COO - Earnings call transcript Q2 2024 | The Cooper Companies, Inc.

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Operator

Thank you for standing by, and welcome to The Cooper Companies Second Quarter 2024 Earnings Conference Call. [Operator Instructions]. Thank you.

I'd now like to turn the call over to Kim Duncan, Vice President of Investor Relations and Risk Management.

You may begin.

Kim Duncan

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

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

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

guidance and Before we contain remind rate, statements, initiatives, revenues including to and forward-looking trends regulatory income, FX this conditions tax strategic that and and begin, you I'd and other and market product financial EPS, operational demand. like will conference expectations, operating and call launches

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

the in our you earnings is GAAP information Also on quarterly materials. information. call provide non-GAAP Relations our is supplement as non-GAAP of provided Investor well on GAAP as section the to encourage to provided as release, as to financial we We consider reconciliations this our a our under a website the reminder, will results available refer under and which

Al opening following please over I'll the the e-mail his call, ir@cooperco.com. you remarks. to now Should turn any additional And call questions have for

Albert White

lenses. quarterly center. great by with to revenue I'm our progress challenges distribution quarter and pleased operational hydrogel of Kim, U.S. And welcome, driven today's organization. you, everyone, CooperSurgical posted CooperVision impacting to solid report our unexpected despite portfolio growth, a silicone system call. some record the revenues, leading Thank upgrade returned our double-digit throughout to

and activity, growth. leverage prior Margins as we investment earnings delivered improved we excellent

As momentum forward, our and increasing earnings and incorporating revenue seeing the guidance our we're move markets. by quarter we in this past

the details of record ] X% led $XXX improved an percentages earnings million, CooperSurgical on posted quarterly [ by posted million, revenues basis. up of and revenues $XXX to up Moving all our Margins a XX%, silicone non-GAAP hydrogel Consolidated and year, were record quarterly $XXX reporting share per up X%. CooperVision a million, and were organic portfolio, revenues $X.XX. daily

XX% accounts. and All combined For CooperVision, innovative led by were Within the X%. key market-leading XX% XX%, regions portfolios, X%. and torics strength X EMEA in and categories, flexibility up spheres and Americas were Pac, grew grow multifocals our Asia product to

XX%, modalities, up MyDay Avaira strength focused our around Biofinity the clariti, was our silicone our our combined silicone grew portfolio. myopia growing with very FRP and quarter XX%. All And management world product daily MiSight and lenses, in, a portfolio hydrogel to hydrogel lenses throughout XX%. and grow nice XX%, Within with

is another growing order With our to our success details leading products. the penta market MyDay outstanding category. delivering with every toric with Turning and way, MyDay high-growth in multifocal and particular [ hydrogel starting silicone portfolio, add we ] results. innovative daily every and product in

the fit range, which Europe expansion in daily parameter SKU eye the by industry-leading widest in market. and professionals toric across range and North more design is ECP or America toric market-leading enabling launch care ongoing our to is Our far wearers

including high a satisfaction advanced resulted combination levels, in paired In of a system very MyDay success multifocal an unique or is rate in design less. fit two XX% fitting easy [ multifocal with ] has an

of an market. a continue contact doubt to best fantastic it on myself count in to receive wearer the ecstatic multifocal the lens continue lens, without We feedback what I as very is positive and

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is to lifestyle important and digital improvement lens and Energys innovative meaningful the is wearers this by technology its technological today's boost contact for digital specifically ECPs. designed driven

the Given in the strong in it performance future. of business in near the to excited U.S., markets additional we're launch

clariti. to Moving

Our our for comfort, family a silicone this which updating love a lenses legacy other driver especially continues driver. success of base daily wearers. good it wearers. and also wearer with remains handed product for easy hydrogel in hydrogel ECPs an makes of complete be It affordability, noted its new choice to expanding daily

expanding and has toward very healthy. and fantastic dailies, XX.X% markets and accomplishment successful. multifocals require an incredible is lenses torics most availability of expanding of the types new reasons and lines fit Outside markets we'll now This benefit prescriptions. who ECPs patient ranges of one traditional patients made-to-order the vision in now be for in to into and new the manufacturing Energys Biofinity in near portfolio lenses, to and continued the This ability provides remains so these With beyond The launching demand office complex remains amazing spheres, differentiator in of true of a a any of manufacturing future. multifocals, service, those Avaira Biofinity Biofinity correction. in ranges state-of-the-art expanded and the an is

Moving to myopia traction, MiSight management. demand. powered gain continues healthy by to

Americas reported Asia month record April. was posted record and a quarter, a Pac strong EMEA in the

reduction quarter. by channel were inventory a in the negatively revenues Although during impacted

robust here. results promotional saw we we expect soon the based back-to-school success on campaigns Our and are starting

So this strong in expecting we're year. back the results of half

In clinical the the XX-year XXXX which from gold control study of duration Pivotal the trial anniversary longest MiSight the children. first running This a control. and in intervention clinical myopia in and contact study lens wear marking being to trial anniversary optical MiSight the with meantime, we're led a FDA-approved of for becoming still in remains from standard the X-day design MiSight study milestone only myopia

control initiatives to be can quarter. establishing CooperVision's this via X seen commitment important of and myopia continues launched care standard

available to the help to interactive practical myopia of offices ECPs tool and of navigator part Optometry, their around partnership This practices. exclusive provides with tips management we've World the myopia as our at digital world. the a resources of management into First, launched continuation toolkit Council

Second, ECPs management Association to care U.S. groundbreaking collective a their CooperVision myopia to as have Optometric of rally American and the partnered for standard adopt pediatric initiative the myopia on the program XX of a The AOA and recruiting is to for District patients. and the policy state each who plus CooperVision with community Columbia work advocate ECPs currently proactively will change. representing

the conclude in contact grew calendar To roughly X%. with share our taking X% lenses, market Cooper QX,

new long-term We products, in fast-growing we our continue portfolio, robust positive data. to this, innovation, to market myopia driven several within with expect leading product management business growth And forward, trends. moving a premium launches, a remain leader expect strength robust by product ongoing macro fit and

reach quarterly fertility million, in X%. cost up strong, our was $XXX this We manage but largely PARAGARD, we're able in and CooperSurgical. the our and We center overcome a backlog systems organic posted revenues distribution Demand progress, range, medical comfortable entirely. to upgrade full were to revenue not and products. U.S. Having but of said strength for device of Moving shipping interruptions unchanged. guidance which we'll lot year we've that, a our made remains

data. experience operations upgrades IT growth, it more certainly of Implementing supports effective improved challenging, our real-time makes work internal success better can a to infrastructure be efficient is customer and long-term but creates type critical with as this

Moving to Sales million, X%. fertility. up were $XXX

look to world facilities, leading also locations for services open strong and well We new with providing to future, of continue donor new products operations. around they improve extensive outcomes our the our existing opportunities geographically and continuing centers demand excellence, our training and upgrade for us investing the opening expanding We're innovation. accelerating clinics optimize in sites, and with position seeing as fertility

This investing on delivering media. focus remains only unmatched. innovative advanced and European clinics Our fertility solutions and and the the a approval formulated for includes to first and uniquely patients most one-step

improved sustained communication and implementation and culture embryo media development, specialized [ transfer no embryo Embryo This and reinforces pregnancy. ] for

the journey our genetic testing, but fertility-based science advances we're the providing types to we're to parenthood. of commitment delivering this is goal improve and these work. market-leading to this Similar to it's straightforward, continue and type Developing is making the innovations a the leader of complex, why innovative, technologies in space, is in

including industry, patient macro Health in people fertility at broader point highlights advancements improving by in their in the awareness, dynamic several positive lives. access technology will benefits The increasing that affected childbirth, infertility X greater by delaying and treatment. X some supported World Regarding is to be coverage, growth market trends, Organization this

this impacts is of people, an we'll future. a the that lot issue in So and do so

we this to patients and incredibly remain industry advancing innovative products, global access committed a a on space, delivering in support in leader the to improving treatment by clinics As basis. to standing and

with driven sales our posted up and challenges. to was $XXX [ to X% babies XX%. And demand demand products by devices led medical due healthy, ] the of mentioned our obstetrics was ally shipping we the portfolio devices, most declining the our up PARAGARD labor Devices, now up delivery of X% previously uterine and strong. storage portfolio. Stem surgical X% arguably is gynecological medical cell comprehensive of safety Medical by and CooperSurgical minimally mothers Within million, and Moving portfolio ensuring manipulator remains invasive

the Our will in stem related to largely Destocking expectations naturally of a quarter with price PARAGARD itself benefit cell and mid-single-digit outperformed had increase. stocking business fiscal a solid offset QX.

special. services, that roughly on and We're a world, can impact obstetrics using and lives, in making baby now with of global the conclude a say people's products our somewhere CooperSurgical and update may every is seconds, CooperSurgical, very business to portfolio we our born the To expand that community around XX products. difference

let It's you responsibility sustainability, wrap we social reading up, website ESG efforts add chance. which when corporate report, strong environmental me that corporate latest on and our To our our released what and just a around have highlights governance.

our for commitment way. and about things to I'm to We doing employees are world the sustainability, passionate around thankful right the their

you drive hard employees that, turn work continuing the let over to dedication Brian. thank So and their as And success. call XX,XXX-plus with to they for our now say our I'll me

Brian Andrews

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

were For XX.X% efficiency margin year, million, the continuing $XXX quarter, revenues price. up consolidated up up XX.X% X% reported X% driven and from Consolidated gross and second by was last gains organically. as

with in and line leverage showing SG&A Operating expenses R&D faster. grew growing with revenues,

XX.X% in and investment R&D, as tax stock to technological led remain to some XX.X% last slightly was come improvement. positive to expense by margin increased and innovative on due more developed the leader Consolidated exciting Below -- launch this products Regarding impact gross we several year activity the XX.X%, improved our markets the of from our income, to are by continuing was of million, exercises. a in launched. operating the $XX.X operating option interest up we've products areas rate most ensure margin effective to

million $XX of million. million CapEx EPS Free Net cash flow with up decreased with $X.XX, average $X.X $XX shares outstanding. XXX year-over-year debt XX% billion. Non-GAAP roughly was to was

than worse with $X.XX impacted earnings the offset were negatively last we in the exchange quarter. was from guidance, Foreign $X.XX a our program. hedging even of expecting by positive at which time our

made to line. fiscal this To FX quarter. delivered headwinds. CooperSurgical system CooperVision bottom margins a a summarize and and was double-digit returned tremendous and improved year-over-year upgrades another, implementing strong even progress against QX, Tax one solid we offset currency growth.

XXXX expectations results fiscal back guidance. by half $X.X of and revenues organically. and our X.X% seeing the the enter incorporating unit $X.XX billion, billion to year. increasing This momentum [ we up Moving X.X% of to We're to performance QX revenues in for full as ] earnings we're fiscal the

X.X% to $X.XX and billion we're up billion, driven demand to X.X% For by guidance healthy to our capacity. CooperVision, $X.XX improving increasing organically

expense billion to rate unchanged the our fiscal $X.XX organic X% $XXX weight changes also $X.XX of guidance unchanged assumes for is For at at no which is revenue interest our to CooperSurgical, Interest roughly remainder to billion. million, year. X%

forecasting And effective for items. tax, ] full [ XX% of discrete rate a assuming year , additional no tax we're

non-GAAP we're -- range guidance our this, up XX%. X-point XX% to EPS $X.XX to all sorry, Given to increasing of $X.XX, a

guidance, Regarding to is from half worse compared we hurdle that our of currency, back than the quarter's with stronger expect operational $X.XX roughly but the the year impact performance. FX last

higher P&L in of than we Lastly, inventory QX to negative non-GAAP a QX QX lower primarily is rolling in result on in quarterly in gross the cost with in QX. gating, margin slightly more is QX. lens higher than also Currency EPS the anticipate be contact associated This through QX.

non-GAAP In Even FX the in EPS to half reflect summary of year. raising impact on of back growth from in the $X.XX by the on an improving CooperSurgical's and guidance, growth $X.XX $X.XX capacity, top. we're the on the additional unchanged negative raising our against CooperVision's range bottom rate and

growth revenue we remain performance. delivering conclude, operational To focused strong on and consistent

and Our capacity We're which organic improving. activity, investment is offer highest investment dollars. with deploying return capital we're focus leveraging investments, the a for prior on

updated guidance. reflected remains very our in and Our momentum healthy, that's

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

Operator

[Operator Instructions].

question comes the Bijou America. first Your from line Bank from of Craig of

Craig Bijou

on Congrats a quarter. strong

to the comps. guidance guidance. be to So CVI assumes revised the in the for half similar first is And second I going to year the growth half tougher the wanted start despite with

what on how QX confidence growth versus the in level is, can that So the of comps? the that I despite guess any question help half gives second the to you growth? you QX think about And maintain

Albert White

Craig, Yes, thanks.

We right. the than comps. harder in have bit year. of a QX You're do harder half is back even QX little the

of we some as we certain momentum has flip half capacity the as year. the now us On that's things little side, have constraints And capacity. good held a the you we the right back improving of been know, one have enter back And products. bit in

to able start So out. reduce, as right, those of put to product more we're some challenges

will have while exceeding situation probably a where for And and supply, I've a before, but mentioned we we here. this demand

bring So sell on that as we we new we're more and going that to product. produce lines that these know product

it think I us positions So well.

tougher So the growth some even pretty face ability about strong deliver the still comps. back of of to in optimistic our in year. half feeling I'm the

Craig Bijou

maybe year? quarter? that And second Any QX that way That's you the helpful. the can how was the QX should about just distribution the distribution, center And that of for and what then surgical U.S. impact we the in basically then half business. quantify think impact impacting on

Albert White

ourselves same within quarters not those [ what, device delays the what does had without digits of I'm are those happened have numbers quarter again down say like quantify some don't mean go X% position. a Sure. if team, that, great said what better a would to a quarter, to medical better forth to dipped speculate row so of that. and having XX, fertility. happened because we clearly would May. XX good this ] have they we're in negatively they around so I issues. and We're I into forth now. wouldn't through to the strong and and proceeding and and Fertility that going get impacted backlog shipping shipping demand a and Having working with are. right double pretty the in right, a up put and But decent have

that I'm year we So most, close work we optimistic as and strong. not quarter address through the can that, of out this all if

Operator

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

Larry Biegelsen

growth market IVF back quite get just think for growth. which few talk before Maybe in we your can business, that Do this the quarters a saw you about and you to double-digit quarter?

Albert White

I maybe of Yes. yes. say is to Kind following up my commentary to the there, would Craig that answer

As a I a here right in QX. chance matter, double-digit good have report to a quarter growth we think revenue

Larry Biegelsen

hear. this are for then year? market to price assuming on out, what Good business lenses the Okay. for contact you contact lens And

Albert White

Sure.

price, this has us earlier For almost would fiscal everyone say Everyone this year I take earlier for to year. we've our price. calendar price year, taken seen either getting

holding it's of kind is pricing So where at.

at probably maybe growing When of the about mid if we X/X look price. upper a coming single talking think is I is lens will. contact in from still perspective, healthy, you're very digits, price that because from you market

about similar few quarters. So to talked in very what the we last

Operator

at of Your from question Kirby comes Issie next from Atlantic. line the Redburn

Issie Kirby

more and first then the basically. I a to [ I there contact in running But guess, there competition have market then or number wanted thoughts the to progress and And on lens And your potential a just you're ask prescribers revenue MiSight U.S. of follow-up. essentially stocking MiSight? soft prescribers I seeing of kind higher this per touch for prescriber wanted growth in Europe quarter. the whether I upon about ]

Albert White

Sure.

practitioners we're seeing who the MiSight. we and fitting world, activity, more currently with both. are We're are fitting occurring around on seeing actually more seeing those So

now. really break So happy that X say those little a If bit. to I up I'm

accounts. things One that's of fitters a lot key the of making driving we're with progress more is because our

activity some I forward, a So That's more that. of standardization bidding there, the maybe going out incorporating that but so bigger big optical bid you know and seeing moving training than a activity. names that's bigger would and of and of their the moving was are within slower chains hoping chains, those lot forth we're into MiSight you're [ little ] because all through out

who and how we're increased look MiSight, seeing If doctors are we fitting are they the throughout bidding. And it's the at universally fitting now. active MiSight essentially, world currently that right

stuff. are me a I'm here happy we're from we competition on. that's a my myopia We MiSight have going for in a half bidding QX that's are where strong approved like from a it's in in So did the and think anything pretty down No really to it's have back be pull to channel I little on and is, perspective year inventory to side. good Americas bit in I do that. But going a going only of mean surprise first, the the QX pretty control. standpoint. product From little

there the in the something an have promote FDA. people of clinical off-label people competition organization something or no doesn't or So approvals like the is, as of data than market using that today, other the

Issie Kirby

you're I And moment. some you pipeline some organic could at of great. investment called focused on, then if the out touch exciting that's call to you of That's the those investments. in across divisions, areas the at, perhaps areas Okay. you upon looking out anything particular that heightened just wanted R&D

Albert White

and that's we mentioning, now was have as for right I within Again, of CapEx. especially to a like lot is lot MyDay demand, manufacturing pretty CooperVision a Sure. you I our one products. capacity mean, expand We're probably as clear in equipment know, investing

that We to to out to We markets. have into we want we a get in and launch. expand market the want want lot things of additional

on hold that's as bit So there's quite our activity we capacity. a launch of increase

a be example. would investments CapEx good So

head things got cool of going touch behind off specifics the fruition. Surgical. I to I that. the the coming on won't look things, think on top some R&D right forward CooperSurgical, I R&D those some side within of of my projects but could Within on we

and capital R&D on some on. well. There's MiSight, So R&D have also, as within we definitely activity and between stuff going going expansion some organic good investment

Operator

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

Jeffrey Johnson

questions couple here. follow-up of maybe Al, a

calendar So it organic. Cooper XX% have market was in was one, X% quarter, April of I that couple up your always month you exit first one. of rate that dangerous stronger put this, talked -- mean growth, number X% you your April your do think It's kind the but the the month, in been growth would in of about of prepared months than to remarks, the Does much XQ.

And I'm of number inventory. instead data, retail data. that's GFK assuming going maybe sell sell-in changes two, out what's is there on Any in

any inventory You But changes a side? you channel did little bit MiSight rest concerns or on U.S. world or inventory. the channel talk about inventory of have

Albert White

Sure. Yes, strong April comments. a couple no a month, question. was of

well. month was industry. I think we for it good certainly quarter off mean is May started a month. good I the the a

April, think interest inventory in that. take I'd So shows months is contact performance inventory reduce them to levels perspective, obligated And May, contractual From and say trying lens out you're holds our rates. Everybody there good just the probably inventory, seeing to higher an who of certainly, the industry. I levels. kind

say [ you So ] little bit a just a inventory channels if gold I now, comfortably on that think you the as go maybe could through right basis. is probably anything, tighter

Jeffrey Johnson

Okay.

MyDay And into happen else on might obviously little have on just multi source been that's a I'm you Japan, back you're APAC multi the back just a since delayed into didn't in like upside this risk. number Just thought was on quarter? Asia guidance, APAC MyDay being been X%, this something feeling a I follow-up we then raised going Japan? assuming quarter underlying there a that. not getting big CVI Or of mean you up Pac that have

Albert White

reduced associated part had, already on would Yes. not the that, with big levels. risk say the deal. a of inventory I inventory customers most would is our say the contraction, that first We've I of their

any We've of lot associated through that already of kind don't I worked So a now. risk see with that. right real

no provide right. If if I still a team. It's product, product. question you're we MyDay them could they would, more exactly is team Asia be Pac selling a And issue. That look at market, that the great capacity

now, we of it issue product. and it And there. we'll there, just right that's get So terms in a we'll sell capacity where can ultimately, get

just thing. that's yes, the So timing

Operator

from comes of question from next Your the John line Stifel. Block

Jonathan Block

of Maybe just first one, clarification. bit the little a a

backlog out that So for Al, called challenges subsequent you get that out, also thought quarters. that you and distribution those center the can in you mentioned

the be sales So would challenges clarity of those for it And two? some little follow-up. those of and then push all not a are Is I'll bit for lost? a the pivot just helpful. Maybe combination there

Albert White

Sure. pushed. of is say most I would that

patterns case, something a upgrade. really you The at whether or change really end job product. it to the nice their the see those know wait You team we an for going somebody sales lose your some never of order going It's some is if that. has In day, of they that not not, was of done multi-quarters. this as IT-related on

think, speaking, is I more of sales. So than a lost it generally push that's

Jonathan Block

good And good solid Helpful. from you maybe Arguably, it. some April. And as May mentioned the question, Got market, the too. the numbers seen then for we've second CVI well. the

So double-digit And ] mention but seems FRP. rarely it [ easier growth, was an big argue little like SII FRP it number. XX% did a bit the a of you it's SII comp,

on to consumer, look changes? comment Is modality into. the anything If just to call out with anything could you there there

Albert White

I I by question, also you're think of us Yes, for a quarter Biofinity, product Avaira really it's Both for And a mean was the and that good did way, strong was double John. which really digits. ], families for right. those [ well.

expanded the one been of quite constrained lot broad of a with that while. thing those products just Biofinity parts and portfolio, is been a there's that we've offerings. for that's happening we of portfolio capacity a lot We've of such demand I as have on a the think

lines, some main cool product lines now. right [ really state-of-the-art are that some producing We have ] new manufacturing new

to able we're the So some out meet of was that there. demand

families. than into that success in a -- scope other broad that quarter. anything kind Biofinity within broad of wouldn't read outside the family and some saw of the just too you think Avaira much I second of So of I

Operator

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

Robert Marcus

and quarter. focus really you're Great. margin for of of Maybe speak first management. be despite one, Congrats any details in drove helpful. warehouse Maybe the specifics a operating nice quarter the Two a me. some how on for ramp it's the gross to margin But on good the doing, what you beats it showed what issue. been would

Brian Andrews

Thanks for the is point to place particular question. investment piece, are -- lot that [ but really the the probably been about there I'd last over quarter several ] one we've a in talking distribution. years in all couple activity of

as activity. also And IT of but with prior all our investment in in comes shipping ] moving that But our We're leverage and together, that cost with seeing sites, really some to among customers. starting product and between improvements envision from different out [ to that of our well. putting we're get

is trying distribution this with to some areas down of initiatives to has certainly, led drive the within expansion. around more and have of we've forth. of Some behaviors margin seen our our so of also influencing patterns and But really ] that kind cost efficient do that around SG&A one meaning improvements operating the customer order [ to getting

Robert Marcus

for Maybe a follow-up me.

program due fears And part I was which it that a probably line. on fiscal quarter last $X.XX limit think income I intercompany came was -- loans, least. good were there lot the hedging other on think whole currency a than hearing I was year, know helps you I that I started, of in disruption worse at the know a third

from you just currency, when And you how at look wondering, program? help I'll that just hedging starting there. So gotten it leave much have

Brian Andrews

prepared glad Thanks, question, you I that asked Yes. put I'm in Robbie. remarks. and my it

line wanting of we've not year. from there absolutely currency. program. our hedging some not And bottom beats think currency a hedge FX that each but that to try think on I of out mitigate mitigate top mean part line about only done to we impact is job We been we're hedging. talking the exposures impact started I last we've hedging. different improving nice I beats and drive we're And to the misconception there's a But quarter.

negative been We it a impact continue as to hedge. did result, again and currency, we've we And quarter. the this offsetting from

but I'd to success more come, say So we're there. having

Operator

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

Jason Bednar

the I there on echo quarter. here on CVI start strong. EMEA, with continues Brian, to the congrats performance be extraordinarily wanted nice to I'll Al and a just

in you've pretty You've been what's really run putting held How got being sustainable bit a maybe because covering APAC. impressive. up EMEA. been It's the up little is back it's good growth,

Just these would these helping level with mid-teens or other to And levels. gauge love could that's accounts its your low that with like simple with confidence you up and respect out capacity expansion if having supporting growth gains? us to just key or you're staying just help wins what's to are that share

Albert White

accomplishing I team so and absolutely First the with a I And She's accounts and I killed work been fantastic. of of be key couldn't they've mean, been fantastic Jason, those Yes, she and think what It's Olive expanding been there prouder forth. over just mean and part her I things. they've few fantastic. it's off, Debbie runs that doing of is because it. organization, geographically our

into of level when you that's product with able the as way. of getting excellence that better but we're marketplace some start activities some that I in of the the account innings some some key wins to we in a of that still, and be that So of to the in earlier demand that that meet coming think new of meeting combine of some demand

together. all come just You're seeing that

numbers I things really quarter. going to It's good but very just moving But So do EMEA level continue I lot be maintain point necessarily it expect pretty one to specific to to good difficult quarter of attribute up a to of happening. after that put forward. wouldn't growth, certainly

Jason Bednar

And Block's I up a Okay. with follow clarification from All Jon then maybe question. a right. want follow-up That's quick helpful. or to

also yet, but back for I want It you the of the of you're margin and CSI the just quarter. said from going that curious Just I you PARAGARD mentioned some pulls more in components the to make updated about to little thinking in whether any revenue the I quantify unchanged assumptions know your helped of guide in don't lost. talk clearing year. I PARAGARD that you current is there's revenue a helping that how here wanted guess some about backlog. of to guide. just lot you're relatively half and unchanged back you if a CSI the of bit get like assumptions maybe like pushes the implications losses up sounds think that think those it

Albert White

in to I would PARAGARD, probably negative. here QX, expect Sure. decently PARAGARD negative be

mentioned PARAGARD here some did. last we to quarter, stronger than I PARAGARD of comfortable we ] going in fertility get an in being in has areas, I we're for that. margins those and to offset can half I those see would That think QX QX. QX will the so thought envision I guidance Yes, a it's [ areas higher much but much issue strong that offset we'd you in we can that have medical work certainly. not back through cause And arguably that. as up that it's numbers itself

Operator

comes Anthony Mizuho Group. from from Petrone next Your line question of the

Anthony Petrone

does the look capacity sort follow-up cycle out it how to growth overall is investment there? then do conclusion? for far this capacity is quarter be contact when underlying your come lenses. And this CapEx capacity solid How on on Maybe long going of just one that some actually competitors expansion be Al to lenses, a That here. for And the be? terms would horizon to of question. revisit to in manufacturing would ahead latest here that, contact a on to Congrats just you Brian, relative of think out or

Albert White

shape capacity. Thank have and you, to we're right we I capacity, capacity need certainly now. a more Yes, think Anthony. frankly, ordered. capacity, probably in competitors, got good quarter. similar We've We It's our

We strong. We just ordered in lens and for overall line year through as through marketplace is we do a and competitors strong. because this And marketplace of our year. capacity have demand next products. think is work lines coming too have our lot The the contact I

products, You're daily interest that, category. to lot see a especially around within torics the in continuing silicone demand of And multifocal daily and hydrogels.

going in and capacity, everyone many, challenge That coming industry for I've So the that to of certainly lines be said, years a us. lens got like a the on kind I of of okay "hey, I'm some for contact capacity think it's seems I on many additional but bit demand." of front many, is to part degree, think to meet everybody here

Operator

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

Joanne Wuensch

Very bit margins their to new on spend or know because that. that the the I'd you've driving put you nice operating that don't new that a But those levers get are of nicely. of quarter. program to you're little I FX towards to pull time into place. view starting up factors want to push new a meaning it's have a I couple whether love or And

Albert White

within here and I'll remember in IT right? distribution we areas true some return quarters IT in areas that's discussing that in are more those that, are other we've investment And the centers that give Yes. talk some are of we it, X those you're got when a to the company. and activity we of our see going the I on level out? the do. of is now. seeing and prior Brian questions of about about Like I leveraging has the investments than last why other we've in were done. certainly know Well, been true high stages going we say some over doing that efficient side. manufacturing would And within right over becoming How from that you'll years, We're a more to work that? talked Those earlier detail play when perspective. I distribution. frankly, But And they're what we've an several

number over on activity see that So investment and years, those of doing that starting we're from to success last the we're leverage -- we've programs. been

some being leverage of of P&L. the able arguably earlier through think some the to in I innings deliver kind of we're So

Brian Andrews

add there, don't really, have what's behind to I some Yes. I got year. last mean, of we've the it end important put Joanne, us much towards is initiatives that nice really think I I'll well.

we're that working and we So of iterating then service. put improving on continuously sort that on into activity

a been than has and across leverage fronts. easier it was to continue So year bit many we obviously year, last little getting that this progress

Operator

the from from Wood Your of Morgan next question line Stanley. Patrick comes

Patrick Andrew Wood

I quick EMEA Just a another it's again, quarter. strong more X love CVI, in you bit ones, please. if incredibly unpack because little could

that great, general guys market? the given in we growth you Just think it be in about region durability killing to the how seem should isn't

Albert White

if of a well out got I performance running that region. top accounts Great know don't of think much are we've we growth on moving multiple And really with I'd a I we team. the I Yes. products, strong years quarters, strong positioned lot really there. said the add of too of earlier, solid into what key for have I potential forward. mean

there all little I up growth. to levels sizable bit But continue a So we're put continue of reasons. to to difficult it well more perform for that those to going anticipate gets

Patrick Andrew Wood

then quick capital out challenging are check work forward? it's the landscape can a relatively of ] if second sheet. I obviously you sort I capital of kind you is assets I with balance the unlevered out thinking are allocation those a about running assets recent. allocation And Sure. one to And because know [ temperature you're broader what appreciate How there, like book going and on fairly

Albert White

investments. answer would organic earlier, on on products one have the investing we expanding number online, that in investing touched more that creating marketplace on I now. by that capital We Well, or saying, bringing right is

we of or they your them. doing debt, So make along game I risk think And deals sense, rates, we're those. mean, debt. investment but regarding of are there's higher return, We'll that type now. which if some see on acquisitions amount if anything decent then come evaluate tough frankly, focus type smaller see I investments, lower I are now, a what And would you carry we happens we don't point, lot interest if activity. still there's right debt we like will, wrong, paying right last a internal would with down some say paying down

Operator

of from next from [ Your Pasquale Nephro. comes the ] question line Chris

Unknown Analyst

particularly clarify expectations easy PARAGARD, comp. for was a To the

You this have what year-over-year? down think all at maybe 'XX. year XQ looks growth lumpiness think And be just sequentially a do from disaggregate hard or pretty Do dynamic just tough FY the are it's down comp the destocking you a little point? you to XQ in [ in in going us like just sales ] full to frame for

Albert White

Yes.

I something along be bit lines. think up that little those launch probably upon in probably a flattish up depending competitor year full or bit. is It'd a growth little a to

lower I would QX I think this in lower expect QX. to quarter. around we than did $XX million sequentially that

Unknown Analyst

walked to for And first. on Okay. from rate. the then XX% Guidance getting one and higher half to require Brian the down the be it even has than helpful. back in XX% That's tax would XX% to XX.X% now,

starting we And XX% is a should over? as look up? go So driven ahead FY then 'XX. good still Why to what's it point back

Brian Andrews

when exercises, know, Chris, behind yes, the going rate as thanks option -- for don't going -- effective the stock or X% hard are story in the we the can't option forecast question. how But rate in exercise. by tax really, stock first quarter exercises the ] effective to people it's to [ stock in you drove down as tax second -- the you our and down quarter. much probably second

you're right. So

of for you balance think of and roughly XX% the if QX QX. least I there, lower in incorporate at around QX to rest the model the out rate getting the year XX% tax and

so organic or tax is somewhere range. rate, around As our tax XX.X% it it relates to rate, underlying that organic XX% hovering to our

would were year, -- in that's I'd expect ballpark. somewhere start it next to kind be that of probably if we So

Operator

line the of Capital from comes Fishbin question Brett next Markets. Your from KeyBanc

Brett Fishbin

on PARAGARD touch the question. to Sorry

ask just X of Just some X given the trends. clarifying to wanted there, more

strong, of on in contribution? you So a into range the competitive maybe the I just you first any a elaborate And terms really Maybe changes to make more XX% know then if such would back a quarter bit half, mid-single-digit in of potential you in little kind of if just trying the pricing change expecting second or but would called out the that's the you're to slowdown still market be sudden just the could part the was remain landscape? why thought sense weighted based growth. of just that off

Albert White

on You get look mean price. seen inventory PARAGARD. it. of did the in that. and it to over I you during I actually helps mean PARAGARD we case, the if died-to-channel increase. end our to And that second price [ first lumpiness and on a a We've And chance always then because buy a in around fiscal always quarter had lot mid-single-digit tied lumpiness in this ] back years, had go fiscal customers the you've of quarter. at

that go we and in QX naturally some So just buy-in you'll itself out kind in the other play of activity, saw and see direction.

the in you themes, from markets Underlying perspective still our kind perspective. if of from unit struggle marketplace will, is, a

a from from is It's other no there other product I out come. IUD there. birth product are growth coming access will There's not easier market control-related competitive that challenging to and birth there's today out maybe getting But pills items you're price. there to that units. and make market. that the mean, in competitive yes, continues nonhormonal So control

Brett Fishbin

exact then a if stronger the a categories. or the quick the one you're XX% those follow-up. lot know in category, than multifocal All across numbers was I right. curious Super X more anymore, helpful. And directionally, just on not the consistent but other growth really toric giving and organic

Albert White

pretty similar. They're They were similar. pretty

Operator

question next Saxon Your from Needham. comes the line of David from

David Saxon

like ortho-k, kind digits. looks down start of in To single it it was low CVI, Great.

are driven in about thinking that of China that still? is by weakness much you recovery the how how So And market?

Albert White

the because Well, of if off China. even head, China grew go it was been ortho-k may it top we China, you that digits. outside double But was of my

a matter China. less Pac maybe is strong it team a China in people Asia little I weak we is As what expecting It's fact, some in region one least market the a numbers believe be. pulls or that would a bit reasons at have total. I for of probably us really of what hoping still down was our than were that,

just need marketplace. we some So in that stability

better half footing growing QX being start I in and think we'll ortho-k of in back here the year. the see

David Saxon

And on a Okay. just Got follow-up then it. margins.

high mean, kind of if you to closer the operating pre-COVID, looking I your So XX%. were margins will,

limiting a over from returning of follow-up to leveraging some as talking about is about? anything it a levels? So you structurally those more just that question, is time kind investments previous you these to of were there Or

Albert White

some years. has quick a one negative significant think, fundamentally know accomplish. I'll let FX clearly matter our of on the that ability Yes. a I foreseeable pretty for that, I'll investments. in. Outside been for it's leveraging something to us. the There's think is can I that, we negative and changed margin of improvements the nothing has Brian drive to that future, of It's give a been I us a jump in

Let me Brian that to that. to turn over add to

Brian Andrews

really will actually Yes. mean, I the we're just that growth and investments, We'll back and whole right this continue that demonstrating that well. to don't continue. in I Again, lot expect -- organic add. now. internal we're I It's have half about of And demonstrate really year, a to execution.

Operator

Your comes Ty from next Navann question the from Paribas. line of BNP

Navann Ty Dietschi

more queue PARAGARD on [ ]. I one have

[ to is for be So approved? low you approval that impacting pushed guidance be IUD to year? could a competitor ] the XXXX similar there the And chance when expect your do by copper

Albert White

a through Sure. No idea. don't that FDA There's a there stands. going know I but that where don't where the that's guess product have out process, I approval stands. competitive

business. how we when approvals. point if, think we'll be obviously launch how So our get that approval they But forth, won't in to time, that transparent impact decide until I and expectations and our that speculate they and product so about their on will

Operator

[Operator Instructions].

next Your Lichtman from Company. Oppenheimer of line & the comes question Steve from

Steven Lichtman

second of half talk guess, And you X the versus just half limited higher sort it little CVI quarter. to COGS. a you that margin, gross be, why overall? think mentioned we should on bit Can more and first how that Brian, about I XQ on the would about

Brian Andrews

Yes. Sure.

So an call, be I margins mean earnings should I last basis as-reported I'll gross year. again mentioned here. pretty mean, it the to on last Steve, really on I say similar

then second as first be reported to basis So down gross versus indicate on an the an absolute that the that margins half are half. would basis going on

in prepared just The in through months to production I levels QX. cost speak really QX, my QX later roll color and inventory X in that our around remarks gave higher

impact going worse that worth to gross the profit, that had gross in and we it's we we impact it's FX our is to -- QX see of be QX. course, to it's We then, So look into in and, And at of know going frankly, in than also can visibility that. QX FX margin. when

second than QX half of to gross gross first margin bit But year, to your little margins driving similar little pretty down that's a the last QX. lower sort So that's versus a get to half. are a

Steven Lichtman

the Brian, half your there? for outlook I was years. free Got it. flow And what's behind And cash bit on guess you just Can you year? point the then flow, free a for prior first cash

Brian Andrews

providing million said, change No I I this a the my that to be think, a free $XXX detriment and are year. in Yes. last mean, commentary, all bit Steve. quarter quarter the last I year, that's maybe higher we expect cash and Obviously, interest, prior a higher. about and of limiter than Sure, to flow taxes, a FX, headwind

we're We're going driving to I the and expansion say is I'd things. a free doing of be capacity cash CapEx big part higher right about that. So flow and talked the high this is CapEx obviously, again year.

cash continue better reasons, -- forward. it's look for we'll as right all to drive we So flow the free and but

Operator

Al over session. That question-and-answer for concludes now will to call back the turn I closing White remarks. our

Albert White

Thank Great. momentum a call. I business. us got thought had the and really for quarter, in we've time on the today join good we you, our to strong taking everyone,

positive So I'm forward looking updates. to continuing to give and QX

talk we'll and again, during quarter. you thank Thanks. So the certainly

Jeffrey Johnson

This for you participation. concludes your call. conference today's Thank

may now You disconnect.

The Cooper Companies, Inc. (COO) 30 May 242024 Q2 Earnings call transcript