CooperCompanies Report First Quarter 2020 Revenue Gains

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SAN RAMON, Calif.—CooperCompanies (NYSE: COO) reported a 3 percent year-over-year revenue increase to $646.2 million for the fiscal first quarter ended Jan. 31, 2020. The solid performance was driven by gains in both its CooperVision (CVI), its contact lens business and CooperSurgical, its products businesses. CVI's revenue climbed 3 percent to $485.2 million, and CSI's revenue rose 2 percent to $161.0 million. "CooperCompanies is off to a strong start to fiscal 2020 as we continue successfully implementing our strategic objectives,” commented Albert White, Cooper’s president and CEO.

“The first quarter saw strength in our 1-day silicone hydrogel lens franchises, our MyDay production improving and the beginning of our MiSight launch in the U.S. We believe we are well positioned to build on our growth as we move through the year even with the challenges presented from the coronavirus."

CooperCompanies’ gross margin was 66 percent compared with 67 percent in last year’s first quarter, and 67 percent on a non-GAAP basis, consistent with 67 percent last year. Operating margin 17 percent compared with 18 percent in last year’s first quarter; on a non-GAAP basis, operating margin was 25 percent compared with 26 percent last year.

Interest expense was $11.6 million compared with $18.2 million in last year's first quarter due to lower average debt balances and interest rates. Total debt outstanding at the end of the quarter was $1,776.7 million with quarter-end cash and cash equivalents of $76.8 million. Adjusted leverage ratio (net debt over adjusted EBITDA) of 1.82x. Cash provided by operations $129.7 million offset by capital expenditures $69.0 million resulted in free cash flow of $60.7 million.

In first quarter operating results, CVI reported a gross margin of 65 percent compared with 66 percent year-ago. On a non-GAAP basis, gross margin was 67 percent compared with 66 percent in last year's first quarter largely due to a reduction in year-over-year expenses associated with infrastructure improvement projects, the company said.

CSI’s first quarter operating results were highlighted by a gross margin 68 percent compared with 69 percent in last year’s first quarter. On a non-GAAP basis, gross margin was 70 percent compared with 72 percent in last year's first quarter largely due to disruptions associated with consolidating the company’s global manufacturing operations into Costa Rica.

CooperCompanies updated its fiscal year 2020 guidance, with total revenue projected to be $2,767 million to $2,817 million, about 5 percent to 7 percent in constant currency. CVI revenue is estimated at $2,070 million to $2,100 million, about 5.5 percent to 7 percent constant currency. CSI revenue is projected to be $697 million to $717 million, about 3 percent to 6 percent constant currency.