The global market for contact lenses is proving to be ?recession-resistant,? according to the management of CooperVision, whose results are improving from several points of view. According to independent market research data cited by CooperVision (CVI), the market for soft contact lenses grew by 7 percent to $1.37 billion in the first three of months of 2008, with increases of 5 percent in the USA and 8 percent in the rest of the world. It grew by 6 percent in the Americas and in Europe, and by 8 percent in the Asia-Pacific region. Silicon hydrogel lenses were the big driver as sales of this product shot up by 29 percent to $412 million, accounting for 46 percent of visits by patients in the USA.
Having finally solved all its capacity constraints in the silicon hydrogel sector, CVI can now roll out its Biofinity line of hydrogel lenses anywhere it is approved for sale, targeting annual sales of $70 million in this segment in the first stage and $200 million later on. It has already started production of a toric silicon hydrogel lens, which should be launched in the first quarter of 2009, followed by a two-week product at the end of the calendar year. A multi-focal Biofinity lens is also in the pipeline.
The company started to deliver Avaira last April, selling it to big customers such as Wal-Mart at a competitive price and making this two-week silicone hydrogel spheric lens available also for private label, but with capacity constraints for the next 12 months.
CVI is also laying big hopes on the planned launch of one-day Proclear lenses in the vast and promising Japanese market in the first half of 2009. CVI no longer has any problems in delivering its Proclear one-day single-use lenses, whose sales grew by 47 percent to $7 million in the second quarter ended April 30, as compared to the first quarter ended Jan. 31.
Major sales increases are expected in the next few months for the American company, which should finally start seeing free cash flow during the current third quarter, building up to an annual level of $50 million from next year.
In the second quarter, CVI's total sales jumped by 18 percent to $222 million, with a 10 percent increase in constant currencies. Currency-neutral sales were up by 8 percent in the Americas and in Europe, and by 22 percent elsewhere. Gross margins improved to 57 percent from 55 percent, but excluding extraordinary costs, they fell to 61 percent from 63 percent because of a large increase in sales of low-margin daily disposable lenses. High selling and marketing expenses related to new product launches caused the operating margin to drop to 17 percent from 19 percent.
Cooper Companies, parent of CVI, has reported a net profit of $18,118,000 for the three months ended April 30, up from $4,821,000 in the same period a year ago, on 17 percent higher revenues of $263.5 million.
Meanwhile Cooper announced that holders of 2.62 convertible bonds due in 2023 can let the company redeem them by June 30 for a total cash consideration of $115 million plus accrured and unpaid interest.