☒
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ANNUAL 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)
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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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Document
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Part of Form 10-K
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Portions of the Proxy Statement for the Annual Meeting
of Stockholders scheduled to be held in March 2020
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Part III
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PART I
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Page
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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PART II
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Item 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosure about Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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PART IV
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Item 15.
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Exhibits and Financial Statement Schedules
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Item 16.
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Form 10-K Summary
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•
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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.
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•
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Adverse changes in the global or regional general business, political and economic conditions, including the impact of continuing uncertainty and instability of certain countries, 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, by countries such as China.
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•
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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.
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•
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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.
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•
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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.
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•
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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).
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•
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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.
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•
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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.
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•
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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.
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•
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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.
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•
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Disruptions in supplies of raw materials, particularly components used to manufacture our silicone hydrogel lenses.
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•
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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, including but not limited to the EU Medical Devices Regulation (MDR), the EU In Vitro Diagnostic Medical Devices Regulation (IVDR), and the medical device excise tax under the U.S. Affordable Care Act.
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•
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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.
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•
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Limitations on sales following product introductions due to poor market acceptance.
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•
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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.
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•
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Reduced sales, loss of customers and costs and expenses related to product recalls and warning letters.
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•
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Failure to receive, or delays in receiving, regulatory approvals for products.
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•
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Failure of our customers and end users to obtain adequate coverage and reimbursement from third-party payors for our products and services.
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•
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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.
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•
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The success of our research and development activities and other start-up projects.
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•
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Dilution to earnings per share from acquisitions or issuing stock.
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•
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Impact and costs incurred from changes in accounting standards and policies.
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•
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Environmental risks, including increasing environmental legislation and the broader impacts of climate change.
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•
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Other events described in our Securities and Exchange Commission filings, including the “Business”, “Risk Factors” and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections in this Annual Report on Form 10-K for the fiscal year ended October 31, 2019, as such Risk Factors may be updated in quarterly filings.
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•
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Spherical lenses including lenses that correct near- and farsightedness uncomplicated by more complex visual defects.
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•
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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.
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•
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Producing high, medium and low volumes of lenses made with a variety of materials for a broader range of market niches: single-use, two-week, monthly and quarterly disposable sphere, toric and multifocal lenses and custom toric lenses for patients with a high degree of astigmatism.
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•
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Offering a wide range of lens parameters, leading to a higher rate of successful fitting for practitioners and better visual acuity for patients.
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•
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Patient visits are for annual checkups, cancer screening, menstrual disorders, vaginitis (inflammation of vaginal tissue), treatment of abnormal Pap smears, osteoporosis (reduction in bone mass) and the management of menopause, pregnancy and reproductive management.
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•
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We believe that approximately one-third of the office visits to OB/GYN are patients seeking diagnosis and treatment for the symptoms of abnormal uterine bleeding.
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•
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A high proportion of office visits are for contraceptive management.
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•
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OB/GYN traditionally provide the initial evaluation for women and their partners who seek infertility assistance. Ovulatory drugs and intrauterine insemination (IUI) are common treatments in these cases.
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•
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IVF is performed by reproductive endocrinologists, a subgroup of OB/GYN, along with partner embryologists.
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•
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Osteoporosis and incontinence have become frequent diagnoses as the female population ages. Early identification and treatment of these conditions will both improve women's health and help reduce overall costs of treatment.
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•
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Sterilization is a frequently performed procedure.
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•
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Hysterectomy is one of the most commonly performed surgical procedures.
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•
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Hysteroscopy is commonly used in the evaluation of abnormal uterine bleeding.
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•
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The trend to move hospital-based procedures to an office or clinical setting is continuing as a method to reduce cost to the health care system without compromising clinical outcomes.
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•
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Increased awareness of improved IVF outcomes with preimplantation genetic screening will continue.
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•
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failure to successfully obtain the anticipated revenues, margins and earnings benefits;
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•
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difficulties in, and expenses related to, the integration of the operations, technologies, products and personnel of the acquired company and establishment of appropriate accounting controls and reporting procedures and other regulatory compliance procedures, including but not limited to third party compliance and due diligence;
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•
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increased leverage and the risk of 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;
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•
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risks of entering markets in which we have no or limited prior experience;
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•
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potential loss of employees;
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•
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an inability to identify and consummate future acquisitions on favorable terms or at all;
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•
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diversion of management's attention away from other business concerns;
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•
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expenses of any undisclosed or potential liabilities, contingent liabilities or indemnification obligations of the acquired company;
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•
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expenses, including restructuring expenses, to shut-down our own locations or terminate our employees;
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•
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application of and compliance with new and unfamiliar regulatory frameworks such as pharmaceutical regulation applicable to our PARAGARD IUS;
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•
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Failure to successfully obtain or maintain reimbursements under the third party payor plans, including but not limited to governmental programs, due to complex reporting and payment obligations;
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•
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a dilution of earnings per share; and
|
•
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risks inherent in accounting allocations and the risk that we are required to record significant adjustments to the preliminary fair value of assets acquired and liabilities assumed within the measurement period.
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•
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acceptance of our products by eye care and health care practitioners;
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•
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the cost competitiveness of our products;
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•
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consumer reluctance to try and use a new product;
|
•
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regulatory and legislative requirements;
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•
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adequate coverage and reimbursement by third party payors;
|
•
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the earlier release of competitive products, such as new silicone hydrogel products, into the market by our competitors; and
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•
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the emergence of newer and more competitive products.
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•
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we may have difficulty enforcing intellectual property rights in some foreign countries;
|
•
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we may have difficulty gaining market share in countries such as Japan and China because of regulatory restrictions and customer preferences;
|
•
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we may find it difficult to grow in emerging markets such as China, India, Russia, Brazil and other developing nations due to, among other things, customer acceptance, undeveloped and/or unfamiliar distribution channels, regulatory restrictions and changes, and business knowledge of these new markets;
|
•
|
tax rates in some foreign countries may exceed those of the United States, and foreign earnings may be subject to withholding requirements or the imposition of tariffs, exchange controls or other restrictions, including the tariffs enacted by the U.S. government on various imports from China and by the Chinese government on certain U.S. goods, the scope and duration of which remain uncertain;
|
•
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we may find it difficult to comply with a variety of United States and foreign legal, compliance and regulatory requirements such as the Foreign Corrupt Practices Act, the Dodd-Frank Act, the U.K. Bribery Act and international data security and privacy laws and MDR and IVDR;
|
•
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we may find it difficult to manage a large organization spread throughout various countries;
|
•
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fluctuations in currency exchange rates could adversely affect our results;
|
•
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foreign customers may have longer payment cycles than customers in the United States;
|
•
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failure to comply with United States Department of Commerce and other nations' import-export controls may result in fines and/or penalties;
|
•
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general economic and political conditions in the countries where we operate may have an adverse effect on our operations in those countries or not be favorable to our growth strategy;
|
•
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foreign governments may adopt regulations, including those similar to MDR and IVDR or take other actions that would have a direct or indirect adverse impact on our business and market opportunities, including but not limited to increased enforcement of potentially conflicting and ambiguous anti-bribery laws;
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•
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we may have difficulty enforcing agreements and collecting receivables through some foreign legal systems; and
|
•
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we may be subject to unforeseen economic or political events in certain countries that may have an impact on our customers' ability or preferences to buy our products.
|
•
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increase our vulnerability to general adverse economic and industry conditions;
|
•
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require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, research and development efforts and other general corporate purposes;
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•
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limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
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•
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place us at a competitive disadvantage compared to our competitors that have less debt;
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•
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result in greater interest rate risk and volatility;
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•
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limit our ability to borrow additional funds; and
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•
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make it more difficult for us to satisfy our obligations with respect to our debt, including our obligation to repay our credit facilities under certain circumstances, or refinance our indebtedness on favorable terms or at all.
|
•
|
be expensive and time consuming to prosecute or defend;
|
•
|
result in a finding that we do not have certain intellectual property rights or that such rights lack sufficient scope or strength;
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•
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divert management's attention and resources; or
|
•
|
require us to license our intellectual property.
|
•
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be expensive and time consuming to defend;
|
•
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cause us to cease making, licensing or selling products that incorporate the challenged intellectual property;
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•
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require us to redesign or re-engineer our products, if feasible;
|
•
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divert management's attention and resources; or
|
•
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require us to enter into royalty or licensing agreements in order to obtain the right to use a necessary product, component or process.
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•
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Establishment of the Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;
|
•
|
Reporting and disclosure requirements on medical device and pharmaceutical manufacturers for certain payments or other “transfers of value” made to physicians and physicians family members, certain healthcare facilities, and any ownership and investment interests held by physicians and physician family members, and any payments or other “transfers of value” to such owners. Manufacturers are required to submit reports to the Centers for Medicare & Medicaid Services (CMS) by the 90th day of each calendar year;
|
•
|
Absent new legislation, a 2.3% excise tax, currently suspended, will be reinstated as of January 1, 2020, on any entity that manufactures or imports medical devices offered for sale in the United States, with limited exceptions, which exceptions include all contact lenses;
|
•
|
Payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain health care services through bundled payment models;
|
•
|
Creation of the Independent Payment Advisory Board which has authority to recommend certain changes to reduce Medicare spending and those recommendations could have the effect of law even if Congress doesn't act on the recommendations;
|
•
|
Establishment of a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending; and
|
•
|
An increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13% of the average manufacturer price for most branded and generic drugs, respectively.
|
•
|
strengthen the rules on placing devices on the market and reinforce surveillance once they are available;
|
•
|
establish explicit provisions on manufacturers' responsibilities for the follow-up of the quality, performance and safety of devices placed on the market;
|
•
|
improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number;
|
•
|
set up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and
|
•
|
strengthen rules for the assessment of certain high-risk devices, such as implants, which may have to undergo an additional check by experts before they are placed on the market.
|
Location
|
Approximate
Square Feet
|
|
|
Operations
|
AMERICAS
|
|
|
|
|
United States:
|
|
|
|
|
California
|
93,594
|
|
|
Executive offices; CooperVision research & development and administrative offices; CooperSurgical laboratory
|
New York
|
423,175
|
|
|
CooperVision manufacturing, marketing, distribution and administrative offices; CooperSurgical manufacturing, office and distribution
|
Connecticut
|
301,962
|
|
|
CooperSurgical manufacturing, marketing, distribution, research & development and administrative offices
|
Texas
|
36,113
|
|
|
CooperSurgical manufacturing
|
Puerto Rico
|
527,285
|
|
|
CooperVision manufacturing, research & development and distribution
|
Costa Rica
|
167,066
|
|
|
CooperVision and CooperSurgical manufacturing and office
|
Brazil
|
16,580
|
|
|
CooperVision marketing and distribution
|
Canada
|
30,625
|
|
|
CooperVision and CooperSurgical office and laboratory
|
Other Americas
|
157,243
|
|
|
CooperVision marketing and distribution; CooperSurgical manufacturing marketing and laboratory
|
|
|
|
|
|
EMEA
|
|
|
|
|
United Kingdom
|
791,754
|
|
|
CooperVision manufacturing, marketing, distribution, research & development and administrative offices; CooperSurgical marketing and manufacturing
|
Hungary
|
330,269
|
|
|
CooperVision manufacturing and marketing
|
Belgium
|
273,609
|
|
|
CooperVision distribution
|
Spain
|
180,058
|
|
|
CooperVision distribution and administrative offices; CooperSurgical marketing
|
Denmark
|
63,787
|
|
|
CooperSurgical manufacturing, marketing, administrative, research and development offices
|
Other EMEA
|
228,811
|
|
|
CooperVision and CooperSurgical marketing and distribution
|
|
|
|
|
|
ASIA PACIFIC
|
|
|
|
|
Japan
|
113,555
|
|
|
CooperVision marketing, distribution and administrative offices; CooperSurgical marketing
|
Australia
|
38,435
|
|
|
CooperVision marketing, distribution and administrative offices; CooperSurgical laboratory
|
Other Asia Pacific
|
77,357
|
|
|
CooperVision and CooperSurgical marketing and distribution
|
|
October 2014
|
|
October 2015
|
|
October 2016
|
|
October 2017
|
|
October 2018
|
|
October 2019
|
||||||||||||
The Cooper Companies, Inc.
|
$
|
100.00
|
|
|
$
|
92.99
|
|
|
$
|
107.49
|
|
|
$
|
146.74
|
|
|
$
|
157.81
|
|
|
$
|
177.81
|
|
S&P 500
|
$
|
100.00
|
|
|
$
|
105.20
|
|
|
$
|
109.94
|
|
|
$
|
135.93
|
|
|
$
|
145.91
|
|
|
$
|
166.81
|
|
S&P Health Care Equipment
|
$
|
100.00
|
|
|
$
|
109.04
|
|
|
$
|
123.35
|
|
|
$
|
154.16
|
|
|
$
|
180.71
|
|
|
$
|
223.24
|
|
Period
|
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
Per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
|
|
Maximum Approximate
Dollar Value of Shares
that May Yet Be
Purchased Under
Publicly Announced
Plans or Programs
|
||||||
8/1/19 – 8/31/19
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
557,400,000
|
|
9/1/19 – 9/30/19
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
557,400,000
|
|
10/1/19 – 10/31/19
|
|
512,472
|
|
|
$
|
292.68
|
|
|
512,472
|
|
|
$
|
407,400,000
|
|
Total
|
|
512,472
|
|
|
|
|
512,472
|
|
|
|
Plan Category
|
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1)
(A)
|
|
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights
(B)
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column A)
(C)
|
Equity compensation plans approved by shareholders(2)
|
1,480,021
|
|
$186.24
|
|
2,280,407
|
Equity compensation plans not approved by shareholders
|
—
|
|
—
|
|
—
|
Total
|
1,480,021
|
|
$186.24
|
|
2,280,407
|
Years Ended October 31,
(In millions, except per share amounts)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Consolidated Operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
2,653.4
|
|
|
$
|
2,532.8
|
|
|
$
|
2,139.0
|
|
|
$
|
1,966.8
|
|
|
$
|
1,797.1
|
|
Gross profit
|
$
|
1,756.8
|
|
|
$
|
1,632.3
|
|
|
$
|
1,365.8
|
|
|
$
|
1,173.1
|
|
|
$
|
1,070.3
|
|
Income before income taxes
|
$
|
477.4
|
|
|
$
|
331.9
|
|
|
$
|
394.0
|
|
|
$
|
295.6
|
|
|
$
|
215.5
|
|
Net income attributable to
Cooper stockholders
|
$
|
466.7
|
|
|
$
|
139.9
|
|
|
$
|
372.9
|
|
|
$
|
273.9
|
|
|
$
|
203.5
|
|
Diluted earnings per share attributable to stockholders
|
$
|
9.33
|
|
|
$
|
2.81
|
|
|
$
|
7.52
|
|
|
$
|
5.59
|
|
|
$
|
4.14
|
|
Number of shares used to compute diluted earnings per share
|
50.0
|
|
|
49.7
|
|
|
49.6
|
|
|
49.0
|
|
|
49.2
|
|
|||||
Dividends paid per share
|
$
|
0.06
|
|
|
$
|
0.06
|
|
|
$
|
0.06
|
|
|
$
|
0.06
|
|
|
$
|
0.06
|
|
Consolidated Financial Position
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
$
|
1,163.4
|
|
|
$
|
1,090.9
|
|
|
$
|
953.2
|
|
|
$
|
937.1
|
|
|
$
|
844.0
|
|
Property, plant and equipment, net
|
1,132.1
|
|
|
976.0
|
|
|
910.1
|
|
|
877.7
|
|
|
967.1
|
|
|||||
Goodwill
|
2,428.9
|
|
|
2,392.1
|
|
|
2,354.8
|
|
|
2,164.7
|
|
|
2,197.1
|
|
|||||
Other intangible assets, net
|
1,405.3
|
|
|
1,521.3
|
|
|
504.7
|
|
|
441.1
|
|
|
411.1
|
|
|||||
Deferred tax assets and other assets
|
144.8
|
|
|
132.5
|
|
|
135.9
|
|
|
58.0
|
|
|
43.2
|
|
|||||
|
$
|
6,274.5
|
|
|
$
|
6,112.8
|
|
|
$
|
4,858.7
|
|
|
$
|
4,478.6
|
|
|
$
|
4,462.5
|
|
Short-term debt
|
$
|
563.7
|
|
|
$
|
37.1
|
|
|
$
|
23.4
|
|
|
$
|
226.3
|
|
|
$
|
243.8
|
|
Other current liabilities
|
546.9
|
|
|
499.4
|
|
|
372.7
|
|
|
316.9
|
|
|
331.7
|
|
|||||
Long-term debt
|
1,262.6
|
|
|
1,985.7
|
|
|
1,149.3
|
|
|
1,107.4
|
|
|
1,105.4
|
|
|||||
Long-term tax payable
|
124.8
|
|
|
141.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other liabilities
|
147.9
|
|
|
141.3
|
|
|
137.5
|
|
|
132.1
|
|
|
111.8
|
|
|||||
Total liabilities
|
2,645.9
|
|
|
2,805.0
|
|
|
1,682.9
|
|
|
1,782.7
|
|
|
1,792.7
|
|
|||||
Stockholders' equity
|
3,628.6
|
|
|
3,307.8
|
|
|
3,175.8
|
|
|
2,695.9
|
|
|
2,669.8
|
|
|||||
|
$
|
6,274.5
|
|
|
$
|
6,112.8
|
|
|
$
|
4,858.7
|
|
|
$
|
4,478.6
|
|
|
$
|
4,462.5
|
|
•
|
Paragon Vision Sciences on December 1, 2017 - a leading provider of ortho-k specialty contact lenses and oxygen permeable rigid contact lens materials.
|
•
|
PARAGARD on November 1, 2017 - CooperSurgical acquired the assets of the PARAGARD IUS business from Teva 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. IUS represent a large and growing segment of the Long Acting Reversible Contraceptive market.
|
•
|
$1.0 billion outstanding on a $1.425 billion syndicated Term Loan Agreement (the 2017 Term Loan Agreement) used to fund the acquisition of PARAGARD, which matures on November 1, 2022
|
•
|
A $500.0 million 364-day senior unsecured term loan agreement (the 2019 Term Loan Agreement), which matures on September 25, 2020
|
•
|
$264.0 million outstanding on a $1.0 billion multi-currency revolving credit facility (the 2016 Revolving Credit Facility), which matures on March 1, 2021.
|
•
|
Gross margin increased to 66% of net sales compared with 64% in fiscal 2018
|
•
|
Operating income increased 36% to $546.7 million from $403.1 million
|
•
|
Interest expense decreased to $68.0 million from $82.7 million due to lower average debt balances, partially offset by higher interest rates
|
•
|
Diluted earnings per share increased 232% to $9.33 from $2.81
|
•
|
Operating cash flow increased 7% to $713.2 million from $668.9 million.
|
Years Ended October 31,
|
2019
|
|
2018
|
2019 vs. 2018 % Change in Absolute Values
|
|||
Net sales
|
100
|
%
|
|
100
|
%
|
5
|
%
|
Cost of sales
|
34
|
%
|
|
36
|
%
|
—
|
%
|
Gross profit
|
66
|
%
|
|
64
|
%
|
8
|
%
|
Selling, general and administrative expense
|
38
|
%
|
|
38
|
%
|
2
|
%
|
Research and development expense
|
3
|
%
|
|
3
|
%
|
2
|
%
|
Amortization of intangibles
|
5
|
%
|
|
6
|
%
|
(1
|
)%
|
Impairment of intangibles
|
—
|
%
|
|
1
|
%
|
—
|
%
|
Gain on sale of an intangible
|
1
|
%
|
|
—
|
%
|
—
|
%
|
Operating income
|
21
|
%
|
|
16
|
%
|
36
|
%
|
($ in millions)
|
2019
|
|
2018
|
|
Increase
|
|
2019 vs 2018 % Change
|
|||||||
CooperVision
|
$
|
1,972.9
|
|
|
$
|
1,882.0
|
|
|
$
|
90.9
|
|
|
5
|
%
|
CooperSurgical
|
680.5
|
|
|
650.8
|
|
|
29.7
|
|
|
5
|
%
|
|||
Net sales
|
$
|
2,653.4
|
|
|
$
|
2,532.8
|
|
|
$
|
120.6
|
|
|
5
|
%
|
•
|
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.
|
($ in millions)
|
2019
|
|
2018
|
|
2019 vs. 2018 % Change
|
|||||
Toric
|
$
|
620.0
|
|
|
$
|
591.4
|
|
|
5
|
%
|
Multifocal
|
202.9
|
|
|
196.6
|
|
|
3
|
%
|
||
Single-use spheres
|
568.2
|
|
|
520.1
|
|
|
9
|
%
|
||
Non single-use sphere, other
|
581.8
|
|
|
573.9
|
|
|
1
|
%
|
||
|
$
|
1,972.9
|
|
|
$
|
1,882.0
|
|
|
5
|
%
|
•
|
Sales growth in fiscal 2019 was largely organic
|
•
|
Toric lenses grew primarily through the success of Biofinity, clariti and MyDay
|
•
|
Multifocal lenses increased in fiscal 2019, compared to fiscal 2018 due to higher Biofinity and clariti sales, partially offset by a decrease in sales of older hydrogel products
|
•
|
Single-use sphere lenses growth was primarily attributed to clariti and MyDay lenses
|
•
|
Non-single-use spheres increased in fiscal 2019, compared to fiscal 2018 due to higher Biofinity sales
|
•
|
"Other" products primarily include lens care which represented approximately 2% of net sales in fiscal 2019 and 2018
|
•
|
Increased sales of silicone hydrogel products were partially offset by lower sales of older hydrogel products. Total silicone hydrogel products grew 9% in fiscal 2019, representing 72% of net sales in fiscal 2019 compared to 69% in fiscal 2018
|
•
|
Foreign exchange rates negatively impacted sales by approximately $53.6 million in fiscal 2019 and positively impacted sales by $43.9 million in fiscal 2018, primarily attributable to fluctuations in the Euro and British Pound
|
•
|
Sales growth was primarily driven by increases in the volume of lenses sold. Average realized prices by product did not materially influence sales growth.
|
($ in millions)
|
2019
|
|
2018
|
|
2019 vs. 2018 % Change
|
|||||
Americas
|
$
|
763.8
|
|
|
$
|
722.9
|
|
|
6
|
%
|
EMEA
|
746.5
|
|
|
744.3
|
|
|
—
|
%
|
||
Asia Pacific
|
462.6
|
|
|
414.8
|
|
|
12
|
%
|
||
|
$
|
1,972.9
|
|
|
$
|
1,882.0
|
|
|
5
|
%
|
($ in millions)
|
|
2019
|
|
2018
|
|
2019 vs 2018 % Change
|
|||||
Office and surgical products
|
|
$
|
422.4
|
|
|
$
|
400.4
|
|
|
6
|
%
|
Fertility
|
|
258.1
|
|
|
250.4
|
|
|
3
|
%
|
||
|
|
$
|
680.5
|
|
|
$
|
650.8
|
|
|
5
|
%
|
•
|
Office and surgical products increased compared to prior year due to continued growth in PARAGARD and surgical products, primarily Uterine Manipulators, Surgical Retractors and recently acquired products of Incisive Surgical, partially offset by a decrease in revenue from sales of the 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
|
•
|
Fertility net sales increased in fiscal 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 and exit of the carrier screening and non-invasive prenatal testing (NIPT) product lines on June 1, 2018
|
•
|
Unit growth and product mix positively impacted sales growth.
|
|
2019
|
|
2018
|
||
CooperVision
|
65
|
%
|
|
66
|
%
|
CooperSurgical
|
69
|
%
|
|
61
|
%
|
Consolidated
|
66
|
%
|
|
64
|
%
|
•
|
the unfavorable impact to revenue from exchange rate fluctuations, primarily attributable to the Euro and British Pound; and product mix
|
•
|
$14.0 million of costs primarily product transition, integration and manufacturing related costs
|
•
|
partially offset by an increase in sales of higher margin products including Biofinity
|
•
|
fiscal 2018 included $10.1 million of costs primarily product transition and manufacturing related costs.
|
•
|
an increase in sales of PARAGARD IUS product and inclusion of LifeGlobal products with higher gross margin
|
•
|
partially offset by $14.2 million of costs, primarily integration and manufacturing related costs
|
•
|
fiscal 2018 included $49.3 million of PARAGARD and LifeGlobal acquisitions inventory step-up charges
|
•
|
fiscal 2018 included $16.2 million of costs primarily integration and manufacturing related costs.
|
($ in millions)
|
2019
|
|
% Net
Sales
|
|
2018
|
|
% Net
Sales
|
|
2019 vs. 2018
% Change
|
|||||||
CooperVision
|
$
|
682.4
|
|
|
35
|
%
|
|
$
|
657.2
|
|
|
35
|
%
|
|
4
|
%
|
CooperSurgical
|
266.2
|
|
|
39
|
%
|
|
259.3
|
|
|
40
|
%
|
|
3
|
%
|
||
Corporate
|
47.6
|
|
|
—
|
|
|
56.8
|
|
|
—
|
|
|
(16
|
)%
|
||
|
$
|
996.2
|
|
|
38
|
%
|
|
$
|
973.3
|
|
|
38
|
%
|
|
2
|
%
|
($ in millions)
|
2019
|
|
% Net
Sales
|
|
|
2018
|
|
% Net
Sales
|
|
2019 vs. 2018 % Change
|
|||||||
CooperVision
|
$
|
55.5
|
|
|
3
|
%
|
|
|
$
|
54.3
|
|
|
3
|
%
|
|
2
|
%
|
CooperSurgical
|
31.2
|
|
|
5
|
%
|
|
|
30.5
|
|
|
5
|
%
|
|
3
|
%
|
||
|
$
|
86.7
|
|
|
3
|
%
|
|
|
$
|
84.8
|
|
|
3
|
%
|
|
2
|
%
|
($ in millions)
|
2019
|
|
% Net
Sales
|
|
2018
|
|
% Net
Sales
|
|
2019 vs. 2018 % Change
|
|||||||
CooperVision
|
$
|
40.9
|
|
|
2
|
%
|
|
$
|
43.6
|
|
|
2
|
%
|
|
(6
|
)%
|
CooperSurgical
|
104.9
|
|
|
15
|
%
|
|
103.1
|
|
|
16
|
%
|
|
2
|
%
|
||
|
$
|
145.8
|
|
|
5
|
%
|
|
$
|
146.7
|
|
|
6
|
%
|
|
(1
|
)%
|
($ in millions)
|
2019
|
|
% Net
Sales
|
|
2018
|
|
% Net
Sales
|
|
2019 vs. 2018
% Change
|
|||||||
CooperVision
|
$
|
506.4
|
|
|
26
|
%
|
|
$
|
479.8
|
|
|
25
|
%
|
|
6
|
%
|
CooperSurgical
|
87.9
|
|
|
13
|
%
|
|
(19.9
|
)
|
|
(3
|
)%
|
|
542
|
%
|
||
Corporate
|
(47.6
|
)
|
|
—
|
|
|
(56.8
|
)
|
|
—
|
|
|
16
|
%
|
||
|
$
|
546.7
|
|
|
21
|
%
|
|
$
|
403.1
|
|
|
16
|
%
|
|
36
|
%
|
($ in millions)
|
2019
|
|
% Net
Sales
|
|
2018
|
|
% Net
Sales
|
|
2019 vs. 2018 % Change
|
|||||||
Interest expense
|
$
|
68.0
|
|
|
3
|
%
|
|
$
|
82.7
|
|
|
3
|
%
|
|
(18
|
)%
|
($ in millions)
|
2019
|
|
2018
|
||||
Foreign exchange loss
|
$
|
2.2
|
|
|
$
|
3.4
|
|
Other income, net
|
(0.9
|
)
|
|
(14.9
|
)
|
||
|
$
|
1.3
|
|
|
$
|
(11.5
|
)
|
•
|
Operating cash flow of $713.2 million up from $668.9 million in fiscal 2018
|
•
|
Expenditures for purchases of property, plant and equipment of $292.1 million up from $193.6 million in fiscal 2018
|
•
|
Cash payments for acquisitions and others of, $59.2 million compared to $1,323.9 million in fiscal 2018
|
•
|
Total debt, net of debt issuance cost, at $1.8 billion at the end of fiscal 2019 compared to $2.0 billion at the end of fiscal 2018
|
Years Ended October 31,
($ in millions)
|
2019
|
|
2018
|
||||
Cash and cash equivalents
|
$
|
89.0
|
|
|
$
|
77.7
|
|
Total assets
|
$
|
6,274.5
|
|
|
$
|
6,112.8
|
|
Working capital
|
$
|
52.8
|
|
|
$
|
554.4
|
|
Total debt
|
$
|
1,826.3
|
|
|
$
|
2,022.8
|
|
Stockholders’ equity
|
$
|
3,628.5
|
|
|
$
|
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 $526.6 million, primarily from the $500 million 2019 Term Loan Agreement entered into on September 27, 2019
|
•
|
decrease of $37.5 million in prepaid expense and other current assets, primarily due to a $29.0 million refund from the U.K. Tax Authorities in the current year
|
•
|
increase in other current liabilities of $33.1 million due to timing of payments
|
•
|
increase in employee compensation and benefits of $10.7 million, partially offset by;
|
•
|
increase in cash $11.3 million
|
•
|
increase in accounts receivables $60.6 million from increased revenue
|
•
|
increase in inventories $38.1 million.
|
•
|
increase in net income of $326.8 million from a net income of $139.9 million in fiscal 2018 to $466.7 million in fiscal 2019; fiscal 2018 net income was unfavorably impacted by a $214.6 million tax expense charge related to the 2017 Act
|
•
|
$104.7 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 the prior year period compared to a $29.0 million refund in the current year, partially offset by
|
•
|
$192.9 million decrease in the net changes in other long-term liabilities, primarily due to a decrease in the provisional tax liability for the mandatory deemed repatriation of deferred foreign earnings under the 2017 Act of $141.5 million in fiscal 2018
|
•
|
$50.4 million decrease of step-up charges related to inventory acquired mainly from PARAGARD in fiscal 2018
|
•
|
$48.1 million decrease in the net changes in accrued liabilities
|
•
|
$32.3 million decrease in the net changes in inventories, driven by acquisitions and higher raw materials to support production levels
|
•
|
decrease of $24.0 million in impairment of intangibles, from $24.4 million in fiscal 2018 to $0.4 million in fiscal 2019, primarily due to an impairment charge recognized by CooperSurgical on its exit from the carrier screening and NIPT product lines in fiscal 2018
|
•
|
increase of $19.0 million due to a gain on sale of an intangible asset, representing the sale by CooperSurgical of the Filshie Clip exclusive distribution right
|
•
|
$18.8 million decrease in the net changes in deferred taxes
|
•
|
$10.8 million decrease in the net changes in provision for doubtful accounts.
|
•
|
decrease of $1,264.7 million in payments made for acquisitions in 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 $98.5 million in capital expenditures primarily used to invest in the expansion of our manufacturing capacity.
|
•
|
$1,561.0 million decrease of net proceeds from long-term debt primarily due to additional debt taken on to fund the PARAGARD acquisition in fiscal 2018
|
•
|
$156.1 million was used for share repurchases in fiscal 2019 compared to nil in the fiscal 2018, partially offset by;
|
•
|
$511.7 million increase in short-term notes payable, primarily due to $500 million short term loan taken on September 27, 2019
|
•
|
$5.9 million increase in the net proceeds related to share-based compensation awards.
|
Payments Due by Period
(In millions)
|
Total
|
|
2020
|
|
2021
& 2022
|
|
2023
& 2024
|
|
2025
& Beyond
|
||||||||||
Contractual obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
$
|
1,264.2
|
|
|
$
|
—
|
|
|
$
|
264.2
|
|
|
$
|
1,000.0
|
|
|
$
|
—
|
|
Interest payments
|
112.5
|
|
|
47.8
|
|
|
64.6
|
|
|
0.1
|
|
|
—
|
|
|||||
Operating leases
|
332.2
|
|
|
38.4
|
|
|
65.9
|
|
|
54.3
|
|
|
173.6
|
|
|||||
Transition tax on unremitted foreign earnings and profits (1)
|
135.8
|
|
|
11.8
|
|
|
23.6
|
|
|
23.6
|
|
|
76.8
|
|
|||||
Purchase obligation (2)
|
96.0
|
|
|
83.7
|
|
|
11.8
|
|
|
0.5
|
|
|
—
|
|
|||||
Defined benefit plan (3)
|
118.3
|
|
|
8.7
|
|
|
20.0
|
|
|
22.9
|
|
|
66.7
|
|
|||||
Total contractual obligations
|
2,059.0
|
|
|
190.4
|
|
|
450.1
|
|
|
1,101.4
|
|
|
317.1
|
|
|||||
Commercial commitments:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Stand-by letters of credit
|
4.8
|
|
|
4.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
2,063.8
|
|
|
$
|
195.2
|
|
|
$
|
450.1
|
|
|
$
|
1,101.4
|
|
|
$
|
317.1
|
|
•
|
Revenue recognition - We recognize revenue from product sales when obligations under the terms of a contract with the customer are satisfied; generally, this occurs with the transfer of control of the goods to customers and/or when services are rendered. Our payment terms are typically between 30 to 120 days. Provisions for certain rebates, sales incentives, volume discounts, contractual pricing allowances and product returns are accounted for as variable consideration and recorded as a reduction in sales. See Note 1 to the Consolidated Financial Statements for the Accounting Standards Update related to revenue, which was adopted in 2019.
|
•
|
Valuation of goodwill - Effective April 30, 2019, there was a change in the reporting units as a result of realignment in the internal reporting structure of the business around markets and customers at CooperSurgical. As such, Cooper Surgical has evolved into two reporting units, namely, Office/Surgical and Fertility, which reflects management oversight of operations. The change in reporting units did not result in a change in operating segments. We allocated CooperSurgical's goodwill based on relative fair values utilizing the discounted cash flow method and guideline public company method as our allocation base. The key assumptions and estimates for the market and income approaches used to determine fair value of the reporting units included market data and market multiples, discount rates and terminal growth rates, as well as future levels of revenue growth, and operating margins, which were based upon the Company’s strategic plan. The allocated fair values exceeded the carrying values for each of the three reporting units
|
•
|
Business combinations - We routinely consummate business combinations. Results of operations for acquired companies are included in our consolidated results of operations from the date of acquisition. We recognize separately from goodwill, the identifiable assets acquired, including acquired in-process research and development, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date fair values as defined by accounting standards related to fair value measurements. Key assumptions routinely utilized in allocation of purchase price to intangible assets include projected financial information such as revenue projections for companies acquired. As of the acquisition date, goodwill is measured as the excess of consideration given, over the net of the acquisition date fair values of the identifiable assets acquired and the liabilities assumed. Direct acquisition costs are expensed as incurred.
|
•
|
Income taxes - We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax losses and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.
|
October 31,
(In millions)
|
2019
|
|
2018
|
||||
Short-term debt
|
$
|
563.7
|
|
|
$
|
37.1
|
|
Long-term debt
|
1,264.2
|
|
|
1,989.2
|
|
||
Less: unamortized debt issuance cost
|
(1.6
|
)
|
|
(3.5
|
)
|
||
Total
|
$
|
1,826.3
|
|
|
$
|
2,022.8
|
|
Expected Maturity Date Fiscal Year
($ in millions)
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
|
Fair
Value
|
||||||||||||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Variable interest rate
|
$
|
—
|
|
|
$
|
264.2
|
|
|
$
|
—
|
|
|
$
|
1,000.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,264.2
|
|
|
$1,264.2
|
Average interest rate
|
—
|
|
|
3.2
|
%
|
|
—
|
|
|
3.2
|
%
|
|
—
|
|
|
—
|
|
|
|
|
|
•
|
evaluating the Company’s tax planning strategies and its interpretation and application of tax laws,
|
•
|
assessing transfer pricing studies for transactions between subsidiaries of the Company for compliance with applicable laws and regulations and evaluating the transfer prices based on observations for comparable companies that perform similar functions, and
|
•
|
inspecting correspondence and settlements from taxing authorities and analyzing the expiration of statutes of limitations.
|
Years Ended October 31,
(In millions, except for earnings per share) |
2019
|
|
2018
|
|
2017
|
||||||
Net sales
|
$
|
2,653.4
|
|
|
$
|
2,532.8
|
|
|
$
|
2,139.0
|
|
Cost of sales
|
896.6
|
|
|
900.5
|
|
|
773.2
|
|
|||
Gross profit
|
1,756.8
|
|
|
1,632.3
|
|
|
1,365.8
|
|
|||
Selling, general and administrative expense
|
996.2
|
|
|
973.3
|
|
|
799.1
|
|
|||
Research and development expense
|
86.7
|
|
|
84.8
|
|
|
69.2
|
|
|||
Amortization of intangibles
|
145.8
|
|
|
146.7
|
|
|
68.4
|
|
|||
Impairment of intangibles
|
0.4
|
|
|
24.4
|
|
|
—
|
|
|||
Gain on sale of an intangible (Note 3)
|
(19.0
|
)
|
|
—
|
|
|
—
|
|
|||
Operating income
|
546.7
|
|
|
403.1
|
|
|
429.1
|
|
|||
Interest expense
|
68.0
|
|
|
82.7
|
|
|
33.4
|
|
|||
Other expense (income), net
|
1.3
|
|
|
(11.5
|
)
|
|
1.7
|
|
|||
Income before income taxes
|
477.4
|
|
|
331.9
|
|
|
394.0
|
|
|||
Provision for income taxes (Note 5)
|
10.7
|
|
|
192.0
|
|
|
21.1
|
|
|||
Net income
|
466.7
|
|
|
139.9
|
|
|
372.9
|
|
|||
Net income attributable to Cooper stockholders
|
$
|
466.7
|
|
|
$
|
139.9
|
|
|
$
|
372.9
|
|
Earnings per share - basic (Note 6)
|
$
|
9.44
|
|
|
$
|
2.85
|
|
|
$
|
7.63
|
|
Earnings per share - diluted (Note 6)
|
$
|
9.33
|
|
|
$
|
2.81
|
|
|
$
|
7.52
|
|
Number of shares used to compute earnings per share:
|
|
|
|
|
|
|
|
|
|||
Basic
|
49.4
|
|
|
49.1
|
|
|
48.9
|
|
|||
Diluted
|
50.0
|
|
|
49.7
|
|
|
49.6
|
|
Years Ended October 31,
(In millions) |
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
$
|
466.7
|
|
|
$
|
139.9
|
|
|
$
|
372.9
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
9.0
|
|
|
(58.5
|
)
|
|
107.7
|
|
|||
Change in minimum pension liability, net of tax (benefit) provision of $(8.0), $3.1 and $4.2, respectively
|
(25.4
|
)
|
|
7.9
|
|
|
6.6
|
|
|||
Other comprehensive (loss) income
|
(16.4
|
)
|
|
(50.6
|
)
|
|
114.3
|
|
|||
Comprehensive income
|
450.3
|
|
|
89.3
|
|
|
487.2
|
|
|||
Comprehensive income attributable to Cooper stockholders
|
$
|
450.3
|
|
|
$
|
89.3
|
|
|
$
|
487.2
|
|
October 31,
(In millions) |
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
89.0
|
|
|
$
|
77.7
|
|
Trade accounts receivable, net of allowance for doubtful accounts of $16.4 at October 31, 2019 and $19.0 at October 31, 2018
|
435.3
|
|
|
374.7
|
|
||
Inventories
|
506.9
|
|
|
468.8
|
|
||
Prepaid expense and other current assets
|
132.2
|
|
|
169.7
|
|
||
Total current assets
|
1,163.4
|
|
|
1,090.9
|
|
||
Property, plant and equipment, at cost
|
2,193.9
|
|
|
1,930.3
|
|
||
Less: accumulated depreciation and amortization
|
1,061.8
|
|
|
954.3
|
|
||
|
1,132.1
|
|
|
976.0
|
|
||
Goodwill (Note 3)
|
2,428.9
|
|
|
2,392.1
|
|
||
Other intangibles, net (Note 3)
|
1,405.3
|
|
|
1,521.3
|
|
||
Deferred tax assets
|
78.0
|
|
|
58.4
|
|
||
Other assets
|
66.8
|
|
|
74.1
|
|
||
|
$
|
6,274.5
|
|
|
$
|
6,112.8
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt (Note 4)
|
$
|
563.7
|
|
|
$
|
37.1
|
|
Accounts payable
|
150.1
|
|
|
146.4
|
|
||
Employee compensation and benefits
|
104.7
|
|
|
94.0
|
|
||
Other current liabilities
|
292.1
|
|
|
259.0
|
|
||
Total current liabilities
|
1,110.6
|
|
|
536.5
|
|
||
Long-term debt (Note 4)
|
1,262.6
|
|
|
1,985.7
|
|
||
Deferred tax liabilities
|
28.0
|
|
|
31.0
|
|
||
Long-term tax payable
|
124.8
|
|
|
141.5
|
|
||
Accrued pension liability and other
|
119.9
|
|
|
110.3
|
|
||
Total liabilities
|
2,645.9
|
|
|
2,805.0
|
|
||
Commitments and contingencies (see Note 11)
|
|
|
|
||||
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 October 31, 2019 and 52.8 at October 31, 2018
|
5.3
|
|
|
5.3
|
|
||
Additional paid-in capital
|
1,615.0
|
|
|
1,572.1
|
|
||
Accumulated other comprehensive loss
|
(447.1
|
)
|
|
(430.7
|
)
|
||
Retained earnings
|
3,026.4
|
|
|
2,576.0
|
|
||
Treasury stock at cost: 4.1 shares at October 31, 2019 and 3.6 shares at October 31, 2018
|
(571.2
|
)
|
|
(415.1
|
)
|
||
Total Cooper stockholders' equity
|
3,628.4
|
|
|
3,307.6
|
|
||
Noncontrolling interests
|
0.2
|
|
|
0.2
|
|
||
Stockholders’ equity (Note 7)
|
3,628.6
|
|
|
3,307.8
|
|
||
|
$
|
6,274.5
|
|
|
$
|
6,112.8
|
|
|
|
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 October 31, 2016
|
48.8
|
|
|
$
|
4.9
|
|
|
3.3
|
|
|
$
|
0.3
|
|
|
$
|
1,494.0
|
|
|
$
|
(489.6
|
)
|
|
$
|
2,046.3
|
|
|
$
|
(360.1
|
)
|
|
$
|
0.1
|
|
|
$
|
2,695.9
|
|
Net income attributable to Cooper stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
372.9
|
|
|
—
|
|
|
—
|
|
|
372.9
|
|
||||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
114.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
114.3
|
|
||||||||
Issuance of common stock for stock plans
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.3
|
)
|
||||||||
Treasury stock repurchase
|
(0.3
|
)
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55.0
|
)
|
|
—
|
|
|
(55.0
|
)
|
||||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.9
|
)
|
|
—
|
|
|
—
|
|
|
(2.9
|
)
|
||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38.2
|
|
||||||||
ASU2016-09 adoption
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
17.9
|
|
|
—
|
|
|
—
|
|
|
17.7
|
|
||||||||
Balance at October 31, 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 income attributable to Cooper stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
139.9
|
|
|
—
|
|
|
—
|
|
|
139.9
|
|
||||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50.6
|
)
|
||||||||
Issuance of common stock for stock plans
|
0.4
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
||||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.9
|
)
|
|
—
|
|
|
—
|
|
|
(2.9
|
)
|
||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43.7
|
|
||||||||
ASU2018-02 adoption
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.8
|
)
|
|
4.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
||||||||
Balance at October 31, 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 attributable to Cooper stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
466.7
|
|
|
—
|
|
|
—
|
|
|
466.7
|
|
||||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.4
|
)
|
||||||||
Issuance of common stock for stock plans
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.8
|
|
||||||||
Treasury stock repurchase
|
(0.5
|
)
|
|
(0.1
|
)
|
|
0.5
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(156.1
|
)
|
|
—
|
|
|
(156.1
|
)
|
||||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35.1
|
|
||||||||
ASU2016-16 adoption
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13.3
|
)
|
|
—
|
|
|
—
|
|
|
(13.3
|
)
|
||||||||
Balance at October 31, 2019
|
49.1
|
|
|
$
|
4.9
|
|
|
4.1
|
|
|
$
|
0.4
|
|
|
$
|
1,615.0
|
|
|
$
|
(447.1
|
)
|
|
$
|
3,026.4
|
|
|
$
|
(571.2
|
)
|
|
$
|
0.2
|
|
|
$
|
3,628.6
|
|
Years Ended October 31,
(In millions) |
2019
|
|
2018
|
|
2017
|
|||||||
Cash flows from operating activities:
|
|
|
|
|
|
|||||||
Net income
|
$
|
466.7
|
|
|
$
|
139.9
|
|
|
$
|
372.9
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
280.8
|
|
|
275.1
|
|
|
188.4
|
|
||||
Impairment of intangibles
|
0.4
|
|
|
24.4
|
|
|
—
|
|
||||
Gain on sale of an intangible (Note 3)
|
(19.0
|
)
|
|
—
|
|
|
—
|
|
||||
Share-based compensation expense
|
35.1
|
|
|
43.2
|
|
|
37.2
|
|
||||
Inventory step-up release
|
0.1
|
|
|
50.5
|
|
|
—
|
|
||||
Loss on disposal of property, plant and equipment
|
7.7
|
|
|
5.1
|
|
|
6.1
|
|
||||
Deferred income taxes
|
(15.9
|
)
|
|
2.9
|
|
|
(7.1
|
)
|
||||
Provision for doubtful accounts
|
(2.6
|
)
|
|
8.2
|
|
|
2.3
|
|
||||
Change in assets and liabilities:
|
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
(55.6
|
)
|
|
(59.5
|
)
|
|
(25.1
|
)
|
||||
Inventories
|
(37.3
|
)
|
|
(5.0
|
)
|
|
(30.9
|
)
|
||||
Other assets
|
39.8
|
|
|
(64.9
|
)
|
|
(13.8
|
)
|
||||
Accounts payable
|
3.6
|
|
|
2.9
|
|
|
25.0
|
|
||||
Accrued liabilities
|
33.1
|
|
|
81.2
|
|
|
18.9
|
|
||||
Accrued income taxes
|
8.7
|
|
|
4.4
|
|
|
9.9
|
|
||||
Other long-term liabilities
|
(32.4
|
)
|
|
160.5
|
|
|
9.8
|
|
||||
Net cash provided by operating activities
|
713.2
|
|
|
668.9
|
|
|
593.6
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|||||||
Purchases of property, plant and equipment
|
(292.1
|
)
|
|
(193.6
|
)
|
—
|
|
(127.2
|
)
|
|||
Acquisitions of businesses and assets, net of cash acquired, and other
|
(59.2
|
)
|
|
(1,323.9
|
)
|
—
|
|
(254.1
|
)
|
|||
Net cash used in investing activities
|
(351.3
|
)
|
|
(1,517.5
|
)
|
|
(381.3
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|||||||
Proceeds from long-term debt
|
1,136.8
|
|
|
2,748.1
|
|
|
1,413.8
|
|
||||
Repayments of long-term debt
|
(1,861.8
|
)
|
|
(1,912.1
|
)
|
|
(1,364.6
|
)
|
||||
Net proceeds from (repayments of) short-term debt
|
525.3
|
|
|
13.6
|
|
|
(211.7
|
)
|
||||
Repurchase of common stock
|
(156.1
|
)
|
|
—
|
|
|
(55.0
|
)
|
||||
Proceeds related to share-based compensation awards
|
29.9
|
|
|
22.3
|
|
—
|
|
10.7
|
|
|||
Payments related to share-based compensation awards
|
(22.1
|
)
|
|
(20.5
|
)
|
|
(16.0
|
)
|
||||
Dividends on common stock
|
(3.0
|
)
|
|
(2.9
|
)
|
|
(2.9
|
)
|
||||
Debt acquisition costs
|
(0.4
|
)
|
|
(3.9
|
)
|
|
—
|
|
||||
Payment of contingent consideration
|
—
|
|
|
(0.2
|
)
|
|
(4.3
|
)
|
||||
Proceeds from construction allowance
|
—
|
|
|
—
|
|
|
2.1
|
|
||||
Net cash (used in) provided by financing activities
|
(351.4
|
)
|
|
844.4
|
|
|
(227.9
|
)
|
||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(1.2
|
)
|
|
(4.4
|
)
|
|
3.6
|
|
||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
9.3
|
|
|
(8.6
|
)
|
|
(12.0
|
)
|
||||
Cash, cash equivalents and restricted cash at beginning of year
|
80.2
|
|
|
88.8
|
|
|
100.8
|
|
||||
Cash, cash equivalents and restricted cash at end of year
|
$
|
89.5
|
|
|
$
|
80.2
|
|
|
$
|
88.8
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
||||
Cash paid for:
|
|
|
|
|
|
|
|
|
||||
Interest
|
$
|
75.3
|
|
|
$
|
82.1
|
|
|
$
|
31.3
|
|
|
Income taxes
|
$
|
39.2
|
|
|
$
|
18.8
|
|
|
$
|
15.6
|
|
|
Reconciliation of cash flow information:
|
|
|
|
|
|
|||||||
Cash and cash equivalents
|
$
|
89.0
|
|
|
$
|
77.7
|
|
|
$
|
88.8
|
|
|
Restricted cash included in other current assets
|
$
|
0.5
|
|
|
$
|
2.5
|
|
|
$
|
—
|
|
|
Total cash, cash equivalents, and restricted cash
|
$
|
89.5
|
|
|
$
|
80.2
|
|
|
$
|
88.8
|
|
•
|
CooperVision primarily develops, manufactures and markets a broad range of soft contact lenses for the worldwide vision correction market.
|
•
|
CooperSurgical primarily develops, manufactures, markets medical devices and procedures solutions, and provides services to improve health care delivery to women, babies and families.
|
•
|
Revenue recognition
|
•
|
Net realizable value of inventory - In assessing the value of inventories, we make estimates and judgments regarding aging of inventories and other relevant issues potentially affecting the saleable condition of products and estimated prices at which those products will sell. On an ongoing basis, we review the carrying value of our inventory, measuring number of months on hand and other indications of saleability. We reduce the value of inventory if there are indications that the carrying value is greater than net realizable value, resulting in a new, lower-cost basis for that inventory. Subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. While estimates are involved, historically, obsolescence has not been a significant factor due to long product dating and lengthy product life cycles.
|
•
|
Valuation of goodwill - Effective April 30, 2019, there was a change in the reporting units as a result of realignment in the internal reporting structure of the business around markets and customers at CooperSurgical. As such, Cooper Surgical has evolved into two reporting units, namely, Office/Surgical and Fertility, which reflects management oversight of operations. The change in reporting units did not result in a change in operating segments. We allocated CooperSurgical's goodwill based on relative fair values utilizing the discounted cash flow method and guideline public company method as our allocation base. The key assumptions and estimates for the market and income approaches used to determine fair value of the reporting units included market data and market multiples, discount rates and terminal growth rates, as well as future levels of revenue growth, and operating margins, which were based upon the Company’s strategic plan. The allocated fair values exceeded the carrying values for each of the three reporting units as of April 30, 2019. Our reporting units are CooperVision, Office/Surgical and Fertility reflecting the current way we manage our business.
|
•
|
Business combinations - We routinely consummate business combinations. Results of operations for acquired companies are included in our consolidated results of operations from the date of acquisition. We recognize separately from goodwill, the identifiable assets acquired, including acquired in-process research and development, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date fair values as defined by accounting standards related to fair value measurements. Key assumptions routinely utilized in allocation of purchase price to intangible assets include projected financial information such as revenue projections for companies acquired. As of the acquisition date, goodwill is measured as the excess of consideration given, over the net of the acquisition date fair values of the identifiable assets acquired and the liabilities assumed. Direct acquisition costs are expensed as incurred.
|
•
|
Income taxes - We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax losses and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.
|
•
|
Share-Based Compensation - We grant various share-based compensation awards, including stock options, performance unit shares, restricted stock and restricted stock units. Under fair value recognition provisions, share-based compensation expense is measured at the grant date based on the
|
October 31,
(In millions) |
2019
|
|
2018
|
||||
Raw materials
|
$
|
131.4
|
|
|
$
|
112.5
|
|
Work-in-process
|
13.3
|
|
|
12.6
|
|
||
Finished goods
|
362.2
|
|
|
343.7
|
|
||
|
$
|
506.9
|
|
|
$
|
468.8
|
|
October 31,
(In millions) |
2019
|
|
2018
|
||||
Land and improvements
|
$
|
19.9
|
|
|
$
|
18.3
|
|
Buildings and improvements
|
330.9
|
|
|
305.0
|
|
||
Machinery and equipment
|
1,582.3
|
|
|
1,420.7
|
|
||
Construction in progress
|
260.8
|
|
|
186.3
|
|
||
Property, plant and equipment, at cost
|
$
|
2,193.9
|
|
|
$
|
1,930.3
|
|
Less: Accumulated depreciation
|
1,061.8
|
|
|
954.3
|
|
||
|
$
|
1,132.1
|
|
|
$
|
976.0
|
|
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Technology
|
$
|
12.3
|
|
|
$
|
—
|
|
|
$
|
71.7
|
|
Customer relationships
|
7.5
|
|
|
23.5
|
|
|
43.1
|
|
|||
Trademarks
|
10.2
|
|
|
100.0
|
|
|
7.1
|
|
|||
Composite intangible asset
|
—
|
|
|
1,061.9
|
|
|
—
|
|
|||
Other
|
0.1
|
|
|
4.2
|
|
|
—
|
|
|||
Total identifiable intangible assets
|
$
|
30.1
|
|
|
$
|
1,189.6
|
|
|
$
|
121.9
|
|
Goodwill
|
29.8
|
|
|
70.6
|
|
|
123.1
|
|
|||
Net tangible assets (liabilities)
|
7.3
|
|
|
59.6
|
|
|
(4.8
|
)
|
|||
Total purchase price
|
$
|
67.2
|
|
|
$
|
1,319.8
|
|
|
$
|
240.2
|
|
(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)
|
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 year ended October 31, 2019
|
14.1
|
|
|
22.0
|
|
|
36.1
|
|
|||
Translation
|
8.4
|
|
|
(7.7
|
)
|
|
0.7
|
|
|||
Balance at October 31, 2019
|
$
|
1,765.4
|
|
|
$
|
663.5
|
|
|
$
|
2,428.9
|
|
|
October 31, 2019
|
|
October 31, 2018
|
|
|
||||||||||||
(In millions)
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
& Translation
|
|
Gross
Carrying
Amount (1)
|
|
Accumulated
Amortization
& Translation (1)
|
|
Weighted Average Amortization Period (In years)
|
||||||||
Intangible assets with definite lives:
|
|
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
$
|
148.5
|
|
|
$
|
27.3
|
|
|
$
|
138.1
|
|
|
$
|
16.9
|
|
|
14
|
Composite intangible asset
|
1,061.9
|
|
|
141.6
|
|
|
1,061.9
|
|
|
70.8
|
|
|
15
|
||||
Technology
|
399.9
|
|
|
221.2
|
|
|
387.2
|
|
|
190.7
|
|
|
11
|
||||
Customer relationships
|
357.6
|
|
|
194.0
|
|
|
350.0
|
|
|
168.6
|
|
|
13
|
||||
License and distribution rights and other (2)
|
27.9
|
|
|
15.3
|
|
|
74.9
|
|
|
52.7
|
|
|
11
|
||||
|
1,995.8
|
|
|
$
|
599.4
|
|
|
2,012.1
|
|
|
$
|
499.7
|
|
|
14
|
||
Less: accumulated amortization and translation
|
599.4
|
|
|
|
|
499.7
|
|
|
|
|
|
||||||
Intangible assets with definitive lives, net
|
$
|
1,396.4
|
|
|
|
|
$
|
1,512.4
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Intangible assets with indefinite lives, net (3)
|
8.9
|
|
|
|
|
8.9
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Total other intangible assets, net
|
$
|
1,405.3
|
|
|
|
|
$
|
1,521.3
|
|
|
|
|
|
Fiscal years:
|
(In millions)
|
||
2020
|
$
|
135.8
|
|
2021
|
134.5
|
|
|
2022
|
132.7
|
|
|
2023
|
130.4
|
|
|
Thereafter
|
863.0
|
|
|
Total remaining amortization for intangible assets with definite lives
|
$
|
1,396.4
|
|
October 31,
(In millions) |
2019
|
|
2018
|
||||
Overdraft and other credit facilities
|
$
|
63.7
|
|
|
$
|
37.1
|
|
Term loans
|
500.0
|
|
|
—
|
|
||
Short-term Debt
|
$
|
563.7
|
|
|
$
|
37.1
|
|
|
|
|
|
||||
Revolving credit
|
$
|
264.0
|
|
|
$
|
439.0
|
|
Term loans
|
1,000.0
|
|
|
1,550.0
|
|
||
Other
|
0.2
|
|
|
0.2
|
|
||
Less: unamortized debt issuance cost
|
(1.6
|
)
|
|
(3.5
|
)
|
||
Long-term Debt
|
$
|
1,262.6
|
|
|
$
|
1,985.7
|
|
Total Debt
|
$
|
1,826.3
|
|
|
$
|
2,022.8
|
|
|
|
||
Year
(In millions) |
|
||
2020
|
$
|
—
|
|
2021
|
$
|
264.2
|
|
2022
|
$
|
—
|
|
2023
|
$
|
1,000.0
|
|
2024
|
$
|
—
|
|
•
|
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.
|
Years Ended October 31,
(In millions) |
2019
|
|
2018
|
|
2017
|
||||||
Income before income taxes:
|
|
|
|
|
|
||||||
United States
|
$
|
(32.8
|
)
|
|
$
|
(122.8
|
)
|
|
$
|
7.8
|
|
Foreign
|
510.2
|
|
|
454.7
|
|
|
386.2
|
|
|||
|
$
|
477.4
|
|
|
$
|
331.9
|
|
|
$
|
394.0
|
|
Income tax provision
|
$
|
10.7
|
|
|
$
|
192.0
|
|
|
$
|
21.1
|
|
2019
|
|
2018
|
|
2017
|
|||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
9.2
|
|
|
$
|
165.6
|
|
|
$
|
6.9
|
|
State
|
1.6
|
|
|
0.5
|
|
|
1.8
|
|
|||
Foreign
|
15.8
|
|
|
23.0
|
|
|
19.5
|
|
|||
|
26.6
|
|
|
189.1
|
|
|
28.2
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(8.1
|
)
|
|
16.1
|
|
|
(3.9
|
)
|
|||
State
|
(0.9
|
)
|
|
1.0
|
|
|
1.4
|
|
|||
Foreign
|
(6.9
|
)
|
|
(14.2
|
)
|
|
(4.6
|
)
|
|||
|
(15.9
|
)
|
|
2.9
|
|
|
(7.1
|
)
|
|||
Income tax provision
|
$
|
10.7
|
|
|
$
|
192.0
|
|
|
$
|
21.1
|
|
Years Ended October 31,
(In millions) |
2019
|
|
2018
|
|
2017
|
||||||
Computed expected provision for taxes
|
$
|
100.3
|
|
|
$
|
77.5
|
|
|
$
|
137.9
|
|
(Decrease) increase in taxes resulting from:
|
|
|
|
|
|
||||||
Income earned outside the United States subject to different tax rates
|
(85.6
|
)
|
|
(97.5
|
)
|
|
(114.6
|
)
|
|||
State taxes, net of federal income tax benefit
|
0.4
|
|
|
(4.9
|
)
|
|
3.9
|
|
|||
Foreign source income subject to United States tax
|
16.1
|
|
|
—
|
|
|
—
|
|
|||
Research and development credit
|
(0.9
|
)
|
|
(0.7
|
)
|
|
(0.7
|
)
|
|||
U.S. tax reform
|
(5.8
|
)
|
|
214.6
|
|
|
—
|
|
|||
Incentive stock option compensation and non-deductible employee compensation
|
(7.8
|
)
|
|
(11.1
|
)
|
|
(12.9
|
)
|
|||
Tax accrual adjustment
|
(4.7
|
)
|
|
10.1
|
|
|
5.0
|
|
|||
Other, net
|
(1.3
|
)
|
|
4.0
|
|
|
2.5
|
|
|||
Actual provision for income taxes
|
$
|
10.7
|
|
|
$
|
192.0
|
|
|
$
|
21.1
|
|
|
|
|
|
|
|
Years Ended October 31,
(In millions) |
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
||||
Accounts receivable, principally due to allowances for doubtful accounts
|
$
|
3.6
|
|
|
$
|
4.0
|
|
Inventories
|
3.5
|
|
|
3.8
|
|
||
Litigation settlements
|
0.1
|
|
|
0.2
|
|
||
Accrued liabilities, reserves and compensation accruals
|
55.1
|
|
|
38.8
|
|
||
Foreign deferred tax assets
|
52.5
|
|
|
51.8
|
|
||
Restricted stock and stock option expenses
|
26.1
|
|
|
25.6
|
|
||
Net operating loss carryforwards
|
8.3
|
|
|
6.7
|
|
||
Intangible assets
|
11.1
|
|
|
3.1
|
|
||
Research and experimental expenses - Section 59(e)
|
2.5
|
|
|
2.5
|
|
||
Tax credit carryforwards
|
1.3
|
|
|
1.3
|
|
||
Total gross deferred tax assets
|
164.1
|
|
|
137.8
|
|
||
Less valuation allowance
|
(41.5
|
)
|
|
(39.1
|
)
|
||
Deferred tax assets
|
122.6
|
|
|
98.7
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Tax deductible goodwill
|
(25.0
|
)
|
|
(22.4
|
)
|
||
Plant and equipment
|
(14.3
|
)
|
|
(8.2
|
)
|
||
Deferred tax on foreign earnings
|
(5.9
|
)
|
|
(8.9
|
)
|
||
Transaction costs
|
(0.7
|
)
|
|
(0.5
|
)
|
||
Foreign deferred tax liabilities
|
(27.6
|
)
|
|
(31.3
|
)
|
||
Total gross deferred tax liabilities
|
(73.5
|
)
|
|
(71.3
|
)
|
||
Net deferred tax assets
|
$
|
49.1
|
|
|
$
|
27.4
|
|
Years Ended October 31,
|
|
|
|
||||||||
(In millions, except for earnings per share)
|
2019
|
|
2018
|
|
2017
|
||||||
Net income attributable to Cooper stockholders
|
$
|
466.7
|
|
|
$
|
139.9
|
|
|
$
|
372.9
|
|
Basic:
|
|
|
|
|
|
||||||
Weighted average common shares
|
49.4
|
|
|
49.1
|
|
|
48.9
|
|
|||
Basic earnings per share attributable to Cooper stockholders
|
$
|
9.44
|
|
|
$
|
2.85
|
|
|
$
|
7.63
|
|
Diluted:
|
|
|
|
|
|
||||||
Weighted average common shares
|
49.4
|
|
|
49.1
|
|
|
48.9
|
|
|||
Effect of dilutive stock options
|
0.6
|
|
|
0.6
|
|
|
0.7
|
|
|||
Diluted weighted average common shares
|
50.0
|
|
|
49.7
|
|
|
49.6
|
|
|||
Diluted earnings per share attributable to Cooper stockholders
|
$
|
9.33
|
|
|
$
|
2.81
|
|
|
$
|
7.52
|
|
Years Ended October 31,
|
|
|
|
|||||||
(In thousands, except exercise prices)
|
2019
|
|
2018
|
|
2017
|
|||||
Stock option shares excluded
|
198
|
|
|
257
|
|
|
90
|
|
||
Range of exercise prices
|
$
|
254.77
|
|
|
$226.30-$230.09
|
|
|
$
|
175.31
|
|
Restricted stock units excluded
|
8
|
|
|
21
|
|
|
3
|
|
(In millions)
|
Foreign Currency Translation Adjustment
|
|
Minimum Pension Liability
|
|
Total
|
||||||
Balance at October 31, 2016
|
$
|
(461.4
|
)
|
|
$
|
(28.2
|
)
|
|
$
|
(489.6
|
)
|
Gross change in value for the period
|
107.7
|
|
|
10.8
|
|
|
118.5
|
|
|||
Tax effect for the period
|
—
|
|
|
(4.2
|
)
|
|
(4.2
|
)
|
|||
Balance at October 31, 2017
|
$
|
(353.7
|
)
|
|
$
|
(21.6
|
)
|
|
$
|
(375.3
|
)
|
Gross change in value for the period
|
$
|
(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 for the period
|
$
|
9.0
|
|
|
$
|
(33.4
|
)
|
|
$
|
(24.4
|
)
|
Tax effect for the period
|
—
|
|
|
8.0
|
|
|
8.0
|
|
|||
Balance at October 31, 2019
|
$
|
(403.2
|
)
|
|
$
|
(43.9
|
)
|
|
$
|
(447.1
|
)
|
(1)
|
Represents reclassification to retained earnings from adoption of ASU 2018-02.
|
October 31,
|
|
|
|
||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Selling, general and administrative expense
|
$
|
28.7
|
|
|
$
|
37.6
|
|
|
$
|
33.1
|
|
Cost of sales
|
4.7
|
|
|
3.6
|
|
|
2.8
|
|
|||
Research and development expense
|
2.9
|
|
|
2.0
|
|
|
1.3
|
|
|||
Total compensation expense
|
$
|
36.3
|
|
|
$
|
43.2
|
|
|
$
|
37.2
|
|
Related income tax benefit
|
$
|
5.1
|
|
|
$
|
8.8
|
|
|
$
|
11.4
|
|
Years Ended October 31,
|
2019
|
|
2018
|
|
2017
|
|||
Expected life
|
4.4 years
|
|
|
5.4 years
|
|
|
5.5 years
|
|
Expected volatility
|
22.0
|
%
|
|
23.0
|
%
|
|
24.5
|
%
|
Risk-free interest rate
|
2.9
|
%
|
|
2.0
|
%
|
|
1.2
|
%
|
Dividend yield
|
0.02
|
%
|
|
0.03
|
%
|
|
0.03
|
%
|
|
Number of
Shares |
|
Weighted-
Average Exercise Price Per Share |
|
Weighted-
Average Remaining Contractual Term (in years) |
|
Aggregate
Intrinsic Value |
|||||
Outstanding at October 31, 2018
|
1,086,998
|
|
|
$
|
160.31
|
|
|
|
|
|
||
Granted
|
198,232
|
|
|
$
|
254.77
|
|
|
|
|
|
||
Exercised
|
(235,988
|
)
|
|
$
|
126.23
|
|
|
|
|
|
||
Forfeited or expired
|
(24,490
|
)
|
|
$
|
168.14
|
|
|
|
|
|
||
Outstanding at October 31, 2019
|
1,024,752
|
|
|
$
|
186.24
|
|
|
6.51
|
|
|
||
Vested and expected to vest at October 31, 2019
|
982,685
|
|
|
$
|
184.31
|
|
|
6.42
|
|
$
|
104,843,305
|
|
Vested and exercisable at October 31, 2019
|
335,551
|
|
|
$
|
145.32
|
|
|
4.98
|
|
$
|
48,882,775
|
|
|
Number of
Shares |
|
Weighted-
Average Grant Date Fair Value Per Share |
|||
Non-vested RSUs at October 31, 2018
|
489,161
|
|
|
$
|
179.67
|
|
Granted
|
155,310
|
|
|
$
|
258.37
|
|
Vested and issued
|
(168,294
|
)
|
|
$
|
168.12
|
|
Forfeited or expired
|
(46,606
|
)
|
|
$
|
197.51
|
|
Non-vested RSUs at October 31, 2019
|
429,571
|
|
|
$
|
210.72
|
|
Years Ended October 31,
(In millions) |
2019
|
|
2018
|
|
2017
|
||||||
Change in benefit obligation
|
|
|
|
|
|
||||||
Benefit obligation, beginning of year
|
$
|
147.1
|
|
|
$
|
151.7
|
|
|
$
|
138.9
|
|
Service cost
|
10.1
|
|
|
10.7
|
|
|
10.2
|
|
|||
Interest cost
|
6.1
|
|
|
5.0
|
|
|
4.4
|
|
|||
Benefits paid
|
(10.2
|
)
|
|
(3.7
|
)
|
|
(2.6
|
)
|
|||
Actuarial loss (gain)
|
36.6
|
|
|
(16.6
|
)
|
|
0.8
|
|
|||
Benefit obligation, end of year
|
$
|
189.7
|
|
|
$
|
147.1
|
|
|
$
|
151.7
|
|
Change in plan assets
|
|
|
|
|
|
||||||
Fair value of plan assets, beginning of year
|
$
|
121.0
|
|
|
$
|
112.8
|
|
|
$
|
89.2
|
|
Actual return on plan assets
|
12.1
|
|
|
1.9
|
|
|
16.2
|
|
|||
Employer contributions
|
13.1
|
|
|
10.0
|
|
|
10.0
|
|
|||
Benefits paid
|
(10.2
|
)
|
|
(3.7
|
)
|
|
(2.6
|
)
|
|||
Fair value of plan assets, end of year
|
$
|
136.0
|
|
|
$
|
121.0
|
|
|
$
|
112.8
|
|
Funded status at end of year
|
$
|
(53.7
|
)
|
|
$
|
(26.1
|
)
|
|
$
|
(38.9
|
)
|
Years Ended October 31,
(In millions) |
2019
|
|
2018
|
|
2017
|
||||||
Amounts recognized in the statement of financial position consist of:
|
|
|
|
|
|
||||||
Noncurrent liabilities
|
(53.7
|
)
|
|
(26.1
|
)
|
|
(38.9
|
)
|
|||
Net amount recognized at year end
|
$
|
(53.7
|
)
|
|
$
|
(26.1
|
)
|
|
$
|
(38.9
|
)
|
Years Ended October 31,
(In millions) |
2019
|
|
2018
|
|
2017
|
||||||
Amounts recognized in accumulated other comprehensive income consist of:
|
|
|
|
|
|
||||||
Net loss
|
57.3
|
|
|
24.0
|
|
|
34.9
|
|
|||
Accumulated other comprehensive income
|
$
|
57.3
|
|
|
$
|
24.0
|
|
|
$
|
34.9
|
|
Years Ended October 31,
(In millions) |
2019
|
|
2018
|
|
2017
|
||||||
Information for pension plans with projected benefit obligation in excess of plan assets
|
|
|
|
|
|
||||||
Projected benefit obligation
|
$
|
189.7
|
|
|
$
|
147.1
|
|
|
$
|
151.7
|
|
Fair value of plan assets
|
$
|
136.0
|
|
|
$
|
121.0
|
|
|
$
|
112.8
|
|
Years Ended October 31,
(In millions) |
2019
|
|
2018
|
|
2017
|
||||||
Information for pension plans with accumulated benefit obligations in excess of plan assets
|
|
|
|
|
|
||||||
Accumulated benefit obligation
|
$
|
170.8
|
|
|
$
|
130.5
|
|
|
$
|
133.3
|
|
Fair value of plan assets
|
$
|
136.0
|
|
|
$
|
121.0
|
|
|
$
|
112.8
|
|
Years Ended October 31,
(In millions) |
2019
|
|
2018
|
|
2017
|
||||||
Reconciliation of prepaid (accrued) pension cost
|
|
|
|
|
|
||||||
Accrued pension cost at prior fiscal year end
|
$
|
2.2
|
|
|
$
|
4.0
|
|
|
$
|
4.0
|
|
Net periodic benefit cost
|
7.2
|
|
|
8.2
|
|
|
10.0
|
|
|||
Contributions made during the year
|
(13.1
|
)
|
|
(10.0
|
)
|
|
(10.0
|
)
|
|||
Accrued pension cost at fiscal year end
|
$
|
(3.7
|
)
|
|
$
|
2.2
|
|
|
$
|
4.0
|
|
Years Ended October 31,
(In millions) |
2019
|
|
2018
|
|
2017
|
||||||
Components of net periodic benefit cost and other amounts recognized in (other comprehensive income) the fiscal year
|
|
|
|
|
|
||||||
Net periodic benefit cost:
|
|
|
|
|
|
||||||
Service cost
|
$
|
10.1
|
|
|
$
|
10.7
|
|
|
$
|
10.2
|
|
Interest cost
|
6.1
|
|
|
5.0
|
|
|
4.4
|
|
|||
Expected return on plan assets
|
(9.8
|
)
|
|
(9.2
|
)
|
|
(7.3
|
)
|
|||
Recognized actuarial loss
|
0.8
|
|
|
1.7
|
|
|
2.7
|
|
|||
Net periodic pension cost
|
$
|
7.2
|
|
|
$
|
8.2
|
|
|
$
|
10.0
|
|
Years Ended October 31,
(In millions) |
2019
|
|
2018
|
|
2017
|
||||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income
|
|
|
|
|
|
|
|
|
|||
Net loss (gain)
|
34.2
|
|
|
(9.3
|
)
|
|
(8.1
|
)
|
|||
Amortizations of net (gain)
|
(0.8
|
)
|
|
(1.7
|
)
|
|
(2.7
|
)
|
|||
Total recognized in other comprehensive income
|
$
|
33.4
|
|
|
$
|
(11.0
|
)
|
|
$
|
(10.8
|
)
|
Total recognized in net periodic benefit cost and other comprehensive income
|
$
|
40.6
|
|
|
$
|
(2.8
|
)
|
|
$
|
(0.8
|
)
|
Years Ended October 31,
|
2019
|
|
2018
|
|
2017
|
|||
Weighted-average assumptions used in computing the net periodic pension cost and projected benefit obligation at year end:
|
|
|
|
|
|
|||
Discount rate for determining net periodic pension cost:
|
|
|
|
|
|
|||
Projected Benefit Obligation
|
4.42
|
%
|
|
3.75
|
%
|
|
3.74
|
%
|
Service Cost
|
4.49
|
%
|
|
3.85
|
%
|
|
3.90
|
%
|
Interest Cost
|
4.22
|
%
|
|
3.39
|
%
|
|
3.23
|
%
|
Discount rate for determining benefit obligations at year end
|
3.13
|
%
|
|
4.42
|
%
|
|
3.75
|
%
|
Rate of compensation increase for determining expense
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
Rate of compensation increase for determining benefit obligations at year end
|
3.60
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
Expected rate of return on plan assets for determining net periodic pension cost
|
8.00
|
%
|
|
8.00
|
%
|
|
8.00
|
%
|
Expected rate of return on plan assets at year end
|
8.00
|
%
|
|
8.00
|
%
|
|
8.00
|
%
|
Measurement date for determining assets and benefit obligations at year end
|
10/31/2019
|
|
|
10/31/2018
|
|
|
10/31/2017
|
|
Years Ended October 31,
|
2019
|
|
2018
|
|
2017
|
|||
Asset category
|
|
|
|
|
|
|||
Cash and cash equivalents
|
3.2
|
%
|
|
2.1
|
%
|
|
0.9
|
%
|
Corporate common stock
|
—
|
%
|
|
14.5
|
%
|
|
12.2
|
%
|
Equity mutual funds
|
63.7
|
%
|
|
47.4
|
%
|
|
49.9
|
%
|
Hedging Strategy Funds
|
4.9
|
%
|
|
—
|
%
|
|
—
|
%
|
Real estate funds
|
—
|
%
|
|
2.7
|
%
|
|
2.9
|
%
|
Bond mutual funds
|
28.2
|
%
|
|
33.3
|
%
|
|
34.1
|
%
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
(In millions)
|
Total
|
|
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
|
Significant
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Asset category
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
4.4
|
|
|
$
|
4.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity mutual funds
|
86.5
|
|
|
86.5
|
|
|
—
|
|
|
—
|
|
||||
Hedging Strategy Funds
|
6.7
|
|
|
6.7
|
|
|
—
|
|
|
—
|
|
||||
Bond mutual funds
|
38.4
|
|
|
15.3
|
|
|
23.1
|
|
|
—
|
|
||||
Total
|
$
|
136.0
|
|
|
$
|
112.9
|
|
|
$
|
23.1
|
|
|
$
|
—
|
|
Years
(In millions) |
|
||
2020
|
$
|
8.7
|
|
2021
|
$
|
9.5
|
|
2022
|
$
|
10.5
|
|
2023
|
$
|
11.0
|
|
2024
|
$
|
11.9
|
|
2025-2029
|
$
|
66.7
|
|
(In millions)
|
|
||
2020
|
$
|
38.5
|
|
2021
|
34.9
|
|
|
2022
|
31.2
|
|
|
2023
|
28.0
|
|
|
2024
|
26.5
|
|
|
2025 and thereafter
|
173.6
|
|
|
|
$
|
332.7
|
|
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
CooperVision net sales by category:
|
|
|
|
|
|
||||||
Toric lens
|
$
|
620.0
|
|
|
$
|
591.4
|
|
|
$
|
526.8
|
|
Multifocal lens
|
202.9
|
|
|
196.6
|
|
|
177.2
|
|
|||
Single-use sphere lens
|
568.2
|
|
|
520.1
|
|
|
438.3
|
|
|||
Non single-use sphere and other
|
581.8
|
|
|
573.9
|
|
|
531.8
|
|
|||
Total CooperVision net sales
|
1,972.9
|
|
|
1,882.0
|
|
|
1,674.1
|
|
|||
CooperSurgical net sales by category:
|
|
|
|
|
|
||||||
Office and surgical products
|
422.4
|
|
|
400.4
|
|
|
214.7
|
|
|||
Fertility
|
258.1
|
|
|
250.4
|
|
|
250.2
|
|
|||
Total CooperSurgical net sales
|
680.5
|
|
|
650.8
|
|
|
464.9
|
|
|||
Total net sales
|
$
|
2,653.4
|
|
|
$
|
2,532.8
|
|
|
$
|
2,139.0
|
|
(In millions)
|
CooperVision
|
|
CooperSurgical
|
|
Corporate
|
|
Consolidated
|
||||||||
2019
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
1,972.9
|
|
|
$
|
680.5
|
|
|
$
|
—
|
|
|
$
|
2,653.4
|
|
Operating income (loss)
|
$
|
506.4
|
|
|
$
|
87.9
|
|
|
$
|
(47.6
|
)
|
|
$
|
546.7
|
|
Interest expense
|
|
|
|
|
|
|
68.0
|
|
|||||||
Other expense, net
|
|
|
|
|
|
|
1.3
|
|
|||||||
Income before income taxes
|
|
|
|
|
|
|
$
|
477.4
|
|
||||||
Identifiable assets
|
$
|
3,911.6
|
|
|
$
|
2,189.8
|
|
|
$
|
173.1
|
|
|
$
|
6,274.5
|
|
Depreciation expense
|
$
|
125.8
|
|
|
$
|
9.0
|
|
|
$
|
0.2
|
|
|
$
|
135.0
|
|
Amortization expense
|
$
|
40.9
|
|
|
$
|
104.9
|
|
|
$
|
—
|
|
|
$
|
145.8
|
|
Capital expenditures
|
$
|
259.0
|
|
|
$
|
33.1
|
|
|
$
|
—
|
|
|
$
|
292.1
|
|
2018
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
1,882.0
|
|
|
$
|
650.8
|
|
|
$
|
—
|
|
|
$
|
2,532.8
|
|
Operating income (loss)
|
$
|
479.8
|
|
|
$
|
(19.9
|
)
|
|
$
|
(56.8
|
)
|
|
$
|
403.1
|
|
Interest expense
|
|
|
|
|
|
|
82.7
|
|
|||||||
Other (income), net
|
|
|
|
|
|
|
(11.5
|
)
|
|||||||
Income before income taxes
|
|
|
|
|
|
|
$
|
331.9
|
|
||||||
Identifiable assets
|
$
|
3,746.0
|
|
|
$
|
2,201.7
|
|
|
$
|
165.1
|
|
|
$
|
6,112.8
|
|
Depreciation expense
|
$
|
120.1
|
|
|
$
|
8.1
|
|
|
$
|
0.2
|
|
|
$
|
128.4
|
|
Amortization expense
|
$
|
43.6
|
|
|
$
|
103.1
|
|
|
$
|
—
|
|
|
$
|
146.7
|
|
Capital expenditures
|
$
|
178.4
|
|
|
$
|
15.1
|
|
|
$
|
0.1
|
|
|
$
|
193.6
|
|
2017
|
|
|
|
|
|
|
|
|
|||||||
Net sales
|
$
|
1,674.1
|
|
|
$
|
464.9
|
|
|
$
|
—
|
|
|
$
|
2,139.0
|
|
Operating income (loss)
|
$
|
418.4
|
|
|
$
|
58.5
|
|
|
$
|
(47.8
|
)
|
|
$
|
429.1
|
|
Interest expense
|
|
|
|
|
|
|
33.4
|
|
|||||||
Other expense, net
|
|
|
|
|
|
|
1.7
|
|
|||||||
Income before income taxes
|
|
|
|
|
|
|
$
|
394.0
|
|
||||||
Identifiable assets
|
$
|
3,562.6
|
|
|
$
|
1,107.5
|
|
|
$
|
188.6
|
|
|
$
|
4,858.7
|
|
Depreciation expense
|
$
|
115.0
|
|
|
$
|
4.7
|
|
|
$
|
0.3
|
|
|
$
|
120.0
|
|
Amortization expense
|
$
|
36.7
|
|
|
$
|
31.7
|
|
|
$
|
—
|
|
|
$
|
68.4
|
|
Capital expenditures
|
$
|
108.2
|
|
|
$
|
18.9
|
|
|
$
|
0.1
|
|
|
$
|
127.2
|
|
(In millions)
|
United
States |
|
Europe
|
|
Rest of
World, Other Eliminations & Corporate |
|
Consolidated
|
||||||||
2019
|
|
|
|
|
|
|
|
||||||||
Net sales to unaffiliated customers
|
$
|
1,211.8
|
|
|
$
|
854.8
|
|
|
$
|
586.8
|
|
|
$
|
2,653.4
|
|
Sales between geographic areas
|
650.7
|
|
|
300.8
|
|
|
(951.5
|
)
|
|
—
|
|
||||
Net sales
|
$
|
1,862.5
|
|
|
$
|
1,155.6
|
|
|
$
|
(364.7
|
)
|
|
$
|
2,653.4
|
|
Operating income
|
$
|
83.2
|
|
|
$
|
29.3
|
|
|
$
|
434.2
|
|
|
$
|
546.7
|
|
Property, plant and equipment, net
|
$
|
626.5
|
|
|
$
|
358.8
|
|
|
$
|
146.8
|
|
|
$
|
1,132.1
|
|
2018
|
|
|
|
|
|
|
|
||||||||
Sales to unaffiliated customers
|
$
|
1,162.2
|
|
|
$
|
846.5
|
|
|
$
|
524.1
|
|
|
$
|
2,532.8
|
|
Sales between geographic areas
|
274.3
|
|
|
407.1
|
|
|
(681.4
|
)
|
|
—
|
|
||||
Net sales
|
$
|
1,436.5
|
|
|
$
|
1,253.6
|
|
|
$
|
(157.3
|
)
|
|
$
|
2,532.8
|
|
Operating (loss) income
|
$
|
(39.3
|
)
|
|
$
|
(16.8
|
)
|
|
$
|
459.2
|
|
|
$
|
403.1
|
|
Property, plant and equipment, net
|
$
|
516.7
|
|
|
$
|
340.7
|
|
|
$
|
118.6
|
|
|
$
|
976.0
|
|
2017
|
|
|
|
|
|
|
|
||||||||
Sales to unaffiliated customers
|
$
|
931.1
|
|
|
$
|
746.2
|
|
|
$
|
461.7
|
|
|
$
|
2,139.0
|
|
Sales between geographic areas
|
255.7
|
|
|
440.5
|
|
|
(696.2
|
)
|
|
—
|
|
||||
Net sales
|
$
|
1,186.8
|
|
|
$
|
1,186.7
|
|
|
$
|
(234.5
|
)
|
|
$
|
2,139.0
|
|
Operating income
|
$
|
37.8
|
|
|
$
|
1.6
|
|
|
$
|
389.7
|
|
|
$
|
429.1
|
|
Property, plant and equipment, net
|
$
|
472.8
|
|
|
$
|
352.3
|
|
|
$
|
85.0
|
|
|
$
|
910.1
|
|
(In millions, except for earnings per share)
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
2019
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
628.1
|
|
|
$
|
654.3
|
|
|
$
|
679.4
|
|
|
$
|
691.6
|
|
Gross profit
|
$
|
418.5
|
|
|
$
|
432.6
|
|
|
$
|
450.7
|
|
|
$
|
455.0
|
|
Income before income taxes
|
$
|
93.8
|
|
|
$
|
128.1
|
|
|
$
|
127.0
|
|
|
$
|
128.5
|
|
Net income attributable to Cooper stockholders
|
$
|
103.2
|
|
|
$
|
122.4
|
|
|
$
|
120.1
|
|
|
$
|
121.0
|
|
Earnings per share attributable to Cooper stockholders - basic
|
$
|
2.09
|
|
|
$
|
2.48
|
|
|
$
|
2.43
|
|
|
$
|
2.44
|
|
Earnings per share attributable to Cooper stockholders - diluted
|
$
|
2.07
|
|
|
$
|
2.45
|
|
|
$
|
2.40
|
|
|
$
|
2.42
|
|
2018
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
590.0
|
|
|
$
|
631.3
|
|
|
$
|
660.0
|
|
|
$
|
651.5
|
|
Gross profit
|
$
|
370.9
|
|
|
$
|
404.5
|
|
|
$
|
426.8
|
|
|
$
|
430.0
|
|
Income before income taxes
|
$
|
74.8
|
|
|
$
|
54.0
|
|
|
$
|
90.4
|
|
|
$
|
112.7
|
|
Net (loss) income attributable to Cooper stockholders
|
$
|
(122.5
|
)
|
|
$
|
60.9
|
|
|
$
|
100.8
|
|
|
$
|
100.6
|
|
Earnings (loss) per share attributable to Cooper stockholders - basic
|
$
|
(2.50
|
)
|
|
$
|
1.24
|
|
|
$
|
2.05
|
|
|
$
|
2.05
|
|
Earnings (loss) per share attributable to Cooper stockholders - diluted
|
$
|
(2.50
|
)
|
|
$
|
1.23
|
|
|
$
|
2.03
|
|
|
$
|
2.02
|
|
(In millions)
|
Balance
Beginning of Year |
|
Additions
Charged to Costs and Expenses |
|
(Deductions)
Recoveries/ Other (1) |
|
Balance
at End of Year |
||||||||
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
||||||||
Year Ended October 31, 2019
|
$
|
19.0
|
|
|
$
|
1.6
|
|
|
$
|
(4.2
|
)
|
|
$
|
16.4
|
|
Year Ended October 31, 2018
|
$
|
10.8
|
|
|
$
|
11.5
|
|
|
$
|
(3.3
|
)
|
|
$
|
19.0
|
|
Year Ended October 31, 2017
|
$
|
8.5
|
|
|
$
|
2.6
|
|
|
$
|
(0.3
|
)
|
|
$
|
10.8
|
|
(In millions)
|
Balance
Beginning of Year |
|
Additions
|
|
Reductions/ Charges (2)
|
|
Balance
at End of Year |
||||||||
Deferred income tax valuation allowance:
|
|
|
|
|
|
|
|
||||||||
Year Ended October 31, 2019
|
$
|
39.1
|
|
|
$
|
3.9
|
|
|
$
|
(1.5
|
)
|
|
$
|
41.5
|
|
Year Ended October 31, 2018
|
$
|
59.1
|
|
|
$
|
2.8
|
|
|
$
|
(22.8
|
)
|
|
$
|
39.1
|
|
Year Ended October 31, 2017
|
$
|
13.3
|
|
|
$
|
45.9
|
|
|
$
|
(0.1
|
)
|
|
$
|
59.1
|
|
(2)
|
Fiscal year 2018 reductions includes $16.5 million of valuation allowance from prior years as a result of the sale of investment in research and development credits.
|
Exhibit Number
|
Description of Document
|
3.1
|
|
3.2
|
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4.1
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10.1#
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10.2#
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10.3#
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10.4#
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10.5#
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10.6#
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10.7#
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10.8#
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10.9#
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10.10#
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10.11#
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Exhibit Number
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Description of Document
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10.26
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10.27
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10.28
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10.29
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10.30
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10.31#
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21
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23
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|
24
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Power of Attorney (included on signature page hereto)
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31.1
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31.2
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32.1*
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32.2*
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|
101
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The following materials from the Company's Annual Report on Form 10-K for the year ended October 31, 2019, formatted in Inline XBRL (Extensible Business Reporting Language):(i) Consolidated Statements of Income for the years ended October 31, 2019, 2018 and 2017, (ii) Consolidated Statements of Comprehensive Income for the years ended October 31, 2019, 2018 and 2017, (iii) Consolidated Balance Sheets at October 31, 2019 and 2018, (iv) Consolidated Statements of Stockholders' Equity for the years ended October 31, 2019, 2018 and 2017, (v) Consolidated Statements of Cash Flows for the years ended October 31, 2019, 2018 and 2017, (vi) related notes to consolidated financial statements and (vii) Schedule II Valuation and Qualifying Accounts
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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(a)
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The agreement received confidential treatment from the Securities and Exchange Commission with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Commission.
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#
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Indicates management contract or compensatory plan.
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Signature
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Capacity
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Date
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/s/ ALBERT G. WHITE, III
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President, Chief Executive Officer and Director (Principal Executive Officer)
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December 20, 2019
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(Albert G. White, III)
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/s/ A. THOMAS BENDER
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Chairman of the Board
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December 20, 2019
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(A. Thomas Bender)
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/s/ ALLAN E. RUBENSTEIN, M.D.
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Vice Chairman of the Board and Lead Director
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December 20, 2019
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(Allan E. Rubenstein)
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/s/ BRIAN G. ANDREWS
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Senior Vice President, Chief Financial Officer & Treasurer
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December 20, 2019
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(Brian G. Andrews)
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(Principal Financial Officer)
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/s/ AGOSTINO RICUPATI
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Chief Accounting Officer & Senior Vice President, Finance & Tax
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December 20, 2019
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(Agostino Ricupati)
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(Principal Accounting Officer)
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/s/ COLLEEN E. JAY
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Director
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December 20, 2019
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(Colleen E. Jay)
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/s/ MICHAEL H. KALKSTEIN
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Director
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December 20, 2019
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(Michael H. Kalkstein)
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|
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/s/ WILLIAM A. KOZY
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Director
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December 20, 2019
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(William A. Kozy)
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|
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/s/ JODY S. LINDELL
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Director
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|
December 20, 2019
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(Jody S. Lindell)
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|
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/s/ GARY S. PETERSMEYER
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Director
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|
December 20, 2019
|
(Gary S. Petersmeyer)
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|
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|
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/s/ ROBERT S. WEISS
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Director
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|
December 20, 2019
|
(Robert S. Weiss)
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BOARD OF DIRECTORS
A. Thomas Bender
Chairman of the Board
Allan E. Rubenstein, M.D.
Vice Chairman and Lead Director,
Chairman of the Board, CalAsia
Pharmaceuticals, Inc.
Colleen E. Jay
Director
Michael H. Kalkstein
Of Counsel, Palo Alto Office, Dechert LLP
William A. Kozy
Director
Jody S. Lindell
President and Chief Executive Officer,
S.G. Management, Inc.
Gary S. Petersmeyer
Director
Robert S. Weiss
Director
Albert G. White, III
President & Chief Executive Officer
COMMITTEES OF THE BOARD
Audit Committee
Jody S. Lindell (Chairman)
Michael H. Kalkstein
William A. Kozy
Gary Petersmeyer
Corporate Governance and Nominating Committee
Allan E. Rubenstein, M.D. (Chairman)
Michael H. Kalkstein
William A. Kozy
Colleen E. Jay
Organization and Compensation Committee
Michael H. Kalkstein (Chairman)
Colleen E. Jay
Jody S. Lindell
Gary S. Petersmeyer
|
|
EXECUTIVE OFFICERS
Albert G. White, III
President and Chief Executive Officer
Randal L. Golden
Vice President, Secretary and
General Counsel
Agostino Ricupati
Senior Vice President Finance and Tax, and Chief Accounting Officer
Brian G. Andrews
Senior Vice President, Chief Financial Officer & Treasurer
Holly Sheffield
Executive Vice President and Chief Strategy Officer
Robert D. Auerbach, M.D
President of CooperSurgical, Inc.
Daniel G. McBride, Esq.
Executive Vice President and Chief Operating Officer; President of CooperVision, Inc.
PRINCIPAL SUBSIDIARIES
CooperVision, Inc.
6101 Bollinger Canyon Road
Suite 500
San Ramon, CA 94583
925-460-3600
www.coopervision.com
CooperSurgical, Inc.
75 Corporate Drive
Trumbull, CT 06611
203-601-5200
www.coopersurgical.com
CORPORATE OFFICES
The Cooper Companies, Inc.
6101 Bollinger Canyon Road
Suite 500
San Ramon, CA 94583
925-460-3600
www.coopercos.com
|
|
INVESTOR INFORMATION
Recent news releases, the annual report on Securities and Exchange Commission Form 10-K, information about the Company's corporate governance program, recent investor presentations, replays of quarterly conference calls and historical stock quotes are available on our Web site at www.coopercos.com.
INVESTOR RELATIONS CONTACT
Kim Duncan
Vice President of Investor Relations & Administration
6101 Bollinger Canyon Road
Suite 500
San Ramon, CA 94583
Voice: 925-460-3663
E-mail: ir@cooperco.com
ANNUAL MEETING
The Cooper Companies will hold its Annual Stockholders' Meeting in March 2020.
TRANSFER AGENT
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
800-937-5449
TRADEMARKS
The Cooper Companies, Inc., its subsidiaries or affiliates own, license or distribute the registered trademarks, common law trademarks and trade names referenced in this report.
INDEPENDENT AUDITORS
KPMG LLP
STOCK EXCHANGE LISTING
The New York Stock Exchange
Ticker Symbol “COO”
|
•
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prior to this time, our board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;
|
•
|
upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time
|
•
|
at or subsequent to such time, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.
|
•
|
any merger or consolidation involving the corporation and the interested stockholder;
|
•
|
any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder;
|
•
|
any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder, subject to limited exceptions;
|
•
|
any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or
|
•
|
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.
|
Name
|
JURISDICTION OF INCORPORATION
|
The Cooper Companies, Inc.
|
Delaware
|
CooperVision, Inc.
|
New York
|
Cooper Global Holdings, Inc.
|
Delaware
|
The Cooper Companies Global Holdings LP
|
England
|
CooperVision International Holding Company, LP
|
England
|
CooperVision de Brasil Ltda
|
Brazil
|
CooperVision Singapore Pte Ltd.
|
Singapore
|
CooperVision Optical Trading (Shanghai) Company Ltd.
|
China
|
CVI Contact Lens India Pvt. Ltd.
|
India
|
CS Holdings CV
|
Netherlands
|
CooperSurgical Netherlands BV
|
Netherlands
|
CooperVision Holdings Ltd.
|
United Kingdom
|
CooperVision Limited
|
United Kingdom
|
CooperVision Manufacturing Limited
|
United Kingdom
|
CooperVision Australia Pty Limited
|
Australia
|
CooperVision Distribution SPRL
|
Belgium
|
CooperVision SAS
|
France
|
CooperVision Canada Corp.
|
Canada
|
CooperVision GmbH
|
Germany
|
CooperVision Italia Srl
|
Italy
|
CooperVision Israel Ltd.
|
Israel
|
CooperVision Nederland BV
|
Belgium
|
CooperVision Nederland B.V, Belgian Branch
|
Belgium
|
CooperVision Japan, Inc.
|
Japan
|
Procornea Nederland B.V.
|
Netherlands
|
CooperVision LLC
|
Russia
|
CooperVision Iberia SL
|
Spain
|
CooperVision S.A. (Pty) Limited
|
South Africa
|
CooperVision Nordic AB
|
Sweden
|
CooperVision Sarl
|
Switzerland
|
CooperVision Lens Care Ltd.
|
United Kingdom
|
Sauflon CL Ltd
|
United Kingdom
|
CooperVision CL Kft
|
Hungary
|
CooperVision Vision Manufacturing Puerto Rico LLC
|
Puerto Rico
|
CooperVision Manufacturing Costa Rica, SRL
|
Costa Rica
|
CooperVision Caribbean Corp.
|
Cayman Islands
|
CooperSurgical Canada Inc.
|
Canada
|
CooperSurgical Holdings Ltd.
|
United Kingdom
|
CooperSurgical Sprl
|
Belgium
|
CooperMedical S.r.l.
|
Costa Rica
|
Invitro Genetics Ltd.
|
United Kingdom
|
Research Instruments Ltd.
|
United Kingdom
|
Origio A/S
|
Denmark
|
Paragon Vision Sciences, Inc.
|
Arizona
|
Cooper Medical, Inc.
|
Delaware
|
CooperSurgical, Inc.
|
Delaware
|
Origio, Inc.
|
Virginia
|
CooperGenomics, Inc.
|
Delaware
|
Reprogenetics LLC
|
Delaware
|
Invitro Genetics LLC
|
Delaware
|
CooperSurgical Distribution B.V.
|
Netherlands
|
LifeGlobal Group LLC
|
Connecticut
|
Date: December 20, 2019
|
|
|
|
/s/ Albert G. White III
|
|
|
Albert G. White III
|
|
|
President and Chief Executive Officer
|
|
Date: December 20, 2019
|
|
|
|
/s/ Brian G. Andrews
|
|
|
Brian G. Andrews
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
|
•
|
the Annual Report on Form 10-K of The Cooper Companies, Inc. (the "Company") for the fiscal year ended October 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
|
•
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: December 20, 2019
|
/s/ Albert G. White III
|
|
Albert G. White III
|
|
President and Chief Executive Officer
|
•
|
the Annual Report on Form 10-K of The Cooper Companies, Inc. (the "Company") for the fiscal year ended October 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
|
•
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: December 20, 2019
|
/s/ Brian G. Andrews
|
|
Brian G. Andrews
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|