COOPER COMPANIES INC
For the period ended Jul 31, 2024. Filed Aug 29, 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.
Jul 31, 2024 · Filed Aug 29, 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 2024-04-30; filed 2024-05-31.
0000711404-24-000043
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-07-31; filed 2024-08-29.
0000711404-24-000062
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 109 previous paragraphs and 108 current paragraphs.
75 unchanged; 32 reworded; 1 added; 1 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 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 (1)
Current report
CooperSurgical Net Sales
Removed paragraphs (1)
Previous report
The chart below shows the percentage of net sales of office and surgical and fertility.
Reworded paragraphs (32)
Previous wording
•Risks related to environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability.
Current wording
•Risks related to environmental, social and corporate governance (ESG) issues, including those related to regulatory and disclosure requirements, climate change and sustainability.
Previous 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.
Current wording
In this section, we discuss the results of our operations for the third quarter of fiscal 2024 ended July 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.
Previous wording
CooperVision, CooperSurgical, and other trade names, trademarks or service marks of Cooper and its subsidiaries appearing in this report are the property of Cooper and its subsidiaries. Trade names, trademarks and service marks of the other companies appearing in this report are the property of their respective holders.
Current wording
CooperVision, CooperSurgical, and other trade names, trademarks or service marks of the Company and its subsidiaries appearing in this report are the property of the Company and its subsidiaries. Trade names, trademarks and service marks of the other companies appearing in this report are the property of their respective holders.
Previous 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.
Current wording
In the three and nine months ended July 31, 2024, the growth experienced across all categories was partially offset by unfavorable foreign exchange rate fluctuations of approximately $13.1 million and $19.8 million, respectively.
Previous wording
•Toric and multifocal grew primarily through the success of MyDay and Biofinity.
Current wording
•Toric and multifocal grew primarily through the success of Biofinity and MyDay.
Previous wording
•Sphere, other grew primarily through MyDay, MiSight, and Biofinity.
Current wording
•Sphere, other grew primarily through Biofinity, MiSight, and MyDay.
Previous wording
•"Other" products represented approximately 1% of net sales in the three and six months ended April 30, 2024, and 2023, respectively.
Current wording
•"Other" products represented approximately 1% of net sales in the three and nine months ended July 31, 2024, and 2023, respectively.
Previous wording
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 wording
In the three months ended July 31, 2024, office and surgical net sales increased primarily due to the addition of Cook Medical on November 1, 2023. Fertility net sales increased due to an increase in revenue from consumable products and genetic testing.
Previous 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.
Current wording
In the nine months ended July 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 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 $4.0 million and $6.7 million for the three and six months ended April 30, 2024, respectively.
Current wording
The above growth experienced across all categories was partially offset by unfavorable foreign exchange rate fluctuations of approximately $3.0 million and $9.7 million for the three and nine months ended July 31, 2024, respectively.
Previous 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.
Current wording
Consolidated gross margin was relatively flat at 66% and 67% in the three and nine months ended July 31, 2024, respectively, compared to 66% in the three and nine months ended July 31, 2023.
Previous 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.
Current wording
CooperVision's SGA expenses increased in the three months ended July 31, 2024, compared to the three months ended July 31, 2023, due to increase in advertising and marketing activities. The increase in thenine months ended July 31, 2024, was primarily due to $31.8 million release of contingent consideration liability associated with SightGlass Vision's regulatory approval milestone in thenine months ended July 31, 2023.
Previous wording
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 wording
CooperSurgical's SGA expenses was relatively flat in the three months ended July 31, 2024, compared to the three months ended July 31, 2023. The decrease in thenine months ended July 31, 2024 was 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 thenine months ended July 31, 2023, partially offset by an increase in selling activities and distribution costs.
Previous 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.
Current wording
Corporate SGA expenses increased in the three and nine months ended July 31, 2024, compared to the three and nine months ended July 31, 2023, primarily due to share-based compensation related expenses.
Previous 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.
Current wording
CooperVision's R&D expenses increased in the three and nine months ended July 31, 2024, compared to the three and nine months ended July 31, 2023, primarily due to myopia management programs and 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 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.
Current wording
CooperSurgical's R&D expenses increased in the three and nine months ended July 31, 2024, compared to the three and nine months ended July 31, 2023, mainly due to an increase in R&D project spend. 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 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.
Current wording
CooperVision's amortization expense for the three and nine months ended July 31, 2024, remained relatively flat year over year. CooperSurgical's amortization expense increased in the three and nine months ended July 31, 2024, compared to the three and nine months ended July 31, 2023, primarily due to the amortization of intangible assets recently acquired through acquisitions.
Previous 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.
Current wording
CooperVision's operating income increased in the three and nine months ended July 31, 2024, compared to the three and nine months ended July 31, 2023, primarily due to a net increase in net sales, partially offset by a net increase in operating expenses.
Previous wording
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 wording
CooperSurgical's operating income increased in the three months ended July 31, 2024, compared to the three months ended July 31, 2023, primarily due to a net increase in net sales, partially offset by a net increase in operating expenses. The increase in the nine months ended July 31, 2023, was 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.
Previous 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.
Current wording
Corporate operating loss increased in the three and nine months ended July 31, 2024, compared to the three and nine months ended July 31, 2023, primarily due to higher share-based compensation expenses.
Previous 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.
Current wording
Interest expense increased during the three and nine months ended July 31, 2024, compared to the three and nine months ended July 31, 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 and six months ended April 30, 2024.
Current wording
Foreign exchange (gain) loss was primarily associated with the relative weakening of the U.S. dollar against foreign currencies and the effect on intercompany receivables during the three and nine months ended July 31, 2024.
Previous wording
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.
Current wording
Other expense, net decreased in the three and nine months ended July 31, 2024, compared to the three and nine months ended July 31, 2023, primarily due to a decrease in loss on minority investments.
Previous 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%.
Current wording
The effective tax rates for the three months ended July 31, 2024, and 2023, were 36.1% and 28.2%, respectively. The effective tax rates for the nine months ended July 31, 2024, and 2023, were 33.6% and 31.6%, respectively. The increases were 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%.
Previous 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.
Current wording
Working capital as of July 31, 2024, and October 31, 2023, was $957.2 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 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.
Current wording
Cash provided by operating activities in the first nine months of fiscal 2024 increased compared to the first nine months of fiscal 2023, primarily due to 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 nine months of fiscal 2023, partially offset by net changes in operating capital.
Previous 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.
Current wording
Cash used in investing activities in the first nine months of fiscal 2024 increased compared to the first nine months of fiscal 2023, primarily attributable to $233.5 million cash paid for acquisitions in the first nine months of fiscal 2024, and an increase in purchases of property, plant and equipment.
Previous 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.
Current wording
Cash provided by financing activities in the first nine months of fiscal 2024 was primarily attributable to funds received from the 2024 Revolving Credit Facility, partially offset by repayments to fully repay all borrowings outstanding under the 2020 Term Loan Facility and the 2020 Revolving Credit Facility.
Previous 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.
Current wording
Cash used in financing activities in the first nine months of fiscal 2023 was primarily due to repayments of $338.0 million on the 2021 364-day term loan, partially offset by $163.5 million of funds drawn on the 2020 Revolving Credit Facility.
Previous 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.
Current 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 2024 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.
Previous wording
During the six months ended April 30, 2024, and 2023, there were no share repurchases.
Current wording
During the nine months ended July 31, 2024, and 2023, there were no share repurchases.
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 $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.
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 $30.0 million and $92.0 million for the three and nine months ended July 31, 2024, respectively, that was included in the deferred revenue balance at April 30, 2024, and October 31, 2023.We recognized revenue of approximately $30.0 million and $80.0 million for the three and nine months ended July 31, 2023, respectively, that was included in the deferred revenue balance at April 30, 2023, and October 31, 2022.
Rearranged previous paragraphs (1)
Previous report — wording carried 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