The Cooper Companies, Inc (COO)
F1Q09 Earnings Call
March 5, 2009 5:00 pm ET
Albert White – Vice President of Investor Relations
Robert S. Weiss - Chief Executive Officer, Director
Eugene J. Midlock - Chief Financial Officer, Senior Vice President
Steven Willoughby - Cleveland Research
Jeff Johnson-Robert W. Baird
Larry Biegelsen -Wachovia
Joanne Wuensch -BMO Capital Markets
Christopher Cooley- FTN Equities
Kim- JP Morgan
Michael Weinstein - JP Morgan
Jared Holt - Thomas Weisel Partners
Peter Bye - Jeffries
[Niquell] - Citigroup
Previous Statements by COO
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» The Cooper Companies, Inc. F4Q08 (Qtr End 10/31/08) Earnings Call Transcript
Thank you. Good afternoon everyone and welcome to Cooper Companies First Quarter 2009 Earnings Conference Call. I am Al White, vice president and treasurer of investor relations and joining me on today’s call are Bob Weiss, President and Chief Executive Officer and Gene Midlock, Chief Financial Officer.
Before we get started I would like to remind you that this call will contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, including all revenue and earnings per share guidance and other statements regarding anticipated results of operations, market conditions, and planned product launches.
Forward-looking statements necessarily depend on assumptions, data or methods that may be incorrect or imprecise and are subject to risks and uncertainties. Events that could cause our actual results and future actions as a company to differ materially from those described in forward looking statements are set forth under the caption Forward Looking Statements in today’s earnings release and are described in our SEC filings including the business section of Cooper’s annual report on Form 10-K. These are available publicly and on request from the Company’s investor relations department.
Now, before I turn the call over to Bob let me comment on the agenda for the call. We will keep the formal presentation to roughly 30 minutes of prepared remarks followed by 30 minutes of Q&A, so the call will last roughly one hour. We request that anyone asking questions please respect the time of other and keep your questions to a minimum so that we may get to as many of the callers as possible. Should anyone have additional questions, please call our Investor Relations line at 925-460-3663 and we will get back to you as soon as possible.
As a reminder this call is being recorded and a copy of the press release is available on our web site at www.coopercos.com under Investor Relations.
With that let me turn the call over to Bob for his opening remarks.
Al thank you, and good afternoon and evening to everyone. I think for starters I will just kind of say in spite of a global recession and a financial crisis, which continues at an unabated pace, this was a great quarter, certainly in my opinion.
Some of the key messages I would like you to take away from this conference call today are the following:
This was, of course, a solid quarter from the point of view of our bottom line with results showing $0.53 in earnings per share versus $0.15 in the prior year and $0.45 when we consider last years call outs.
Our top line growth was 3% and 4% in constant currency was at the top end of our guidance range in spite of a weak November that we had talked about previously.
Our new launches targeted for calendar quarter ended March 31, have already started, Proclear 1 day in Japan and Biofinity toric has been shipped in the US.
Our cash flow is looking much better than we had anticipated. Our Q109 results hurdled a $3.6 million restructuring related cost for a reduction in force and when I say reduction in force I don’t mean sales force I mean basically our operating infrastructure.
Like every other company in America and for that matter the world take the recession seriously; having said that the industry, consistent with the prior recession, remains recession resistant.
Q408 saw contact lenses data showed a respectable 4% of growth worldwide.
We had a solid quarter. We had $251 million in revenue plus 3% and 4% in constant currency. Cooper Vision had $211 million in revenue, 4%, and also 4% in constant currency. Cooper Surgical had $40 million in revenue, up 1%.
Earnings per share of $0.53 compares to the $0.15 for the prior year.
Timing of discrete tax items shifted somewhat leaving our effective tax rate for the quarter at 19%. We remain expecting a tax rate for the year at around 15%. Importantly, if you net the four items that we’ve identified, the $5.4 million accelerated depreciation, $3.6 million of the reduction in force or the restructuring.
Going the other way, other income, which includes $1.8 in the bond buy backs and $6.5 million of foreign exchange, you come out to a ballpark wash on those items, a slight negative of about $1 million; so, the $0.53 remains excluding those items.
From the point of new products and the Proclear family, that continued to drive the top line. In spite of the November of ’08 hurdle where we finished down in the first month of the quarter, we ended up 4% in actual constant currency. November started down 8% at $69 million worldwide. The drivers of our quarter included single use plus 18% in constant currency and in multi-focal this was also up 18% in constant currency.
New products, our silicone hydrogel products were $16.7 million; up more than double the prior year and the Proclear family continues a stellar performance, being 285 of our revenue up 22% in constant currency.
Geographically the America’s was up 1% while Europe was up 6% and Asia Pacific was up 9% all in constant currency. The US is our one issue, if you will, and it’s one category dimensional which is toric’s. Toric’s, while up outside the US +2% were down in the US 9%.
There we are addressing the issue and I’m happy to say that our new products are, as we indicated, going out the door. Biofinity toric has been launched. We are targeting 6,000 fitting sets in 2009 and 14,000 by 2010 in the US alone. Initial reports are all very favorable. It is too early to give too much feedback, but suffice it to say that we’re extremely excited about this launch. We expect a much more aggressive rollout compared to any other previous launch that we have done.
We have converted six lines in production for Biofinity, so essentially we have a lot of horsepower from a manufacturing perspective. With these six lines it will allow us to accelerate the launch of a broader range of toric products. In fact, our broader range, our complete range, will be accelerated by between 10 and 11 months. We will put a lot more color behind this rollout in the second quarter conference call.
On Japan, I’m happy to say that we are rolling out the product in Japan for Proclear 1 day.
The market for the fourth quarter of ’08 and calendar ’08 remained, as I indicated, recession resistant. Worldwide, for the fourth quarter, the market was up 4% in constant currency and for the fiscal year it was up 6%.