The Cooper Companies, Inc.

Good afternoon. At this time, we would like to welcome everyone to the Q1 2024 Cooper Companies Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to redraw your question, again, please press star one. I would now like to turn the conference over to Kim Duncan, VP of Investor Relations and Risk Management. Please go ahead.

Good afternoon and welcome to Cooper Company's first quarter 2024 earnings conference call. During today's call, we will discuss the results and guidance included in the earnings release and then use the remaining time for questions. Our presenters on today's call are Al White, President and Chief Executive Officer of and Brian Andrews, Chief Financial Officer and Treasurer. Before we begin, I'd like to remind you that this conference call contains forward-looking statements, including revenues, EPS, operating income, tax rate, FX, and other financial guidance and expectations, strategic and operational initiatives, market and regulatory conditions and trends, and product launches and demand. Forward-looking statements depend on assumptions, data, or methods that may be incorrect or imprecise and are subject to risks and uncertainties. events that could cause our actual results and future actions of the company to differ materially from those described in forward-looking statements are set forth under the caption forward-looking statements in today's earnings release and are described in our SEC filings, including Cooper's Form 10-K and Form 10-Q filings, all of which are available on our website at coopercos.com. Also, as a reminder, the non-GAAP financial information we will provide on this call is provided as a supplement to our GAAP information. We encourage you to consider our results under GAAP as well as non-GAAP and refer to the reconciliations provided in our earnings release, which is available on the investor relations section of our website. Should you have any additional questions following the call, please email ir at cooperco.com. And now I'll turn the call over to Al for his opening remarks.

Great. Thank you, Kim. And welcome, everyone, to Cooper Company's 2024 Fiscal First Quarter Conference Call. We're off to an outstanding start this year, posting all-time record quarterly revenues of $932 million. Cooper Vision started the year on a solid note, growing nicely around the world, and Cooper Surgical achieved record quarterly revenues, with our fertility business posting its 13th consecutive quarter of double-digit organic growth. Our earnings were strong, and our momentum is excellent, with capacity expansion progressing well and demand remaining very healthy. Moving to the quarterly numbers and reporting all percentages on an organic basis, consolidated revenues were $932 million, up 8% year-over-year. Cooper Vision posted revenues of $622 million, up 7%, led by strength in our daily silicone hydrogel portfolio. And Cooper Surgical posted revenues of $310 million, up 8%, led by another great quarter in our fertility business. Margins improved and profits were solid with non-GAAP earnings per share of $0.85, remembering that we just completed a 4-for-1 stock split last week. For Cooper Vision, the Americas grew 6%, EMEA 10%, and Asia-Pac 7%. All three regions reported success with our innovative product portfolios, market-leading flexibility, and growth in key accounts. Within modalities, our daily silicone hydrogel lenses, MyDay and Clarity, grew 14%. and our silicone hydrogel monthly and two-week lenses biofinity and Avera Vitality grew 6%. We're continuing to see outsized demand, especially for MyDay, but our capacity is improving, and this is reflected in our higher revenue guidance that we'll cover shortly. Turning to products, we're seeing very strong growth in demand with MyDay. Starting with MyDay Multifocal, our momentum is truly fantastic. The unique combination of an advanced multifocal design paired with an easy fitting system is resulting in 98% of patients being fit in two pairs or less. And patient feedback continues to be outstanding, including my own. As many of you know, I wear these lenses and they're amazing. Whether I'm looking at a screen for long hours, driving home, eating out, or doing anything else, my vision is crisp and my eyes feel great. I'm comfortable saying these are the best multifocals in the market. And our outstanding growth and strong demand certainly supports that. Moving to MiDay Toric, this lens is also performing extremely well. The rollout of our parameter expansion across North America and Europe has been a tremendous success, and we look forward to increasing availability as capacity improves. Demand for the product continues to be driven by our market-leading Toric design, which mirrors BioAffinity's design, and our industry-leading SKU range, which is by far the widest Toric range in the daily market. In our My Day Sphere portfolio, My Day Energist is approaching its one-year anniversary in the U.S. market, and it's continuing to generate great results. Its innovative digital boost technology delivers optics designed for today's lifestyle, where on average people spend more than seven hours per day on screens, and wearers love it. Meanwhile, our premium My Day Sphere is also posting great results. To wrap up on my day, our team has done a phenomenal job supplying existing customers while keeping expectations in check on new product launches and geographic expansion. I'm now happy to report that our success expanding capacity is easing some of those constraints and allowing us to be more active moving forward. Moving to clarity, with its full family of silicone hydrogel spheres, torques, and multifocals, we're continuing to do well. The comfort, ease of handling, and price positioning have led Clarity to be a lens of choice for many new wearers. Outside of dailies, demand for bioaffinity remains strong, led by torques and multifocals. It's worth highlighting our bioaffinity torque multifocal, which is growing very nicely as eye care practitioners continue making it their primary lens for patients experiencing more complex vision needs, balancing presbyopia with differing levels of astigmatism. We'll be expanding availability of this lens in existing markets and launching a new market soon, so we're excited about that. Avera also had a nice quarter, led by Torx. Moving to Myopia Management, we posted revenues at $29 million, up 19%, with MySite up 51%. This was another excellent quarter for MySite, powered by growth across all regions, with particular strength in EMEA, where we posted record quarterly sales. Worldwide, we're continuing to see momentum in key accounts, high retention rates, and a nice halo effect. We're also launching new digital tools and programs to streamline the fitting process, making it easier and quicker. MySite remains the first and only FDA-approved contact lens for myopia control, and it's backed by extensive clinical data and real-world results. This is a critical differentiator as the proactive management of myopia becomes standard of care within the eye care community to help reduce the progression of myopia in children. Outside of my site, our ortho-K lenses declined 10% due to weakness in China. And on sight glass, you may have heard from our JV partner, Essilor Luxottica, that the FDA recently granted sight glass spectacles breakthrough device designations. We're excited about this update and we'll continue working closely with the FDA in hopes of obtaining approval in the second half of 2025. Finally, as we look to expand myopia care to all children, we've launched a pilot program in the U.S. called Generation Sight in collaboration with three top optometry schools, the Illinois College of Optometry, the New England College of Optometry, and the Massachusetts College of Pharmacy and Health Sciences to provide myopia care to underserved children. This program engages local public school systems to drive awareness and treatment of myopia by providing free eye exams and free MySite. It also helps optometry students get real-world pediatric experience while increasing their clinical capabilities as they develop into the next generation of professional leaders. As a leader in the myopia management space, we're certainly proud of programs like this that are making a difference with kids in our communities. To finish on Cooper Vision, the contact lens market grew 9% in calendar 2023, with Cooper Vision taking share growing 11%. We expect 2024 to be another strong year, supported by the long-term macro growth trend and more people needing vision correction. It's estimated that 50% of the global population will have myopia by the year 2050, up from roughly 34% today. When you combine this with the ongoing shift to silicone hydrogel dailies, the increasing focus on higher-value products, and higher pricing, we expect many years of solid growth for the industry. Within this, we expect to remain a leader with our innovation, robust product portfolio, ongoing product launches, strength in premium torque and multifocal products, fast-growing myopia management business, and leading NuFit data. Moving to Cooper Surgical. We posted record quarterly revenues of $310 million, up 8% organically. Fertility sales were $119 million, up 11%, which is our 13th consecutive quarter of double-digit organic growth. This success was driven by our outstanding team and market-leading products and services within consumables, capital equipment, and reproductive genetic testing. We're also investing for the future, opening new donor sites, providing extensive training in our centers of excellence, expanding geographically, and accelerating innovation. We believe our focus on investing and delivering the most innovative and advanced solutions to fertility clinics and patients remains unmatched. This includes our recent launch of Witness IQ, a cloud-based digital platform that further enhances the benefits of the Witness system to track activity, reduce errors, and improve efficiencies in fertility labs. And we remain at the forefront of fertility-based genetic testing. Cooper Surgical was an early adopter of artificial intelligence to identify the best embryos to transfer during an IVF cycle, and we're now further advancing our leadership position with a launch of primary template-directed amplification, a new approach to DNA amplification for embryo biopsy samples. As an enhancement to the existing pre-implementation genetic testing process, this technology better identifies genetic anomalies in a faster, more accurate manner. This is the first major advancement to DNA amplification in embryos since 2009, and will help drive better patient outcomes. Delivering these types of innovations is why we're a leader in this space, and it's our commitment to continue this type of work. For the global fertility market, the trends supporting significant long-term growth remain intact, including women delaying childbirth, increasing patient awareness, greater benefits coverage, technology advancements that improve success rates, and broadly speaking, improving access to treatment. The World Health Organization highlights that one in six people globally will be affected by infertility at some point in their lives. So this is an issue that impacts a lot of people and will continue to do so in the future. As part of this, we remain incredibly committed to the fertility industry and will always stand in support of patients and clinics. Access to fertility treatment is incredibly important for so many people, and Cooper will continue to advocate for increased accessibility and the advancement of human reproductive rights on a global basis. Moving to office and surgical, we posted sales of $191 million, up 6% organically, with medical devices growing 6%, stem cell storage up 4%, and paragraph up 7%. Within our medical device business, we reported strength in our labor and delivery portfolio, including the Cook products that we acquired last November that grew 13%. We also reported strength in our minimally invasive gynecological surgery products, which include market-leading disposables and innovative capitals such as our Ally uterine manipulator portfolio. Our stem cell business had a solid quarter, and Paragard outperformed expectations with outstanding execution around a mid-single-digit price increase. To conclude on Cooper Surgical, we take great pride in being able to say that every minute, somewhere around the world, a baby is born using Cooper Surgical products. We're making a difference in people's lives, and that's a big part of what makes this business special for us. Before turning the call over to Brian, let me say that in addition to our strong operational performance, our efforts around environmental sustainability, corporate social responsibility, and other important areas within our business are also advancing well. So thank you to our 15,000-plus employees around the world for their hard work and dedication as they drive our success. And now I'll turn the call over to Brian.