In the first nine months of the 2009 calendar year, CooperVision didn't fare too badly against the global soft contact lens market as compiled by the Contact Lens Institute, a market research group. The market for soft contact lenses grew by 3.1 percent in the nine months, accelerating to 4 percent growth in the quarter, and CVI outpaced it with a rise of 4.6 percent.
Most impressively, the company's sales of silicon hydrogel lenses shot up by 106 percent in the nine months and by 125 percent in the quarter. The market for this kind of lenses increased by 20 percent to $1,587 million in the nine months, including a rise of 21 percent in the latest quarter.
Globally, sales of spherical lenses rose by 2 percent over the period, with growth of 3 percent in the third quarter, but at CVI that segment grew by 8 percent in the nine months and 7 percent in the three months.
The story is a little different for toric and multifocal spheres. Torics overall rose by 6 percent in the nine months and in the last quarter, and CVI couldn't keep up, rising by only 2 percent in the quarter and falling by 2 percent over the nine months. Multifocal lenses enjoyed market growth of 20 percent in the nine months and the quarters, but CVI saw increases of only 13 and 9 percent in those two periods, respectively.
Regionally, in the latest quarter the soft contact lens industry in the Americas grew by 6 percent, but CVI did only 3 percent better there. The European market rose by 9 percent, and CVI almost matched it with 8 percent growth. In Asia-Pacific, the market as a whole saw a decline of 1 percent, while CVI salvaged at 3 percent gain.
The calendar year is not the same as the fiscal year of The Cooper Companies, which owns CVI. For the fourth quarter of its financial year, which ended last Sept. 30, CVI's total revenues increased by 8 percent to $239.6 million, a 5 percent increase in constant currencies. All product categories and geographic regions contributed to the growth, which was higher than expected.
Geographically, in terms of dollars, the Asia-Pacific region performed the best, increasing by 13 percent to $45.7 million, or a rise of 4 percent in constant currencies. European sales grew by 11 percent to $90.7 million, 9 percent up on a currency-neutral basis. Turnover from the Americas crept up by 3 percent to $103.2 million.
Sales of Proclear products grew by 14 percent to $70.6 million. Sales of silicone hydrogel skyrocketed by 119 percent to $40.1 million, a jump of 117 percent in constant currencies.
CVI's gross margin fell by 5 percentage points to 56 percent, due to restructuring charges, writeoffs, idle equipment and changes in currency exchange rates. In spite of lower operating expenses and decreased R&D spending, the operating margin dropped, too, to 17 percent from 20 percent in the fourth quarter of 2008.
The level of profitability is expected to improve in the current year, with the gross margin moving up to a level of between 58 and 60 percent, following the shutdown of CVI's production facilities in Norfolk, Virginia, although it will cost about $10 million in restructuring charges. This will only leave manufacturing in the U.K. and Puerto Rico, where the average capacity utilization rate will grow from 50 to nearly 70 percent.
New products in the pipeline include a multi-focal Biofinity lens in 2010. An Avaira toric is also planned for next year, to be followed by a multi-focal version.
For the full fiscal year, CVI had a 3 percent sales increase to $909.5 million. Cooper Companies' total sales rose by 6 percent to $283.5 million in the fourth quarter, and by 3 percent to $1,080.4 million for the full year. Its net income improved to $100.5 million from $65.5 million, and the group generated higher than expected cash flow of $129.2 million.
For the financial year ending in September 2010, the company is forecasting revenues of $925 million to $975 million from CVI, indicating growth of between 4 and 6 percent, one percentage point better than the market. Including Cooper Surgical, the group's total revenues should increase to between $1,100 million and $1,160 million.