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What changed in Cooper Companies (The)'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Cooper Companies (The)'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+227 added−252 removedSource: 10-K (2024-12-06) vs 10-K (2023-12-08)

Top changes in Cooper Companies (The)'s 2024 10-K

227 paragraphs added · 252 removed · 174 edited across 5 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

115 edited+34 added−55 removed191 unchanged
Biggest changeAND SUBSIDIARIES chiropractors), certain non-physician practitioners including physician assistants and nurse practitioners, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers and self-pay patients; some state laws that require biotechnology companies to comply with the industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug and device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; some state laws that require biotechnology companies to report information on the pricing of certain drug products; and some state and local laws that require the registration of sales representatives.
Biggest changeSimilar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the CMS, information related to payments and other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners including physician assistants and nurse practitioners, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers and self-pay patients; some state laws that require biotechnology companies to comply with the industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug and device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; some state laws that require biotechnology companies to report information on the pricing of certain drug products; and some state and local laws that require the registration of sales representatives.
Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverse effect on our business and damage our reputation. There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, public interest and legislative pressure related to public companies’ ESG practices continue to grow.
Environmental, social and corporate governance issues, including those related to climate change and sustainability, may have an adverse effect on our business and damage our reputation. There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, public interest and legislative pressure related to public companies’ ESG practices continue to grow.
Any sanction imposed under CLIA, its implementing regulations, or state or foreign laws or regulations governing licensure, or our failure to renew a CLIA certificate, a state or foreign license or accreditation, could have a material and adverse effect on our diagnostic testing business, operating results and financial condition.
Any sanction imposed under CLIA, its implementing regulations, or state or foreign laws or regulations governing licensure, or our failure to renew a CLIA certificate, or a state or foreign license or accreditation, could have a material and adverse effect on our diagnostic testing business, operating results and financial condition.
When we acquire companies or business that engage personal data processing, we may become subject to additional regulation or scrutiny, particularly if such activity is different in nature from what we have done in the past.
When we acquire companies or business that engage in personal data processing, we may become subject to additional regulation or scrutiny, particularly if such activity is different in nature from what we have done in the past.
AND SUBSIDIARIES Our indebtedness could: • increase our vulnerability to general adverse economic and industry conditions; • require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, research and development efforts and other general corporate purposes; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • place us at a competitive disadvantage compared to our competitors that have less debt; • result in greater interest rate risk and volatility; • limit our ability to borrow additional funds; and • make it more difficult for us to satisfy our obligations with respect to our debt, including our obligation to repay our credit facilities under certain circumstances, or refinance our indebtedness on favorable terms or at all.
Our indebtedness could: • increase our vulnerability to general adverse economic and industry conditions; • require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, research and development efforts and other general corporate purposes; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • place us at a competitive disadvantage compared to our competitors that have less debt; • result in greater interest rate risk and volatility; • limit our ability to borrow additional funds; and • make it more difficult for us to satisfy our obligations with respect to our debt, including our obligation to repay our credit facilities under certain circumstances, or refinance our indebtedness on favorable terms or at all.
Failure to comply with QSR requirements and other applicable domestic or international regulatory requirements or to respond to any adverse inspectional observations or product safety issues could result in disruption of our operations and manufacturing delays in addition to, among other things, warning letters, significant fines, injunctions, suspension of approvals, seizures, recalls or import holds of products, operating restrictions and criminal prosecutions.
Failure to comply with cGMP, QSR and other applicable domestic or international regulatory requirements or to respond to any adverse inspectional observations or product safety issues could result in disruption of our operations and manufacturing delays in addition to, among other things, warning letters, significant fines, injunctions, suspension of approvals, seizures, recalls or import holds of products, operating restrictions and criminal prosecutions.
If we do not adapt to or comply with new regulations, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues, investors may reconsider their capital investment in our Company, and customers and consumers may choose to stop purchasing our products, which could have a material adverse effect on our reputation and business.
AND SUBSIDIARIES If we do not adapt to or comply with new regulations, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues, investors may reconsider their capital investment in our Company, and customers and consumers may choose to stop purchasing our products, which could have a material adverse effect on our reputation and business.
Certain of our proposed products have not yet been clinically tested or commercially introduced, and some of our existing products are marketed and sold on the basis of potential future medical or therapeutic value (assuming technology advances), and we cannot be sure that any of them will achieve market acceptance or generate revenues or operating profits.
Certain of our proposed products or services have not yet been clinically tested or commercially introduced, and some of our existing products or services are marketed and sold on the basis of potential future medical or therapeutic value (assuming technology advances), and we cannot be sure that any of them will achieve market acceptance or generate revenues or operating profits.
Modifications and enhancements to medical devices also require a new FDA clearance or approval if they could significantly affect its safety or effectiveness or would constitute a major change in its intended use, design or manufacture. The FDA requires every medical device manufacturer to make this determination in the first instance, but the FDA may review any manufacturer's decision.
Modifications and enhancements to medical devices require a new FDA clearance or approval if they could significantly affect its safety or effectiveness or would constitute a major change in its intended use, design or manufacture. The FDA requires every medical device manufacturer to make this determination in the first instance, but the FDA may review any manufacturer's decision.
Our failure to comply with FDA regulations could lead to the imposition of administrative or judicial sanctions, including injunctions, fines, warning letters, suspensions or the loss of regulatory approvals, product recalls, termination of distribution or product seizures. In the most egregious cases, criminal sanctions or closure of our manufacturing facilities are possible.
Our failure to comply with FDA regulations could lead to the imposition of administrative or judicial sanctions, including injunctions, fines, warning letters, suspensions or the loss of regulatory clearances or approvals, product recalls, termination of distribution or product seizures. In the most egregious cases, criminal sanctions or closure of our manufacturing facilities are possible.
The development of a market for our products may be influenced by many factors, some of which are out of our control, including: • acceptance of our products by eye care and health care practitioners; • the cost competitiveness of our products; • consumer reluctance to try and use a new product; • regulatory and legislative requirements; • adequate coverage and reimbursement by third-party payors; • lack of scientific advancements to validate the medical value of certain products, such as stored cord blood or cord tissue (or scientific advancements in other medical approaches that reduce or eliminate the value of such products); and • the earlier release of competitive products, such as new silicone hydrogel products or contraceptive technologies, into the market by our competitors; and the emergence of newer and more competitive products.
The development of a market for our products or services may be influenced by many factors, some of which are out of our control, including: • acceptance of our products or services by eye care or other health care practitioners; • the cost competitiveness of our products and services; • consumer reluctance to try and use a new product or service; • regulatory and legislative requirements; • adequate coverage and reimbursement by third-party payors; • lack of scientific advancements to validate the medical value of certain products or services, such as stored cord blood or cord tissue (or scientific advancements in other medical approaches that reduce or eliminate the value of such products or services); and • the earlier release of competitive products or services, such as new silicone hydrogel products or contraceptive technologies, into the market by our competitors; and the emergence of newer and more competitive products or services.
Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenue from our products and product candidates. If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of our Company and our operating results may be adversely affected.
AND SUBSIDIARIES Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenue from our products and product candidates. If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of our Company and our operating results may be adversely affected.
AND SUBSIDIARIES CooperVision manufactures molded contact lenses, which represent the majority of our contact lens revenues, primarily at our facilities in Costa Rica, Hungary, Puerto Rico, the United Kingdom and the United States, with other smaller facilities also existing in multiple locations around the world.
CooperVision manufactures molded contact lenses, which represent the majority of our contact lens revenues, primarily at our facilities in Costa Rica, Hungary, Puerto Rico, the United Kingdom and the United States, with other smaller facilities also existing in multiple locations around the world.
AND SUBSIDIARIES Changes in legislation and government regulation of the health care industry both in the United States and internationally, as well as third-party payors' efforts to control the costs of health care could materially adversely affect our business. The ACA made extensive changes to the delivery of health care in the United States.
Changes in legislation and government regulation of the health care industry both in the United States and internationally, as well as third-party payors' efforts to control the costs of health care could materially adversely affect our business. The ACA made extensive changes to the delivery of health care in the United States.
Any prolonged disruption in the operations of our existing manufacturing or distribution facilities or our fertility and stem cell storage facilities, whether due to work stoppages, technical or labor difficulties, integration difficulties, destruction of or damage to any facility (as a result of natural disaster, use and storage of hazardous materials or other events), enforcement action by the FDA or other regulatory body if we are found to be in non-compliance with current Good Manufacturing Practices (cGMP) or similar foreign requirements or other reasons, could have a material adverse effect on our business.
Any prolonged disruption in the operations of our existing manufacturing or distribution facilities or our fertility and stem cell storage facilities, whether due to work stoppages, technical or labor difficulties, integration difficulties, destruction of or damage to any facility (as a result of natural disaster, use and storage of hazardous materials or other events), enforcement action by the FDA or other regulatory body if we are found to be in non-compliance with current cGMP or similar foreign requirements or other reasons, could have a material adverse effect on our business.
AND SUBSIDIARIES We are in the midst of a multiyear process of implementing new enterprise resource planning (ERP) systems at CooperVision and CooperSurgical. Implementing a new ERP system is not only costly but complex and difficult.
We are in the midst of a multiyear process of implementing new enterprise resource planning (ERP) systems at CooperVision and CooperSurgical. Implementing a new ERP system is not only costly but complex and difficult.
Because our CooperSurgical products are generally purchased by hospitals and surgical centers, OB/GYN medical offices and fertility clinics, and billed to various third-party payors, changes in the purchasing behavior of such customers or the amount such payors are willing to reimburse our customers for procedures using our products, including as a result of healthcare reform initiatives, could create additional pricing pressure on us.
Because our CooperSurgical products are generally purchased by hospitals and surgery centers, OB/GYN medical offices and fertility clinics, and billed to various third-party payors, changes in the purchasing behavior of such customers or the amount such payors are willing to reimburse our customers for procedures using our products, including as a result of healthcare reform initiatives, could create additional pricing pressure on us.
If satisfied that the relevant product conforms to the general safety and performance requirements, the notified body issues an EU certificate, which the manufacturer uses as a basis for its own declaration of conformity. The manufacturer may then apply the CE mark to the device, which allows the device to be placed on the market throughout the EU.
If satisfied that the relevant product conforms to the general safety and performance requirements, the notified body issues a CE certificate, which the manufacturer uses as a basis for its declaration of conformity. The manufacturer may then apply the CE mark to the device, which allows the device to be placed on the market throughout the EU.
AND SUBSIDIARIES In addition, the FDA may in the future modify the scope of its enforcement discretion with respect to 361 HCT/Ps or change its position on which current or future products qualify as 361 HCT/Ps, or determine that some or all of our HCT/P products may not be lawfully marketed without a marketing authorization.
In addition, the FDA may in the future modify the scope of its enforcement discretion with respect to 361 HCT/Ps or change its position on which current or future products qualify as 361 HCT/Ps, or determine that some or all of our HCT/P products may not be lawfully marketed without a marketing authorization.
The FDA requires that certain corrections or removals, including recalls, be reported to the FDA within ten working days of initiating the correction or removal. Recalls of any of our products may divert managerial and financial resources and have an adverse effect on our financial condition and results of operations.
The FDA requires that certain medical device corrections or removals, including recalls, be reported to the FDA within ten working days of initiating the correction or removal. Recalls of any of our products may divert managerial and financial resources and have an adverse effect on our financial condition and results of operations.
More than half of our net sales for the fiscal years ended October 31, 2023 and 2022 , were derived from the sale of products outside the United States. We believe that sales outside the United States will continue to account for a material portion of our total net sales for the foreseeable future.
More than half of our net sales for the fiscal years ended October 31, 2024, and 2023, were derived from the sale of products outside the United States. We believe that sales outside the United States will continue to account for a material portion of our total net sales for the foreseeable future.
If our products are not accepted by the market, we will not be able to sustain or expand our business.
If our products or services are not accepted by the market, we will not be able to sustain or expand our business.
Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, the war in Ukraine and other international conflicts, and steps taken by governments and central banks, as well as other stimulus and spending programs, have led to higher inflation, which is likely to lead to an increase in costs and may cause changes in fiscal and monetary policy, including increased interest rates.
Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, international conflicts, and steps taken by governments and central banks, as well as other stimulus and spending programs, have led to higher inflation, which is likely to lead to an increase in costs and may cause changes in fiscal and monetary policy, including increased interest rates.
This regulation intends to boost cooperation among EU member states in assessing health technologies, including certain high-risk medical devices, and providing the basis for cooperation at the EU level for joint clinical assessments in these areas.
This Regulation intends to boost cooperation among EU member states in assessing health technologies, including certain high-risk medical devices, and provide the basis for cooperation at the EU level for joint clinical assessments in these areas.
Our manufacturing operations and processes are required to comply with numerous federal, state and foreign regulatory requirements, including the FDA's cGMP for medical devices, known as the QSR regulations, which govern the procedures related to the design, testing, production processes, controls, quality assurance, labeling, packaging, storage, importing, exporting and shipping of our products.
Our manufacturing operations and processes are required to comply with numerous federal, state and foreign regulatory requirements, including the FDA's cGMP regulations for drugs and QSR for medical devices, which govern the procedures related to the design, testing, production processes, controls, quality assurance, labeling, packaging, storage, importing, exporting and shipping of our products.
We have made modifications and enhancements to our medical devices that we do not believe require a new clearance or application, but we cannot confirm that the FDA will agree with our decisions.
We have made modifications and enhancements to our medical devices that we do not believe require a new clearance or approval, but we cannot confirm that the FDA will agree with our decisions.
After a device is placed on the market, numerous regulatory requirements apply, including the FDA's QSR regulations, which require manufacturers to follow, among other things, design, testing, production, control, documentation and other quality assurance procedures during the manufacturing process; labeling regulations; and medical device reporting regulations that require us to report to FDA or similar governmental bodies in other countries if our products may have caused or contributed to a death or serious injury or malfunction in a way that would be reasonably likely to contribute to death or serious injury if the malfunction were to recur.
After a drug or device is placed on the market, numerous regulatory requirements apply, including the FDA's cGMP and QSR regulations, which require manufacturers to follow, among other things, design, testing, production, control, documentation and other quality assurance procedures during the manufacturing process; labeling regulations; and adverse event reporting regulations that require us to report to FDA or similar governmental bodies in other countries if our products may have caused or contributed to a death or serious injury or malfunction in a way that would be reasonably likely to contribute to death or serious injury if the malfunction were to recur.
In addition, new disclosure standards and rules related to environmental, social and corporate governance (ESG) matters have been adopted and may continue to be introduced in various states and other jurisdiction. For example, the European Union Corporate Sustainability Reporting Directive (CSRD) became effective in 2023 and applies to both EU and non-EU entities.
In addition, new disclosure standards and rules related to ESG matters have been adopted and may continue to be introduced in various states and other jurisdiction. For example, the European Union Corporate Sustainability Reporting Directive (CSRD) became effective in 2023 and applies to both EU and non-EU entities.
The regulation will permit EU member states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas.
It will permit EU member states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the highest potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas.
We cannot be assured that any stability or other issues relating to the manufacture of any of our therapeutics will not occur in the future. Additionally, our manufacturers may experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments.
We cannot be assured that any stability or other issues relating to the manufacture of any of our drug products will not occur in the future. Additionally, our manufacturers may experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments.
However, the FDA could disagree with our determination that these human tissue products are 361 HCT/Ps and could determine that these products are biologics requiring a BLA or medical devices requiring 510(k) clearance or PMA approval, and could require that we cease marketing such products and/or recall them pending appropriate clearance, approval or licensure from the FDA, which would adversely affect our business. 33 THE COOPER COMPANIES, INC.
However, the FDA could disagree with our determination that these human tissue products are 361 HCT/Ps and could determine that these products are biologics requiring a BLA or medical devices requiring 510(k) clearance or PMA approval, and could require that we cease marketing such products and/or recall them pending appropriate clearance, approval or licensure from the FDA, which would adversely affect our business.
AND SUBSIDIARIES In addition, third-party payors, whether governmental or commercial, whether inside the United States or abroad, increasingly attempt to contain or reduce the costs of health care.
In addition, third-party payors, whether governmental or commercial, whether inside the United States or abroad, increasingly attempt to contain or reduce the costs of health care.
Our medical device products are subject to reporting requirements and recalls, even after receiving regulatory clearance, approval or certification, which could harm our reputation and business.
Our products are subject to reporting requirements and recalls, even after receiving regulatory clearance, approval or certification, which could harm our reputation and business.
Following the end of the “Brexit” transitional period, from January 1, 2021, the Medicines and Healthcare products Regulatory Agency (MHRA) became the UK’s independent regulatory agency for medical devices. Post-Brexit, amendments have been made to the existing UK medical devices legislation which require medical devices to be registered with the MHRA before being placed on the Great Britain market.
Following the end of the “Brexit” transitional period, from January 1, 2021, the MHRA became the UK’s independent regulatory agency for medical devices. Post-Brexit, amendments have been made to the existing UK medical devices legislation which require medical devices to be registered with the MHRA before being placed on the Great Britain market.
The CMS also has the authority to impose a wide range of sanctions, including revocation of the CLIA certification along with a bar on the ownership or operation of a CLIA-certified laboratory by any owners or operators of the deficient laboratory.
The CMS in particular has the authority to impose a wide range of sanctions, including revocation of CLIA certification along with a bar on the ownership or operation of a CLIA-certified laboratory by any owners or operators of the deficient laboratory.
Also, any adoption of health care reform proposals on a state-by-state basis could require us to develop state-specific marketing and sales approaches. We cannot predict the effect such reforms or the prospect of their enactment may have on our business. 36 THE COOPER COMPANIES, INC.
Also, any adoption of health care reform proposals on a state-by-state basis could require us to develop state-specific marketing and sales approaches. We cannot predict the effect such reforms or the prospect of their enactment may have on our business.
AND SUBSIDIARIES • difficulty growing our sales in emerging markets such as China, India, Russia, Brazil and other developing nations due to, among other things, customer acceptance, undeveloped and/or unfamiliar distribution channels, regulatory restrictions and changes, and business knowledge of these new markets; • foreign earnings being subject to withholding requirements or the imposition of tariffs, exchange controls or other restrictions, including the tariffs enacted by the Chinese government on certain U.S. goods, the scope and duration of which remain uncertain; • challenges in complying with a variety of international legal, compliance and regulatory requirements such as the Foreign Corrupt Practices Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the UK Bribery Act, international data security and privacy laws, EU MDR and EU IVDR. and environmental laws and requirements applicable to our facilities, products or manufacturing processes, including evolving regulations regarding the use of hazardous substances or chemicals in our products. • foreign customers creating longer payment cycles than customers in the United States; • failure to comply with U.S.
AND SUBSIDIARIES • difficulty growing our sales in emerging markets such as China, India, Russia, Brazil and other developing nations due to, among other things, customer acceptance, undeveloped and/or unfamiliar distribution channels, regulatory restrictions and changes, and business knowledge of these new markets; • foreign earnings being subject to withholding requirements or the imposition of tariffs, exchange controls or other restrictions, including the tariffs enacted by the Chinese government on certain U.S. goods, the scope and duration of which remain uncertain; • challenges in complying with a variety of international legal, compliance and regulatory requirements such as the Foreign Corrupt Practices Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the UK Bribery Act, international data security and privacy laws, EU MDR and EU IVDR and environmental laws and requirements applicable to our facilities, products or manufacturing processes, including evolving regulations regarding the use of hazardous substances or chemicals in our products; • the need to engage third-party agents or intermediaries to act on our behalf in certain countries, including in those countries with a high risk of corruption; • foreign customers creating longer payment cycles than customers in the United States; • failure to comply with U.S.
In many of the foreign countries in which we market our products, we are subject to regulations affecting, among other things, product standards, packaging requirements, labeling requirements, import restrictions, tariff regulations, the reporting of certain payments to health care practitioners in certain markets (for example, the French anti-gift legislation), 31 THE COOPER COMPANIES, INC. AND SUBSIDIARIES duties and tax requirements.
In many of the foreign countries in which we market our products, we are subject to regulations affecting, among other things, product standards, packaging requirements, labeling requirements, import restrictions, tariff regulations, the reporting of certain payments to health care practitioners in certain markets (for example, the French anti-gift legislation), duties and tax requirements.
However, we cannot be assured that our systems will meet our future business needs or that upgrades will operate as designed. We cannot be assured that there will not be associated excessive costs or disruptions in portions of our business in the course of our maintenance, support and/or upgrade of these systems. 22 THE COOPER COMPANIES, INC.
However, we cannot be assured that our systems will meet our future business needs or that upgrades will operate as designed. We cannot be assured that there will not be associated excessive costs or disruptions in portions of our business in the course of our maintenance, support and/or upgrade of these systems.
We also cannot assure that we will be successful in obtaining clearances or approvals for our modifications, if required. 30 THE COOPER COMPANIES, INC. AND SUBSIDIARIES Our efforts to promote some of our products and services via direct-to-consumer marketing initiatives may subject us to additional scrutiny by the FDA, FTC or other agencies.
We also cannot assure that we will be successful in obtaining clearances or approvals for our modifications, if required. Our efforts to promote some of our products and services via direct-to-consumer marketing initiatives may subject us to additional scrutiny by the FDA, FTC or other agencies.
Cybersecurity threats continue to increase in frequency and sophistication; a successful cybersecurity attack could interrupt or disrupt our information technology systems, or those of our third-party service providers, or cause the loss of confidential or protected data which could disrupt our business, force us to incur excessive costs or cause reputational harm.
Cybersecurity threats continue to increase in frequency and sophistication; a successful cybersecurity attack could interrupt or disrupt our information technology systems, or those of our third-party service providers, or cause the 21 THE COOPER COMPANIES, INC. AND SUBSIDIARIES loss of confidential or protected data which could disrupt our business, force us to incur excessive costs or cause reputational harm.
Competition for these persons in our industry is intense, and we may not be able to successfully recruit, train or retain qualified personnel. We are experiencing increasing challenges in building and retaining our workforce in certain markets, where pressure from inflation and competition have exacerbated turnover and retention trends continuing from the COVID-19 pandemic.
Competition for these persons in our industry is intense, and we may not be able to successfully recruit, train or retain qualified personnel. We are experiencing increasing challenges in building and retaining our workforce in certain markets, where pressure from inflation and competition have exacerbated turnover and retention trends.
We may also have to take inventory write-offs and incur other charges and expenses for therapeutics or therapeutic candidates that fail to meet specifications, undertake costly remediation efforts or seek more costly manufacturing alternatives.
We may also have to take inventory write-offs and incur other charges and expenses for products that fail to meet specifications, undertake costly remediation efforts or seek more costly manufacturing alternatives.
Both regulations have been adopted to establish a uniform, transparent, predictable and sustainable regulatory framework across the EU for medical devices (including IVDs) and ensure a high level of safety and health while supporting innovation. These modifications may have an effect on the way we intend to develop our business in the EU and EEA.
AND SUBSIDIARIES uniform, transparent, predictable and sustainable regulatory framework across the EU for medical devices (including IVDs) and ensure a high level of safety and health while supporting innovation. These modifications may have an effect on the way we intend to develop our business in the EU and EEA.
We cannot be assured that we will successfully obtain necessary regulatory approvals, certifications or clearances for our new products or that our new products will successfully compete in the marketplace and, as a result, justify the expense involved in their development and regulatory approval or certification.
We cannot be assured that we will successfully obtain necessary regulatory approvals, certifications or clearances for our new products or that our new 26 THE COOPER COMPANIES, INC. AND SUBSIDIARIES products will successfully compete in the marketplace and, as a result, justify the expense involved in their development and regulatory approval or certification.
Conversely, constrained, excess or idle capacity, which could result from acquisitions, unexpected demand, inaccurate sales forecasting or unexpected manufacturing efficiencies, could significantly impact our profitability, capital investments, customer service levels and near-term financial condition. 21 THE COOPER COMPANIES, INC.
Conversely, constrained, excess or idle capacity, which could result from acquisitions, unexpected demand, inaccurate sales forecasting or unexpected manufacturing efficiencies, could significantly impact our profitability, capital investments, customer service levels and near-term financial condition.
Medical device manufacturers, such as CooperVision and CooperSurgical, may, under their own initiative, recall a product if a reasonable possibility of serious injury or any material deficiency in a device is found, or withdraw a product to improve device performance or for other reasons.
Manufacturers, such as CooperVision and CooperSurgical, may, under their own initiative, recall a product if a reasonable possibility of serious injury or any material deficiency in a product is found, or withdraw a product for other reasons.
Furthermore, if microbial, viral or other contaminations are discovered in our therapeutics or in the manufacturing facilities in which our therapeutics, if approved, are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.
Furthermore, if microbial, viral or other contamination are discovered in our drug products or in the manufacturing facilities in which our drug products are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.
In foreign countries where we market our products, recent healthcare reform has taken place as well. For instance, in December 2021, the EU Regulation No 2021/2282 on Health Technology Assessment (HTA) amending Directive 2011/24/EU was adopted.
In foreign countries where we market our products, recent healthcare reform has taken place as well. For instance, in December 2021, the EU Regulation No 2021/2282 on Health Technology Assessment (HTA) amending Directive 35 THE COOPER COMPANIES, INC. AND SUBSIDIARIES 2011/24/EU was adopted.
Many of the regulations applicable to our devices and products in such countries are similar to those of the FDA. The advertising and promotion of medical devices is subject to some general principles set forth in the EU legislation.
Many of the regulations applicable to our devices and products in such countries are similar to those of the FDA. 31 THE COOPER COMPANIES, INC. AND SUBSIDIARIES The advertising and promotion of medical devices is subject to some general principles set forth in the EU legislation.
In addition, we are subject to the UK Human Fertilization & Embryology Association (HFEA) regulating IVF. Our laboratories are located in Japan, the United Kingdom and United States, and we must maintain the requisite licenses in each jurisdiction.
In addition, we are subject to the UK Human Fertilization & 32 THE COOPER COMPANIES, INC. AND SUBSIDIARIES Embryology Association (HFEA) regulating IVF. Our laboratories are located in Japan, the United Kingdom and United States, and we must maintain the requisite licenses in each jurisdiction.
For example, the GDPR imposes stringent operational requirements for processors and controllers of personal data in the context of an establishment in the EEA or the processing of personal data of individuals within the EEA and increases the scrutiny of transfer of personal data from the EEA.
For example, the GDPR imposes stringent operational requirements for processors and controllers of personal data in the context of an establishment in the 34 THE COOPER COMPANIES, INC. AND SUBSIDIARIES EEA or the processing of personal data of individuals within the EEA and increases the scrutiny of transfer of personal data from the EEA.
For example, we promote Paragard and cord blood and cord tissue storage directly to end consumers. Regulatory agencies may scrutinize our practices with respect to effective communication of risk information, benefits or claims with respect to such products.
For example, we promote PARAGARD and cord blood and cord tissue storage directly to end consumers. Regulatory agencies may further scrutinize our practices with respect to effective communication of risk information, benefits or claims with respect to such products. 30 THE COOPER COMPANIES, INC.
The process of obtaining, renewing and maintaining regulatory clearances and approvals to market a medical device, particularly from the FDA, can be costly and time consuming.
The process of obtaining, renewing and maintaining regulatory clearances and approvals to market product, particularly from the FDA, can be costly and time consuming.
Changing customer and consumer preferences or increased regulatory requirements may result in increased demands or requirements regarding plastics and packaging materials, including single-use and non-recyclable plastic products and packaging, other components of our products and their environmental impact on sustainability, or increased customer and consumer concerns or perceptions (whether accurate or inaccurate) 27 THE COOPER COMPANIES, INC.
Changing customer and consumer preferences or increased regulatory requirements may result in increased demands or requirements regarding plastics and packaging materials, including single-use and non-recyclable plastic products and packaging, other components of our products and their environmental impact on sustainability, or increased customer and consumer concerns or perceptions (whether accurate or inaccurate) regarding the effects of substances present in certain of our products.
A successful claim of infringement against us or our contract manufacturers in connection with the use of our technology, in particular if we are unable to manufacture or sell any of our planned products in any major market, could adversely affect our business.
AND SUBSIDIARIES We cannot be certain of the outcome of any litigation. A successful claim of infringement against us or our contract manufacturers in connection with the use of our technology, in particular if we are unable to manufacture or sell any of our planned products in any major market, could adversely affect our business.
For example, we have engaged (and expect to continue to engage) with tax authorities over tax positions we have taken in connection with acquisitions, and such examinations could cause us to incur significant expense (and adverse determinations by the tax authority could result in penalties).
For example, we have engaged (and expect to continue to engage) with tax authorities over tax positions we have taken in connection with our acquisitions, and such examinations could cause us to incur significant expense (and adverse determinations by the tax authority could result in penalties) which could have an adverse effect on our financial results.
Accordingly, failures or difficulties faced at any level of our supply chain could materially adversely affect our business and delay or impede the development and commercialization of any of our therapeutics or therapeutic candidates and could have a material adverse effect on our business.
Accordingly, failures or difficulties faced at any level of our supply chain could materially adversely affect our business and delay or impede the commercialization and marketing of any of our products and could have a material adverse effect on our business.
We and our contract manufacturers must comply with cGMP regulations and guidelines. Manufacturers of pharmaceutical therapeutics often encounter difficulties in production, including difficulties with production costs and yields, quality control, quality assurance testing, operator error, shortages of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations.
Manufacturers of pharmaceutical therapeutics often encounter difficulties in production, including difficulties with production costs and yields, quality control, quality assurance testing, operator error, shortages of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations.
CooperSurgical also has invested in expanding the internal research and development function with the goal of organic growth and to complement our acquisitions 26 THE COOPER COMPANIES, INC. AND SUBSIDIARIES strategy.
CooperSurgical also has invested in expanding the internal research and development function with the goal of organic growth and to complement our acquisitions strategy.
The EU regulatory landscape concerning medical devices (including IVDs) has recently evolved and the new requirements may have a significant effect on the way we conduct our business in the EU and the EEA.
The EU regulatory landscape concerning medical devices (including IVDs) is continuously evolving and the new requirements may have a significant effect on the way we conduct our business in the EU and the EEA.
Donated reproductive tissues, including eggs and sperm, as well as cord blood and cord tissue, are regulated to by the FDA as human cells, tissues and cellular or tissue-based products (HCT/Ps). In the United States, we are marketing these HCT/Ps pursuant to Section 361 of the Public Health Service Act (PHSA) and 21 C.F.R. Part 1271 of FDA’s regulations.
Donated reproductive tissues, including eggs and sperm, as well as cord blood and cord tissue, are regulated to by the FDA as HCT/Ps. In the United States, we are marketing these HCT/Ps pursuant to Section 361 of the PHSA and 21 C.F.R. Part 1271 of FDA’s regulations.
The so-called “361 HCT/Ps” are not currently subject to the FDA requirements to obtain marketing authorizations, so long as they meet certain criteria set forth in FDA regulations.
Products subject to regulation as “361 HCT/Ps” are not currently required to obtain marketing authorizations, so long as they meet certain criteria set forth in FDA regulations.
Wade has raised concerns in the fertility industry that more restrictive laws could limit access to various reproductive services. New and emerging laws may be interpreted to limit access to contraceptive technologies or cryostorage services, which could adversely affect certain aspects of CooperSurgical’s business. In addition, the EU landscape concerning medical devices (including IVDs) has recently evolved.
Wade has raised concerns in the fertility industry that more restrictive laws could limit access to various reproductive services. New and emerging laws may be interpreted to limit access to contraceptive technologies or cryostorage services, which could adversely affect certain aspects of CooperSurgical’s business.
Risks we could face with respect to these acquisitions and other strategic transaction include: • failure to successfully obtain the anticipated revenues, margins and earnings benefits; • difficulties in, and expenses related to, the integration of the operations, technologies, information technology and other enterprise resource planning systems, products and personnel of the acquired company and establishment of appropriate accounting controls and reporting procedures, data protection systems and other regulatory compliance procedures, including but not limited to third-party compliance and due diligence; • increased leverage and the risk of lack of access to available financing, including financing for the acquisition or refinancing of debt owed by us on a timely basis and on reasonable terms; • risks of entering markets in which we have no or limited prior experience; • potential loss of employees; • an inability to identify and consummate future acquisitions on favorable terms or at all; • diversion of management's attention away from other business concerns; • risks of the acquired company’s noncompliance with applicable laws or regulations; • expenses of any undisclosed or potential liabilities, contingent liabilities or indemnification obligations of the acquired company; • expenses, including restructuring expenses, to shut down our own locations or terminate our employees; • application of and compliance with new and unfamiliar regulatory frameworks such as regulation applicable to our newly acquired fertility-related businesses; • failure to successfully obtain or maintain reimbursements under the third-party payor plans, including but not limited to governmental programs, due to complex reporting and payment obligations; • our ability to develop satisfactory working arrangements with our strategic partners in joint ventures or other affiliations; • a dilution of earnings per share; and • risks inherent in accounting allocations and the risk that we are required to record significant adjustments to the preliminary fair value of assets acquired and liabilities assumed within the measurement period.
AND SUBSIDIARIES • increased leverage and the risk of lack of access to available financing, including financing for the acquisition or refinancing of debt owed by us on a timely basis and on reasonable terms; • risks of entering markets in which we have no or limited prior experience; • potential loss of employees; • an inability to identify and consummate future acquisitions on favorable terms or at all; • diversion of management's attention away from other business concerns; • risks of the acquired company’s noncompliance with applicable laws or regulations; • expenses of any undisclosed or potential liabilities, contingent liabilities or indemnification obligations of the acquired company; • expenses, including restructuring expenses, to shut down our own locations or terminate our employees; • application of and compliance with new and unfamiliar regulatory frameworks; • failure to successfully obtain or maintain reimbursements under the third-party payor plans, including but not limited to governmental programs, due to complex reporting and payment obligations; • our ability to develop satisfactory working arrangements with our strategic partners in joint ventures or other affiliations; • a dilution of earnings per share; and • risks inherent in accounting allocations and the risk that we are required to record significant adjustments to the preliminary fair value of assets acquired and liabilities assumed within the measurement period.
Ethical, legal and social concerns related to the use of genetic information, sperm and egg selection services and stem cells could reduce demand for our service offerings. Genetic testing, sperm and egg selection services and the use of stem cells have raised ethical, legal and social issues regarding privacy and the appropriate uses of information related to these services.
Genetic testing, sperm and egg selection services and the use of stem cells have raised ethical, legal and social issues regarding privacy and the appropriate uses of information related to these services.
We also are subject to state requirements and licenses applicable to manufacturers of medical devices. In addition, we must engage in extensive recordkeeping and reporting and must make available our manufacturing facilities and records for periodic unscheduled inspections by governmental agencies, including the FDA, state authorities and comparable agencies (as well as audits by notified bodies) in other countries.
In addition, we must engage in extensive recordkeeping and reporting and must make available our manufacturing facilities and records for periodic unscheduled inspections by governmental agencies, including the FDA, state authorities and comparable agencies (as well as audits by notified bodies) in other countries.
Any new FDA enforcement policies affecting LDTs or new legislation, regulations such as the EU IVDR regulation may result in increased regulatory burdens on our ability to continue marketing our genetic products and to develop and introduce new products in the future, which could reduce our revenue or increase our costs and adversely affect our business.
Any new FDA enforcement policies affecting LDTs or regulations such as the EU IVDR is likely to result in increased regulatory burden on our ability to continue marketing our genetic products and to develop and introduce new products in the future, which could adversely affect our business.
Any significant decrease in our costs per lens will depend, in part, on our ability to increase sales volume and production capabilities and our ability to secure adequate supply of materials used in production at reasonable costs.
AND SUBSIDIARIES and to achieve manufacturing efficiencies and sufficient manufacturing capacity and capabilities for such products. Any significant decrease in our costs per lens will depend, in part, on our ability to increase sales volume and production capabilities and our ability to secure adequate supply of materials used in production at reasonable costs.
AND SUBSIDIARIES EU IVDR fully applies since May 26, 2022, but there is a tiered system extending the grace period for many devices (depending on their risk classification) before they have to be fully compliant with the regulation.
The EU IVDR fully applies since May 26, 2022, but there is a tiered system extending the grace period for many devices (depending on their risk classification) before they have to be fully compliant with the regulation. Both regulations have been adopted to establish a 28 THE COOPER COMPANIES, INC.
Our supply chain and our cost of goods also may be negatively impacted by unanticipated price increases due to factors such as inflation, including wage inflation, or to supply restrictions beyond our control or the control of our suppliers.
Our supply chain and our cost of goods also may be negatively impacted by unanticipated price increases due to factors such as inflation, including wage inflation, or to supply restrictions beyond our control or the control of our suppliers. If we fail to protect our intellectual property adequately, our business could suffer.
Future transactions could result in potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities and an increase in amortization and/or impairments of goodwill and other intangible assets, which could have a material adverse effect upon our business. In fiscal 2022, CooperVision acquired a private Denmark-based ortho-k contact lens distributor.
Future transactions could result in potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities and an increase in amortization and/or impairments of goodwill and other intangible assets, which could have a material adverse effect upon our business.
In addition, litigation can: • be expensive and time consuming to prosecute or defend; • result in a finding that we do not have certain intellectual property rights or that such rights lack sufficient scope or strength; • divert management's attention and resources; or • require us to license our intellectual property.
AND SUBSIDIARIES • result in a finding that we do not have certain intellectual property rights or that such rights lack sufficient scope or strength; • divert management's attention and resources; or • require us to license our intellectual property.
These prohibitions apply regardless of any intent by the parties to induce or reward referrals or the reasons for the financial relationship and the referral; • the federal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, to the federal government, claims for payment or approval that are false or fraudulent, or knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or knowingly making or causing to be made a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
These prohibitions apply regardless of any intent by the parties to induce or reward referrals or the reasons for the financial relationship and the referral; • the federal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, to the federal government, claims for payment or approval that are false or fraudulent, or knowingly making, using or 36 THE COOPER COMPANIES, INC.
A significant increase in our obligations or future funding requirements could increase our cash requirements and adversely affect our business. Risks Relating to Taxes Changes in tax laws, examinations by tax authorities, and changes in our geographic composition of income could adversely affect our business.
A significant increase in our obligations or future funding requirements could increase our cash requirements and adversely affect our business. Risks Relating to Taxes Changes in tax laws, examinations by tax authorities, and changes in our geographic composition of income could adversely affect our financial results. We are subject to U.S. and foreign tax laws that may change.
As part of our growth strategy, we intend to continue to consider acquiring complementary technologies, products and businesses and establishing joint ventures or other strategic relationships.
We have a history of acquiring businesses and products that have significantly contributed to our growth in recent years. As part of our growth strategy, we intend to continue to consider acquiring complementary technologies, products and businesses and establishing joint ventures or other strategic relationships.
Our ability to respond to these competitive pressures will depend on our ability to decrease our costs and maintain gross margins and operating results and to introduce new products successfully, on a timely basis in the Americas, EMEA and Asia Pacific, and to achieve manufacturing efficiencies and sufficient manufacturing capacity and capabilities for such products.
Our ability to respond to these competitive pressures will depend on our ability to decrease our costs and maintain gross margins and operating results and to introduce new products successfully, on a timely basis in the Americas, EMEA and Asia Pacific, 25 THE COOPER COMPANIES, INC.
We expect to generate an increasing portion of our revenue and incur a significant portion of our expenses in currencies other than U.S. dollars. To the extent we are unable to materially offset non-functional currency flows, exchange rate fluctuations could have a positive or negative impact on our financial condition and results of operations.
We expect to generate an increasing portion of our revenue and incur a significant portion of our expenses in currencies other than U.S. dollars. To the extent we are unable to materially offset non-functional currency flows, exchange rate fluctuations could 37 THE COOPER COMPANIES, INC.
Department of Commerce and other nations' import-export controls may result in fines and/or penalties; • general economic and political conditions in the countries where we operate having an adverse effect on our operations in those countries or being unfavorable to our growth strategy; • natural disasters, pandemics, war, terrorism, labor disruptions and international conflicts may cause significant economic disruption and political and social instability, resulting in decreased demand for our products, adversely affecting our manufacturing and distribution capabilities, or causing interruptions in our supply chain; • foreign governments adopting regulations, including those similar to the EU MDR and EU IVDR or take other actions that would have a direct or indirect adverse impact on our business and market opportunities, including but not limited to increased enforcement of potentially conflicting and ambiguous anti-bribery and privacy laws; • challenges enforcing agreements and collecting receivables through some foreign legal systems; and • unforeseen economic or political events in certain countries that may have an impact on our customers' ability or preferences to buy our products.
Department of Commerce and other nations' import-export controls may result in fines and/or penalties; • general economic and political conditions in the countries where we operate having an adverse effect on our operations in those countries or being unfavorable to our growth strategy; • international conflicts, acts or threats of war or terrorism may lead to significant market and other disruptions, supply chain interruptions, political and social instability, trade disputes or trade barriers, embargoes, changes in consumer or purchase preferences, as well as an increase in cyberattacks and espionage; • challenges in complying with new and evolving international economic and trade sanctions laws and regulations; • natural disasters, pandemics and labor disruptions, the duration and severity of which are highly uncertain and difficult to predict; • foreign governments adopting regulations, including those similar to the EU MDR and EU IVDR or take other actions that would have a direct or indirect adverse impact on our business and market opportunities, including but not limited to increased enforcement of potentially conflicting and ambiguous anti-bribery and privacy laws; • challenges enforcing agreements and collecting receivables through some foreign legal systems; and • unforeseen economic or political events in certain countries that may have an impact on our customers' ability or preferences to buy our products.
In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute or Stark Law constitutes a false or fraudulent claim for purposes of the civil False Claims Act; • the federal Health Insurance Portability and Accountability Act of 1996, which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services.
In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute or Stark Law constitutes a false or fraudulent claim for purposes of the civil False Claims Act; • the federal Civil Monetary Penalties Law, which, among other things, authorizes the imposition of civil monetary penalties, assessments, and exclusion against an individual or entity based on a variety of prohibited conduct, including, but not limited to, offering remuneration to a federal healthcare program beneficiary that the individual or entity knows or should know is likely to influence the beneficiary to order or receive healthcare items or services from a particular provider; • the federal Health Insurance Portability and Accountability Act of 1996, which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocation Approximate Leased Square Feet Operations AMERICAS United States: California 200,140 Executive offices; CooperVision manufacturing, research & development and administrative offices; CooperSurgical research & development, distribution and administrative offices New York 132,813 CooperVision and CooperSurgical distribution and administrative offices New Jersey 37,700 CooperSurgical research and development, distribution and administrative offices Connecticut 275,337 CooperSurgical distribution and administrative offices Arizona 45,000 CooperVision manufacturing and distribution Puerto Rico 740,954 CooperVision manufacturing, research and development and distribution Canada 63,836 CooperVision manufacturing and administrative office; CooperSurgical research & development, distribution and administrative offices Brazil 22,048 CooperVision distribution and administrative office Other Americas 58,365 CooperVision distribution and administrative offices; CooperSurgical research & development, distribution and administrative offices EMEA United Kingdom 667,384 CooperVision manufacturing, distribution, research & development and administrative offices; CooperSurgical research & development, administrative offices Hungary 330,245 CooperVision manufacturing Belgium 282,108 CooperVision distribution Spain 181,145 CooperVision distribution and administrative office; CooperSurgical administrative office Netherlands 279,288 CooperVision administrative offices; CooperSurgical research & development and distribution Other EMEA 148,980 CooperVision distribution and administrative offices; CooperSurgical administrative offices ASIA PACIFIC Japan 109,163 CooperVision distribution and administrative offices; CooperSurgical laboratory/research & development Australia 40,139 CooperVision marketing and distribution; CooperSurgical research & development and distribution Other Asia Pacific 92,517 CooperVision distribution, marketing and administrative offices; CooperSurgical marketing and administrative office 40 THE COOPER COMPANIES, INC.
Biggest changeLocation Approximate Leased Square Feet Operations AMERICAS United States: California 158,626 Executive offices; CooperVision manufacturing, research & development and administrative offices; CooperSurgical research & development and administrative offices New York 132,313 CooperVision distribution and administrative offices; CooperSurgical administrative offices New Jersey 37,700 CooperSurgical research and development, distribution and administrative offices Connecticut 271,537 CooperSurgical manufacturing, distribution and administrative offices Arizona 45,000 CooperVision manufacturing Texas 272,895 CooperSurgical manufacturing and distribution Puerto Rico 617,650 CooperVision manufacturing, research and development and distribution Canada 58,966 CooperVision manufacturing and administrative office; CooperSurgical research & development, distribution and administrative offices Brazil 22,048 CooperVision distribution and administrative office Other Americas 51,658 CooperVision distribution and administrative offices; CooperSurgical research & development, distribution and administrative offices EMEA United Kingdom 364,938 CooperVision manufacturing, distribution, research & development and administrative offices; CooperSurgical research & development, administrative offices Hungary 421,953 CooperVision manufacturing and distribution Belgium 259,445 CooperVision distribution Spain 181,145 CooperVision distribution and administrative office; CooperSurgical administrative office Netherlands 279,287 CooperVision administrative offices; CooperSurgical research & development and distribution Other EMEA 169,849 CooperVision distribution and administrative offices; CooperSurgical administrative offices ASIA PACIFIC Japan 110,359 CooperVision distribution, administrative offices; CooperSurgical laboratory/research & development Australia 40,139 CooperVision marketing and distribution; CooperSurgical research & development and distribution China 50,663 CooperVision distribution, and administrative office Other Asia Pacific 67,041 CooperVision distribution, marketing and administrative offices; CooperSurgical marketing and administrative office 41 THE COOPER COMPANIES, INC.
Item 2. Properties. The following is a summary of Cooper's principal facilities as of October 31, 2023.
Item 2. Properties. The following is a summary of Cooper's principal facilities as of October 31, 2024.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+6 added−5 removed0 unchanged
Biggest changeAND SUBSIDIARIES Equity Compensation Plan Information The following table sets forth certain information as of October 31, 2023, concerning the shares of our Common Stock that may be issued under any form of award granted under our equity compensation plans in effect as of October 31, 2023: Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) (A) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (2) (B) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column A) (C) Equity compensation plans approved by shareholders (3) 1,505,841 $277.29 2,325,881 Equity compensation plans not approved by shareholders — — — Total 1,505,841 $277.29 2,325,881 (1) Includes (i) 290,029 shares subject to outstanding Restricted Stock Units (RSU), (ii) 138,256 shares subject to Performance Share Units (PSU), calculated at the maximum potential payout and (iii) 1,077,556 shares subject to outstanding options.
Biggest changeEquity Compensation Plan Information The following table sets forth certain information as of October 31, 2024, concerning the shares of our Common Stock that may be issued under any form of award granted under our equity compensation plans in effect as of October 31, 2024: Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) (A) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (2) (B) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column A) (3) (C) Equity compensation plans approved by shareholders 5,240,679 $75.25 8,523,044 Equity compensation plans not approved by shareholders — — — Total 5,240,679 $75.25 8,523,044 Above table has been adjusted to reflect the four-for-one stock split effected on February 16, 2024.
The graph assumes that the value of the investment in Cooper and in each index was $100 on October 31, 2018, and assumes that all dividends were reinvested.
The graph assumes that the value of the investment in Cooper and in each index was $100 on October 31, 2019, and assumes that all dividends were reinvested.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among The Cooper Companies, Inc., the S&P 500 Index and the S&P Health Care Equipment Index *$100 invested on October 31, 2018, in stock or index, including reinvestment of dividends. Fiscal year ending October 31. Copyright© 2023 Standard & Poor's, a division of S&P Global. All rights reserved.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among The Cooper Companies, Inc., the S&P 500 Index and the S&P Health Care Equipment Index *$100 invested on October 31, 2019, in stock or index, including reinvestment of dividends. Fiscal year ending October 31. Copyright© 2024 Standard & Poor's, a division of S&P Global. All rights reserved.
Does not include rights to purchase shares under the 2019 Employee Stock Purchase Plan (2019 ESPP). (2) The weighted-average exercise price is calculated based solely on the exercise prices of outstanding options and do not reflect shares to be issued upon the vesting of RSUs and PSUs, which have no exercise price.
(2) The weighted-average exercise price is calculated based solely on the exercise prices of outstanding options and do not reflect shares to be issued upon the vesting of RSUs and PSUs, which have no exercise price.
Issuer Purchases of Equity Securities There was no share repurchase activity during the three-month period ended October 31, 2023. 42 THE COOPER COMPANIES, INC.
Issuer Purchases of Equity Securities 43 THE COOPER COMPANIES, INC. AND SUBSIDIARIES There was no share repurchase activity during the three-month period ended October 31, 2024. Unregistered Sales of Equity Securities None.
In December 2023, our Board of Directors decided to end the declaration of the semiannual dividend. Performance Graph The following graph compares the cumulative total return on Cooper's common stock with the cumulative total return of the Standard & Poor 500 and the Standard & Poor's Health Care Equipment Index for the five-year period ended October 31, 2023.
The following graph compares the cumulative total return on our common stock with the cumulative total return of the Standard & Poor 500 and the Standard & Poor's Health Care Equipment Index for the five-year period ended October 31, 2024.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Cooper's common stock, par value $0.10 per share, is traded on the Nasdaq under the symbol “COO.” Prior to September 26, 2023, Cooper's common stock traded on the New York Stock Exchange under the symbol "COO".
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock, par value $0.10 per share, is traded on the Nasdaq under the symbol “COO.” As of November 29, 2024, there were 133 common stockholders of record.
Removed
At December 1, 2023, there were 256 common stockholders of record. Dividend Policy In the past, we have paid annual cash dividends on our common stock of $0.06 per share, in two semiannual payments of $0.03 per share each. In dollar terms, we paid cash for dividends of $3.0 million in each of fiscal 2023 and 2022.
Added
Dividends In December 2023, our Board of Directors decided to end the declaration of the semiannual dividend. We paid dividends of approximately $3.0 million in fiscal 2023.
Removed
Dividends are paid when, as and if declared at the discretion of our Board of Directors from funds legally available for that purpose. Our Board of Directors considers the Company's earnings, financial condition, liquidity needs, business plans and opportunities and other factors in determining whether to declare a dividend.
Added
Any future determination to pay dividends will be made at the discretion of our Board of Directors subject to applicable laws and will depend on, among other factors, our results of operations, financial condition, contractual restrictions and capital requirements.
Removed
(3) Includes information with respect to the Third Amended and Restated 2007 Long Term Incentive Plan for Employees (2007 Plan), the 2023 Long-Term Incentive Plan (2023 Plan), which replaces the 2007 Plan, and the 2019 ESPP, as discussed in Note 9. Stock Plans of the Consolidated Financial Statements.
Added
Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act, except as shall be expressly set forth by specific reference in such filing.
Removed
Also includes information from the 2020 Long Term Incentive Plan for Non-Employee Directors (2020 Directors' Plan).
Added
Refer to Note 1. Organization and Significant Accounting Policies for further information (1) Includes (i) 1,298,723 shares subject to outstanding Restricted Stock Units (RSU), (ii) 649,488 shares subject to outstanding Performance Share Units (PSU), calculated at the maximum potential payout and (iii) 3,292,468 shares subject to outstanding options.
Removed
As of October 31, 2023, up to 1,376,240 shares of Common Stock may be issued pursuant to the 2023 Plan, up to 921,974 s hares of Common Stock may be issued pursuant to the 2019 ESPP and up to 27,667 shares of Common Stock may be issued pursuant to the 2020 Directors' Plan.
Added
Does not include rights to purchase shares under the 2019 Employee Stock Purchase Plan (the "2019 ESPP" or the "ESPP"), which depend on a number of factors described in the 2019 ESPP.
Added
(3) Includes (i) 4,852,018 shares available for issuance under the 2023 Plan, (ii) 3,580,869 s hares available for issuance under the 2019 ESPP and (iii) 90,157 shares available for issuance under the 2020 Long Term Incentive Plan for Non-Employee Directors.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

46 edited+13 added−17 removed18 unchanged
Biggest changeCash Flow ($ in millions) 2023 2022 2021 Operating activities $ 607.5 $ 692.4 $ 738.6 Investing activities (449.0) (1,831.2) (450.3) Financing activities (173.9) 1,193.7 (311.4) Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents (2.3) (12.9) 2.9 (Decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents $ (17.7) $ 42.0 $ (20.2) Operating Cash Flow Cash provided by operating activities in fiscal 2023 decreased compared to fiscal 2022, primarily due to the payment of a $45 million termination fee under an asset purchase agreement and net changes in operating capital, partially offset by net changes in other non-cash items.
Biggest changeCash Flow ($ in millions) 2024 2023 2022 Operating activities $ 709.3 $ 607.5 $ 692.4 Investing activities (764.6) (449.0) (1,831.2) Financing activities 39.2 (173.9) 1,193.7 Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents 2.9 (2.3) (12.9) Net decrease in cash, cash equivalents, restricted cash and restricted cash equivalents $ (13.2) $ (17.7) $ 42.0 Operating Cash Flow Cash provided by operating activities in fiscal 2024 increased compared to fiscal 2023, primarily due to increases in net income, and non-cash add backs such as deferred income taxes and share-based compensation expenses in fiscal 2024 and the release of $31.8 million contingent consideration liability associated with SightGlass Vision's regulatory approval milestone in fiscal 2023, offset by net changes in operating capital.
Competitive factors in the segments in which CooperSurgical competes include technological and scientific advances, product quality and availability, price and customer service (including response time and effective communication of product information to physicians, consumers, fertility clinics and hospitals). 44 THE COOPER COMPANIES, INC.
Competitive factors in the segments in which CooperSurgical competes include technological and scientific advances, product quality and availability, price and customer service (including response time and effective communication of product information to physicians, consumers, fertility clinics and hospitals). 45 THE COOPER COMPANIES, INC.
We recognize separately from goodwill, the identifiable assets acquired, including acquired in-process research and development, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date fair values as defined by accounting standards related to fair value measurements.
We recognize separately from goodwill, the identifiable assets acquired, including acquired in-process research and development (IPR&D), the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date fair values as defined by accounting standards related to fair value measurements.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. Note numbers refer to “Notes to Consolidated Financial Statements” in Item 8. Financial Statements and Supplementary Data. Results of Operations In this section, we discuss the results of our operations for fiscal 2023 compared with fiscal 2022.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. Note numbers refer to “Notes to Consolidated Financial Statements” in Item 8. Financial Statements and Supplementary Data. Results of Operations In this section, we discuss the results of our operations for fiscal 2024 compared with fiscal 2023.
Financing Cash Flow Cash used in financing activities in fiscal 2023 was primarily due to repayments of $338.0 million on the 2021 364-day term loan, partially offset by $172.6 million of funds drawn on the 2020 Revolving Credit.
Cash used in financing activities in fiscal 2023 was primarily due to repayments of $338.0 million on the 2021 364-day term loan, partially offset by $172.6 million of funds drawn on the 2020 Revolving Credit Facility.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations Corporate operating loss increased in fiscal 2023 compared to fiscal 2022, primarily due to higher share-based compensation expenses.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations Corporate operating loss increased in fiscal 2024 compared to fiscal 2023, primarily due to higher share-based compensation expenses.
CooperSurgical's amortization expense increased in fiscal 2023 compared to fiscal 2022, primarily due to the amortization of intangible assets recently acquired through acquisitions.
CooperSurgical's amortization expense increased in fiscal 2024 compared to fiscal 2023, primarily due to the amortization of intangible assets recently acquired through acquisitions.
We discuss our cash flows and current financial condition under “Capital Resources and Liquidity.” For a discussion related to fiscal 2022 compared with fiscal 2021, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended October 31, 2022, which was filed with the United States Securities and Exchange Commission (SEC) on December 9, 2022, and is available on the SEC's website at www.sec.gov and our Investor Relations website at investor.coopercos.com.
We discuss our cash flows and current financial condition under “Capital Resources and Liquidity.” For a discussion related to fiscal 2023 compared with fiscal 2022, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended October 31, 2023, which was filed with the SEC on December 8, 2023, and is available on the SEC's website at www.sec.gov and our Investor Relations website at investor.coopercos.com.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations Considering recent market conditions, we have re-evaluated our operating cash flows and cash requirements and continue to believe that current cash, cash equivalents, future cash flow from operating activities and cash available under our 2020 Credit Agreement will be sufficient to meet our anticipated cash needs, including working capital needs, capital expenditures and contractual obligations for at least 12 months from the issuance date of the Consolidated Financial Statements included in this annual report.
Considering recent market conditions, we have re-evaluated our operating cash flows and cash requirements and continue to believe that current cash, cash equivalents, future cash flow from operating activities and cash available under our 2024 Credit Agreement will be sufficient to meet our anticipated cash needs, including working capital needs, capital expenditures and contractual obligations for at least 12 months from the issuance date of the Consolidated Financial Statements included in this annual report.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations Net Sales CooperVision Net Sales The contact lens market has two major product categories: • Spherical lenses including lenses that correct near- and farsightedness uncomplicated by more complex visual defects; and • Toric and multifocal lenses including lenses that, in addition to correcting near- and farsightedness, address more complex visual defects such as astigmatism and presbyopia by adding optical properties of cylinder and axis, which correct for irregularities in the shape of the cornea.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations Net Sales CooperVision Net Sales The contact lens market has two major product categories: • Toric and multifocal lenses including lenses that, in addition to correcting near- and farsightedness, address more complex visual defects such as astigmatism and presbyopia by adding optical properties of cylinder and axis, which correct for irregularities in the shape of the cornea; and • Spherical lenses, including lenses that correct near- and farsightedness uncomplicated by more complex visual defects, myopia management lenses, which slow the progression of and correct myopia in age-appropriate children, and other specialty lenses.
CooperVision Net Sales by Geography CooperVision competes in the worldwide soft contact lens market and services in three primary regions: the Americas, EMEA (Europe, Middle East and Africa) and Asia Pacific.
CooperVision Net Sales by Geography CooperVision competes in the worldwide soft contact lens market and services in three primary regions: the Americas, EMEA and Asia Pacific.
CooperVision's R&D activities are primarily focused on the development of contact lenses, manufacturing technology and process enhancements. CooperSurgical's R&D expenses increased in fiscal 2023 compared to fiscal 2022 mainly due to European Medical Device Regulation costs. CooperSurgical's R&D activities are focused on developing and refining diagnostic and therapeutic products including medical interventions, surgical devices and fertility solutions.
CooperVision's R&D activities are primarily focused on the development of contact lenses, manufacturing technology and process enhancements. CooperSurgical's R&D expenses increased in fiscal 2024 compared to fiscal 2023 mainly due to an increase in R&D project spend. CooperSurgical's R&D activities are focused on developing and refining diagnostic and therapeutic products including medical interventions, surgical devices and fertility solutions.
Corporate SGA expenses increased in fiscal 2023 compared to fiscal 2022 primarily due to share-based compensation related expenses.
Corporate SGA expenses increased in fiscal 2024 compared to fiscal 2023 primarily due to share-based compensation related expenses and corporate support functions.
Fertility – This includes fertility consumables and equipment, donor gamete services, and genomic services (including genetic testing).
This includes fertility consumables and equipment, donor gamete services, and genomic services (including genetic testing). 47 THE COOPER COMPANIES, INC.
The following is a summary of the maximum commitments and the net amounts available to us under different credit facilities as of October 31, 2023: (In millions) Facility Limit Outstanding Borrowings Outstanding Letters of Credit Total Amount Available Maturity Date Revolving Credit: 2020 Revolving Credit $ 1,290.0 $ 172.6 $ 2.1 $ 1,115.3 April 1, 2025 Term Loan: 2020 Term Loan 850.0 850.0 n/a — April 1, 2025 2021 Term Loan 1,500.0 1,500.0 n/a — December 17, 2026 Total $ 3,640.0 $ 2,522.6 $ 2.1 $ 1,115.3 As of October 31, 2023, the Company was in compliance with all debt covenants.
The following is a summary of the maximum commitments and the net amounts available to us under different credit facilities as of October 31, 2024: (In millions) Facility Limit Outstanding Borrowings Outstanding Letters of Credit Total Amount Available Maturity Date Revolving Credit: 2024 Revolving Credit $ 2,300.0 $ 1,049.2 $ 4.75 $ 1,246.1 May 1, 2029 Term Loan: 2021 Term Loan 1,500.0 1,500.0 n/a — December 17, 2026 Total $ 3,800.0 $ 2,549.2 $ 4.75 $ 1,246.1 As of October 31, 2024, the Company was in compliance with all debt covenants.
To the extent additional funds are necessary to meet our liquidity needs such as that for acquisitions, share repurchases, cash dividends or other activities as we execute our business strategy, we anticipate that additional funds could be obtained through the incurrence of additional indebtedness, additional equity financings or a combination of these potential sources of funds; however, such financing may not be available on favorable terms, or at all.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations for acquisitions, share repurchases or other activities as we execute our business strategy, we anticipate that additional funds could be obtained through the incurrence of additional indebtedness, additional equity financings or a combination of these potential sources of funds; however, such financing may not be available on favorable terms, or at all.
Interest Expense ($ in millions) 2023 % Net Sales 2022 % Net Sales 2023 vs. 2022 % Change Interest expense $ 105.3 3 % $ 57.3 2 % 84 % Interest expense increased during fiscal 2023 compared to the prior year, primarily due to higher interest rates.
Interest Expense ($ in millions) 2024 % Net Sales 2023 % Net Sales 2024 vs. 2023 % Change Interest expense $ 114.3 3 % $ 105.3 3 % 9 % Interest expense increased during fiscal 2024 compared to the prior year, primarily due to higher interest rates and higher debt balances.
($ in millions) 2023 2022 2023 vs. 2022 % Change Americas $ 991.3 $ 887.2 12 % EMEA 891.6 843.7 6 % Asia Pacific 540.8 512.4 6 % $ 2,423.7 $ 2,243.3 8 % CooperVision's growth in net sales across all regions was primarily attributable to market gains of silicone hydrogel contact lenses.
($ in millions) 2024 2023 2024 vs. 2023 % Change Americas $ 1,067.3 $ 991.3 8 % EMEA 988.3 891.6 11 % Asia Pacific 553.8 540.8 2 % $ 2,609.4 $ 2,423.7 8 % CooperVision's growth in net sales across all regions was primarily attributable to increased sales of silicone hydrogel contact lenses.
Our payment terms are typically between 30 to 120 days. Provisions for certain rebates, sales incentives, volume discounts, contractual pricing allowances and product returns are accounted for as variable consideration and recorded as a reduction in sales.
Our payment terms are typically between 30 to 120 days. Provisions for certain rebates, sales incentives, volume discounts, contractual pricing allowances and product returns are accounted for as variable consideration and recorded as a reduction in sales. Estimating these provisions requires judgment based on current and historical customer patterns related to these programs or contractual terms as described below.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations ($ in millions) 2023 2022 2023 vs. 2022 % Change Toric $ 828.7 $ 737.4 12 % Multifocal 305.7 264.4 16 % Single-use spheres 705.4 661.6 7 % Non single-use sphere, other 583.9 579.9 1 % $ 2,423.7 $ 2,243.3 8 % In the fiscal year ended October 31, 2023, the growth experienced across all categories was partially offset by unfavorable foreign exchange rate fluctuations, which approximated $61.0 million. • Toric and multifocal lenses grew primarily through the success of MyDay and Biofinity. • Single-use sphere lenses grew primarily through MyDay, MiSight, and clariti lenses. • Non single-use sphere lenses grew primarily through specialty lenses. • "Other" products represented approximately 1% of net sales in fiscal 2023 and 2022.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations ($ in millions) 2024 2023 2024 vs 2023 % Change Toric and multifocal $ 1,257.2 $ 1,134.4 11 % Sphere, other 1,352.2 1,289.3 5 % $ 2,609.4 $ 2,423.7 8 % In the fiscal year ended October 31, 2024, the growth experienced across all categories was partially offset by unfavorable foreign exchange rate fluctuations, which approximated $14.6 million. • Toric and multifocal grew primarily through the success of MyDay and Biofinity. • Sphere, other grew primarily through MyDay, MiSight and Biofinity. • "Other" products represented approximately 1% of net sales in fiscal 2024 and 2023.
Fertility offerings include highly specialized products and services that target the IVF process, including diagnostics testing with a goal to make fertility treatment safer, more efficient and convenient. 46 THE COOPER COMPANIES, INC.
This includes medical devices, cryostorage (such as cord blood and cord tissue storage), and contraception. • Fertility offerings include highly specialized products and services that target the IVF process, including diagnostics testing with a goal to make fertility treatment safer, more efficient and convenient.
Operating Leases and future maturities of long-term debt are disclosed in Note 5. Financing Arrangements. The expected future benefit payments for our Retirement Income Plan through 2033 are disclosed in Note 10. Employee Benefits.
The minimum future payments for operating leases are disclosed in Note 2. Operating Leases and the expected future benefit payments for our Retirement Income Plan through 2033 are disclosed in Note 10. Employee Benefits. 52 THE COOPER COMPANIES, INC.
CooperSurgical rebates are predominately related to the Medicaid rebate provision that is estimated based upon contractual terms, historical experience, and trend analysis. Sales returns are estimated and recorded based on historical sales return data. Promotional programs, such as cooperative advertising arrangements, are recorded in the same period as related sales.
Sales returns are estimated and recorded based on historical sales return data. Promotional programs, such as cooperative advertising arrangements, are recorded in the same period as related sales.
We consider an accounting estimate critical if changes in the estimate may have a material impact on our financial condition or results of operations. We believe that the accounting estimates employed are appropriate and resulting balances are reasonable, however, actual results could differ from the original estimates, requiring adjustment to these balances in future period.
We believe that the accounting estimates employed are appropriate and resulting balances are reasonable, however, actual results could differ from the original estimates, requiring adjustment to these balances in future period.
CooperSurgical's SGA expenses increased in fiscal 2023 compared to fiscal 2022 primarily due to an increase in selling and marketing activities and the payment of a $45.0 million termination fee under an asset purchase agreement related to Cook Medical’s reproductive health business. See Note 3. Acquisitions and Joint Venture for further information on the termination fee.
CooperSurgical's operating income increased in fiscal 2024 compared to fiscal 2023, primarily due to payment of a $45.0 million termination fee under an asset purchase agreement related to Cook Medical’s reproductive health business in fiscal 2023 and decrease in advertising and marketing expenses in fiscal 2024. 49 THE COOPER COMPANIES, INC.
Research and Development (R&D) Expenses ($ in millions) 2023 % Net Sales 2022 % Net Sales 2023 vs. 2022 % Change CooperVision $ 73.4 3 % $ 62.4 3 % 18 % CooperSurgical 64.0 5 % 47.9 4 % 34 % $ 137.4 4 % $ 110.3 3 % 25 % CooperVision's R&D expenses increased in fiscal 2023 compared to fiscal 2022 primarily due to European Medical Device Regulation costs and myopia management programs, and timing of R&D projects.
Research and Development (R&D) Expenses ($ in millions) 2024 % Net Sales 2023 % Net Sales 2024 vs. 2023 % Change CooperVision $ 82.9 3 % $ 73.4 3 % 13 % CooperSurgical 72.2 6 % 64.0 5 % 13 % $ 155.1 4 % $ 137.4 4 % 13 % Coop erVision's R&D expenses increased in fiscal 2024 compared to fiscal 2023 primarily due to myopia management programs and R&D projects.
The effective tax rate for fiscal 2022 was lower than the US federal statutory rate primarily due to foreign earnings in jurisdictions with lower tax rates and changes in unrecognized tax benefits, partially offset by foreign earnings subject to US tax. See Note 6. Income Taxes for further information. 49 THE COOPER COMPANIES, INC.
The effective tax rate for fiscal 2023 was higher than the U.S. federal statutory rate primarily due to foreign earnings subject to U.S. tax. See Note 6. Income Taxes for further information. 50 THE COOPER COMPANIES, INC.
Our office and surgical offerings include products that facilitate surgical and non-surgical procedures that are commonly performed primarily by obstetricians and gynecologists in hospitals, surgical centers, fertility clinics and medical offices.
CooperSurgical Net Sales CooperSurgical supplies the fertility and women's health care market with a diversified portfolio of products and services in two categories: • Office and surgical offerings include products that facilitate surgical and non-surgical procedures that are commonly performed primarily by obstetricians and gynecologists in hospitals, surgery centers, and medical offices.
Selling, General and Administrative (SGA) Expenses ($ in millions) 2023 % Net Sales 2022 % Net Sales 2023 vs. 2022 % Change CooperVision $ 871.1 36 % $ 826.7 37 % 5 % CooperSurgical 559.4 48 % 461.7 43 % 21 % Corporate 70.7 — 53.8 — 31 % $ 1,501.2 42 % $ 1,342.2 41 % 12 % CooperVision's SGA expenses increased in fiscal 2023 compared to fiscal 2022 primarily due to an increase in selling and marketing activities, distribution costs, and an intangible assets impairment charge associated with the discontinuation of 47 THE COOPER COMPANIES, INC.
Selling, General and Administrative (SGA) Expenses ($ in millions) 2024 % Net Sales 2023 % Net Sales 2024 vs. 2023 % Change CooperVision $ 910.7 35 % $ 871.1 36 % 5 % CooperSurgical 534.2 42 % 559.4 48 % (5) % Corporate 88.8 — 70.7 — 26 % $ 1,533.7 39 % $ 1,501.2 42 % 2 % CooperVision's SGA expenses increased in fiscal 2024 compared to fiscal 2023 primarily due to a $31.8 million release of contingent consideration liability associated with SightGlass Vision's regulatory approval milestone in fiscal 2023 and increased selling activities in fiscal 2024. 48 THE COOPER COMPANIES, INC.
Operating Income ($ in millions) 2023 % Net Sales 2022 % Net Sales 2023 vs. 2022 % Change CooperVision $ 587.7 24 % $ 494.3 22 % 19 % CooperSurgical 16.1 1 % 67.1 6 % (76) % Corporate (70.7) — (53.8) — (31) % $ 533.1 15 % $ 507.6 15 % 5 % CooperVision's operating income increased in fiscal 2023 compared to fiscal 2022, primarily due to an increase in net sales partially offset by net changes in operating expenses.
Operating Income ($ in millions) 2024 % Net Sales 2023 % Net Sales 2024 vs. 2023 % Change CooperVision $ 676.2 26 % $ 587.7 24 % 15 % CooperSurgical 118.3 9 % 16.1 1 % 635 % Corporate (88.8) — (70.7) — (26) % $ 705.7 18 % $ 533.1 15 % 32 % CooperVision's operating income increased in fiscal 2024 compared to fiscal 2023, primarily due to the increase in net sales outpaced the increase in operating expenses.
The installment for fiscal 2023 is classified in " Other current liabilities" i n our Consolidated Balance Sheet. We are unable to reliably estimate the timing of future payments related to uncertain tax positions and have excluded $24.0 million of long-term income taxes payable from the table above. See Note 6. Income Taxes for additional information.
We are unable to reliably estimate the timing of future payments related to uncertain tax positions and have excluded $20.4 million of long-term income taxes payable. See Note 6. Income Taxes for the expected one-time transition tax payments.
Key assumptions routinely utilized the allocation of purchase price to intangible assets include discount rates, and projected financial information such as revenue projections for companies acquired. As of the acquisition date, goodwill is measured as the excess of consideration given, over the net of the acquisition date fair values of the identifiable assets acquired and the liabilities assumed.
The fair value of the identifiable intangible assets is determined primarily using the “income approach.” Key assumptions routinely utilized in the income approach to allocate the purchase price to intangible assets include risk-adjusted discount rates and projected financial information such as revenue projections, expected gross and operating margins for the acquired companies.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations CAPITAL RESOURCES AND LIQUIDITY Working capital at October 31, 2023 and October 31, 2022, was $735.9 million and $253.4 million, respectively. The increase in working capital was primarily due to repayment of the 364-day term loan during fiscal 2023 and an increase in inventories. See Note 5.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations CAPITAL RESOURCES AND LIQUIDITY Working capital at October 31, 2024, and October 31, 2023, was $928.7 million and $735.9 million, respectively.
The increase was primarily due to changes in the geographic composition of pre-tax earnings, an increase in the UK statutory tax rate from 19% to 25%, capitalization of research and experimental expenditures for fiscal 2023 as required by the 2017 Tax Cuts and Jobs Act, and changes in unrecognized tax benefits.
The increase was primarily due to changes in the geographic composition of pre-tax earnings and an increase in the UK statutory tax rate from 19% to 25%. The effective tax rate for fiscal 2024 was higher than the U.S. federal statutory rate primarily due to foreign earnings subject to U.S. tax and foreign earnings in jurisdictions with higher tax rates.
Deferred tax assets are reduced by a valuation allowance to the extent it is more likely than not they are not expected to be realized. Long-term tax payable is estimated income tax to be paid for unrecognized tax benefits.
Deferred tax assets and liabilities are estimated based on temporary differences between the financial reporting basis and income tax basis of assets and liabilities. Judgment is required in measuring the value of deferred tax assets, which are reduced by a valuation allowance to the extent it is more likely than not the assets are not expected to be realized.
Amortization Expense ($ in millions) 2023 % Net Sales 2022 % Net Sales 2023 vs. 2022 % Change CooperVision $ 32.9 1 % $ 32.3 1 % 2 % CooperSurgical 153.3 13 % 147.2 14 % 4 % $ 186.2 5 % $ 179.5 5 % 4 % CooperVision's amortization expense for fiscal 2023 compared to fiscal 2022 remained relatively flat year over year.
Amortization Expense ($ in millions) 2024 % Net Sales 2023 % Net Sales 2024 vs. 2023 % Change CooperVision $ 28.2 1 % $ 32.9 1 % (14) % CooperSurgical 173.0 13 % 153.3 13 % 13 % $ 201.2 5 % $ 186.2 5 % 8 % CooperVision's amortization expense for fiscal 2024 comp ared to fiscal 2023 decreased primarily due to more intangible assets becoming fully amortized during fiscal 2024.
Cash provided by financing activities in fiscal 2022 was primarily due to funds received from the 2021 term loan facility ($1.5 billion) and the 2021 364-day term loan facility ($840.0 million), partially offset by $561.5 million repayments of the 2020 Revolving Credit, $502.0 million repayments of the 2021 364-day term loan facility, and $78.5 million repurchases of common stock.
Financing Cash Flow Cash provided by financing activities in fiscal 2024 was primarily attributable to funds received from the 2024 Revolving Credit Facility, partially offset by repayments to fully repay all borrowings outstanding under the 2020 Term Loan Facility and the 2020 Revolving Credit Facility. See Note 5. Financing Arrangements for further information.
Foreign exchange loss is primarily associated with the weakening of the U.S. dollar against foreign currencies and the effect on intercompany receivables. Other expenses (income), net increased in fiscal 2023, primarily due to a loss on minority investments, partially offset by defined benefit plan related income.
Other Expense, Net ($ in millions) 2024 2023 Foreign exchange loss 5.2 7.0 Other expense, net 3.9 7.9 $ 9.1 $ 14.9 Foreign exchange loss was primarily associated with the relative weakening of the U.S. dollar against foreign currencies and the effect on intercompany receivables.
Effective February 1, 2023, the Company transitioned its credit agreements from LIBOR to the Secured Overnight Financing Rate ("SOFR"). 52 THE COOPER COMPANIES, INC. AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting Estimates Management estimates and judgments are an integral part of financial statements prepared in accordance with GAAP.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting Estimates Management estimates and judgments are an integral part of financial statements prepared in accordance with GAAP. We consider an accounting estimate critical if changes in the estimate may have a material impact on our financial condition or results of operations.
Additionally, office and surgical net sales increased due to an increase in sales from products such as Uterine Manipulators, Fetal Pillow and Surgical Retractors, and fertility net sales increased due to an increase in revenue from consumable products and genomic services. The increase was partially offset by unfavorable foreign exchange rate fluctuations, which approximated $15.1 million.
Fertility net sales increased due to an increase in revenue from consumable products and genetic testing. The above growth experienced across all categories was partially offset by unfavorable foreign exchange rate fluctuations, which approximated $9.5 million. Gross Margin Consolidated gross margin was relatively flat at 67% in fiscal 2024 compared to 66% in fiscal 2023.
Provision for Income Taxes The effective tax rates for fiscal 2023 and 2022 were 28.7% and 18.8%, respectively.
Other expense, net decreased in fiscal 2024, primarily due to a decrease in loss on minority investments. Provision for Income Taxes The effective tax rates for fiscal 2024 and 2023 were 32.6% and 28.7%, respectively.
Refer to CooperVision Net Sales by Category above for further discussion. CooperSurgical Net Sales by Category CooperSurgical supplies the fertility and women's health care market with a diversified portfolio of products and services.
Refer to CooperVision Net Sales by Category above for further discussion.
($ in millions) 2023 2022 2023 vs. 2022 % Change Office and surgical $ 689.5 $ 633.6 9 % Fertility 480.0 431.5 11 % $ 1,169.5 $ 1,065.1 10 % In th e fiscal year ended October 31, 2023, the net sales increase in both categories was partially due to the addition of Generate Life Sciences (Generate) on December 17, 2021.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations CooperSurgical Net Sales by Category ($ in millions) 2024 2023 2024 vs. 2023 % Change Office and surgical $ 774.7 $ 689.5 12 % Fertility 511.3 480.0 7 % $ 1,286.0 $ 1,169.5 10 % In the fiscal year ended October 31, 2024, office and surgical net sales increased primarily due to the addition of Cook Medical on November 1, 2023.
(2) Purchase obligations consist of agreements to purchase goods and services that are enforceable and legally binding and includes obligations for inventory, capital expenditures and other operating expense commitments. The table above excludes future payments for operating leases, long-term debt, and our defined benefit plan. The minimum future payments for operating leases are disclosed in Note 2.
Purchase obligations consist of agreements to purchase goods and services that are enforceable and legally binding and includes obligations for inventory, capital expenditures and other operating expense commitments. As of October 31, 2024, we had purchase obligations of $696.0 million, with $272.8 million payable within the twelve months ending Oct 31, 2025.
Direct acquisition costs are expensed as incurred. • Income taxes - Income taxes are estimated based on enacted income tax laws and the results of operations in each jurisdiction. Deferred tax assets and liabilities are estimated based on temporary differences between the financial reporting basis and income tax basis of assets and liabilities.
If the actual results differ from the estimates and judgments used in these estimates, the amounts recorded in the financial statements could result in a possible impairment of the intangible assets and goodwill. • Income taxes - Income taxes are estimated based on enacted income tax laws and the results of operations in each jurisdiction.
Purchases under the 2012 Program are subject to a review of the circumstances in place at the time and may be made from time to time as permitted by securities laws and other legal requirements. In fiscal 2023, there were no share repurchases under the 2012 Program. At October 31, 2023, $256.4 million remained authorized for repurchase under the program.
Share Repurchases In March 2017, the authorization under the 2012 Share Repurchase Program (2012 Program) was increased to $1.0 billion by the Company's Board of Directors. As of October 31, 2024, $256.4 million remained authorized for repurchase under the program. See Note 8. Stockholders’ Equity for additional information. In fiscal 2024, there were no share repurchases under the 2012 Program.
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CooperVision Net Sales by Category Single-use spheres – This includes Biomedics 1 day, clariti 1 day, MiSight, MyDay, and Proclear 1 day Toric – This includes Avaira Vitality toric, Biofinity toric, Biomedics toric, clariti 1 day toric, MyDay toric and Proclear toric Multifocal – This includes Biofinity multifocal, Biofinity toric multifocal, clariti 1 day multifocal, MyDay multifocal and Proclear 1 day multifocal Non single-use sphere, other – This includes our frequent replacement product (FRP) lens portfolio (Avaira Vitality spheres, Biofinity spheres, Biofinity Energys spheres, Biomedics spheres, clariti spheres, Proclear spheres), specialty lenses (custom, ortho-k, and scleral lenses) and other. 45 THE COOPER COMPANIES, INC.
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CooperVision Net Sales by Category 46 THE COOPER COMPANIES, INC.
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AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations The chart below shows the percentage of net sales of office and surgical and fertility.
Added
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations CooperSurgical's SGA expenses decreased in fiscal 2024 compared to fiscal 2023 primarily due to the payment of a $45.0 million termination fee under an asset purchase agreement related to Cook Medical’s reproductive health business in fiscal 2023, partially offset by an increase in selling activities and distribution costs.
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Office/Surgical – This includes Endosee endometrial imaging products, Fetal Pillow cephalic elevation devices for use in Cesarean sections, illuminated speculum products, Lone Star retractor systems, loop electrosurgical excision procedure (LEEP) products, Mara water ablation systems, cryostorage (such as cord blood and cord tissue storage), Paragard contraceptive IUDs, point-of-care products and uterine positioning products.
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The increase in working capital was primarily due to increases in trade accounts receivable, prepaid expenses and other current assets, and inventories, partially offset by an increase in other current liabilities.
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Gross Margin Consolidated Gross Margin was relatively flat at 66% in fiscal 2023 compared to 65% in fiscal 2022.
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Investing Cash Flow Cash used in investing activities in fiscal 2024 increased compared to cash used in investing activities in fiscal 2023, primarily attributable to $343.4 million cash paid for acquisitions in fiscal 2024.
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AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations certain products, partially offset by $31.8 million release of contingent consideration liability associated with SightGlass Vision's regulatory approval milestone.
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On May 1, 2024, the Company entered into a Revolving Credit Agreement. The Company drew on the 2024 Credit Agreement to fully repay borrowings outstanding under the 2020 Term Loan and 2020 Revolving Credit Facility and terminated the 2020 Credit Agreement. See Note 5. Financing Arrangements for further information.
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CooperSurgical's operating income decreased in fiscal 2023 compared to fiscal 2022, primarily due to an increase in SGA and R&D expenses, partially offset by an increase in net sales. 48 THE COOPER COMPANIES, INC.
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To the extent additional funds are necessary to meet our liquidity needs such as 51 THE COOPER COMPANIES, INC.
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Other Expense (Income), Net ($ in millions) 2023 2022 Investment gain $ — $ (47.7) Foreign exchange loss 7.0 22.0 Other expense (income), net 7.9 0.7 $ 14.9 $ (25.0) Investment gain in fiscal 2022 primarily consists of a gain on remeasurement of the fair value of retained equity investment in SGV as a result of deconsolidation.
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Dividends In December 2023, the Company's Board of Directors decided to end the declaration of the semiannual dividend. Stock Split On February 16, 2024, the Company effected a four-for-one stock split of its outstanding shares of common stock. All share and per share information has been retroactively adjusted to reflect the stock split for all periods presented.
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The effective tax rate for fiscal 2023 was higher than the US federal statutory rate primarily due to foreign earnings subject to US tax.
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The par value of the common stock remains $0.10 per share. Contractual Obligations As of October 31, 2024, our material cash requirements consisted of future payments for debt and related interests, income tax liabilities related to one-time transition tax, purchase obligations, operating lease and Retirement Income Plan. We incur interest on a revolving loan and a term loan.
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The $45.0 million termination fee under an asset purchase agreement related to Cook Medical’s reproductive health business was accrued for during the second quarter of fiscal 2023 and paid on August 9, 2023. See Note 3. Acquisitions and Joint Venture for further information on the termination fee.
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Using the same interest rate of October 31, 2024, and assuming borrowings as of October 31, 2024, remain constant throughout all periods, these loans would result in interest payments of $109.5 million in the twelve months ending October 31, 2025, and $272.1 million in the years thereafter. See Note 5. Financing Arrangements for additional information related to debt and interests.
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Investing Cash Flow Cash used in investing activities in fiscal 2023 was lower than cash used in investing activities in fiscal 2022, primarily attributable to $1.6 billion cash paid, net of cash acquired, for the Generate acquisition in fiscal 2022. The decrease in cash used for acquisitions was partially offset by an increase in purchases of property, plant and equipment.
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Income tax liabilities related to the one-time transition tax resulted from the enactment of the 2017 U.S. Tax Act and are payable in annual installments through fiscal 2026. The installment for fiscal 2024 is classified in "Other current liabilities" in our Consolidated Balance Sheet.
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See Note 5. Financing Arrangements for further information. 50 THE COOPER COMPANIES, INC.
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Variations between our estimates and actual product discounts have not been material. CooperSurgical rebates are predominately related to the Medicaid rebate provision that is estimated based upon contractual terms, historical experience, and trend analysis which requires judgment due to the length of time between sale and reimbursement from Medicaid.
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Share Repurchases In December 2011, the Company's Board of Directors authorized the 2012 Share Repurchase Program ("2012 Program") and through subsequent amendments, the most recent in March 2017, the total repurchase authorization was increased from $500.0 million to $1.0 billion of the Company's common stock. The program has no expiration date and may be discontinued at any time.
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The fair value of IPR&D also factors in probability assumptions about the stage of development and successful completion.
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See Note 8. Stockholders’ Equity for additional information. Dividends In fiscal 2023 and 2022, the Company declared regular dividends of 6 cents per share (a semiannual dividend of 3 cents per share) and paid a total of $3.0 million in each fiscal year. In December 2023, our Board of Directors decided to end the declaration of the semiannual dividend.
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These deferred tax assets are primarily tax credits and net operating loss carryforwards expected to expire before they can be claimed or deducted. For uncertain tax positions, judgment is required in evaluating tax positions for uncertainty in the application of accounting guidance and tax laws.
Removed
Contractual Obligations As of October 31, 2023, we had the following contractual obligations: Payments Due by Fiscal Year (In millions) Total 2024 2025 & 2026 2027 & 2028 2029 & Beyond Interest payments $ 249.0 $ 113.3 $ 135.7 $ — $ — Transition tax on unremitted foreign earnings and profits (1) 88.6 22.1 66.5 — — Purchase obligations (2) 408.5 201.7 139.7 62.0 5.1 Total contractual obligations $ 746.1 $ 337.1 $ 341.9 $ 62.0 $ 5.1 (1) As of October 31, 2023, we had $88.6 million of income tax liabilities related to the one-time transition tax that resulted from the enactment of the 2017 US Tax Act, which is payable in annual installments through fiscal 2026.
Removed
Transition from LIBOR The UK’s Financial Conduct Authority (FCA), which regulates the London Interbank Offered Rate (LIBOR), announced in July 2017 that it will no longer persuade or require banks to submit rates for LIBOR after 2021. In March 2021, the FCA confirmed its intention to stop requiring banks to submit rates required to calculate LIBOR after 2021.
Removed
However, for U.S. dollar-denominated (USD) LIBOR, only one-week and two-month USD LIBOR will cease to be published after 2021, and all remaining USD LIBOR tenors will continue being published until June 2023. Further, in March 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects 51 THE COOPER COMPANIES, INC.
Removed
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations of Reference Rate Reform on Financial Reporting . This guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur ultimate realized gain or loss with respect to interest rate fluctuations will depend on interest rates, the exposures that arise during the period and our hedging strategies at that time.
Biggest changeWe have entered, and in the future may enter, into interest rate swaps to manage interest rate risk. Our ultimate realized gain or loss with respect to interest rate fluctuations will depend on interest rates, the exposures that arise during the period and our hedging strategies at that time.
As an example, if interest rates were to increase or decrease by 1% or 100 basis points, the quarterly interest expense would not have a material impact, based on average debt outstanding, after consideration of our interest rate swap contracts, during the fourth quarter of fiscal 2023. Refer to Item 1A.
As an example, if interest rates were to increase or decrease by 1% or 100 basis points, the quarterly interest expense would not have a material impact, based on average debt outstanding, after consideration of our interest rate swap contracts, during the fourth quarter of fiscal 2024. Refer to Item 1A.
Interest Rate Risk We are exposed to risks associated with changes in interest rates, as the interest rates on our revolving lines of credit and term loans may vary with the federal funds rate and SOFR (and, previously, LIBOR). As of October 31, 2023, we had outstanding debt for an aggregate carrying amount of $2.6 billion.
Interest Rate Risk We are exposed to risks associated with changes in interest rates, as the interest rates on our revolving lines of credit and term loans may vary with the federal funds rate and SOFR. As of October 31, 2024, we had outstanding debt for an aggregate carrying amount of $2.6 billion.
At October 31, 2023, a uniform hypothetical 10% increase or decrease in the foreign currency exchange rates in comparison to the value of the U.S. dollar would have resulted in a corresponding increase or decrease of approximately $95.6 million in operating income for the fiscal year ended October 31, 2023. Refer to Item 1A.
At October 31, 2024, a uniform hypothetical 10% increase or decrease in the foreign currency exchange rates in comparison to the value of the U.S. dollar would have resulted in a corresponding increase or decrease of approximately $103.2 million in operating income for the fiscal year ended October 31, 2024. Refer to Item 1A.
Removed
We have entered, and in the future may enter, into interest rate swaps to manage interest rate risk. Effective February 1, 2023, the base interest rate on our credit agreements was converted from LIBOR to SOFR.

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