But this one is not so bad ? people are not at risk of going blind this time. And this one will not have nearly the same impact on the company's financial performance as did the nightmarish recall of the ReNu with MoistureLoc contact lens solution last year. Bausch & Lomb has initiated a voluntary recall of 12 lots of ReNu MultiPlus lens care solution made at its production facility in South Carolina from distribution centers and retail shelves in the USA as well as in certain other countries. Nine of the 12 lots, comprising about 1 million bottles, were distributed in the USA, and several were sold in Canada, Latin America, Korea and Taiwan. B&L said it was taking the product out of the market after finding an elevated level of trace iron, following three reports by customers of discoloration in the formula.
The company does not expect the costs of this recall to have a significant impact on its financial results, whose release has been delayed once more. It is now promising to file its 2006 financial report by Apr. 30. The report was originally due to the U.S Securities and Exchange Commission (SEC) by Feb. 28, but the company has needed extra time to restate its 2005 financial results, which were turned in only on Feb. 7.
In the meantime, the company issued a set of preliminary results for 2006, indicating a drop in sales of by 3 percent to $2.293 billion, mainly caused by lower sales of vision care products such as the ReNu with MoistureLoc solution. Excluding sales of these items and those of companies acquired or divested, sales were down by 4 percent on the year.
B&L expects to report a large decrease in income before taxes and minority interest to about $70 million for the year, as compared to $246.4 million 2005. The large drop is being blamed on the MoistureLoc recall, higher net financing expenses and costs associated with the financial restatement. The company expects full-year revenues to rise by about 9 percent in 2007.
Preliminary estimates indicate that sales in Europe fell by 3 percent to $831.8 million in 2006, down by 4 percent in constant currencies. Sales in the region were hurt by the MoistureLoc recall. Excluding the related sales and those of Woehlk, a German company contact lens firm that contributed sales of $7.2 million in 2005, before its divestiture in the 3rd quarter of 2005, sales were flat in Europe in 2006, and they declined by 1 percent in local currencies. At the end of 2006 B&L introduced in Europe a new aspheric one-day contact lens, the SofLens Daily Disposable, which should drive sales growth in 2007.
In the Americas, sales were flat at $1,007.5 million. Turnover from contact lenses grew by roughly 8 percent, but it was offset by declines in lens care and refractive surgery. Sales in Asia fell by 7 percent to $454.1 million, dropping by 5 percent at constant exchange rates. Like elsewhere the region was hit by lower sales of solutions, but they were offset by additional revenues resulting from the acquisition of Freda. Excluding these items, turnover in the continent decreased by 17 percent, or by 15 percent in constant currencies.
Separately, the U.S. Centers for Medicare and Medical Services (CMS) has granted New Technology Intraocular Lens (NTIOL) designation to Bausch & Lomb's SofPort Advanced Optics (AO) and SofPort Advanced Optics with Violet Shield Technology for their designs to reduce spherical aberration. U.S. Medicare reimbursement to ambulatory surgery centers for cataract surgery will increase by $50 until February 2011 if either one of these products is used in an operation.
In management news, B&L has named Efrain Rivera as senior vice president and chief financial officer, replacing 54-year-old Stephen C. McCluski, who is retiring on June 30. Effrain was previously corporate vice president and treasurer.