COO - Earnings call transcript Q1 2020 | The Cooper Companies, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q1 2020 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. [Operator Instructions]. to Duncan, conference and Vice like speaker to Administrations. now Kim today President, would hand over the you I Investor Relations Please ma’am. go ahead

Kim Duncan

Quarter and Earnings afternoon, welcome The Companies Good to Conference First Call. Cooper XXXX

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

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

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

Forward-Looking those available may described today's XX-K, and and subject materially and to website statements forth be and incorrect are Forward-looking of earnings from Cooper's Events on uncertainties. set in coopercos.com. the future company statements our depend at forward-looking or to our actions are described are that assumptions, our actual risks which including SEC differ could Statements methods data cause all release that Form the results of filings, imprecise in on are or in caption under

the you ir@coopercos.com. XXX- our XXX-XXXX Should call, or questions any have investor additional following e-mail call please line at

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

Al White

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

increased to well stronger given production. This now This moving expectations operational especially positioned deliver recent MyDay we're quarter including and met true is results improvements, forward.

and there's challenges that, presents. obvious said coronavirus impact the Having the it

performance. the let details, those me getting Before through walk quarter’s into

X% currency X% million constant up in currency. $XXX X% reported posting consolidated up revenues reported revenues QX were For posting CooperSurgical or CooperVision and million, as with X% as and million of in revenues $XXX of up $XXX constant

earnings were share $X.XX. Non-GAAP per

broadest portfolio basis continue For sphere, in silicone in a a daily and multifocal. on clariti healthy the grew MyDay toric with where to hydrogel led we franchises, CooperVision, market constant on a and Americas available a by offer all sphere the and currency X% our toric, the

Both our to posting Vitality, portfolio well entire VAT Toric Japan. with as capacity lens was due and as expected associated X% constraints strength. the fast destocking supported hydrogel by X% Biofinity September and as not rebounding in families performed EMEA Asia down exceptionally MyDay grew with the Pac well silicone increase particular as from Avaira

even silicone grew share Having it Asia said is of regions demonstrates industry. in to face that, well XX% expect fastest the is which already segment the quickly daily take in All and growing the bodes silicones with were really strength as future and MyDay of hydrogel QX portfolio, growth capacity the continuing rebounding lens daily our Pac This by improving. for contact we coronavirus. three in the led our growth

and Avaira following in world Biofinity recently a the multifocals the uptick Asia our by and that, and our X% MyDay than toric launch led Clariti destocking U.S. multifocal X% said X% forward the rest the Pac an Meanwhile, Torics Clariti shortly. franchises the moving grew with approved we issue in of Biofinity. in from little Pac. by grew, and of led grew better performance Biofinity softer expect with to usual along Asia due Having

in So summary quarter. a solid

to Given, comps as to start Americas to the remainder easier, we QX we're year. strong about the the a QX return remain expect Asia the in Pac of in growth get rebound stronger to optimistic showing EMEA and

news positive want on moving to Before some to cover MyDay. I MiSight,

capacity constrained. call. last for on discussed we've we strong extremely is quarter's The great MyDay results, but As demand and produced earnings we’ve been

truly team lines accelerate well. to manufacturing is in for to I want commend realigned going startup we and a efforts happy new to such, exceptionally activity our job. on I'm report fantastic their As resources efforts significant that

achieve MiSight, our was positions lens, for slightly myopia well contact innovative expectations above XX% to year. up $X.X objectives and to as which this quarter we're Moving our sales million the management

to As children's a lens XX reminder, old. MiSight eight is of proven safe been shown and slow clinically five-year it's to easy that It for to data in and myopia experience progression the approved FDA our years clinical daily has handle has extensive has children and wear.

children wearing have up product and to this finishing U.S. I'm over the our happy in quarter We're world, to with continuing around XX,XXX includes the last success February from XX,XXX first report the kids

we the U.S. invited the for U.S. Regarding now top optometry roughly the of into certification in KOL completed in our our first universities program (X:XX:XX) training U.S. docs round launch of and in seven happening of X,XXX February reps completed have MiSight activity sales and January, in education the

also continuing clinical educational investments regulatory of along and around the continuing rest sales, activity the with and We're marketing world our work. in

eye care underway, is a we With of resources care lenses, of suite myopia Brilliant the as Management part educate eye connect holistic tools practitioner and called the being and practice. U.S. assist to sold targeted in building launch the their to with Futures where the product practitioner help now a the parents Program provide Myopia marketing management

and then doctor into price which for customized then complete their charge could can offering. all own program, other and such Ortho exams include this as The K their an offerings potentially eye incorporate lenses appropriate

to of should making it's remember myopia, patients levels eye severe especially progress with we're The has clinical on really why phenomenal standard-of-care and with myopia, and life, to has of retinal later in such important that as glaucoma, cataracts, high conditions to be early benefits It's myopia. linked detachment. been young exciting the and for this see MiSight feedback the ECP been treatment

has a the so to be condition game the in exciting. incredibly actually such changer MiSight is this the we're MiSight optical truly be believe innovative We potential So proud and this industry, true way treats to a with product. product happy that as leading

a for children being platform. market, $XX that entrance offering XXXX driver on in while still expectations, it's financial $XX $X growth new high in produced brand forecasting great million Proclear based also a around as U.S. we're XXXX. million sales a it's in is an year, us and including margins the MiSight into Regarding million million roughly an $XX this MiSight, from fiscal in and as existing fiscal lens

Additionally, and a it is portfolio the care interest other eye products. practitioner rest on already driving effect halo of strong CooperVision's offers in our

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

means starts increase currently It for the This myopic lot estimated of and in it's population XXXX. where to optical great visual this roughly the myopia with correction, is one third which obviously that is of industry. will world's a XX% entire

dailies legacy trade and to dailies growth continuing geographic of a wearers contact dailiesto There's to and up to off are from hydrogel dailies, today and hydrogel hydrogel torics silicone and XX% daily only specifically current from Additionally XX% multifocals. are trade lenses. silicone FRPs in expansion lenses. of only sales dailies more that XX% in Within

will five future trade to Our us expectations opportunity, years for silicone the multibillion of And the upper the a range many which for daily XX portfolio. this occur therefore in by market over to led next dollar up X% all growth X% hydrogel share the part foreseeable taking remain years. this with continues to leading that our to is support market come

silicone very to report our bodes was for which future. strongest happy hydrogel well our to new I’m daily with again respect finally, this once fits, data quarter, especially And fit

the and up in EndoSee and office X%, office growth and Moving X% surgical fertility constant currency, to up with CooperSurgical, was $XXX we X%. of million, driven reported Within surgical, up revenues by our during surgical with was following quarter. price for quarter implemented where PARAGARD X% increase significant second-generation buy-in flat and associated office hysteroscope we handheld our a the retractors. had QX activity

arrangements and On pricing, remember as years, increases that buy-in Medicaid. market activity, public purchases, such in over three roll due contractual to

so For and includes products and our forecasting mid-single our market-leading transfer quarter the end, IVF which year, media This shipment by at genomics but delays offset growth business, part still was for to by by PARAGARD. Wallace Embryo we’re led portfolio, device catheters. like was digit our QX. moved which in consumable Fertility needles more

expect and from strong due that the a to and Asia-Pac. the impact we for in stronger CooperSurgical, challenging fertility the we posting a our expectations remain QX confident hit ago Given with coronavirus QX PARAGARD most this buy-in, our year. to we of tough in expected year be Overall but quarter X% comp a from even

let impact. and concluding, its before coronavirus Now cover the me

foremost, by the infected their virus. the fortunate and families impacted we’re been by are any communities that had thoughts our We’ve the of. employees, employees and haven’t virus with our and First aware that we

helped. revenues Our China our business in obviously in is country, no only relatively located X.X% and the we roughly or that’s so packaging manufacturing of small, have

that product being to specialty has able supply been been is our sold fertility have maintain around of hospitals, lens of the our third-party sell the impact business. distributors, China, in into so through our parts We largely that and business which

is heightened there other also resistant. proving businesses a modest in activity seeing impact be countries to our where relatively We’re that virus are

total which unchanged, sales and said MyDay expected $XX the won At our guidance. impact this business, cost CooperSurgical. production the estimating be including of and roughly CooperVision I back we $X Having million higher by million that in revenue the in that, in in holding as this generate fertility revenue year will some and in not we $XX we’re likely and driven we’re full QX. believe point, QX will our through guidance of moved year, we’ve QX but million, we’re comprised new improved contracts

will beginning operations in assumption numbers, additional provide largely the but intact. fiscal expectations strong all normal Brian global Underlying this of for is our year the quarter. our return remained third in our May,

contact by in accelerate With taking share growth. progressing up saying capacity ramping CooperSurgical positioned global me MyDay is well MiSight lens to launch that is the is and let we��re nicely. well conclude The market.

which diversity We’re my action of support, driven to with also strides initiative the community a and recent diversity continuing inclusion pledge, is for and within ESG world’s involvement to including advance CEO several inclusion the make the signing CEO efforts positive workplace. expanding largest our efforts

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

Brian Andrews

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

year-over-year the margins XX.X%. we basis the projects margin a infrastructure due last improved roughly CooperVision’s P&L. Consolidated year, to we’ve So in XX let improvement now the gross move XX.X% me discussed rest XX%, to with from the of largely for were XX.X% points quarter expenses gross completed. to from associated flat year-over-year which at reduction

we’ve global largely previously decreased XX%, margin Rica. consolidating associated operations CooperSurgical’s from disruptions to our gross manufacturing XX.X% discussed due into with Costa to

completed the to forecast work including low-XXs. year-over-year, this consolidation continue As expected back the into though moving we improving QX margins with activity associated upfront is gross and

of and last the up down reduction improved gross consolidated X.X% margin nicely but in by XX.X% Within operating CooperVision’s year. was driven leverage, was to our XX% of to should improvements due selling gross OpEx this from down DTC year-over-year and CooperSurgical’s year not the margin margins timing resulting operating operating in costs margin combined and profitability mostly activity. expectations. with certain re-launch It PARAGARD is of including This related expenses full pull a noted. marketing our associated be does alter forward

lower than outstanding. expense expected true average timing interest $X.XX Non-GAAP restructuring tax XX% $XX.X roughly million, rate balances related Interest and of debt the grants normal larger with and driven rates. $XX.X EPS largely equity million quarter was Effective by due the to for activity. was shares to was QX ups lower average

was our lower million comprised billion moves adjusted $XX.X to flow operating decreased slightly by and CapEx. of Net of cash million flow, Free by X.XX cash ratio $XX.X $XXX.X offset of million times. debt leverage $XX to million $X.X

and the negative EPS. $X.X on was revenues million impact FX QX year-over-year impact to there to was no Lastly

to variability the including use pound in X.XX given guidance, currencies, at yen with XXXX decided X.XX, the at same the euro fiscal used December at rates the we’ve and X.XX. to the we Moving

Al that revenues make expect roughly we businesses mentioned, from anticipate QX. million the impact both $XX up For in are coronavirus but in and QX to QX, negative as

guidance roughly of $XXX fiscal range holding to in to billion $X.XXX of our X% CooperSurgical in Therefore, we’re to currency. of $X.XXX X% X.X% revenue revenue $X.XXX consolidated unchanged $XXX for billion billion. in currency includes with $X.X This billion constant revenue in million remaining up XXXX roughly CooperVision million guidance to and the constant X% to range the the

year for full fertility QX for rate ranges guidance to Al for of that to incorporating X% and including CooperSurgical. remain for We X% to accelerating X% improved QX growth these production and roughly performance. X% mentioned improving and our roughly implies Note our reasons the when QX MyDay comfortable performance, CooperVision with

range, consolidating – and growth forecasting slightly $XX operating be the to to recent the up fed to reduction, rate which while now point basis continue to million expense expect rate in million interest $XX includes be margins but additional no We consolidated moves. XX

would floating, we have billion benefit. rate Given and additional nice debt reductions positive interest $X.X it’s roughly be of all a any

we’re incorporates estimates existing QX regional and now benefits profit the rate, tax comp. share-based forecasting the with XX%, which For full effective roughly from be year updated to along

on and at lower around and is still bottom million per to increased Our hydrogel to to $XX.XX Free elevated $XXX daily ends the out $X.XX range production the share to interest flow the to is being non-GAAP be rate. expense $XXX around earnings cash capacity. with due remaining million of reflect expected build silicone $XX.XX top CapEx tax

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

Operator

Instructions] first you. comes Raymond Larry Our question Thank from with Keusch [Operator James.

You may proceed your question. with

Larry Keusch

pushed you items have Great, Okay. everyone. SG&A in – if was spend just there than guess afternoon, anticipated. higher or if that thanks. spend first might what it was our discrete the little higher? bit I to the were guys just relative a bit with any was behind I Good a that question planning were wondering model, line was actually

Al White

in but It higher PARAGARD little than we forward roughly it was was DTC higher TV It fairly was expensive we and activity came the it from CooperSurgical. little than a than ads. were expecting. bit, Larry, that’s line, from pulled expecting. bit Yes. Really, were came a

forward We’re the rather it’s hitting markets, pulled stations cable a fairly expensive and still than QX. primary to big in doing little but we’re going that This year, them differently. the was into

not change going for but full-year first move it that’s into expenses, did and surgical our our So expectations SG&A some quarter. the to

Larry Keusch

people little you of on Okay, MyDay is do that guess January – I out China, the else? since just, you I know have but talk with progressed perfect. that another or any raw And don’t improving Thanks. manufacturing JPMorgan China along any Japan that, said bit then one Can And you material about for at for you source in updated on lenses I somewhere you in or capacity coming you just just what’s Conference? guess, a toric. have the contact

Al White

China. out Yes. We do material of of we do well, not out certainly China. We source have material any don’t raw – anything

the CooperSurgical, for there small, is certainly from think of but of a Most including that I Japan world, nothing that’s any mentioned. really large by part maybe you rest something means. the

MyDay up yes, production it. matter a solely and faster. MyDay, On That’s getting is running of

a by or the those XXXX XXXX. a in the and So this months XXXX and forward beginning in or number coming of we months year earlier has bringing production months latter from lines month of and some into lines X.X of pulled have in cases two part even here

So allowed us product. doing more all to is that’s produce

fitting about, the demand that talked we’ve pulled of some back really of a that markets, lot is out We strong. the on market, in As and kind back putting stuff. took the lens sets cut of

of that’s remains to is strong. up, matter more fact a that have ramping solely us sales we’ll lenses is the So and demand comforting of production This more and going really because it. the give

Larry Keusch

Okay, guys. terrific. Thanks

Al White

Yes.

Operator

you. Thank

comes question Our Baird. next Jeff from with Johnson

may You your proceed question. with

Jeff Johnson

Thanks. Good afternoon, guys.

maybe follow-up on me MyDay. Let Larry’s around question

the don’t CVI bit little a as it’s guide X% Just take I X% the for to year, if question of the I guess the you’re $XX like – on I out if yet, Japan quarter but back I’m me of balance Brian, also and check million we a in well, MyDay, and at Japan think of one guidance saying, the have least in on second is that. correct wrong, over not assume,

and quarter So of at throughout assume to year? think Maybe about end X% in the that Al? over that kind the of lower to than the then that year? X% balance the second that, the should builds of How we higher

Al White

It ramping, fact pulling that QX of right. $XX because Yes, nothing MyDay a million that production you’re is because out of if spot – currently and be on. will the else, just the lot

markets right. and back to and supply We pulled pulled in a forth. so so product out few retailers on some And different the you’re

definitely that for a in more see to QX. bit QX will a improve and QX, You little start but quite improve bit

back So right, kind you’re right. of you end it, up adding

talking QX million of So more get taking number out, $X be, exactly if you what in million about QX, $XX type don’t know thing. you’re but in it’s I $X that the maybe will and million

Jeff Johnson

a in or you’re a market, just through then will about into us home, not they’re other small seeing themselves. doctor maybe right. Italy of lot China. kind any to even maybe sense All maybe know And people hearing or I eye of lenses, going it’s Al, in or talk Japan or at plenty is those your but our of have going utilizing lenses, of the markets, those lenses what

few that So to timing just a if a you million, so how Is help out than and impact think risk continues maybe would if about it spread how there Just think what quarters do an the could about maybe there to contact this a regions? conceptually, bigger you and impact far sales lens next greater be is year, lose the $XX we think Thanks. you’re seeing play this us impact? while? for to

Al White

two, split into in because decent through specialty China. CooperVision specialty it there. business business lot pretty lens I’ll has sold of Yes, a is lens a and hospitals is And the that

to So hit up because bigger people right, there, to aren’t hospitals, going want hospital. a end to go don’t taking we

that’s Now our the portion hit. bigger of

think normal do the more okay be there. get is lenses in moving May, our I starting covers back I that things specialty to to Now we’ll forward. sell that. with that And think It expectation

I’m will, kind I not honest of with we that to not you. but up, pick think positive sure business be I’m of we’d that.

deferrals I’m the roll we million, speaking. we of out why up, about rest because do if just wouldn’t, the we that world that pick of we rolled that in the guidance, but right. think do is at didn’t sure generally look that into said not you I coronavirus If that’s there, $X there we

to to need going not more, reason, for get lenses going somebody has them. are they’re If ultimately at and home, some they then

people online. because buying not we’re get products. much impact things other ways an people are There’s honestly, that seeing can Now of

demand strong, sell-through right user remains now, as end remains our So of strong.

seeing ourselves impact fully kind the lot day, that this be go not we’re the to I now. right from fine, decently impact quarter. have back covering of pretty mean covered So we’re there. think normal hey, to going with At think and sufficiently so, expectations end we’re by don’t of I out the know. a I have we’re that of will saying, just I Everything we

Operator

Thank you.

comes question Our next with Jefferies. Petrone from Anthony

You may your with proceed question.

Anthony Petrone

it’s just just is for $XX thanks. wondering stick I’m guide that, countries than to I the more China? on think million. total China. the is that Great, coronavirus, how many Maybe actually just so actually

So China and much CVI, China? $XX of much of maybe is Thanks. how how is I’ll of the then just of million a that And follow-ups. in even that outside couple have

Al White

Yes.

So is if million right. look I’ll at China. million, a – it ways, CooperSurgical. couple from $XX you break down all That’s $X about of

So out that’s clinics for where in China, operate all that’s in fertility them. hospitals for so of China

We’re not impact seeing of an outside really China.

look a somewhere around CooperVision’s countries. to a a million, of million that and other million some kind you is China-related business, $X that’s little specialty lens out that products associated little couple different related at If $X remaining remaining to of of the that $XX bit is lens And portion there. the of spread to bit largely is then

not that there, probably the like little numbers a any seeing country Korea, an there aren’t big, We’re but right. impact than a of dramatic bigger is other impact where in particular South bit

get as from little you a nothing dramatic bit a commentary. bit South So Korea, little you little my bit can in a tell spots, a Italy, but get of couple in in you

Anthony Petrone

down again. And I the in APAC running And and or constant started just as then the is U.S., XQ through last in to we as X% the the XQ it new it there Last And on then those was in they impact ads rate there fiscal APAC? digits want just up question down move national we it the PARAGARD, it just in put confirm, million, of January, on in year? currency. is growth in through print move was to quarter, fiscal were any $XXX mid-single the XX%. XXXX? APAC, in or the on But sort it Thanks, have again was quarter ends the just so the up

Al White

and running. on Yes, are so ads the PARAGARD up national

certainly starting started in So QX. I know in QX, even those costs – the were

You’re in December, shaking started the head. just your TV They ads. actual

the So ads QX. and so up yes, running were in

thought look Avaira be. softer you of Kind minus If Biofinity at what they as quarter a and yes, bit were Asia-Pac, surprisingly X%. we than the we finished were to little we going had

seen in come we’ve So those back already February.

feel me So good. that makes

happened ended I that tied VAT to think with September the up the that purchases change. being in

I digits, And now, QX is back single coronavirus. I and then but much certainly Asia-Pac for I’m like with wouldn’t we surprised, sure to expect QX. right grow. grow that going be the quarter. not believe to is even how should what second it I the of kind in something growth be will double-digit low-mid

Operator

you. Thank

from comes Larry Fargo. question next Biegelsen Wells with Our

question. You with may your proceed

Larry Biegelsen

guys, Hey thanks question. the for taking

got And we Thanks second throw threw daily I’ll can are VSP in multifocal approval two the you particularly from hydrogel – How our that in now. U.S.? silicone questions. that out you should MyDay of What ramp my kind Just PRECISIONX the me. competition just Al, second lens? the new product and there out toric. new taking the expect from of you from be? disposable big seeing for question space, What

Al White

a to best we It’s And product, will, there revenue that Yes. we FRP out like other my toric mind, will family it’s out go in from marketplace. multifocal great able The in get Having we the be is, toric. Biofinity profitable about. massive of for got it. be No that perspective, to the market. the talk that, product the multifocal have question million franchise, whole to That’s but That thing that. few and Biofinity a huge about clearly will the that said and approved targeted a dollars a pretty never because never it’s a launched approval highly a here. product. product was Yes, it’s for

just about continue it being helps entire talk family. So that and to it Biofinity out product is about talk having the able great, to and

little marketplace in out that at being the look here. bit product you If its make the is is a to side of launched into competition way PRECISIONX things, starting yeah

And look – VSP, from at much on way making So you its we either. its Haven’t making yet. much way impact I frankly too that that’s too that is know seen also. that out seen if lens impact haven’t

from competitive impact much this standpoint, a too not at point. So

as And and And that a people we’re with clariti happy I’m stand with success in but clariti good mean is really before this the for said within with pretty we there room I’ve I other space, spot. where seen clariti MyDay toric, pretty being we’ve good everything, it hold as especially with and out more in and the up us with to us to of able a and has, continuing toric puts here come as well spot.

Larry Biegelsen

Thanks questions. for the taking

Al White

Yes.

Operator

you. Thank

Our next question with from Mishan comes Matthew KeyBanc.

You question. may proceed your with

Matthew Mishan

Great. rounding Hey taking to that to for with the Thank moving DTX questions. in Al, point becomes of the now forward year, Alcon for get appears the the MyDay greater family be you where the toric full later out priority? you that does

Al White

really multifocal. into Yes, MyDay go you

is fulfill had and we toric. the out out right The to marketplace, key get in meet demand. sets for demand the fitting to toric to be more then the we now We will So that there. able us for the need

demand is saying lot So premium for right now, toric, lot of there. daily just hydrogel a of it’s of for silicone a matter there a there out out demand

when We’re but here actually as I We’ll there well they fairly the do I product come more will out get product. well. proceed through imagine with toric say that year DTX – really we launch doing launch, do well. And robustly we’ll out shouldn’t and the

MyDay, for get out like think we’d a there. I to in the we’re look that good When both So multifocal you at spot.

constrained be for I to Our couple year, of at be say for problem a we’re won’t and we capacity being, least itself. capacity – up through for here before years it the move the ends could sphere going the toric a

little a it’s do there get we it multifocal we’ll market. point, before to but going out be some a at get So out to I think while

Matthew Mishan

areas Okay. get And lenses bit where ability to weaken this, as does you’re move Asia to other worse region, world regions? this So constrained? could are you in an the If if to between thing how with flexible demand were result Asia then question. capacity move of that you that my of a a little

Al White

yes. elsewhere. They those I were is would little them product for if okay, obviously, it constraints. European back hit That’s quarter that that Europe the reallocate happen, demand. even did the MyDay into lenses a bit quarter. of answer of they product over was little if Short were We There U.S. ship there, demand but a And we but and the there, pulled take and market this is and bit plenty because this capacity certainly sure. allocate we’ve we hit – would sell mean

Matthew Mishan

Okay, excellent. Thank you.

Al White

Yes.

Operator

you. Thank

Our question Stephens. Cooley comes from Chris next with

proceed may You with your question.

Chris Cooley

questions appreciate you. taking this Thank I afternoon. you the

to sounds Just two the and but point, coronavirus over It assuming more from the One, to Italy. domestic the to a and United you’re here hate Al, belabor I acceleration States, extent, just your virus guidance, clarify, quickly in the region, me. not putting lesser to demand. it’s in further like of pull relegated and so the Asia-Pac

you second remind during production you question contract just better the why back an forward well, confidence, and gives year? were of could that fiscal coronavirus, us won go kind my was what us in And in quarter the the and franchise the Thank that fertility you. acceleration going of that then in still the and you can delays you into see as as in half despite understand the just help

Al White

gets moving they infected Yes, and as Thanks, But to – product assuming we then pretty back normal that to assuming kind sure. from headline we obviously Yes, news. worse not so U.S. the move there in Chris. how to be with continue of right, perspective. to as normal sales forth. we’re go and be people coronavirus, it similar you’re fortunately, QX. a we’re additional And assuming doesn’t through mean to May. today going That anything But sell into will gets we’re it’s selling back the we’re everything

If delays. was production It fertility. you at fertility, delays wasn’t look it in shipment

going at end gone out, is that we that it out of out out already going of So has QX. this in have quarter. Large portion have should the product QX gone but it’s

shipping in second that just a we movement quarter. of goods that’s obviously, recognize the So so of

we couple contracts, have the a of On did here. contracts

of to us gives QX QX. obviously, outside to already into the we’ll in you’ll won’t kind start other revenue, in our in go details, won same, from nice revenues contracts. than we revenue the opportunities keeping speak, U.S., contracts a because those on see impact say, of capitalizing that I so the that from guidance and comfort it and increase visibility we’ve Some have to few specific

Chris Cooley

you. Thank

Operator

Thank you.

Stifel. next question comes with from Our Jon Block

proceed question. may You with your

Jon Block

Good with guys. Thanks. MiSight. I’ll afternoon, start

it that You you then program the then X,XXX? look mentioned at How first And a the mentioned, got I just the or does interest program. high certification that what think does you follow-up. the was Maybe program. if backlog, And certification part I beyond level, would, a in taking X,XXX entail? level docs

Al White

Sure.

certification to the speak, of education yes, kind or So and associated the so with that. it’s – certification,

we straightforward off. the in down of key with training, leaders So opinion that the for online a had group is Miami they went honestly and optometrist. the we kick through them they And that to in January pretty did certification, which then did an

We have XX lens. certified right selling docs in already the now prescribing the U.S.

out. now was training that that X,XXX at go are selling certified seven docs to it. The to the all went universities think just I invitation in docs went the that frankly to the the to

I days went think out it ago. couple of a

that pediatric very will, been has we positive There you decent who have So verbal the that. if a docs feedback, those is lot the of on targeted pretty feedback practices.

looking in relatively forward there to there definitely So move people and a some excitement jump who and of number was quickly. are

good pretty that. feel about I So

Jon Block

Okay.

to back be had I Back accounts? in fiscal from to a hold subset to question mentioned Is you gather the one. guess follow-up these maybe going and a then some where of next larger you pursuing where think tranches? are In of And just terms – that guys. of accounts. go are where you ask some want back standpoint. arguably key in you to and words, pursue now? strategic of also the So that two, on it because maybe were in right Thanks, XXXX, capacity the in systems you first all learnings from layer I X,XXX XQ tranche? other just I’ll you to to bring next

Al White

Yes.

who management. was some a had already to presence course, tried of form myopia we’ll bigger on doing X,XXX So going and docs pediatric kind keep of What of is who docs. the anyone target we do

So group expanding it. be that than smaller going strong. a bit a should little up good be that, to interest X,XXX of We the docs. ended It’s pretty was

including that we up number docs, are in if you So of who docs that CooperVision will. and ended we expanded not actually a

came There to involved number be signed that early. to wanted were of a get that really up wanted and

that we as expanded could. much we as So

Our seven doing we colleges limitation top the the is of that training. have

we classes of there. a it’s push get through people just how So matter many and can in

practitioners question. in, we’ll we that and expand As work through that no more invite process,

key the of long look bit they you because kind yes, job of crazy side heels time. for a MyDay our good accounts, team, a boy, of production just And If did that little got we on things.

back are there. We at it

we’ll It moving terms kind news here having raise So we’re in conversations. that there things out much of of those before a long, get back new your optimistic are eyebrows. good key maybe that some will longer too account

Operator

you. Thank

Jaffray. Piper from comes O’Brien Matthew question next with Our

with proceed may your You question.

Matthew O’Brien

we’re the up as can cut about Afternoon. Hopefully on one then Al, starting new legacy your coming you of Thanks taking to hear rebating X, for far bigger me market the down okay. cutting competitors trying that’s questions. April gray back on as market. dynamics from and some products hearing

the it, can then potentially present you disrupt over six you marketplace? I’ve if how of have, you that about improve next what And the to months – talk and opportunities marketplace, that kind heard sure months? I’m can the So Cooper maybe do for could XX about

Al White

one market we that. tell you what like I'll the you we're talked of someone's two getting so that and discounts and but And intent least volume into pricing or some that, probably lenses their and about but reason. advantage taking shipping a gray tell year talking is about through it at market right, We market, I'll to something some in ago, what, takes that got forth, for not they're that Yes. discounts Well, you're work. is years at sell

times A lot contracts. to legacy tied of

product that have market, the pricing So into hurting are rerouting they and and product another that there. you buying then

a around profitability analysis gray tough and market that so contracts benefit We and that's positive improved them. it clean be else and will to through get that that That's your going is So arms and through who forth our up, actual that, to a anyone one. an a project clean that went evaluate up. for

exactly at look you If in the pricing market, right. the you're dynamics

see of for increased down But this be taken had you for but everybody by wears. annual seen year. a recent existing dynamic. pricing anything $XXX We $XXX rebate Still that's and We activity a getting list $XXX rebate we for or of you've lot know for haven't I something also did wears. a new seen saw positive really down. lot rebates that move

to already. activity. looking incremental own little pricing here. any this at the we we're So kind pricing year rebate own did looking and right move our bit look adjustments year We're We pricing through of now. rebates as of at take a our We'll at

Matthew O'Brien

Okay. there a of as more lens You generally you think comfortable you that are constant think, to the toric was this talk I'm a the still to in about being, get your how best the to space? lenses DTX seeing is, and follow-up, i.e., toric you the really the impacting good generally worried is do lot out And market year. future. are room about expand I trying clinicians you evolving? quite Can are coming some on currency I toughest just more and the out Because if quarter As comp performance for even more then lot market this prescribing competition to speaking, starting a what expand? of toric have and of torics, this guys And marketplace things people there. again are in comfortable, getting basis,

Al White

great expanding. market. a is is market It toric the Yeah,

the buy practitioners patient look things their patient fit is, everybody their have them. if lenses at you from right, wants One and of to

and it turn You out online. product have fitting don't door buy you're fit want if the and out and to buy in and walk them online the pretty someone just around walk door sphere. the to easy them It's Right.

to be much and astigmatism. that and in an that online, buy walk it's out someone people a number and A patient significant around for turn fitting you're If more toric, of challenging comfortable buying have online. it

toric. a need they So

fitting but the is lot fit now, a times, often truly and and have Now they more a patients as than better with docs for don't right looking better really lens. understanding of at lens, to correct and toric lens astigmatisms be become a that have have it correct that toric,

continue that see price forth. to to points torics. premium you're getting at So, growth you're to so better And see there, going That's you're growth. as in daily and going torics out obviously

in many, growth going years to of of So front see here toric in now. mind, my us many, many you're

the best there the for well do market share one. I in lenses number But definitely we and out and think do have I still we there toric certainly think our space, no that of is space is we as and that. a the daily silicone Maybe out part really move the of really, here part people question strong That's forward hydrogel market there is other strongest about market. torics.

Matthew O'Brien

Got Thank you. it.

Operator

Thank you.

comes Chris question with next from Guggenheim. Our Pasquale

You may proceed question. with your

Chris Pasquale

quantify Thanks. held capacity Al, how back I'm can And customers. with particular constraints those really have much you at MyDay you in happening – all how business? what's the think thinking about

with really patients? have the you been two lines. have is more So, you pushing between those so as been the And difference happening those clariti? capacity, opportunity, What's into them price

Al White

or lenses, our older toric. lot like a those things. they're or A Proclear they're two-week Yes. They're wearing are one like toric two toric a someone daily a monthly or hydrogel patients doing of our competitor's daily else's toric product wearing either wearing or so Biofinity frankly or of one

well for with another lot know, it's been there. clariti the is with MyDay right lot same toric flying word, So, off toric. them fantastic the selling options a quarter right don't torics. unfortunately had It's, I of shelf really clariti We hasn't but there doing now. and a of just We're

sure. you're see cannibalizing think, clariti, I toric MyDay of end at to So, the the going day, not that's for

more FRP daily torics and it's think torics. hydrogel legacy I

Chris Pasquale

U.S. is MiSight, million guys patients of using to year? helpful. be are users then That's $X get by number And in a end you terms want in time target in terms sales the you to Do actually where the going of the in what Okay. the assumed be product have of the to we October? the on who of for

Al White

we the of a we'll year's you're gets product, lot changing, end the of of million, many, a depending Yes. In selling upon of them doc revenue those might wants to for you're because eyesight of the – months be six A sure. the but their is of selling the year's the shipping what day, hit wearers, we're be say patients, couple the the order selling we Because on recognize at shipped. supply supply. what do, to number thousands that's many product,

of recognizing that. six worth be months revenue we'll So, on

get so to sure it's to premium cost package look assuming, math, north guys not the we're require is it's kind are the daily thousands that as of you're a of going the of to you sells or us If price back lens, going point, many got the at of kind hydrogel patients. of U.S. into quite I'm – or kind but silicone to what the which just be And X,XXX it's right, exiting

Chris Pasquale

Thanks.

Al White

X,XXX fiscal the It's year U.S., we the right. exit as in

Chris Pasquale

That's Thank right. you. All helpful.

Al White

Yes.

Operator

Thank you.

with Wuensch comes Citi. question from Joanne next Our

may You your proceed with question.

Joanne Wuensch

Thank you very much, talking and nice to with you. be

for the kind of start training, you you back, and if how to what to push training you two questions. do go the products explain When up receiving? physicians Just are MiSight them any,

is think Asia-Pac, other which understanding specifically sorry, second corona, my is to my the I'm global has if where correct, then do, adapt the comparable spreads something that of does include you. anywhere about potential And so Thank not is, estimate with it outside to scenarios China if question regional to region. you there more slowdown? we How or a do had your

Al White

Yes. Yes. Sure.

clear, So we to the continues to that spread. are assuming, be coronavirus

spreads, you on we're going business. in Japan Japan, We're business as Because from the on an our not The our big business if definitely to like a not right? impact our that's for it look happen is at question unfortunately. the on think big seeing assuming impact example, impact a coronavirus. I

it's there, sales our much. So but not it's spreading it’s impacting through obviously there, that

our So this the U.S. spreads that's through an saying kind and it of other that hey, is, big impact sales. marketplace, actual as won't of what on have we're

the ECPs professionals be we that sure it fitting look have anything you think or them and works, right all worse, It benefits with professional If who is, and understand how now, behind training by making MiSight, forth, the at it's and X.X at I why then hours universities clinical about the and it's done. help the the the are will lens trials it may any training questions there, done they to the a clinical that have. so how and of so information

Generally how parent we've question how olds, their speaking, can has comfortable on wear I do year do do or a much get eight eight-year-old get been that or this nine-year-old about I back XX How – do like talking push their I can XX-year-old lenses. not these as their with year push the received around, the we're kids. to It's back olds maybe, is but hey, that been this get parents around comfortable.

fit work matter in educate a in talking to that's you them, parents talked children with helping to in them, and you we And of lenses. the to someone someone like practice, parent them your you talk bring your with and staff what have help and in about, upon you the in families staff size who specializes educating depending of and the the the your working

and a couple they the times, struggle of when Unlike good who continue seem go. in is drop and put they're kids seen it on. lens out, that done they're then actually do the and and to to to we've people younger kids out What older move figure it then

of more of kind it's that stuff. So

We welcome speak, questions. the And to lot Joanne. back, but by number of of a a back, way, so haven't push had certainly

Joanne Wuensch

Thank you much. very

Al White

Yeah.

Operator

Thank you.

Marcus Robbie from comes JPMorgan. question next with Our

You may proceed with your question.

Robbie Marcus

question. for Thanks the in half. to to Maybe maybe Is coronavirus. two One the conflicting questions. assuming on just that I caught the second come are clarifying make correct? sure just you back revenues start want comments. I've that off,

Al White

No.

we’re out. I plays $XX is we'll to guidance. not speak, back that our those and in to personally what will is So, we right will, some revenues will happen of believe assumed so see now, how them come that million lose, but saying

be on trying those come conservative to little In being a – back. we of assume do not that, terms

Robbie Marcus

then, again, below great well Got quarter expectations. rate tax And it. another with the

I'll sales a through for like if EPS impact first in is just it gross or rate And then be was that lower to have last it, the slip You and what similar FX see What quarter Thanks. might tax I you missed and XQ year. in. one the X% it? XQ year? have margin, lowered but quarter the on wouldn't may more

Al White

hadn't to let take – talk. Brian He Brian chance a I'll had I'll those. let

Brian Andrews

Yes. Robbie. Hi,

in So little came a rate lower the we than tax bit expected.

if equity Our QX so the us we when X% because somewhere rate you we the first quarter, take the be issue were of around in to tends down always line kind year. is straight started ETR grants always off year tax to to lowest the that's at kind going of

from true this the the into flowed quarter, reform up happened in a had we provisions of quarter fiscal enacted tax by was that also What XXXX that generated this quarter. kind from

you've planning, bit up tax estimates, QX. with expected a we brought us than those haven’t obviously, true So, in got truing down little that have you're and up more a we just

our tax look with be last balance the and So, QX, ETR somewhere for QX neighborhood to flattish. year I the the X% would we our guidance, expect going of QX, down through from by rate when of in XX.X% the roughly relatively

FX. Your next question on is

rates EPS. we about FX keeping positive So sales same, roughly $X.XX to guidance million and to the a detriment $XX have

Robbie Marcus

the for or quarter year now? the for that's And

Brian Andrews

to year, quarter detriment the For QX about $X.X million the no EPS. for and was to revenues impact

Robbie Marcus

for Thanks question. Great. the

Al White

Yes.

Operator

Thank you.

Our from Research. next Willoughby comes Cleveland question with Steve

question. may your proceed with You

Steve Willoughby

Thanks evening. for my I couple questions. actually. still good taking Hi, have a

previous EPS The negative that's million full to on there to that Brian relative year you're from Just, revenue positive quick your to $XX expecting just or I follow-up guess, guidance a what real last FX, $X.XX for and overall? the comment.

Brian Andrews

used we last on guidance. the the to quarter's relative That's rates

question? euro, rate the that for gave $X.XX we more and you answer for the or unchanged. less have on a rates – for basically $X.XX impact on yen, less more euro $X.XX basically the have you pound Does or of the the when So your you

Steve Willoughby

the yes. to a growth what I question. offset The then kind for does, $XX unchanged? be from your keep It being rates million is guess of year the able to impact coronavirus headwind, follow-up full just another

Brian Andrews

MyDay and during you ultimately million those that sales we contracts here QX and production think up I the quarter. in made comes in improvement of million headwind $X QX fertility the then and more and higher million from kind is from first $XX won of Yes. get $XX what in QX that because

Steve Willoughby

is Okay. you're some wondering way there to And thought Al, these MyDay, all on realignment you still production? last mentioned improvements ended wondering that this MyDay if year. if case? capacity in fiscal quantify you and I the you just as the constrained MyDay you be – any on of sort quarter was still was of seeing you at would

Al White

be with to well quantify have capacity of the a as say fact, been keep if of And of to comfortable other could constrained, we're we growth moving upside pace them matter year. kind can in revenue moving, half we than we've that. year. we think We'll multifocal constrained until I along get the Yes. the the talking about we'll back won't think, that think at I'm will some so at sometime next have some I capacity the the in marketplace, That's we're I say out year, I Because that the day. MyDay Steve, be, probably to would the headwinds. will end into of next – I us thing but allow

coming now Having that, off growth some rates. to – be we've good product have going that put pretty able got enough to we're right up we said

Steve Willoughby

overall daily think I one than The grew grew daily slip X% overall said, last you you a one could on it overall I I in it's growth, been said dailies. slower hydrogels was If just dailies X%, then, Okay. – XX%. while. Dailies silicone believe quite and

any just happening performance. with the color on you what's wondering could if So us hydrogel daily non-silicon give

Al White

there Yes. lot oranges daily is a apples seeing coming sphere, torics. X% And growth we're from those so little of a because single-use the and our

of business ends bit. So to number. that throws that. No hydrogel a number question off that point, it is one just up that into the little That's your decline. legacy getting about your and to to toric things question continuing put But the

one Proclear is, We're MiSight, MiSight on. over. we I want declines, those make as are the pressure there to that which exact as to mean, That's convert of product I continuing right, to lines people used because same reasons the on driving feel keep it lines

need we we the see hopeful then over on anything and any lines and and MyDay to throw or there. clariti in So we those that don't new of capital that declines, as growth out I'm MiSight kind put

same numbers, Hey, point to don't question on currency my I your clear these the stayed few last by Steve, on moved that. the of quick just in currency you same. everything our days of be rate, never and on I over the use say the favor. did Brian I'll almost like head. currency we But top the has have so tell everybody, here, kind to one might way, But

currency, guys always a same were know. life Cooper, rates. You currency using positive we like We the from any are and they us. headwind from but And rates in the incremental easy work, talking because where our time held you to similar. would seems But an moved at favor those that I'm about idea rates the make has on... the doing be more have it were at they were today, if for Do

Brian Andrews

Yes.

$X revenues be and million about the would rates, EPS rates, today's would So, better. $X.XX the about better if we current use be

So is moving around of just EPS rates of on you're roughly $X.XX and goes that crazy, shouldn't detriment on $X million everything like go moving because crazy $XX to your on revenues. like that. We are crazy, would to be go in detriment but a around to million clear $X.XX

Operator

Instructions] Lichtman from you. [Operator Steven Oppenheimer question Co. Our next comes & Thank with

question. with may You your proceed

Steven Lichtman

guys. Hi you. Thank

one for me. left Just

spend through evaluate investment? update DTC, the be return you is when expect to to PARAGARD be on the this able for much do us will that you you On And how whether anticipate year? coming can that

Al White

in now $X and PARAGARD for higher say Steve, spend Yes. position I think year-over-year basis. about sales and of that million that year-over-year kind right marketing be will on a that we're a to still it

in spot. I end this we really we'll think that as year, be that

hired York on Cal. Northern we in stations, of ads area, New of salespeople, a you year will, first The we bunch kind did TV the in if all the metro

Now cable year, a lot a ads place, of the are more we those salespeople basis. doing in have TV on we this

or think XX it's like XX around. cities cities I

around, hey, on don't, have in able look most just cable versus national the some marketing how forth. we'll where with see were where detail the we being salespeople, so we we successful being we on channels targeted with So where markets successful be and to and

So good of year a I and think for terms really PARAGARD. in important this us is

next it's what us us, Next year dependent But expense will be up good doing good for this – no upon and answers. PARAGARD reason, shouldn't from may a year perspective. end we year think those I year it extra be an give

Steven Lichtman

Got it. Thanks, Al.

Al White

Yes.

Operator

the not I call you. And like at now any this remarks. showing Thank to and time. CEO White, to turn Al any questions I'm back for President would further over further

Al White

discussion good again Great. today, months. on so in very you you for Thank And call to That's and talking next we to you calling Thank a forth. you. in quarterly look thank Good and our few it. much. you. questions here Thank so forward

Operator

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

The Cooper Companies, Inc. (COO) 5 Mar 202020 Q1 Earnings call transcript