Earnings call transcript Q3 2023

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Operator

Good afternoon. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Third Quarter 2023 Cooper Companies Earnings Conference Call. [Operator Instructions].

I will now turn the conference over to Kim Duncan, Vice President of Investor Relations and Risk Management.

conference. your begin may You

Kim Duncan

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

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

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

financial Before call operations, statements, other forward-looking results product of anticipated will revenue, pending rate transactions. and I'd operating guidance including operational to tax or and demand regulatory you remind of strategic like begin, conditions benefits contain we that and conference income, EPS, infrastructure trends, this expenses, and and possible market anticipated launches and investments, initiatives,

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

consider call, quarterly earnings Should please the non-GAAP provided results Also, our a non-GAAP call section to is We on under reconciliations release, the additional our Investor provide supplement to information. as in as provided GAAP any ir@cooperco.com. questions you of materials. well to is a refer under which Relations will and our e-mail: the have website the following we financial you available encourage as reminder, as information on this our GAAP

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

Albert White

in business its expectations, to our and revenues revenue growth. Thank and double-digit of conference record we record Demand $XXX growth welcome, growth. million, remains consecutive call. reported fiscal with of everyone, XXth sustainable quarterly for organic by revenue driven its organic CooperSurgical reported XXXX its and solidly of fertility services very double-digit exceeded products quarter posting tenth and posting revenue revenues strong revenues quarterly Cooper Company's CooperVision healthy, you, quarter third organic quarter consecutive Ken, quarterly record

Our impressive and strong, growth our we're momentum teams well results, our are delivering is strategic executing initiatives. on

to first Consolidated $XXX organically. the up posted $XXX were up XX% of first posted for and million, numbers. X% million million organically. and Moving the $XXX revenues quarterly Exceeding CooperSurgical revenues $XXX in the CooperSurgical. was exceeding XX% million, for $XXX was CooperVision million, revenues organically revenues of up CooperVision

was were hydrogel our growth CooperVision's our by silicone earnings growth driven daily portfolios $X.XX. per Non-GAAP by business. share CooperSurgical's was and fertility led

XX% growth quarter the geography, we're to on multifocal For Asia world, key innovation spheres and XX%. grew strong expanded tied reporting and Throughout CooperVision's categories, grew and XX%. flexibility, leading By XX% and the grew growth in basis, XX%, was new accounts. Americas EMEA Torics percentages with grew products, X%, an grew organic market-leading Pac product ranges, and grew all revenue the diversified. Within

to of vitality and two-week spheres grew broadest grew lenses monthly offer we Biofinity wide hydrogel industry, MyDay main and lastly, available with a the multifocal. Avera the Clarity MyDay X%. accelerated XX% hydrogel Within way. portfolio a on lenses Daily And silicone healthy modalities, with and range and our Daily lens and be lenses growth Hydrogel Torics, and of silicone continue contact the Silicone leading for driver the

It's lens or well. of the the six fundamental by and a and very months into America Europe. with Toric to hydrogel across silicone strong. high strain. technology boost for of we lifestyle demands to wearers eye is our digital to into portfolio, taps momentum practitioners as and care digit innovative seeing -- big need rolling our lens the Energous Turning a expansion the we're This demand also alike, continue starting is daily products North incorporating ramp parameter digital MyDay wear success our eye exceptionally launch today's We're U.S. highly our alleviate with and MyDay of premium sales high-growth impacts catering progressing out

widest daily which two-week to demand daily option This to its Toric monthly care lens. practitioners in capitalizing enjoy which market-leading Toric and Toric on by by a wearers driven being freedom is our far the Biofinity's range, range, is broad eye this industry-leading the offer market. opportunity design, their design, and mirrors SKU wearing range the of the are the Toric

Multifocal MyDay CooperVision's least, around world, share not segment. market the considerable the but premium last continues multifocal to reestablishing take And in position

fit to the very is. first continue time to hear easy the to lenses is I acuity this the as fantastic recently contact and I lens how visual from was well fit We for eye And personally MyDay can how in multifocal. practitioners with speak care in

at lenses superior to daily on truly well for Toric, It markets, nice by technologically To strength a of offering custom strong, high-quality offerings acceleration Outside momentum Toric. sales are our this Biofinity and and perform The Pac. our conclude an by And Avera of the a quarter fantastic. high and led had demand and multifocal, in remains within process these and our mass lastly, by dailies, led of with Clarity see price products international Clarity a family to family point. fast solid amazing. continues MyDay, growth remarkably including was in is product Asia was vitality segment, continues especially deliver to market easy, lenses of several

in stocking up comfortable end, Ortho-K XX%, million in tied posting best as even with though, well, remain of guidance our albeit Fiscal the a quarter, to and year, we for revenues MiSight million, difficult Management. the probably like at growth lower Ortho-K Moving the its quarter portfolio our offset to full-year China due $XX started China. to had of year-over-year declining strength order often. comps QX to tough weakness this against up and myopia MiSight We accelerated realignment million, year. Meanwhile, with XX%. MiSight with off $XXX last $XXX won't posted franchise

driven the pediatric the key the our sales rates, unit process in improving high world, lens CooperVision including see practices, into Regarding trends roughly channel. very with other regular sales We're continuing U.S. retention of MiSight, higher-volume specialty with from ongoing by accelerating we're seeing from practitioners XX% integration also successful our and effect around MiSight along the use to halo accounts, fitting of an lenses. positive their optometry

that medical We to confirmed MiSight is Aetna of covering lens XX% XX% in now to to also plans recently represents opt coverage plans. which Aetna under

cataracts, year contact associated risk lens degeneration. progression Care as the ensure backed reducing the with is exciting, retinal of as management the coverage is for eye it's myopia type a lot reminder, proactive with along data. what a plans health who the care as critical and problems of This of work and covering still families ago. first practitioners it's macular detachment, become started Kaiser, product only within long-term control, help of clinical This myopia the by we the through standard differentiator of all myopian MiSight eye care a early is extensive and myopia care such it and reduce to the and in children to This is community to To eye MiSight, but understand a very means. conclude of do have FDA-approved Vision roughly on process,

in QX CooperVision, CooperVision at share on roughly contact the finish lens market grew calendar with taking X% To XX%.

nearsightedness indoors, is market or the the macro trend factors. will kids people more myopia healthy, vision by XXXX, population from have estimated less roughly supported by to that other today. outdoors driven growth spending use the by of of screen expect This correction. long-term and related time year greater up remain We global digital and among XX% the It's needing XX% the

years ongoing industry. business, pricing, increasing new this of CooperVision we this, focus launches, data. market-leading the product with ongoing hydrogel higher fast-growing leading shift you remain innovation, and its on leader management silicone such expect the multifocals, as growth combine for the we portfolio, a with expect higher robust Torics and myopia product fit to Within to When value and dailies, many

organic including X% million, posted to Moving fertility XXth organically $XXX sales double-digit growth, XX% for revenue of of organic growth. We its consecutive quarter CooperSurgical. up

bright and is trends at growth. business high industry's Our fertility macro future supporting continues the very level, a to perform strong with the

capital growth expansion, investing in solid the For success our offerings consumables, EMEA, from within posted testing, diverse infrastructure Americas, realized in genetic reproductive geographic and R&D. we build-out, Asia once equipment, again accomplished we the areas, Pac. quarter, while including accounts, and key regionally, And was and activity. donor This multiple

great our world. existing a momentum. new diverse we're one launch roll the to geographies, in and fantastic continue continue products most success companies delivering we're well-positioned out way and clearly In innovative as to and leading portfolio, and products summary, the we're and fertility We given of in place, global the new team,

are the exciting of strong, we're driving broader global growth that lot activity space. the the macro a Regarding in market, fertility to remains and see trends continuing

increasing The has to growth a of several multiple to roughly Other increasing old awareness, XX is fertility continuing male years benefits and a first childbirth. fertility in in women countries need and drivers, include starting the U.S. for and both higher. improving patient delaying contributing Age female median drivers coverage, the age challenges. with factor improvements developed and is treatment, within technology assistance woman's key the growth industry access for fertility and birth move to other

a or and in affected data showing is is by in people that underlying and six men women, at that of is future. some one-third their one-third issue Organization continue And point infertility globally two Health to updated an the unknown. lot The cause lives. infertility of one-third World do given people This are impacts so recently of in a one of the the that will combination is released

PARAGARD, surgical, procedure and and Devices million, of this, several and medical delivery cell which Moving positive our labor Within by particular, products XX%, core up we includes products. office driven sales reported X% to surgical in $XXX organically. strong posted growth devices, well. In of and Medical storage, strength performed and volume stem

PARAGARD expectations. say quarter's world, cell with storage our that great X%, back some it's a X% baby as the and around every minute, softness, somewhere To on conclude with saw CooperSurgical in business that bounce grew Meanwhile, born CooperSurgical, products. grew last from using we pride stem we is line

characteristics, people's operating that also makes love several a have as we business that. fertility. and We're in lives, in growth difference Our excellent long-term such markets

positioned we're holds. where So, about what we and good the feel future

revenue expanding over infrastructure, result comments concentrated while years couple strategy growth we Before to our investing moving continue a has call with strength of high-level this pandemic. initiative. such The on is strategic turning business sales forward. organic effort multiyear We investing This exited acquisitions. the our on a of let me R&D. as we've with shown make COVID people, growth embedded improving in investing Brian, and our strategic the accelerating our last to the in this several completing growth of successful this And sustainable areas is growth, to done drive within as marketing, and some intend

let that, dedication am by employees. how is proud our I of and of conclude teams. me the None work incredible hard without saying of possible our With this

let Brian. me to the call over Now turn

Brian Andrews

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

were offset consolidated Third mix period by XX% and revenues as XX.X% cost. with being flat million, year-over-year was quarter margin XX% or Consolidated reported certain positive $XXX organically. up currency at a gross up product

line operating up but income, of led Consolidated was $XX.X XX.X%, parts margin of P&L certain from due leveraging average operating as effective we than million XX.X% with at due mainly expected, expense tax was X%, below grew than unhedged expenses Operating leverage in investment discrete respect currencies. better started Below last $X.XX, it XX.X% roughly improved shares to year, by our expected Non-GAAP and with to to to operating $X.XX rate income operating the expenses. worse XX.X% prior was seeing FX, losses XX.X from interest EPS outstanding. items. the was revenues to With activity. initially million, the improved associated

Revenues better leverage That P&L. exceeded OpEx and to items. certain tax rate. color This FX we're the offset loss seeing line expectations, in a

to due attributable primarily period is this expectations earnings fertility $X.XX. margins However, This negatively CooperSurgical, gross and by business. roughly margins largely in below at softer-than-expected were impacted our costs to

businesses egg an are with sperm we generate. example, As significantly up acquired and we ramping our donor that

charges. faster activity large is created moving it period is which This ahead unexpectedly expected, But news. great than

We write-offs also during quarter. had the inventory some

XXXX. Meanwhile, we Some to resolved not QX leverage, activity but that I'm during we've be of these into August, and completed matters fiscal OpEx continued to report fiscal this impact expect regarding pleased warehouse major several year, IT and improvements implementation our moving important upgrades at a will several us European this includes forward. primary at which CooperVision. large benefit at including This CooperSurgical, CooperVision infrastructure

in our added facility CapEx Additionally, quarter, the labeling doubled Net position And upgraded with now billion. puts to the million was us lines. distribution the P&L and This flow Back excellent cash and packaging essentially U.S. activity size $X.XX online. million. forward. moving debt is that we to of leverage of facility $XX several $XX decreased to an free

meeting Medical's guidance, won't flow $XX end, did flow. Before impact QX reproductive quarter we as add This reduction the Cook after impact QX paid let not in the as fee a and million for cash this treated as free that will but it me of termination contemplated impact business. it acquisition ending is health cash P&L, QX negatively operating for a

guidance. to Moving

and full-year strength We incorporate we're revenue the we seeing are our increasing to fiscal QX fiscal strong results as enter guidance QX. our

constant operating the unchanged range growth our midpoint, income For which currency year. full EPS, reconfirms roughly XX% holding we're the for at

to expected led million, roughly $XXX the X% tax to margin organically. and and CooperSurgical's XX% revenue X% weakness yen. $XXX organically $X.XX in the consolidated guidance QX, up FX the to to is effective softer by of to X% $XXX up EPS Specific a to of revenues range on which is the fiscal X% $XXX be CooperSurgical Non-GAAP million to offsets gross million rate $X.XX in based recent range million

some capability. on we leverage to of exercises. a me P&L level, that, supply capacity conclusion, impact double-digit For to work our long-term a In focus tax to quarter. we delivering effective direction. discrete such was the year. constant on expanding fiscal will this detailed as on rate, this, enhancing stock income next but high Outside expect growth a give low focus currency early provide let which too objectives, roughly of and XX% the option another operating items include executing positive with solid subject growth XXXX, it's chain guidance, our Within our remains At

CooperSurgical. Our momentum strong very was organic our and growth and healthy in is both CooperVision

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

Operator

[Operator Instructions].

Your first line ahead. Block question Jon of comes go Please Stifel. from from the

Your line is open.

Jonathan Block

you guys. might where sort just little Hi, afternoon. left Brian, Good off up a I pick of bit.

quarter So maybe the the fiscal about high-level I'll ask 'XX. and

seems per unchanged. a both EPS OpEx. sure. had solid businesses, comments, for increase top-line Brian, It like to just nothing make COGS-related was you want I So, on your that midpoint all

XX So of getting you GM bps around sort 'XX, updated into headwinds expansion level? to. expansion verification high guide this we at about just XX some just I'm more And think alluded that's year landing year in at a about rate think that there. looking range got when Should of or XX if bps the OM fiscal for that's accelerating of to XXX fiscal the of back we 'XX, the that bps margin case, next with of maybe being

Brian Andrews

Yes.

year, few Outside maintaining months same a our now. really mean, OI to Jon, have constant I and I So sequentially still at XX%. we're part digits quarter. still what -- that And of not margin kind answer December, next We're margins this question, guidance next color you're the a year, just I'll there. year. provided to versus QX. We'll once in to first going on more of direction in correct. -- this currency growth was like into gross in for OI of It get that I the basis year, purely growing is not of give growth said, miss softened I'm your we up terms delivery a for in double going get do EPS giving we're And

Jonathan Block

price? be just ahead you But to price level, a your couple that's just also, if can Al, bit maybe stay sticky a into again, speak about going think then 'XX? it. little question you to And demand And it. moving maybe, fiscal high durability talk will of ability a the second of Got of parts -- just Okay. And curve. to

of up have tripped competitors Some been your there.

obviously, our component that's up relative put expectations, You to demand to growth and it. least dailies at in inside really big got a high

to Thanks. curve So of able ahead just confidence the demand stay you're there. your

Albert White

Jon. Sure,

We're now, I think I made think few I range. probably the we're that. I on in X% little inflation But we of which that move is, lighter additional lingering. for just think to continue positive. think side you'll improve talked in would statements quarters, the pricing I to it's pricing will seems X% reconfirm the that somewhere would that probably a in a quarters us. a that, on about market perspective, like prior We've and some for since see as market the I've still is forward that's probably

We supply We've spots, sure. too. growth. some challenges different our challenges manage and capacity our had That's in to we've Ability issues do for some have got chain. through

in up I costing obviously some Demand some we're good It's putting a is decent place. think strong. numbers. We're money. revenue us

expense areas. some distribution from as operating So, forward of I'd out we move to love leverage, especially additional get some leverage in

right high-quality really it a it and to able get able product. somebody delivering in make ship on product We're But and their we're now, we're pretty to meaning customer orders that focused service, hands.

leveraging little us coming a I see that cost revenues. over we'd sometimes years. us. in think we're And to a just costs you're think It's like hit to more to to to going able continue it the which be of for actually money that, really I matter But good bit than shape

And be even next I I will be more think year think it will more after a positive. that, the year. positive year probably

Operator

from comes Larry ahead. Your Fargo. next Biegelsen line question Wells from of the Please go

open. is line Your

Lawrence Biegelsen

me of and Interest that about to that here, 'XX expense, follow-up. $X.XX? I should as Brian, headwind stable Just to from And EPS had commentary. we Is maybe two expect today? FX fiscal Just on be one

Brian Andrews

really Fed down pay going I surprising. say, doing I -- I wish mean, I would anything We're guess to color could gosh, to year. the not Yes, I debt you I could next a that. I subject I on mean, good wish give

So, debt see hopefully, swinging wildly. I at expense our so our flat mean, moving a It's target. decline paydown. with FX, least interest just we just it's or

I commentary I So, December. get mean, on to hesitate you kind to of any FX until give we

Lawrence Biegelsen

X% entering year. enough. this X% you Al, growth Cooper to organic guided to Fair for total And

that guiding the color you to about next Just helpful. You're now. Thank X% momentum think do are year? be XX% that What on sustainability any of to -- you. how would

Albert White

It's is in me our continuing it's lean the we're of but side, towards even healthy, launch share, will we products The out are You more remaining just healthy. kind roll world. strong. we're probably conservative on markets or we whether surgical that business operate know healthy, guiding I'm taking not would sure to products, the to because just around Envision or we're

more probably I'm in normally optimistic than point this forward year time, at I following the look next as year. I into would be or So,

guidance give we'll optimistic. in I'm that but months So, here, a few

Operator

of comes Baird. from next Johnson Your the question from Please ahead. line go Jeff

Your line is open.

Jeffrey Johnson

you Thank I growth. afternoon business Clarity that on Pac in is start to double-digit some Good mentioned How I you. business, the your PVI in mean, up wanted organic putting strength you're Al, guys. obviously, Clarity Asia and maybe EMEA. U.S.?

got some peer are starting over that's those doing where their some years. had both well, daily entry-level specialty just move into is very good silicone You've success -- those It seems here has same. the like the two but a Clarity of you the to areas doing in U.S.

the Clarity continue pace at last quarters? they've the into PVI gains U.S. your of share here few been business growth? think is Do kind in next of And year folding going in in? where at do the how you kind So

Albert White

gangbusters Clarity the so that U.S. just about across you well. to fair talk fine. MyDay It's yes, doing the numbers the not sure in right, which Energy’s, much. if It's may strong is a Clarity, that's it less. whether or about performing necessarily about I'm I And will. are I is board, MyDay Toric going or talk talk -- as be don't that or in we is sometimes a multifocal year, the so little Clarity it's of this don't or The little, kind

from was still still accelerate and gains on the no should in rate those lot that did share several think a it's still but product It the the the okay. doing having see, the just Clarity okay that Pac, moving think years been mean kind activity is would in perspective, forward, which gain -- products. actually yes, expansion on. product of the we've somewhat I of would of U.S. nice and its our But next growth product of I based expansion, to share doing of we're I we a pretty active going be geographic have some launches with similar launches for Asia

continue while. think I yes, for a we'll take quite share So to

Jeffrey Johnson

All at I somewhat million $XX as skeptical right. was That's I on -- $XX believe. this And a just now you got on number follow-up then helpful. quarter. million, hit I've PARAGARD, you that

that. last wasn't you So but I from just would sequential to math cross quarter this check all go it $XX that is my on maybe a convinced quarter But was is, that $XX.X to could nice I again, bump assume pricing? million million do.

So of just any the outside your anything of Thanks. color business. PARAGARD changing pricing, on view there

Albert White

Yes, always $XX businesses, And when million, is you're stuff. view. predominantly our That bit nothing there's on channel in inventory clearly kind pricing. that in that all a of the of comes bit it to driver some But of pricing. right, right. of little little and now No, was a my changing

Jeffrey Johnson

you. Thank

Operator

go Mishan KeyBanc comes from of Please Your Matthew the ahead. next Capital Markets. from line question

open. is line Your

Matthew Mishan

Thank then investments? the pipeline mean I driving of of and it's -- Could you a that's sort Hi. lot the year-over-year. you. it's guys what's like R&D just lines those through one up increased walk

Albert White

too in management. will R&D but lot of MiSight get projects, associated there. CooperVision, Yes, A got on detailed higher activity won't is Matt, mean within certainly, I I myopia say we've I our with

businesses. our in Within within development But also. So in our both which business, products to space definitely occurring. different our that there's of couple fertility we're it's definitely CooperSurgical actually, R&D include -- tied would for increased that's seeing a product

Matthew Mishan

to a with, does And kind push how context into the investments of you how leveraging Okay. through, P&L that the of able kind not of fit thinking be made to the forward? the into unfortunately, about more being go global And moving of then Cook that fertility might business? are to need

Albert White

QX. now, question, we have European presence in it say big would QX. that now is global than here no, in we're countries, Pac We a Yes. international investing Asia We very business that going I business, franchise constant drive do to the in fiscal much Well, growth, investing currency growth right of right next others. gave within and going numbers the stronger an to of to some right? OI a have year Fertility deliver year, Brian embedded did no in to to definitely more growth. presence, But and We're We're OI support constant next XX% that's all fertility double-digit this currency year the growth. long-term you low within the objective

is yes, one continuing fertility no that, to in. invest. about investing question we're There's the areas and we're So I of mean definitely

Operator

Your Please of from go question Bednar Sandler. comes Piper from Jason next the ahead. line

open. Your is line

Jason Bednar

Good echo market. the versus good is on performance quarter. the afternoon. good I'd here Thanks that contact questions. on for Al congrats taking the the really Brian, lenses and

product Can are Is category a certain comfortable a confident guidance think you're moving or fourth that the bit. have for going more for which what's you in the business. results quarter, in out your I street quarter, definitely your you're you're or benefit your of geography seems in guidance, trade. on it a July, had But fourth quarter fiscal the like also for just based April the called elaborate core you changed was trading where calendar it As to you numbers quarter? seeing good up little today? good

Albert White

we up the saying we remember, economic year, where of we Yes. were versus the or possibility, probably started looking that a are today where slowdown. like would an I little recession bit at a end

-- and I higher look example, products haven't We when of if sales And seen our products. actually you kind the the selling of accelerating are those better an like as at Energys some of at that. priced of multifocal products, look some MyDay, even our MyDay,

feels more about So, good a a here in it better earlier stable have lot that And that's a asked we're now. environment a -- products feel like like for look sit us. fiscal of lot we're I today, when better, you 'XX we good environment. somebody of right at just just that as in momentum. with

Jason Bednar

on there then your seems value because as then I higher wanted don't I you strategy but the an strategy, and talk lens maybe like And a respect I doing actually as any a to it Okay. seeing fiscal higher ahead account what just a terms maybe a look to key but update recession with caught or -- shift your emphasis are maybe as to of gains that maybe little in on follow-up think on said, you're lower we bit hedge, better ask share about of here. account key that's strategy 'XX.

Albert White

Yes.

if think of store private be that hedge, You because sales. seen. not some about increases would of and I've would some right, against types you will, more companies That's the the would I've if be an of inflationary say, from you driving a what will, brands or label we've environment. And that activity, growth, actually seen or those that read that, should I talking

in and isn't would if do an see our activity. issue inflationary increase see an So, economic or we you pullback, that, there maybe brand store an

of it's I mentioning a those lot a we higher-priced some branded that -- by other some some but driven right of doing those But products are more now, products the have. it store of was basis, -- for, as of the certainly some is we being and on brands being

Jason Bednar

so Okay, helpful. Thank you, much.

Operator

Wuensch go of comes question Joanne the ahead. Please from line Citi. next from Your

Your line is open.

Joanne Wuensch

sure understand When to quarter. that want Just is Joanne make FX? appropriately. trying I we double-digit talk margins make next It's low peel year. operating operating I'm it the And Wuensch. And to margin sure expansion, commentary that dollar? nice that. is you. peel to that so the you about about Very I your expectations away, through set Is Thank margin?

Brian Andrews

currency Yes. When operating growth, growth, it's OI double-digit I mentioned constant OI. low income

it's operating basis. just constant currency on a So,

Joanne Wuensch

for to to about how right that for number Okay. X% the position Should we to thinking to a things? revenue next you range? think way able go guidance a this Or not us back about to Are is at a year? even in X%? entered be give you year

Albert White

would that three now me see December. tell update We'll giving but a in time that my right hard have guidance, conservative of months. we'll gut would in I mean level we

Operator

line go question next Securities. of the Mizuho from Please Your comes ahead. Petrone from Anthony

Your line is open.

Bradley Bowers

for Hi. question. my Thank taking you

You for Brad Anthony Bowers today. on here have

So, of expansion. points headwind, the of a some a bit XQ. into a step-up imply point assume it But we little and to using of the XX XXX the if This math imply basis basis margin about on like XXXX about op a that's it tailwind that then GM was comments would OI headwind. reverses looks

more So, leverage be as it seems opportunity the organic side on like cost that the on would expansion as imply some there that well GM would side.

out I that wanted is how make of kind sure checking you're to thinking. into that, math So,

Albert White

Yes.

I on, we're the growth strong order and right logically, that's we geographic now get You now. might all But going but flows that all I'll not is with I seeing being issues let do continue one think year that those challenge you able incremental that, support and get into to your here, that's to through revenues we'll we're leverage, OI. comment confirm have demand think with And right do will, expansion that I checks sense agree you else that hey, potentially now. out, if to to that math think, everything right? the Brian have very of infrastructure running great, I investments and in doing, think makes And a me. combined and about next right with that that with the incremental to you're

certainly the to tell that have if what history So And here than long on history Cooper? now, get tell be been the organic time historically. would organic you comfortable you a it this is sustainable have. based growth had growth, higher will, have with we organic what I've better appears when growth we stuff we we happen, you would

and is Once it facilities get you're mean margin I that, touched we you Brian stuff everything to with get and Once some of shipping lines in packaging place, and expansion. else get place and comfortable you these and on you leveraging in that drive in that. the really get that by able place, some you lines the start

I happen. think that will

dollars deal to going or managing I But we're those the with you confident matter a that's activity to MiSight, business, continue a in business, that our we're of within the if time we're I'm dollars As lot challenges year myopia where putting tied that where it's a fact, of frame of growth we're some right about, some now. over talking especially next of to whether highly will, investment putting going the that, lot think or management happen. to fertility

I and this kind back go, step makes it for you year. sense when sense that together, year, you infrastructure okay, this So, of low digits think years for you we all interesting double It next leverage that. makes put able what we in happen will and of forward of some as out the be some it, are move will after to and and build

Bradley Bowers

CBI on business. specifically helpful. That's one within And the follow-up that,

as the in strategy opposed core more had hear side. focus kind much more to the how of more think J&J that on wanted your of from to SKUs some there some about You to of ophthalmology. mentioned to do We business was some you SKUs. carry the just tail the heard wins Toric I contributing potentially in that's

contact manufacturing be months to lines. about from In XX a perspective? we maybe that infrastructure right way thinking addition market a is SKU in that those and least talk kind lens months the of build-out much see I at couple the maintaining the And to range. share to if how Is from that of related benefit years, past, also the to think about of it's to XX

Albert White

question a if Yes, range. to that they're take mean that we Brad, walks great in office, do into a a that on able a great an is and patient fit position point CooperVision I the product. SKU be optometrist's

wide so the industry, like is Toric have So, that's is through to far the SKU by available. daily through the your Toric, doubt -- do manage at right. chains you look range It logistics those. chain no expensive distribution forth. ranges, the when SKU expensive you're through widest manufacture in MyDay But there's largest we very them It's to and exactly

and you through several so order and of really does get place, your you excellent really, behind years forth, get that improving take distribution it an capabilities production there. move period in you're capabilities You a to in time increasing you're and your where you're

one So, deliver team that it will But the confident done of that highly growth. successfully We've before. our done it challenges journey we before. dealing are before. now. of we're is there now the example again. around right right I'm great another been We've We've on with

Operator

Stanley. the Wood next comes from of Morgan go Patrick line Your question [Operator ahead. Instructions] Please from

open. Your line is

Patrick Wood

on the one much, for Thank maybe so you, I questions. guess, taking first my my side.

You of better need the of alluded why I a DTC? spent expect dollars work be we to happen consumer? lot to here on now. convince the marginal of to And thinking quite to to some mean you've the we are better optometrist coverage you Do the advantage Or take on on the consumer shouldn't awareness side. coverage? got think in go money to that

Albert White

focus be We'll side and spent things. DTC-related. optometrists think that's I so Yes. going it's forth. be think to some, that to The significant media continue don't money is more we I the going social on I it's but more dollars of don't spend mean themselves. to on because

could I different will. you insurance coverage would Kaiser insurance MiSight reimbursement a bit covering for had think the here little We've I now if that mentioned little covering to be one a thing be site. see starting Aetna we're it. or is

work be little assumptions. activity. more bit bit that But we, could it some little of with families. and of I but work. available little and on of us all that a comfortable couple a the who little it, a bucks, working with and of and think a covering That they bit cost works companies reimbursement built up of pick ensuring it's As are we with other easier that our how ophthalmologists like of with us insurance a will know knock wood, That's take optometrists, -- bit pediatric into insurance

-- we're gaining throughout well, lot in I But a now. it I do see right I the know in gaining and Europe. in do U.S. markets, MiSight -- We we're here that traction think of especially different

we're got it. to in behind it. mean, I going invest our we've to continue So, shoulder

leverage a be start that to will we dollars business about infrastructure, leveraging large Now It's and of want no sustainable drive good we there's out spent, forward. some it. we We move build to fairly that. driving a did to going But forward. long-term a it are that business. little question We bit still as more

to for sure. to That's push want it. we continue So,

Patrick Wood

any terms this maybe lean I sense think guess, do from quite with like sell-in relative normalized some presumably to then side players? is chain sell at a And more. in the of moment? out? But I of inventory peers. channel of of lot Like is just In because it the Totally. Or you quite the there's I your one to challenges answer have been vision, supply know

Albert White

say inventory would lean. is I

Patrick Wood

Thank you, so much.

Operator

question line Marcus ahead. next from comes from the Your Please of Robbie go JPMorgan.

is line Your open.

Robbie Marcus

Okay, thanks ability think And for operating far add, your Maybe and levels. event? a How you both Two gross below And pre-COVID are fairly for return pre-COVID margin? question. first, me. taking margins, how to the on margin particularly congrats about I'll my good margin is quarter. to out that on do operating

Brian Andrews

that. take I'll Robbie, Yes,

So, I driver big mean, half reduction if almost that's at is that you pre-COVID, to big, FX, look difference. margin operating a of

investments, You've changes years general, had then, a there. quarters XXXX. vesting those cost, since XXXX. got one of a We chain they're that's have ago Obviously, elevated things few And course, all comp. five this been about some there inflation, some IT in operational before. even items in from freight, share-based talked elevated from higher where they being we in right infrastructure gotten though of big Supply about better, were

-- prepared said had to move of start So, that our we'll some what some OpEx we're got to in I kind to FX favor. remarks, start in just if hopefully, earlier these back and this And leverage I just But quarter. starts days, one of some stuff. I'm of Al my confident get going that we leverage to just play

year. leveraging as from You'll those into see some more next next quarter year and get this we investments from

Robbie Marcus

on a free cash about third I be at to fourth of you're investments, a And through lot this flow. cash year going quarter is free XX% conversion know one Great. lower. even maybe flow has quarter,

of those the you tech think And lower you the sort on conversion. Are you might let's Thanks. year get So, to you Same when able levels? say of against end to average comping do or back yourself be XX%? med up XX% question. about

Brian Andrews

I you number mean, far, I mean, free is then interest factor. And if obviously, cash a big lot year a much, expense CapEx I very this year, moving besides mean, of Yes. last By driving a you've that, much higher. you've at parts. got got as look things, flow of versus

my over $XXX million. combined Cook The two prepared in will $XX alone that mentioned remarks, be termination those million. Just is that fee, I

on back depending then has look few got how other outside a you up So you've of items. capital far that, got gone tax and working you've FX,

lot will we're expansion, going mostly infrastructure capacity investing year. free but year is So, our in tied this improve a really business, flow versus lot next that dollars to definitely towards which expect a cash of do

Operator

of comes Saxon question next David & go Your ahead. the from Please from line Needham Company.

open. is line Your

David Saxon

Maybe just myopia portfolio. management strong the MiSight a China. couple on was despite

on that about thinking you that are that MiSight? how region Thanks. And and more for give then recovery is you a impact realignment lasts? how color can So the in long what little maybe Ortho-K,

Albert White

don't just word I as has management backwards, Yes, included it a China. steps we describe MiSight do business we been, a myopia lot But We is there, and times the over there step take do guess, big don't it. in bumpy to China and at certainly have what seems two maybe forward so -- a China. in there. We

optimistic a it personally, So, see of all get then I'm down. sudden, good slows more happen. I because it know to starting about I some stuff And

So, it. I'm a having hard time reading

business what Now it's the China of a our starts. at definitely do again, and there, of myopia not management part the of We a I'm don't But the part fits business, we for expert. do business least ton there. and

lot with into more how that. on out. But I going assumptions I a I'm specific our sure not mean, I play China. that's don't you could give we So, respect built to detail wish to have

really and China in China. the will that strong successful. I product the in the been feedback I say gotten mean the good is it's be world, really think strong to And receptivity has around going MiSight we've to been about I product.

order Now we which great. last did this a We accelerate had growth stocking year. quarter, was

start here. even we and really as quarter So, hurdled nice some the accelerated with continue growth, that to we and MiSight MiSight we still out fourth see success

portfolio global a little there. going a to going side products. on basis, within questioning on We where more up realignment happen my where including what's of true had did have China, optimistic it's had with definitely bit products Ortho-K. we I'm and a lot We some So, to some

some had so forth. to we have better do up a products and QX. So, We should

pretty think As still But a have again, bumpy. a fact, QX. we'll decent of I matter it's

$XXX mean held $XXX I or range did the million, XX to XX. we XX of and right? We

XX. we're So at

million hit So that's $XX bottom of that range. to the

at at least in business. $X sequentially million looking management our So, we're more myopia

you're thinking I'm just So that gives moving keep improvement. But where little because and I'm you some about we like to stepping kind it excited directionally hesitant too to forward there. it going get is back bounce seems of a back some see and

Operator

line of next Stephen Litchman from ahead. comes go Your from question the Oppenheimer. Please

is Your line open.

Ron Feiner

guys This contribution is was Steve. for you price Ron year? to what wanted on for of I And what this are of the assuming ask the the rest to CVI quarter. just

Albert White

fiscal Prices that QX. helping CVI same low of We would around have in the X%. into kind factored amount

Ron Feiner

rate, impact today? 'XX tax you on fiscal Do things and any FX have interest thoughts guys Okay. based early for on like at expense, are where

Brian Andrews

pre-discrete. any just subject didn't nonoperational other pay of outside give Yes, I down earlier bit some flat the Fed a we'll tax next organic on Ron, of expense we'll of debt. And commentary commentary. expecting declining the little a hopefully, to of sort our gave interest And rate and some back I see rate sort XX% bounce to to of tax we're to sort year.

Ron Feiner

Okay, thanks, guys.

Operator

the no this you. back time. turn further White, questions at Al I'll to have We call over

Albert White

Great. today. you, is everyone now. where pretty Thank proud we're you The for business and joining really doing well. right I'm of thank at

strong really quarter. As posted revenue knows, we everyone this numbers just

our And is solid and EPS strong. numbers guidance

definitely sit where and talking discussing QX guidance look and forward to next optimistic about giving And I future year we the and December those holds. pretty in what about I'm details. for and So, today

forward hopefully look and seeing during quarter. again, the thanks to So, everybody

Operator

may and disconnect. you conference This call. now your concludes you today's Thank for participation,

The Cooper Companies, Inc. (COO) 30 Aug 232023 Q3 Earnings call transcript