Cooper Companies Earnings Call Nuggets: Biofinity Outlook and MyDay Margins

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Cooper Companies (NYSE:COO) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.

Biofinity Outlook

Kimberly Gailun – JPMorgan: I guess, the first question maybe just on Biofinity. You had another really solid quarter and you’re out of place now, where silicon hydrogels as a percentage of CooperVision sales is pretty close to on par with where we think the industry is. I’ve always thought that Cooper, because you’re under-indexed in dailies should actually be able to go higher than the industry, but I think it’ll be helpful just to kind of walk through what you see as the runway for Biofinity from here and maybe Avaira, so silicon hydrogel as a family and then as you bring in the daily?

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Robert S. Weiss – President and CEO: Kim, as far as we’re concerned, Biofinity which is approaching $500 million run rate product line with solid double-digit growth, it still has a lot of runway left. As I mentioned in my comments, a lot of that runway still has to do with Japan and the rest of the world, where this product obviously is viewed in a very special league within silicon hydrogel lenses, and I think there’s no reason to think that it won’t continue to perform very well, albeit off of a much higher base going forward, particularly in the monthly modality. Avaira of course is just really getting going. It took a couple of years to get Avaira Toric aligned, so we can see the halo effect of Avaira Toric with the Avaira Sphere line. I mentioned that it grew as a family off of a granted a much smaller base more than 50% on a year-over-year basis. So, we’re pleased with the momentum it starting to develop. So, I kind of look at each, how are they going to do in each modality. We have a good entre in monthly with Biofinity and that will continue to do well, probably the non-growth factor globally or the one that will grow the least is the two-week modality, but it is a huge opportunity where we are under-indexed. Then of course the real growth right now from the point of view of the overall lens industry is the 1 Day modality, sponsored partly by the U.S. where it’s doing extremely well. In that area revenue has gone and the industry’s slump 11% three years ago to well over 20% now, we think between Proclear 1 Day and now MyDay, we have good entres in that area. So, when I think about it, I kind of think of the way we present the CLI data in the back of our release. We’re gaining share on all fronts right now. I don’t care if you look at modality. I don’t care if you look at geographic areas. I don’t care if you look at types of lenses, which unfortunately, we weren’t able to present (this go around) because the Contact Lens Institute is kind of suppressed some data which doesn’t allow us to be able to tell you what the industry did, but ourself, we did very well as you can see, can’t really tell you how, but we think we’re covering all fronts pretty effectively and we’ll gain share pretty effectively, and that translates to expecting good growth out of Biofinity in the monthly, Avaira in the two-week and Proclear 1 day and MyDay in the 1 day.

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