that came on really years owned with target market many

Now respectable a J&J have so little claimed Alcon everyone has up multifocals. there and catch

so the the action that are course. in is is up are part that’s a market. high area. share still others the way at a Torics growth of It market. we in overall of around and of is XX% long the catch our have are played one-third overall the growth we in worldwide X% short little it is market where a at the market multifocals bigger a it of multifocals point of We is around is we’re share still that is, and growing the still when look about So you and small But revenue the market in the market, market, XX% market XX% have it

in many broad there and And that’s fish lot as a a compared are category you good is multifocals. entry will barriers are Toric on. we Torics the more to things there lot a have bigger a more area in of a lot the of SKUs going tougher So Toric so if much

John Hsu

Al, follow one Okay, on EPS. just was the the think the great. impact gross margins? housekeeping. FX you What on I then up top-line gave and And

Al White

of We with don’t get adjusting everything to that FX. level respect on detail to

Operator

next And our question Robbie with the comes Marcus of from JPMorgan. line

Your line open. is now

Robbie Marcus

of X% in Great, question. doing Pro for X% you've forma Wanted thanks kind what trend on to the for low CooperSurgical. taking XXXX. the ask been to guidance

impact of happening So next maybe you versus can talk through year? acceleration what's the an

Al White

Sure.

if growth forma finished kind that to with look guidance at is part X will the what's a the to finish. a two. guidance, going X% year at split on to the X% you business of X% If kind pro strong a to the that's so because it's X% PARAGARD pro on looking around X% that mentioned. you then is of We And And the growth with at impact pro consolidated roughly QX the forma of the forma more somewhere of there growth we're down same. the we one at X% bringing at respect because that

Robbie Marcus

Vision. Can Okay. and XXXX maybe of in through of up, how in in the a you outside had see accelerated some talk and getting two pretty there been years Asia-Pac trends there market growth you Maybe continuing? phenomenal past the you've in you've has follow that

Bob Weiss

Sure.

area. the We in XX% are in Asia-Pac the XX% look underindexed Asia-Pac number approaching at only one we're I market in if about U.S., Europe, XX% share so in but

very last lens into things franchise flat line. XX And So, our of and we've a one selling part are a market in is specialty way we'll way China we over continue headway developing in we to is number of started we go, that good has as and it product the that Japan the but other Torics regions, may good where been the be space, have in long to to multifocals some that's is the specialty with that of were Asia-Pac which But our fairly years, had game but a later we're game it products our essentially was in some OneDay which we starting be U.S. MyDay progress gaining have mentioned, we've as headway the other Asia-Pac as to share made and both with continue I been the which in portfolio there, broad lens early good a the in so portfolio. Korea making of regions will in very well of China. a one includes gaining nice come [ph] ride in

with Asia-Pac I looking pretty see the market market, moving our growth to at share continue to So, portfolio. share level and good respectful a market more of forward, gain expect in overall to

Operator

And Matthew from Piper you. our line Jaffray. question next Thank of with O'Brien comes the

Your open. is line now

Matthew O'Brien

competitors questions. bigger first there in side know of again is big your curious some the anything I'm Two been much for soft, rebating of all, box specifically, if the the we there so bit quick channel one some is from questions has to Thanks on a taking ones, there. there Americas chain. the little

any you're a the than certain those better of I pressures So, facing the then term I'm not whereas if may your you follow-up. segment near any is and if in headwinds in elsewhere channel doing be or you're wondering of And that there even competitors. may ease have seeing

Bob Weiss

channels. have we or challenges with the different we’re, think, undue any don’t challenges I Yes.

-- comps activity have it We good. tougher the when particularly the on-eye did comes So I mentioned is overall marketplace. than to

which coming has out our big one-day the in Asia-Pac, in not of only fit key premium part MyDay the role with in Europe, also of is big which evolving that product We’re Americas. silicone is market. that Private a not strategy hydrogel need only a label a market, but Toric will new the

say, independent LensFerry professionals a home. eye forward. is we lot have our I the care to So, going which delivering would facilitating

of tools inhibited and and a any sting particular So, area. products see we a have a lot of lot [ph] I in don’t

Matthew O'Brien

a as on professionals saw just you there. broadly most benefits as little Toric bit then bit you there with color Bob eye recommend little But And that, like launched of Okay. kind can what MyDay products. as you know far are provide before I together just follow-up touch a in as to you more the and both Can lens. because more care [sphere] see Toric Europe a

will can of provide there just kind Thank color you helpful? So any be you.

Bob Weiss

Yes.

about you a has just very excitement compared have lot now. case correct the Biofinity it’s sphere, to having for later, similar the the add product, a [indiscernible] XX Toric, Biofinity the get how And Toric well, XX of super else that. years only and a in a And the and that sphere to, to combo. last halo of done a someone MyDay a of great over Anytime, effect with you multifocals. years good You’re having sphere then

for you the if have of of Biofinity going some the us more in a of being to features we MyDay analogous terms So, lot will.

Operator

And our next question comes from the line of Matthew KeyBanc. Mishan with

now is line open. Your

Matthew Mishan

the guess Clariti see And the I market of years follow-up the been mass that next barrier you seen your have out hydrogel a in to after just rounding silicone given couple and success over have still competition space. that premium of and first manufacturing? I my the the in that. question then you’ve expecting entry Are end on competitors

Bob Weiss

Yes.

made wave voice putting non-one-day and mass they’re And think, into substantial riding they’re I hydrogel all they of in up if progress lot reducing had see but the a [ph] the Right oxygen some behind apply silicone that the market. in case taking product. J&J case the really basically costs, that you the entrée not MOIST would the features of daily to eventually and Alcon. in now,

they So, products. big have two

with rock the So, one their is in is you or competing hard if play and that are kind putting you’re dilemma one hydrogel, of market, into spot. come gee someone a of they’re yourself you between

have We two nothing cost. because products, have premium lose and to we great low

were cost to Clariti. We the to Toric down complete with only silicone and on get a would come would that a comparable a product fear going Clariti a to the the If are with then to a start structure in they and piggyback and got have and to then eventually they a that one multifocal product daily to market, cost can price that hydrogel comparable MOIST they range. if

still of I front in long Clariti runway to has a So, ride. it see

Matthew Mishan

then you on the have think you margin margin XX there operating target are I you of long-term on side? by of operating any already. an Do I thoughts previous on And previously targets the operating margins think Okay. had least PARAGARD kind at and XXXX plus

Al White

I with advance. are that think we working all in

my we years our correct that because XX% target for we for early XXXX, is are next -- three operating arrived You target year.

new off tuned our operating thinking what as So, stay we our dust target should be.

[indiscernible] around phone people the on you tell to me. were five I if So,

Operator

with the comes Steve And next you. of your Willoughby Cleveland from Thank Research. line question

is Your open. now line

Steve Willoughby

everyone. evening questions Good for you. Two

was as provide frequent quarters First and that some I hydrogel just in the your on, of us you on an update in silicone versus subscription your US in us hydrogel what past then lenses as I in quarter prepared been disposable daily guys Bob, opinion the M&A you that I remarks? give your also wondering about -- your have in Bob, to fourth believe state could total it and And offerings, I talked you could secondly grew LensFerry products. provided know guess lenses there’s if but globally you your the silicone you replacement relates

So just much. wondering update on that? Thanks so

Bob Weiss

mentioned on think remarks hydrogel growth I all, of I my for of silicone day. XX% First the one

Steve Willoughby

missed just that. I Okay sorry

Bob Weiss

there things. of different you State and have Hubble offering, out course of we subscription companies It’s okay. LensFerry, have

many, have outside way leading many of We been with for home the kind years. US the delivery many,

it’s that with an of course experienced highly professional. eye the care So for and model enhancer

it that own So, will those a spheres, more One attractive having of will of perspective and the care that and so Hubble get far model. Taiwan model Torics continue of pick from multifocals you terms all Number couple understand importing do our eye get to I to I professionals, it’s things. labels, From two things end in design product Taiwan that that like not for will professional makes a is bad to moment with companies that’s only have on developing script want the of is the important tell more for Hubble writing generic still model. broadest portfolio it. you have at so to could having is the and you on private embark model. here only day to offering trying from narrow eye products far to a care very convert the generic so their

to model the is to need prescribe complicated are prescribe more to lot a fit there on a hydrogel. professional multifocals. going tempting that the That's influence have model. the tough than patient prescribed care And reasons products breadth a recent they prescribe. doctors are for You're doctors to There there Toric, eye just of silicon what generic are a reasons

Operator

of from Lichtman with you. line our question Steven the next comes And Thank Oppenheimer.

line now Your is open.

Steven Lichtman

the quarters or has wondering give I could market? Bob, America the in latest the As past UPP had you. on us now over can update negative give gone, any if Hi its removal you was on what your you market, the North if us you with guys. on world? all back look post-UPP at Thank several impact thoughts positive

Bob Weiss

got and day by guy and It UPP way. on like other I like you marketing a and the try game. is method for marketing used one part been there of XX it Clearly rebates still have of along big their have years. are much was methods a never a and I was enamored the that never it of role, but XX of those

was through UPP that out of event So it. of on the and but be pass neck the kind we'll pain in

Steven Lichtman

you how then, And more talk going the can little Al, that should Okay. in mentioned, we and that about a was think genetic what testing pricing lower that you bit about forward?

Al White

are competitors money. recently test that space. money strategy to who very just getting we've do stay are Sure, And companies give the R&D some in are to amounts And to people IVS within good willing their profitable so space, be, as testing we price with who But long significant experience of money aggressive some them I as interestingly that and tests forth. losing can genetic pressure a there. more developing within in we'll continue strategy and there putting could improved running many experienced guess business is as and by as of our and are

a I we we face that bit think fiscal through that more as could see move 'XX. little we'll how So, out, that plays

Operator

you. Jeff question from next line Robert of the comes Johnson with And our Baird. Thank

Your line is now open.

Jeff Johnson

the said follow but beyond tailwind, incremental sorry. minuses guys. any sales $X.XX year, thinking be the the And quarter what about offsetting. were $X.XX. and does you then How quarter. some into we center you, FX fiscal Are that will things if PARAGARD there $X.XX I'm to is should pluses those for in Thank distribution the in and continue, force question. know Hey, is investments had that if mentioned maybe or those and other above I are investments investments a up continue just you like one fourth the that Al, XXXX?

Al White

'XX million. for stronger than our guidance we're fiscal Sure, of call, a talked medical a a $X.XX about that be FX, give on that. tax we I'll hurdling $X.XX, about we hurdling would the indicated here quite on $X good bit device Because we're September clearly we're what little back color which is the is giving meaning also that it

look pretty So, the good. numbers

forth the though that Now and from other having continue said in we are to investing do moved within even sales distribution marketing going has business currency us. against we're to areas so and

those We have on back not investments. got

margins this to in the So, business OpEx because improvements cost strength it leveraging things and fundamental our throughout business, of some we're put the kind of be operating itself of goods, of P&L. able the parts within good guidance up look in leveraging pretty

investing get in will quarter. just probably we’re guess, how the specific I you we’re going I each I two it. and So, much we’re to say spend that excited business, about

We’re growth. excited about

We’re looks of they’re There well excited continued number there upside going PARAGARD in about really a that. in like areas CooperVision, is to lot taking share. a that of within invest is market we want

excited that, hire pretty we’re business. about part of marketing and we’re So, in going sales the to and people that there in invest

stopping the growth. drive top-line say to to to So, not business and it’s feeling in continue good pretty fair investing

Operator

questions further no this showing time. I’m And you. at Thank

any I’d return So, like closing remarks. Bob for Mr. to Weiss to call the

Bob Weiss

thank We nothing, updating that We about per and I and look that’s for forward XXXX importantly Xth share point. exciting. Well, Paragon it joining conclude that I report be first about that. some days to of news excited more for or of you’re set which and at look to talk on I’ll look look year earnings of and of more next us year teen There has it today the where please will very thrilled the up you, hormonal I is about Thank on growth on makes quarter exciting. [indiscernible] operator, March think we obviously we’re the land where real, the you call, last conference call. we our fiscal the as to look couple even for forward earnings Its want is hopefully next upper and we going. been here you

Operator

all thank conclude Everyone gentlemen, you This great may and have a call. disconnect. Ladies for day. does today’s and the in program you participating

The Cooper Companies, Inc. (COO) 7 Dec 172017 Q4 Earnings call transcript