COO - Earnings call transcript Q4 2020 | The Cooper Companies, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q4 2020 Cooper Companies 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]. I would now like to turn the conference over to your host, Ms. Investor Risk President, Vice Duncan, Relations Management. and Kim you may begin. Ma'am

Kim Duncan

Cooper and conference quarter welcome afternoon, Companies’ call. to earnings Good XXXX The fourth year and full

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

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

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

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

Al White

fourth conference Kim, Great. call. welcome fiscal and Thank quarter everyone our to you,

some key takeaways. me providing Let start by

X%. flat for lens contact the market being continued calendar being CooperVision First, the in we taking with global share QX against down market

like with and strong hydrogel portfolio Biofinity several launches. with daily We product are unique success our Energys having with silicon products

particular, Second, CooperSurgical momentum. and fertility we're market expectations. PARAGARD where fertility, devices taking seeing In medical strong outperformed in exceeding share we're the all with

comprised being portfolio XX%. and management ortho-k MiSight including of up performed extremely myopia well MiSight our Third, lenses

intelligently, investing pediatric launching products marketplace. So taking including and optometry the helping we're share expand

executing and very teams continue. high at to that Our level are a we expect

reporting We on and revenues numbers CooperSurgical QX, were per X%. revenues the down basis. with all million to of constant $X.XX. currency million XXX a earnings of XXX down consolidated and percentages X% of Moving share Non-GAAP revenues XXX million CooperVision in posted

the EMEA For in in COVID-related return large and accounts was region restrictive quarter led CooperVision, by $XX up to rebound October. more roughly were from delays Biofinity million. and which MyDay X%, Americas inventory the X% strength down some of channel purchasing and included in as lockdowns several

the by November share quarter COVID to in sales. and but revenues our strong taking softness little becoming than in COVID-related driven executing present into To and we and on up add account but and expanding that quarter Overall, it with where product region more been came key roughly October full we're as has continuing for share saw well though Asia-Pac, optimistic sluggish. a expecting. We're positioned with pick X% we longer lingering down in the launches taking was market through relationships. on MyDay were a it Asia-Pac managing more the we color by challenges, expect we're

to some Moving numbers. additional quarterly

drive silicones and Our wellness rebound right our for bodes hydrogels strong sales. continue well in a adoption strong MyDay us in were torics in winner this QX, seeing and We're as health silicone led given now, and by up strength dailies daily sphere the portfolio. X% trends is to clear

time. noted quarter, years toric especially lens world. certainly catching product flat But still ago double-digit. zone is from growing to was for early design performer time on uses optics fully in able which screen it's need of to on a that a few continues as Additionally, combined today's MyDay, in the fatigue and its launch alleviate its its help aggressively excessive Biofinity relatively It is be a eye and Energys digital world, innovative be toric we're ahead strength with now launched the Avaira strong addressing launch probably stage. in around now digital to important so little the we're unconstrained an Biofinity Energys. the to

active and XXXX. the products to sphere silicone extended we to many remain launch launching their highlight product probably daily this One space hydrogel successful toric, right incredibly continuing we around throughout daily or range we the are MiSight. the toric Moving world. relaunched and markets our launches, incredibly toric to is expect continue busy in busier than launches, launched of clarities point Biofinity how being now, MyDay And with anyone. and in multifocal

a Given and still there's exists daily hydrogels worldwide industry. us opportunity trade-off significant sales traditional for roughly there X.X our multi-year in billion

Moving and is strong. U.S. early we is recently We're to incredibly more U.S., MiSight, positive. to also including in lens myopia XXXX when XXXX in approved and early Taiwan clinically launched slow and the wearing the process over to the FDA have certified children MiSight, We are and already lens the launch going well. myopia the certified. the management fits new very in but of things the We've around proven roughly in XX,XXX Russia, fit progression kids world only in momentum contact XXXX still the feedback now optometrists our have of being

of fit is we're new age age launch, from new Additionally, we're what so range lenses regular means getting age are under, overall Furthermore, wear interesting lenses. accumulating for U.S. the a fits XX in age contact MiSight being worth is and years' Getting average our this XX for fit the a perception in including which can be six some of changing wear XX, contact an kids is average fantastic we're old. in MiSight as the fitting in data XX% extra really revenue. years of kids

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

million in which from revenue quarter's GP X.X results XX% acquisition ortho-k included Within MiSight grew grew these X.X of and million to last XX% Specialties.

target franchise driven the to global by as sales, impacting continuing receipt mark approval growth even the XXX%. is in exciting Myopia MiSight When positive Paragon we're ortho-k looking over path of sales coming our help regulatory developments This and care manufacturers. We're investing strong we forward. with category. talk the XX and great market launches, of new and targeting is discussed this a a For annually there's the drive such will to work pediatric approach lenses. which its in of patients. infancy. an also in growth clear we million of roughly standard CE year, market, And that for we're pediatric clearly recent at global to optometry in a working forefront market market, as extremely management for management myopia of at European quarter, a But is our well We approvals billion programs, we're be still R&D ultimately marketing lot their last have do. expect to the $X hearing it's optometrists keep really MiSight for COVID activities about to

we're that mostly a and lens As challenges. of on efficient below through roughly levels a pre-COVID that To with staffing with me and trained reducing market. disease to of hearing professionals, their get including appointments profile our serious pre-COVID optometry We're fits they're reducing normal know benefits, offices global more the consumption open protocols brings safety let touch contact the running challenge. fully throughput vision, on as glaucoma. such detachment, eye conclude XX% Having running of and are offices the levels patient many wearers habits. frequently progression the cataracts But later risk myopia managing perspective, as the booked COVID January. remains global new life and world, optometrists said returning And work around seeing retinal that's From wearing to that, ordering in basis. are

demand better seeing markets and like in that everywhere professionals demand. in and the We're certainly meet U.S. signs China, still it's any are that is not are though. fits improving disappearing struggling to eyecare of New

we a strong position improving new to the of increase growth. in space underlying term And the for our roughly is more future. up to for to world expansion lenses, continuing On with geographic strong matter strong a a time remain daily devices of and growth pre-COVID hydrogel fit myopia sustainable very levels drivers a in So shift with to new longer our industry puts and one torics of it's XXXX by addressed. and a basis, management growth with and trend fit multi-focals, momentum expected pent only spending portfolio they be activity bright actually demand returns time this a long-term macro the and electronic for combined CooperVision, the in our people myopic great and third silicone XX% believe data before product us has industry within strong

faster million rebounded revenues for quarter. XXX the expected to Moving to CooperSurgical, than

on clinics safety, well with recording to portfolio and safety starting challenging workflow taking are X.X positioned Witness accounts. as doubled a million led operating compliance This and share is system. rebounded and and within in automate a use continue only performance fertility for reduce traction our their revenues a standard this we fertility forward. of and this future strong product throughout RFID fertility solution almost nicely with focus improve Starting to X% our Although to patient and compliance with solid market exceeded expect we're expectations enhance procedures. the by product down errors, identifying, consumable we an and management our gains with tracking grew X% revenue growing improve down nicely. by environment expect we're improved processes RI We're growing year-over-year. The Labs IVF products, that Within cornerstone to key process. clinics, helps market it management a product quarter lab-based business, and portfolio system samples in moving

leader growth activity, offerings. office our on has in we're historical global product virtual and fertility sales extremely and growth helping personnel and strong But expanding the as testing saw sales very intent our return a marketing and adding which the The comp to space, and a From perspective, rates. macro business PARAGARD softness to from down and declined person price we're a better we seeing COVID seeing impact positive unit, continued long-term up against trends industry fertility Within X% against in the market due The in still products growth buy-in from tough tough increase. only genomics surgical trends we're forecasted. was before quarter year as that benefiting to the to from to PARAGARD the Our grew. returned last picked we the were than X% year. is down also U.S. important last this negatively some this improving and also our return news down capital patient see countries media volume equipment seeing soon. in cycles we're believe or business to flow good flow clinic India minimal with shut patient our still the we'll through With is, we'll IVF we continue happening, normal volume. another patient like product rebound slightly is million operating expanding wellness comp $XX and positive activity have market

only the continued trending the of XXX% birth that November. needs long-lasting a on hormone Sales direction offers and the it looking for As fantastic product U.S. market, a addresses the IUD of alternative. interests control the through healthy free option in right women

surgical year-over-year and me as direct about have for our medical optimistic So seen the device see grow products PARAGARD In position INSORB, let we're patented Endosee this of focused a really we've of say closure optimistic our many entering future. procedures some Advance QX. grow deferred device skin our with to like markets sales medical as conclusion, We're the evaluation companies, rescheduled and in elective nicely rebound. improved. device positioned our year we'll in I'm nice endometrium Elsewhere, system visualization such steadily

dedicated and businesses forward. driving Our And We're businesses performing product turn taking people active launches, the new with are over we're we share. and to with Brian. our I'll that, fantastic have very well call

Brian Andrews

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

improvements X% XX.X%. basis at Our fourth CooperSurgical to integration This by manufacturing Consolidated efforts. XX consolidation constant driven from quarter and currency points CooperVision global our revenues margin or in currency and successful was consolidated at reported to as gross increased decreased efficiency primarily year-over-year million. X% $XXX

and plan performance XX.X%, sized the an average was to quarter flow X.X% we by and was now marketing, costs. work of effectively positioned for to year. quickly up FX was current related year-over-year to We're last diligently one margins XXX finish adjusted being in XX.X% up position opportunities. debt million due positive X.XXx. We was to our $X.XX to investment rates manage by manufacturing XX.X inventory quarter sales to we minimize activity. flow margins us right tax lower This cash and a production have operating rate shares against revenue of of offset to our as average decreased million This driven flow. continued $X.XX. expense and some slightly This absorption extremely in million our X.XX to down debt and from million manufacturing more well impact Net XX.X exceeded costs, billion consolidated OpEx returns. as decreased quickly. was MiSight better and efficiently comprised costs The is while Interest quarter This most a resulted million also managing busy at levels for largely year-over-year roughly of still XXX lower expect inefficiencies, million balancing with while teams our improve positive with and significantly XX.X%. ratio cash $X.X expectations effective allows as environment, growth including CapEx. ramp to go we and the restructuring $XX to a these by the cash investment Non-GAAP and was optimizing but away operations for million manufacturing strong activity, EPS the expenses, R&D operating Free outstanding. regulatory leverage EPS interest of XXX for

Barbados mention property were moving In the simplify CooperVision's tax see November footnote in internal to from assets you'll to transferred upcoming supply Before an restructuring part the of U.K. guidance, in our item to I related an as to intellectual want chain, and our XX-K. disclosed

over will impact impact with entries non-GAAP these next a not will ensure plus material transparency. one-time along our our period. in including to financials, our this results We P&L on offsetting QX, this we non-GAAP rate XX adjustments significant having over Although do GAAP the benefit tax years, a expect exclude this from

guidance that extremely in hoping but we COVID difficult. guidance, surging in give to the were year to and Moving full Europe cases U.S. make the

down is to constant guidance at This includes we're revenues to to million up in currency. down or and the revenue million consolidated XXX of or down to expected X% only both So to to constant to X% million X% X% million of in up $X.XX. EPS range to up currency. down CooperSurgical X% Non-GAAP to revenue X% XXX X% X% QX providing be million XXX $X.XX X% this XXX as constant CooperVision XXX X% reported time. down XXX in of And up in of currency. to up

to expect last rate. higher expense to absorption. As $X.XX to tax EPS the we compared guidance to year, non-GAAP and we roughly tied currency due MiSight the midpoint of up expect margins lower unfavorable gross line, impact Below by to be our effective positive slightly activity offset $X.XX a manufacturing a offset be by interest lower investment

In Lastly, well. COVID, free we off CapEx expect significant reduces. the made expansion on in to our and operating even conclusion, completing capacity cash cash flow, flow start improvement we solid multi-year year and cash progress moving forward as expect flow improves program with

growing to product strong capabilities, for of management look have our that, MyDay to plenty solid hand operator and and treatments manufacturing taking market we account it business. myopia key continue lines, with share And questions. vaccines back better We dynamic COVID forward the normal. We returning and to to markets relationships, capacity I'll and plan distribution

Operator

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

Larry Keusch

number And guidance I back think XX you you said performed here. Obviously, to optometrists that. to could one, targeting over there I would same. were questions sounds like million the kind things XXXX. better certainly, guess for if way going it you did the than Couple MiSight. and well first extremely the you come of the are Al, the obviously, that But significantly remains closer that train you anticipated year, of

guidance So to think get that it confident do you takes more what moving in up?

Al White

good question, Yes, Larry.

on. spot You're

outside and seeing forth, and We of picking of The certifications. similar up with doing better you're of quite are we those U.S. sales activity in a commensurate than U.S. so here right? up, anticipated, the all docs the bit number certified

it. holds that's being that that ends And COVID. up thing the really So really back

move is now reason have along, every the hand I we of marketplace a a if we is better, mean, side that conservative increases that like Maybe little we beat the think, you argue Right? at could quarter, QX think see on but or chance you're back anything bit see other of I going because kind are to next I year. the continuing to loaded. looking you're number. a in big

do I question have we potential number, the the to that's mark. So beat think that though.

Larry Keusch

Okay, two I'll ones then and And perfect. jump off. other

use to spheres. single Just relative

street called bit were on I sphere there But use delayed for perhaps that roughly held was of a revenues and single does think some quickly also side, you obviously then been? in anticipating back. million might And than channel think like to have below the got in COGS Europe dynamics XQ. this Brian, was the XX.X feel in just revenues issues of the I had probably in being the I lower inventory quarter the million you sort orders what parse larger was if the to was, that think I than adjustment came the COVID. it And some due anticipated. for XX in on -- Because some you are could those XQ COVID those what the right, just out

So how Thanks. increased XQ looking that so that and walk be could you the why for us much outlook? should we at through sequentially adjustment

Al White

Yes.

side sphere. Where weakness was We're where on traditional things, of dailies. saw traditional share. So surprise So we no there strength was side was silicones growing let your Right? taking there. me single on And touch there on softer. use hydrogels. the We're the silicone

the in were as U.S. quite the here at impact, back yes, we look came channel thinking. you not the as If much inventory

here trend some seeing kind number. we of in we orders, whether some fiscal year, daily to turn have we expecting there. move been, as of thinking for see frankly, were silicone, we back and end improved October, will Same in up that at would but that bit you'll were here so the it think less have than as would Brian A it those move 'XX. of Europe, a over orders that end little in come or through very will of number back whether through there think this the the… that I were U.S. I I Europe

Brian Andrews

Sure.

So there's what was about from we talked would I on different nothing Yes, quarter. last the highlight that materially question adjustments

In earnings fact, how push we talked into on our activity would about last call QX. this

Now there we completed things our needed to is end. no of especially the majority manufacturing do by the right get future work inventory it the levels were that task, a significant Frankly, number production of and fiscal levels. done size, small that was vast to by to teams manufacturing, our year

COVID-related So the in and XXXX enter taken a us we steps at are challenges as the going of the adjustments to end the putting day, QX. the address to in great reduced starting dramatically be we've position are

Operator

from next of comes Biegelsen Larry Fargo. question Our Wells

Larry Biegelsen

QX on picture kind just one fiscal XXXX. one of me, big for Two trends and in CVI on

So Al, can the you talk CVI, QX QX up, said in August a on little bit about you trends the was call.

down November looks up. bit a follow September of negative October and it for the I had relative think midpoint QX, like How CVI about of X%. I year-over-year. a the guidance So to And then, is little were

Al White

a bit on from little much don't much COVID. step too to step monthly we're away doing -- through away that too kind a into -- of that. I want get I I basis. from Yes. detail know to want

happened little of of see kind a can what You though. bit

at the look I quarter. number gave the calendar fiscal versus If you

I'll October you is The I going very included I give gave is was to the thing I our November, same guidance. activity what end October. I'm to say it about was largely was really talking answer yes, November, the only of So mean, down, in historically, tied at performance

Larry Biegelsen

out XXXX it. maybe Got have know, do And playing see you directionally. Al, just there. guidance how fiscal you I don't out

XXXX? consensus before can for Thanks fiscal mid-September, over you here. did taking sales questions, EPS, fiscal in spiking comfortable still obviously Can with XXXX and where was grow seem COVID the You guys. you dramatically started, in

Al White

Yes.

into struggles Brian kind much in get going The else, We it's said, issue too it's manufacturing well. that. not It's to product is of anything a continue because little to being a well, lot not I frankly assuming up gave tough to COVID positioned going very it's just perspective, we're everything as on places. So things 'XX. guidance are say our else good, ends cases is, continued a detail that from in really distribution I well here, as of business going won't our want compare don't which is up launches and COVID.

offices ordering to personally and news there, optometry of world were open that you see tied and that hopefully whatever better we their I forth, wearing kind as our out guidance, and fact anything wear So than happening or the their back pre-COVID, provide can who the assumptions in QX respect we're lenses comes we what some I And are improvements, sure. habits. optimistic you for coming COVID. to contact And and it's of have with the But continues, with baked to around off that's terms our and vaccines move that's to out assuming back, so into consumers really QX they and your that, respect habits make upside that are look that forward if us. I'm at think assumptions for that with

a of So there. really lot signs positive

Operator

Mishan next from comes Key. of Our question Matt

Matt Mishan

inventory the channel some where to when versus you quarter and the your, that patient destocking the some at in stock to point finally one look you're Just going reached in demand? inventory next that point? And is now, see the equalized have right level in quarter? you where Is of to not

Al White

Yes.

probably month have reasons of of we this, entire away always need one always and pinpoint it being has we it, in than terms looking our lower. again, had and equalized, in to everything But because that it's so lower being basically we But all down to have, of with and and would that months bit one coming I at I we say from that's month get forth. numbers the I I was the lives one a sales think if so. orders And charts are your pre-COVID. inventories and little say up kind channel see

So through that positive get a forward. talking And move continue from we if be term, the to some shorter I trends bit October about 'XX not little you'll that aspect. think see positive anticipating we're that I there. hope of inventory you moving would channel I here, anything would But as delayed maybe come certainly won't of

Matt Mishan

Excellent. being And Okay. category daily especially then were previously the leadership where guys But of just lenses kind sort a more you first you? evolved people fast interesting -- inside now over longer-term how question, and just like it's in you're Cooper's followers like side. years, the to like the of high-end up harder of sticky it catch to markets? Is for over what's it is starting MiSight, these time, advantages in you're

Al White

now, were started here, we mean, company lens wide inner, that It's powerful the in toric a program the new with a Why big get at look mean, in would as And you contact a world you lens high-end is like that's an Coke, you it? MiSight is fewer skews. right marketplace, first, when as get that's So I the a leader in there a mean, being Oh, remember Why go replace talk you there myopia deal pride mean, now, you creation, right. ago, fitting a coke, daily right product, market, look When absolutely and been That defined that order set would now a that one ourselves toric we example, case MiSight the created set You I defining clearly used years I follower, leader. almost now hand category world's it. we're is in replace as bring you is fitting massive. take that I I Right at management as yes. the they somebody first I not like -- about MiSight. anymore. category parameter a in you how as get fast MyDay like is almost being MyDay? you're in world you range, to Pepsi. being innovative most in the category there. period. the

So several been yes, the enough I about it's good done years -- say here. has what It's the last things over team can't amazing.

it's innovator now being right So great versus the fast the being follower.

Operator

Matthew Our O'Brien next from question of Sandler. Piper comes

Matthew O'Brien

the going probably Again, can piece first, most little people what it's daily to tomorrow. because get going of out as bit Al the business headwind, like is the or Get on mentioned, Brian, modeling. a attention time Larry aggressively, it people of focus we market, bit the obviously more a rebating just little got a below on J&J were economy the you've now, out much. aren't is

more come that clearly? that So under what pandemic? you really gives lot new a can that see you you is really we to moving can't really with point and hood more in a of you the see it other you point lot clinicians? can't Are here really hopefully maybe And to out the we getting patients? confidence we parts are can these that What a getting rebound that as business all

Al White

it, of put that right. at looking you're out there, we release I Well, some earnings think the Yes.

single about there. talking you're use so spheres And

If you strong for there. performance look are us, at seeing torics, which multifocals, torics, single better especially use you're

What the replaced So are is, anything. orders if orders when where being industry, doing what daily from it's channel seen that's well, happened more inventory get of it's pandemic you is the older here than industry, talking is quarter spheres And in that silicones. that's delayed still you bit of delayed. this and and that X.X it's at in the by see item, we're about narrow into use in we've at whole look a single and that, line you The sales, in little massive a lenses, not down right? end declining, pull weakness terms through billion hydrogel part the you're it when of tied to ordering, people silicones this getting coming

daily silicones sphere, the in at weakness from sphere marketplaces, transition it the is the daily, dailies and over. weakness the in with the strong comes end of day, had a to When traditional quarter So MyDay. we away, the industry coming move

feel the one at we're side about product for that constrained. countries, things, looking and pulled marketplace. that is the of as off past the were calls, success on think I We specifically us could. as we makes that having in of while it the things several that that I sphere didn't We we of daily right? good back aggressively coming MyDay market sphere about a in talked launch with earnings

on unconstrained now are that We product.

it positive And So of you're way aggressively MyDay out. to by is I about outperforming. clarity, well. seeing doing definitely don't really MyDay clarity, feel I out the want that. But unconstrained either, definitely the rolling we're because future downplay there,

Matthew O'Brien

makes more That a lot the of lot expensive, a sense. and chef to more with hold. Okay. there's It's

So the among have sell. the that products all down come inventory you different makes levels sense,

makes Okay, sense.

Again, over month as couple if XX. like, math, to now, revenue don't X MiSight numbers to some here. like, from adding So of to flipping But lot a then seems certified patients As you of your back seems are envelope MiSight. year, But of the up a per I you've got last it's number do again, did far perfect average. the in what of docs big that step quick just a have you on it doctors

market? a game it, much of they is on next is so think number docs seems this read monthly tranche many patients town how only it can some new the kind you're If of fairly group, you that aerobars because on put to basis. that a that triangulate Is Because a quickly? in or pretty this for and how about, to way on add reasonable

Al White

Yes.

about interesting is been really what's that wonder that true. that's You

kid they get come they it's see fit how a certified, working in, two, out. they or They want to we So docs. get these

these they little and you X, then clearly product. of these fit see it, these And about once significant then, successful over have these and can comes a get Yes, product curve, an we've the a wear wear comfortable year-old So XX sell couple interaction going in lenses. very they'll a to those talk when is pediatric seen about parents, all how And ramp, ramp. I to it, was they going. as it, which this it they'll can talk kids and every because checked. fast kids works, right, hurdle I a is can concerned a it's get just this yes, things are how can X, a whether times well, and what say, docs I'm we they'll lot here checked, they And ramps saying, flipping at that if Like big looked with to yes, is. see wait a parents that patient while it get single with I

to continue should activity, stock, a see excited. Cooper I to mean of we ramps we very kind there. So you're see seeing be you're we person that that we're all if continue holding if happy

Operator

from comes next Our Block Stifel. of Jon question

Jon Block

Brian, But qualitatively for then, XX up. first fiscal a specific guess versus profile? I to provide gains continue And 'XX the anything certainly you, hesitancy comments high one, at I your to could months portfolio? any I'm maybe guidance. get market level clip, same just accelerated based past you of to daily comment on, question the curious, quick a XX the a if that got follow sort should similar the would, just I've Then, of margin from comments, being on share

Al White

Yes.

a little to gains, indicate share not share see to Our don't going work quarter. to it's anything I tell. would that we're take hard continue market each

unique some much And Biofinity Energys. product a us, of that bit products share that's that vary that'll mark. products. the In a how are of that little question are is, of a like MiSight, Clearly quarter-by-quarter. growth stuff, to Those terms high ortho-k,

are I we through help whether to hesitant accelerate it to continue as move take those themselves. would forecast, market to or market I share, going we'll not, but take kind to do believe XXXX. So share continue of

Brian Andrews

getting take down I'll I mentioned higher absorption. related I margin from question. MiSight my guidance we're the mean, beyond not guess I Yes. prepared also, being slightly QX, And gross margins remarks, spend. but in volume

to the pluses two I our EPS with that drivers be that that, you I COVID. lots the brings dealing FX beyond primary obviously of of we're mean, there's would of So, those outside And are of from minuses that, say, going midpoint and but range. kind to

Jon Block

even more ramp year from in in a could Thanks, the actually revenue if this with beyond. it. And start MiSight. doing, And perspective, us just us, year fiscal MiSight what just up targets depending other for I'm guessing, us pretty to XX and or totaled be investments got perspective? spend from the advertising remind it this management we question 'XX? or is, remind MiSight, those year Okay, you're in And Can and on Because myopia detail way. you maybe DTC an DTC maybe follow the you could specific what before diluted going fiscal guys. the

Al White

into in about that We I'll we that Yes. But XX Brian, spend of something I get million, I hate had to look some like to on million did. MiSight. at XX think QX stuff.

year roughly So must XX. then were going a to what for pretty have full do we about significant million. we the hit number,

pretty to to in and market while gross margins, pretty be it margins it accretive, to how it be spend forward. now, lot. going that. of determine clearly couple way that. way. and flip We're little spent looking accretive it's pretty around it question gross become and So in dilutive is kind best the drive accretive it for I a and no good a We just But to margins on, did about doing annualize not launch. operating the of should lot would We should we're operating a a and a should years QX Jon, in right now investments but the won't good guess that not I great over take then stuff at a

Operator

Jefferies. Petrone Our of comes next question from Anthony

Anthony Petrone

couple I'll and with MiSight a start a on well. then have Maybe question CVI on as I'll

trended there on new precision And year, this CVI, as competitive out is this one. the maybe your an the with lens, just Bausch daily they've dynamics, SiHy with on updated update through in view outcome as there. just particular, So

Thanks. competitively? in rebate the And And So anything up front? I follow of views have any on kind then, a have seen you well, that on as regard, new MiSight? just

Al White

rebate Yes. the front. Nothing new on

a from as some news year. get near because updated think new future. We'll in we're do they move activity, into that rebate to on tendency a have calendar I new a the we probably relatively here, we're point at some of competitors our

there's products. will, out competitive the been On They of the sure I we as So long But end have I nothing they don't here, long They day, as dynamics, I new. maybe as maybe as there. been have I'm I've they and at great know. mean, am are for launching competitors always for won't, here. they will

can own products. launch from own We So can drive do our to manage what do is all We We our our do, we business. products. own success we right? continue

very a campaigns going have now. on active We right launch

a have We strong pipeline.

So we I we continue to I control mentioned, that. can take control doing and -- as share think we'll

Anthony Petrone

as you particular, get the have on we any updated feedback I'm to again. views TAM. and at standpoint guide, XX It's point updated to if helpful. that to continue just in On ODS maybe amongst a the baked numbers I'm Al, MiSight, just continue curious that on MiSight in And to stocking there cleared? are curious from million scrub is this Thanks TAM going opportunity there's as it bullish, seems you for what's back the the geographies if trained views

Al White

Yes.

Some there. good stuff

million. First of all, the no in XX stocking

product there continue the people's assumption just So is homes. directly to to ship we

in approvals get China some a on So we'll of launched progress, markets. expanding, in to them is there. markets, stocking. making one, Geographically, one just approved we We some couple has We're that trying potential. another right? launch zero got we huge are

new quarters us launched So talk think I you'll coming forward we markets into. continue about these on to that see

it's total about based remarks we XX, the my you the of I U.S., we When seeing quarter XX% that really and numbers annually. label start of XX $X We see in which to the market year fits outside XX size XX, earlier If this under. last billion on of prepared you XX, on off look the year mentioned clearly a X the expands at fascinating, are kind did in the old we're XX in and over said, that the TAM, market. and here U.S. of olds, U.S. of years the seeing that fitting olds.

some market like definitely is, products look out of sure about not a forward north in I'm But of early. what I coming pretty billion there talk forth. good that could forward. to the you still you comes that and some that'll advancements -- to with market play. you So braces I've make drive and X help And when so now argument But the right spectacles, very seen they're is this of some it when the spectacles when

spectacles ultimately, contact are more that efficacious I lenses to going think be than are.

that. going there annually a position billion market So pediatric I of contact you're be but think manufacturers. north to really for market. It'll a I lens, leading optometry we'll X think very great have believe large have with I a do

Operator

Our Stephens. [Operator comes next question Instructions] Cooley of from Chris

Chris Cooley

the growing, make Brian, me. do you if help us or on you more DTC Just MiSight? Al number, assuming about just relative for quick continuation do follow a CVI how kind of two up coming if think curious Then, expect that aggressive And push? Just we spend fiscal with year? PARAGARD a a year-over-year so, focused that Or if Maybe that's got if marketing? to the as to to that's said you without could having grow in of I've well.

Al White

Yes.

comment growth. only on gave QX So PARAGARD, expecting the we was growth,

like to spending similar this think that is so here think more this consumer pretty We in grow of was to media year. towards direct up do year, I a spending what and now. would television The a expensive. end I it that And social lot spending did The So did will the on forth. would that that, trending of QX being lot year-over-year. we

So activity for our buck, social and spending pull back we can type bang get money. more without a shifted that media on any to over spending bigger

on going spending see going profitability a going we're flat. get more to some from to your hold coming you're because year-over-year ultimately, growth to you're PARAGARD, think basis, right, I So

get good spend we'll to more PARAGARD, top, all into spend to on get it comes So be going when I be, respect on But on does mean on I to going With we're I put because that'll the little markets around the to activity spot won't think we're world. then it's get there. MiSight. a when quantifying approval in behind MiSight, what dependent that MiSight, a we we it

Chris Cooley

say MiSight in, so days, early just if for you. operating contrast you it's means. lastly States, still we here me, sales Cooper you fitters if how and not most that. think by just it type you what a products exclude know, prior lens a only, you And the not just MiSight total if from just a or But it's utilization Thank United but versus Appreciate at I any we environment there. could from is you've your you practice seen about based? broader the then, maybe think when the lift Understood. about look portion, basis, of looks kind year? in and that curious typical If just, not I'm mature clarifying

Al White

real That's Yes. interesting a one.

would [myopia] docs, doing who what think practices. are like CooperVision we've who were not docs gravitated else, through right. [ph] people something ortho-k that But that's have management seen. or people myopia either the or who were who beforehand MiSight really pediatric MiSight fitting towards You people things have or The bigger are

are docs. It's who more broad. more give in part So products of obviously, broader to over family, It's effect ship to kind who of CooperVision people we the the concept are at it, our optometrists halo to not some family, product who treatment of it's preferential that options. focused I or early, It's talked willing terms other very on for competitive using the still looking but about. are CooperVision CooperVision

Operator

Baird. of Johnson Jeff from comes question next Our

Jeff Johnson

And Al, what could? of MiSight just How MiSight here, of maybe trying that? kind end doctor cumulative the get pacing number just QX the fiscal if training, here. drives So couple all just of coming of number the maybe vaccine the got impact are being that around of talked the here two, one? that locked backend down guidance, we you to and kind Is thoughts you and possible. I've at cleanup big a if questions year about loaded thinking

Al White

QX, December we as fists an Yes. example, the you as free. in U.S. remember first the two away given for Well, were

kids year and to activity, lot fit. QX, there If getting are next year. get supply they that of of they're going a until some of get done year we've as QX, not So supply, well, next a

because that's get right there, ball order now their the going us that right, to we to And So supply. doctor a people free. paying just you're happens of year's for kind naturally they're gave that

doc the received receive the money. So money. We the didn't

natural of here next it's then, right? QX just what was QX, ramp QX definitely accelerated. optometrists. in a in XXXX We And get year. QX, So will optometrist of We had you we're the up to it itself, lot in

We through lot it. have QX backlog in who in a going the are here

ramp so So it few, as up forth mentioned, those has start I kits optometrists lens, of fitting quickly few come a lot a do to and a they tendency the in as on, when a and more, they're do successful.

right it's year, to QX QX, That So just QX naturally, going because continue will QX. next into to ramp. it's move a natural

to specifically not related There's just evolve. revenues it's of to COVID nothing COVID. that. cadence related the on So how It's the

Jeff Johnson

part million target hit big Yes. we this obviously, the said That makes sense. dial that. of to try you of a in million again, or full as XX side model. year, was of OpEx below kind think on XX MiSight I just the kind question don't year, of But QX the that spending I above heard year you answer Jon's for

Al White

China, of in a It'll I million. don't, that. just less. what higher early decent we I being happen be get like see approval it amount it'll matter be to XX could be right? mean, over It's we it'll if a Because than If

management in versions specialists, forth the are through do It's salespeople, so you and existing adding around DTC regulatory, you'll And and of lot in docs management and We're R&D for to and on we're of we're markets rid related and a and see It's hard not that, right approval but spending, it doing markets by increase. specific MiSight work you'll spending new R&D. some to. it's cost talk forces. world. enhanced then, add the a we depend like is can but And to So get selling again, see. fits to more still And COVID on, that into specialists Because does myopia who see early regulatory versions, also now. of more related, way, to so high dial we going and the of because forth. are call COVID, the get have we be that spending just our more clear myopia sales stuff, here lot we're new our

So spending DTC. it than is just is to broad kind it rather attached of a that

Jeff Johnson

XX% And out, up better, if little out know been your maybe growth of to a your the put got, typically your I'm assuming like gut it I And of possible. Okay. U.S. number that Americas, competitors but America break U.S. in don't is kind But give your you of you help my inventory. QX. impact lower higher, us quarter, spread have over of kind did channel kind and a QX it XX% gauge plus growth. and they if but little U.S. South this X% guys us you that'll that might a full

Al White

Yes.

If a was numbers handy. it in don't than bit. market flat America there's were we The us competitive Latin and U.S. there. a the stronger, from like I U.S. so was break QX, at standpoint, really mean, was at you not if big between looked calendar, a don't stronger The was. we look and difference competitors those We those did right? you much. But I have out the where we grew little apples-to-apples, X%. down

at competitors pretty the basis, a look you consolidated If on it's similar.

a share bit Just little of again.

Operator

Research. Willoughby Our next of Cleveland Steve question comes from

Steve Willoughby

potential running, made ups a I for if And you about first. from is you that the for mind. I impact normal or two couple then, just about next it thought follow the comment of a year had -- over don't all guess What down Al. had XX%? new fits I the you, so? are XX% you Have you,

Al White

Yes.

you comes fits. look somewhere revenue it on basis, around global a from new at our If XX% of

XX% are So I normal. say, they're market of the normal. are is habits they're up. gone kind of okay, wearing patterns I And back ordering normal, to kind And of that break

still now. down XX% look about running to the market the But from chunk little back fluctuations. a that's we're of big fit, some that's maybe at seeing And get normal. bit. we is big, at that Now, just new right of XX% I a If what's revenues

right, obviously, And back to you come here guys kind back, say rate X% faster and of grow to you down of to new fits that XX% because growth two. you want look XX through traditional we're or rates. if So going of your point see you to you more cost. back get those knocks have, the that, the growth because get But to a our question

where So we're that need seeing that, that's have really comeback. that to we

number, a make XX, will, So does massive you not if it's of right? Because that it's XX% sense?

Steve Willoughby

It Yes. does.

to changes COVID, So the been of then to of because happened shipping. both you that and second, the more one guys has industry direct patient

to And that wondering, revenue, much to still offices, if their then, guys as had need need are as believe the in direct, annual The you're I so, have rate is too, could their don't as do. relates And if continuing don't I final are which in any shipping guess question. impact be was doctors you that purchases, much inventory MiSight shipping what in been that, one there potentially patients I And, more inventory and with just it things distributors ordering has warehouses. direct, well. also you're change the impacting as of supply

Al White

Yes.

less spot direct we've more are We're You channel you on, inventory. some that of done. doing have Because right? shipping patient than to

to in was us kind million of U.S. XX to be that were. quarter where the XX million This I to about that even, back XX kind talked we of million maybe number get And to thought I closer going

happening I kind to that that from about, of system shipping, patient better is the the through what talking happening. think you're direct inventory what's right, management prevented the

way a that to pull to then So remain. as If back beforehand, to to right? if that with shipping is we fine, ultimately, in. revenue believe was will going the direct stay that back the it is have tendency it shipping direct I goes we

it But we good bit. perspective. an inventory I of So little from to think hit kind point there, your did stabilized us a

Steve Willoughby

that, like Does have that a get of the want them? lens any I've to lens to or that If it going doesn't their Does lenses got I'm impact, what a shelf, impact if my the I'm sitting make doctor sense? prescribe? and in on potentially inventory? if rid -- Does impact doctor, decision have doesn't OD they

Al White

Yes.

the We that because of haven't set. seen fitting

and you're and going they curves, especially lenses So tendency torics the their. that to set the higher they more to going they to whatever forth. get, outside It'd a still bell the to go they're so like, like, with that be outsides of fitting that have volume have on product the

have product them. to somebody, we'll MyDay So they go with the ship to toric fitting they'll that's how they'll like fit directly sets then and

to office probably the of being you're of and the their stuff curve So just that bell middle curves directly of patients. bell we're more tail more the the being taking in of shipping

Steve Willoughby

Got you.

MiSight And Okay. question. then,

Following up question in But of on marketing spend, the sounded there. talking there's spend, terms the initially variables to MiSight. when of number back I a significantly. the marketing you're Jeff's in about you grow compared know It potential continue going started multi-year -- could ramp some revenue to like, quite quarters,

XX is getting if XX And equation? within million XX any XXXX depending to So, out that approvals XXXX that also any anywhere? million? upon in you revenue million countries new of in in is that in the spending did XXXX, Is the

Al White

the in to million, No. Getting XX don't countries. approvals we need other

right get we'll few I it. need don't but we think a

market. forth. us, marketing. by between it like all and the some We've interesting as products people and Magazine all different free Magazine giving it People in, call put to media, one just of That's media Yorker magazine just us seen top sophisticated New in educated here new so On spending of the things. been getting highly marketing I've and idea. you We're a their Science The want whatever, awarded in is these media the gift earn free our whatever Popular more It's side. spend like,

gravitate So and how and for, about one interestingly surprised up actually that are of pleasantly is talking a about talking to not are management, many save more. things a been at the profession of the of people is people we're it you're bit bit talking us we've only that's picking -- it the about towards myopia not profession that helping seeing right? the money out it getting little talking outside you are marketplace So pay in that having itself little but MiSight

of kind cool. that's So

I scenario. to XX a see So spend million going think to don't XX that you're

Operator

Our comes Citibank. of Joanne question from next Wuensch

Joanne Wuensch

year, COVID-XX? the I impact foreign an appreciate down. be first of us give little when is outside thinking upside But the idea Sunday of full quarter should about land the could the exchange just guide, the world rate, and of tax which feels bit what the for of the other you're of particularly you a metrics some

Al White

Brian that one. I'll answer let

Brian Andrews

hear going it we're of not we're just that. at and Joanne, be leave means talking he we'll be I you to about. that the the by going at into end Well, day, QX I to think guide

Joanne Wuensch

goes to just a I to and something into non-GAAP want sure to a And was second will numbers, or I Okay, behind I'm what U.K., of go that GAAP you try what give be? decision going time only the understand way. that to us P&L make is Barbados can different benefit in going the whether one the that numbers?

Al White

Sure.

But prepared whole in add what after other make we Okay. this in the new the there's Well, to not asset talk and to at a day, a end in lengthy my to remarks, have related transferred right, I'm not to lot U.K. up value. of stepped going to might try hours. QX. than It's and are market tax I the to said significant fair deferred going IT a result to assets the conversation,

from So years. over that's taxable income us XX going shielding next future to be the plus

be EPS QX. what non-GAAP DTA, it's in than in is the then, that going our with our to years, GAAP, rate. is lower be going significantly And to subsequent you're going all to significant So find high

making that be -- next over years. And will the over so, amortization going the shield basically the will result that to from non-GAAP we're adjustments the XX neutralize

Brian Andrews

in see clear, be that to won't But non-GAAP. you

Al White

correct. That's non-GAAP. in that see won't you But

Joanne Wuensch

Okay.

non-GAAP about going So my historical think first should back tax historical, recent relatively in levels we purposes, to for question, EPS. tax

Al White

that's appropriate. say I'd Yes.

Operator

question next comes Pasquale Guggenheim. of from Our Chris

Chris Pasquale

to in not this historical, too Brian, rate a relative to driven make IP. much conversation company's But that tax favorable low the the large was for jurisdiction tax by of here. was understanding part the my tax peers

rate not in have domicile would higher negative tax forward? a that going why a impact resulting So changing

Brian Andrews

good Well, that related assets get we and that amortization future U.K. from the in into an basis that's up very those IP the the step transferring shield a that income. Ultimately, question. the provides against taxable

the a have are to taxes, we going yes, tax paying shield will So, XX but next be for eventually plus years.

Chris Pasquale

over, the jurisdiction? rate because in was Okay. the But XX-year after difference that is up, period tax step

Brian Andrews

Yes.

Chris Pasquale

could then, the If just challenging down And picture down this to quarter, guidance. the it me so inventory been currency, implying X% now more guidance constant XQ it's is but the macro seems if underlying was most through the some CVI XQ, of about interesting. Al, X% improvement. the Okay, would you at of X% than benefit midpoint, walk that have through thinking around I got out you back

through the and two walk So periods? thought contrast process the maybe there

Al White

is Yes. seeing are optometry offices open. What we're that

and had that's you the last and you over to closed go offices if months, back had foot six continued improve. seven reduced traffic, So you or

So you Europe, open optometry excluded everywhere, they've can have optometry that remain in business offices, even open. and offices such essential they're an

from and of in terms a better the through open than position that's amount optometry in offices So open foot coming being in were a we're we when of position offices. we're those traffic better

glasses I return just wearers about Yes, their wearing that fogging. glasses people talking complaining fogging habits That's glasses. of seen we've a are wear was just who optometrist and patterns. is, today thing of out other was optometrist normal four their there wearing of people to to it are their XX% to purchase talking amazing. read study done. that about Three The

you, into more we're in than are right? QX what tell So the seeing months, winter better were market going fiscal things lens activity. bit our are you in So there of actually we And making I'll little contact are the a down talking that last for seeing that because, X% midpoint, numbers here on about mean, mind, in keep basis, that's against a really if compare year. I QX, a And fiscal non-COVID the at year-over-year that fiscal QX. helps the we're in a quarter you kind

quarters For work. don't us, the way we of fiscal the because

non-COVID QX So growing comparing to to COVID-impacted impacted in we're fiscal almost growing a quarter back a quarter. even and maybe

stuff. So pretty good

Operator

JPMorgan. of Our next Marcus from question comes Robbie

Robbie Marcus

Brian, and way you is touched R&D on the little of there? gross first how a quarter revenue think to similar, down maybe get to inputs I about guidance, SG&A in some flat, margin, hold step EPS the take that basically If to the there. and get and

Brian Andrews

or less, yes. More Yes.

Robbie Marcus

Al, And maybe it. Got just quickly.

any You are where what the you think just to post trying geography, And businesses as it vast look picking seeing the on majority it Thanks. of in about percentage people is different like COVID? are might up talked normal? to terms Are of out? you what trends about how business, a that reorder stretching reorders you trending? how Is of the are by

Al White

because Yes. the It's one it world. to is a around answer tough different

seeing forth, amount up different back I go that you're of level, to seeing things wearers the around of of going pre-COVID normal, activity. restrictions their back that contact stuff, to normal, that levels. because different to There's all you're I to a for my just if lens of I'd to different pull so amount and type ordering But comments there. number of back unique going back nothing particularly COVID of Just amount significant cases, back some highlighted, patterns, really going high

Operator

Oppenheimer [Operator & Instructions] Steven Company. Our next question comes Lichtman of from

Steven Lichtman

margin, mentioned, of mentioned had continue past the Just on that slight unfavorable you that headwind gross absorption couple Brian, quarter? first will that impact you obviously a P&L this XQ, questions. manufacturing will just in

Brian Andrews

I inefficiency. sort of growth. it's mean, related tied with really not Well, volume to purely

So grow, away. as to then starts that go we

Steven Lichtman

for then, north secondly, million. year the guess Okay. And was of CapEx I XXX

Can fiscal 'XX? You of a down. us you number mentioned year could come that should what sense that for be give

Brian Andrews

down Well, it's down pretty million least We'll meaningful meaningfully. We in going half CapEx down followed year. decent then CapEx the in to maybe QX step slight step at in second probably QX a or quarter in so of million the XXX QX. materially, and still a come XXX more did have by or a over of

$XX than wouldn't say of, million I neighborhood somewhere this year. in less let's before surprised So, the we be ended where

Operator

question at time. turn this any closing over call Thank management will no the for remarks. back to you. I I'm further showing

Al White

holidays. the time good your Okay. everyone. like heading shape. Appreciate into you, Thank it sounds Well, we're in

I to speaking everyone when to conference So next you. look and March. good to health to we wishes call our get everyone best and Thank in forward year

Operator

for Thank you. participating. today's you Ladies and Thank conclude gentlemen, this conference. does

all day. disconnect. a may Have great You

The Cooper Companies, Inc. (COO) 3 Dec 202020 Q4 Earnings call transcript