☒
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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☐
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Delaware
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94-2657368
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, $.10 par value
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COO
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The New York Stock Exchange
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page No.
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PART I.
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Three Months
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Nine Months
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||||||||||||
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2019
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2018
|
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2019
|
|
2018
|
||||||||
Net sales (Note 2)
|
$
|
679.4
|
|
|
$
|
660.0
|
|
|
$
|
1,961.8
|
|
|
$
|
1,881.3
|
|
Cost of sales
|
228.7
|
|
|
233.2
|
|
|
660.0
|
|
|
679.1
|
|
||||
Gross profit
|
450.7
|
|
|
426.8
|
|
|
1,301.8
|
|
|
1,202.2
|
|
||||
Selling, general and administrative expense
|
249.8
|
|
|
251.0
|
|
|
746.6
|
|
|
724.7
|
|
||||
Research and development expense
|
21.5
|
|
|
22.5
|
|
|
63.4
|
|
|
62.2
|
|
||||
Amortization of intangibles
|
37.2
|
|
|
37.7
|
|
|
110.7
|
|
|
110.5
|
|
||||
Impairment of intangibles
|
—
|
|
|
—
|
|
|
—
|
|
|
24.4
|
|
||||
Gain on sale of an intangible (Note 5)
|
—
|
|
|
—
|
|
|
(19.0
|
)
|
|
—
|
|
||||
Operating income
|
142.2
|
|
|
115.6
|
|
|
400.1
|
|
|
280.4
|
|
||||
Interest expense
|
16.7
|
|
|
22.8
|
|
|
53.3
|
|
|
59.9
|
|
||||
Other (income) expense, net
|
(1.5
|
)
|
|
2.4
|
|
|
(2.1
|
)
|
|
1.3
|
|
||||
Income before income taxes
|
127.0
|
|
|
90.4
|
|
|
348.9
|
|
|
219.2
|
|
||||
Provision (benefit) for income taxes (Note 7)
|
6.9
|
|
|
(10.4
|
)
|
|
3.2
|
|
|
180.0
|
|
||||
Net income
|
$
|
120.1
|
|
|
$
|
100.8
|
|
|
$
|
345.7
|
|
|
$
|
39.2
|
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Earnings per share - basic (Note 8)
|
$
|
2.43
|
|
|
$
|
2.05
|
|
|
$
|
7.00
|
|
|
$
|
0.80
|
|
Earnings per share - diluted (Note 8)
|
$
|
2.40
|
|
|
$
|
2.03
|
|
|
$
|
6.91
|
|
|
$
|
0.79
|
|
Number of shares used to compute earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
49.5
|
|
|
49.1
|
|
|
49.4
|
|
|
49.0
|
|
||||
Diluted
|
50.1
|
|
|
49.7
|
|
|
50.0
|
|
|
49.6
|
|
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Three Months
|
|
Nine Months
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
120.1
|
|
|
$
|
100.8
|
|
|
$
|
345.7
|
|
|
$
|
39.2
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment, net of tax
|
(65.2
|
)
|
|
(69.6
|
)
|
|
(51.1
|
)
|
|
(10.3
|
)
|
||||
Comprehensive income
|
$
|
54.9
|
|
|
$
|
31.2
|
|
|
$
|
294.6
|
|
|
$
|
28.9
|
|
|
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July 31, 2019
|
|
October 31, 2018
|
||||
ASSETS
|
|
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|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
112.7
|
|
|
$
|
77.7
|
|
Trade accounts receivable, net of allowance for doubtful accounts of $17.1 at July 31, 2019 and $19.0 at October 31, 2018
|
404.7
|
|
|
374.7
|
|
||
Inventories (Note 4)
|
502.1
|
|
|
468.8
|
|
||
Prepaid expense and other current assets
|
131.3
|
|
|
169.7
|
|
||
Total current assets
|
1,150.8
|
|
|
1,090.9
|
|
||
Property, plant and equipment, at cost
|
2,086.9
|
|
|
1,930.3
|
|
||
Less: accumulated depreciation and amortization
|
1,021.5
|
|
|
954.3
|
|
||
|
1,065.4
|
|
|
976.0
|
|
||
Goodwill (Note 5)
|
2,391.4
|
|
|
2,392.1
|
|
||
Other intangibles, net (Note 5)
|
1,438.6
|
|
|
1,521.3
|
|
||
Deferred tax assets
|
63.1
|
|
|
58.4
|
|
||
Other assets
|
63.5
|
|
|
74.1
|
|
||
|
$
|
6,172.8
|
|
|
$
|
6,112.8
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
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|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt (Note 6)
|
$
|
390.0
|
|
|
$
|
37.1
|
|
Accounts payable
|
141.5
|
|
|
146.4
|
|
||
Employee compensation and benefits
|
89.5
|
|
|
94.0
|
|
||
Other current liabilities
|
268.4
|
|
|
259.0
|
|
||
Total current liabilities
|
889.4
|
|
|
536.5
|
|
||
Long-term debt (Note 6)
|
1,422.6
|
|
|
1,985.7
|
|
||
Deferred tax liabilities
|
31.5
|
|
|
31.0
|
|
||
Long-term tax payable
|
124.8
|
|
|
141.5
|
|
||
Accrued pension liability and other
|
89.0
|
|
|
110.3
|
|
||
Total liabilities
|
2,557.3
|
|
|
2,805.0
|
|
||
Contingencies (see Note 13)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, 10 cents par value, shares authorized: 1.0; zero shares issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock, 10 cents par value, shares authorized: 120.0; issued 53.2 at July 31, 2019 and 52.8 at October 31, 2018
|
5.3
|
|
|
5.3
|
|
||
Additional paid-in capital
|
1,607.6
|
|
|
1,572.1
|
|
||
Accumulated other comprehensive loss
|
(481.8
|
)
|
|
(430.7
|
)
|
||
Retained earnings
|
2,905.4
|
|
|
2,576.0
|
|
||
Treasury stock at cost: 3.6 shares at July 31, 2019 and 3.6 shares at October 31, 2018
|
(421.2
|
)
|
|
(415.1
|
)
|
||
Noncontrolling interests
|
0.2
|
|
|
0.2
|
|
||
Stockholders’ equity (Note 10)
|
3,615.5
|
|
|
3,307.8
|
|
||
|
$
|
6,172.8
|
|
|
$
|
6,112.8
|
|
Consolidated Condensed Statements of Stockholders' Equity
|
|||||||||||||||||||||||||||||||||||||
|
Common Shares
|
|
Treasury Stock
|
|
Additional Paid-In Capital
|
|
Accumulated
Other Comprehensive Income (Loss) |
|
Retained Earnings
|
|
Treasury Stock
|
|
Noncontrolling Interests
|
|
Total
Stockholders' Equity |
||||||||||||||||||||||
(In millions)
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|
||||||||||||||||||||||||
Balance at November 1, 2017
|
48.8
|
|
|
$
|
4.9
|
|
|
3.6
|
|
|
$
|
0.3
|
|
|
$
|
1,526.7
|
|
|
$
|
(375.3
|
)
|
|
$
|
2,434.2
|
|
|
$
|
(415.1
|
)
|
|
$
|
0.1
|
|
|
$
|
3,175.8
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(122.5
|
)
|
|
—
|
|
|
—
|
|
|
(122.5
|
)
|
||||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102.3
|
|
||||||||
Issuance of common stock for stock plans, net
|
0.2
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
(10.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.5
|
)
|
||||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.7
|
|
||||||||
Balance at January 31, 2018
|
49.0
|
|
|
$
|
5.0
|
|
|
3.6
|
|
|
$
|
0.3
|
|
|
$
|
1,528.8
|
|
|
$
|
(273.0
|
)
|
|
$
|
2,310.3
|
|
|
$
|
(415.1
|
)
|
|
$
|
0.1
|
|
|
$
|
3,156.4
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60.9
|
|
|
—
|
|
|
—
|
|
|
60.9
|
|
||||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43.0
|
)
|
||||||||
Issuance of common stock for stock plans, net
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.6
|
|
||||||||
Balance at April 30, 2018
|
49.1
|
|
|
$
|
5.0
|
|
|
3.6
|
|
|
$
|
0.3
|
|
|
$
|
1,542.5
|
|
|
$
|
(316.0
|
)
|
|
$
|
2,371.2
|
|
|
$
|
(415.1
|
)
|
|
$
|
0.1
|
|
|
$
|
3,188.0
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100.8
|
|
|
—
|
|
|
—
|
|
|
100.8
|
|
||||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69.6
|
)
|
||||||||
Issuance of common stock for stock plans, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
||||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.1
|
|
||||||||
Balance at July 31, 2018
|
49.1
|
|
|
$
|
5.0
|
|
|
3.6
|
|
|
$
|
0.3
|
|
|
$
|
1,551.4
|
|
|
$
|
(385.6
|
)
|
|
$
|
2,470.5
|
|
|
$
|
(415.1
|
)
|
|
$
|
0.1
|
|
|
$
|
3,226.6
|
|
Consolidated Condensed Statements of Stockholders' Equity
|
|||||||||||||||||||||||||||||||||||||
|
Common Shares
|
|
Treasury Stock
|
|
Additional Paid-In Capital
|
|
Accumulated
Other Comprehensive Income (Loss) |
|
Retained Earnings
|
|
Treasury Stock
|
|
Noncontrolling Interests
|
|
Total
Stockholders' Equity |
||||||||||||||||||||||
(In millions)
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|
||||||||||||||||||||||||
Balance at November 1, 2018
|
49.2
|
|
|
$
|
5.0
|
|
|
3.6
|
|
|
$
|
0.3
|
|
|
$
|
1,572.1
|
|
|
$
|
(430.7
|
)
|
|
$
|
2,576.0
|
|
|
$
|
(415.1
|
)
|
|
$
|
0.2
|
|
|
$
|
3,307.8
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
103.2
|
|
|
—
|
|
|
—
|
|
|
103.2
|
|
||||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32.7
|
|
||||||||
Issuance of common stock for stock plans, net
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.0
|
)
|
||||||||
Treasury stock repurchase
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
|
—
|
|
|
(6.1
|
)
|
||||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.7
|
|
||||||||
ASU 2016-16 adoption (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13.3
|
)
|
|
—
|
|
|
—
|
|
|
(13.3
|
)
|
||||||||
Balance at January 31, 2019
|
49.3
|
|
|
$
|
5.0
|
|
|
3.6
|
|
|
$
|
0.3
|
|
|
$
|
1,574.8
|
|
|
$
|
(398.0
|
)
|
|
$
|
2,664.4
|
|
|
$
|
(421.2
|
)
|
|
$
|
0.2
|
|
|
$
|
3,425.5
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
122.4
|
|
|
—
|
|
|
—
|
|
|
122.4
|
|
||||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.6
|
)
|
||||||||
Issuance of common stock for stock plans, net
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.5
|
|
||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.4
|
|
||||||||
Balance at April 30, 2019
|
49.5
|
|
|
$
|
5.0
|
|
|
3.6
|
|
|
$
|
0.3
|
|
|
$
|
1,587.7
|
|
|
$
|
(416.6
|
)
|
|
$
|
2,786.8
|
|
|
$
|
(421.2
|
)
|
|
$
|
0.2
|
|
|
$
|
3,542.2
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120.1
|
|
|
—
|
|
|
—
|
|
|
120.1
|
|
||||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(65.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(65.2
|
)
|
||||||||
Issuance of common stock for stock plans, net
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.2
|
|
||||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.7
|
|
||||||||
Balance at July 31, 2019
|
49.6
|
|
|
$
|
5.0
|
|
|
3.6
|
|
|
$
|
0.3
|
|
|
$
|
1,607.6
|
|
|
$
|
(481.8
|
)
|
|
$
|
2,905.4
|
|
|
$
|
(421.2
|
)
|
|
$
|
0.2
|
|
|
$
|
3,615.5
|
|
|
|
|
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
345.7
|
|
|
$
|
39.2
|
|
Depreciation and amortization
|
210.2
|
|
|
204.6
|
|
||
Gain on sale of an intangible (Note 5)
|
(19.0
|
)
|
|
—
|
|
||
Impairment of intangibles
|
—
|
|
|
24.4
|
|
||
Increase in operating capital
|
(22.1
|
)
|
|
(141.1
|
)
|
||
Other non-cash items
|
(1.5
|
)
|
|
305.2
|
|
||
Net cash provided by operating activities
|
513.3
|
|
|
432.3
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property, plant and equipment
|
(207.3
|
)
|
|
(150.2
|
)
|
||
Acquisitions of businesses and assets, net of cash acquired, and other
|
(59.1
|
)
|
|
(1,320.8
|
)
|
||
Net cash used in investing activities
|
(266.4
|
)
|
|
(1,471.0
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from long-term debt
|
576.8
|
|
|
2,073.1
|
|
||
Repayments of long-term debt
|
(1,140.8
|
)
|
|
(971.1
|
)
|
||
Net proceeds from short-term debt
|
351.8
|
|
|
21.0
|
|
||
Net proceeds (payments) related to share-based compensation awards
|
7.7
|
|
|
(9.8
|
)
|
||
Dividends on common stock
|
(1.5
|
)
|
|
(1.5
|
)
|
||
Repurchase of common stock
|
(6.1
|
)
|
|
—
|
|
||
Debt acquisition costs
|
(0.2
|
)
|
|
(3.9
|
)
|
||
Payment of contingent consideration
|
—
|
|
|
(0.1
|
)
|
||
Net cash (used in) provided by financing activities
|
(212.3
|
)
|
|
1,107.7
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(1.6
|
)
|
|
(2.2
|
)
|
||
Net increase in cash, cash equivalents and restricted cash
|
33.0
|
|
|
66.8
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
80.2
|
|
|
88.8
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
113.2
|
|
|
$
|
155.6
|
|
Reconciliation of cash flow information:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
112.7
|
|
|
$
|
155.6
|
|
Restricted cash included in other current assets
|
0.5
|
|
|
—
|
|
||
Total cash, cash equivalents, and restricted cash
|
$
|
113.2
|
|
|
$
|
155.6
|
|
(In millions)
|
July 31, 2019
|
|
October 31, 2018
|
||||
Technology
|
$
|
12.3
|
|
|
$
|
—
|
|
Customer relationships
|
7.5
|
|
|
23.5
|
|
||
Trademarks
|
10.2
|
|
|
100.0
|
|
||
Composite intangible asset
|
—
|
|
|
1,061.9
|
|
||
Other
|
0.1
|
|
|
4.2
|
|
||
Total identifiable intangible assets
|
$
|
30.1
|
|
|
$
|
1,189.6
|
|
Goodwill
|
35.8
|
|
|
70.6
|
|
||
Net tangible assets
|
1.3
|
|
|
59.6
|
|
||
Total purchase price
|
$
|
67.2
|
|
|
$
|
1,319.8
|
|
(In millions)
|
Relative Fair Value
|
||
Composite intangible asset (1)
|
$
|
1,061.9
|
|
Assembled workforce intangible asset (2)
|
1.2
|
|
|
Property, plant and equipment
|
2.0
|
|
|
Inventory (3)
|
47.3
|
|
|
Other assets
|
9.4
|
|
|
Total assets acquired
|
$
|
1,121.8
|
|
Less: liabilities assumed
|
16.4
|
|
|
Total Purchase Price
|
$
|
1,105.4
|
|
(In millions)
|
July 31, 2019
|
|
October 31, 2018
|
||||
Raw materials
|
$
|
127.1
|
|
|
$
|
112.5
|
|
Work-in-process
|
13.4
|
|
|
12.6
|
|
||
Finished goods
|
361.6
|
|
|
343.7
|
|
||
|
$
|
502.1
|
|
|
$
|
468.8
|
|
(In millions)
|
CooperVision
|
|
CooperSurgical
|
|
Total
|
||||||
Balance at October 31, 2017
|
$
|
1,735.7
|
|
|
$
|
619.1
|
|
|
$
|
2,354.8
|
|
Net additions during the year ended October 31, 2018
|
36.8
|
|
|
34.4
|
|
|
71.2
|
|
|||
Translation
|
(29.6
|
)
|
|
(4.3
|
)
|
|
(33.9
|
)
|
|||
Balance at October 31, 2018
|
1,742.9
|
|
|
649.2
|
|
|
2,392.1
|
|
|||
Net additions during the nine months ended July 31, 2019
|
13.8
|
|
|
22.0
|
|
|
35.8
|
|
|||
Translation
|
(33.0
|
)
|
|
(3.5
|
)
|
|
(36.5
|
)
|
|||
Balance at July 31, 2019
|
$
|
1,723.7
|
|
|
$
|
667.7
|
|
|
$
|
2,391.4
|
|
|
July 31, 2019
|
|
October 31, 2018
|
|
|
||||||||||||
(In millions)
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Weighted Average Amortization Period (In years)
|
||||||||
Intangible assets with definite lives:
|
|
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
$
|
148.3
|
|
|
$
|
24.6
|
|
|
$
|
138.1
|
|
|
$
|
16.9
|
|
|
14
|
Composite intangible asset
|
1,061.9
|
|
|
123.9
|
|
|
1,061.9
|
|
|
70.8
|
|
|
15
|
||||
Technology
|
398.8
|
|
|
213.0
|
|
|
387.2
|
|
|
190.7
|
|
|
11
|
||||
Customer relationships
|
356.1
|
|
|
187.0
|
|
|
350.0
|
|
|
168.6
|
|
|
13
|
||||
License and distribution rights and other (1)
|
27.8
|
|
|
14.7
|
|
|
74.9
|
|
|
52.7
|
|
|
11
|
||||
|
1,992.9
|
|
|
$
|
563.2
|
|
|
2,012.1
|
|
|
$
|
499.7
|
|
|
14
|
||
Less: accumulated amortization and translation
|
563.2
|
|
|
|
|
499.7
|
|
|
|
|
|
||||||
Intangible assets with definite lives, net
|
1,429.7
|
|
|
|
|
1,512.4
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Intangible assets with indefinite lives, net (2)
|
8.9
|
|
|
|
|
8.9
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Total other intangible assets, net
|
$
|
1,438.6
|
|
|
|
|
$
|
1,521.3
|
|
|
|
|
|
Fiscal years:
|
(In millions)
|
||
Remainder of 2019
|
$
|
35.1
|
|
2020
|
135.6
|
|
|
2021
|
134.3
|
|
|
2022
|
132.4
|
|
|
2023
|
130.2
|
|
|
Thereafter
|
862.1
|
|
|
Total remaining amortization for intangible assets with definite lives
|
$
|
1,429.7
|
|
(In millions)
|
July 31, 2019
|
|
October 31, 2018
|
||||
Overdraft and other credit facilities
|
$
|
65.0
|
|
|
$
|
37.1
|
|
Term loans
|
325.0
|
|
|
—
|
|
||
Short-term Debt
|
$
|
390.0
|
|
|
$
|
37.1
|
|
|
|
|
|
||||
Revolving credit
|
$
|
—
|
|
|
$
|
439.0
|
|
Term loans
|
1,425.0
|
|
|
1,550.0
|
|
||
Other
|
0.2
|
|
|
0.2
|
|
||
Less: unamortized debt issuance cost
|
(2.6
|
)
|
|
(3.5
|
)
|
||
Long-term Debt
|
$
|
1,422.6
|
|
|
$
|
1,985.7
|
|
|
|
|
|
||||
Total Debt
|
$
|
1,812.6
|
|
|
$
|
2,022.8
|
|
•
|
Interest Coverage Ratio, as defined, to be at least 3.00 to 1.00 at all times.
|
•
|
Total Leverage Ratio, as defined, to be no higher than 3.75 to 1.00.
|
Periods Ended July 31,
|
Three Months
|
|
Nine Months
|
||||||||||||
(In millions, except per share amounts)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
120.1
|
|
|
$
|
100.8
|
|
|
$
|
345.7
|
|
|
$
|
39.2
|
|
Basic:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares
|
49.5
|
|
|
49.1
|
|
|
49.4
|
|
|
49.0
|
|
||||
Basic earnings per share
|
$
|
2.43
|
|
|
$
|
2.05
|
|
|
$
|
7.00
|
|
|
$
|
0.80
|
|
Diluted:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares
|
49.5
|
|
|
49.1
|
|
|
49.4
|
|
|
49.0
|
|
||||
Effect of potential dilutive shares
|
0.6
|
|
|
0.6
|
|
|
0.6
|
|
|
0.6
|
|
||||
Diluted weighted average common shares
|
50.1
|
|
|
49.7
|
|
|
50.0
|
|
|
49.6
|
|
||||
Diluted earnings per share attributable to Cooper stockholders
|
$
|
2.40
|
|
|
$
|
2.03
|
|
|
$
|
6.91
|
|
|
$
|
0.79
|
|
Periods Ended July 31,
|
Three Months
|
|
Nine Months
|
|||||||||
(In thousands, except exercise prices)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||
Number of stock option shares excluded
|
—
|
|
|
257
|
|
|
198
|
|
|
257
|
|
|
Range of exercise prices
|
n/a
|
|
|
$226.30-$230.09
|
|
|
$
|
254.77
|
|
|
$226.30-$230.09
|
|
Numbers of restricted stock units excluded
|
18
|
|
|
78
|
|
|
19
|
|
|
78
|
|
Periods Ended July 31,
|
Three Months
|
|
Nine Months
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Selling, general and administrative expense
|
$
|
6.8
|
|
|
$
|
6.7
|
|
|
$
|
22.1
|
|
|
$
|
30.3
|
|
Cost of sales
|
1.0
|
|
|
0.9
|
|
|
3.9
|
|
|
2.6
|
|
||||
Research and development expense
|
0.5
|
|
|
0.5
|
|
|
2.4
|
|
|
1.6
|
|
||||
Total share-based compensation expense
|
$
|
8.3
|
|
|
$
|
8.1
|
|
|
$
|
28.4
|
|
|
$
|
34.5
|
|
Related income tax benefit
|
$
|
1.1
|
|
|
$
|
1.5
|
|
|
$
|
4.0
|
|
|
$
|
7.1
|
|
(In millions)
|
Foreign Currency Translation Adjustment
|
|
Minimum Pension Liability
|
|
Total
|
||||||
Balance at October 31, 2017
|
$
|
(353.7
|
)
|
|
$
|
(21.6
|
)
|
|
$
|
(375.3
|
)
|
Gross change in value during the year ended October 31, 2018
|
(58.5
|
)
|
|
11.0
|
|
|
(47.5
|
)
|
|||
Tax effect for the period
|
—
|
|
|
(3.1
|
)
|
|
(3.1
|
)
|
|||
ASU 2018-02 adoption(1)
|
—
|
|
|
(4.8
|
)
|
|
(4.8
|
)
|
|||
Balance at October 31, 2018
|
$
|
(412.2
|
)
|
|
$
|
(18.5
|
)
|
|
$
|
(430.7
|
)
|
Gross change in value during the nine months ended July 31, 2019
|
(51.1
|
)
|
|
—
|
|
|
(51.1
|
)
|
|||
Balance at July 31, 2019
|
$
|
(463.3
|
)
|
|
$
|
(18.5
|
)
|
|
$
|
(481.8
|
)
|
(1)
|
Represents reclassification to retained earnings from adoption of ASU 2018-02. Refer to our Annual Report on Form 10-K for the fiscal year ended October 31, 2018 for more details.
|
Periods Ended July 31,
|
Three Months
|
|
Nine Months
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
$
|
2.2
|
|
|
$
|
2.7
|
|
|
$
|
7.6
|
|
|
$
|
8.1
|
|
Interest cost
|
2.1
|
|
|
1.3
|
|
|
4.6
|
|
|
3.8
|
|
||||
Expected return on plan assets
|
(2.8
|
)
|
|
(2.3
|
)
|
|
(7.4
|
)
|
|
(6.9
|
)
|
||||
Recognized net actuarial loss
|
(0.2
|
)
|
|
0.4
|
|
|
0.6
|
|
|
1.2
|
|
||||
Net periodic pension cost
|
$
|
1.3
|
|
|
$
|
2.1
|
|
|
$
|
5.4
|
|
|
$
|
6.2
|
|
Periods Ended July 31,
|
Three Months
|
|
Nine Months
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
CooperVision net sales by category:
|
|
|
|
|
|
|
|
||||||||
Toric lens
|
$
|
163.1
|
|
|
$
|
153.6
|
|
|
$
|
464.4
|
|
|
$
|
442.2
|
|
Multifocal lens
|
52.4
|
|
|
52.7
|
|
|
151.1
|
|
|
148.8
|
|
||||
Single-use sphere lens
|
146.3
|
|
|
137.6
|
|
|
413.6
|
|
|
378.3
|
|
||||
Non single-use sphere and other
|
147.3
|
|
|
145.2
|
|
|
434.2
|
|
|
432.1
|
|
||||
Total CooperVision net sales
|
509.1
|
|
|
489.1
|
|
|
1,463.3
|
|
|
1,401.4
|
|
||||
CooperSurgical net sales by category:
|
|
|
|
|
|
|
|
||||||||
Office and surgical products
|
106.3
|
|
|
104.4
|
|
|
307.7
|
|
|
290.4
|
|
||||
Fertility
|
64.0
|
|
|
66.5
|
|
|
190.8
|
|
|
189.5
|
|
||||
CooperSurgical net sales
|
170.3
|
|
|
170.9
|
|
|
498.5
|
|
|
479.9
|
|
||||
Total net sales
|
$
|
679.4
|
|
|
$
|
660.0
|
|
|
$
|
1,961.8
|
|
|
$
|
1,881.3
|
|
Operating income (loss):
|
|
|
|
|
|
|
|
||||||||
CooperVision
|
$
|
134.2
|
|
|
$
|
125.4
|
|
|
$
|
375.9
|
|
|
$
|
361.1
|
|
CooperSurgical
|
20.6
|
|
|
1.6
|
|
|
59.0
|
|
|
(37.5
|
)
|
||||
Corporate
|
(12.6
|
)
|
|
(11.4
|
)
|
|
(34.8
|
)
|
|
(43.2
|
)
|
||||
Total operating income
|
142.2
|
|
|
115.6
|
|
|
400.1
|
|
|
280.4
|
|
||||
Interest expense
|
16.7
|
|
|
22.8
|
|
|
53.3
|
|
|
59.9
|
|
||||
Other (income) expense, net
|
(1.5
|
)
|
|
2.4
|
|
|
(2.1
|
)
|
|
1.3
|
|
||||
Income before income taxes
|
$
|
127.0
|
|
|
$
|
90.4
|
|
|
$
|
348.9
|
|
|
$
|
219.2
|
|
(In millions) [to update]
|
July 31, 2019
|
|
October 31, 2018
|
||||
Total identifiable assets:
|
|
|
|
||||
CooperVision
|
$
|
3,801.3
|
|
|
$
|
3,746.0
|
|
CooperSurgical
|
2,184.4
|
|
|
2,201.7
|
|
||
Corporate
|
187.1
|
|
|
165.1
|
|
||
Total
|
$
|
6,172.8
|
|
|
$
|
6,112.8
|
|
Periods Ended July 31,
|
Three Months
|
|
Nine Months
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net sales to unaffiliated customers by country of domicile:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
306.2
|
|
|
$
|
302.1
|
|
|
$
|
891.1
|
|
|
$
|
856.8
|
|
Europe
|
222.7
|
|
|
224.0
|
|
|
642.0
|
|
|
637.8
|
|
||||
Rest of world
|
150.5
|
|
|
133.9
|
|
|
428.7
|
|
|
386.7
|
|
||||
Total
|
$
|
679.4
|
|
|
$
|
660.0
|
|
|
$
|
1,961.8
|
|
|
$
|
1,881.3
|
|
(In millions)
|
July 31, 2019
|
|
October 31, 2018
|
||||
Net property, plant and equipment by country of domicile:
|
|
|
|
||||
United States
|
$
|
589.7
|
|
|
$
|
516.7
|
|
Europe
|
339.7
|
|
|
340.7
|
|
||
Rest of world
|
136.0
|
|
|
118.6
|
|
||
Total
|
$
|
1,065.4
|
|
|
$
|
976.0
|
|
•
|
Adverse changes in global political and economic conditions, and related uncertainty caused by the United Kingdom’s election to withdraw from the European Union and its potential impact on, among other things, the movement of goods and materials in our supply chain, additional regulatory approvals and requirements, and increased tariffs and duties.
|
•
|
Adverse changes in the global or regional general business, political and economic conditions, including the impact of continuing uncertainty and instability of certain countries, such as China, that could adversely affect our global markets, and the potential adverse economic impact and related uncertainty caused by these items, including but not limited to, escalating global trade barriers including additional tariffs.
|
•
|
Foreign currency exchange rate and interest rate fluctuations including the risk of fluctuations in the value of foreign currencies or interest rates that would decrease our revenues and earnings.
|
•
|
Changes in tax laws or their interpretation and changes in statutory tax rates, including but not limited to, the U.S., the United Kingdom and other countries may affect our taxation of earnings recognized in foreign jurisdictions and/or negatively impact our effective tax rate.
|
•
|
Our existing indebtedness and associated interest expense, most of which is variable and impacted by rate increases, which could adversely affect our financial health or limit our ability to borrow additional funds.
|
•
|
Acquisition-related adverse effects including the failure to successfully obtain the anticipated revenues, margins and earnings benefits of acquisitions, integration delays or costs and the requirement to record significant adjustments to the preliminary fair value of assets acquired and liabilities assumed within the measurement period, required regulatory approvals for an acquisition not being obtained or being delayed or subject to conditions that are not anticipated, adverse impacts of changes to accounting controls and reporting procedures, contingent liabilities or indemnification obligations, increased leverage and lack of access to available financing (including financing for the acquisition or refinancing of debt owed by us on a timely basis and on reasonable terms).
|
•
|
Compliance costs and potential liability in connection with U.S. and foreign laws and health care regulations pertaining to privacy and security of third- party information, such as HIPAA in the U.S. and the General Data Protection Regulation requirements in Europe, including but not limited to those resulting from data security breaches.
|
•
|
A major disruption in the operations of our manufacturing, accounting and financial reporting, research and development, distribution facilities or raw material supply chain due to integration of acquisitions, natural disasters or other causes.
|
•
|
A major disruption in the operations of our manufacturing, accounting and financial reporting, research and development or distribution facilities due to technological problems, including any related to our information systems maintenance, enhancements or new system deployments, integrations or upgrades.
|
•
|
Market consolidation of large customers globally through mergers or acquisitions resulting in a larger proportion or concentration of our business being derived from fewer customers.
|
•
|
Disruptions in supplies of raw materials, particularly components used to manufacture our silicone hydrogel lenses.
|
•
|
New U.S. and foreign government laws and regulations, and changes in existing laws, regulations and enforcement guidance, which affect areas of our operations including, but not limited to, those affecting the health care industry, including the contact lens industry specifically and the medical device or pharmaceutical industries generally.
|
•
|
Legal costs, insurance expenses, settlement costs and the risk of an adverse decision, prohibitive injunction or settlement related to product liability, patent infringement or other litigation.
|
•
|
Limitations on sales following product introductions due to poor market acceptance.
|
•
|
New competitors, product innovations or technologies, including but not limited to, technological advances by competitors, new products and patents attained by competitors, and competitors' expansion through acquisitions.
|
•
|
Reduced sales, loss of customers and costs and expenses related to product recalls and warning letters.
|
•
|
Failure to receive, or delays in receiving, regulatory approvals for products.
|
•
|
Failure of our customers and end users to obtain adequate coverage and reimbursement from third-party payors for our products and services.
|
•
|
The requirement to provide for a significant liability or to write off, or accelerate depreciation on, a significant asset, including goodwill, other intangible assets and idle manufacturing facilities and equipment.
|
•
|
The success of our research and development activities and other start-up projects.
|
•
|
Dilution to earnings per share from acquisitions or issuing stock.
|
•
|
Impact and costs incurred from changes in accounting standards and policies.
|
•
|
Environmental risks, including increasing environmental legislation and the broader impacts of climate change.
|
•
|
Other events described in our Securities and Exchange Commission filings, including the “Business” and “Risk Factors” sections in our Annual Report on Form 10-K for the fiscal year ended October 31, 2018, as such Risk Factors may be updated in quarterly filings.
|
•
|
Gross profit $450.7 million, up 6% from $426.8 million in the prior year period
|
•
|
Operating income $142.2 million, up 23% from $115.6 million in the prior year period
|
•
|
Diluted earnings per share of $2.40, up 18% from $2.03 per share in the prior year period
|
•
|
Cash provided by operations $ 196.7 million, compared to $235.3 million in the prior year period.
|
•
|
Gross profit $1,301.8 million, up 8% from $1,202.2 million in the prior year period
|
•
|
Operating income $400.1 million, up 43% from $280.4 million in the prior year period
|
•
|
Diluted earnings per share of $6.91, up from $0.79 per share in the prior year period
|
•
|
Cash provided by operations $513.3 million, compared to $432.3 million in the prior year period.
|
•
|
Blanchard Contact Lenses on December 28, 2018 - a privately-held scleral lens company, which expands CooperVision's specialty and scleral lens portfolio.
|
•
|
Blueyes on January 4, 2018 - a long-standing distribution partner, which had a leading position in the distribution of contact lenses to the optical and pharmacy sector in Israel
|
•
|
Paragon Vision Sciences on December 1, 2017 - a leading provider of orthokeratology (ortho-k) specialty contact lenses and oxygen permeable rigid contact lens materials.
|
•
|
Incisive Surgical Inc. on December 31, 2018 - a privately-held U.S. medical device company that develops mechanical surgical solutions for skin closure.
|
•
|
LifeGlobal Group on April 3, 2018 - a privately held company that specializes primarily in IVF media. LifeGlobal’s product categories include media products, IVF laboratory air filtration products and dishware
|
•
|
PARAGARD on November 1, 2017 - CooperSurgical acquired the assets of the PARAGARD IUD business from Teva Pharmaceuticals Industries Limited for $1.1 billion. PARAGARD broadened and strengthened CooperSurgical's women's health product portfolio and it is the only non-hormonal, long lasting, reversible contraceptive option approved by the FDA and available in the United States. IUDs represent a large and growing segment of the Long Acting Reversible Contraceptive market.
|
|
Three Months
|
|
Nine Months
|
||||||||||||||
|
Percentage of Sales
|
|
2019 vs 2018 % Change in Absolute Values
|
|
Percentage of Sales
|
|
2019 vs 2018 % Change in Absolute Values
|
||||||||||
Periods Ended July 31,
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||||||
Net sales
|
100
|
%
|
|
100
|
%
|
|
3
|
%
|
|
100
|
%
|
|
100
|
%
|
|
4
|
%
|
Cost of sales
|
34
|
%
|
|
35
|
%
|
|
(2
|
)%
|
|
34
|
%
|
|
36
|
%
|
|
(3
|
)%
|
Gross profit
|
66
|
%
|
|
65
|
%
|
|
6
|
%
|
|
66
|
%
|
|
64
|
%
|
|
8
|
%
|
Selling, general and administrative expense
|
37
|
%
|
|
38
|
%
|
|
—
|
%
|
|
38
|
%
|
|
39
|
%
|
|
3
|
%
|
Research and development expense
|
3
|
%
|
|
3
|
%
|
|
(5
|
)%
|
|
3
|
%
|
|
3
|
%
|
|
2
|
%
|
Amortization of intangibles
|
5
|
%
|
|
6
|
%
|
|
(1
|
)%
|
|
6
|
%
|
|
6
|
%
|
|
—
|
%
|
Impairment of intangibles
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
Gain on sale of an intangible
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
|
—
|
%
|
Operating income
|
21
|
%
|
|
18
|
%
|
|
23
|
%
|
|
20
|
%
|
|
15
|
%
|
|
43
|
%
|
Periods Ended July 31,
|
Three Months
|
|
Nine Months
|
||||||||||||||||||||||||
($ in millions)
|
2019
|
|
2018
|
|
Increase (Decrease)
|
2019 vs 2018 % Change
|
|
2019
|
|
2018
|
|
Increase
|
2019 vs 2018
% Change |
||||||||||||||
CooperVision
|
$
|
509.1
|
|
|
$
|
489.1
|
|
|
$
|
20.0
|
|
4
|
%
|
|
$
|
1,463.3
|
|
|
$
|
1,401.4
|
|
|
$
|
61.9
|
|
4
|
%
|
CooperSurgical
|
170.3
|
|
|
170.9
|
|
|
(0.6
|
)
|
—
|
%
|
|
498.5
|
|
|
479.9
|
|
|
18.6
|
|
4
|
%
|
||||||
Net sales
|
$
|
679.4
|
|
|
$
|
660.0
|
|
|
$
|
19.4
|
|
3
|
%
|
|
$
|
1,961.8
|
|
|
$
|
1,881.3
|
|
|
$
|
80.5
|
|
4
|
%
|
•
|
Spherical lenses including lenses that correct near- and farsightedness uncomplicated by more complex visual defects
|
•
|
Toric and multifocal lenses including lenses that, in addition to correcting near- and farsightedness, address more complex visual defects such as astigmatism and presbyopia by adding optical properties of cylinder and axis, which correct for irregularities in the shape of the cornea.
|
Three Months Ended July 31,
|
|
|
|
|
|
|
||||||
($ in millions)
|
|
2019
|
|
|
2018
|
|
2019 vs 2018
% Change |
|||||
Toric
|
|
$
|
163.1
|
|
|
|
$
|
153.6
|
|
|
6
|
%
|
Multifocal
|
|
52.4
|
|
|
|
52.7
|
|
|
(1
|
)%
|
||
Single-use spheres
|
|
146.3
|
|
|
|
137.6
|
|
|
6
|
%
|
||
Non single-use sphere, other
|
|
147.3
|
|
|
|
145.2
|
|
|
1
|
%
|
||
|
|
$
|
509.1
|
|
|
|
$
|
489.1
|
|
|
4
|
%
|
Nine Months Ended July 31,
|
|
|
|
|
|
||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019 vs 2018
% Change |
|||||
Toric
|
|
$
|
464.4
|
|
|
$
|
442.2
|
|
|
5
|
%
|
Multifocal
|
|
151.1
|
|
|
148.8
|
|
|
2
|
%
|
||
Single-use spheres
|
|
413.6
|
|
|
378.3
|
|
|
9
|
%
|
||
Non single-use sphere, other
|
|
434.2
|
|
|
432.1
|
|
|
—
|
%
|
||
|
|
$
|
1,463.3
|
|
|
$
|
1,401.4
|
|
|
4
|
%
|
•
|
Toric lenses grew primarily through the success of Biofinity, clariti and MyDay
|
•
|
Multifocal lenses decreased in three months ended and increased in nine months ended, compared to fiscal 2018 due to higher Biofinity and clariti sales, partially offset by decrease in sales of Proclear and negative impact of foreign exchange rates
|
•
|
Single-use sphere lenses growth was primarily attributed to clariti and MyDay lenses
|
•
|
Non-single-use spheres increased in three months ended and remained relatively flat in nine months ended, compared to fiscal 2018 due to higher Biofinity sales, partially offset by the negative impact of foreign exchange rates
|
•
|
"Other" products primarily include lens care which represent approximately 2% of net sales in the three and nine months ended, compared to 2% and 3% in the three and nine months ended July 31, 2018, respectively
|
•
|
Increased sales of silicone hydrogel products were partially offset by lower sales of older hydrogel products. Total silicone hydrogel products grew 9% and 10% in three and nine months ended, respectively, representing 72% and 71% of net sales in the three and nine months ended July 31, 2019 compared to 69% and 68% in the three and nine months ended July 31, 2018
|
•
|
Foreign exchange rates negatively impacted sales by approximately $11.0 million and $46.6 million in the three and nine months ended, respectively, primarily attributable to the Euro and British Pound
|
•
|
Sales growth was primarily driven by increases in the volume of lenses sold. Average realized prices by product did not materially influence sales growth.
|
Periods Ended July 31,
|
|
Three Months
|
|
Nine Months
|
||||||||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019 vs 2018 % Change
|
|
2019
|
|
2018
|
|
2019 vs 2018
% Change |
||||||||||
Americas
|
|
$
|
195.0
|
|
|
$
|
184.4
|
|
|
6
|
%
|
|
$
|
564.4
|
|
|
$
|
537.1
|
|
|
5
|
%
|
EMEA
|
|
196.0
|
|
|
199.2
|
|
|
(2
|
)%
|
|
561.4
|
|
|
560.4
|
|
|
—
|
%
|
||||
Asia Pacific
|
|
118.1
|
|
|
105.5
|
|
|
12
|
%
|
|
337.5
|
|
|
303.9
|
|
|
11
|
%
|
||||
|
|
$
|
509.1
|
|
|
$
|
489.1
|
|
|
4
|
%
|
|
$
|
1,463.3
|
|
|
$
|
1,401.4
|
|
|
4
|
%
|
Three Months Ended July 31,
|
|
|
|
|
||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019 vs 2018
% Change |
|
|||||
Office and surgical products
|
|
$
|
106.3
|
|
|
$
|
104.4
|
|
|
2
|
%
|
|
Fertility
|
|
64.0
|
|
|
66.5
|
|
|
(4
|
)%
|
|
||
|
|
$
|
170.3
|
|
|
$
|
170.9
|
|
|
—
|
%
|
|
Nine Months Ended July 31,
|
|
|
|
|||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019 vs 2018
% Change |
|
|||||
Office and surgical products
|
|
$
|
307.7
|
|
|
$
|
290.4
|
|
|
6
|
%
|
|
Fertility
|
|
190.8
|
|
|
189.5
|
|
|
1
|
%
|
|
||
|
|
$
|
498.5
|
|
|
$
|
479.9
|
|
|
4
|
%
|
|
•
|
Office and surgical products increased compared to prior year periods due to continued growth in PARAGARD and surgical products, primarily Uterine Manipulators, Surgical Retractors and recently acquired products of Incisive Surgical, partially offset by decrease in revenue on Filshie Clip system. On February 1, 2019, the Company agreed to the early termination of an exclusive distribution agreement which had given CooperSurgical the rights to distribute the Filshie Clip System in the United States.
|
•
|
In the three months ended July 31, 2019, Fertility net sales decreased due to the exit of the carrier screening and non-invasive prenatal testing (NIPT) product lines on June 1, 2018. However, Fertility net sales increased in nine months ended July 31, 2019 compared to fiscal 2018, primarily due to increased sales of IVF consumables, IVF equipment and LifeGlobal products, partially offset by a decrease in diagnostics revenue.
|
•
|
Unit growth and product mix positively impacted sales growth.
|
Gross Profit Percentage of Net Sales
|
|
Three Months
|
|
Nine Months
|
||||||||
Periods Ended July 31,
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||
CooperVision
|
|
65
|
%
|
|
66
|
%
|
|
65
|
%
|
|
66
|
%
|
CooperSurgical
|
|
71
|
%
|
|
62
|
%
|
|
69
|
%
|
|
58
|
%
|
Consolidated
|
|
66
|
%
|
|
65
|
%
|
|
66
|
%
|
|
64
|
%
|
•
|
the unfavorable impact to revenue from exchange rate fluctuations, primarily attributable to the Euro and British Pound; and product mix;
|
•
|
$3.6 million and $6.5 million of integration and manufacturing related cost;
|
•
|
partially offset by an increase in sales of higher margin products including Biofinity.
|
•
|
three and nine months ended July 31, 2018 included $1.9 million and $11.8 million, respectively, of product transition, integration and costs associated with the impact of Hurricane Maria on our Puerto Rico manufacturing facility
|
•
|
an increase in sales of PARAGARD IUD product and inclusion of LifeGlobal products with higher gross margin;
|
•
|
partially offset by $2.9 million and $11.2 million of integration and manufacturing related costs
|
•
|
three and nine months ended July 31, 2018 included $12.7 million and $49.3 million, respectively, of PARAGARD and LifeGlobal acquisitions inventory step-up charges.
|
•
|
three and nine months ended July 31, 2018 included $3.6 million and $11.5 million, respectively, of integration and acquisitions costs.
|
Three Months Ended July 31,
($ in millions) |
|
2019
|
|
% Net
Sales
|
|
2018
|
|
% Net
Sales
|
|
2019 vs 2018 % Change
|
|||||||
CooperVision
|
|
171.9
|
|
|
34
|
%
|
|
$
|
168.9
|
|
|
35
|
%
|
|
2
|
%
|
|
CooperSurgical
|
|
65.3
|
|
|
38
|
%
|
|
70.7
|
|
|
41
|
%
|
|
(8
|
)%
|
||
Corporate
|
|
12.6
|
|
|
—
|
|
|
11.4
|
|
|
—
|
|
|
10
|
%
|
||
|
|
$
|
249.8
|
|
|
37
|
%
|
|
$
|
251.0
|
|
|
38
|
%
|
|
—
|
%
|
Nine Months Ended July 31,
($ in millions)
|
|
2019
|
|
% Net
Sales
|
|
2018
|
|
% Net
Sales
|
|
2019 vs 2018 % Change
|
|||||||
CooperVision
|
|
$
|
509.7
|
|
|
35
|
%
|
|
$
|
490.9
|
|
|
35
|
%
|
|
4
|
%
|
CooperSurgical
|
|
202.1
|
|
|
41
|
%
|
|
190.6
|
|
|
40
|
%
|
|
6
|
%
|
||
Corporate
|
|
34.8
|
|
|
—
|
|
|
43.2
|
|
|
—
|
|
|
(19
|
)%
|
||
|
|
$
|
746.6
|
|
|
38
|
%
|
|
$
|
724.7
|
|
|
39
|
%
|
|
3
|
%
|
Three Months Ended July 31,
($ in millions) |
|
2019
|
|
% Net
Sales |
|
2018
|
|
% Net
Sales |
|
2019 vs 2018
% Change |
|||||||
CooperVision
|
|
$
|
13.6
|
|
|
3
|
%
|
|
$
|
14.6
|
|
|
3
|
%
|
|
(7
|
)%
|
CooperSurgical
|
|
7.9
|
|
|
5
|
%
|
|
7.9
|
|
|
5
|
%
|
|
—
|
%
|
||
|
|
$
|
21.5
|
|
|
3
|
%
|
|
$
|
22.5
|
|
|
3
|
%
|
|
(5
|
)%
|
Nine Months Ended July 31,
($ in millions)
|
|
2019
|
|
% Net
Sales |
|
2018
|
|
% Net
Sales |
|
2019 vs 2018
% Change |
|||||||
CooperVision
|
|
$
|
40.1
|
|
|
3
|
%
|
|
$
|
39.7
|
|
|
3
|
%
|
|
1
|
%
|
CooperSurgical
|
|
23.3
|
|
|
5
|
%
|
|
22.5
|
|
|
5
|
%
|
|
4
|
%
|
||
|
|
$
|
63.4
|
|
|
3
|
%
|
|
$
|
62.2
|
|
|
3
|
%
|
|
2
|
%
|
•
|
CooperVision's R&D decreased in the three months ended July 31, 2019 compared to fiscal 2018 due to lower head count and timing of clinical spend. The increase in absolute dollars in the nine months ended July 31, 2019 compared to fiscal 2018 is mainly due to increased costs from clinical studies. As a percentage of sales, R&D expense remained flat. CooperVision's R&D activities are primarily focused on the development of contact lenses, manufacturing technology and process enhancements.
|
•
|
The increase in CooperSurgical's R&D in the nine months ended July 31, 2019 compared to fiscal 2018 was primarily due to acquisitions, increased investment and activities in developing new products and services and upgrades of existing products. As a percentage of sales, R&D expense remained flat. CooperSurgical's R&D activities include diagnostics, IVF product development, design and upgrade of surgical procedure devices.
|
Three Months Ended July 31,
($ in millions) |
2019
|
|
% Net
Sales |
|
2018
|
|
% Net
Sales |
|
2019 vs 2018
% Change |
|||||||
CooperVision
|
$
|
10.7
|
|
|
2
|
%
|
|
$
|
11.8
|
|
|
2
|
%
|
|
(10
|
)%
|
CooperSurgical
|
26.5
|
|
|
16
|
%
|
|
25.9
|
|
|
15
|
%
|
|
2
|
%
|
||
|
$
|
37.2
|
|
|
5
|
%
|
|
$
|
37.7
|
|
|
6
|
%
|
|
(1
|
)%
|
Nine Months Ended July 31,
($ in millions)
|
2019
|
|
% Net
Sales |
|
2018
|
|
% Net
Sales |
|
2019 vs 2018
% Change |
|||||||
CooperVision
|
$
|
31.9
|
|
|
2
|
%
|
|
$
|
33.2
|
|
|
2
|
%
|
|
(4
|
)%
|
CooperSurgical
|
78.8
|
|
|
16
|
%
|
|
77.3
|
|
|
16
|
%
|
|
2
|
%
|
||
|
$
|
110.7
|
|
|
6
|
%
|
|
$
|
110.5
|
|
|
6
|
%
|
|
—
|
%
|
Three Months Ended July 31,
($ in millions) |
|
2019
|
|
% Net
Sales |
|
2018
|
|
% Net
Sales |
|
2019 vs 2018
% Change |
|||||||
CooperVision
|
|
$
|
134.2
|
|
|
26
|
%
|
|
$
|
125.4
|
|
|
26
|
%
|
|
7
|
%
|
CooperSurgical
|
|
20.6
|
|
|
12
|
%
|
|
1.6
|
|
|
1
|
%
|
|
1,205
|
%
|
||
Corporate
|
|
(12.6
|
)
|
|
—
|
|
|
(11.4
|
)
|
|
—
|
|
|
(10
|
)%
|
||
|
|
$
|
142.2
|
|
|
21
|
%
|
|
$
|
115.6
|
|
|
18
|
%
|
|
23
|
%
|
Nine Months Ended July 31,
($ in millions)
|
|
2019
|
|
% Net
Sales |
|
2018
|
|
% Net
Sales |
|
2019 vs 2018
% Change |
|||||||
CooperVision
|
|
$
|
375.9
|
|
|
26
|
%
|
|
$
|
361.1
|
|
|
26
|
%
|
|
4
|
%
|
CooperSurgical
|
|
59.0
|
|
|
12
|
%
|
|
(37.5
|
)
|
|
(8
|
)%
|
|
257
|
%
|
||
Corporate
|
|
(34.8
|
)
|
|
—
|
|
|
(43.2
|
)
|
|
—
|
|
|
19
|
%
|
||
|
|
$
|
400.1
|
|
|
20
|
%
|
|
$
|
280.4
|
|
|
15
|
%
|
|
43
|
%
|
Three Months Ended July 31,
($ in millions) |
2019
|
|
% Net
Sales |
|
2018
|
|
% Net
Sales |
|
2019 vs 2018
% Change |
|||||||
Interest expense
|
$
|
16.7
|
|
|
2
|
%
|
|
$
|
22.8
|
|
|
3
|
%
|
|
(27
|
)%
|
Nine Months Ended July 31,
($ in millions)
|
2019
|
|
% Net Sales
|
|
2018
|
|
% Net Sales
|
|
2019 vs 2018
% Change |
|||||||
Interest expense
|
$
|
53.3
|
|
|
3
|
%
|
|
$
|
59.9
|
|
|
3
|
%
|
|
(11
|
)%
|
Periods Ended July 31,
|
|
Three Months
|
|
Nine Months
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Foreign exchange (gain) loss
|
|
$
|
(1.1
|
)
|
|
$
|
2.7
|
|
|
$
|
(1.1
|
)
|
|
$
|
1.7
|
|
Other, net
|
|
(0.4
|
)
|
|
(0.3
|
)
|
|
(1.0
|
)
|
|
(0.4
|
)
|
||||
|
|
$
|
(1.5
|
)
|
|
$
|
2.4
|
|
|
$
|
(2.1
|
)
|
|
$
|
1.3
|
|
Periods Ended July 31,
|
|
Three Months
|
|
Nine Months
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Selling, general and administrative expense
|
|
$
|
6.8
|
|
|
$
|
6.7
|
|
|
$
|
22.1
|
|
|
$
|
30.3
|
|
Cost of sales
|
|
1.0
|
|
|
0.9
|
|
|
3.9
|
|
|
2.6
|
|
||||
Research and development expense
|
|
0.5
|
|
|
0.5
|
|
|
2.4
|
|
|
1.6
|
|
||||
Total share-based compensation expense
|
|
$
|
8.3
|
|
|
$
|
8.1
|
|
|
$
|
28.4
|
|
|
$
|
34.5
|
|
Related income tax benefit
|
|
$
|
1.1
|
|
|
$
|
1.5
|
|
|
$
|
4.0
|
|
|
$
|
7.1
|
|
•
|
Operating cash flow was $196.7 million compared to $235.3 million in the third quarter of fiscal 2018
|
•
|
Expenditures for purchases of property, plant and equipment were $75.4 million compared to $52.3 million in the prior year period.
|
•
|
Operating cash flow was $513.3 million compared to $432.3 million in the prior year period
|
•
|
Expenditures for purchases of property, plant and equipment were $207.3 million compared to $150.2 million in the prior year period
|
•
|
Cash payments for acquisitions and others, of $59.1 million, compared to $1,320.8 million in the prior year period.
|
($ in millions)
|
|
July 31, 2019
|
|
October 31, 2018
|
||||
Cash and cash equivalents
|
|
$
|
112.7
|
|
|
$
|
77.7
|
|
Total assets
|
|
$
|
6,172.8
|
|
|
$
|
6,112.8
|
|
Working capital
|
|
$
|
261.4
|
|
|
$
|
554.4
|
|
Total debt
|
|
$
|
1,812.6
|
|
|
$
|
2,022.8
|
|
Stockholders' equity
|
|
$
|
3,615.5
|
|
|
$
|
3,307.8
|
|
Ratio of debt to equity
|
|
0.50:1
|
|
|
0.61:1
|
|
||
Debt as a percentage of total capitalization
|
|
33
|
%
|
|
38
|
%
|
•
|
increase in short-term debt $352.9 million, primarily from the $400 million 2018 Term Loan Agreement entered into on November 1, 2018, partially offset by;
|
•
|
increase in cash $35.0 million
|
•
|
increase in accounts receivables $30.0 million from increased revenue
|
•
|
increase in inventories $33.3 million.
|
•
|
increase in net income of $306.5 million from a net income of $39.2 million in the first nine months of fiscal 2018 to $345.7 million in the first nine months of fiscal 2019
|
•
|
increase of $119.0 million in net cash flow from changes in operating capital, from $141.1 million outflow in the first nine months of fiscal 2018 to $22.1 million outflow in fiscal 2019, partially offset by;
|
•
|
decrease of $306.7 million in non-cash items, from $305.2 million in the first nine months of fiscal 2018 to $(1.5) million in fiscal 2019
|
•
|
decrease of $24.4 million in impairment of intangibles, from $24.4 million in the first nine months of fiscal 2018 to nil in fiscal 2019. Impairment charge was recognized by CooperSurgical on its exit of the carrier screening and non-invasive prenatal testing (NIPT) product lines in prior year period
|
•
|
increase of $19.0 million from gain on sale of an intangible asset by CooperSurgical of the Filshie Clip exclusive distribution right.
|
•
|
$70.8 million increase in the net changes in accounts and other receivables from increased revenue
|
•
|
$89.5 million increase in the net changes in prepayments and other assets primarily due to a $42.0 million payment to the U.K. Tax Authorities in prior year period compared to a $29.0 million refund in the current year
|
•
|
$12.4 million increase in the net changes in accounts payable, partially offset by;
|
•
|
$16.9 million decrease in the net changes in inventories
|
•
|
$36.9 million decrease in the net changes in accrued liabilities.
|
•
|
decrease of $238.2 million driven by net changes in long term tax liabilities, deferred taxes and defined benefit pension
|
•
|
$50.2 million of step-up charges related to inventory acquired mainly from PARAGARD in the prior year period
|
•
|
decrease of $6.8 million driven by net changes in other long-term assets.
|
•
|
decrease of $1,261.7 million in payments made for acquisitions in the first nine months of fiscal 2019 compared to the prior year period, largely due to the acquisition of PARAGARD at $1.1 billion in first quarter of fiscal 2018, partially offset by;
|
•
|
increase of $57.1 million in capital expenditures primarily used to invest in the expansion of our manufacturing capacity.
|
•
|
$1,666.0 million decrease of net proceeds from long-term debt primarily due to additional debt taken on to fund the PARAGARD acquisition in prior year period
|
•
|
$6.1 million share repurchases were made in the first nine months of fiscal 2019 compared to nil in the fiscal 2018, partially offset by;
|
•
|
$330.8 million increase in short-term notes payable, primarily due to $400 million short term loan taken on November 1, 2018
|
•
|
$17.5 million increase in net changes in the net proceeds related to share-based compensation awards.
|
Exhibit
Number
|
Description
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
32.2
|
|
|
|
101.1
|
The following materials from the Company's Quarterly Report on Form 10-Q for the three and nine months period ended July 31, 2019, formatted in Inline XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Income for the three and nine months ended July 31, 2019 and 2018, (ii) Consolidated Statements of Comprehensive Income for the three and nine months ended July 31, 2019 and 2018, (iii) Consolidated Condensed Balance Sheets at July 31, 2019 and October 31, 2018, (iv) Consolidated Condensed Statements of Stockholders' Equity for the three and nine months period ended July 31, 2019 and 2018 (v) Consolidated Condensed Statements of Cash Flows for the nine months ended July 31, 2019 and 2018 and (vi) related Notes to Consolidated Condensed Financial Statements.
|
|
|
104.1
|
Cover Page Interactive Data File (embedded within the Inline XBRL document)
|
|
The Cooper Companies, Inc.
|
|
(Registrant)
|
|
|
Date: August 30, 2019
|
/s/ Brian G. Andrews
|
|
Brian G. Andrews
|
|
Senior Vice President, Chief Financial Officer & Treasurer
(Principal Financial Officer)
|
|
|
|
|
|
|
Date: August 30, 2019
|
/s/ Agostino Ricupati
|
|
Agostino Ricupati
|
|
Chief Accounting Officer & Senior Vice President, Finance & Tax (Principal Accounting Officer)
|
Date: August 30, 2019
|
|
|
|
/s/ Albert G. White III
|
|
|
Albert G. White III
|
|
|
President and Chief Executive Officer
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Date: August 30, 2019
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/s/ Brian G. Andrews
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Brian G. Andrews
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Senior Vice President, Chief Financial Officer and Treasurer
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the Quarterly Report on Form 10-Q of The Cooper Companies, Inc. (the “Company”) for the quarterly period ended July 31, 2019, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: August 30, 2019
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/s/ Albert G. White III
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Albert G. White III
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President and Chief Executive Officer
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the Quarterly Report on Form 10-Q of The Cooper Companies, Inc. (the “Company”) for the quarterly period ended July 31, 2019, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: August 30, 2019
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/s/ Brian G. Andrews
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Brian G. Andrews
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Senior Vice President, Chief Financial Officer and Treasurer
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