Cooper Companies Announces First Quarter Results.IRVINE, Calif.--(BW HealthWire)--Feb. 25, 1998-- Earnings Per Share Before Net Tax Benefit Up 50% to 36 Cents on 51% Revenue Gain CooperVision and CooperSurgical Expand Product Lines The Cooper Companies, Inc. (NYSE/PCX:COO) today reported results for its first fiscal quarter ended January 31, 1998. Revenue, at $42.8 million, was 51% above the first quarter of 1997. Income from operations was $5.9 million, up 44%. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were 39 cents compared with 28 cents in the first quarter of 1997. Before net tax benefits of 3 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , diluted earnings per share increased 50% to 36 cents from 24 cents before 4 cents per share in net tax benefits in 1997's first quarter. Per share amounts for 1997 have been restated to reflect the required adoption in the first quarter of fiscal 1998 of Statement of Financial Accounting Standards No. 128, "Earnings per Share." Commenting on operating results, A. Thomas Bender, president and chief executive officer, said, "The first quarter's results showed strong revenue performance in all three of our businesses with CooperVision's 87% increase reflecting our acquisition of Aspect Vision and continued strong growth in our U.S. planned replacement contact lens contact lens, thin plastic lens worn between the eye and eyelid that may be used instead of eyeglasses. Actors, models, and others wear them for appearance, and athletes use them for safety and convenience. business. HGA's revenue growth exceeded expectations, despite lower Medicare reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. rates that hurt margins. I'm also pleased with the new product development at CooperVision and CooperSurgical. The addition of several new products will further accelerate our performance during the year and in the future. "Although we had exceptional operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. growth of 44%, it did not match our 51% revenue growth for two principal reasons. First, the level of lower margin Aspect Vision sales in CooperVision's overall sales mix sales mix See product mix. was somewhat greater than expected. Second, HGA HGA High-Gain Antenna HGA Handweavers Guild of America HGA Hammel Green and Abrahamson HGA Hercules Graphics Adapter HGA Homogentisic Acid HGA Honor Guard Academy HGA Holy Guardian Angels (Reading, PA catholic church) felt the impact of government mandated Medicare rate reductions under the Tax Equity and Financial Responsibility Act of 1982 (TEFRA TEFRA (Tax Equity and Fiscal Responsibility Act of 1983) The law requiring federal income tax withholding on payments of dividend and interest to accounts without a certified tax identification number on file. See: W-9. ) and Hampton Hospital, HGA's main source of Medicare revenue, had greater than anticipated Medicare volume. Going forward, we expect HGA's operating income to grow in line with revenue as management increases the efficiency of medical service integration during psychiatric psy·chi·at·ric adj. Of or relating to psychiatry. psychiatric adjective Pertaining to psychiatry, mental disorders hospitalization hospitalization /hos·pi·tal·iza·tion/ (hos?pi-t'l-i-za´shun) 1. the placing of a patient in a hospital for treatment. 2. the term of confinement in a hospital. and our higher margin management services business begins to gain a larger share of HGA's total revenue." -0-
Business Unit Results
P&L OPERATING HIGHLIGHTS BY BUSINESS UNIT
Quarter Ended January 31,
($'s in millions)
Revenue Operating Income
% % %Revenue %Revenue
1998 1997 Inc. 1998 1997 Inc. 1998 1997
CVI $22.9 $12.2 87% $5.9 $4.4 35% 26% 36%
CSI 6.5 4.8 36% 0.8 0.4 85% 12% 9%
HGA 13.4 11.4 19% 0.7 0.6 11% 5% 5%
Sub-
total 42.8 28.4 51% 7.4 5.4 36% 17% 19%
HQ (1.5) (1.3) n/a
expense
TOTAL $42.8 $28.4 51% $5.9 $4.1 44% 14% 14%
CooperVision CVI CVI C (Language) Virtual Instrument CVI Clinical and Vaccine Immunology (journal) CVI Chronic Venous Insufficiency CVI Coastal Vulnerability Index CVI Canaan Valley Institute sales grew 87% over the first quarter of 1997 and include $6.1 million from Aspect Vision, the British contact lens manufacturer that the Company acquired last December. Without Aspect, CVI sales grew 37%. Aspect's earnings were not accretive during the first quarter but are expected to add to earnings during the remainder of the year. CVI's planned replacement/disposable lenses, including Aspect's products, now represent 52% of its total lens business and grew more than 50% during the quarter on a worldwide basis. Planned replacement is the fastest growing segment of the worldwide contact lens market. CVI introduced two new products in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. at the end of the quarter: -0-
-- Alliance Toric, a high quality, custom manufactured, deposit
resistant lens
-- Frequency 55, CVI's first entry into the semimonthly/monthly
planned replacement spherical lens segment, the largest segment
of the domestic contact lens market. Frequency 55 was developed
by Aspect Vision and represents an improvement in patient comfort
due to its superior edge design.
Later this spring CVI plans to introduce the Frequency 55 toric tor·ic adj. Of, relating to, or shaped like a torus or part of a torus. line of frequent replacement lenses designed for semimonthly sem·i·month·ly adj. Occurring or issued twice a month. n. pl. sem·i·month·lies A semimonthly publication. adv. At intervals twice monthly. See Usage Note at bi-1. Noun 1. or monthly disposability. CVI believes that it will be the first company to achieve national distribution with this modality modality /mo·dal·i·ty/ (mo-dal´i-te) 1. a method of application of, or the employment of, any therapeutic agent, especially a physical agent. 2. . CVI also announced that it has received ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9001 and CE mark approval for its manufacturing facilities ahead of the June 1998 deadline required for sales of its products in Common Market countries. CooperSurgical CooperSurgical sales grew 36% over last year's first quarter as sales from internally developed new products and from the acquisitions of Unimar and Marlow Surgical Technologies continued strong. Recently, CSI CSI Crime Scene Investigator CSI CompuServe, Inc. CSI Commodity Systems, Inc. CSI Commodity Systems Inc. (Boca Raton, FL) CSI Crime Scene Investigation (CBS TV show) CSI Christian Schools International has made significant progress with its new product portfolio announcing: -0-
-- Clearance from the U.S. Food and Drug Administration to market
its Cerveillance Scope, the first in a planned series of products
using digital imaging and proprietary software to provide
enhanced visualization and documentation in examinations of the
cervix. The Cerveillance Scope is a fully integrated compact
colposcope, an optical device used to examine the vagina and the
cervix. It refines image capture, enhancement and analysis
allowing measurement of lesion size and documentation of cervical
changes over time.
-- An agreement to purchase for $10 million a 10% equity position
in Litmus Concepts, Inc. (LCI) and the exclusive North American
license rights for the women's healthcare professional market
to four novel, patented diagnostic tests that comprise the
FemExam(R) Vaginal Fluid TestCard(TM) System. These tests,
designed for use primarily in the physician's office, rapidly and
economically screen and diagnose common vaginal infections such
as bacterial vaginosis, yeast and trichomonasis. They are
designed to replace current testing practices that are difficult,
costly and inconvenient to perform. The potential U.S. market for
vaginitis tests is estimated at 125 million annually. CSI expects
that, over the next three to five years, these products will add
a cumulative total of between $30 and $50 million to its revenue.
In addition, CSI has recently introduced two new products that further its strategy to consolidate, integrate and build critical mass in the women's healthcare market: -0-
-- Hyskon (32% dextran 70), a clear, viscous solution currently used
to distend the uterus during diagnostic and surgical procedures,
was acquired for cash and added to the CSI product line. CSI
expects Hyskon to add approximately $1.5 million to CSI's annual
revenue and be accretive to earnings in its first twelve months.
Hyskon can be used safely at low pressures for longer periods of
time and with greater visual clarity than competitive media can.
-- The CooperSurgical Infrared Coagulator, a device that creates
infrared energy for contact coagulation of condylomas, received
FDA clearance. Infrared coagulation is a simple, safe, rapid and
exact technique that causes no scaring. It can be used on an
outpatient basis without special training of physicians or
nurses. CSI expects this device to add approximately $3 to $5
million in cumulative revenue over the next three to five years.
These new CSI products will be featured at the meeting of the American College of Obstetricians and Gynecologists The American College of Obstetricians and Gynecologists (ACOG) is a professional association of medical doctors specializing in obstetrics and gynecology in the United States. It has a membership of over 49,000[1] and represents 90 percent of U.S. in May. Hospital Group of America -0-
HOSPITAL GROUP OF AMERICA
SELECTED STATISTICAL INFORMATION
Three months ended January 31,(1)
1998 1997 % Chg
Licensed
inpatient beds 319(2) 269 19%
Inpatient
admissions 1,733 1,454 19%
Total inpatient 21,519 16,445 31%
days
Average length of 11.7 11.2 4%
stay (days)
Total outpatient 14,526 12,109 20%
visits
(1) Data is for HGA owned hospitals only
(2) The Midwest Center for Youth and Families opened in April
1997 adding 50 beds
HGA revenue grew 19% over last year's first quarter reflecting a 19% increase in inpatient inpatient /in·pa·tient/ (in´pa-shent) a patient who comes to a hospital or other health care facility for diagnosis or treatment that requires an overnight stay. in·pa·tient n. admissions, a 20% rise in outpatient visits and a stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. length of stay compared with last year's first quarter. Operating income growth, however, was held to 11% compared with last year's first quarter as greater than anticipated incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. Medicare inpatient volume met with reduced reimbursement under TEFRA, which established a cap on the TEFRA target amount per Medicare discharge. Hampton Hospital, which receives the majority of HGA's Medicare reimbursement, felt the greatest impact from these lower rates during the quarter. HGA's Management Service Division now has eight agreements to manage psychiatric programs in acute care hospitals around the country. Recently, agreements were signed with the Orange County Community Hospital in California and with two hospitals in the Columbia HCA HCA, n.pr See acid, hydroxycitric. system in the Chicago area. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Statements in this press release that are not based on historical fact may be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements use forward-looking terminology such as "may", "will", "expect", "estimate", "anticipate", "continue" or similar terms. Actual results could differ materially from those contained in the forward-looking statements due to: major changes in business conditions and the economy in general, loss of key members of senior management, prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. disruption in the operations of the Company's manufacturing facilities or hospitals, inroads inroads Noun, pl make inroads into to start affecting or reducing: my gambling has made great inroads into my savings inroads npl to make inroads into [+ by new competitors or technologies, costs to integrate acquisitions, potential foreign exchange exposure, decisions to invest in research and development and other start-up projects, dilution to earnings per share associated with acquisitions or stock issuances, regulatory issues, unexpected changes in reimbursement rates and payor mix, environmental clean-up costs above those already accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. , litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , decisions to divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. businesses and factors listed from time to time in the Company's SEC reports, including the section entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Business" in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended October 31, 1997. The Cooper Companies, Inc. and its subsidiaries develop, manufacture and market specialty healthcare products and services. Corporate offices are located in Irvine and Pleasanton, Calif. CooperVision, Inc., headquartered in Irvine, Calif., with manufacturing facilities in Huntington Beach Huntington Beach, city (1990 pop. 181,519), Orange co., S Calif., on the Pacific coast, across from Santa Catalina Island, in an oil-producing area; inc. 1909. It manufactures aerospace vehicles, aircraft parts, optical instruments, and heat transfer equipment. , Calif., Rochester, N.Y., Toronto, Canada and Southampton, England, markets a broad range of contact lenses contact lenses contact npl → verres mpl de contact contact lenses contact npl → Kontaktlinsen pl contact lenses npl for the vision care market. CooperSurgical, Inc., headquartered in Shelton, Conn., markets diagnostic and surgical instruments A surgical instrument is a specially designed tool or device for performing specific actions of carrying out desired effects during a surgery or operation, such as modifying biological tissue, or to provide access or viewing it. , equipment and accessories for the gynecological gynecological /gy·ne·co·log·i·cal/ (-kah-loj´i-k'l) gynecologic. market. Hospital Group of America, Inc. provides psychiatric services through facilities in Delaware, Illinois, Indiana and New Jersey and satellite locations. NOTE: A toll free interactive telephone system at 1-800-334-1986 provides stock quotes, recent press releases and financial data. The Company's website address is www.coopercos.com. Alliance, Frequency, Hyskon, RUMI, Cerveillance System and Cerveillance Scope are trademarks of The Cooper Companies, Inc., its subsidiaries or affiliates. -0-
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Income
(In thousands, except per share figures)
(Unaudited)
Three Months Ended
January 31,
1998 1997
Net sales of products $ 29,384 $ 17,027
Net service revenue 13,454 11,349
Net operating revenue 42,838 28,376
Cost of products sold 11,277 5,031
Cost of services provided 12,770 10,682
Selling, general and administrative
expense 11,661 7,946
Research and development expense 456 324
Amortization of intangibles 763 288
Income from operations 5,911 4,105
Interest expense 1,150 1,229
Other income, net 795 20
Income before income taxes 5,556 2,896
(Benefit of) income taxes (437) (414)
Net income $ 5,993 $ 3,310
Earnings per share:
Basic $ 0.40 $ 0.28(a)
Diluted $ 0.39 $ 0.28(a)
Number of shares used to compute
earnings per share:
Basic 14,808 11,676(a)
Diluted 15,354 11,920(a)
Memo diluted earnings per share data:
Income before income taxes $ 0.36 $ 0.24
(a) Restated to reflect per share amounts in accordance with Statement of Financial Accounting Standards No. 128, "Earnings per Share," adopted by the Company in the first quarter of fiscal 1998.
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(In thousands)
(Unaudited)
January 31, October 31,
1998 1997
ASSETS
Current assets:
Cash and cash equivalents $ 8,757 $18,249
Trade receivables, net 38,084 27,469
Inventories 26,200 15,096
Other current assets 10,140 7,755
Total current assets 83,181 68,569
Property, plant and equipment, net 52,726 39,523
Intangibles, net 85,543 36,698
Other assets 30,165 30,508
$251,615 $175,298
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 3,831 $ 447
Other current liabilities 39,526 33,170
Total current liabilities 43,357 33,617
Long-term debt 64,837 9,125
Other liabilities 24,641 21,023
Total liabilities 132,835 63,765
Stockholders' equity 118,780 111,533
$251,615 $175,298
CONTACT: The Cooper Companies, Inc., Irvine Norris Battin, 714/597-4700 or 888/822-2660 714/673-4299 (Home) E-mail: nbattin@usa.net |
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