COO - Earnings call transcript Q2 2018 | The Cooper Companies, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Q2 2018 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] And as a reminder this conference call is being recorded. like your now conference, for would Ms. I to host introduce today's And President Investor Duncan, of Kim Vice Relations. may you Ma'am, begin.

Kim Duncan

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

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

Al on Officer and are Executive and White, presenters Our call Brian Officer; Treasurer. Chief today's Andrews, Financial Chief

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

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

Albert White

along key second moves XXXX had strong excited a Thank the to I'm you, afternoon We with call. strategic Kim earnings quarter conference to some and made. Welcome details quarter good we've everyone. and our discuss

solutions consolidated earnings revenues share revenues both X% with CooperSurgical pro we up year-over-year. and with of per up fertility and XX% posted forma, up reported year-over-year; hydrogel up or growth. quarter, PARAGARD pro up up posting X% forma daily million, posted revenue, the CooperVision XX% and pro leading XX% $XXX lenses million, $X.XX, $XXX and of XX% million $XXX XX% silicone XX% forma. of growth in double-digit For non-GAAP up

and growth expect to Avaira. driven forma, post multiyear in our the us be to results with regions trade-up daily half offset of hydrogel strong comp believe were for many solid will to three On portfolio in X% is digits. to XX%, EMEA deliver strong growth Asia-Pac of in regions or years throughout with declines cycle performers. a upper-single momentum the a silicone pro a of XX% combined Asia-Pac to fantastic continued X%, forma Overall, that Avaira Americas we Americas three and that by grow supported segment the key respectively. the to particular, X% suite tough both In legacy details, global X% driver Outside CooperVision still continues lenses. midst is of remain Clariti early of the MyDay growth strong CooperVision daily posted by hydrogel The EMEA Moving and show improvement up growth. Biofinity silicone our The and and we're in by in and of dailies, second driven the Biofinity, the basis, up life in in grew strong by year we XX%. its a and all pro results, the and but had growth posted while region. continued

activity of I'm transition fiscal of running Vitality wearers to to and finish the year this is current by now rather pleased that end. majority to continue this we transition and quarter end the expect to Avaira, than we Regarding smoothly, announce

out roll silicone and Multifocals hydrogel well. and product countries, pro XX%, extremely X% grew up U.S., lenses forma. and going ranges growth our we driven global XX% in such is a and and leader Turning was respectively This X% by as expanded to product continue categories. or We respectively, as the remain Torics Toric launch we which MyDay expect this in in strength new products to and

or We're lens X% $X.X range continuing the lenses, driven hydrogel see to the billion tradeup the broader growth, soft that silicone of roughly XX% X% the market. to expansion. of market. geographic daily product frequently of largely offerings, the for continue to upper This lenses growth and to part Daily Turning the $X.X the to by daily accounting that $X.X majority hydrogel daily in drive now discuss. billion is billion lenses contact with we market growth silicone of

our our supporting a share, that capitalize today's continue growing where world competitors our hydrogel than strong gaining in of market fit wearers of to clear, and market bases rest data the not geographic success at on is growth. share. continue we the be wearer growing when our the executing newer revenue wearers, strong dailies the roughly in on and gains CooperVision's legacy believe of on. look from trade-up which daily they which the upon at faster strategy market, of new up remains our other posting sense by world, the little our can and base realizing with belief To continuing new focus We're technologies, wearers share trading mirrors And revenue have focus we multiple expansion. Regarding XX% winning we'll diversified Americas, large of we market makes a

few sales we to behind offers our support this $XXX nice of now growth $XX growth revenues This issues of on million the and grew posted the we to to CooperSurgical, reported offerings, have and believe the market saw XX investments post-acquisition PARAGARD us Moving and opportunity, ahead very remain multiyear the was product to we product continue slowly ourselves, selling see levels. don't a record reps as both we'll and to want But expect. in it. PARAGARD seeing. direct led XX%. We we're product so great million. so quarterly moved higher get plan many or adding we a reps which This based restack accounts inventory to channel do fertility has by solutions for of been around diligent double-digit. and years, we PARAGARD returns of plan the was we momentum revenue

Regarding training back sales growth of up PARAGARD revenues Note, we a expect the comp we as efforts. stronger and the year, continue harder we QX, ramping the in half expect QX. in the so mid-single-digits is in

record take business fertility, such such medical by EndoSee, as focus Excluding growth manipulator PARAGARD, sales, grew of growth solutions an was a devices. pro driven declines of is products media comprised new week. strong surgical offset forma I'll a of which in impressive sales any Within uterine of which our On our as and our fertility the office and day strong by we sales products, posted and of tradeoff X%, OEM XX% our portfolio, basis, XX%. is from

PGD fertility and core Regarding are the on as and the outside PGS within where PGD solutions genetic testing, increasingly we offerings part key process U.S. our PGS important our increase the nicely and they our genomics becoming away carrier pressure. made IVF portfolio. of the with such best-in-class and experiencing a NIPT fit screening so pricing focus decision and from very move U.S., to significant were we

from but this strategy. and QX. revenue cross-selling with supporting not pro these our exclude Additionally, recent our NIPT we pro did in aggressively calculations that experienced this will Note to success products carrier forma change starting thus portfolio screening we've forma quarter continue plan and reporting

deep years Lastly, but met I these makes we're I feel has posting Dr. early things to reiterate I'm In improving the the of been stand you at extremely leader the Bob over perfect the a endorse. X% importantly, continued trained President April To confident key drive of industry, the and very PGS and CooperSurgical points. of Bob behind genetic positive about in I PGD, which that such expertise X% X% in and IVF Auerbach back have a the CooperSurgical wholeheartedly growth. to growth including as testing forward. Americas, became the knowledge today. half him forecasting summarize year to architect CooperVision few as want conclusion, where accompanying his and with of changes, OB/GYN, Many

improved pro with, the global CooperSurgical, guidance X% seeing quarter moving periodic hopefully, PARAGARD and momentum supports strong to can positioning basis, had which we Within Additionally, mid-single-digit and to grow in growth. forward X% product on our product in that. our hydrogel forma believe we a franchise, a raising to we've upside year full range daily silicone improved we're CooperVision's the

but confident guidance we're moving We maintaining addressed which to Brian. strong feel maintaining favorable, And I'll earnings also the has upgrading are And while providing concerns earnings have businesses, genomics personnel our our within and that, we're around our that produce our fertility will past selectively capabilities. less sales nice call including in turn become the forward. over investments, investing by still supported FX we with group guidance the and world results hiring distribution returns.

Brian Andrews

to on will the so afternoon let non-GAAP Al last and of in rest XX% of driven consolidated and you, Thank be product from by year, CooperSurgical's last a focus gross to today's This results. year, driven quarter XX.X% to nicely up a commentary the for XX.X%, gross significantly everyone. non-GAAP on favorable up strong CooperVision's of was of good improvements gross our me revenues, margins addition by financials basis, to reconciliation improved driven Al PARAGARD. mix. gross both with guidance. from was please the currency so release Most XX.X%, full year, for earnings margin up GAAP XX.X% margins, and from improving last by refer businesses. covered margin my XX.X%, another

and operating growing improvement, stemming Below of shares faster sales by charge investments $X.X free there for effective with of million margins our the $XX.X company. marketing outstanding. roughly income, the expense, operating loans quarter, an by $XX revenues. margin operating impressive operating year. and $X.XX cash from earlier. for million offset million $XX of with CapEx. Regarding expenses intercompany mentioned PARAGARD flow throughout We activity debt up million XX.X% was that million million with reported billion Al OpEx posted cash Operating from had $XXX on associated of XX%. a EPS XX.X%, cash consolidated was rate and businesses addition Non-GAAP an $X.XX roughly moves million loss last reported to $XXX grew operating interest year's driven CooperSurgical, a This last with $XXX up of quarter, second flow, was XX.X%, onetime with in within from the grew hand. of currency million included profits income against quarter. genomics improving Total expenses, along impairment average negative XX.X% the XX.X Note FX we tax we in Both operating XX% than the

forma billion of billion increase growth, which consolidated CooperVision to includes This XXXX we're billion. $X.XX guidance reflecting or guiding Moving to guidance XX.X%. performance pro is to $X.XX of to guidance, a million, roughly CooperSurgical's growth, revenue million X% $XXX expect a year-to-date forma quarter's fiscal pro revenue billion to an and to basis pro stronger is revenues our X% X% in to we $X.XXX margins $X.XX increase half. of strong slightly to guidance growth. last a of slight which Outside operating be consolidated forma $XXX flat anticipation revenues, on remains than second to

revenues positive interest against to range impact year still We EPS $X.XX, EPS seen to basis than for worse. a million and $X.XX last lower be and roughly positive to $XX full FX, effective with of to On hikes move rate year. of XX XX% additional have year is we expense our us year impact a full both being year be now X% earnings We're since our end fiscal being full the quarter. release, forecasting to currency last $XX point expected two tax expect by around million, rate the assumes in which

operations. that, based primarily our having XXXX in Now to for said strength on we're XX.X shares guidance $XX.XX by outstanding, our EPS $XX.XX fiscal million non-GAAP maintaining at driven

cash strong it resulting line on operator as questions. hand roughly year the Lastly $XXX with year, the back of prior full flow million, guidance, free And with exit that, free flow I'll we for we to in in expect cash expectations.

Operator

question the Instructions] line first of with [Operator Our Johnson comes Jeff Baird. from

open. now is line Your

Jeff Johnson

you can Guys, okay? afternoon. hear Good me you. Thank

Albert White

Hey, Jeff. Yes.

Jeff Johnson

Hey, on increasing only of obviously quarter your rest great. little some like the two talk helped a here. maybe seems know Americas rebate time, side close about I getting they of talk daily you taking the guidance the for All little EMEA was the down of But kind marketing to started rebates if the impact help this at out number? nick in gray and the it side things could what stronger quarter. the then the any of are the And updates last helping that of seeing is and the in to and of both higher out Al, U.S., so One, of Americas was on quarter. right, in about the EMEA maybe if year. Can just you wondering same that far the that's us silicone you your softer a month those dollars? you I but,

Albert White

second Jeff, first. Yes, that one I'll take

You're a newer customers activity talked bit softer. altered about spot gray which a little story, Europe, or on, the yes, -- had the to there. the bit for the No We've some some where activity surprise market EMEA, stronger; saw in Americas, those numbers. some of perhaps U.S. we purchasing product little

behind that We most so fixed that, us. have activity of is so to speak,

weaker the slightly year the numbers indicating Americas Europe. you're you'll I as of we're the see of back in from probably think what going strength some half and kind is see to in

I look you the see in can was that the You QX, remember activity out, X%, it right, comp that so year. really last gray XX% in third think I quarter and at market play if

associated you Americas coming If the activity, some positively. we're at is I improved some is and it and about you in implement that of from rebates look of in the from working on some That U.S. coming second touched higher activity. did then year, rebate the think the is comp U.S. talking that the dailies, within half And of strength of we the operations with the

it The we great. that increased of seeing momentum timing some because So, of which activity, is are fantastic. is

The about where are from going any upside absolutely detriment So, activity. from incremental sales is things there. than pretty good better we rebate feel

Jeff Johnson

And helpful. question. maybe that's right, my All then follow-up

on But you're X% little X% to first CVI guiding even Just year CVI, maybe a get about of quarter the the now fourth more at comps half in guess, do X%. easier, I on than to side. the quarter so growth, third

like, comps? it half other anything second were that's it it the even activity you than than the you other in Is be confidence stronger, rebates? you're Is sounds to So, that the giving going half? first the

Albert White

that positioned we're I Yes, three where with like I actually, -- of all think kind regions.

the we're there, on I just the to momentum for or the think a EMEA those the it's is doing but positive daily side. of some tied well. out because also us. seeing the Whether Americas rebates that's of comps getting products

then going especially in growth built region, of some decent on to be or well. is the Although do second year, continue well side able they have that hard large there, account should put we really over to comps corporate think really I expecting. I think it's challenging maybe than going they're the relationships to and result a great up a half phenomenal in And key better doing were Asia-Pac's They've and some some to numbers.

optimistic So, enter just second a more the kind generally we the speaking, think of half little I bit of year. as

Operator

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

line Your open. now is

Larry Biegelsen

Al. Good taking afternoon couple on questions. guys. guidance, Thanks A for the

about in went wrong in since you the the looks direction for So last FX the $X.XX like first, just call. it -- EPS, on other

of be like And that's didn't really You can there? you're CSI Could understand, around with that. looks a the us bit guidance second, I you're little clear, just benefit. $XX and the testing million $XX LifeGlobal, more guidance? some be honest, us it change the help to the going you CSI global give you you. to out just million Thank to kind probably on And an made absorbing a clarity that of So through. acquisition changes

Albert White

Yes, sure.

since about we the so numbers, being absorbing right. are it's we When quarter, you're FX, re-ran $X.XX worse one last First the that.

up so the that the is If testing returns, business are operational a to the screening specifically you those and being that's of at on guidance that's going keep that half NIPT. year investments hurdle we some had look We offset allowing so same, our to and pluses back and have nice offering negative complete two, $X.XX that last guidance. year. nice. site, for of ends we into within and When did core of or genetic carrier the that acquisition over strength the The the our us of CooperSurgical, the exclude incorporated the so obviously minuses. Some we've LifeGlobal, we've the what's really

is just offering out carrier screening and revenue We'll now of the of offsets we've probably million within this -- basically, acquisition kind testing, genetic of just a do so they So, testing, done getting that and stopping revenue, what the in CooperSurgical somewhere, it, $XX that one let's year. stop and that detriment we're negative. another. that's testing NIPT call testing And neutralize of of offsets kind LifeGlobal

Larry Biegelsen

questions guys. the taking for Thanks Perfect.

Operator

from with comes Keusch you. our James. question next Thank line Larry the And of Raymond

line is open. now Your

Lawrence Keusch

Thanks.

just like mid-single-digit sort back the than anticipated you're touch was on half I it is to for the like talking of kind of of growth, deceleration the But in did I quarter. about now a force seems Al, wanted without sales sounds product thought that the PARAGARD. So, year, doing Obviously, previously. to it which what better

a you talk in? PARAGARD beginning So, the how kick the dynamics to about bit maybe force little and just around sales see

Albert White

second Sure, had out. that definitely with strong PARAGARD quarter, yes. happy the a way played

For strange keep they Teva us. price for a price that to there where remember, half QX kind implemented us some of that in numbers the mind the increase, and buying impacted increase and their the sold that the of into resulted, back that QX QX you before that in business saw had year, was

QX should should we'll because and on a stronger So, to perspective, of basis a QX have more stronger, going what with on that. year-over-year then you're because that, challenging be QX for a clearly be end is, comp up of PARAGARD.

the there. positive see of we've that's underlying really excited our we certainly be unit where bit fiscal there, sales We we're to some stuff, going. still kind of that that's look obviously, year, some of beginning force, momentum positive, going. implementing product move the quarters XX here. stuff. that learning little up the this comfortable salespeople We're at those and calling get So, margins just hey, being then But some higher or do a so that. with that, uniqueness we of than fantastic how when forth are we're at given We so effort hired about there But of ends we're and still saying, numbers just so growth more that's kind and it appearing acquisition think happy if mid-single-digit the -- some up on is can closed higher periodically a that grower than to I

to going so keep feeling we're little So, but that. deal. now out, forth, and the I bit we done better we've We inventory feel we're issues keep the keep QX figuring behind and out salespeople, about learning, about had to get rolling and channel a that us good and would market say that

Lawrence Keusch

sales. Okay. flow, a really of on early just from it And Is any this obviously you year. I And separately cash then, cash then New England about the for The of talked PARAGARD too the lastly, impact guess of article? Journal flow end to follow-up strength on see Medicine

debt. billion higher. are just I You've got move interest in sort I'm continue $X.X rates to of curious assume to going --

-- that's floating. got You've all most of

about forward? allocation So, this we how as we do move think capital

Albert White

New about England the question physicians that. still to important that too us of topic discussion obviously are out important would Medicine, I best aware study what's PARAGARD, early Yes, physicians. think the for their on a that. that of about really for There's recommending, we're conversations hot that and they in That's There's that. ensure and anything It's the no having patients. Journal a for marketplace from do it lot still be see to that of and about

that. about through that activity that we salesforce we some from seen So, hadn't where in some while. positives the already. some growth XX% we have talk The in this quarter We salesforce, the saw continue seen saw of to we a little purchase

too very Having in we're out. strategically. down be variable little acquisitions would in the going we're of allocation like some capital Product's it's to and said have we it, debt one those fairway. understand the If at there's to market ahead or back in of long early a looks to it that, of a plays get or been then We up, to and the So, going that's want time. is It's and an that out did want I the okay, bit yes, quarter, too, salesforce positive to sure talked thing. bad get the getting how down going it, sense, we'll to we'll ourselves, ahead debts, to benefit adding acquisitions ourselves there. And salespeople since see make of like, that don't something especially certainly particular. challenging that in do look a everyone's do, if bad. fit have about debt a space and pay there at think going I debt. increase comp we when mean, If little paying levels, a on we room like have all you acquisition a and level CooperVision completely of in want anything to at makes a to more nice plenty middle be I'd come whether that so forth. down not do. and space. would look rate to it leverage because not flexibility do If look numbers We I We at have don't debt. that some look it's be so CooperSurgical the basis things certainly we it's to higher of ratios, price of yes, it's the the

Operator

Joanne from BMO question of you. our with And Capital Thank comes Markets. Wuensch next the line

now Your line is open.

Joanne Wuensch

talk Thank want the little CVI much. I about to bit a you market. very

or clarify that's there. answer that your or is unit just share that please You you not it XX% I'm impression leave And dollar because could made question, to whether unit my to -- well, comment the some at I'm that going have roughly share? share. Is beginning you dollar going

Albert White

Dollar share. That's based on dollars. revenue

Joanne Wuensch

number for share units? you And a do have

Albert White

We under-indexed because I well there dailies. do not. of would be

on a currently our a we're revenue market of on where we so basis, a XX% so lot -- market have about basis, growth have share from. XX% daily that's comes global share but We

a look -- the that basis, having competitors growth. revenue the If market, higher. obviously, you dailies lion's the in on that's what's unit to going lot and our be a us at offering they're share of But

look XX% that three, take up towards four, share So, will obviously, is our and to the we moving allow XX% and, when continue move XX% next five-plus grow. our market share at years, the going to us to daily higher,

Joanne Wuensch

And would XX when we in XX think you the what products new over months, CVI us about to? point next to

Albert White

sorry I'm what was that again, sorry?

Joanne Wuensch

And if we the XX you look XX CVI would what us at over the new to franchise, point products to? the in next months

Albert White

look we're at products where MyDay I we that, where that way. quarter the is out. Toric just right -- in products We of in rolling stages where good being are U.S. with example to out. the of a started products some There the brand-new rolling by a parameter nice early along expansions more would now a need had markets or we're we second new still out the roll lines product. either than

good, is is mostly parameter and expansion, existing kind the really to is we're But we're everything products and making having products those available there going right the sure enviable So, rollout out, of what some there on. rolling mostly of now new focused just strong completing position markets.

Joanne Wuensch

Thank much. very you

Operator

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

open. now is line Your

Unidentified Analyst

year with latest next plan that more Dennis build the is for give salesforce And there out comment initiatives could I guess, a Jon. first in question or--? to CVI? an you on this is is the on Yes, on update or

Albert White

Yes.

that So, to a to with that. and sales CooperVision been is plan the respect little the we've force do while, continue expanding to for salesforce,

some salesforce I but salesforce that U.S. kind think was have a is people some that, a that global may of the expansion, for reason, gotten expansion. impression,

street, direct the where I So, tend it accounts, of feet selectively, sense, that to global on makes say corporate, whether and on expanding we type it's a key at thing, salesforce our it's looking whether large are basis.

doing been we've that. So,

that the on We to the can returns returns of of in in year kind that We going that. the see back some think half seeing start of on we're the P&L. through seeing topline. are We this

things, So, on good I that say, return but numbers feel will we feel yes, selectively a we're it or that we'll get on won't details and of into it, specific side add. about we seeing continue to I

Unidentified Analyst

whether Got Or the does about Alcon it. from either it the half for second competitive how questions. that the guidance, Thanks any to in taking CVI those assume Bausch would as are contemplated? And launches we or year? & of relates Lomb the think

Albert White

I think products, they years for many we'll many Yes, with deal going with We that launch I if competitors products. mean, that launch for and forward. dealt that years

can position, do into a spot to it guys lenses don't about Bausch do. or know And whether launch forth. where so those of and they're lenses we salespeople, about our great own products. what they're or and be There's different with is Alcon different pricing we're going So, launch I to launch to rumors to get speculating that. going what and control to it's going launch launch and when to people to magnitude they're when going What launch them. in I'm be in what them going type going it to respect they're and to them they're not

happens what at looking see we're with our own business. we'll but just So, them,

Operator

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

now is line Your open.

Matthew O'Brien

also on start side. tough that bit Toric Thanks with a the Afternoon. taking those time, headwind. slowest in that Avaira; was a just on the of transition under a year, seemed lot for of I MyDay not. and bit a Biofinity, of moving But same [Indiscernible] comp the for questions. the think, think the Al, there's daily momentum or seen the introducing of with the I it's you've the last back if we've little a of be parts. to is two And quarter half know don't at X. to a I got guidance you're pressure those little lot but, this CVI products

the some the takes time? weaker of whereas getting puts and products is talk American a market of can on growth of likely -- So, EMEA those you a same stronger the about in North getting the at backdrop over

Albert White

can a last majority done. and product. But done of which of the about transitioning second fact, comp That shift Avaira, we're Biofinity. about right, in where as this a selling bit to They talking sure. will we're a matter gone stop We're forma because on the actually quarter the end a will unexpected, be in Yes, you now pro well position that little be tail the out, of has Yes, you customers tough great, is that. better of up you're were that that XX% transitioning you where them moving The to year. in, of Vitality it Avaira product and a was vast Avaira. the quarter talk can puts now to than

Now having a at that which that's and the right market said you FRP when market, flat now. is remember market, two-week pretty that, the monthly look

So, are we we're a share space. relatively really we're in But doing there, in we taking in that competing, you flat well growing, space. market are if will,

So, they'll much the to of year. think it's do get okay back those hard I growth products. the But of too out in half

well to that's growth. strong. right positioned. are its where That's the market talking Dailies look driving If it. now we're where That's that growth driving dailies, silicone we're at are hydrogel really you going drive what that's our to continue we're and the about. what dailies And

Americas to EMEA, when I a again. that the Avaira Biofinity and optimistic it about feel certainly in won't think comp touched between the daily here to bit the But drive continued silicones. up only ability do We'll and the growth worldwide behind a I and is point get Clariti. so issues back pretty transition and on Americas to our We key silicone will cover So, comes -- us solid daily see to put going growth growth, both MyDay though, the product, decent much big Avaira, and to the stabilize between it in franchise Biofinity flat well. little growing. that so so growth. hydrogel is continue it's help to

Matthew O'Brien

Fair question then welcomed for welcome. that enough. has don't And Brian, Brian. anybody to you And think a I so role,

Brian Andrews

you. Thank

Matthew O'Brien

that little and buried the impact currency durable side. of you're how be gross I'm as is bit $X.XX Can -- offsetting bit operating you Can margin? because as about you're you're with PARAGARD additional then talk trying that how here the a from on out far -- you exactly a figure offsetting you then little in. to kicking mentioned more there within on currency And headwind? that specific headwind welcome -- But

Brian Andrews

Sure.

for impact the part of was the the year So, remaining $X.XX.

is pound that impact later. a so quarter, that way flows a the OI about so We you $X.X of up this to was was kind the $X.XX. with there know, million had, and currency, had obviously, as And months it then FX loss million about $X.XX. flows So, that's through six $X through we that --

$X.XX. to related So, that $X.XX result also in guidance, that's previous that so in to pound to QX, going compared we're is expecting loss the the currencies

that Now, to of really confident pretty how believe half we fundamentals will back We business, the into are the going hurdle to our business strengthen we're and feel and the underlying in That's operations. headwind of going been just the we've the with PARAGARD investments yield hurdle that? our that dividends putting year.

Matthew O'Brien

it. Thank Got you.

Operator

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

open. now line Your is

Chris Pasquale

surgical the on questions of couple business. A Thanks.

upping you full First, Al, think actually year or been million. you sales? you forecast the were PARAGARD keeping what now whether I that wasn't for It $XXX it at are same? clear guys had assuming

Albert White

mid-single-digits. Yes, higher I that, look at little think back Maybe combined, dramatically higher. that it's like the the than around bit a little going but not be $XXX will would or something if be in year be million a that I bit you to higher we should the envision. of It half

Chris Pasquale

very a PARAGARD segment. the lot And Okay. had a the This good lot, where business of non-PARAGARD you've pieces for quarter. going? then a that helps surgical see gross in do noise that obviously margin is you of but

over that higher business is time? even a So, it get than Could mid-XXs that?

Albert White

higher. high, move I it believe but don't it that to think continues goes I

XXs. gross XX.X%, think, in So quarter this we margins that low so business, I were

Chris Pasquale

Okay. Thanks.

Operator

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

Your line is open. now

Anthony Petrone

of Brian, that area interest the second well. to Thanks Day, talked that I can at want be on X% delivery just, views then X% competitive both and would the would And Al, to range. good benchmark new wondering overall trending an two a attended global? just that's be and as us e-commerce. you've about drug your end performance the J&J to front Cooper. initiatives, of just your is Were you referring U.S.? that sense the of And -- Is would Maybe follow-up growth that in afternoon. and higher potentially you the mentioned for role to welcome, to give Analyst CVI. those if one and of the be the on I'm they we market markets

Albert White

information try Yes, had that to It data and like and basis the quarterly of we the FX releases little a third-party We At just and basis. forth. confusing. gross Alcon quarterly a to you That would so global earnings X% bit day, pull and even look really rates we and more end the We spend and guys, that. Bausch. to in on the X% from time a J&J and was growth data at. was different it on us, would was used on be get

some information this own of how -- the a market, of I'm to or can basis see that and you me, you bit Bausch can get global can to J&J, range. quarter. talked in fill day, a So, growing the the market, To channel X% contact that you is that everyone sorry, about adjust fit. X% little their on opinion. kind end lens have At

X% going to think of upper part continue that X%. I at to be to the it's

to So, I range. like that X% X%

while. settled And silicone a daily think for I just the to be in forth. we kind with we that's so and think can of hydrogels little seeing where trade-up I

that the if all to end that. I And So, take market share kind I'm going of we'll strong day, is about market want. range. growth of strong At within the we lift to what that is of continue kind a market happy boats, think

drug lenses past. talk delivery. animal J&J, or need, kind talking type contact about eye it things allergies. within what back in dry and look talked that glaucoma approvals of a delivery you forth about, the of so the whether it's or is or You it's is of you're you eye delivery drug of We've treatment talking kind about when FDA at Drug a different about you're that

ton is I think, a there there.

many, So, that's -- much we'll thing, That's been a vision the more see where of that players. goes. of I we'll mean, topic that's kind different years many correction off, on not We're see. really from for been and conversation our on focused but thing.

time through talk the and also of presence channels retail this of in sold sales space through lot strategies and and retailers You distribution right lot lot you smart big have that sold call. who and so are about sold spend a and on be spend sales different on and effort on We lenses we look forth, very working we online part didn't so about space at right optometrists have we money the now, important on a a marketplace chains, and of some how But an for it online, e-commerce have of that now. talking in side e-commerce that or side. forth, that's people the us

products much smaller You want which frequent to to homes, be means able to individuals' shipments, smaller distribute shipments, type shipments. more

it's will, and we're and bit we the a of from want through if be whether money of We We spending the perspective traditional infrastructure on So, to in capabilities track, happening. e-commerce, we continuing distribution work position and you a of about through that that. is are that and that it off, doing we All distribution have, a feel forefront the we're pretty or kind lot distribution do that little there. good on right a competitive your on upgrades good of IT to build-out centers. talked are

Anthony Petrone

Thanks.

Operator

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

now is line open. Your

Matthew Mishan

for Great. questions. Thanks taking

lenses eye well? at what it move can online that time that, When as follow-up limit sphere? trying model to to to to kind that's develop, to a are there enough the it? is Or limitations you the is there I look something that moat like Just exam mean, of a of Al. over towards specialty

Albert White

tough kind book airport glasses And you like to pair compared bit a you're try reading up little go a on see reading at for it few which pick I one. and works you of Yes, actually a I glasses. you you. -- a mean of to the different you and of kind that's and one

could So, do that. you certainly

It's more spectacle in the your eye. a market. device. think in day, you're than the of end in I lens market At lens that's putting it contact the prevalent still medical contact is a the

You still have middle who physician in speaking to. a the you're

exams of at get grow? you challenge. astigmatisms So, online and be with a That and Can would is going you're to so where the Toric forth? fitting really talking prevalence about Probably. to

is lines. a more the if person about or the generic, You're probably along minus you two talking where will, something see. sphere those We'll

on-eye more business of the of then that advance. to contact office exams, more doesn't, our continues physician's I That's profile. lenses they're people day, at patients think get their contact shift potentially buying then change more technology lenses. a from great, are to way a If wearing to lenses. a doing they're But end because different the necessarily of

Matthew Mishan

expectations? this little year, you digest color bit have more to And Moving any then have we're forward, midway through you a on rate do time do it? tax more

Albert White

the this No based same. our rate wouldn't I to most update anything guidance right have. we're at change we on time, going keep nope. in tax I on now really mean the recent point that, that information

Matthew Mishan

All right. Al. Thanks

Operator

of comes with next Goldman from our question Sachs. And Isaac you. line the Thank Ro

is now open. line Your

Isaac Ro

I to bit comments you. Asia. your about in little Thank ask guys. afternoon wanted Good a

plan? what above had region, maybe products us in detail the a within a Was strong little of a specific or you guys that You country really a give handful result more came outperformed? Could there. really there

Albert White

enough pro on Yes, constant love diversified thing region been its growth. basis time a region. it's there good quarters I is Asia-Pac. question. growing currency Yes, about talking for is I fantastic double-digits that good or many quarter another That we that spend and don't The here. mean, now, about forma a

growth Greater we of in a right at the double-digit have infrastructure we're lot XX% talking now. countries. China, great where range we're in China a kind growth about we or If So, of about talk getting

of of up again, a We it's lot also don't know because continue example that's where opportunity and nice market numbers people you we'll it I of to is have a look built growth would about a potential and to countries fantastic U.S. China that right a and market expansion, to lot a grow there, sales talk have where that we growth We the at nice the do We to there. really market. Japan in Australia, growth invest But team U.S. right we put well want number putting there. as our infrastructure and own that put But be an there's a that force and it

So, it's there We is team and strong good there and and with I love. growth products that's a thing countries. diversified putting keep the up rates

Isaac Ro

Thanks. it. just penetration market Could LensFerry. follow-up well be as would us And goal maybe in just terms as long-term financial that of goals on what initiative? Got reasonable a in remind Thanks, a both you just

Albert White

is I long how history of and and And we kind success that's terms lenses little with me how look a delivery the have what LensFerry a Yes, we get with, independent how our to help is. we of support optometrists. relationship them CooperVision that something had has LensFerry bit optometrists relationship -- independent in of the with and at we their -- manage them to practices, of and it we that's manage lenses offer them what help broader them,

but are lens that trying on we is that, individually we at that contact helping it, answer platform. an are IT going continue helping we more and how a manner so holistic perspective like Because LensFerry and to grow expanding look physicians, that invest to we say to where I look in the that don't we that, apart I context wearers. ton that that in I at profitable updating from So, are won't time and forth. go. the a yes of And of that to and the pull are is spend of of or

think So, that's standalone here a the probably have we or more strength. is I organization, the if of of an it entity. Americas, underestimate more lot business a than area, will, kind where in of But throughout kind it's area of that especially a linked the people you of product a

Isaac Ro

Got you it. Thank guys.

Operator

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

Your now line is open.

Robbie Marcus

housekeeping a for just you. few questions Thank you. Great. Brian,

follow-up. and rates for -- then acquisitions what topline what there I'll FX were. assuming help start a maybe Maybe second then and I'll guidance, And results and you break the quarter and in you from yen? are out FX, euro, on the First pound impact in the ask us the

Brian Andrews

the X.XX guidance; on Sure. X.XX Euro, to guidance; last X.XX pound of on X.XX euro rate against the the that compared as to yen last guidance. and last X.XX compares was X.XX, on the

as as on of Surgical. CooperVision in of the -- this was CVI to around the and far was million. topline, impact impact was $XX that the million $XX $X quarter million, So, balance

Robbie Marcus

from what's contribution M&A And wise? guidance the percentage or estimate

Albert White

the Are from full you guidance in sorry, based for saying that's built on the -- now I'm year -- acquisitions?

Robbie Marcus

Yes, an how into for guidance much the the year? of sales is M&A built contribution

Albert White

grew -- that outside of There's the those XX%, lens those PARAGARD, on not specialty our a acquisition, acquisition CooperVision, pro we lens about acquisitions ton But of acquisitions forma did because acquisitions the within basis. portion a relatively our we're small. --

would lens we grow specialty expect to So, that component to see that continue double-digits. kind of in low

Robbie Marcus

then, maybe Al, a question. strategy And

is market. to changes I and company and the growing now to talking you behind talk press Cooper some the forward going versus the And message hear the the see there. no the of in CEO used we that thoughts role of in about Thanks. how the plan you about there. Maybe longer you're data reasons release you maybe don't Some could

Albert White

Yes. absolutely. Yes, Yes.

page, was use the and data pull data way. than in net it some market, and data some that to discuss a were use that reported we basis, acquisitions and release there on that gross was providing of were we the they were not try reasons they basis FX matching from was for And we ran different the rather last confusing. weird where rates people. external as data multiple that a would think a that in the quarters I to earnings we in pretty And into there results incorporate together

the continuing performance what numbers we a numbers out J&J's they're wasn't be out what market end the the a to on at of it on get in reflective at to you Alcon's And the frankly, from comfortable do, it and take where So, turning there of point you going we and can. the basis. numbers, just so really day, go-forward pull to doing was here like kind of use Bausch's perspective a and get, look like can data we and were

off when about accumulate people's are I at about right say of kind of results the what's and to I think mean, look that thing important than I talking I look we're silicone big better numbers lens it market trade-up driving is on as-reported daily different third-party contact basis, the So, a we is at Then we from kind the a now go-forward talking part sources. of it hydrogels.

in J&J a now about about are that see of in Alcon. process. competitors right But with big see our it its We'll that. of DTX. own is process. it Bausch. is Alcon part some We'll does Now with that

get because do lot that them do XX% Now I because for and can some they daily period where some wearers. market have overall have the competitors pretty there growth. significant can sustainable We don't in of was time they should market luxury they the our have daily good that have help share. And growth that's and Joanne, trading-up again, going hydrogel position a to as to put legacy we pretty that a opportunity of about to quite a mentioning

many So, we that's a don't just carry as legacy we -- hydrogel plus/minus. don't wearers,

growing share We a lot dailies because of silicone. taking we're our are

higher believe, And that. message that towards we'll grow, in X% north and is lens I is that. important the I range of to of to the think overall more it'll going X% to think the me I So, part grow market contact be

come data new a seen, of it's pretty data lot data fit that out just And wearers. to recent even kind came that market stuff. of of we've So, I of there. at going hit highs share. out, the mean, of new the a new When we more in is take fit I've exciting some some that look will I terms from growth

our because and think because trade-up think well can strategy, do of win competitors wearers. do I we on we I well take the So, they some

some We expanding that also there. strategy, our trade-up of out and we're have product offerings

that's at So, better of a good, think the day, bit solid message little end market, the and kind doing the I of in we're that.

Operator

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

Your open. line now is

Andrew Brackmann

last the CooperSurgical like seems in genetic to is Brian just is This a actually Brackmann today. guys. add a just bit from Al, It there strategy you wanted the there on that? more I slight for testing. change on start Hi call. on Could little Andrew color

Albert White

going at that talked of Hansen took kind give there take and my doing about into from Sure, dug of really Dr. we drive and from said Auerbach clinics we and it are said, runs sell or done IVF testing that position transfer Yes, to to of of this, to who off here. PGD these who is the strong -- at are to sell with which the clinics. up going profitability embryo going We're makes Bob IVF product all at genetic the That's catheter Valentine look couple and what we a us. the we little PGS so and And with going media NIPT, our the are Linking how on, last day, commodity took you point, products. this carry said, a microneedles the team the absolutely. a that, sold are drive are IVF we how is we we a and hard [ph], We end that -- best and sales and take Mark forth. of I when products, we perfect into what's And quarters. growth go is I real we costing the world. more business, perspective more that and where David we're and where we you we look a bit to for clinic. this carrier it, products going hey, that's where look you not those little fit together When sense bit the will, strong. screening, in at generalized, if are hat

offering and at and out Cooper's look when exit sense for we now, types right tests. accomplish, of us where those made our So, we're it we're business, profile business what at trying to of to

to -- right made the to going the the at of the day, is At We've that. the us. end that's that, do for decision answer and that actually down our road that. of we're we've notified customers moving So,

On devices the a you will, bit IVF on IVF and clinics on more side, become other our So, we've IVF. if -- side. clinics then medical laser-focused, little one

Andrew Brackmann

Great. question. Thanks. And then one other

a You've CEO few just, you strategy them? talk made a and role. about taking changes those little Can your bit more Thanks. open-ended, behind personnel the since

Albert White

changes here, personnel doing right going. runs Bob here. not a a McBride killing Yes, as in, direction we been be Dan happier you I are perspective few stepped it from a I guys great know, CooperVision, sure. Yes, took a Brian's could now over. and mean personnel month honestly CFO. I the there. There's where He's chair on doing CooperSurgical, in running a come he's fantastic as only just and job. job. the we're

just and here, time a who's Golden, to She's Investor has lot that; administrative in capital me, Sheffield, this running Human shareholder you report-wise, Strategy done other Holly long-term came long Relations Officer Chief Resources. work who if deployment, a Counsel. Monday Kim, our responsibilities of picked For value. was right onboard. Holly's direct week, of and with me addition on Randy day first up will, for the General

intelligent. personnel team we incredibly spot highly a great team, a a great dedicated, have perspective. So, great people, We're a of from in

Operator

Research. question Steve you. And Cleveland from comes the with of our Willoughby Thank final line

now line is Your open.

Steve Willoughby

commentary or an way about earlier have evening in like out coming new year, to market up current think bit whether the fair that? up -- X% that's competitors on on come is half thanks maybe launches -- first, even for I do and my assuming of [Indiscernible] that. that that guess, Good to market own and following taking potential If question questions. their second contacts with you. on a I Are the competitive Hi. Bausch to lens. regarding for X% the a with & it? your stepping Al, a of Lomb products, Is Alcon, growth couple you

Albert White

we're out that, with we to out believe know, mean, I to play, us gives mean, Stephen, a there's going with Yes, opportunity. well that's come you in yes. right? really daily, wearers it plus-minuses competitors I positioned. Alcon some put right? Yes, Correct. mass-market comes launches, and if

of kind to plus-minuses situations. all So, there's these

Steve Willoughby

going, thing Yes. you've but into the of account was sense, of that. The is was there's taken kind entrant before. been guidance feel -- I new there in I one the and makes that was just where that That comfortable Al. to about market it kind around If thinking that's that haven't

Albert White

Yes, yes.

Steve Willoughby

Okay.

the the things? on remind ago looked year maybe second the walking scheme business Can a The in on what versus question, from, of the the it of business. other us NIPT you're genetic overall away that grand business just screening and how like you much was

Albert White

$XX Probably NIPT. think a little were it, NIPT screening, is to revenue. And the million the testing the now looking in in way screening. in numbers, some carrier because about the the at revenue quarter in within out easiest our we're from And in $XX numbers carrier probably, we million Yes, excluded declines CooperSurgical. convoluted genetic but that, what's of gets call about it being let's and last here

to that, to the probably So, fairest million when of about look would $XX way best. trying think a the -- million probably look that's we you're talking I'm way $XX at that less. is different that this to but And it. at at be look on -- less

global So, to kind on. we that of like offset a natural added that deal

Steve Willoughby

do two-week in you're Thanks been? guess, it Avaira that Al. with doesn't the two-week no almost Okay. it decline you now bit decline done can a little us things. transition? then, I color market And then things Or on demand about CVI and much all since maybe throughout as data, through think did trend business more I market has just just quarter? as that, the industry you're grow market at the can the guess, just providing did comment the first, the two longer just is which through quick trend And secondly, last would quarter, provide how you so the that how in is

Albert White

you're market is -- two-week Yes, two the declining. the right,

of we think got It's it's back Avaira, can little now going we growth take maybe we to home bit a position in a where if not see little wouldn't to growing from we even once run. we Avaira flat, I be that that going get a surprise with off, to have Avaira a being think me bit. transition, put ourselves Avaira. this done I not But right? can It

we little as through the have little us, bit of associated growth. of unit margin getting starting that still the to was out. for you come link flat, margins. that with the of of that some Avaira gross which out That remember You'll of biggest think a behind But back P&L was calling gross cost still it, I of see we're transition a are than that items you're once Avaira. the done get the per and calling move because less some legacy that it kind associated with Vitality not And the you to then maybe and We're significantly improvement we're which get unique, is bit. charges. get We

we terms into in have in May wouldn't of the and of talking anything by quarter results the the -- particular the about half into the May get results those for say, within the of I On would was any we're I wouldn't some here to quarter we QX. optimism incorporated -- a -- those anything along point lines I or year. back CooperVision, monthly basis obviously,

Operator

call I'd Al And Thank remarks. Q&A like any return for conclude you. today's Mr. closing does to White And the to session. that

Albert White

Thank a the with some think are, and within good There's right quarter, summarize, personnel Surgical where We're a the we of and I had just happy. our so the perspective from within is company. excited the to about pretty within changes we direction. of happy pretty in the direction future. Vision and and the here happy dynamics here I -- corporate organization headquarters but everything mean, you. been going Yes, with We're

that just August. people earnings sorry, exclude to concludes, me, talking early to forward to -- look September. giving at So, looked to and Kim, And continue of the or our in end

Kim Duncan

XX. August

Albert White

for August our next XXth earnings release.

the we'll that, So, with conclude call.

Operator

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

The Cooper Companies, Inc. (COO) 7 Jun 182018 Q2 Earnings call transcript