SAN RAMON, Calif., Aug. 28, 2024 (GLOBE NEWSWIRE) -- CooperCompanies (NASDAQ:COO), a leading global medical device company, today announced financial results for its fiscal third quarter ended July 31, 2024.
Revenue increased 8% year-over-year to $1,002.8 million. CooperVision (CVI) revenue up 7% to $675.6 million, and CooperSurgical (CSI) revenue up 9% to $327.2 million.
GAAP diluted earnings per share (EPS) of $0.52, up $0.09 or 22% from last year's third quarter.
Non-GAAP diluted EPS of $0.96, up $0.12 or 14% from last year's third quarter. See "Reconciliation of Selected GAAP Results to Non-GAAP Results" below.
Commenting on the results, Al White, Cooper's President and CEO said, "Our strong performance this quarter reflects the strength of our business, the successful execution on our multi-year growth strategy, and the hard work and dedication of our amazing employees. Our momentum is strong, and we are well positioned for success today and into the future."
Third Quarter Operating Results
Revenue of $1,002.8 million, up 8% from last year's third quarter, up 10% in constant currency, up 8% organically.
Gross margin of 66% compared with 66% in last year's third quarter. On a non-GAAP basis, gross margin was 67%, up from 66% last year. The margin was driven by continuing efficiency gains and product mix, offset by currency.
Operating margin of 19% compared with 16% in last year's third quarter. On a non-GAAP basis, operating margin was 26%, up from 24% last year. The margin was driven by strong gross margin and SG&A expense leverage.
Interest expense of $28.5 million compared with $26.8 million in last year's third quarter driven by higher average debt and higher interest rates. On a non-GAAP basis, interest expense was $27.1 million, up from $26.8 million.
Cash provided by operations of $207.5 million offset by capital expenditures of $89.0 million resulted in free cash flow of $118.5 million.
Third Quarter CooperVision (CVI) Revenue
Revenue of $675.6 million, up 7% from last year's third quarter, up 9% in constant currency, up 10% organically.
Revenue by category:
% change y/y
(In millions)
Currency
Constant
Acquisitions and
3Q24
Reported
Impact
Currency
Divestitures
Organic
Toric and multifocal
$
326.4
10%
2%
12%
—%
12%
Sphere, other
349.2
5%
2%
7%
1%
8%
Total
$
675.6
7%
2%
9%
1%
10%
Revenue by geography:
% change y/y
(In millions)
Currency
Constant
Acquisitions and
3Q24
Reported
Impact
Currency
Divestitures
Organic
Americas
$
279.8
13%
—%
13%
—%
13%
EMEA
256.5
6%
1%
7%
—%
7%
Asia Pacific
139.3
—%
7%
7%
—%
7%
Total
$
675.6
7%
2%
9%
1%
10%
Third Quarter CooperSurgical (CSI) Revenue
Revenue of $327.2 million, up 9% from last year's third quarter, up 10% in constant currency, up 5% organically.
Revenue by category:
% change y/y
(In millions)
Currency
Constant
Acquisitions and
3Q24
Reported
Impact
Currency
Divestitures
Organic
Office and surgical
$
197.9
11%
—%
11%
(9)%
2%
Fertility
129.3
6%
3%
9%
1%
10%
Total
$
327.2
9%
1%
10%
(5)%
5%
Fiscal Year 2024 Financial Guidance
The Company raised its fiscal year 2024 financial guidance. Details are summarized as follows:
Fiscal 2024 total revenue of $3,892 - $3,913 million (organic growth of 8% to 8.5%)
CVI revenue of $2,606 - $2,618 million (organic growth of 9% to 9.5%)
CSI revenue of $1,286 - $1,294 million (organic growth of 5.5% to 6.5%)
Fiscal 2024 non-GAAP diluted EPS of $3.64- $3.67
Fiscal fourth quarter 2024 total revenue of $1,015 - $1,036 million (organic growth of 7% to 9.5%)
CVI revenue of $673 - $685 million (organic growth of 8% to 10%)
CSI revenue of $342 - $350 million (organic growth of 6% to 8%)
Fiscal fourth quarter 2024 non-GAAP diluted EPS of $0.98 to $1.01
Non-GAAP diluted earnings per share guidance excludes amortization and impairment of intangible assets, and certain income or gains and charges or expenses including acquisition and integration costs which we may incur as part of our continuing operations.
With respect to the Company's guidance expectations, the Company has not reconciled non-GAAP diluted earnings per share guidance to GAAP diluted earnings per share due to the inherent difficulty in forecasting acquisition-related, integration and restructuring charges and expenses, which are reconciling items between the non-GAAP and GAAP measure. Due to the unknown effect, timing and potential significance of such charges and expenses that impact GAAP diluted earnings per share, the Company is not able to provide such guidance.
Reconciliation of Selected GAAP Results to Non-GAAP Results
To supplement our financial results and guidance presented on a GAAP basis, we provide non-GAAP measures such as non-GAAP gross margin, non-GAAP operating margin, non-GAAP diluted earnings per share, as well as constant currency and organic revenue growth because we believe they are helpful for the investors to understand our consolidated operating results. Management uses supplemental non-GAAP financial measures internally to understand, manage and evaluate our business, to make operating decisions, and to plan and forecast for future periods. The non-GAAP measures exclude costs which we generally would not have otherwise incurred in the periods presented as a part of our continuing operations. We provide further details of the non-GAAP adjustments made to arrive at our non-GAAP measures in the GAAP to non-GAAP reconciliations below. Our non-GAAP financial results and guidance are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.
To present constant currency revenue growth, current period revenue for entities reporting in currencies other than the United States dollar are converted into United States dollars at the average foreign exchange rates for the corresponding period in the prior year. To present organic revenue growth, we excluded the effect of foreign currency fluctuations and the impact of any acquisitions, divestitures and discontinuations that occurred in the comparable period.
We define the non-GAAP measure of free cash flow as cash provided by operating activities less capital expenditures. We believe free cash flow is useful for investors as an additional measure of liquidity because it represents cash that is available to grow the business, make strategic acquisitions, repay debt, or buyback common stock. Management uses free cash flow internally to understand, manage, make operating decisions and evaluate our business. In addition, we use free cash flow to help plan and forecast future periods.
Investors should consider non-GAAP financial measures in addition to, and not as replacements for, or superior to, measures of financial performance prepared in accordance with GAAP.
THE COOPER COMPANIES, INC. AND SUBSIDIARIESGAAP to Non-GAAP ReconciliationGross Margin, Operating Margin, and EPS
Three Months Ended July 31,
Nine Months Ended July 31,
(In millions)
2024
Margin %
2023
Margin %
2024
Margin %
2023
Margin %
GAAP Gross Profit
$
663.0
66
%
$
610.0
66
%
$
1,918.0
67
%
$
1,751.4
66
%
Acquisition and integration-related charges (1)
0.2
—
%
2.7
—
%
1.4
—
%
7.6
—
%
Exit of business (2)
2.3
1
%
0.3
—
%
2.8
—
%
5.2
—
%
Medical device regulations (3)
1.0
—
%
1.2
—
%
2.7
—
%
2.9
—
%
Business optimization charges (4)
1.2
—
%
1.0
—
%
4.5
—
%
1.1
—
%
Total
4.7
1
%
5.2
—
%
11.4
—
%
16.8
—
%
Non-GAAP Gross Profit
$
667.7
67
%
$
615.2
66
%
$
1,929.4
67
%
$
1,768.2
66
%
Three Months Ended July 31,
Nine Months Ended July 31,
(In millions)
2024
Margin %
2023
Margin %
2024
Margin %
2023
Margin %
GAAP Operating Income
$
192.5
19
%
$
151.6
16
%
$
507.3
18
%
$
397.4
15
%
Amortization of acquired intangibles
50.4
5
%
46.7
5
%
151.0
5
%
139.7
5
%
Acquisition and integration-related charges (1)
