COO - Earnings call transcript Q3 2020 | The Cooper Companies, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to The Cooper Companies Inc.

Third Quarter 2020 Earnings 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. to Investor conference Relations like Duncan, to, now President, Vice and would hand over the Kim I Risk Management. ahead. go Please

Kim Duncan

Good Cooper The conference welcome quarter and earnings call. Companies�� XXXX afternoon, third to

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

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

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

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

Al White

are and August. momentum call, by the number on and we They There a things of to saying performing but that afternoon, quarter, improved well. me today's through everyone. as let Kim, in you, really moved start continued good our businesses Thank cover are

expanding June global share world. the getting CVI at lens strong and for The team Combining of the taking our right products, manufacturing. to contact high increasing the With our our becoming strategic now, account strong this expanding upgrading the initiatives we executing the milestones, organization and relationships, independent share. performance new entire of we in and level in remain congratulate with high great capabilities contact want customer McBride innovative market number incredibly our I continue is distribution during key optometrists, relatively the our in of hit first and most key performance down including two COVID. the Before support driving their position to U.S. launching levels an the service recent to lens world, Dan X%, into MiSight, extremely launch details, XX% company a key of

million, numbers earnings posted $XXX stronger back the consolidated than constant expected all XX%. bounced CooperVision of to $XXX XX%; lows. revenues from million of and COVID a $X.XX. QX, both results down per CooperSurgical We percentages nicely as basis. revenues Moving currency share were in on with million, of revenues businesses reporting $XXX Non-GAAP These and down were

Brian in August, in cover the incorporated and in call. continued will which strength guidance, our Our later that we've

with quarter posted July all as single June both we being digits. the CooperVision, progressed three regions low performance through down For improving and

halo picks seen drivers, traction. conferencing up video to on times. consumers habits positive other quarter, our effect bringing as our Outside of as full their strategic were show a value EMEA We're returning Pac really products to results and consumption of than and expected also normal better These activity years Americas the MiSight these social CooperVision-specific the For silicone seeing we've down attention as was we've and down XX%. hydrogel X%, initiatives while our were executed Biofinity during couple gains more with improve launch, the challenging franchises. wearing Asia in the past over daily from with activity

for back-to-school activity, time, of MyDay product or is global market consumption, multifocal, all so MiSight quite increasing, toric all than including that premium This extended fall, offerings and extremely for range. as hydrogel demand about lot is videoconferencing also with problems in I'll proactively and will conjunction but an with and therefore, launched be a relaunched mode, time, lastly, were With attentive launches, an screen be the continuing remain eyestrain high active clariti's screen with has they're toric concerned successfully it's busy these expecting. launch unconstrained children in to around manner. online ahead And we something the our and kids. headaches their also in Digital world. exams time. their pipeline long their we incredibly coming, with adults great toric, to causes has increased daily silicone issue of minute. being Parents addressing launches time kids' Looking these we'll stronger believe were sphere in is, focusing eye a issue are including for the selling We're on In be been by lens new which and scheduling some the significantly. need for we to. and Biofinity education and MyDay cover and improving going previously the to in a daily worries we're

quarterly be noted some Biofinity the quarter with down numbers, in Avaira strength Biofinity Energys. and toric to to X% combined and Moving in

pre-COVID including strength as MyDay optics is we've fit seen it notable a this With expect time. nice and Energys activity, Biofinity quarter. the XX%, with to remember, screen toric. down help in and excessive a channel world, fatigue our growing very eye may in inventory rebound pop, to unique levels be It's growing back hydrogel silicone a from were the X% lens showed using You to alleviate today's quarter progressed, nicely fiscal year-end. dailies July, perfect in digital Meanwhile, zone in by rebounding

the Moving team job. amazing to an done MiSight, has

optometrists partnering initial exciting is initiative multichannel campaign, now in at U.S. Gellar it's children, fit success, in far certified high. launched we're the is in optometrists. Michelle our As FDA-approved process. many and clinically interest multibillion-dollar an received become progression exciting we're myopia infancy, to MiSight, in already a category, as well in forefront. more proven new X,XXX We MiSight, its lens direct-to-consumer spokesperson. our What's with the interest being only most well-known incredibly to advertising creating This has management Myopia With but is this outpaced the that by celebrity we Sarah incredibly of over with accelerated with a contact the brand-new set slow including myopia just to estimates actress it's management and category. consumer

children million benefit current this million The roughly retinal about get which to candidates. new to these addressable MiSight olds, estimate now similar approval $X.X new based U.S., global annual program see and we so optometry being order and a XX-year household price children such a over as lens addressable you the myopia if the the But kids needs market, in XX% increases market MiSight, total ages to to X at of with so people to billion. Europe talk people lens myopia more see, many to myopia as this the lack is adding the to so be such corrected pediatric and able kids XX% support children Futures, be years. behind would about an myopia just from roughly the $X roughly as to and a XX the and total which addressable the reasonable These specialist. half the manufacturer's for In including considerably the is well creates around takes be X pretty equates numbers this billion of to the a including XX, include support, myopic, excited the income seeing prevalence higher, on between conservatively billion, pediatric cataracts management. they needs Asia we we you're myopic and addressable but geo-targeted FDA's you When kids why contact myopic. of of of to insurance Pac, All covers what conservative, an appreciation and myopic market, dedicated higher be are glaucoma. marketing XX Regarding for the it teenage Americas clearly we X and rest they from a X- programs the $X.X reduce knows of management teenagers, optometrists detachment, kids more to of among myopia in assuming why time. for the and myopia looking MiSight roughly do creating be are U.S. estimate category reimbursement, serious that estimates, everyone total diseases, be $X.X market to estimate $XXX are their where dentistry. market math perspective. Brilliant as becoming we're includes at eye and remember, become Adding and to this these percentage not in accompanying billion market appear aware training, but market straightforward. risk U.S., And of may for ortho-k the total narrow treated management young of specialty This the ages There are

including Within $X.X Regarding XX% this myopia XX% with ortho-k this, quarter million. COVID grew sales, MiSight even MiSight to million. management and portfolio, $X challenges, grew our past lenses, to

myopia in management extra consultations involve QX. touch progresses let expect One now specifically data. and early-stage MiSight treatment. helping telemedicine. conveniently easily launch been positive what consultations critical virtual consultations, MiSight for be we're is important parents how can on restrictions. with have U.S. regarding me a of need handled is, COVID additional the that solid point which impact vision, virtual families the With lot on and seeing we highlight management market is today Myopia fully conclude via from dialogue the To to These understand growth with it myopia underway,

increased regions, all number of market was posted impact we the For QX, With outperformance, to felt the including XX%. our this down global strengthening our were share position in one while and we calendar XX%, record down and three in market shares XX%, COVID Europe.

future. strong on strong strategic which the also plan. for We extremely testament work hard Data, well the our and New a posted execution of the investment is to Fit multiyear This team bodes our

market screen the Combine with torics driving market the roughly our remains number shift to daily has it's expected by increase our market to XX% and Regarding underlying in actually macro in X/X The with expansion bright that this myopic lenses, may hydrogel key hydrogels, growth industry myopia, multifocals, with and to the geographic silicone and our estimated to XXXX. future. the growth, and world a legacy now increasing dynamics hydrogel trade-up from of higher where place is remain be for trend of time. the future continuing silicone

to Moving revenue CooperSurgical. of million. $XXX We reported

encouraging, to quarter, more only such Endosee evaluation focus brand, stronger PARAGARD with results of Even innovative XX%, Although for All office direct saw slightly proceeded patients the bleeding. reopened. looking our and a surgical, we've steadily sales setting our QX. solidly Advance, solid products as offices abnormal so system segments June placement procedures skin activity both in our a medical it preferring we Elsewhere, Within uterine we products challenging we testament as the environment. as through seen These of results hard-working our nicely. rebounded device, posted to in down endometrium, into and expectations August. PARAGARD, seen as business an elective teams. INSORB, the solidly, a down and flagship causes increased and R&D quarter a the an surgical and and strong Advance rebound and for the trends our visualization improving surgical success for In continue performing fertility to physicians exceeded our closure expect continue patented forward, we potential in-office that and steadily visit. on market this especially activity ability office products we've sales are and of and were July, deferred particular, rescheduled, is OR course capitalizes over developing expect group's moving Endosee August, and our device of the

the expected. we're through the the we'll is some With for starting Europe Fertility XX% normal world, flow the Moving better following improving, we U.S. clinics slightly We year-end, have this, to IVF market the and to fertility. in is and and around in return cycles believe by with pent-up demand, including down positive trends. largely reopened than telemedicine. quarter, were Asia Patient Pac to really of use QX. see address seeing

for in in consumables our bodes saw business and genomics products, August, July. Regarding as media quarter such actually in this well so progressed, as trends grew considerably we continued a pipettes nice our These QX. and the to nicely rebound in business our strengthen

and personnel businesses this in-office continue so with sales offerings. training investing we'll appropriate product market-leading supporting we'll forward, on adding remains global Fertility space, expanding Moving to long-term continue we're that, sessions, unique conclusion, Brian. In products our optimistic trends, With very I'll Energys, growth and virtual call driven a well, business our continue over are and product where we'll sales Endosee our strong position. marketing to by to improvement, positive focus including our and in the our ortho-k Biofinity performing some lenses like turn and Advance. MiSight, see portfolio,

Brian Andrews

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

was offsetting operating down exceeded in funding resulting we PARAGARD to lower XX.X% positive from was XX% consolidated sales expenses, XX.X%. costs. margin to We X.X% CooperVision's did higher at from Our XX.X%, and decreased expectations CooperVision. third programs managed XX.X%, COVID-related in million. employees, PARAGARD investments supporting partially revenues CooperSurgical's offset gross expenses the gross as maintaining margins internal margin driven year-over-year with margin and higher our upgrading associated XX.X% of Consolidated and projects, IT primarily our last Despite decreased gross XX.X% year. constant or this OpEx down while as currency from by decreased top COVID, year-over-year, from performance such to pressures, mix by product line XX.X%, infrastructure. effectively down $XXX quarter XX.X%. MiSight higher our advertising consolidated XX% in

a outstanding. monitor $X.X of lack We million million closely comprised was option flow, $X.XX mix positive to was cash the tax $XX leverage negative for of will of rates. $XX $X.XX million our expenses, debt million and interest rate the XX.X XX%, Non-GAAP by to of by offset Net and impact to for million costs cash $XXX and million activity. reflecting FX The income opportunities. expense the $X.X million, Interest driven QX was revenue shares balancing against Free by time. year-over-year with quarter EPS roughly lower $X.XX. X.XX the a and was EPS investment adjusted $XX average was geographic continue flow CapEx. of ratio was And operating decreased effective billion,

Given and our end our we're current very capital project, comfortable with multiyear approaching and expected expansion liquidity the of we leverage. remain

$XXX and flat million. $XXX guiding which guidance basis This constant strong of or QX. at in $XXX comp tough year, Pac the to to currency. minus minus increase. growth which for is an revenues QX X% to Moving This million, X% with to We're associated VAT buy-in XX% consolidated Japan last includes CooperVision our million to X% from to Asia on million $XXX plus included from incorporates in as-reported

EPS to XX% constant This X% $XXX X% our is we're minus is questions. to fertility CooperSurgical, year, $X.XX. in as that, with and or strong operator For currency. Non-GAAP back I'll to growth. And guiding also tough million QX minus hand expected million, the between XX% $X reported and $XXX minus to which X% to incorporates for which it minus last included from to comp be

Operator

from first from question [Operator James. go Raymond Instructions] Keusch Please is ahead. Our Larry

Larry Keusch

just I with a on rebating. had of Obviously, quarter. been guess, saw now most stable Al, this a in and quarters that maybe recent movement for little starting some bit question

thinking you're out net about that And positive? get actually to of you is there. still are thinking some rebating wanted sense kind how just still of So activity pricing

Al White

associated when we're we're consumer rebating. referencing, believe, vast here of what with discussing U.S. about I Larry, the talking Yes. majority and rebating, you're is what

with have give from new of that, when guess pricing strategy rolling relatively us, up occurs on behind we're portfolio, from But competitors. not stand. it's really a excited where a activity basis products, I could we strong why doing share. they've we I to and what their decided and marketplace, to we're a So market well the product out some at what pretty they we We're say there perspective. look wanted about one all the during But for of obviously, comment our was gaining quarter in you profits. on is have small a part global going I'm

like So good we position. in really feel a we're

with on don't we're where comment much going. pretty I are have and that happy So to our just than things position other

Larry Keusch

was -- to you, then the And with just now? about XQ. along about there million sort again, of quarter, guess, then X-part MyDay Perfect. I capacity where just And sits a similar the of very kind just, question, I out talk bit right $XX secondarily, adjusted thinking a that, fiscal Okay. in levels about for guess kind that of kind of COVID can in you're COGS of your this manufacturing little toric, how I for

that idled? when And you do fiscal expect the where production imply versus you expenses call to you decline does lines those start the that So stand last the to quarter? -- are do still in fourth

Al White

sure. Yes,

perspective, now. -- a a production talked couple good over as up we shape last from and shape included about, including of So toric, and quarters, number production We're a we in here MyDay MyDay in good with ramping definitely we're lines is right really the nicely. up of ramped

with we've MyDay. So production continued on full

actions. meant infected with had inventory took and down. that lines then had some take was And an proactively someone and quarter, to stepping we'll respect on production the to MyDay of around think of yes, With demand call-outs seeing based continue with the don't COVID-related we respect also project, control we're the I see or specific we a world. production. an number some associated we we actions kind us taking I employee on that full if we COVID-related call-outs from back to had who the initiated

that. anticipate occurring the any fiscal So having of those in do those of kind associated costs not costs 'XX. incurred were that with We were

Operator

Biegelsen Please go with comes Fargo. ahead. Our from Larry Wells next question

Larry Biegelsen

tough CVI. Al, me quarter a environment. good a in start let on Congrats with

First, QX? contribute June should in and how down Do but QX? QX. growth to bit, July in a little August? expect say us much July be for you with would Al, growth flat CVI the QX to maybe Will in slightly rates? to continue you you Al, and fiscal rates up restocking you us, said low provide you you heard nitpicking that monthly single I specific digits, on And give is this will the but call, was

-- you did to guiding you're currency on basis better fact to expected. in Now you than lot the better flat QX negative constant did X% a little a a despite you

slightly why multipart for Al, I And drop, guess the given lower QX? I'll the after -- guidance So the given that, multipart question.

Al White

This is a multipart question.

off, Yes, Larry. a so appreciate it First was quarter, good thanks, that.

On the you as fair restocking, and But about restocking half that of had of think to this some offices be your doctors' little hard it go say get around quarter. we is would that down it hands forth. so fiscal come past probably in a I in to

rest the So QX, the QX. think get in lost that I stocking in fiscal of QX we'll during back we

degree. of the half kind of in I've two them split So to some

July thing currency that's If grew you but on to for a that, not because monthly keep going at into doing. of a I'm down guess CooperSurgical will constant to basis. June July, We year-over-year both forth, look did and June, sure it down forward CooperVision I'm going say so X%. good not and I was X%, COVID because was numbers I get August, specific August,

So obviously good there. news

I flat. talking you to was CooperVision, back guidance the for get hard QX yes, fighting If about to at look

a bit X% as currency, little minus shows guidance basis, currency without flat on reported. constant to up Our a

But which news, part inventory of were of did that that we've it anticipating, faster -- and QX. channel into we than frankly increase, seen that fill think goes some increased right? just consumption great is pull I to

don't way, $XX something QX. in said consumption up you we easier pickup in stronger that I'll to were have day improvement that that channel the that million, probably if fill say the we an QX moved extra into thinking long will, million, and let's you $X take million million, with that, $X the QX QX, from ended So $X as report marketplace. Having all in

Operator

Mishan from is with Please Matthew next KeyBanc. ahead. question go Our

Matthew Mishan

that mentioned just I like back to get were think you ECPs. I the proactively And parents Al, scheduling want eye to time.

are patient digits, of just the a visits for outpacing like be ECPs. like Kind of what ECPs low you single you're pre-COVID do are the well down the to it seems where ahead capacity seems to performance visits. with the versus ECPs level? Your at think And

Al White

Yes, all right I now, open open. right now. I offices think basically think so ECP because are They're

of percentage -- are Now seeing many significant doing of them fits, are are in terms how a new degrees that's so there different back news. patients very good

there, may with can people ship we manufacturing, I product that investments good what a with people's they spot. our just we're done I've share is right, of tied our we talk level that, over kind Yes, those same performance have that, of upgrading and their right occurring, of the were distribution back product coming distribution now. which that the if we're That's few QX. is calendar couple products, that share at last if continuing goes fits gains. I those been over quarter, at relationships, and positives so what patients homes put believe lot about than we couple been open, not new we've with in our directly get I a from back expanding focus kind terms better years, a the on, saw I they're frustrated of new in, launching so are to look talked you that of see from of perspective. years the And but accomplished historically, really think But that and to Now about you will. in key own right, we've coming stuff. more to know last and where has And we the every launches to gains I account And what capabilities door in strategies.

And to in when and about Energys able MiSight. unique and market continue is products specialty a that. touch of forth, point to with have We're the that's Biofinity and lot which MiSight, like share other coming you're products. back, to to yes, us you some in effect, starting last talk nice those see lenses that on, position the So conversations you're of it at having look people, puts so lenses, our is we with taking really launching And and are having where halo the about optometrists we're them your ortho-k that we we're a conversations I'd market.

Matthew Mishan

as then to where lens that, I follow-up And contact think Excellent. had Okay. on mentioned side? coming. down a I you portfolio dailies? in think pipeline you it to new have do migrate do you just And Energys think guess offerings you that gaps the the you makes sense to the

Al White

Good going too mean I'm not new to get have Yes. be products much coming into some will pipeline. we I question. the that out.

some right the expanded clariti out toric also have range we We expanded for going have things now. like

don't I say to backlog is coming. now, and you'll too than competitive to products perspective from that a good that pretty be the into So seeing much more get want other right

Operator

Our next Please question is from Jeff Johnson go with Baird. ahead.

Jeff Johnson

probably versus in but up August, should worse my talked you CVI, up a bit Is think the June July to do how in has kind So like, might down but But just but bit are months? X% some little Just then that? they I and reconcile that trend. June And been that bit conservatism is to July And bucking about well, backlog little for that, next territory. that, out But interesting barking, flat data, it think start -- you here with guys obviously you I talking helping down that, about of in that. little you question wanted how there about that ease there? couple to hear that's positive X% the in August of it over I'm sorry quarter, August. demand? find Al, about don't that we as -- a talk for and follow the how in sounds in Eyecare to as the or I dog if can X%, said I know normalized time a about backlog you my Business sorry, perfect

Al White

Yes.

picked because marketplace so order that's have shelves, little need bit, of retailers a their backlog up right, pullback consumption of product situation back we now. the QX. stock some where see is a a of I seen pullout we think in up, And to distributors, terms has inventory helping because the that in really not and right did back

share. look Again, -- took you but going I'm at when So I fitting where speaking to with products. respect there, on fitting, think new our we

we're think continuing to take share. I

on So to can't the but move I direction continue can tell really things on the comment I marketplace, that in us. you, right for

look don't you to two still I it's spikes QX, still conservative. forth. exists, at One, If And are and and there want there, stay certainly say out reasons. still I for that and I'd COVID guess so

is, So in I the Pac COVID of Japan. think mention because September a VAT some with I take in comp, around the we Asia associated in one last for did as you year increase And had last still other need disruption potential some including would to into world. we consideration the buy-in the X% quarter, and

probably out. now, to So mean after right conservative. But guidance. we'll tell was that's plays I you fact reasonable the to I'd see it pretty a it I able love how be think

Jeff Johnson

really to All year-to-date million? number the there brings the for to. then, remember quarter $X still million just don't $X.X Brian, matter? tailwind what is what $X sure, MiSight, to with I to the did And That's the small too And then is helpful. are you million is, number just quarter, thinking you CVI? in Or that right. make any that C&E from acquisition this

Al White

On MiSight, are million $X.X around we year. at, what the for Yes.

million range how that think still get are into a chance to I to yes, successful have million $X So based things going on we $X right now.

to is. so from fits forth, through You it are a that and would would way But the more lot that think plowing than impacting some new with of physician's a be of perspective. kind that be -- new fit we it seem

range. million $XX then in And so or So be revenue $X can MiSight think in be we'll I million $X I still year. next still million we that think to

I talking think you're on the acquisition about...

Brian Andrews

GP Specialists, the...

Al White

GP Specialists, about? talking that you're one

Jeff Johnson

Yes. C&E. sorry. yes, But I called same sorry, thing, Specialists, GP I'm yes, it,

Al White

yes, yes. thing okay. Yes, -- same Yes,

the On yes. product,

-- I'm XX the million, looking acquired something that. that beginning like of about So business at, for we Brian, $XX at August

Brian Andrews

Yes.

Al White

add about of million It will per quarter. revenue $X

Operator

is Stifel. from question ahead. next Block go Jon with Please Our

Joh Block

start I'll MiSight. with

about there of ability get quick the great your label XX the and call for big you then is you to chunk Sort a talked time? you data rate question halo we over to MiSight expansion And You sitting non-MiSight the think X it it, for XX? that a it, two have about breaking any did it, years, you I just, teen the a first XX their down growth guys so And job go to do effect. with one what market in just take then how is adopter, versus, hits to it's Al, a get beyond but I've size. And CVI got overall pretty market mentioned adopters? is Al, the What would to follow-up. also on early, the

Al White

Yes.

from So getting a the be here just where label little XX perspective. will to in beyond clinical are challenging a terms we X of

U.S. MiSight, then be that's the so fitting some keep U.S. the U.S. and when Now to the your stuff, you We've don't seen they We're how in I per off-label and R&D here to. also in do XX respect as don't little work the to hundreds on talk kids telemedicine it it and I of that FDA. while. halo incorporate out wanted of a I product some bring restriction. products. opportunity we're some of we're have -- we'll here we're into But mind well, the doing you're do really that With having But in talk wearing we getting doc already practice the for based have do we'll a terms does in MiSight, label MiSight, accommodate kind the is offering them, U.S. if how wanting you're of lot how effect how already conversations imagine, of adjust I have U.S., that the outside you it's And seeing about it, early about to the it sell and the think the other the a seeing to two to here with us, a that have how forth. in U.S. having fit I things. still so into dialogue to effect, work, initial because dialogue taking One, ECPs All and market in -- sale. what right, are practice, that Outside we'll in of my clinical because to could a X do here even forth, can U.S., that my wanting expand halo of beyond of

I to. question numbers have don't So to halo there's you effect But time, this at there's to positive a give really specifically in point to point able there. be no

Joh Block

the practice the opening, the year year, up When we should Because XQ. fiscal do is about to you look Got then back Fair distinct is revert range? about And or fits. normalized the that And CVI reset of that's Okay. of three right? industry, with most about sort It we fit. of calendar or clawing mid-single-digit back new enough. end inventory guess your next to 'XX of it. sort then I'm out to it headwinds. 'XX when by reverts and was normal COVID, to fiscal a mid-single-digit-plus back trued fiscal year, you whether new growth, going just and XQ, do was talked think the about is inventory question be we calendar on talked it inventory, market XQ this just partially mentioned last there's for quarter, consumption was second we you with or the a to think you between dependent to in where I consumption, when

Al White

it as talked Yes, here, back mean inventory we think can. have I about. do itself work to going you're I

that of off. kind take you So

degree. at recently If were all I consumption, here to we about of months consumption back going the last people some concerned and to working look was think couple home going seen is, more one, People on, what we've you from over work. what

you're the seeing probably to most is video days. conferencing. Our office here is up But third other a thing on half a the filled

places. video do lot now, think conferencing least, a it's I You at and our trued of company in in

You a call. video a the it's not are conference so on call. screen, It's

coming So about are looking they they're even even the they're because for they're were the than wearing cosmetic conscious how into lenses them now same more wearing reasons, office. probably reason that people

actually fogging fogging they're contact more about glasses that's as contact only example, as you their here. wearers the glasses in with wear and up that's be So I lens you country anecdotal talk so stuff winter you're worse other right? helped. getting There's because gets think lenses an seeing annoyed mean up, going to parts many of

that obviously weren't we think positives on negatives I consumption, are there's there on there So probably anticipating. consumption is but -- some

research we're definitely heard are been younger fits. that demand new coming on up. back some of people. There's We've teenagers, and among there seen that. the in out that your fits doing We've pent-up group especially New your

exists, So It COVID some a challenge out of the coming in It's and of lot markets world still a still is parts back. there. right? still

So during move into upon if ahead don't the see think, do to you it next you're I back going of to year, to want depending we normal will. year, get contact But move I lenses ourselves. rates, when is certainly as growth

Operator

ahead. Petrone Our go with next Anthony question Jefferies. Please comes from

Anthony Petrone

maybe months, follow-ups And Jon's then extend? cost And of new cycle in are more control. just specifically benefit of that COVID associated One the the the is fiscal back-to-school? expansion, follow-up playing there there the the to out the next the should just a guide? I still that in Or two wondering on when some that, much from in back-to-school benefit to is out, guess, is obviously, of available questions. of fiscal XQ how XX would control just I'm XQ? cost how control look margin was on cost what executed? you is And much sort mentioned you of And CVI, completely fits How that be, reflected season sort efforts with was there Company

Al White

the one, months point, -- things. he sitting, to Back-to-school answer kind ago, has to color be one thinking we side on add, has back-to-school at wants close first we're I'll mean Sure. on give the second if add. to he and to tough going learning, everything It's that anything, seen parents I let the of were a along one a if and of shot the you're to, Brian zero. right, goes learning by that, that you forth online if and them that, about fatigue and and we've turned asking right, And kids, will, so the from is headaches, people with reacting seeing lot was of what people optometrists calling online. where and digital back eye that.

Well, did terms let the to you expenses, Brian Brian we I'll clearly expansion we there's decline I we nice around that, a than think eyesight. do, sure was will, parents to hard On be of their it the really but add place you expense to with much good happened. in nice on and here control. specific going if margin way and control, seems or not some I anticipated really it numbers saw kids' that mean, really has our job think better to I'm job. that did some a know if So that -- that. thought It's to we see would controlling controlled, will. more not pretty we natural, with I quite in we're team about but give expense it's be, holding that concerned I

Brian Andrews

to million nothing add really I much place that Yes. have MiSight us will more to were revenues. We'll $X and mean But we Al. hit QX. million that. think No, I $XX investments down there's in sequentially, to not we're add good in some to a

Operator

Stephens. is next question Cooley Our go from with Please ahead. Chris

Chris Cooley

this bit shift back a in that's natural we say little when Do next And really maybe I well see PARAGARD third on into saw line about starting out go a just in heard back there following I'll a there as can we reintroducing CooperSurgical. earlier color you about up maybe great growth? just one practice? around curious Are missed a in Maybe Could time around to as coming you we kind think should you as rate heightening curious well my to the see quite to go PARAGARD, expect call again -- for about and around Energys with that, first Energys. what maybe to what growth it additional of this, a second. of provide CSI ahead term? but about think, increased I'm think I'm in I expectations for quarter. And on Matt's It's long if That's, total the talk I I'll you the a kind think of just of just gears that that the a Congratulations historical On more while. kind you CooperVision, But product. marketing I've longer normalized to apologize, do whole has year. just growth focus PARAGARD whole the a for fiscal question, for time. been solid as you -- should I for lift? quarter? ask

little just as there I bit to So hear want could? I more a well if

Al White

stuff about on on, of Energys school touch is time. on or doing the stuff, parents all they media we're But and stuff. other they're on kind doing also because what with fatigue calls their also, and I'll video eye interesting. screens one kids on digital or that they're obviously. Yes. of social doing It's that TikTok That's all at Biofinity and whatever happens talk We Zoom all first. do, with then video. and games our and We're we're else doing work it now And about. now

the So actually there. the that there it's you yes, eye hey, know certainly this people digital fatigue it you're them. for for little out on not fitting issues surprise. you for to having, in saying, and guys, mean product which I with if see see sales you're a of reminder, I to But people are us it's as out putting reminding those all are will, but higher growing, are mean, it those they talking just who a from some and think us don't because of a quarter, is about marketing, you pleasant a emphasis really it. calling and Energys, I going grew perfect associated was you'll that who

level. down of everything XX% channel and quarter, then now. I if and were So, came basically now, month back. product in of that, of is kind like for what it. if I back for Biofinity we But the as right, we I they it's sales ago, up, doing back We'll launched the for guess, We're like seeing it We channel you back were attention talked product the right We the fine. really because QX. were, on anything, quarter. down at will, in PARAGARD We're yes, a see PARAGARD, bringing On come COVID inventory like pre-COVID that upside, the placements better clearly Energys, to mean ticked years go doing well. what, QX two, seeing that already about, had the and is no done it's first rest probably to something inventory three

good So on we're pretty shape PARAGARD.

day, I think at the will end of PARAGARD down the be still QX. in

QX, a And some increase. remember, had price we you did of is that PARAGARD because strong last a we because quarter

got of it's PARAGARD in back into mid-single-digit obviously true next going So couple so had better to it's and health year, terms forth. trend kind more in forth, positive and on in But of placements where months that that. to about a no, do is But so normal have in a concerned seem it's and IUD PARAGARD PARAGARD, good for that will we as buy-in because for QX comp of a year, so like one comping little grower. It I the normal, a option only would and we last didn't PARAGARD people you non-hormonal focusing move well, product sales. anticipate health to good be we doing marketplace a is a a have tough against think is a bit which like obviously And the on the market. about I

Operator

next ahead. Matthew go Please is from with Sandler. Our O'Brien Piper question

Matthew O'Brien

got some than are coming little kind then So big that especially between another are durable got all rebating picking we've down. own larger competitive of online key that durable market retailers where it's delta? from? what And the where some products? some of they we've out But more a can gains the an do your this up And and some both because where a more of they're drivers and was and but how get seen Al, are, obviously investments, parse those quarter if I relative you've the in talk seen out real some those with you bit of delta how competitor the about and increase think you you internal company it. of environment coming in you've are, you

Al White

is. products be and new I new there's say, years, the mean no more than the day, with Yes. probably next in CooperVision with there I products CooperVision, it in at at And end my mind, year several today of more -- believe there's look the one market no will than over active one active in to period. I marketplace the the

of So that that's one. answer would sales, with retailers. how From perspective I we're the big not online

kind big product. who will, about Not the So fitting aren't I with think talking the that if online, distributors, with you guys fitters. online I'm of We're right, nonfitters. the -- and

when So That's June the and probably were That's where because groups forth. and with the And rebounded so fitters over July, like we're fitters. and markets heard market rebounded, key you where at accounts buying and we that, as indexed. strong. with look we're it where initially rebounded of

better strategic That talking couple focus of right reallocated about being the launches able years, and about and our to been been manufacturing. there so we on strong manufacturing, And to strategic forth. doing." I've now durable share the was Right? value all and you more it's regions on of market COVID and behind on those executing world, We hit around continue with share it on we for say, I'd of areas are to at show with take and growth how distribution. in launches where that last now. to share and that's more durable side look share. the kind when past that's gains, share. we capabilities grew by why fitters. of that We're market taking -- long-term think them, people's strong coming than marketplace we're those in light strong gains, focusing I I've so now, the We're forth, with we're where key we're "Hey, talked that all resources those plan all and COVID and that with talking around you're investments in to homes strong of investments all when driven So I on we're ship the anyone things. over the to product and initiatives product about coming We're out we'll strong those by why that where world. accounts. areas years. had record put I've new doing stuff We're what strong the the posted We're over product And

Matthew O'Brien

of And over you helpful. again, that again, to a the environment, COVID shifting really a light might little looks in That's but -- Okay. up like MiSight understand we're come it then I like $X million Sarah step. talked I Michelle that about. million from know $XX $X and Gellar everybody seems to everything. up But million to maybe a you getting million around big loves $X

in too, those So I of early accounts gives what maybe have coming What a that that other know in get investment there's some are as lot but with the how 'XX? comfortable And to comfort? of comfort then you far 'XX? for goes? $XX can that that you QX, X,XXX million And you progresses seen gives as $XX million it in you you still in uptake optometrists

Al White

seen the million in other already what $XX million that to next the build that based at are look assumptions we've we When on Yes. for Sure. year, $XX markets.

where So and so seen in product Australia forth, around we've and in the in U.K. launched the world those launches. the did like and Spain, we markets has success,

markets rates consumer that the growth same didn't the saw forth. other Now and places. in and we'll see we in same growth in Canada we that rates But the assuming advertising and are the so programs have U.S. those we're

sell other that's right do can would there. what get to million at because in enough break better I do because some at I do." end interest saying, I up nothing at or MiSight and we other number range." fancy the do as $XX of we've becoming would looking But as regular the yes, forth. crazy million it just we've to It's there. do Now you're we contact that think and There's be we wait other of of Sarah you and about looking that we'll exceed what market some moves not and big could really offices about going what enough we market, markets, confirm And optometry lenses And and and done that the thing interest I see that product the and looking that minute, can't the many the as so But growth down actually $XX some seeing success if special big, think because just and new think more to thinking nothing might that. are the we're just of pediatric "Hey, optometry, and at what day, lot We're end And sells you're a size and within rate a direct-to-consumer the fits other programs than saying, we there's care market activity. there's accelerate. if see you have at we'll practice that people in right? that for we acceleration multiples happening. done now do we the better say, to that talking in seem for. can markets, look size abnormal a standard day, of of you "Hey, But

Because dentists can other to why? a and and Well, don't You're to dentistry. in. pediatric I braces, talking about a can mean they through that have that about braces it's they're sell practice. creating children adults treat already dentistry that has the because opticians of going pediatric to a brand-new a there, big We're it, money, product most have talking they reasons, compliance there's that money out have can make category. and brand-new They come make category.

about glasses. because to anymore. able selling been case not haven't Well, optometry have the You in that talking that's you're

Now everyone about myopia. knows

You have in. kids come

also is There now a exist does a can can MiSight If the going so brand-new not if on market going offices in You a because to focused move actually on pediatric of in direction. pediatric management, other -- kids that successful doctor's That in on incredibly you open on because people you practice ultimately is in optometry myopia regular they're market and ortho-k, or and start pediatric that of to they're that's market and to no as into glasses. MiSight focus focus we And it. office, optometry in you right? than start -- move MiSight direction, be optometry help that seeing now have today. with seeing focused ortho-k,

I the is $XX think So million in yes, play.

$XX I million million think the is $XX the year. play in of or next north

Operator

is Wuensch next Joanne Please Our with ahead. question from Citibank. go

Joanne Wuensch

put going them I'm to upfront. both

some of my the gave that Is calls, about second is, year? The first there then commentary one stage next the has third is on it? And proper being MiSight. to to broad guidance for it get that frame think reimbursement at able fiscal you be If next of for you with quarter sort some or some question year. way the treatment, a usually thought as do you do you reimbursement might can

Al White

Sure.

the MiSight, up really for market around management. reimbursement the blow On would that myopia

myopia in will more care and ourselves a future. that that answer do to the standard on with of right the treatment, yes. professionals matter process going and ultimately the particular, around you're on get timing determined some ultimately that, of on but now. MiSight, a fact I standard spending to the point management there reimbursement. believe think become medical in point at you'll will care, to this is have as the comfortable as this of is that I be where more be reimbursement working To fact, and be that question as money for We're

that, just it's on not right? time give we're commentary Yes, give sure XXXX, And matter gave commentary there. going in right mind. We we December in can XXXX. when on any get guidance So a of to my we'll appreciate you on XXXX I'm now, QX.

Operator

Please ahead. Our go with comes Chris Pasquale question next from Guggenheim.

Chris Pasquale

at with I I'm guidance your the quick year understand rate. for the fourth comp. full that numbers idea an year, was for is follow-up on look tough that Al, in not then you unusually and growth line did in One sure If a XQ quarter the I X% Brian. last

Asia in Pac slower year a the or XQ grew either actually year last XQ overall. than little

that is tough what it makes about comparison? So XQ an unusually it

Al White

tough than But I so comparison, still There spikes with that anything, exists, forth and least comparison did tough with Chris, unusually it's be we still There the maybe say point buy-in from have guess the are out wouldn't I created that Yes. in Japan it. COVID still It's at behind it a perspective. except is there. that could still it. issues right? more

don't So that think means those to I to would say. say appropriate by things anything want -- I are don't because conservative guiding we're or be

easy So not I think is X% do comp. an that

a a last comp look at you of as If different QX story, of more from that's year. normal/challenging bit an kind right? a little is QX example,

want I that overplay means. any So by to don't

reason that So we're just guiding kind of highlight in to not that one QX. as growing

Chris Pasquale

than least taking Okay. the into But just quarter fourth fair to increased or say that factors rather implies guidance account at today. bakes in known uncertainty some

Al White

it, put good a way correct. Yes, that's to

Chris Pasquale

investment of next of down come up then, was like a And closer on There time million when years couple the year coming averaging right. next while you're to meaningfully versus actually or multiyear cycle. a mentioned Brian, CapEx were CapEx $XXX more to we've been All for million a you the Okay. free end either the $XXX you cash? up at year over now. Can a

Brian Andrews

Yes. year this peak CapEx, down and our coming for year could after. be mean would expect I case. be the I coming absolutely down then will believe that I the that, that year year next

delivery, go I to comes cash that up. free cash with flow expect flow So free and would

Operator

ahead. next our with Cleveland Willoughby is go Steve Research. Please And question from

Stephen Willoughby

two. have I

wear have changed that trends. asked talk of to Block if about about that asked, you he other or could because a of question some changing sort follow-up a the Jon as either consumer First, COVID. potentially I which business Al, your wondering things was industry to

it First, secondly, last and have as And in rate the the the or shipping. annual change you a the purchasing it then months six seen of purchasing over like direct-to-patient seems relates shift there's been to any supplies?

then patient and forward of out are and in impact second third over the patient of prior -- by the question. you think what patients switching have. the just, use in benefits or been potentially on their both do that My do just, it sticks lenses there losing And demand frequently that on as then because that less relates of the contact because type their the wondering that's is the to practice? from in and their wanting your or concern any what desire Just physician up could job impact get potentially is quarter. patients brand And thoughts around if vision any to to one fourth COVID later potential question a has any you pull have to of

but for the it. question, Sorry appreciate all I

Al White

Every no always Yes, I worries, that. don't to and forward. with know and bit of people a benefits anticipating goes pull be little Yes. We're in buy-in a that up about there forth. Yes. not seems so benefits associated year, using Steve. their

Energys other rebates, the out any And mostly different there. at world. different changes in When We're some change been associated there, thing. But nice of gets trends, much some you have rest for of It the in marketplace. an driven consumer as those with of this year. changes much any So will of of But that's not the right? a number, a kind haven't but wear supply U.S., it surprise the a you at that. the some us. so it's pleasant by that U.S. even it's U.S., seen to not annual out not stuff I'm example look anticipating a look it's not talked of sure of Biofinity we mostly right, that the of I happening the purchases, be big

all but there's are I the real we where that think every wouldn't out I And so really back help saw a I that. are pull people going to running businesses. one difference, there any their seen and and to to forth. were want world. highlight holding changes mean direct-to-patient wants between significant do that we we around We've to spike single on to some a The bit, side higher right? money and really lot And changes of things. as haven't rebates, of we think getting are doctors' but the that like today, we're help of and where a in don't from that a So maybe I we little know that's very people come on push a offices and I shipping, us some same, seen small people, in

go you get, from optometrist you So go doc out. the purchase the them. ahead it's to you even help probably likely into more want best not but to when your though still product you're can office, and deal Maybe

you're help the everybody more willing that. right? bit I physician to to is want do a think to, out So that You going little

the Now having they're shipped lenses that's to there said or different their whether that, house, a getting question.

packages that to ramp the taken do I hit financial We've in put our the infrastructure shipping. in. as We're continues Target that ability all forefront whatever in on willing get the we to do think I that. those your think continues, all willing that we're home, thing leverage of associated. that terms from up Amazon we and to eventually else. and direct-to-patient We're the direct-to-shipping more But because and efforts you just do right,

think doctors' I time to been offices well It's them sets and switching from hard Patients fitting into CooperVision. less, products. to as so. It's yes, get launch easier, new it, a so a a know might what get It's like. now. like it. hard You a they forth little they but with right MyDay challenge, product because They still easier love little a like they

MyDay a to having been like long success we did or we've ways toric. that more so little bit that, little something did launch that, there. a a out we having we a time getting of Remember, go. We're launch XX% only So have product easier a probably but launching

MyDay maybe are there, that's some change, expanded of putting switching still se, little MyDay toric, of less of sphere switch perspective, are stuff, still we that that the launching good to maybe products of and wearing kind it's the a we the seeing. because pretty clariti, right? or to range from lenses bit toric, other I they're seeing think place they're we out MyDay, but per a in kind going -- in They're are a patients be pace that You're wearing that kind But happen that all of switching.

Operator

Steven from with is Oppenheimer. question Please next Our ahead. go Lichtman

Steven Lichtman

give key us your you wondering Al, was I if on could an update account work.

aggressive it's there COVID really you to that? you earlier, I now constrained. supply? impacted You alluded Have to of reengage able to it were has that front better given on capacity tough been course. when be know Or

Al White

details, I of key in yes, those aggressive won't into been our we and but to that more be terms Yes. reengage right able have we're with discussions accounts get specific having now.

Steven Lichtman

last quarter, consultation, recovery through sounds you over It the of up go that has Okay. visibility follow-up talked there And to offices last delayed on then fertility, you a here your as as about first. really recovery I Fair patient the a reopen, couple improved. of you though picking seeing think months? just course, enough. activity Are on there process have consultation

Al White

numbers in fertility. that But share our would fertility. struggle now we're is It's Asia now. right that of good -- that's weren't so although say I The -- Yes. of space taking that a little a in up right? really right bit picked We're about share in Pac. one well, doing we're thing still really, market well We're fertility lot taking really a great,

Asia terms in coming and seen seen Americas as as the clinics fast haven't Pac rebound opening Europe We we've and fertility traffic of through.

if visibility our a good clinics terms feel I Europe I the which Americas that I So traffic, gains, in Asia is market little think Pac we and at good lagging share look opening, on, of foot bit. have

lot they look XX%, XX% their have and of a right were at some place India, we about growth, now. IVF we you fairly example, getting open If clinics like where as only an of well, do

doesn't but more back no So I was think kind getting of that, that to of I kind referring that's it's reason pre-COVID they before that open, cycles come to levels. why will you There's and don't come. start maybe QX

Operator

Marcus Robbie Please last with ahead. question our go comes from JPMorgan. And

Robbie Marcus

how I could amount what growth start, around them, -- in fiscal the these, XQ to expecting you finer Maybe in you're what in stocking of the put talked guidance PARAGARD stocking if much kind this and you dollar destocking point but quarter just or was wondering, in was fiscal quarter the on and and quarter. a of fourth

Al White

any stocking for ever Do QX of numbers we the PARAGARD. numbers into think don't have the you PARAGARD? on got I

Brian Andrews

$XX million. number sorry, For for -- PARAGARD, yes, QX the PARAGARD was XX

Robbie Marcus

to any stocking, the as what or way in X% than versus impact? X% trying And Just meaningful it figure Is the just year. is stocking we exit out frame more to like that? underlying

Al White

I through $XX numbers, stocking. we $XX right I basically in the say It's in of little Yes. of its than and the were rough million like sales, a down work have what didn't right, month. probably we about then April way somewhere roughly kind higher so that's guess that And seeing sales. And we're a PARAGARD bit now. running you're in anything in May, because back million that, something

Robbie Marcus

the stocking just Al. CVI separate and PARAGARD. questions, Sorry, was two one is destocking other and

Al White

Yes. Okay.

So for PARAGARD, that would -- that PARAGARD. answers of kind the

think the you'd of lower of some stocking, I People CooperVision get levels, that thing. kind at probably For back. more operate never efficient, the inventory that stocking,

QX. other in in we'll million half fiscal June back say, period of then going maybe of fiscal the back And I get $XX of for takes did back. think throughout You're that it come got, of while have or amount it July. get we some so, to think But QX, I what time a that and happen whatever a we to is, back, or

Robbie Marcus

moving to then way, Bausch how, company. if a that. And Can split impact any a as is appreciate I some vision Great. lastly, at out forward? just us you will that all going maybe on stand-alone give thoughts Cooper

Al White

Bausch in I Yes. it range of that I global know impact kind us. share, mean now. right around think is our would from how perspective, I X% don't somewhere market

So no, one another. impact an I on us that see of having way much don't or

Operator

the would back final And remarks. I'm to further any to questions not like the I call queue. Albert showing in for his turn White

Al White

Yes. Thank the calling for you, thank you, in taking time. and and everyone,

that pickup consumption, the some going in on things a are lot some with the we what marketplace. capitalizing of the new are in some that are were think there. some on some and people There difference to the real unique of this from that of and I expecting that trends trends then quarter positive trends degree, are big have

time. You in look -- that of taking screen more like trend Energys the at advantage things Biofinity what's of going on

another so that's and MiSight our myopia big And look Endosee You fertility mega products what is would the ortho-k forth. management right direction. Advance lastly we're and in moving be at seeing in trend with with kids and

hitting in feel have are kind right right we where So marketplace. we're -- trends where are I going now. and we place about of products just in good the the the

Labor great our with look we'll wrap of I for forward up. Thank a everyone So next operator. hope call. with that, kind beginning Day everyone and has weekend December earnings speaking in you, of to

Operator

conference. sir. welcome, gentlemen, thank You're And in ladies for and you participating today's

disconnect. now Have may You a day. wonderful

The Cooper Companies, Inc. (COO) 3 Sep 202020 Q3 Earnings call transcript