COO - Earnings call transcript Q4 2019 | The Cooper Companies, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter 2019 Cooper Companies, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question and answer session. [Operator Instructions] Please be advised that today's conference is being recorded. Instructions] [Operator

like Relations conference and now Duncan, to hand Investor VP, Administrations. to would over the Kim I

Kim Duncan

Good afternoon, and Quarter and welcome to The Year Earnings Cooper XXXX Conference Call. Full Companies Fourth

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

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

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

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

over for opening his call Al remarks. to turn the And I now

Al White

results fiscal QX a year. businesses conference we're revenue forward. X% fourth year CooperSurgical revenues, QX, Thank a you, successful X% This for high Both record up to strong strong XXXX and Kim, X% moving and reached each a year pro year up the record afternoon, and earnings. our and positioned with producing year, driving with quarter good and our We to was very continue note for well CooperVision closed forma Welcome full growth call. everyone. the posted on full

million, X% reported $XXX share year-over-year million, up pro with up Non-GAAP revenue up per were forma. forma to X% of pro CooperVision posting For and reporting as revenues consolidated $XXX and revenues XX% $X.XX. million, CooperSurgical X% the grew quarter, earnings or $XXX of

Beginning forma family. On Americas offering sphere given led and silicone and challenging growth clariti in where available the solid last and a the grew a were we pro by Of clariti, product quarter. we posted a with year's the from hydrogel broadest in performance sphere, market the CooperVision, fourth basis, our continue with X%, XX% where with the was note results franchises to we provide impressive daily in MyDay multifocal. the toric saw the across toric comp

by EMEA our with FRP strength grew of key X%, several seen driven accounts. in results daily and

XX% the posted Japan was tough Asia in effect went of a There our October into X, product with to prior portfolio strength the region. strong Pac drop XX% activity this seen and in with comp line growth guidance. across was VAT largely buying some the a against which but increase,

torics, two discuss product Energys of later Biofinity, Avaira and by multifocals a nice We our growth silicon spheres franchises, Vitality, for these FRP performance X% in guidance. in impact saw three Within note, our from did see also impact MyDay's portfolio, I'll it's QX, this, regions led daily hydrogel negative were constraints, important silicone will to XX%. some which All this we supply and by which and and a led families. leading combined grew

nicely, and XX% Biofinity. growing outside and by brands. grew clariti Torics multifocals Moving revalued led of X%

strength So solid in summary, geographically. with quarter the this throughout was and portfolio a seen

and the the Belgium, we operations manufacturing Costa construction extremely packaging expanded was expanded Rico investments. in active distribution and added Rica our distribution Moving in our Budapest U.K., to manufacturing year This new CooperVision's U.K. facility as past Spain, centers our significantly new in and on South facility opened infrastructure began Africa, in a doubling Puerto center

MiSight March, our packaging For including myopia to received programs fiscal FDA marketing expected, management U.S. launch starting hiring silicone approval several on focus lens. our and requirements. and contact meet our plans specialists, marketing education on targeted we've MiSight, and than We our labeling on FDA innovative expanding is manufacturing XXXX, earlier hydrogel supporting to so daily accelerated finalizing

the myopia. I'm been standard and that report of now happy should early be this patients more to for both and aware MiSight of are for has becoming young optometrists, why interest consumers phenomenal treatment who with benefits of care clinical

XXX% around selling over From around XXXX $XX spent fiscal in launching developing, sales, $X.X an the million MiSight million in This helped generate investment perspective, and year-over-year. world. up we activity

investing year, educational this expand and support. increase geographically, increase we launch, regulatory clinical activity, continued million around accelerate and as $XX marketing sales, For we're targeting fiscal our U.S. work

We're forecasting for that. U.S. $X sales XXXX, being of the million fiscal with million roughly in around $XX

Moving million to to double $XX then fiscal forward, we than expect more that around to in around double and XXXX $XX fiscal XXXX. in million

roughly so that who Lastly, estimated of improve of world's that and one's excited of increase about this challenges is correction It's ever on XX% MiSight, -- currently Anyone we're a life. this visual product. needed XXXX. to myopia population myopic, can due the why in and myopia, knows has on comments the let significantly quality one-third few myopia will and to nearsightedness

on is world have kids. over MiSight, XX,XXX seen reason children, treatment life-altering This who parents of around to MiSight. us, the for importantly, use this benefits already we've who want educated myopic the most provide kids their to And are the

epidemic. later retinal to such reason glaucoma, Given detachment, myopia's eye having have we life, severe cataracts this conditions the good first to as product FDA-approved excited in about address and get link to proactively

million all risk prescriptions also later And largely life. there's problems our mild daily largely on remember, hydrogel way, $XXX in higher expanding where have market reason this manufacturing base. active Outside investment health a a silicone activity focused growing ortho-k the the an our global by And of is with eye even is MiSight, of we're serious children participant.

this We've near going term. recently strong well really cost significant realigned to in new efforts main the ability it accelerating. the with for robust our reduces accelerate MyDay and detriment lines, The clariti is remains demand to tackle the start-up for reduction demand and resources being is and projects extremely on

soon as Regardless, well lines containment on possible extremely well these opportunities fiscal we position we're cost this fiscal at I on XXXX. these certainly us growth operational seeing, getting investments to and a imperative and believe the capitalizing us projects position later can is focus for as date. year, they for

underlie CooperVision, $X.X drivers on the concluding the industry. Before growth of let remind contact multiple me everyone billion lens that

hydrogels. increasing incidence and myopia to the specifically, In and earlier, there's dailies, growth geographic from in silicone addition to -- and mentioned the FRPs to trade today up multifocals torics expansion, of continuing dailies

up continues a of as time only estimate today many upper of come. years last long are range hydrogel and dailies in in Within market XX% XX% XX% we to are support to growth for dailies. dailies, trade those to the this X% the this part powerful of X% All silicon wearers double to only

to once I'm our Data finally, was very to especially happy again hydrogel quarter, dailies And report Fit fits. this strong respect New silicone with

well performance bodes our this forward. moving So for

catheters. our CooperSurgical. by revenue Fertility and of portfolio, market-leading fertility led up consumable We products transfer like media needles and reported up forma. to of IVF with was growth $XXX XX% X%, growing our million, Wallace Embryo Moving and device X% pro which surgical includes office a and healthy

of focus finish the and well products. The accounts team key a year market-leading exceptionally cross-selling with executed to portfolio on our

continued fantastic year, For posted fertility and we growth has the growth as market strong trends. expect of X%, global growth fertility the full

driven of Within showing was against surgical, our XX% PARAGARD, single-digit was by PARAGARD office is demand, by comp. with difficult and increase buying driven upper growth which in implemented an and as September price X% which advance up strong we XX. effective second-generation along unit EndoSee, a was XX%, activity performance device very grew solid

see year arrangements years to to by growth for believe over years, unit come, X%, public grew PARAGARD On rolling and remember we such On a continue that supported somewhat full many buying three contractual market as activity, to due growth purchases, basis, and price. Medicaid. and increases pricing, mid-single-digit we'll evenly

sales, of our made we activities. to that happy expansion Outside I'm progress significant report on

several the with the construction on size in products product Rica transfers running Our of transferred proceeding in facility several is project well and and triple Costa to progress production, schedule. other

we the manufacturing well advanced on a to our include, facility state-of-the-art technologically way will in most fertility that what believe, will We're operation world. having manufacturing be

Connecticut also support distribution this a and consolidation year the to center completed of headquarters in X. to new our in XX expanded down labs growth, added Europe our We testing genetic

our sales activity. media television, upcoming new print year, activity be our where PARAGARD, on social For will reps, and with be XX targeted investments and similar marketing including and this will with advertising activity, precision. We recently educational along campaigns, added focused continuing we we

activity international started be business, key Additional growing business, medical management we device account as operations our we within fertility our and our our expanding expand will team. on where investment international focused

logistics, upgrade Rica facility, Costa long-term finish In improve key costs reduce of of efficiency. and to is addition, our improve our strategy part we'll construction which a manufacturing,

constraints we're option to yet, Japan continue We'll present to clarity but guidance, we don't have Asia expecting in more year, to so business, don't Moving EMEA to degree, a us. but see an some our will in in this so Pac impact MyDay as strong have alternative impact customers.

a that needs we're in some before to also return the hurdle to growth Pac single-digit so growth QX low double-digit QX. Asia region in forecasting for of buy-in, Japan-backed

lines. news the output existing We're efficient, and demand our accelerate. month, to is good lines become Regarding is additional MyDay, adding every as continuing increasing we're

QX. expect we exit So improvement as we

quarter softest to the similar we CooperVision, CooperSurgical, due completed of activity where with QX. in to we're For forecasting just associated year price something the being our we're buying QX increase, which PARAGARD expecting

about corporate sustainability make products a operations CooperSurgical, includes ESG within of me let exciting also are efforts. that, really our continual excited we're and for our our on the we This support CooperVision and With fantastic focus with philanthropic seeing Cooper. improving expanding communities, say we're this strides for local to the demand efforts. time and our Not our continuing but and increasing is of only MiSight responsibility

care charity long-standing example, children Optometry have $X.X Giving we which and funds in a As world. including Since partnership, supports an our matching by Sight, dollars. in the cumulative are vision adults surpassed communities world-class million raised corporate we initiating sponsor providing around employees, a underserved by of

allowing a all our have I'm rebates, part of than an customers also more resulted donations. to This is part lens important and proud something part say, in of program has Cooper. culture or $XXX,XXX is donate to their of contact which We our in

to I'll over that, And call with the Brian. turn

Brian Andrews

on of afternoon, refer of everyone. good results. will GAAP release Most for please basis, a Al, full Thank to to today's be my non-GAAP earnings and commentary a you, non-GAAP so recondition

rest so me improvement to the last margin the the only revenues, with from mix, being and legacy XXX a was basis write-offs product largely due points to hydrogel real up solid of XX.X% XX.X%. year-over-year products. improved to XX.X% negative currency quarter from points XX year. in margins gross XX% Outcome to P&L. let CooperVision's Consolidated gross was move of the basis for The higher-than-expected

from from CooperSurgical's XX.X% gross clearing due orders primarily consolidation activity generated back Costa largely margin decreased to to global inefficiencies last XX.X% Rica. to our year, from

made the the this in On an we disruption of expect side, move and the of with year. minimal progress work only we improvement a flip through as QX lot and remainder

control, managed OpEx resulted year. increasing last Moving points margin consolidated The grew forward, from basis combined XX.X% X%. OpEx tightly with XXX gross XX.X% and margins is only operating expansion, to in

lower balances, to was and to rates. past $X.X particularly the move pound, noncash nonfunctional balances significant of expense loss, driven primarily million, posted Interest million intercompany made a we quarter. other the $XX.X a trade tied which tied this FX In by expense, average debt those lower interest re-measurement

considerable which income the gains our of effective losses forward. largely lot reduced of was exposure, XX%, internal attributes FX The help settlements. activity FX audit reduce tax of day With mostly remeasurement certain our a at lower-than-anticipated and amount we've should moving and to rate restructuring to due completed,

roughly $XX CapEx. of of operating flow XX.X% with the $X.XX offset for Free million by outstanding. flow, cash $XXX grew million free quarter average cash $XXX -- Non-GAAP XX comprised EPS of to shares million was of million

and $XX $XXX the we roughly to stock, net moved million bought billion which leverage back equated share. debt quarter, an in XXX,XXX average slightly adjusted our higher $X.XX $XXX million price X.XXx. shares by at to to ratio per In of increased This

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

impact to EPS Lastly, was on negative respectively, $XX.X to a and negative revenue negative million and to for revenue XXXX, impact $X.XX, negative EPS. the the was fiscal $X.XX million to FX and year and the QX $X

X.X% billion currency. which XXXX, of in $X.XX currency, to $X.X to to X% provision, X% Moving and CooperSurgical, we're guidance X% to introducing to fiscal million billion $X.XXX up income revenue in consolidated in of constant $XXX approximately $XXX $X.XXX billion is comprised billion, million to constant

up cost consolidated to Rica margins slightly, to improve gross be roughly CooperSurgical CooperVision MyDay increased expected to due margins to expect flat reduction Costa faster. of the Gross We projects are up manufacturing expected with production deferment the PARAGARD. due and at to be to ramp

margins roughly lower lower are expected even higher $X a million, to improve discount MiSight rate interest rates. investments due costs of tied pension the operating Consolidated much incremental slightly, to including to and primarily

a note, last freeze soft side announced we a our As pension. we that quarter remember on implemented

reduce and So forecasted cash range, Interest to the not time. over and we reducing buybacks. is that goes expect be assumes low all share to $XX expense the pension costs to debt flow in million

the does from this expected to per exercising Our any not be benefits options. and rate Non-GAAP stock-based is $XX is excess XX%. compensation be $XX.XX, assumption include million on And to for based approximately with tax shares XX effective stock earnings between outstanding. associated share tax forecasted around

we're EPS million the to XX% to to in a increase. positive within growth this be revenues the MiSight impact and expected $XX to EPS. to this, year-over-year -- forecasting With a is XX% the impact constant currency when tax $X.XX roughly negative of investments be and currency excluding

All this our currencies not to be the the production Note, excise the with three X.XX X.XX for pound for reinstatement remaining being XXX the of euro, dailies the FX to flow rates include around capacity. Yen. is does will of $XXX with assumes current cash our $XXX expected for around Free the tax roughly elevated assuming million, again. we're million device suspended that CapEx and guidance hydrogel be this medical silicon due build-out primary

$XXX constant-currency revenues guiding to we're EPS $XXX million consolidated flat $XXX $XXX X% $X.XX guidance, to at CooperSurgical to constant-currency million growth X% to be to with million is to or $XXX or and and $X.XX. on growth. expected million million to Lastly, $XXX CooperVision million, non-GAAP between X% QX QX at

And it that, operator questions. hand I'll with to back for the

Operator

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

Jason Bednar

This CVI I and here that start on the constraints reflected MyDay just to is there guide. And appreciate all QX Al the want pull on Jason the on Jeff. in guidance. I color maybe Brian, some forward capacity to for seem F be anything F F to that are QX that's implied competitive you'd impacting here to from with is the anything respect maybe just forces point But the to and or VAT there guide else CVI guide maybe roughly the growth? QX tax. impacting for

Al White

from No, competitive I a perspective. wouldn't say anything

QX that If for And you for QX, X% X% it's the of look at did guide X% year and around year kind CooperVision this before. the range. to we

respect shifts of more then VAT think truly with around little Japan. I the we're that's running. bit constraints run true capacity we made This that's of MyDay that situation So the And kind is us. really and some rates to in on impacting MyDay like a

Jason Bednar

to think cost know beyond and think as and some spending cost those I as here And how we mean infrastructure Okay. about That maybe maybe look we over MiSight about I fixed about MiSight briefly. 'XX as spending fiscal gave in shifting 'XX? helpful. for to or was that? of then you numbers of you a how think and the 'XX mean, that maybe but when for guide, of about to we think I some the revenue just bit levels 'XX guide start is and leverage 'XX, little out getting fiscal the

Al White

has Japan fantastic to have we get there. going gargantuan opportunity approval is growth, up and in opportunity right just would additional we end the that out There's for be in. success we it's there, product massive think that don't opportunities really approval ultimately. approval once now. market I a Yes, another some a the what upon get depending of countries China

think market will I well of invest. depend So it in the doing how how terms how much develops, well we we're more

product. honest be hope I a for to about because investing pretty excited I'm I And mean, high the stays that pretty you, quite with while the

really, do it's really, I think to really going well.

and it if fiscal we'll in then again it invest pretty does, next that in it direction, So heavily goes year.

good get going that at on leverage margins Because a you lot some naturally point, though. have gross You're to product. of

so of else all the work product dollars. Proclear solid margins is investment the and right activity. off A good so is regulatory that forth. That's start It's Everything you clinical work, lot bat. with educational gross

you no levers. of significant question So pretty is. what get give to It going years, just couple matter it be a when that you're will of

Operator

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

Larry Biegelsen

on CVI guidance on One MiSight, one the and QX Al.

quantify in the from that buying the you for Could rolling constraint CVI QX supply will? And please? you're quantify So guidance. the QX? impact those off Japan us, QX you Could in just from MyDay assuming impact and if the QX in in QX benefit the you -- on

Al White

Yes, million Japan. in the volume was somewhere around $X

basis little X% that then have XX% little percent to -- the a in hurdle have So X%, in that, that, bit bit somewhere overall Pac a Asia a on than of and to obviously, XX% percentage to obviously, business. we X% But on QX. or more impact would affected and kind less growth

look MyDay If MyDay's else really at the you besides my Larry. that's that -- constraint, is constraint, everything

shape. can Clariti of is it's of But Avaira continuing MyDay. it go is in looking rest kind strong. to in the strong, Everything Vitality finally the else The Biofinity's is strong. plug You to is number. like growing. related is business pretty pretty everything good

last on we're get just existing mentioned. a is happening a MyDay in in give lines, increasing another manufacturing week. on by We shape more I as our production to a good are And ability spot QX. to from bit and back good you color line about our we right all feel little what's on and come perspective, I had

coming. pretty So shape. we have in other good We're lines

little with toric. there Where visibility we of bit was have ran MyDay a that. on problem into a We good associated

the more a of accelerating, toric. from production increasing created really of As that had, and kind short-term coming dealing saw strain producing that that we And that the started inventory we're we we was of product demand constraint in and change the once with. lot MyDay there has what really

right? you bit bit; bit. that look a say, had pull sets we what little little do, okay, And So trial raise you price on a and to little can we lenses and at back fitting a

You problem in do, your to that the can in knowing solve market big do near you capacity back the a way in you're and get future. really going things the

doing The this push/pull. and it do up toric and of lot an it store our set of have on kind inventory, -- this after a was way range was there quarter. the impact way to expand customers, we ended So and level least build so to forth one our ourselves

Larry Biegelsen

the the there? very on $X And if the and as like -- so bit strong enthusiasm is It in now going plan there. about That's you're certify helpful. -- -- the only is million mentioned, U.S. Can Congratulations high, optometrists, the if about demand you your MiSight. to you in why commercialization a talk XXXX? fiscal little approval on sales so more sounds or

Al White

this working sell best full as is get product a bang with working I'm there, out March, means treatment, of mind year conservative launch day, multi-year families day, the a the $X little a and on the their commitment at the this with this buck. They number. to doing end we're to of million the them in for being understand we're doing that kids we Yes. activity in treatment. for the as end a as a At Keep the we if and are probably need which treatment. educational doctor, training to

get to is $X that. we you'll dollar a product doctors we matter initial looked how marketplace, So that quick off I slower million the in little the be of When we go be And and all when educational kind going process, the -- solely how into $X needed done. going worked was the fast training, Canada, the think ramp. does and -- with accelerated, as million question start of to a fast activity how work it kind accelerating Canada the in and The market all to with a just out and and it that's where everything at else consideration see gain traction. you took fairly of through that we we've in started

Canada X-year launched that different. Now activity with associated This our strong lot FDA been data. off consumer was clinical a is it. a approval. there's off more And We little

little I that I'm So that. we'll mean, will faster bit see, than optimistic a it go

I prudent to kind think probably fair -- partial million year. say a for number is it's now, but for $X of the

Operator

Raymond Our James. next line comes the question from of Keusch with Larry

Larry Keusch

Al, I MiSight. on just want start to

here. was said You something that important

lens, pricing the Canada, With fairly data. really can now this around contact clearance, for the is world. position And has FDA varied know traditional I the given differently that you than example, low.

pricing product it? about we where about for basis this how clearance think So on an you're that should annual behind FDA thinking with

Al White

it's discounts optometrist the a of what activity. we end pricing Yes, But That's the price. this optometrists the other and it's are to kind of will Obviously, Larry. to largely on of patient. go out internal answer that because, to see a we at to you're the the dictated wants working that product and And going cleaning good world be to now. the project, the the up day, question, between mean going see. around and the is be will with part ensure challenging kind right rebates I is that's a it the that bunch of little standardize of all not

around spots XX a could a in a it and than to I'd to this that a contact times where every is is extensive world say is and right? like to let's make child back to the more their treatment. see like I'd they of a into in days. a be more That okay. of lot goes than is sold everything true treatment, little now, to optometrist have is here see bit you right decide just as MiSight the process you working, is So put you lens an certain in hey, family everything This saying, check of

of with that one in optometrists going where profitable themselves. is is you of day, very I for us this result the but short, the patients on guess So sells in at the handle long to terms it this answer TBD on my end out product probably a to story how

Larry Keusch

Okay. But premium least, above a or a think this for as we at daily, silicone pricing probably of minimum, should at -- correct?

Al White

of it think would I that way. Yes,

Larry Keusch

Yes.

perfect. more a of Okay, then question. just longer-term the And second really is question

'XX out revenues. 'XX MiSight from and laid objectives You

So those XXX a right growth, guys little way growth here. as points is what points imply I'm Or really around on? basis really about and certainty lot, calibrate sort franchise the to lot trying Is really durable just years drive really trying you over MiSight several here. there's right the about over right the X%? XXX basis growing of to you X%, when of investing MyDay to MiSight X% a is are and coming way to include the know I think be capacity next as to growth. long-term and at a we'd engine way you're plus a growth of to think CVI think the looking a about incremental

Al White

the more this positioned of what higher we've end Larry, Yes, about. as talking you're

has accommodate a look to us coming you center the doing, the when So that's been we're expansion, put distribution everything else in. build-outs, in the growth all position at to

silicone as the CapEx the CapEx of hydrogel things. We're to associated all coming you this When the side of You'll look highest dailies year, company I talking had significant we've that. we're $XX CapEx, this drive about mean, that's capacity expansion get with at million a in leverage quarter.

kind at about to market matter as That I is, in to we've have about? question and it at not X% Do range look MiSight numbers positioning do to able top Absolutely. the we we're what is that's been think running the higher? tacking out there. of stronger conditions, holds getting outer put of you're a of that us as feel a look when I some -- that I the Yes, similar years. X% mean, so like yes, So talking good say, do. if ourselves I It's of I being that. chance we just a on grow

Operator

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

Anthony Petrone

on couple one, a actually, on Maybe MiSight and PARAGARD.

that go you that not in a just to are MiSight, terms kind all that $XX about It opportunity. and market is within I'm maybe XXXX, a Just of progression strikes just after of thinking how million to that you're terms number target of age and actual of to at the myopia size myopias when me XXXX -- back sort category in pediatrics, then million in fine-tune trying $XX market, that possibly U.S? there to is just TAM, guidance I'm you're of going there. -- candidates. that the for target much just And actually look

Al White

I'll that one. Well, take

U.S. kind the at you million, up you kind then the would double doubling the world So around talking look forecast if about the kind kind the that, million, $XX of something to at rest the got right? and again talking look think million, I you're of at year, the of $X And U.S. look U.S., of of we've $XX OUS get a you being this right? in So doubling in also. $X we We're that and platform, same about like million. vein, on existing

at double $XX help number that market, get than regulatory markets. from waiting I could of more that, There's And to million, approval also will uptake approval us now is I what we're would think come that on probably and right U.S. markets. million markets Japan. those I'm saying. we The we on. other then China approval FDA anything than the mentioned other a $X better actually get more doesn't necessarily just as million stop $X from than Upside where the --

upset think that a on little I that provides side. So

look for the any in mean, very has market, candidate large. When to happen very, child that is myopia, I a I you age at to addressable group think it's going be that MiSight.

blackboard dad lot having their to until there're kids age in they see optometrist. where taken so as is or day, of They the any say goes Now -- untreated they're end issues or seeing complaining mom they finally child optometrist. the group get can't the that and that to the of there. at finally the to that the don't But we don't it a point even know, anything go

about And things I'll us. of on guys in. some of that excited a side. That mean, tell spectacles one other these I'm the people the for positive come you, I is is

you're out Luxe, it us educating So and ultimately, in how it. of market start front then all be someone in to proactive getting together moving come And more excited well get else and we're on Essilor pushing working if will start this are the watch this I'd you is get explode. and really and spectacles kind and and is in or insurance to have epidemic one out. myopia, there for you be the that and that reimbursement, direction then market of And important spectacles

-- I no my mean, in billions multiple mind, So have of question. multiple, dollars I market

Anthony Petrone

And down. helpful. just ads just DTC on ads quick PARAGARD and you specifically? TV PARAGARD, took wondering is on what know TV I'm the Very update some I

Al White

Yes.

but work Northern in So York ads expensive, really the worked well. Cal TV them and the well. Metro New They're did area. they really We

this around market, what is So it to the spread markets take do looking smaller in a a number we're U.S., year in in more different to and much that but angle put little broadly. of

that off in future. not-too-distant here And the we'll kick

We I'll more it the stuff. print of of some big the So I of and of think little the other TV you, back we're investments, what you mean coming end a first little bit couple advertising lot a year, social kind advertising a and in a tell TV markets. of investing do the I saw to in we going different, ton. did on we media at a lot big salespeople, But of day, PARAGARD. at the a we're year, the hired was This fine-tuned again. We're learned

year. $X million in this than We're did probably to more last spend we sales marketing year and going

heavy pretty on fiscal able of gross growth, be understand XXXX. this a we us, be are for like going definitely a it. market here year product. much We're is number of very margin product we're looks high then like it to getting years it in if to mid-single-digit can invest in. another start to do we PARAGARD. investment want And we a front But year sure think we'll So to leverage that and I seeing better in in make on we capitalize talking another taking some is the

Operator

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

Matthew Mishan

FY going for capacity bringing 'XX? a to ceiling increased persistent Or in Al, is on you meet be enough are to this demand growth?

Al White

we're lot a -- think on. bringing I

the me I you give numbers to on couple shift years. and say shift But of growth reality, the of to think first a dailies. will that. if a all. be very let the That's XX%, will couple going it continues in support my is I market So market go, probably X/X of mean, it's like of dailies. going mind, to for in that, XX% About market, of solid

dailies at the XX% like XX% silicones, that's to going to XX%, look FRPs now, like If go right XX%, of of that's market you are. up where kind

will lift tide like see, dailies, several contact massive all boats, look that That to that you the it math, it when think of moves CapEx dollars that to billion that. If probably of off but now going you see I rising because billion level it's think include if was don't industry. to in to a will get about at little CapEx it the naturally not market terms seeing are but in there did to \ us. to I conversion move. we're of -- $X.X the I you'll continue bit, over think going $X that's like trade is I sales. lens You put the incremental years up, incremental It's us definitely revenue case, billion

Matthew Mishan

wins in I account from private competitors but Okay. And the you there a in couple label know were contract, win key Asia can't of every quarter. or

a capacity year ago? or you Given a are able level to new you've at were like seen two you customers like strain, onboard,

Al White

is answer Short no.

the done, to are have do been to so able speak. if not. stronger that QX things could would We we were we have

take want means, what much, opportunities based quarter. advantage we'll don't have I been the QX contracts But positioned going we on mean? to opportunities We we those QX to, a downplay I be so wanted to have better, have still better executed You a those by in it the know that been -- it and would any and would could like of forward. quarter, much great I but on better think

are right hold. couple So now, a a little on of things

as in doing really Clariti's sight around we're lose the work, it this well. doing It's product, that's a One has happy We of it growth. really all as that world, is shouldn't and seeing good of gets really I'm particular, about attention it's done things MyDay all a and well product clariti. accelerated the great well.

that. there, So happy we're about I'm and sales nice some seeing

So we'll or clariti there for and so see as opportunities these look you and private and MyDay label contracts, forth. all that stuff grows, are more say, within there

that pushing our I and going on you'll up right we see now, But that as QX do forward we're little that and So the year. move think but pretty one, we're pulling in muted a of in results here right? kind

Operator

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

Matthew O’Brien

product Just, about next of products. in in about competitive you a coming bigger lot bit the think a of Al, and mass what robust competitor CVI nervous growth is But numbers out. I some over the dynamic little years, of that talking a just have investments new high surrounding the everybody you're couple pretty is

the know I So threat, and you next the year? investors how you think the but competitive navigate should side about can off wave launches, of on those don't -- side torics how potential how around kind and to impact that sphere both want

Al White

that's unless Well, not there's Yes. is with know, something a than out coming bigger competitor I us. don't J&J

could So they're out other there competitors but be are. And bigger we product, fine. not coming that's with than

into there's dailies to just when to that other silicone, the FRPs market. dailies seeing opportunities As dailies for I about, was talking to products from look and come conversion you the over at we're clearly

competitor get opportunities whether to people a and a that So for whether or growth. into there's competitor lot in this it's into that's market, a direct participant a here, the be market an of competitor Asia or coming Pac

products. positioning have our and that customized unique presence in great in We're do solution we a geographic a We great do little great with have branded so forth.

at So that, our When It's we out ranges. We're of kind when parameter new here. expanding year. always always also. there. with. be this main I with I we're say, competition -- products part products you coming new look they products, out the competitors, launching coming new of is what look some with are We'll live but at products We'll be new launching yes,

We have on. stuff exciting going some really

the day, a MyDay competitive activity? that is sphere, front itself in say, of no a is activity? Absolutely. I'd in a multifocal. and there There we fantastic end of out is market. toric the toric the competitive question. and at sphere Are So Clariti

nice So out people a really to that's happy I'm be numbers. going something for this and growing with is opportunities our marketplace put enough, competitive But up that number there. enough always there's of big positioning. fast it's strong really There's to

Matthew O’Brien

Okay. And ways, mentioned far I And of follow-up, timing there's know of ahead, lifting, do about a getting is any go you a then for control. heavy MiSight? sorry but to Japan? like just this you then and myopia for looking on and I'm That seems too out but reimbursement get lot reimbursement thoughts how for

Al White

and the markets Yes. other the markets, of by those On some considerably can get Japan FDA approval. help

they it approval, FDA necessarily into So don't but the they'll use take consideration.

number couple those I so I'm want years. Japan, on a that markets, I speculate they within to looking be kind of two could and but So don't say, kind at of for forth, earlier, China but of hopefully, a -- yet, would years of

approvals good came checking approval all to see so clinical we'll We're pretty make that to and side how doing additional The here on right us. and that, money box of the now just plays recently that So forth the work on pretty work need. lot a get FDA for through spending out. regulatory we we're the sure

marketplace. the years you the coming multiple line, as about why that's same management reimbursement, vein I out. spectacle tough that's at myopia a in kind put that talking the and of lenses If into That's look probably insurance

insurance product, that forth -- and it's and a it's that As of organizations value can now epidemic, treatment something the the so as so be agencies and this realize the bigger, addressed. and ophthalmic market gets ophthalmic and and an forth, proactively benefit of

you'd I time. drive other to don't reimbursement. would it, of help bit I people in to ultimately to get going do that to coming why it will ends and in point fantastic. driving the behind get insurance see it players market be really market there. the like think but to know thing lenses up in a us the really of And will order take contact little But get not that will some One this

Operator

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

Jon Block

me. first for I guess, PARAGARD. on Two

a call if what 'XX that If mentioned contracts, the of their so, in, 'XX? is all we should be the don't more took just increase, You I then it, price volume. follow-up. fiscal the fiscal thinking about? And the price or amount And you of that would or is quantify 'XX can over then it got and And helpful. in you buy-in. phase I know is be Al, it

Al White

Yes.

of like next X%. The a P&L the kind will around way of the So couple was like it almost increase number of -- think of price is of through flow the because as different of one-third that over dynamics, kind years.

then a of PARAGARD's that growth So say, think been about X% X% price. And at from underlying in we've when growth, I been running range. there's kind I'd unit

The X%. there, to X% X%. hard tell So you look some to then hormonal little price, get those itself, And two similar. IUD when you but a at probably the unit combine about if growing market is out from of it's perspective, a you options

But faster think of little kind the overall. of kind to IUD question. the that's price, bit than about growing we're easier a market So how

When activities, have at look buying how PARAGARD where challenging thought versus QX, said exactly buying defining, was forth. a the you yes, I always I probably that's when look of we would little at in -- normal like would you were activity get at declined. to we quarter so PARAGARD's and activity looking terms have a okay, much that

QX QX the there So to somewhere range. but going makes on. million you something QX look a year, into at that buying was between of It going was also, quarter into -- When of decent a hard maybe $X grow QX kind it QX. activity or last in

Jon Block

advantage it. what because certainly But Very you if XX of because months referenced, some now came Or some that of just perspective? you I shift gears. it of numbers of manufacturing it, mean, inflect, a out-year MiSight call I'm constraints from cap, potential be I'm China from to just impressive. MiSight got trying on to really able And and demand? those to Japan is then are they're of out you arguably, were very helpful. Okay, curious, and/or begin -- to standpoint? with this from numbers a go is guys because alluding would of to fill a were and In I Al, board, those take to those manufacturing guess,

Al White

Yes.

One exciting is a that about it is of things Proclear the MiSight lens.

produce touched entire lens. kind And So is what's lenses that it we older on some traditional little nice see with shifting that's in of pressure space. us. bit hydrogel as that be market the capacity on to have probably our a it in of Brian our what able we lenses, products to hydrogel extra makes constant silicone from

So can everyone lines we're getting that increasing capacity fantastic we within to as over allocate to because hydrogel. our Proclear new capacity MiSight. That's shifts silicone

on MiSight. some we do able good of from get we'll faster, shape markets meet production to on if in situation where be a We're those come that perspective So a demand.

Operator

with Cooley question Stephens. next of from the our comes And line Chris

Chris Cooley

I Just Al, a couple if me, from may.

$X.XX, incremental depending the obviously, And tax so you $X.XX upon about MiSight, investments million there, rate. on about an the from with -- spend million thinking the then $X incremental 'XX, the investment PARAGARD in appreciate $XX the Just call about quick I fiscal called out incremental in you those one-time unique -- on investment a came somewhat spend. nature? a have in Then fiscal only 'XX, to Are I in be two items one-time was of additional there just or bit follow-up. the I or there late, additional a apologize, to

Al White

two point we're salespeople we're Same forth. vision CooperSurgical, come international just of to excited our we international individual distributors. through doing thing within talented marketing the geographically and and no side, ones and lead within hired where really mean, the a an so some clear within to as are question. out, expansion more hiring Those within there. medical some We're activity we I on device our really most example, efforts that business do CooperSurgical,

think core to have internationally So medical good better pretty we our on I growth products. opportunity CooperSurgical some drive device

question, out, of more normal of I and you call will, that that activity. But kind there's if So then growth two The MiSight, grid. kind the no stand PARAGARD on of some would activity, certainly, that are normal activity. is

Chris Cooley

but just will Understood. that would then commentary the adoption at competitive I the the any I'm expect, regarding SiHy the are how in where to if change newer recent if there's that in ramping be And views some launches -- say up? it's just dailies just are your space? color. any -- on silicone here or curves pricing, marketplace adopted of lastly the How for you if broadly, this, dailies appreciate competitor say Just in curious you hydrogel U.S.? me.

Al White

No our real recently positioning in change that the marketplace seen anything market. or the change terms there. about I would my entering mind haven't products are of that any new

Operator

comes from Guggenheim. question Pasquale of line next Our the Chris with

Chris Pasquale

one surgical. quick on on tax One one the and device

in let impact extended, plan So through a is be? is the -- device to earnings? to for contingency likely that would drop just And a place you the have tax the only if that hits that portion suspension offset there an what you estimate or of not Do business. would

Brian Andrews

And to the take January, that, of by only million products we million that excise roughly If to tax. in CooperVision's from in Chris. sale tax. sold of excluding I'll an CooperSurgical, Yes, expect are $X impact were be tax are that in to U.S. the exempt total. products $X.X PARAGARD, reinstituted SG&A included

that. like try that other like of to be hurdle, So anything something those just would if to were happen, we hurdle it and any tariffs --

Chris Pasquale

on core seems the the exiting just helpful. CooperSurgical business good here business with the mean, growth that's like Okay, office are And XXXX. forecast I both and for momentum. it the then, year fertility pretty Al, and

a growth mid-single-digit XXXX? as stay or we grew so. at X% level? Why year that X%, of X% to off Why where X.X% shouldn't coming more You're look at you

Al White

Yes.

now. surgical that businesses are of is vision, to similar way the that year think right here, is both finished way is the the kind we the I operating

I think lines in more QX, you'll QX see forward. QX along and going those them operating

thing of to respect the QX the a it's PARAGARD think at day. I end with

to So forth. I and fertilities so do think fine

how of I a the matter just PARAGARD do. think it's

downs ups the be more would ideal with We than with channel PARAGARD. and of get inventory there kind

would into I but a a softer there's This because of QX, QX, the right not. shape. matter negative with in of not is that guidance back else how saying terms we impacting back year. I in normal. past depending does, just So on think pretty you're hey, full fundamental a anything then be that, we the to up anything issue end we'll there's QX or good Once get read

Operator

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

Robbie Marcus

any could here? impacts was qualitative throughout of you accounts after And you quantitative the kind these benefits of can or on? investing measure key or a XXXX, I wondering, year in pass how success

Al White

of probably key key it. has in of done the in our a -- nice drive really, accounts are growing throughout an investments than a put place, kind That's really faster job Yes. to done nice that put kind our and that there really team global We overall infrastructure way accounts, really, Well, to team job. easiest define business.

So growing day, faster at that's business. the of than the our end overall

than some as I to on we're we move We continue think to fast opportunities overall on expect grow we that there here. key capitalizing accounts out forward kind our business. going that to of touched are be there earlier

key be to growth. from So a at our future to the looks to positive bright certainly end of drive our overall turned day, strategy line and account perspective continue that's top the the out

Robbie Marcus

dailies would What guess, capacity? had silicon been manufacturing, for a XX% I that capacity MyDay growth did So And have that issue. you much on the lenses How the exactly? full if impact it's overall.

Al White

a higher. there of of demand right it capacity, that lot now. can't full really for is have that we demand product. for but there number a Well, been if had bit product throw -- a would lot There That's a quite out was

I were But here, of we'll online capacity be on we on. a comes So capacity as feel forward. that's selling bringing where heavily are lot focused we it do move good that we as that about, using and

to made won't specific So into say it, numbers easy an than go it kind on. difference. I of other

Operator

question And with Willoughby our next Cleveland Research. Steve line comes of from the

Steve Willoughby

-- can how how I to all, in add on up continuing eventually the more get? well. question. take a will bit to long capacity on I it last much you how Or to as quantify if have what these I Al, that, more And additions have much with increase come follow-up of you're manufacturing guess, it could XXXX? guess, capacity provide hoping sounds following just a you're then And increase you two. capacity. first, like on? I little Can a capacity color

Al White

order really touch it and I'm a this our that that competitors on especially that's to line sure in time with of are great for and dealing take and and But story. your great can Steve, this that a ship to ultimately could there. sell. And didn't line a order it's to right to from who's I you XX anyone I warehouses And producing that it's now, to months, new Yes, get question. months actually product -- new some the XX point up I running. mean mean relevant you

average, them XX months and something month, time. could on kind those can't or And take get right? a next the of of you it and So amount lines. decent fingers manufacturing say just to order your takes, snack of these lines I it get in

So we ordered ordered them I while this We a bunch mean saw ago. lines. of coming. quite these a we

done part thing. them I time, -- significant at the industry accelerating got That's this mentioned. have on the point We coming an those manufacturing as into he's that type the insane are job. big part pretty if you start good almost up entry a of of has problem. But the on and our dates that's XX/X team runs getting lines Rolando, running -- I this the the of group, moat, who in, to takes because barriers -- them. like we our and and working of It will, mean, going

numerous I'm to more that, year year with next timing there's -- So that are than anyway, into takes how coming say number last this capacity lines. of get associated and long going lines in because dollar on. amounts week, many lines those that increases the just story to the our to coming on. it much get short, one other just it's that come, We not to and we're

Steve Willoughby

do of Al, that, constrained capacity you'll guess, think at I be XXXX? still end the so, with you And

Al White

think in better do that constrained. XXXX, still into said as XXx are move we'll But position we'll be having we I than I that, think today. be so. capacity we

Steve Willoughby

Sure.

Okay. And then my follow-up question, Al.

kind last bit a here. the little -- of Over longer-term view take

let's has pretty lens points the last, decade, contact consistently. the say, XXX XXX, the XXX, company market maybe Over outgrown even by basis

the having the to much that has of your that of much had just decade, in you've ability shares being outperformance you've any XXX favorable MyDay, hydrogel to XXX versus ever a come it market, looked in that, from from of at or position have the lot a especially XXX up more wondering you've from with unique lenses silicone thought portfolio, how but breakdown competitors? the points During of put outperformed product marketplace. way trade expensive gaining of daily you particularly basis clariti your to outperformed if I'm The last the how competitive sort or terms market? you've

Al White

Yes.

for the XX%, base mean get for a their coming did premium and for up it's XX% existing trade a So will we drive now. good out they'll trade those and them interesting right some of have. of on right kind of -- years. of We kind growth with number ups. solid it now, wearer competitors That's them, fantastic I products

don't up big have As of as trade you hydrogel as because know, daily we don't have we quite base that base.

has when -- has been a coming look lot especially here, at over that you more new of that recently, winning the or from growth, become growth our growth, wearers. years So

kind daily happy at of New wearers And silicone new to am look wearers, happy the we're I with I space. continuing win that fits new Data look Fit get, in I'm the we new well when I when hydrogel -- that

for us. So the keys that's one of

trade from the get that to and We're get up. to the of the existing little getting you're continue trade we to to at trading some it's conversion think that daily over up. that to get see wearers because to going I So some again, see a XX%, wearers, XX% you're FRP growth market to good going end going We're of wearers. growth going day, up growth because of competitors interesting going are

get to look new XXXX, as going of at like And We're growth drive enter marketplace. about one out and of the just from you will new that. MyDay we That's then you the we coming into the some MyDay is to able products be I'm ask the wearers. getting to growth. in winning constraints When to But things some the in point ultimately future, out get right? about the at excited have multifocal roll we do capacity

wearers. will translate I say, can long right itself the ultimately, in And a now, New matter And that doing good into winning Fit in Data. are see new how that we revenues, I it's takes. So job that, just of will a

Operator

Lichtman from And comes line Steven Oppenheimer. our question the last with of

Steven Lichtman

work little geographic Al, bit post-market study the and the And reflective that post-market well? MiSight expansion number and just question in of we as of more that about of provide you study regulatory or includes? the in design you a when a in patients, can talk around a you terms see might the investment clinical on that color Can on little what mentioned. Is data?

Al White

Yes.

terms of to of clinical things, number tests. your data in a it's So it's expanded point, right? So

to work want well we right? that don't Why children to some do and say, children MiSight. things doing on the as of that. is When One So other look at clinical you as that, react are who olds how onset best late tackle at to that? What's tackle to can So look not X getting myopia. the myopia, older way we XX-year that? we're talking kids but

also get to of regulatory regulatory we going product, Japan the other -- activity a associated of at hydrogel approvals, and countries, silicone that a that. and kind through work, of number at roll work going process China look then kind you with MiSight investment When to there's the in

kicking detail in we're expensive this one. at time. look that months. much in that That's to That's right great another information come I'm not out go into point that's study, that If coming the at There that here you on on one. one post-market be an will going a that off will now.

of wait dollars. as give to that. is So of those that expensive But I'll investment on kind more thing another that's color part

can of imagine, a activity, upfront lot you as activity. it's that So

done, I so offerings But going different work, clinicals where areas. on the ultimately on real the that that, those you get in talking product leverage or behind you when future fit new approval. You dollars and dollars you, That's was the you approval products do do get get those clinical And done. you're of expanded it, a are forth you you're the space seeing investment through about. and you start like multitude -- those that

Steven Lichtman

a Got it. educational is around And you marketing will sales the then have or MiSight mentioned no? force And force? you lastly, expanding on the some support, of and MiSight, sales increased that sales, around for targeted

Al White

to will, of We treatment, going may. drive to of optometrists you're now, professional is who you really the where forward. Right and talking want of the as product side most lens, the sales, and out a that the if lens fit it, individuals clinical kind understand

lines. early saying, more to this of stage, So also?" can the right Ultimately, force it's now point you "Hey, existing lens sell my because move along those sales it's

they're of No to to surprise it they're getting some anyone, and tons over the it referring specialists. right just now, about of questions

how plays time. over out kind we'll see it of So

based you some more professionals. becomes sales less more dedicated as that the clinically you'll it yourself get in sales probably sale, that think and dedicated people, will I mainstream on move direction. And

Operator

turn for back today Thank CEO, remarks. we for questions. President will White, to you. the time closing call and And Al I over all now the have that's

Al White

about of have everyone. And things of we covered you, holds. our tell, as future work I'm We to I'm where through what QX way good. you are where of is and here pretty and the can lot a pretty through our the and excited business looking pretty good thank But Well, rest today. topics the are Kind year. excited. roll

months. the hope look everyone and here weeks on So coming seeing forward a Thanksgiving coming and had I to happy up, holidays in and out road everyone good the

So thank you.

Operator

for concludes call. Thank may gentlemen, you today's and you this and now conference participating, Ladies disconnect.

The Cooper Companies, Inc. (COO) 6 Dec 192019 Q4 Earnings call transcript