The paragraph introduces the Q1 2025 earnings conference call for The Cooper Companies, Inc. Desiree, the conference operator, outlines the procedure for the call, including muting lines to eliminate background noise and instructions for participating in the question and answer session. Kim Duncan, the VP of Investor Relations and Risk Management, welcomes participants and introduces the call's agenda, which includes discussing earnings results and guidance before moving to a Q&A session. The presenters are Albert White, the President and CEO, and Brian Andrews, the CFO and Treasurer. Kim also reminds listeners that the call will include forward-looking statements subject to risks and uncertainties.

The paragraph discusses a fiscal Q1 earnings call for The Cooper Companies, where Albert White reports strong financial performance. The company achieved record revenues and earnings, meeting revenue expectations and exceeding those for margins, earnings, and free cash flow, despite currency challenges. CooperVision outperformed operational plans, with increased product availability and accelerated launch activities, including international launches for MyDay Energous and others. They also expanded their private label availability. Consolidated revenues for the quarter were $965 million, marking a 4% year-over-year increase and a 5% organic growth. The company attributes these successes to effective operational execution.

CooperVision reported a 4% increase in quarterly revenues to $646 million, with an organic growth of 6%, while Cooper Surgical saw revenues rise by 3% to $319 million. Non-GAAP earnings per share were $0.92. In regional growth, CooperVision noted an 8% increase in the Americas, 6% in EMEA, and 3% in Asia Pac. Product categories like torics and multifocals grew by 10%, and spheres by 3%. Daily silicone hydrogel lenses MyDay and Clarity, along with silicone hydrogel FRP lenses Biofinity and Avera, both grew by 9%. Myopia management grew 20%, with MySite up by 27%. The quarter faced initial inventory issues but stabilized, except in China, which continued to face challenges. MyDay lenses, especially torics and multifocals, enjoyed strong demand, benefiting from expansion and a high fit success rate. The brand plans to leverage its competitive advantages in the toric lens segment and growing presbyopia market.

The paragraph highlights the growth and expansion of several contact lens products. MyDay Energous is seeing strong demand and is expanding into new markets, supported by increased production capacity. The Clarity portfolio is also growing, particularly with positive responses to its redesigned multifocal lens in the US and Canada, with plans to launch in Asia-Pacific. Biofinity maintains its position as the top lens worldwide due to its comfort, technology, wide prescription range, and affordability. In myopia management, there has been a notable increase in activity, driven by MySite with projected growth of 40% for the year. This growth is supported by strategic enhancements in sales force, digital marketing, and key account partnerships.

CooperVision is enhancing its leadership through R&D investments, clinical studies, and advocacy for making myopia control a standard care practice. Their capacity improvements in MyDay have facilitated plans to launch MyDay MySite internationally, combining comfort and innovative technology. Significant growth is noted with Sight Glass in China and a 9% global increase in OrthoK traction. The contact lens industry is projected to grow 5% to 7% this year, largely driven by trends like the shift to daily lenses, torics, multifocals, increased wearers, better pricing, and myopia management. CooperVision aims to capture more market share. The paragraph clarifies that they maintain a consistent private label strategy, contributing to a third of revenues, and stresses the complexity of manufacturing and logistics for lenses, particularly for toric and multifocal ones.

The paragraph highlights Cooper Surgical's financial performance and strategic activities. It reports $319 million in revenue, a 3% increase, despite obstacles like an IT system upgrade and challenging comparisons from previous quarters. Fertility revenue increased by 1%, influenced by unique events, but high growth is expected for the rest of the year. There is strong demand for Cooper Surgical's innovative fertility products and services, with a robust pipeline for equipment installations and advancements in AI-based genetic testing. Integration from prior acquisitions is enhancing operational efficiencies.

The global fertility industry is experiencing significant growth driven by factors such as delayed childbirth, improved treatment accessibility, increased patient awareness, better benefits coverage, and technological advancements. The World Health Organization reports that infertility affects one in six people globally, highlighting the industry’s long-term potential. The company remains committed to supporting patients and clinics through innovation, new product launches, clinical training, geographic expansion, and R&D. In the surgical products and services division, Q1 sales reached $199 million, with expectations for stronger Q2 performance, driven by products like minimally invasive gynecologic surgical devices and successful products such as PARAGARD. The focus remains on executing strategic priorities, increasing availability of innovative products, expanding manufacturing capacity, optimizing technology, and investing in human resources.

In the first fiscal quarter, the company's consolidated revenues reached $965 million, marking a 4% increase as reported and a 5% organic growth. The consolidated gross margin improved to 68.7% from 67.3% due to efficiency gains, while operating expenses rose by 5% to 43.6% of revenues, driven by commercial and R&D investments. The company witnessed leveraging benefits in various parts of the P&L, particularly in production, distribution, and support functions. Operating income increased by 6.5%, with the operating margin reaching 25.1% and a 12% growth in constant currency terms. Interest expense stood at $25.3 million, and the effective tax rate was 14.3%. Non-GAAP EPS rose by 7.4%, or 14.2% excluding FX impact. Free cash flow was $101 million, and net debt decreased to $2.44 billion, improving the leverage ratio to 1.91 times. Overall, the company achieved its internal revenue expectations, expanded margins, and made progress in generating free cash flow, setting a solid start for the year.

The paragraph provides an update on financial guidance for CooperVision and Cooper Surgical, maintaining their revenue projections while slightly raising non-GAAP EPS guidance. Consolidated revenues are expected to grow 6% to 8% organically. The company emphasizes strong financial strategies, including improvements in gross margins and operating expense leverage, leading to earnings growth. Free cash flow is projected at $350 to $400 million, prioritizing debt reduction. The company highlights positive outcomes from recent investments, efficiency improvements, and strategic initiatives like IT upgrades and process standardization. The paragraph concludes by noting a recent weakening of the US dollar against other currencies.

The paragraph is part of a Q&A session during a call where Jeffrey Johnson from Baird asks Albert White about the company's MyDay product line. Jeffrey points out that MyDay is not available in certain markets, like Japan, and asks if recent manufacturing constraints being lifted could allow the company to reenter these markets and achieve faster growth. Albert confirms that there is demand in markets they are not currently in, and they could potentially reenter or expand there, including through private label opportunities.

The paragraph discusses the sales growth strategy of a company by increasing product availability and directing products to high-demand markets. Jeffrey Johnson inquires about the company's market presence, private label business, and its growth compared to branded products. Albert White responds that, although he cannot provide exact figures for the MyDay product line, increased production and internal trends boost his confidence for Q3 and Q4. The private label business has been growing at a similar rate as the branded business, with recent signs of acceleration.

In the paragraph, Albert White discusses the company's performance, noting that their private label business is expected to grow faster than their branded business due to customer shifts towards lower-cost options. In response to Larry Biegelsen’s question, Albert explains that the company had a slow start to the fiscal first quarter and a weak end to the previous year. However, business picked up in January and February, showing strong performance and giving him optimism for future growth. He also notes that unlike peers, they do not provide quarterly guidance.

In the paragraph, Albert White expresses optimism about their market performance despite some initial setbacks due to channel inventory reductions and competitor activities. He remains positive about the company's quarterly growth prospects, particularly in Q2, Q3, and Q4, with the release of the MyDay product. In response to Larry Biegelsen's question about the impact of a newly approved non-hormonal IUD competitor to PARAGARD, White acknowledges the competitive pressure but believes Perrigo's performance will range between a slight decrease to a slight increase for the fiscal year. He emphasizes the need for increased end-user demand, despite some initial purchase activities with their current product.

The paragraph features a conversation during an earnings call where Larry Biegelsen and Jonathan Block discuss the company's product lineup and performance. Al mentions the hurdles faced by a competing product made from nitinol, highlighting its reduced efficacy and shorter lifespan compared to their own product, PARAGARD. Jonathan then asks Brian Andrews about the company's solid gross margins, noting that they surpassed estimates. Brian explains that improved gross margins are due to increased production in existing facilities, leading to better utilization and lower costs per unit.

The paragraph discusses the expected efficiency gains that are anticipated to improve gross margins throughout the year, largely due to product and regional mixes. In Q1, higher than expected margins were attributed to strong sales in Biofinity and PARAGARD and a favorable regional revenue mix, particularly with strong growth in the Americas and weaker growth in Asia Pacific. Jonathan Block inquires about the acceleration of CVI's performance for the remainder of the year and whether improvements in manufacturing capacity, particularly for MyDay contact lenses, have progressed faster than anticipated. Albert White responds by noting that much of the contact lens market growth is driven by customers upgrading to daily contact lenses, benefiting both his company and competitors.

The paragraph discusses the demand and production improvements for a product called MyDay, expressing confidence in the fiscal outlook for 2026. Issie Kirby from Redburn Atlantic asks about the myopia-focused Sight Glass product, including details on units sold in China, the impact on revenue, and the joint venture's role in the company's financials. Albert White explains that the Sight Glass joint venture is a 50/50 partnership with Essilor Luxottica, emphasizing their shared enthusiasm for the myopia control market and its societal benefits. He mentions that the financials from the joint venture appear as a gain or loss below operating income in the company's P&L, currently running as a loss due to ongoing investment and product launch expenses.

The paragraph discusses the launch and testing of the MiteEye glasses product in various markets, including Spain and Canada, and notes a significant increase in demand and activity in China. Albert White, responding to Issie Kirby, clarifies that the partnership with Essilor Luxottica is key for MySite and OrthoK business in China, which saw growth despite a decline in their core contact lens business. The decline is attributed more to company-specific issues than broader economic factors, as competitors had good quarters in China.

In this exchange, Albert White discusses the company's performance in the fertility sector, responding to Robbie Marcus's questions. White acknowledges that while fertility met internal expectations, it fell 1% below market expectations due to capital being pulled forward to the fourth quarter and some being delayed. Despite this, White expresses confidence in returning to double-digit growth for the rest of the year, citing strong demand for consumables and improved capital backlog for installations. He also notes that fertility has shown strong growth in fourteen of the last fifteen quarters, suggesting the recent performance was an anomaly.

The paragraph discusses the company's strong demand for reproductive genetic testing and donor activity, predicting a return to upper single-digit and double-digit growth for the rest of the year. The company sees China as a smaller but important market, comprising less than 5% of revenues. While challenges in China could impact the Asia Pacific growth rates, the company is already seeing progress and has adjusted its guidance accordingly, offset by strengths in other countries and increased capacity in their MyDay channels. Additionally, the contact lens business is expected to have price growth between 2% to 3% globally, with the company likely at the upper end of that range due to higher pricing compared to competitors, with no consumer pushback reported.

The paragraph features a discussion on the strong demand for premium products like Toric and multifocals and a preference for daily wear lenses. Steve Lichtman asks Brian Andrews about the expenses for the year and initiatives like MySite, specifically whether they are included in current operational expenses or expected to grow. Brian responds by mentioning leveraging SG&A to achieve operational efficiencies and maintaining strong gross margins. This balance helps them meet or exceed financial targets. Joanne Wuensch from Citi then questions the impact of tariff-related language from Washington on their business.

In the paragraph, Albert White addresses market growth questions, indicating that while the market grew by 7% last year and his company grew by 8%, he predicts a 5% to 7% growth for the market going forward. He attributes this expected growth to strong market fundamentals such as healthy demand, good consumption, and product innovation. Despite uncertainties, White remains optimistic about achieving growth within that range. Additionally, Jason Bednar from Piper Sandler inquires about the early launch planning for "MyDay, MySite," asking about prerequisites, trial work, and pricing strategy. White acknowledges it is in the early stages but does not provide specific details within this excerpt.

In the paragraph, Albert White discusses the internal deliberations about pricing strategy for introducing a new silicon hydrogel lens. The company is considering how to price this new lens in relation to its existing MyDay and MySite products, aiming to make the products more affordable, particularly for children. He emphasizes the importance of making high-quality lenses accessible to children, even if it presents challenges. The company is also working on obtaining regulatory approvals and strategizing how to market and distribute the lens through various channels, including private labels and independent practitioners. White remains focused on ensuring children can access these products to build the marketplace effectively.

In the discussion, the introduction of the MyDay, MySite Toric contact lenses is highlighted as a significant development for the market, addressing optometrists' hesitancy to fit children with astigmatism with such lenses. Patrick Wood from Morgan Stanley inquires about the current market penetration of toric lenses in the US and the reasons why some astigmatic individuals haven’t switched to these lenses. Albert White responds by explaining the segmentation within the toric market, noting variations in penetration between markets, with the US having higher penetration than Europe and Asia. He mentions the market's growth and states that revenue from toric lenses, once around 25%, is increasing.

The paragraph discusses advancements in fitting patients with astigmatism using toric lenses, highlighting improvements that make it easier and more effective for doctors to fit patients. Products like Biofinity toric and MyDay are noted for their stability and design, leading to high patient satisfaction. In terms of market penetration, the highest is in the U.S. and the Americas, with growth seen globally, particularly from daily silicone hydrogels and Biofinity itself. The conversation shifts to address the growth of CooperVision (CVI), with expectations of strong performance in Q3 and Q4 despite a challenging Q2 comparison. EMEA (Europe, Middle East, and Africa) is experiencing solid growth, attributed to a strong team.

The paragraph discusses the anticipated performance of CooperVision, predicting steady growth in upcoming quarters. It also highlights the positive impact of recent FX improvements on earnings, potentially benefiting Q3 and Q4. In response to a question from Brett Fishbin about changes in strategy due to new competition in the PARAGARD market, Albert White emphasizes the importance of continuing to execute their existing strategy, showcasing confidence in the team and product, notably mentioning the recently approved one-hand inserter.

The paragraph involves a discussion about the variability in the performance of a product compared to PARAGARD, highlighting its advantages like efficacy and duration. Brett Fishbin expresses concerns about the tightness of guidance given past fluctuations in the product's performance. Albert White explains that the product experiences significant quarterly swings but expects that, over the full year, the performance will likely remain within a tight range, similar to the previous year, mainly due to lack of substantial market movement in the non-hormonal sector. Despite quarterly fluctuations, the overall annual performance is expected to be relatively flat. Young Li from Jefferies then joins the conversation with an open-ended question.

The paragraph is a discussion between Albert White and Young Li about the company's strategic focus and growth prospects. Albert White mentions an increase in R&D investments in Cooper Surgical, particularly in CSI and specialty medical devices, with a focus on geographic expansion. Young Li asks about the expected growth for BBI's spherical products, noting that despite a 3% organic growth, more is anticipated in the second half of the year. Albert White attributes this future growth to the production of MyDay spheres, emphasizing the expansion of their toric range, which involves producing many SKUs and lenses. They are increasing production levels to meet market demand.

In the paragraph, Chris Pasquale from the audience asks about interest rates and growth expectations related to their product MySite. Albert White clarifies that MyDay, MySite growth is expected for fiscal year 2026 and not included in 2025 projections. Brian Andrews explains there's no expectation of Fed interest rate moves this year and their interest expense assumptions remain largely unchanged. Anthony Petrone from Mizuho brings up concerns about contact lens inventory trends at distributors and big box retailers like Costco due to tariffs, questioning if there's a risk of destocking or tightened inventory. He also inquires about the executive order on IVF and its potential to expand access.

The paragraph discusses the impact of an executive order on IVF and health care costs. Albert White expresses that while IVF product costs are a small part of fertility expenses, which are largely driven by pharmaceuticals, increased support for IVF is beneficial. He also addresses potential risks concerning tighter channel inventory globally, although he notes that Cooper's contracts have certain obligations that mitigate significant risk. In response to Navann Ty's questions, Albert acknowledges numerous private label contracts of varying durations and addresses that while the approval of a low copper IUD might affect the PARAGARD product, the competitive impact may be lessened due to factors like the presence of nickel energy.

The paragraph discusses the nature of long-term contracts, which can range from two to ten years, emphasizing their importance in forming partnerships where both parties commit to building and promoting a brand. It highlights a diverse portfolio with various products and brands across different locations. Regarding PARAGARD, it's mentioned that a competitive product has been approved and will undergo the REMS process, while the current strategy will continue. Navann Ty thanks Albert White, and the conversation shifts to David Saxon from Needham and Company. David asks about the realignment of the sales force in the myopia management sector, inquiring about the motivations and confidence in managing the transition. He also questions PARAGARD's growth driven by pricing and the ability to maintain this growth amid new competition. Albert White is expected to respond.

The paragraph discusses PARAGARD, an IUD that is fully reimbursed, and mentions a price increase due to inflation. It also highlights the company's strategic adjustments in sales practices, specifically regarding myopia management. The sales team now includes specialists focused on myopia control, which has been reorganized to incorporate the traditional sales force, leading to accelerated progress in Q1. The speaker expresses confidence in reaching a 40% target for the full year, thanks to these efforts, and concludes with gratitude for the call participants, looking forward to the next earnings call.

This summary was generated with AI and may contain some inaccuracies.