COOPER COMPANIES INC
For the period ended Apr 30, 2024. Filed May 31, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Apr 30, 2024 · Filed May 31, 2024
COO$62.36-1.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-01-31; filed 2024-03-01.
0000711404-24-000020
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-04-30; filed 2024-05-31.
0000711404-24-000043
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 107 previous paragraphs and 109 current paragraphs.
71 unchanged; 31 reworded; 3 added; 2 removed; 3 previous and 4 current paragraphs rearranged.
Tables are not compared: 11 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
CooperSurgical's SGA expenses decreased in the three and six months ended April 30, 2024, compared to the three and six months ended April 30, 2023, primarily due to an accrual of $45.0 million associated with the payment of a termination fee under an asset purchase agreement related to Cook Medical’s reproductive health business in the three and six months ended April 30, 2023, partially offset by an increase in selling activities and distribution costs.
Current report
CooperSurgical's operating income in the three and six months ended April 30, 2024, compared to operating loss in the three and six months ended April 30, 2023, was primarily due to an accrual of $45.0 million associated with the payment of a termination fee under an asset purchase agreement related to Cook Medical’s reproductive health business in the three and six months ended April 30, 2023.
Current report
Other expense, net decreased in the three and six months ended April 30, 2024, compared to the three and six months ended April 30, 2023, primarily due to a decrease in loss on minority investments.
Removed paragraphs (2)
Previous report
CooperSurgical's SGA expenses increased in the three months ended January 31, 2024, compared to the three months ended January 31, 2023, primarily due to acquisition and integration expenses.
Previous report
Other expense, net was relatively flat in the three months ended January 31, 2024, compared to the three months ended January 31, 2023.
Reworded paragraphs (31)
Previous wording
•The impact of international conflicts, such as Russia's invasion of Ukraine, and the global response to international conflicts on the global economy, European economy, financial markets, energy markets, currency rates and our ability to supply product to, or through, affected countries.
Current wording
•The impact of international conflicts and the global response to international conflicts on the global economy, European economy, financial markets, energy markets, currency rates and our ability to supply product to, or through, affected countries.
Previous wording
•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.
Current wording
•A major disruption in the operations of our manufacturing, accounting and financial reporting, research and development or distribution facilities due to the failure to perform by third-party vendors, including cloud computing providers or other technological problems, including any related to our information systems maintenance, enhancements or new system deployments, integrations or upgrades.
Previous wording
•Reduced sales, loss of customers and costs and expenses related to product recalls and warning letters.
Current wording
•Reduced sales, loss of customers, reputational harm and costs and expenses, including from claims and litigation related to product recalls and warning letters.
Previous wording
In this section, we discuss the results of our operations for the first quarter of fiscal 2024 ended January 31, 2024, compared with the same period of fiscal 2023. We discuss our cash flows and current financial condition under “Capital Resources and Liquidity.” Within the tables presented, percentages are calculated based on the underlying whole-dollar amounts and, therefore, may not recalculate exactly from the rounded numbers used for disclosure purposes.
Current wording
In this section, we discuss the results of our operations for the second quarter of fiscal 2024 ended April 30, 2024, compared with the same period of fiscal 2023. We discuss our cash flows and current financial condition under “Capital Resources and Liquidity.” Within the tables presented, percentages are calculated based on the underlying whole-dollar amounts and, therefore, may not recalculate exactly from the rounded numbers used for disclosure purposes.
Previous wording
In the three months ended January 31, 2024, the growth experienced across most categories was positively impacted by favorable foreign exchange rate fluctuations of approximately $4.4 million.
Current wording
In the three and six months ended April 30, 2024, the growth experienced across most categories was partially offset by unfavorable foreign exchange rate fluctuations of approximately $11.1 million and $6.7 million, respectively.
Previous wording
•Sphere, other grew primarily through MyDay and MiSight lenses.
Current wording
•Sphere, other grew primarily through MyDay, MiSight, and Biofinity.
Previous wording
•"Other" products represented approximately 1% of net sales in the three months ended January 31, 2024, and 2023, respectively.
Current wording
•"Other" products represented approximately 1% of net sales in the three and six months ended April 30, 2024, and 2023, respectively.
Previous wording
CooperSurgical supplies the fertility and women's health care market with a diversified portfolio of products and services. Our office and surgical offerings include products that facilitate surgical and non-surgical procedures that are commonly performed primarily by obstetricians and gynecologists in hospitals, surgical centers, fertility clinics and medical offices. Fertility offerings include highly specialized products and services that target the IVF process, including diagnostics testing with a goal to make fertility treatment safer, more efficient and convenient.
Current wording
CooperSurgical supplies the fertility and women's health care market with a diversified portfolio of products and services in two categories:
Previous wording
In the three months ended January 31, 2024, office and surgical net sales increased primarily due to the addition of Cook Medical on November 1, 2023, and an increase in revenue from products such as Uterine Manipulators and Paragard. Fertility net sales increased due to an increase in revenue from consumable products and genomic services.
Current wording
In the six months ended April 30, 2024, office and surgical net sales increased primarily due to the addition of Cook Medical on November 1, 2023, and an increase in revenue from Paragard. Fertility net sales increased due to an increase in revenue from consumable products and genomic services, partially offset by a decrease in revenue from gamete services.
Previous wording
The above growth experienced across all categories was partially offset by unfavorable foreign exchange rate fluctuations of approximately $2.7 million for the three months ended January 31, 2024.
Current wording
The above growth experienced across all categories was partially offset by unfavorable foreign exchange rate fluctuations of approximately $4.0 million and $6.7 million for the three and six months ended April 30, 2024, respectively.
Previous wording
Consolidated gross margin increased in the three months ended January 31, 2024, to 67% compared to 65% in the three months ended January 31, 2023, primarily driven by efficiency gains and price.
Current wording
Consolidated gross margin increased in the three and six months ended April 30, 2024, to 67% compared to 66% in the three and six months ended April 30, 2023, primarily driven by efficiency gains and price.
Previous wording
CooperVision's SGA expenses increased in the three months ended January 31, 2024, compared to the three months ended January 31, 2023, primarily due to $31.8 million release of contingent consideration liability associated with SightGlass Vision's regulatory approval milestone in the three months ended January 31, 2023.
Current wording
CooperVision's SGA expenses increased in the three months ended April 30, 2024, compared to the three months ended April 30, 2023, due to increases in advertising and marketing activities. The increase in thesix months ended April 30, 2024, was primarily due to $31.8 million release of contingent consideration liability associated with SightGlass Vision's regulatory approval milestone in thesix months ended April 30, 2023.
Previous wording
Corporate SGA expenses increased in the three months ended January 31, 2024, compared to the three months ended January 31, 2023, primarily due to share-based compensation related expenses.
Current wording
Corporate SGA expenses increased in the three and six months ended April 30, 2024, compared to the three and six months ended April 30, 2023, primarily due to share-based compensation related expenses.
Previous wording
CooperVision's R&D expenses increased in the three months ended January 31, 2024, compared to the three months ended January 31, 2023, primarily due to myopia management programs and timing of R&D projects. CooperVision's R&D activities are primarily focused on the development of contact lenses, manufacturing technology and process enhancements.
Current wording
CooperVision's R&D expenses increased in the three and six months ended April 30, 2024, compared to the three and six months ended April 30, 2023, primarily due to myopia management programs and timing of R&D projects. CooperVision's R&D activities are primarily focused on the development of contact lenses, manufacturing technology and process enhancements.
Previous wording
CooperSurgical's R&D expenses increased in the three months ended January 31, 2024, compared to the three months ended January 31, 2023, mainly due to project spend and European Medical Device Regulation costs. CooperSurgical's R&D activities are focused on developing and refining diagnostic and therapeutic products including medical interventions, surgical devices and fertility solutions.
Current wording
CooperSurgical's R&D expenses increased in the three and six months ended April 30, 2024, compared to the three and six months ended April 30, 2023, mainly due to project spend and European Medical Device Regulation costs. CooperSurgical's R&D activities are focused on developing and refining diagnostic and therapeutic products including medical interventions, surgical devices and fertility solutions.
Previous wording
CooperVision's amortization expense for the three months ended January 31, 2024, remained relatively flat year over year. CooperSurgical's amortization expense increased in the three months ended January 31, 2024, compared to the three months ended January 31, 2023, primarily due to the amortization of intangible assets recently acquired through acquisitions.
Current wording
CooperVision's amortization expense for the three and six months ended April 30, 2024, remained relatively flat year over year. CooperSurgical's amortization expense increased in the three and six months ended April 30, 2024, compared to the three and six months ended April 30, 2023, primarily due to the amortization of intangible assets recently acquired through acquisitions.
Previous wording
CooperVision's operating income decreased in the three months ended January 31, 2024, compared to the three months ended January 31, 2023, primarily due to a net increase in operating expenses, partially offset by an increase in net sales.
Current wording
CooperVision's operating income increased in the three and six months ended April 30, 2024, compared to the three and six months ended April 30, 2023, primarily due to a net increase in net sales, partially offset by a net increase in operating expenses.
Previous wording
Corporate operating loss increased in the three months ended January 31, 2024, compared to the three months ended January 31, 2023, primarily due to higher share-based compensation expenses.
Current wording
Corporate operating loss increased in the three and six months ended April 30, 2024, compared to the three and six months ended April 30, 2023, primarily due to higher share-based compensation expenses.
Previous wording
Interest expense increased during the three months ended January 31, 2024, compared to the three months ended January 31, 2023, primarily due to higher interest rates.
Current wording
Interest expense increased during the three and six months ended April 30, 2024, compared to the three and six months ended April 30, 2023, primarily due to higher debt balances and higher interest rates.
Previous wording
Foreign exchange loss is primarily associated with the weakening of the U.S. dollar against foreign currencies and the effect on intercompany receivables during the three months ended January 31, 2024.
Current wording
Foreign exchange loss is primarily associated with the weakening of the U.S. dollar against foreign currencies and the effect on intercompany receivables during the three and six months ended April 30, 2024.
Previous wording
The effective tax rates for the three months ended January 31, 2024, and January 31, 2023, were 32.4% and 30.7%, respectively. The increase was primarily due to changes in the geographic composition of pre-tax earnings and an increase in the UK statutory tax rate from 19% to 25%, partially offset by an increase in excess tax benefits from share-based compensation.
Current wording
The effective tax rates for the three months ended April 30, 2024, and 2023, were 31.6% and 39.3%, respectively. The effective tax rates for the six months ended April 30, 2024, and 2023, were 32.0% and 33.7%, respectively. The decreases were primarily due to changes in the geographic composition of pre-tax earnings, partially offset by an increase in the UK statutory tax rate from 19% to 25%.
Previous wording
Working capital on January 31, 2024, and October 31, 2023, was $829.0 million and $735.9 million, respectively. The increase in working capital was primarily due to an increase in trade accounts receivable mainly due to higher sales and timing of collections, and an increase in prepaid expenses and other current assets.
Current wording
Working capital on April 30, 2024, and October 31, 2023, was $906.5 million and $735.9 million, respectively. The increase in working capital was primarily due to an increase in trade accounts receivable mainly due to higher sales and timing of collections, an increase in prepaid expenses and other current assets, and an increase in inventories.
Previous wording
Cash provided by operating activities in the first three months of fiscal 2024 decreased compared to the first three months of fiscal 2023, primarily due to net changes in operating capital, including a decrease in accounts payable, partially offset by the $31.8 million release of contingent consideration liability associated with SightGlass Vision's regulatory approval milestone in the first three months of fiscal 2023.
Current wording
Cash provided by operating activities in the first six months of fiscal 2024 decreased compared to the first six months of fiscal 2023, primarily due to net changes in operating capital, including a decrease in accrued liabilities and an increase in accounts receivable, partially offset by net changes in other non-cash items and the $31.8 million release of contingent consideration liability associated with SightGlass Vision's regulatory approval milestone in the first six months of fiscal 2023.
Previous wording
Cash used in investing activities in the first three months of fiscal 2024 increased compared to the first three months of fiscal 2023, primarily attributable to $200.0 million cash paid for the Cook Medical acquisition in the first three months of fiscal 2024 and an increase in purchases of property, plant and equipment.
Current wording
Cash used in investing activities in the first six months of fiscal 2024 increased compared to the first six months of fiscal 2023, primarily attributable to$200.0 million cash paid for the Cook Medical acquisition in the firstsix months of fiscal 2024, and an increase in purchases of property, plant and equipment.
Previous wording
Cash provided by financing activities in the first three months of fiscal 2024 was primarily attributable to $200.0 million drawn on the revolving credit to pay for the Cook Medical acquisition.
Current wording
Cash provided by financing activities in the first six months of fiscal 2024 was primarily attributable to$200.0 million drawn on the 2020 revolving credit to pay for the Cook Medical acquisition, partially offset byrepayments on the 2020 revolving credit.
Previous wording
Cash used in financing activities in the first three months of fiscal 2023 was primarily due to repayments of $338.0 million on the 2021 364-day term loan, partially offset by $276.5 million of funds drawn on the 2020 revolving credit.
Current wording
Cash used in financing activities in the first six months of fiscal 2023 was primarily due to repayments of $338.0 million on the 2021 364-day term loan, partially offset by $215.0 million of funds drawn on the 2020 revolving credit.
Previous wording
As of January 31, 2024, the Company was in compliance with all debt covenants. See Note 5. Financing Arrangements of the Consolidated Condensed Financial Statements for further information.
Current wording
As of April 30, 2024, the Company was in compliance with all debt covenants. On May 1, 2024, the Company entered into a Revolving Credit Agreement (the 2024 Credit Agreement). The Company drew on the 2024 Credit Agreement to fully repay borrowings outstanding under the 2020 Term Loan and 2020 Revolving Credit Facility and terminated the 2020 Credit Agreement. See Note 5. Financing Arrangements of the Consolidated Condensed Financial Statements for further information.
Previous wording
Considering recent market conditions, we have re-evaluated our operating cash flows and cash requirements and continue to believe that current cash, cash equivalents, future cash flow from operating activities and cash available under our 2020 Credit Agreement will be sufficient to meet our anticipated cash needs, including working capital needs, capital expenditures and contractual obligations for at least 12 months from the issuance date of the Consolidated Condensed Financial Statements included in this quarterly report. To the extent additional funds are necessary to meet our liquidity needs such as for acquisitions, share repurchases or other activities as we execute our business strategy, we anticipate that additional funds could be obtained through the incurrence of additional indebtedness, additional equity financings or a combination of these potential sources of funds; however, such financing may not be available on favorable terms, or at all.
Current wording
Agreement will be sufficient to meet our anticipated cash needs, including working capital needs, capital expenditures and contractual obligations for at least 12 months from the issuance date of the Consolidated Condensed Financial Statements included in this quarterly report. To the extent additional funds are necessary to meet our liquidity needs such as for acquisitions, share repurchases or other activities as we execute our business strategy, we anticipate that additional funds could be obtained through the incurrence of additional indebtedness, additional equity financings or a combination of these potential sources of funds; however, such financing may not be available on favorable terms, or at all.
Previous wording
During the three months ended January 31, 2024, and 2023, there were no share repurchases.
Current wording
During the six months ended April 30, 2024, and 2023, there were no share repurchases.
Previous wording
On February 16, 2024, the Company effected a four-for-one stock split of its outstanding shares of common stock. All share and per share information has been retroactively adjusted to reflect the stock split for all periods presented. The par value of the common stock remains $0.10 cents per share.
Current wording
On February 16, 2024, the Company effected a four-for-one stock split of its outstanding shares of common stock. All share and per share information has been retroactively adjusted to reflect the stock split for all periods presented. The par value of the common stock remains $0.10 per share.
Previous wording
2 To further clarify the policy detailed in our Annual Report on Form 10-K for the fiscal year ended October 31, 2023, the current portion of the deferred revenue balances at the beginning of each period presented were generally fully recognized in a ratable manner in the subsequent 12-month period. We recognized revenue of approximately $31.0 million and $23.0 million for the three months ended January 31, 2024, and 2023, respectively, that was included in the deferred revenue balance at October 31, 2023 and October 31, 2022.
Current wording
2 To further clarify the policy detailed in our Annual Report on Form 10-K for the fiscal year ended October 31, 2023, the current portion of the deferred revenue balances at the beginning of each period presented were generally fully recognized in a ratable manner in the subsequent 12-month period. We recognized revenue of approximately $31.0 million and $62.0 million for the three and six months ended April 30, 2024, respectively, that was included in the deferred revenue balance at January 31, 2024, and October 31, 2023.We recognized revenue of approximately $27.0 million and $50.0 million for the three and six months ended April 30, 2023, respectively, that was included in the deferred revenue balance at January 31, 2023, and October 31, 2022.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
•Office and surgical offerings include products that facilitate surgical and non-surgical procedures that are commonly performed primarily by obstetricians and gynecologists in hospitals, surgical centers, and medical offices. This includes medical devices, cryostorage (such as cord blood and cord tissue storage), and contraception.
Current report — wording carried from elsewhere
•Fertility offerings include highly specialized products and services that target the IVF process, including diagnostics testing with a goal to make fertility treatment safer, more efficient and convenient. This includes fertility consumables and equipment, donor gamete services, and genomic services (including genetic testing).
Current report — wording carried from elsewhere
In the three months ended April 30, 2024, office and surgical net sales increased primarily due to the addition of Cook Medical on November 1, 2023, and an increase in revenue from Paragard. Fertility net sales remained relatively flat compared to the three months ended April 30, 2023.
Current report — wording carried from elsewhere
Considering recent market conditions, we have re-evaluated our operating cash flows and cash requirements and continue to believe that current cash, cash equivalents, future cash flow from operating activities and cash available under our 2024 Credit
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Office and surgical – This includes medical devices, cryostorage (such as cord blood and cord tissue storage), and contraception.
Previous report — wording carried elsewhere
Fertility – This includes fertility consumables and equipment, donor gamete services, and genomic services (including genetic testing).
Previous report — wording carried elsewhere
CooperSurgical's operating income increased in the three months ended January 31, 2024, compared to the three months ended January 31, 2023, primarily due to an increase in net sales, partially offset by a net increase in operating expenses.