The Cooper Companies, Inc. (NYSE:COO) Q4 2022 Earnings Call Transcript

Brian Andrews: Yes. So on margins, Q4 to next year, I touched on — I gave a little bit of guidance in my prepared remarks just around being a little bit lower than Q4. Some of that gross margin is going to be somewhat similar, but OpEx is still going to be elevated. We saw some of the issues that we dealt with in Q4 kind of bleed into Q1. As you work through the year, like I said, currency improves, gross margin will improve from price and then operating margins, while they’re going to be up slightly year-over-year. they are being held down a little bit from the elevated OpEx. The cadence and the gating or on revenues is going to be pretty similar to the way it is typically. And — so that’s basically the gaming. Did you — did I answer your question, ?

Unidentified Analyst: Just to be clear, you said both revenue and margin will be lower in Q1 versus Q4?

Brian Andrews: So revenues will be a little bit lower and gross margins probably a little bit similar, but you’ve got higher OpEx and certainly higher interest expense, which will drive your EPS a little bit lower versus.

Unidentified Analyst: Okay. That’s helpful. And if I can just have another question on the guidance. You talked about $120 million to $130 million in Op management revenue. What’s assumed on cycles in that? And what do you see about SightGlass launch cost in the guidance?

Albert White: So there’s nothing in there for SightGlass revenue. As you know, a, that’s a joint venture that we have. So we don’t recognize revenue from that other than a little bit of the product that we distribute, but it’s pretty minimal. We’ve assumed continued cost there. We’ve had expenses associated with site class that have been rolled through our P&L every quarter. We’ve assumed that will continue. The only thing that I would probably highlight that’s not factored in there is what happens with FDA approval. If we do get FDA approval, I’m sure there will be incremental launch costs associated with that activity. And we’ll obviously pull that out and highlight that specifically, but that’s a little bit of an unknown. So that’s the only thing that wouldn’t be in there.

Operator: Our next question comes from Jeff Johnson from Baird.

Unidentified Analyst: This is Dan on for Jeff. On the kind of 7 to 9 CVI organic guide, it looks like maybe you got 150 basis points of tailwind from myopia management. We were just wondering kind of what is the pricing assumption in there? I know I think you mentioned it being a little bit higher than this year. So what’s kind of the organic ex price ex myopia kind of CVI growth you’re expecting?

Albert White: Yes. I think that price this year ends up being somewhere around 2% as a positive. And that’s probably true for us and an industry comment, it’s going to be somewhere around in that range. So yes, when you look at the 7 to 9 depending upon how you want to look at that compared to prior years and so on and so forth. You’ve got 1% — 1.5% coming from myopia management and a couple of points coming from price still within that.

Unidentified Analyst: Okay. And just to clarify, that 2% for ’23.

Albert White: Correct.

Unidentified Analyst: Okay. And then just one follow-up on PARAGARD. I know this quarter you guys had easy comp. But we did see some data starting to suggest office visits improve and just IUD use improve overall. So what are your kind of thoughts on the end market growth for IUD and PARAGARD into ’23?