COO - Earnings call transcript Q1 2018 | The Cooper Companies, Inc.

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Operator

Good day ladies and gentlemen and welcome to the First Quarter 2018 The Cooper Companies 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] And as a reminder this conference call is being recorded. I would now like to turn the call over to Ms. Investor President, Vice Duncan, Relations. Kim Please proceed.

Kim Duncan

and first Companies afternoon The Cooper XXXX earnings to quarter conference Good welcome call.

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

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

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

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

Robert Weiss

XXXX Welcome everyone. the afternoon first conference good and to Kim you, call. quarter Thank

White, and you and our the Strategy Board CEO and President and Cooper spend Cooper Before while Companies, on this I on with Directors. Cooper to CEO the of XX fantastic the a earlier of new become at And Company family, Chief plus, Company it's as I CooperSurgical, calendar Al April more get year Holding XX to getting CEO, The years today, time will retire into him through the traveling transitioning the role CEO at CFO, who as know May little golf. time President as Medical years effective end with quarter, Officer, plus announced work the of will we remaining of trying a as most year. of -- will better with my me and Xst. the After last for along XX

would of many time XX lot I last planning I say time on years. the from been we this such know, the highly the when that confidence As leader step My to to the description for bench of has goal down, is that you the fits be within. prepare executive to spent able and right of a came over I'm train deep to working trained future Al Companies. happy leadership and promote that have a Cooper complete succession he

through completed low of company expanded team the and recently we proud States had the largest CooperSurgical, only United material CooperVision, help the saw passion the acquisitions industry our of accomplishments I've years, to little called XX medical all I and the modalities PARAGARD leading on past a -- several Sauflon three that a the company. hydrogel hydrogel best one-day with there of a our all from acquired and At us building and device Over a around employees. world. acquisition. the Origio in map with -- we Paragon the the silicone player offerings of privilege new am acquisition our the our And IVF to we a grow became products. trade-up our and company silicone continue put cost outside of family of globally the in called as acquisition At the great of

to XX-plus thank want and years. performance. work fantastic hard their me a for turn and to dedication let them for I With So, that,

$XXX forma. as $XXX quarter, Biofinity up share posted XX% year-over-year, posted up forma. up $X.XX, revenues in non-GAAP year-over-year. combined down X% the XX% and of reported, revenues revenues, we Avaira CooperVision forma, up hydrogel For up QX million XX% per reported of $XXX of did pro million, XX% earnings drove as X% X% consolidated forma. pro lenses pro and as growth Daily up million, pro XX% reported, CooperSurgical up silicone

with pro EMEA, solid details. quarter to This up up up the X%; X%; Moving in all all the and was growth Americas forma. a for including regions, Asia-Pacific, CooperVision XX%,

the As single-digits. in a was Americas in low expected, growth

stronger we that and QX However, the the expect be of in to remainder year.

Regarding EMEA had Asia-Pac, good quarters. and very both

regions. by in the our space in driven monthly to gaining hydrogel share and Clariti our both Overall, continue revenues in be MyDay silicone continue and Biofinity by space. all we in dailies So, led -- lenses, the

of are help geographically, feedback our MyDay States. been believe while further also the in offerings of MyDay United to adoption helping expand one-day growth launch will accelerate We the has including launch and Toric positive, here. drive continuing the very Toric The we

well. also extremely Our perform products one-day to Clariti continue

to products. Moving other

and to perform our Biofinity Our grow transitioning to slightly growth the where Vitality anticipate Avaira upgraded Avaira pro lenses, well diversified of forma. world. continue by of Biofinity as end family combined X% around declined focus our to Avaira the which with on lenses this we completing year. very remained

X% leader by remain grew driven We MyDay, categories. Toric, product Clariti. forma, Biofinity, to global pro in and Turning which

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

Turning to soft contact market the -- global market. lens

up growing with Asia-Pac, up while XX% a up X% basis, -- in market the X% up of X%. lenses market with the continue market market versus for for X% up X% EMEA, up comp market. XX% year For market CooperVision's a the X%; and the up X% taking up X% X%. XX% X%. finally, CooperVision modality, market single-use share grew X%. very lenses market, versus On faster the versus QX, on XX% versus By Americas we calendar And grew This included up grew market versus Americas declined come X% difficult we CooperVision grew the the XX%. non-single-use than calendar The the the

Going continue forward, and to growing X% to market. the we X% still faster than market growth targeting we are expect

to hitting with a of basis, forma Moving expected declines due an all-time of we XX% by growth pro On reported last with revenues quarter. declined million, high mostly acquisition X%, CooperSurgical, we year-over-year PARAGARD. PARAGARD, revenue driven discussed $XXX to the up our of which we

we levels a now demand. QX, As was Further built on so there market acquired future we reps November our the no normal to channel and sales supporting XXXX from We acquisition. significant prior closely end for year as on which the direct follow the after may Xst, salesforce PARAGARD, recall PARAGARD to XX our conversations of was soon inherited or purchased new reminder, reps the one hiring roughly and sales began this return approximately during Inventory it. direct should month. we by more acquisition have you growth inventory, discussions, product will prior before

this, expect our fiscal a quarter of impact see Given to full third positive we quarter. beginning in

be as IUD we do on the we remain the to form and only product's non-hormonal U.S. communicate we birth or the very will reversible it So, well long-acting continue well positive market benefits. will PARAGARD. believe control on It's we -- overall,

Excluding with PARAGARD, business grew surgical our X% office and in expectations. line

our medical our which continued devices, declined earnings XX%. until testing but the testing of entered part regarding includes solutions on year and genetics fertility like up median the business, margins. products X%, performing years discussed several well business experiencing genetic well competitive as business pricing call and performing We fertility, last was last a our market ago really we significant began Regarding pressure

our we part know focus unprofitable of an and models, which it process said the plan fertility businesses meant fertility solutions. rather ties to allowing Having genetic testing that, remain has matching exit genetic process highly important we as participant to you sustainable As a some business on remains than -- pricing. to

running our this operation, fertility our will well-managed end remain continue year. of likely on results in Given will through testing on our to genetic the focus drag category a

and fertility it will drive hard turn continue I In employees perform side, dedication. portfolio express market over positive results. continue I'll And to Al. combined the the positive trends with work want and to On believe our to to appreciation our solutions for product with our that, my well to we conclusion, their

Albert White

and comments earlier. the Thank for you, thanks Bob

to Before trust has of the a take like excited extremely It's I'm me. this thoughts say, numbers, in the placed to and of Needless getting the an Directors Bob I'd Board couple to to role. share grateful announcement. succeed on into and confidence for honor the on CEO extraordinary I'm

increased from ago Regarding Bob, year our He this an to over for amazing under XX the billion current exceeding incredibly became time, $X has mentor and plus an guidance he important that success of and me. little of years part has amazing billion. XX revenue Cooper our $X.X since years a been to CEO slightly an for

margins with roughly of half numbers. responded This half efficiency success. with the was driven for improved and With last up up full are from a look I Those please me impressive CooperVision's a gross to CooperSurgical's financials inherit, consolidated margin manufacturing earnings covered currency of mix Bob has addition be XX.X% I'm the significantly to gross continued nice so our accordingly to focus non-GAAP turn refer to so from up my margins guidance. has gross let very release annual me stock that, strong today's product built revenues, gross XX.X%, other reconciliation roughly by team fortunate let XX.X% robust on the nicely Our Most GAAP will the happy that for with year, general very of return numbers on some non-GAAP last add a XX.X% a very to and XX%. improving driven quarter to so XX.X%, to Bob results. to year was PARAGARD. of commentary a last year. primarily also and forward rest management margin from by I'm improvements. of that an obviously XX.X%, basis, favorable also and

less along was Expense throughout driven the the the Regarding expenses. investments operating than growth with and PARAGARD sales Consolidated addition slightly largely by XX% marketing grew revenue. in company. expenses quarter, of

enhance selectively hiring We salesforce and world CooperSurgical. CooperVision continue around within by the to our both

distribution saw upgrade we increased in investments look upgrade where R&D enhance investments within legacy certain also with CooperSurgical as in We products. higher continue to infrastructure our we and to along

to improving businesses We operating and $X.X reported Both effective of margins interest with improvement XX.X% margin million tax improvements. we income. an gain, strong expense, FX from XX.X% operating to a of X.X%. Moving operating operating reported year. million rate gross $XX.X driven income, by last margin XX.X% impressive Below grew an

GAAP new the primarily legislation. tax recent our related enactment results that U.S. to include million part the a U.S. as the transition note $XXX taxes, tax net Regarding of charge of

tax finalize credits, $X.XX the offset schedule. quarter payment I of information see for in the cash with also roughly with most CapEx. our to of we're such next any accrued and to more this years fully roughly the work million in for add cash around the $XX.X and posted average the information. continue historical operating quarter, that actual should over our similar estimates. companies Non-GAAP XX-Q act Although and EPS negative We XX.X analyze tax million made as $XX.X multinational flow by was of be outstanding. cash details that million eight new backend-loaded through million very so we flow, upcoming Please earnings, shares will forth to with XX-K reform free payment $XX.X

QX of due acquisition, receivables, $XX.X build was U.K. to Our the the ongoing taxing of $X.XX the roughly a impacted which property line transfer with flow led and million PARAGARD with associated certain authority billion to from soft million acquisitions $XX the of valuation by intellectual increased primarily cash primarily negatively in PARAGARD. dispute to initial the by the normalizes associated $X.XXX Total payment acquisition. associated billion, over debt with

to roughly CooperVision's the year, $XXX growth and operating guidance. moving This fiscal the to Moving is or did $XXX to growth million QX, mind, with to in revenues revenues do profits, to guidance by highlighted but expenses raising upper which billion businesses fiscal updated are roughly thus, as QX expected genetic did $X.XXX just million, been revenues year's performance be point a to Updating revenue million pro earlier. revenues. X% supported to and by PARAGARD impact billion products, mid be this will operating the positive office Consolidated last Within reflect year, impact investments, along than it XX equates forma past to currency. our higher expected not consolidated roughly and billion. three distribution would strength were if revenue hikes meeting was revenues QX year forward. not from margins much have recent This $XX Interest a forma XX.X% X% driven so forecasted. thinking million for quarter, of price increasing PARAGARD to with million, revenue CooperSurgical's for to guidance reduce initially $X.XX reflect million and by to $XX to $XXX pro end. remains increase rate around assumes more our and this certain for not expense additional expect going which Bob flat X% single-digit new salesforce. $X.XX in expectations. $X.X both PARAGARD reclassification we against which basis in for to to at to around expectations including is a billion reclassification, $XX to testing, surgical We're which growth XXXX includes Revenues our on

earnings. just Incorporating effective the we to roughly PARAGARD range range forecasting favorable higher positive XX% activity, of all EPS to QX. by last revenues guidance, recently this both offset in reform. incorporating have the we're $X.XX, seen a reflecting with investment expect positive rate slightly non-GAAP at tax for XX% our higher $XX and On we taxes, since EPS EPS in year-over-year currencies in respect we're non-GAAP of a FX, forecasting reported QX, in fiscal a XX% Within $XX.XX QX basis. X% current now our We're regarding impact to a overall on strength million to especially impact non-GAAP raising to be we shares an to based million these XX.X enacted analysis Regarding on for than items, an to year, being XXXX revenues of the resulting to outstanding. tax $XX.XX move

we Lastly, year. free guidance, strong continue on to cash expect flow this

the while With receivable last to conclude but tax on that, item one-time expect low focused the similar share and discussed, we and As expanding build PARAGARD the item. consistent, we financial global payment be U.K. by solid from expect free delivering was cash tax PARAGARD, excluding gaining year remain the to and hurdle let QX our to results. businesses saying still due to market flow me

for we we that and look This step hand reporting through work questions. rest With another back quarter operator of in the to the was direction XXXX. that, as I'll forward fiscal it results to

Operator

Keusch James. is line you. of from Instructions] Our [Operator question Thank first the Larry Raymond of

open. is line Your

Lawrence Keusch

and your good Thanks. evening retirement. congratulations, on everyone. Al And Bob congratulations,

Albert White

you. Thank

Robert Weiss

Thank you.

Lawrence Keusch

again your to start, if So, private could, are maybe that we the I a Al, channel? have I optometrist seeing guys want And dynamics discussion, within Americas, talk could versus guess, doing impacting talk and the about you and I or the on just I Bob about what are a of independent business. guess, little that follow-up. you sort little label then a channel within And bit bit

Robert Weiss

reconciliation factor that United States in specifics. also, the on dollars feel dollar in to out starting industry a And on U.S. than real and we momentum to, key internationally shell our -- of being, with been MyDay build any or look turning a at Americas as couple And with the about trailing a revenue good year, launch do just go for least the we you we so more our of in -- with them. last to performance and we the that quarter which about to our pretty door over at say for serve our with to the between of the I And that two-year X% won't factor market XX industry. the performance. We're Larry. in had comps comes outside when importantly, if eye as rollout -- we and the remiss eye in good happy stacking the good will X% the the will, Sure now the into the other was basis, suffice Toric, months, It to get back more tougher feel bounds much the we serves at MyDay the prior versus when XX% we which stronger hasn't therefore, in did one-day presence say, U.S. business. years, look be of of middle continue feel been the stronger. the into product. way, that's And the companies But it the reach a time gray for be particularly it I'd those the minimizer and

us. private versus very as are done has far Independents well Private doing label. well. the As for independents label

things. expect the of We year. pretty something both to go of as that a Vitality, label, Toric halo better of the is expect along have we to And do Avaira the by there much effect would Avaira for even the Private sphere. couple a we which end MyDay, The of wrap-up to sides so aisle. the transition calendar with we complete to

So, those will forward. afford as better catalysts going

Lawrence Keusch

second doing last And then now me was $X.XX, if perfect. I the it's point Okay, time at the here. $X.XX. wrong in FX and But think math question I'm correct

So, that's a went EPS up guidance $X.XX delta. And $X.XX. about

So, is of have I function investing figure up disconnect. EPS more in a of And more. would Just business? A, correct? trying thought the the have out that been is just would sort really that really to

Albert White

Larry, Yes, one. take that I'll

You're correct.

that $X.XX, QX. $X.XX. it positive About of so it's was up $X.XX $X.XX was So, a to in

keep you kind to of look it built year, at in of reconciling there. mind So, numbers. couple the was guidance. A into to half guidance the past for current those When back you're things

is positive. tax an rate of As one big of medical was it the neutral, in is There's QX, little you as negatives is expense a you the low a kind because a will. in FX bit example there. know, device Interest if the tax

assume September. additional March, here increases, you rate three look -- increases, we in you rate here June, if if at will, So, occurring three

interest impact our guidance up big had from million taking a to million. $XX that pretty So, $XX forecast negative

out So, new between forth where investments you and kind in midpoint. that, it's so net is of the business the

Lawrence Keusch

it. Okay, Appreciate guys. perfect. Thanks

Operator

our from Thank Biegelsen of Wells question Fargo. comes of next you, Larry And the line

line Your open. is

Larry Biegelsen

Hey miss and you. question. echo Bob good afternoon both the taking congratulations guys. And I'll we'll for Thanks Al. Bob, for

the guess, I'll named think, ask I was where year I One, ago. So, questions. this Board you two a coming knew Bob, knew, Al or you're probably high-level the and CFO

And of Thanks And just strategic on CDI So, the early change? questions. question the now is for and priorities? directions, feeling your the any the thoughts why might lastly, keeping just on together. Al, taking Al, your CSI second, how you kind shape

Robert Weiss

be factor to probably held a in Larry, I the of for not from got Well, Kona, we condo. When came Executive honest, was back meeting married I kind single a January. XX Hawaii. I there ago. biggest was there, almost And like I Hawaii owned my looking in I years condo. I

So, the back on probably I time that enjoy like maybe to then gone we've the and started of and world. few always reflecting stinks. victory a My game golf traveling. a fact places I lap it's take to about But much behind than I latter part. bench. me I've of am. coming solid do fun better had And confident can't a I'm the are developing the players a that it's lot highly -- time

So, upgrade? why not

Albert White

Sorry, Larry, a of couple things.

look to almost been and Obviously, years here sat at -- Bob next priorities. entire that Bob You I've time. to next sat I've XX

the today we've going and us where we're company. done lot a of a together, the So, over hip. two forward, least hip where When we have the we're done look to at have I great of joined at activity years

Bob like that more We a have spend to get background employees and see with has. of customers. I'd out and employees going. Definitely sales and here. have to the keep a I than want time great culture

spend to time I'd talk the some out little there. to and So, people of out and a with customers like get

going the want we've certainly and we mean I the spend make position that do the I'll future of stay We for day, provided what future. past beat delivering there. in to the strong XXXX done end that's and on shareholder I we sure long-term the for to that So, today. the meet, laser-focused guidance what but because value at the and in ourselves we're time that's doing

CooperSurgical, and lot of of look very drive both them, the and expect continue that's respect I great of So, CooperVision a keep would and of both certainly the it. both With businesses. businesses way spent time consolidated together to two success. I'm us to I businesses at fond to in

Larry Biegelsen

Thanks for taking questions. the

Operator

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

Your line open. is

Jeff Johnson

CEO same afternoon for last guess And the been and been Thank Bob, XX It's I've XX and you. business guys. in just thoughts. exact you've impressively but wish a I Good best. the the But and truly nothing you. as you for I been the I'll it's accomplished the echo years pleasure years

Robert Weiss

you, Jeff. Thank

Jeff Johnson

of I X% look Al. in a moving Congratulations that. questions. you the year. do CVI But X% you throughout on easier mean maybe the the couple comps you just do as X% the didn’t you the guidance growth, to when And to into at leave first well, quarter, out get for year, to

of had deals color you they provide there how couple getting people But think points. XX Just constant balance been could upside how wondering you're about the contributed. maybe know even some questions the I I've that X% great. the there currency that in I you is organic? this of basis will It guidance. Any than year. of thinking quarter, less And did a there. could be kind over that you CVI much seems small like from

Robert Weiss

which Yes, expectations. exceeded that of came the forma, gate our currency. a constant organic very is out X% pro is And solid, we

some So, yes, upside there are there.

Toric in with course, the which very MyDay transition been on a bottom-line from than Vitality. with we've we're exchange. Vitality, from Avaira transition more topline. happy Avaira our to flat -- with But progress the rollout a we're topline also is more course, to We're the U.S. in the in Avaira And play that Of probably is margin a with into the guidance, gross of of and mode of is a foreign a it reflected we've we're play which taking the making also, Avaira happy direction

that will will transition that optimistic serve we're So, period. post-XXXX the better the some momentum post-XXXX, get complete as in we

Albert White

to of X% was too. at did point actual a We ones, acquired But The on was X.X%, beginning well December. Jeff, tackle X%. your a Yes, the this so rounded the I'll very We on strong of on Bob, couple up acquisitions, quarter quarter. quarter. quick just PARAGARD

low if million at it to, if in this lens our is quarter. acquisitions which comprised a it But So, impact growth revenues on if you was look the had overall about only standalone those did very you kind organic will, double-digits. you're number. of strong were small so referring specialty you will. CooperVision business, grow It XX%, numbers, just Those very $X.X of

Jeff Johnson

That's retailers for for you. yesterday. one now to did Kirkland helpful. that. Thank of the a love in level right. then like private Would in high follow-up, private good and as a these And label you maybe prescriptions thoughts, or on a some looks good, interesting All what I Kirkland high there. own that to as one maybe bad, level. way product, of was offices, things lock brand but workshop side anything a and now label The in been FTC's the brand heard have just maybe market thing using way Costco the heard think with I it something a using their kind good brand, to get

is And big as or how the should of little a we a private as actually time? still label risk going nice, label the a So, your important -- guys look you of to opportunity Thanks. bit over at up? importance business private

Robert Weiss

incredibly is of SKUs label you that. and Yes, I our and think It complex something way it's of easily. by private manage replicate you how highly not could

barrier-to-entry. is it So,

tighter get with and partnership arrangements become with players. As large we global, companies more tighter global to

strategic. the came -- has a negative the extremely nothing as workshop anything. continues debate the that independents There's as retailers, of see to the -- the same right retailer much at So, Rx of that patient through it's certain between FTC and the cyclically, it and up repeat that with on I as

line of lot the retailers, entirely there a label to far a and their love names retailer as and product it's of private are quality or product Biofinity own willing on doesn't label a their matter. own line, As brand put they love is names. private product think of lots great not into It name they on name Cooper that -- ability it's out it. because broad to the the afforded names has I product taking Clariti and that large There's whether tough or MyDay. really in their own like There's

think its our great of and barrier-to-entry great I So, a part story. key

Operator

Thank you.

Block from Stifel. of next question Our Jon of comes the line

line open. is Your

JonBlock

Great. Thanks got two. afternoon. Good I guys.

the of have else in first got focus comp, see would Americas quick which just some that of you I comps, of that sort follow-up. But confidence guess, bit just coming guys quarters? MyDay launch. one. in I rebounding. to that I a me that Let the easing want on Toric U.S. believe the in front out there And in instead anything you accelerates placed your the rate have I've but CVI growth a maybe then

Robert Weiss

a comps will But are after top quarter, green activity Yes, there's the still quarter. second the the post in the is neutralized. create There's of also degree of no comps, market very the no quarter, some some that -- particularly that the doubt anomaly. second doubt second

comps part the some in pretty second of of to the certain quarter. quarters in bullish easy my -- So, for we is pretty have the we're going Americas post reason being

compared so quarters. if anomalously And easy, you the to they are last anomalously hard over two will,

brought of So, plays by future. or the effect gray leave the skewing of halo the evening the the bumpiness lot us Vitality rolling market, that about the Toric retailers business, the it. a the in has and out into But which point private about market from Avaira the of and MyDay three a into MyDay the those think of more sticking confident -- combination part of been combination label middle a the the transition I particularly of

Jon Block

to And do you investments $XXX to million million, to allude helpful. yet over also lower. in more then favorable, understand now to accounting, I Very direct you to with shift And margin initial reps one still expectations. it. I Al, relative Got the talked that's second a revs, PARAGARD. but believe, $XXX just profile

investments achieve profile slightly favorable guys you and more of what's light you the is allowing the in In that? other lower that So, margin making? words, to are revs

Albert White

on just side, It's you're revenue adjustment. Yes, the accounting literally an right.

within there the for Those that expenses were certain being to were operating moved they distribution accounted historically So, and revenues. reduced expenses. account revenue

So, operating profits. the that did affect not

So kind that of talked profits that very very are business We the perspective, end conservatively the guided we strong, it on very, we guided beforehand, We in of and same to the we retrospect. numbers. look talked about at did certain you At if is day, from basis similar. what on from that. the when

invest was grow a so as forth, business business plans part that running to and that in, look we're we're along. of to all to going So, our that going

there's So, there. nothing additional

a We hiring people. in have of done nice terms job

We month the have reps. the selling. this on by XX street those end are two-thirds PARAGARD of reps old of Probably reps

able So, they going are quickly. to going to be fairly get

quarter, okay an and improvement anticipating helping drive bottom-line QX that some acceleration we profitability. and to additional QX as So, get second

Operator

Thank you.

the next from line Brian of of Our question is Blair. Weinstein William

open. Your is line

Brian Weinstein

Thanks the for guys. taking question. Hey

maybe of can Maybe a APAC. new by can we APAC products, launches? you bit expecting you there? context what we break us start product that year? that some geography about give of had from the But First, and growth Can the be rest obviously, for strong the talk little on you around down and should

Robert Weiss

if of existing the we there. perform well. viewed of we're you with word multifocal compared specialty continued anymore. of process as specialty cylinders Yes, the and family Torics of will hitting as Torics, to we're on I there -- talk as use of MyDay some or APAC sphere, that Biofinity Asia-Pac, is of to getting all products, will. Japan, lenses. I our are through the rest shouldn't with franchise a But well well all lot A on has products continue specialty behind whole when registration probably and fours lot In about lot momentum basically, coming market lens, China, now, that have is also process they're where that a to particularly The soft a them. and doing force

by a Chinese you if market, north we're -- up putting faster stellar we're multiples, much growing than of So, And market XX%. growing market will. the is the

also a the the then into private certain there around reach retailers as that's theater. large catalyst. So, And that world, are we global Asia-Pac moving label, are

in. on going things good of lot a So,

would continue. to So, expect solid I numbers

Brian Weinstein

then Okay, follow-up. great. And a

the products bit You in launch they've about you competitive stabilizing. on seems launched of poised to year product landscape? talked talk additional Both later the those positive recently. can this the Bausch a a companies the appear But Americas. be new the back like year. dynamics about half Alcon to little in

what year. give can So, Americas' thoughts on think about us into of just the you that how your like Thanks. the rest looks you growth factored situation that for how competitive and

Robert Weiss

year were last Yes, of that year. products saw the their underwhelming. they three million to this from lead $XXX numbers I Clearly, Bausch up totaling and showed I think

And working time. a that to been to ULTRA -- so be number The me. for flat seemed they've a long

anything do on the which structure cost meaningful put is that I'm I take aware just think is ULTRA, OASYS, an now can be ULTRA up there a it's on one-day. I of. with you don't now new manufacturing come a which of ULTRA. have J&J or manufacturing equipment OASYS is not a expensive product what they're name how platform, say don't new one-day. to whole do the [Indiscernible] they with it's know honest ULTRA did, I effectively given know it and

they They're things. mature I fact think tweaking to into that's So, major a of DAILIES Plus. in hydrogel in yes, bring a to will market, exposed couple products. continue is, have love market would they a mass lot the one-day silicone have Alcon a the do of kind of barrier But we with. they immensely it. mass with AquaComfort one-day And if deal

billion because a will oxygen we're And the it the silicone start which that in then trying do one-day for they'll talk in. the they up the will. one-day of $X oxygen, product need benefits to believers be one hoping about in won't -- we to have and if firm the I'm only put play talking market, So, you in

Operator

Thank you.

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

is line open. Your

Joanne Wuensch

their And also both Bob endeavors. Al, evening. future stuck Al a I Good longer. you're us and congratulate will on while with

Robert Weiss

Thank you so much.

Joanne Wuensch

it with of to particularly -- minute could in you pound? us are of margins, gross is the out a brought the gross strong that Anyway, can a Because margin the was we nice, And spend you the and see remainder rolling shift on please? how the takes year number? that puts there you British quarter. a What give sense a

Albert White

Yes.

exclude easy first. surgical, comment margins I'll take few driven the mean, So, we're things, If we gross around ones heavily CooperSurgical for the Joanne. obviously, PARAGARD we'd a I is XX%. PARAGARD. by

improvements at that margins If range, obviously look a similar from that high Avaira to which the they Avaira have to that's pulling and that We're and margins. to margins gross half the mix the come talked we so then through to of there's what has general that quarters about pound XXX the more last is year. as we've So, past the write-outs, great We Vitality combination to idle gross a pretty product, about PARAGARD's improvement, It's so XXs. that, we transition, manufacturing in the pound. write-outs, two-thirds to you a talking of us. had, remaining And at about asset P&L basis things magnitude years that Biofinity, that that equipment forth. The what to or at that like CooperVision, coming product grow spent then few some efficiency continues last of for starting And were the business is the of coming and up them. over starting we I see look come. definitely was things. and in helped. and inventory portion, from about call mean, delivers I point

goods. those, improved result talked And through that were charges to we it Well, to margins going of we're was seeing move cost that. we go other future. in our and the going Some of how into about gross in those

stuff the this laid So, kind past. out that of we've in it's

anticipating strong. nice to quarter. very We're a margins gross So, be continuing

XX% somewhere of year. As a looking around matter at for we're full this fact,

usual margins So, but in trend kind of pretty and is ups good get gross downs, for and we'll the surgical. our vision both

Robert Weiss

I add thing. would one just

Avaira reminder, that transition a play gross Avaira margin that a was was gross As margin a to Vitality, as play. and we substantial from

benefits Brexit if also that of may year and goes recall a more ago, you quarter November six December, will, each in month, particularly post into anniversaried the finally end which the that. QX, you get December. And of as by, So, we timing played little a

sustainable Avaira positive today conversion So, a show effects. where to to Vitality that are will is and lot we of continue

Joanne Wuensch

positive anticipate the CSI, turns anticipate fiscal question, follow-up being that in the resolved? the problem genetics business, you my the at And year? core that during how business As stage Thank any do you do you.

Albert White

Yes, device will, products, of your would so within variety fertility, That you traditional more of business, to be there's medical fertility solutions other There business. which the kind of been the has that the well pieces for doing is look certainly part part media, well things a really products. from the looks is medical that. two products trends if the quarter. The forth so in comes good. demographics, It bright it business this perspective, a many that and did of years. And all when again future geographic to device

and like And good increase get even margins aggressive. testing of So, the feel summer your to it, people But just at that look to don't the days It's understand kind good testing be gone. about the more pressure competitive trying I the volume. Internet that's come If the head seeing it the continued completely genetic direction you, of to over I the a became my of and significant about and old that, very business, growth and honest of thinking website. and pricing to last with behind just piece more of so really that's feel working started to some piece the of it business. forth, scratch we we some

look at when and it, maintain we businesses that's of Now, within going negative so to testing going looking here our to run part used It's and business. piece. genetic fertility IVF not It's sit are forth. important We're solutions clinics. great fertility. margins we're that, with we our an where said Having unprofitable at gross

run business. intelligent to going a we're good, So,

from pricing going in and it's -- QX, bad then that QX much true it numbers. QX be seeing and to -- some worst going it of I will that will some the think then will then move we and perspective, back because challenging competitive holds assuming better genetic QX started be fertility result a in to in everything result numbers of to probably of kind annualizes in and better pressure that's

Joanne Wuensch

much. so you Thank

Operator

you. Thank

Jaffray. Matthew with from question line the comes next O'Brien of Piper Our

Your line is open.

Matthew O'Brien

Afternoon. retirement. the taking questions Thanks luck, Bob, for and the in of best

U.S., as OUS for close the to kind a it the bringing as little potentially it or and changes of some Al, to Just understand distributors I OUS to a far future, headwind then maybe did Bob, so of think buying loop, ordering be having then and And far is I the were the maybe, that then you? of correctly? as in that talking brought the a easing potentially there commentary, that it's way bit your as rate you U.S. the margin about can't back back

Robert Weiss

a energy eliminate Yes. long that's of outside The you real to systems as as U.S. world those building we lot buying foreign and it. said a basically Having of is identify support buying retailer have time can't are moving, currency the outlets quickly that spent that, all we've that

So, sooner minimize that more you off, that. the the close you

The better. have dollar's headed systems gotten much our the So, right way.

stable over So, the the And bit exchange I'd move it nice prefer rate erratically if little a exchange that future. will rates nothing. one more to all did I'm will affect even goes a frankly. optimistic you that with than quite be even if minimization in begin map, foreign stable But

Matthew O'Brien

should as a halo sphere you how access MyDay. And point? And with be Toric, and this about at MyDay of to Toric just the customers then somewhat have the new Fair the that that I'd how opportunities follow-up, about to have effect of just bit enough. little open have a now accounts some there as maybe went, love you hear more launch. then that your talking Toric to many

Robert Weiss

the we've we -- effect the and I the specifics reallyX won't it into month premium halo get January. showing we're is how starting into into you're that we're the ripple we're accounts get all from in rolled many we're sphere the of particularly two-tiered, the since Yes. part And expecting out and But as to. effects. see of Yes, right, its to MyDay into market

So, we we're first we're very I -- early optimistic. are. in the in we're is the say would where inning

Matthew O'Brien

you. Thank

Operator

you. Thank

is Pasquale of Guggenheim. question Our line of the next Chris from

open. is line Your

Chris Pasquale

congrats, and Bob. Thanks and Al

topic. picture bigger another and PARAGARD on question one So,

it's of call I some portfolio existing resources about product. bit go-to-market to But a appeal of strategy and been that points. talk the it your of sales for you adding existing can first, your large a have So, would leveraging thought part PARAGARD? would I understand have the

to out So, why separate that a big build does that ultimately just team And need how salesforce to be? dedicated product?

Albert White

product, The and initially. and that big That's Journal went force, sales indicated you're invest a like of and and we remember disposable Yes, we EndoSee, actions, great some moves fit. Medicine a of product right obviously. Chris. our a absolutely path the we with the we hysteroscope improve moves properly very we contraceptive. acquired certainly in you take study The down pretty share on natural New hormonal which sells products that's market some our that that There's and within right. existing a good said profitable if could at We And that out space, take a it through It sell other have. look and looked our England right came -- question, that that the can direction IUD took a we lot we

advantageous us. very can growth we do there to for anything drive So, is

of salespeople or the what if done is a the salespeople. something talked cover the about. we'll what performance, I a return look And at from XX to hopefully, but the to get XX message possible. that about XX another going kind we the take And just it do how to kind we've market. strong. add and that, It to the higher market look what does, that's and of we've see let's taken half in We're covers That know And salespeople we look of added not could communicating going add roughly. and entire we don't or it, is We've very they like does market. So, it's result if hopefully, sales. call --

that. we maybe then out, pan if it at look doesn't we'll So, won't. And

acquired perspective, better So, first I It's are the changing than business. it. looking think acquired better dynamics that since we we -- from of some than opportunities its that looking

to on to going of to early. going try that. here advantage skimp not we're So, take We're dollars

Chris Pasquale

you estimate Does and the original at accretion all what year? that this thought change contribute it could

Albert White

we that with would say $X.XX those estimates I exceed you, to the $X.XX, investments. looking to from even the we were No, the to provided

Chris Pasquale

today Okay, rising have And as that's Thank first when to offset helpful. guided. some bit then tailwinds highlighted you the an a versus you rates of earnings of you you.

be? what with for Given capital floating whether we're structure place and rates broadly, thought is Cooper about seeing to rate debt in any the right

Albert White

for we fixed rate debt. go that. back Right we've had floating on rate in forth had We've many Yes, and rate debt past actually, now, and and floating now, had the years we've debt.

right invest We is a we generate to company. if our to back look strategy keep can always that to pay lot is continue default to So, opportunities. floating. debt. to it then of If which not, a now in we We different cash as position, go our

pay of cash to have we that able be to so And debt. lot a

we see start plan down. to it continue knocking let flow if So, and right the now, can it

Operator

Thank you.

Our next Mishan is of the line Matt coming KeyBanc. of question from

open. Your is line

Unidentified Analyst

guys. Matt. for questions. Thanks lot taking in the Brett standing is for Hey This a

you're if ask far the if kind you of First, a expected the the more. hoping so geographically us the bit if getting on year? in last more and the made payback And Specifically, you investment I reps? investment one then was allocated you give little how was could salesforce I could from color U.S.

just much. currently figure Thanks sales of this at professionals could give the a you you're us working We care a with point. If sense the here. of of eye very number found that size LensFerry maybe and

Robert Weiss

-- And had -- international return. some Sure. started where that, about been to Asia-Pac, we've prior we like our we ago, on street. process getting locations with already XX it the our of the feet of months started a good The expanding

that down global a on continue path basis. We

U.S., the we much we've is only So, -- X%. it's we than at And believe is European market. trailing as it's X% versus when to The see July growing tougher distorted been basis XX happy just the terms global as of U.S., with it not look articulated of months But payback market. also at the we Relative that, getting. the in I'm we the terms started on Asian we exact that going U.S. solid. the results, continuing fact the activity not in reported well XX% look and numbers than faster since I the a the market the some the sales of XXXX. in on we're market Overall, of other reasons we've into to revenue the gray we're get about return through that force the comps. grown when for our say in the

get expect put with been has investment and the that going to and continue we're getting return substantial in return we a So, forward. we're happy to

a say see get As the of making are lot with a consumers customer are than that are other progress into far of alliance There of are details obviously that. value our I lot good like better a There having won't independents as LensFerry, the base. we concept. with to the that

built even momentum. a it's our it lot competitors. And of with offering to So, we're LensFerry,

own independent that It's also. available it our professionals. It's So, about eye business. -- isn't and all with all us retailers we're care in locking certainly something alliance only sponsoring professional the to the our

Operator

you. Thank

comes of line from Robbie Marcus the question of next JPMorgan. Our

Your line is open.

Robbie Marcus

into month? then bit. your I numbers with in Americas' up Thanks the down that there growth, to at maybe trends a a next and at on the X% picking stronger Maybe Al, X% January Bob, add and congratulations on -- is the if maybe But look I'll pro calendar read just basis, forma anything chapters.

Robert Weiss

gray the combination trend year-over-year in and this activity sorting The A -- of line through let's put it way. market the the comps.

-- deleting adding January on year-over-year pretty was was October a deleting and robust. basis. therefore, January And right, You're real plus a up

Robbie Marcus

through year help Al terms margin you Thanks. think through cadence of gross that be as aware FX, about maybe it then and the can then we us And the anything the in the should as Okay. increased the anomalies? I flows of and EPS,

Albert White

the kind not through it you QX, spread. the interesting it's flows look kind too QX. is improvement From basis, of gave When today, probably of where model, consistent how to guidance it's initially much. in what we it of kind at when Yes, on was currency a QX,

December, So, interestingly we cadence lot kind of talked of not the about a enough. change at from

did make to to for in on comment highlight major EPS that. the I of perspective QX associated from the QX highlight but of on kind QX off too necessarily. off closer that EPS of being anomaly So, different little a with an a strength couple maybe particularly that, factors, little I bit wouldn't a side an nothing bit

Robbie Marcus

All right. Thanks.

Operator

you. Thank

the from Jefferies. is question Anthony next line Our Petrone of of

is line open. Your

Anthony Petrone

with success. Thanks. I And going Al, congratulations, quick you forward luck, Two and wish on Bob, role. luck questions. good golf new your good best and

Just on monthlies.

that and update from of there. an expanded family And XR. Just specifically, of sort Energys course, The you had with Biofinity Vita. then you competition

the anything So, it operating on actually, looks would just in the monthly be overall follow-up improved from levels that And us then on XQ. as the question it sequentially, margin. fiscal to

of And in first have sort there, approaching presentation, of the presentation XXXX. quarter still so the XX% calls out fiscal you by for XXXX, we're that investor that the and fiscal

the today. we how just maybe we So, think years do margins kind three again. of given next about just where are Thanks over

Robert Weiss

We've you're Biofinity, opener, margin going a do gotten on more little absolutely right. Energys a afforded of range, Al Biofinity let I'll outlook. the momentum the So, operating has a basis. afforded door opener. extended and defend a door global

clear, a it's out product. being left So, were lot of a of people good kind of

which it a base. a eye approach to a then past, flat of have professionals in or ability offer range, broader Toric lot a out making and love really the their what of expand entire you as care consumer, to customer to which is a Cooper you you custom So, something for do the lens much enhances used the service lot

terrific. It's The Biofinity So, multifocal designs great the lens. that's great. designs, doing why a material. is are a particularly Toric great and It's the

So, Al, them? want to it us. going operating has margins, for a Relative lot about to talk you

Albert White

margins, expansion continuing guiding anticipate that different kind XX.X% to have We're we Yes, operating of I to mean, range and this continue you operating a as of margin reasons. for year to improve. obviously number

fine-tune there, of maybe XXXX in look had here. for on probably to that years look out it's pretty We it. of a some So, operating be improvements basis. talk if at roll way range, at forward the five solid, to we we I if this annual and look consistent good frame kind somewhere move pretty I But that at margin time that will as XX% in we an us about, to to that

would anticipate continue. that So, I to

Anthony Petrone

congratulations again. Thanks And you both. to

Robert Weiss

you. Thank

Operator

our the Willoughby of And Thank Steve is next question Research. from of you. line Cleveland

is Your line open.

Steve Willoughby

luck a say evening over Bob, wish new good you to in pleasure Al, you your role. Hi been with guys. the years. I working I it's want And good just

Robert Weiss

Thank you.

Steve Willoughby

Sure. Two questions for you.

quarters your in as First, a numbers line row the your relate It in growth like basis. I the business now. contact for looks you look market the provide with overall to at has on two calendar a grown lens market it in

Just you then for that? guidance could think thoughts Any did benefit Al, comment Just now first wondering the here in year. if through on how FX trying on secondly, EPS that? your And much full $X.XX of, to think, the I quarter?

what and how how during into coming that helped Just the you're the maybe that quarter? expecting on first to much curious quarter compared

Albert White

market on Yes, other the I'll question and one Bob answer let growth. I'll take that the

Steve, FX, guidance. when we So, roughly on gave incremental it from helped $X.XX

a the at in about about it, finished basis. was of $X.XX we $X.XX It's it QX So, positive look QX, positive. on when year-over-year

QX. So if that was within pick-up, the will, you

which about those it through kind you evenly in to year, at pick-up, If QX, $X.XX mean of full $X.XX for we would QX the spread talked kind the quarters. look of

Steve Willoughby

Thank you. Perfect.

Robert Weiss

of doing. pretty if terms number led seven for and two by Yes. good last quarters. And J&J seven quarter, they're reasons of versus the was robust versus the a One five and seven, last is, what you will, in being some five the

emphasized the stepped So there. look year. tough XXXX have comps first row they've On growth a you the of last we it growth with basis, in a having Cooper. XXXX quarter up and a quarters for always in double-digits double-digit pretty put that of XX-month some industry In basis. for up fourth quarter two on were the one-quarter kind should at We've of trailing

a figure So, one our why is and than comp the the is tougher XX months a quarter. more trailing little meaningful there

Steve Willoughby

Okay. Thanks Bob.

Operator

does this session. to at conference for the you. to over Q&A Thank Weiss the Robert conclude remarks. like And I'd turn this time, closing

Robert Weiss

what forget update that, on June, forward -- the the just you June quarter June is support for the say? Xth. On quickly thank Xth, it. have to all concludes thoughts With -- results want we'll June forgot sorry Kim Kim forward incoming did and I quarter -- date pressure, And of I I'm that we -- No -- the call. I to update because on we we'll Xth, I our new certainly second everyone Al. second look see Well, in look to CEO. June, expectations results I think, you at updating the their for we and you look

Operator

thank gentlemen, you program. participation today's conference. and your in does Ladies the for This conclude

You great may disconnect. have a day. Everyone, now

The Cooper Companies, Inc. (COO) 8 Mar 182018 Q1 Earnings call transcript