The Cooper Companies(COO) - 2025 Q2 - Quarterly Report

Financial Performance - For the three months ended April 30, 2025, CooperVision reported net sales of $669.6 million, a 5$635.9 million in the same period of 2024[92]. - For the six months ended April 30, 2025, total net sales reached $1,315.7 million, reflecting a 5$1,257.4 million in the same period of 2024[96]. - For the three months ended April 30, 2025, total net sales increased by 8% to $332.7 million compared to$306.7 million in the same period of 2024[103]. - Consolidated gross margin improved to 68% in the three months ended April 30, 2025, up from 67% in the same period of 2024, due to efficiency gains and a favorable product mix[110]. - Operating income for the company increased by 14% to $184.8 million in the three months ended April 30, 2025, compared to$161.7 million in the same period of 2024[121]. Sales by Product Type - Toric and multifocal lenses generated $328.4 million in sales, up 6$310.3 million in the prior year, while spherical and other lenses increased by 5% to $341.2 million from$325.6 million[92]. - CooperSurgical's net sales are supported by a diversified portfolio in the fertility and women's health care market, with significant contributions from products like MiSight and Biofinity[99]. - Office and surgical net sales rose by 13% to $205.8 million, driven by increased sales of Paragard contraceptive intrauterine devices and the acquisition of obp Surgical[107]. - Fertility net sales increased by 3$126.9 million, attributed to higher revenue from gamete services[107]. Regional Sales Performance - In the Americas region, net sales increased by 7% to $282.4 million for the three months and$553.3 million for the six months, compared to $264.4 million and$517.0 million, respectively, in 2024[98]. - EMEA region sales grew by 5% to $248.6 million for the three months and 4$495.1 million for the six months, compared to $237.0 million and$475.2 million in 2024[98]. - Asia Pacific region sales saw a 3% increase to $138.6 million for the three months and a 1$267.3 million for the six months, compared to $134.5 million and$265.2 million in 2024[98]. Expenses and Costs - Selling, General and Administrative (SGA) expenses for CooperVision increased by 5% to $236.9 million, while CooperSurgical's SGA expenses rose by 2$136.8 million[113]. - Research and Development (R&D) expenses increased by 17% to $45.5 million in the three months ended April 30, 2025, primarily due to myopia management programs[116]. Cash Flow and Capital Management - Operating cash flow for the first six months of fiscal 2025 increased to$286.8 million, up from $233.7 million in the same period of fiscal 2024, reflecting improved net income and changes in operating capital[133][134]. - Cash used in investing activities decreased to$(176.0) million in the first half of fiscal 2025, compared to $(398.9) million in the first half of fiscal 2024, primarily due to a$200 million payment for the Cook Medical acquisition in 2024[135]. - Cash used in financing activities was $(105.2) million in the first six months of fiscal 2025, mainly for repayments on revolving credit and the first installment related to the Cook Medical acquisition[136]. - Working capital increased to$1,113.2 million as of April 30, 2025, from $928.7 million as of October 31, 2024, mainly due to higher inventories and accounts receivable[132]. Debt and Compliance - As of April 30, 2025, the company had outstanding debt of$2.6 billion and may use interest rate swaps to manage interest rate risk[148][149]. - As of April 30, 2025, the company had total credit facilities of $3.8 billion, with$2.5 billion outstanding and $1.27 billion available[137]. - The company remains in compliance with all debt covenants and anticipates sufficient cash flow to meet its needs for at least the next 12 months[138]. Tax and Interest - Interest expense decreased by 16$24.2 million in the three months ended April 30, 2025, due to lower interest rates and average debt balances[126]. - The effective tax rate for the three months ended April 30, 2025, was 39.3%, up from 31.6% in the same period of 2024, primarily due to changes in valuation allowance[129]. Market Outlook - CooperVision is focused on expanding its market presence through new product introductions and acquisitions, particularly in the silicone hydrogel contact lens segment[81]. - The company anticipates continued growth in the contact lens market driven by technological advancements and improved product offerings[80]. Currency Impact - A hypothetical 10% change in foreign currency exchange rates could result in a $31.8 million impact on operating income for the fiscal quarter ended April 30, 2025[147]. - CooperVision's sales growth was partially offset by unfavorable foreign exchange rate fluctuations of approximately$7.7 million for the three months and $22.4 million for the six months ended April 30, 2025[96]. Share Repurchase - As of April 30, 2025, the company had$215.8 million remaining for share repurchase under the 2012 program, having repurchased 0.5 million shares for $40.6 million at an average price of$75.60 per share during the first half of fiscal 2025[141].