Consumer traffic in US stores was slow last December and the pattern continued into January. Based on this trend and on the recent pricing problems experienced in Europe, where it is accelerating the reorganization of its production apparatus, Ocular Sciences predicts that its revenues will increase by only between 3 and 7 percent this year, yielding a gross margin of 53-55 percent.
OC continued to gain market share in the USA in disposable toric and color contact lenses in the 4th quarter ended Dec. 31 to 12.6 and to almost 3 percent, respectively, but the 9 percent overall US sales increase was lower than it had expected. Total sales grew by 17.4 percent in the quarter, but excluding the Japanese market, which it entered earlier in the year, organic revenue growth was limited to 7 percent.
Restructuring charges of $31.9 million led to a net loss of $23.7 million for the quarter, up from $14.9 million in the year-ago period. In spite of these charges, OC recorded a 15 percent gain in net profit for the full year to $7,213,000. Total sales grew by 18.7 percent to $267.1 million, with an organic increase of 11 percent.
The investment program intended to lower its manufacturing costs will end up costing about $50 million through 2005, instead of the $40 million previously budgeted. Two of its 3 factories in the UK and a French factory are due to be closed as part of this program over the next 16 months or so.