Back to GetFilings.com
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED OCTOBER 31, 2003 COMMISSION FILE NO. 1-8597
----------
THE COOPER COMPANIES, INC.
(Exact name of registrant as specified in its charter)
----------
Delaware 94-2657368
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
6140 Stoneridge Mall Road, Suite 590
Pleasanton, California 94588
(Address of principal executive offices) (Zip Code)
925-460-3600
(Registrant's telephone number, including area code)
----------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- -------------------
Common Stock, $.10 par value, and New York Stock Exchange
associated rights
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [X] No [ ]
On December 31, 2003, there were 31,914,540 shares of the registrant's
common stock held by non-affiliates with aggregate market value of $893,607,120
on April 30, 2003, the last day of the registrant's most recently completed
second fiscal quarter.
Number of shares outstanding of the registrant's common stock, as of
December 31, 2003: 32,103,480.
Documents Incorporated by Reference:
Document Part of Form 10-K
-------- -----------------
Portions of the 2003 Annual Report to Stockholders for Parts I and II
the fiscal year ended October 31, 2003
Portions of the Proxy Statement for the Annual Part III
Meeting of Stockholders scheduled to be held
March 23, 2004
================================================================================
PART I
Item 1. Business.
Introduction
The Cooper Companies, Inc. (the "Company," "Cooper" or "we" and similar
pronouns), through its principal business units, develops, manufactures and
markets healthcare products. Cooper is a Delaware corporation that was organized
in 1980.
CooperVision (CVI) develops, manufactures and markets a broad range of
contact lenses for the worldwide vision care market. It specializes in toric
lenses that correct astigmatism, cosmetic lenses that change the appearance of
the color of the eye, and other lenses, primarily high growth, specialty and
value-added market segments around the world. Its leading products are
disposable and planned replacement toric and spherical lenses. CooperSurgical
(CSI) develops, manufactures and markets medical devices, diagnostic products
and surgical instruments and accessories used primarily by gynecologists and
obstetricians.
Forward-Looking Statements
Some of the information included in this Form 10-K contains
"forward-looking statements" as defined by the Private Securities Litigation
Reform Act of 1995. The forward-looking statements include certain statements
pertaining to our capital resources, performance and results of operations. In
addition, all statements regarding anticipated growth in our revenue, market
conditions and results of operations are forward-looking statements. To identify
forward-looking statements look for words like "believes," "expects," "may,"
"will," "should," "seeks," "intends," "plans," "estimates" or "anticipates" and
similar words or phrases. Discussions of strategy, plans or intentions often
contain forward-looking statements. These, and all forward-looking statements,
necessarily depend on assumptions, data or methods that may be incorrect or
imprecise.
Events, among others, that could cause actual results and future actions to
differ materially from those described in forward-looking statements include
major changes in business conditions, a major disruption in the operations of
our manufacturing facilities, new competitors or technologies, significant
delays in new product introductions, the impact of an undetected virus on our
computer systems, acquisition integration delays or costs, increases in interest
rates, foreign currency exchange exposure, investments in research and
development and other start-up projects, dilution to earnings per share from
acquisitions or issuing stock, worldwide regulatory issues, including product
recalls and the effect of healthcare reform legislation, cost of complying with
new corporate governance requirements, changes in tax laws or their
interpretation, changes in geographical profit mix effecting tax rates,
significant environmental cleanup costs above those already accrued, litigation
costs including any related settlements or judgments, cost of business
divestitures, the requirement to provide for a significant liability or to write
off a significant asset, including impaired goodwill, changes in accounting
principles or estimates, including the potential cost of expensing stock
options, and other events described in our Securities and Exchange Commission
filings, including the "Business" section in this Form 10-K for the year ended
October 31, 2003 and the related portions of the Company's 2003 Annual Report to
Stockholders (2003 Annual Report) incorporated herein by reference. We caution
investors that forward-looking statements reflect our analysis only on their
stated date. We disclaim any intent to update them except as required by law.
2
General Description and Development of Businesses
The information required by this item is incorporated by reference to the
captions "CooperVision" and "CooperSurgical" under "Business Review" in the 2003
Annual Report.
Research and Development
Our Company-sponsored research and development expenditures during the
fiscal years ended October 31, 2003, 2002 and 2001 were $5.6 million, $4.3
million and $3.7 million, respectively. During fiscal 2003, CooperVision spent
68% and CooperSurgical spent 32% of the total. We did not participate in any
customer-sponsored research and development programs.
Cooper employs 28 people in its research and development and manufacturing
engineering departments. Outside specialists in lens design, formulation
science, polymer chemistry, microbiology and biochemistry support product
development and clinical research for CVI products. CSI conducts research and
development in-house and also employs outside surgical specialists, including
members of its surgical advisory board.
Additional information under the caption "Research and Development Expense"
under "Management's Discussion and Analysis of Financial Condition and Results
of Operations" in the 2003 Annual Report is incorporated by reference.
Government Regulation
The U.S. Food and Drug Administration (FDA), other federal agencies and
various foreign ministries of health regulate the development, testing,
production and marketing of the Company's products. The Federal Food, Drug and
Cosmetic Act and other statutes and regulations govern the testing,
manufacturing, labeling, storage, advertising and promotion of these products.
If applicable regulations are not followed, companies may be subject to fines,
product recall or seizure, suspension of production and criminal prosecution.
Both CVI and CSI develop and market medical devices under different levels
of FDA regulation depending on the classification of the device. Class III
devices, such as flexible and extended wear contact lenses, require extensive
premarket testing and approval, while Class I and II devices require
substantially lower levels of regulation.
Before a new contact lens can be sold commercially, CVI must complete these
steps: (1) compile data on its chemistry and toxicology, (2) determine its
microbiological profile and (3) define the proposed manufacturing process. This
data must be submitted to the FDA to support an application for an
Investigational Device Exemption. Once this is granted, clinical trials can
begin. These are subject to review and approval by an Institutional Review Board
and, where a lens is determined to have a significant risk, the FDA. After the
clinical trials are completed, a Premarket Approval Application must be
submitted to and approved by the FDA.
In connection with some of Cooper's new products, we can submit an
expedited procedure known as a 510(k) application for premarket notification to
the FDA. Any product that can demonstrate that it is substantially equivalent to
another device marketed before May 28, 1976 can use this procedure. If the new
product is not substantially equivalent to a preexisting device or if the FDA
rejects a claim of substantial equivalence, FDA marketing clearance requires
extensive preclinical and clinical testing, substantially increasing the cost
and delaying the time to market.
3
FDA and state regulations also require the Company to adhere to applicable
"good manufacturing practices" (GMP). They require detailed quality assurance
and record keeping and make periodic unscheduled regulatory inspections. The
Company believes it is in compliance with GMP regulations.
Health authorities in foreign countries regulate Cooper's clinical trials
and medical device sales. The regulations vary widely from country to country.
Even if the FDA has approved a product, the regulatory agencies in each country
must approve new products before they may be marketed there.
These regulatory procedures require a considerable investment in time and
resources and usually result in a substantial delay between new product
development and marketing. Cooper cannot assure that all necessary approvals
will be obtained, or obtained in a timely manner. If the Company does not
maintain compliance with regulatory standards or if problems occur after
marketing, product approval may be withdrawn.
All of Cooper's currently marketed products have been cleared by all
appropriate regulatory agencies, and none are being marketed under an
Investigative Device Exemption.
In addition to FDA regulatory requirements, the Company also maintains ISO
9000 certification and CE mark approvals for its products. A CE mark is an
international symbol of adherence to certain standards and compliance with
applicable European medical device requirements. These quality programs and
approvals are required by the European Medical Device Directive and must be
maintained for all products intended to be sold in the European market. In order
to maintain these quality benchmarks, the Company is subjected to rigorous
biannual reassessment audits of its quality systems and procedures.
Raw Materials
CVI's raw materials primarily consist of various chemicals and packaging
materials. There are alternative supply sources for each of them. Raw materials
used by CSI are generally available from more than one source. However, because
some products require specialized manufacturing procedures, CSI could experience
inventory shortages if it were required to use an alternative manufacturer on
short notice.
Marketing and Distribution
In the United States, Canada, United Kingdom, Brazil, Portugal, Italy,
Spain, France, Holland, Sweden, Finland, Norway, Australia and South Africa, CVI
markets its products through its field sales representatives, who call on
optometrists, ophthalmologists, opticians and optical chains. In the United
States, field sales representatives also call on distributors. In Japan and
other countries outside North America, CVI uses distributors and has given most
of them the exclusive right to market our products. In the United States, CVI
augments its sales and marketing efforts with e-commerce, telemarketing and
advertising in professional journals.
CSI's products are marketed by a network of field sales representatives and
distributors. In the United States, CSI augments its sales and marketing
activities with e-commerce, telemarketing, direct mail and advertising in
professional journals.
Patents, Trademarks and Licensing Agreements
Cooper owns or licenses a variety of domestic and foreign patents, which,
in total, are material to its overall business. The names of certain of Cooper's
products are protected by trademark registrations in the United States Patent
and Trademark Office and, in some cases, also in foreign trademark offices.
4
Applications are pending for additional trademark registrations. Cooper
aggressively defends its intellectual property rights.
No individual patent or license is material to the Company or either of its
principal business units other than:
o Our non-exclusive Patent License Agreement dated as of December 2, 1997,
between Cooper and Geoffrey Galley, Albert Moreland, Barry Bevis and Ivor
Atkinson entered into in connection with the Company's acquisition of
Aspect Vision Care Limited (the "Edge Patent License"). This agreement
expires in January 2010 and relates to patents used by CVI to produce a
contact lens edge that provides superior comfort to the wearer. The edge
forms a part of CVI's products (both spherical and toric lenses) that are
manufactured using a cast molding technology in the Company's Hamble,
England, and Norfolk, Virginia, facilities.
o Our license related to products manufactured by CVI using the proprietary
phosphorylcholine (PC) technology patents that we received in connection
with the Company's acquisition of Biocompatibles Eye Care, Inc. Our
Proclear Compatibles brand of spherical and toric soft contact lenses are
manufactured using this PC technology.
In addition to trademarks and patent licenses, the Company owns certain
trade secrets, copyrights, know-how and other intellectual property.
Dependence on Customers
Neither of Cooper's business segments depends to any material extent on any
one customer or any one affiliated group of customers.
Government Contracts
Neither of our business units is materially subject to profit renegotiation
or termination of contracts or subcontracts at the election of the United States
government.
Competition
CVI and CSI each operate in a highly competitive environment. Competition
in the medical device industry involves the search for technological and
therapeutic innovations in the prevention, diagnosis and treatment of disease.
Both of Cooper's businesses compete primarily on the basis of product quality
and differentiation, technological benefit, service and reliability.
CVI
A number of manufacturers compete in the worldwide market for contact
lenses, which was approximately $3.5 billion in 2003. The three largest are
Johnson & Johnson's Vistakon division, CIBA Vision/Wesley Jessen (owned by
Novartis AG) and Bausch & Lomb Incorporated.
The contact lens market has two major segments. The larger "commodity"
segment, about $2.5 billion in 2003, is comprised of lenses that only correct
near- and farsightedness. The smaller "specialty" segment, about $1 billion in
2003, is comprised of lenses that address special needs of contact lens
patients, which includes toric, cosmetic, multifocal and premium lenses.
CooperVision competes successfully in the contact lens market primarily by
offering specialty lenses, and secondarily by offering commodity lenses. About
62% of CVI's sales are specialty lenses.
5
To compete successfully in the contact lens market, companies must market
differentiated products priced competitively and, therefore, manufactured
efficiently. CVI believes that it is the only contact lens manufacturer to use
three different manufacturing processes to produce its lenses (lathing, cast
molding and FIPS, a cost effective combination of lathing and molding). This
manufacturing flexibility means that CVI can:
o Develop more lens types for patients than competitors (two week, monthly
and quarterly disposable and custom toric products, the latter for patients
with a high amount of astigmatism); and
o Offer a wider range of lens parameters, leading to a more successful
fitting with better visual acuity.
In addition, CVI believes that its lenses provide superior comfort through
its use of the lens edge technology provided under the patents covered by its
Edge Patent License described under "Patents, Trademarks and Licensing
Agreement." CVI also sponsors clinical studies to generate medical information
to improve its lenses.
In order to enhance its competitiveness in the specialty market, Cooper
completed the acquisition of Biocompatibles Eye Care, Inc. (Biocompatibles) the
contact lens business of Biocompatibles plc., in February 2002. Biocompatibles'
Proclear line spherical and toric lenses, are manufactured with omafilcon A, a
material that incorporates the proprietary phosphorylcholine technology that
helps enhance tissue-device compatibility. Proclear is the only lens with FDA
clearance for the claim "... may provide improved comfort for contact lens
wearers who experience mild discomfort or symptoms relating to dryness during
lens wear." Mild discomfort relating to dryness during lens wear is a condition
that often causes patients to discontinue contact lens wear.
Toric contact lenses correct astigmatism (irregularities of the cornea) and
accounted for about 13% of the total worldwide contact lens market in 2003.
CVI's toric lens sales represented about 30% of this market segment in 2003.
The toric market segment is highly competitive. CVI's primary toric
competitors are CIBA Vision/Wesley Jessen (owned by Novartis AG), Bausch & Lomb
Incorporated, Johnson & Johnson's Vistakon division and Ocular Sciences, Inc.
Toric lens manufacturers compete to provide the highest possible level of visual
acuity and patient satisfaction by offering a wide range of lens parameters,
superior wearing comfort and a high level of customer service, both for patients
and contact lens practitioners. CVI believes that its three manufacturing
processes yield a wider range of toric lens parameters than its competitors,
providing greater patient and practitioner satisfaction and better visual
acuity, and that it offers superior customer services, including high standards
of on-time product delivery.
Major competitors have greater financial resources and larger research and
development budgets and sales forces than CVI. Nevertheless, CVI offers a high
level of customer service through its several direct sales organizations around
the world and through telephone sales and technical service representatives who
consult with eyecare professionals about the use of the Company's lens products.
CVI believes that its sales force is particularly well equipped through
extensive training to meet the need of contact lens practitioners and their
customers.
CVI also competes with manufacturers of eyeglasses and with refractive
surgical procedures that correct visual defects. The Company believes that CVI
will continue to compete favorably against eyeglasses, particularly in markets
where the penetration of contact lenses in the vision correction market is low,
offering lens manufacturers an opportunity to gain market share. The Company
also believes that laser vision correction is not a material threat to its sales
of contact lenses because each modality serves a different demographic group.
Almost all new contact lens wearers are in their teens or twenties, while
refractive surgical procedures are performed primarily on patients in their late
thirties or early forties.
6
CSI
CSI focuses on selected segments of the women's healthcare market,
supplying high quality diagnostic products and surgical instruments and
accessories. In some instances, CSI offers all of the products needed for a
complete procedure. The market segments in which CSI competes continue to be
fragmented, typified by smaller technology-driven firms that generally offer
only one or two product lines. Most are privately owned or divisions of public
companies including some owned by companies with greater financial resources
than Cooper. Competitive factors in these segments include technological and
scientific advances, product quality, price, customer service and effective
communication of product information to physicians and hospitals. CSI believes
that it competes successfully against these companies with its superior sales
and marketing, the technological advantages of its products and by developing
and acquiring new products, including those used in new medical procedures. In
addition, as CSI expands its product line, it offers to train medical
professionals how to use them.
Backlog
Backlog is not a material factor in either of Cooper's business units.
Seasonality
CVI's contact lens sales in its first fiscal quarter, which runs from
November 1 through January 31, are typically lower than subsequent quarters, as
patient traffic to practitioners' offices is relatively light during the holiday
season.
Compliance with Environmental Laws
Federal, state and local provisions that regulate the discharge of
materials into the environment, or relate to the protection of the environment,
do not currently materially affect Cooper's capital expenditures, earnings or
competitive position.
Working Capital
Cooper has not required any material working capital arrangements in the
past five years.
Financial Information about Business Segments, Geographic Areas, Foreign
Operations and Export Sales
The information required by this item is incorporated by reference to Note
12 "Business Segment Information" of Notes to Consolidated Financial Statements
of the Company included in the 2003 Annual Report.
Employees
On October 31, 2003, Cooper had approximately 3,700 employees. The Company
believes that its relations with its employees are good.
7
Available Information
The Cooper Companies, Inc. Internet address is http://www.coopercos.com.
Our annual reports on Form 10-K, along with all other reports and amendments
filed with or furnished to the Securities and Exchange Commission (SEC) are
publicly available free of charge on our Web site as soon as reasonably
practicable after the Company furnishes it to the SEC. The Company's Corporate
Governance Principles, Business Conduct and Ethics Policy and Board of
Directors' committee charters are also posted on the Web site. The information
on the Company's Web site is not part of this or any other report we file with,
or furnish to, the SEC.
8
Item 2. Properties.
The following are Cooper's principal facilities as of October 31, 2003:
Approximate Owned
Floor Area or Lease
Location Operations (Sq. Ft.) Leased Expiration
- ----------------------- -------------------------------------------- ----------- ------ ----------
United States
Pleasanton, CA Executive Offices 13,700 Leased Sept. 2005
Lake Forest, CA Executive Offices and CVI Offices 8,100 Leased Jan. 2005
Huntington Beach, CA CVI Manufacturing & Technical Offices 20,600 Leased Sept. 2007
Fairport, NY CVI Administrative Offices & Marketing 31,000 Leased April 2004
Scottsville, NY CVI Manufacturing and Research 49,500 Owned N/A
Henrietta, NY CVI Distribution and Warehouse Facility 68,000 Leased Feb. 2008
Norfolk, VA CVI Manufacturing, Offices and Warehouse
Facilities 39,000 Owned N/A
Trumbull, CT CSI Manufacturing, Research and
Development, Marketing, Distribution and
Warehouse Facilities 92,000 Leased May 2011
Canada
Markham, Ont. CVI Offices, Manufacturing
Distribution and Warehouse Facilities 23,000 Leased Feb. 2005
St. Liboire, QC CSI Manufacturing and Administrative 24,273 Owned N/A
United Kingdom
Hamble, Hampshire, CVI Manufacturing, Research and Development,
England Marketing and Admin. Offices 91,400 Owned N/A
Fareham, Hampshire, CVI Manufacturing and Administrative 29,600 Leased Jan. 2018
England
Fareham, Hampshire, CVI Manufacturing and Warehouse
England 35,000 Leased June 2013
Fareham, Hampshire, CVI Manufacturing
England 33,300 Leased Sept. 2023
Italy
Milan CVI Warehouse and Administrative 29,700 Leased Sept. 2008
Australia
South Australia CVI Manufacturing, Distribution and
Administration 14,800 Leased June 2004
The Company believes its properties are suitable and adequate for its
businesses.
9
Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
During the fourth quarter of fiscal 2003, the Company did not submit any
matters to a vote of the Company's security holders.
10
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
The information required by this item is incorporated by reference to
"Quarterly Common Stock Price Range," "Corporate Information," and the heading
"Cash Dividends" in Note 8 "Stockholders' Equity" of "Notes to Consolidated
Financial Statements" in the 2003 Annual Report.
Item 6. Selected Financial Data.
The information set forth under "Five-Year Financial Highlights," on page
30, and "Contractual Obligations and Commercial Commitments" in the 2003 Annual
Report is incorporated by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The information required by this item is incorporated by reference to
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the 2003 Annual Report.
Item 7A. Quantitative and Qualitative Disclosure about Market Risk.
The Company is exposed to market risks that relate principally to changes
in interest rates and foreign currency fluctuations. The Company's policy is to
minimize, to the extent reasonable and practical, its exposure to the impact of
changing interest rates and foreign currency fluctuations by entering into
interest rate swaps and foreign currency forward exchange contracts,
respectively. The Company does not enter into derivative financial instrument
transactions for speculative purposes. Additional information for this item is
incorporated by reference to "Derivatives" in Note 1 "Summary of Significant
Accounting Policies" and in Note 7 "Financial Instruments" to the Financial
Statements in the 2003 Annual Report.
Long-term Debt
Total debt increased to $185.9 million at October 31, 2003 from $163.6
million at October 31, 2002. We issued $115 million of convertible senior
debentures (see caption "Convertible Senior Debentures" in Note 6 "Debt" in the
2003 Annual Report, which is incorporated by reference) and the proceeds were
used to reduce amounts drawn under our revolving credit facility and for
additional funding requirements.
October 31, 2003 October 31, 2002
---------------- ----------------
(In millions)
Short-term debt $ 20.7 $ 36.3
Long-term debt 165.2 127.3
------ ------
Total $185.9 $163.6
====== ======
11
As of October 31, 2003, the scheduled maturities of the Company's fixed and
variable rate long-term debt obligations (excluding capitalized leases), their
weighted average interest rates and their estimated fair values were as follows:
Expected Maturity Date - Fiscal Year
--------------------------------------------------------------
There- Fair
2004 2005 2006 2007 2008 after Total Value
----- ----- ----- ---- ---- ------ ------ ------
($ in Millions)
Long-term debt:
Fixed interest rate $ -- $ -- $ -- $ -- $ -- $112.2 $112.2 $138.0
Average interest rate 2.625%
Variable interest rate $19.1 $22.7 $19.0 $9.6 $0.1 $ 0.2 $ 70.7 $ 70.7
Average interest rate 2.9% 2.9% 2.9% 2.9% 2.9% 2.9%
Item 8. Financial Statements and Supplementary Data.
The information required by this item is incorporated by reference to
"Consolidated Balance Sheets," "Consolidated Statements of Income,"
"Consolidated Statements of Cash Flows," "Consolidated Statements of
Comprehensive Income," "Notes to Consolidated Financial Statements,"
"Independent Auditors' Report" and "Two-Year Quarterly Financial Data" in the
2003 Annual Report.
Item 9. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure.
None.
Item 9A. Controls and Procedures.
The Company has established and currently maintains disclosure controls and
procedures designed to ensure that material information required to be disclosed
in its reports filed under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported, within the time periods specified by the
Securities and Exchange Commission and that any material information relating to
the Company is recorded, processed, summarized and reported to its principal
officers to allow timely decisions regarding required disclosures. In designing
and evaluating the disclosure controls and procedures, management recognized
that any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives,
and in reaching a reasonable level of assurance, management necessarily was
required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures.
In conjunction with the close of each fiscal quarter, the Company conducts
a review and evaluation, under the supervision and with the participation of the
Company's management, including the Chief Executive Officer and the Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. The Company's Chief Executive
Officer and Chief Financial Officer, based upon such an evaluation as of October
31, 2003, the end of the fiscal year covered by this report, concluded that the
Company's disclosure controls and procedures were effective at the reasonable
assurance level.
There has been no change in the Company's internal control over financial
reporting during the Company's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the Company's internal
controls over financial reporting.
12
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information required by this item is incorporated by reference to
"Proposal 1 - Election of Directors" in the Company's Proxy Statement for the
Annual Meeting of Stockholders to be held on March 23, 2004 (the "2004 Proxy
Statement").
Item 11. Executive Compensation.
The information required by this item is incorporated by reference to the
subheadings "Executive Compensation" and "Board Committees, Meetings and
Compensation" of the "Proposal 1 - Election of Directors" section of the 2004
Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information required by this item is incorporated by reference to the
subheadings "Securities Held by Management" and "Principal Securityholders" of
the "Proposal 1 - Election of Directors" section and the "Equity Compensation
Plan Information" subheading of "Proposal 3 - Approval of the Amendment of
Amended and Restated 2001 Long Term Incentive Plan" of the 2004 Proxy Statement.
Item 13. Certain Relationships and Related Transactions.
None.
Item 14. Principal Accounting Fees and Services.
The information required by this item is incorporated by reference to
"Report of the Audit and Finance Committee" of the "Proposal 1 - Election of
Directors" section of the 2004 Proxy Statement.
13
PART IV
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) Documents filed as part of this report:
1. Accountants' Consent and Report on Schedule.
2. Financial Statement Schedules of the Company.
Schedule
Number Description
-------- -----------
Schedule II Valuation and Qualifying Accounts
3. Exhibits.
The exhibits listed on the accompanying Exhibit Index are filed
as part of this report.
All other schedules which are included in the applicable
accounting regulations of the Securities and Exchange Commission are
not required here because they are not applicable.
(b) Reports filed on Form 8-K:
Cooper filed on Form 8-K dated October 28, 2003 a report of Item
5 - Other Events, during the period August 1, 2003 through October 31,
2003. Cooper furnished on Form 8-K dated September 3, 2003 a report of
Item 12 - Results of Operations and Financial Condition, during the
period August 1, 2003 through October 31, 2003.
14
SCHEDULE II
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
Three Years Ended October 31, 2003
Additions
Balance at Charged to (Deductions)/ Balance
Beginning Costs and Recoveries/ at End
of Year Expenses Other (1) of Year
---------- ---------- ------------- -------
(In thousands)
Allowance for doubtful accounts:
Year ended October 31, 2003 $3,883 $1,598 $ 443 $5,924
====== ====== ===== ======
Year ended October 31, 2002 $1,966 $ 944 $ 973 $3,883
====== ====== ===== ======
Year Ended October 31, 2001 $2,440 $ 251 $(725) $1,966
====== ====== ===== ======
(1) Consists of additions representing acquired allowances and recoveries, less
deductions representing receivables written off as uncollectible.
Balance at Balance
Beginning Reductions/ at End
of Year Additions Charges of Year
---------- --------- ----------- -------
(In thousands)
Income tax valuation allowance:
Year ended October 31, 2003 $ 4,795 $ -- $ 507 $4,288
======== ==== ====== ======
Year ended October 31, 2002 $ 5,540 $ -- $ 745 $4,795
======== ==== ====== ======
Year Ended October 31, 2001 $ 6,488 $558 $1,506 $5,540
======== ==== ====== ======
15
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on January 28, 2004.
THE COOPER COMPANIES, INC.
By: /s/ A. THOMAS BENDER
---------------------------------
A. Thomas Bender
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on the dates set forth opposite their
respective names.
Signature Capacity Date
--------- -------- ----
/s/ A. THOMAS BENDER Chairman of the Board, President January 28, 2004
- -----------------------------
(A. Thomas Bender) and Chief Executive Officer
/s/ ALLAN E. RUBENSTEIN, M.D. Vice Chairman of the Board and January 28, 2004
- -----------------------------
(Allan E. Rubenstein) Lead Director
/s/ ROBERT S. WEISS Executive Vice President, January 28, 2004
- -----------------------------
(Robert S. Weiss) Chief Financial Officer and Director
/s/ STEPHEN C. WHITEFORD Vice President and Corporate January 28, 2004
- -----------------------------
(Stephen C. Whiteford) Controller
/s/ MICHAEL H. KALKSTEIN Director January 28, 2004
- -----------------------------
(Michael H. Kalkstein)
/s/ MOSES MARX Director January 28, 2004
- -----------------------------
(Moses Marx)
/s/ DONALD PRESS Director January 28, 2004
- -----------------------------
(Donald Press)
/s/ STEVEN ROSENBERG Director January 28, 2004
- -----------------------------
(Steven Rosenberg)
/s/ STANLEY ZINBERG, M.D. Director January 28, 2004
- -----------------------------
(Stanley Zinberg)
16
EXHIBIT INDEX
Location of
Exhibit in
Exhibit Sequential
Number Description of Document Number System
- ------- ----------------------- -------------
2.1 - International Share Sale Agreement among Biocompatibles International plc.,
Aspect Vision Holdings Limited and The Cooper Companies, Inc., incorporated by
reference to Exhibit 2.1 to the Company's Current Report on Form 8-K dated
February 27, 2002.................................................................
3.1 - Restated Certificate of Incorporation, as partially amended, incorporated by
reference to Exhibit 4(a) to the Company's Registration Statement on Form S-3
(No. 33-17330) and Exhibits 19(a) and 19(c) to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended April 30, 1988.............................
3.2 - Certificate of Amendment of Restated Certificate of Incorporation dated
September 21, 1995 incorporated by reference to Exhibit 3.2 to the Company's
Annual Report on Form 10-K for the fiscal year ended October 31, 1995.............
3.3 - Amended and Restated By-Laws dated December 16, 1999, incorporated by reference
to Exhibit 3.3 to the Company's Annual Report on Form 10-K for the fiscal year
ended October 31, 1999............................................................
3.4 - Certificate of Amendment of Certificate of Incorporation dated May 24, 2000,
incorporated by reference to Exhibit 3.4 to the Company's Annual Report on Form
10-K for the fiscal year ended October 31, 2000...................................
3.5 Fourth Certificate of Amendment of Restated Certificate of Incorporation filed
with the Delaware Secretary of State on March 26, 2003, incorporated by
reference to Exhibit 4.5 to our Registration Statement on Form S-8 filed with
the Securities and Exchange Commission on April 7, 2003...........................
4.1 - Certificate of Elimination of Series A Junior Participating Preferred Stock of
The Cooper Companies, Inc. filed with the Delaware Secretary of State on October
30, 1997, incorporated by reference to Exhibit 4.1 on Form 10-K for fiscal year
ended October 31, 1997............................................................
4.2 - Rights Agreement, dated as of October 29, 1997, between the Company and American
Stock Transfer & Trust Company, incorporated by reference to Exhibit 4 to the
Company's Current Report on Form 8-K dated October 29, 1997.......................
4.3 - Amendment No. 1 to Rights Agreement dated September 26, 1998, incorporated by
reference to Exhibit 99.1 of the Company's Current Report on Form 8-K dated
September 25, 1998................................................................
4.4 - Certificate of Designations of Series A Junior Participating Preferred Stock of
The Cooper Companies, Inc., incorporated by reference to Exhibit 4.0 of the
Company's Current Report on Form 8-K dated October 29, 1997.......................
4.5 Indenture dated as of June 25, 2003, between The Cooper Companies, Inc. and
Wells Fargo Bank, National Association, incorporated by reference to Exhibit 4.1
of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended on
April 30, 2003....................................................................
10.1 - 2001 Long-term Incentive Plan, incorporated by reference to Exhibit 10.8 of the
Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2000...
10.2 - Severance Agreement entered into as of June 10, 1991, by and between
CooperVision, Inc. and A. Thomas Bender, incorporated by reference to Exhibit
10.26 to Amendment No. 1 to the Company's Annual Report on Form 10-K for the
fiscal year ended October 31, 1992................................................
10.3 - Letter dated March 25, 1994, to A. Thomas Bender from the Chairman of the
Compensation Committee of the Company's Board of Directors, incorporated by
reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K for the
fiscal year ended October 31, 1994................................................
17
Location of
Exhibit in
Exhibit Sequential
Number Description of Document Number System
- ------- ----------------------- -------------
10.4 - Severance Agreement entered into as of April 26, 1990, by and between Nicholas
J. Pichotta and the Company incorporated by reference to Exhibit 10.8 to the
Company's Annual Report on Form 10-K for fiscal year ended October 31, 1995.......
10.5 - Letter Agreement dated November 1, 1992, by and between Nicholas J. Pichotta and
the Company incorporated by reference to Exhibit 10.9 to the Company's Annual
Report on Form 10-K for the fiscal year ended October 31, 1995....................
10.6 - Severance Agreement entered into as of August 21, 1989, by and between Robert S.
Weiss and the Company, incorporated by reference to Exhibit 10.28 to Amendment
No. 1 to the Company's Annual Report on Form 10-K for the fiscal year ended
October 31, 1992..................................................................
10.7 - Change in Control Agreement dated as of October 14, 1999, between The Cooper
Companies, Inc. and Carol R. Kaufman, incorporated by reference to Exhibit 10.13
to the Company's Annual Report on Form 10-K for the fiscal year ended October
31, 1999..........................................................................
10.8 - 1996 Long-term Incentive Plan for Non-Employee Directors of The Cooper
Companies, Inc., incorporated by reference to Appendix A to the Company's Proxy
Statement for its 1996 Annual Meeting of Stockholders.............................
10.9 - Amendment No. 1 to 1996 Long-term Incentive Plan for Non-Employee Directors of
The Cooper Companies, Inc., dated October 10, 1996, incorporated by reference to
Exhibit 10.14 to the Company's Annual Report on Form 10-K for the fiscal year
ended October 31, 1996............................................................
10.10 - Amendment No. 2 to 1996 Long-term Incentive Plan for Non-Employee Directors of
The Cooper Companies, Inc., dated October 29, 1997, incorporated by reference to
Exhibit 10.15 to the Company's Annual Report on Form 10-K for the fiscal year
ended October 31, 1997............................................................
10.11 - Amendment No. 3 to 1996 Long-term Incentive Plan for Non-Employee Directors of
The Cooper Companies, Inc., dated October 29, 1999, incorporated by reference to
Exhibit 10.15 to the Company's Annual Report on Form 10-K for the fiscal year
ended October 31, 2001............................................................
10.12 - Amendment No. 4 to 1996 Long-term Incentive Plan for Non-Employee Directors of
The Cooper Companies, Inc., dated October 24, 2000, incorporated by reference to
Exhibit 10.16 to the Company's Annual Report on Form 10-K for the fiscal year
ended October 31, 2001............................................................
10.13 - Amendment No. 5 to the 1996 Long-term Incentive Plan for Non-employee Directors
of The Cooper Companies, Inc., incorporated by reference to Exhibit 10.17 to the
Company's Annual Report on Form 10-K for the fiscal year ended October 31,
2001..............................................................................
10.14 - Amendment No. 6 to the 1996 Long-term Incentive Plan for Non-employee Directors
of The Cooper Companies, Inc., incorporated by reference to Exhibit 4.15 to the
Company's Registration Statement on form S-8 dated November 21,
2002..............................................................................
10.15 - Amendment No. 7 to the 1996 Long-term Incentive Plan for Non-employee Directors
of The Cooper Companies, Inc. dated November 4, 2002, incorporated by reference
to Exhibit 10.16 to the Company's Annual Report on Form 10-K for the fiscal year
ended October 31, 2002............................................................
10.16 - Amendment No. 8 to 1996 Long-term Incentive Plan for Non-Employee Directors of
The Cooper Companies, Inc. dated October 29, 2003.................................
10.17(a)- Patent License Agreement dated February 13, 2002 between Geoffrey H. Galley and
others and CooperVision, Inc., incorporated by reference to Exhibit 10.11 of the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended January 31,
2002..............................................................................
18
Location of
Exhibit in
Exhibit Sequential
Number Description of Document Number System
- ------- ----------------------- -------------
10.18 The Cooper Companies, Inc. Amended and Restated 2001 Long Term Incentive Plan,
incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended April 30, 2003.............................
10.19 Amendment No. 1 to the Amended and Restated 2001 Long Term Incentive Plan,
incorporated by reference to Exhibit 10.2 of the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended April 30, 2003.............................
10.20 Patent and Trade Mark License Agreement dated February 28, 2002 between
Biocompatibles Limited and CooperVision International Holding Company LP and The
Cooper Companies, Inc.............................................................
10.21 Patent and Trade Mark License Agreement dated February 28, 2002 between
Biocompatibles Limited and CooperVision Technology Inc. and The Cooper
Companies, Inc....................................................................
10.22 Deed of Novation dated March 3, 2003 between Abbott Vascular Devices Limited
(formerly known as Biocompatibles Limited) and CooperVision International
Holding Company LP and The Cooper Companies, Inc. and Biocompatibles UK Limited...
10.23 Deed of Novation dated March 3, 2003 between Abbott Vascular Devices Limited
(formerly known as Biocompatibles Limited) and CooperVision Technology, Inc. and
The Cooper Companies, Inc. and Biocompatibles UK Limited..........................
11(b) Calculation of earnings per share.................................................
13 2003 Annual Report to Stockholders................................................
21 Subsidiaries......................................................................
23 Accountants' Consent and Report on Schedule.......................................
31.1 Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934...................................................
31.2 Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934...................................................
32.1 Certification of the Chief Executive Officer, pursuant to 18 U.S.C. Section
1350..............................................................................
32.2 Certification of the Chief Financial Officer, pursuant to 18 U.S.C. Section
1350..............................................................................
(a) The agreement received confidential treatment from the Securities and
Exchange Commission with respect to certain portions of this Exhibit.
Omitted portions have been filed separately with The Commission
(b) The information required in this exhibit is incorporated by reference to
Note 4, "Earnings Per Share," in the 2003 Annual Report
19
STATEMENT OF DIFFERENCES
------------------------
The British pound sterling sign shall be expressed as..................... 'L'
The section symbol shall be expressed as.................................. 'SS'
The trademark symbol shall be expressed as................................ 'TM'
The registered trademark symbol shall be expressed as..................... 'r'
The copyright symbol shall be expressed as................................ 'c'