CooperVision, a division of the Cooper Companies, has reported a sales increase of 2 percent to $215.9 million for the three months last Jan. 1, which corresponds to the first quarter of its new fiscal year. Revenues rose by 8 percent in terms of local currencies. They increased in most product categories and all regions except the Americas, where they were flat.
CVI's operating margin was flat at 15 percent, while the gross margin was up by 1.0 percentage point to 57.0 percent. The management attributed this to improvements in manufacturing efficiencies, though these were partially offset by costs related to the restructuring of manufacturing operations, mainly revolving around the shutdown of its factory in Norfolk, Virginia. The shutdown resulted in extraordinary charges of $2.3 million for the quarter, but the new manufacturing set-up is expected to get the gross margin level up gradually, moving upward of 60 percent by 2011.
Toric lenses, which make up 29 percent of CVI's business, had an 8 percent increase in turnover to $63.5 million. Single-use spheres made up 22 percent of sales and grew by 11 percent to $46.9 million. Multifocal lenses brought in 8 percent of the division's total revenues and grew by 5 percent to $16.7 million. Non-single-use spheres and «other» contact lenses, comprising 41 percent of total turnover, slumped by 6 percent to $88.8 million.
CVI stumbled in some categories compared with the overall development of the contact lens industry, but it exceeded its growth in terms of total sales. For the fourth quarter of the 2009 calendar year, CVI's revenues grew by 5 percent, while the worldwide market for soft contact lenses rose by 4.3 percent, according to the Contact Lens Institute.
CVI also did well in spheres, with turnover growing by 4 percent, compared with the industry average of 2 percent. But its sales of toric lenses, which rose by 6 percent, were 3 percentage points below the worldwide figure, and its multifocals rose by just 7 percent, whereas the overall industry had a 24 percent increase. Silicone hydrogels stood out by this measure, with CVI seeing a jump of 126 percent in sales for the last three months of 2009, while the global market rose by just 20 percent.
Silicone hydrogel represented 19 percent of CVI's revenues in the quarter ? 21 percent of sales in Europe, 25 percent in the U.S. and virtually nothing in Asia as the company's products have not yet been approved by regulatory authorities in Japan. The Contact Lens Institute has calculated that 36 percent of the global soft contact lens market, and 53 percent of the market in the U.S., is now taken up by silicone hydrogel.
Looking at the geographical spread of CVI's sales, Europe, the Middle East and Africa (EMEA) had a 3 percent increase in turnover to $84.7 million during its first quarter. The Americas stayed stable at $86.0 million. The remaining 21 percent of CVI's sales came from the Asia-Pacific region, which saw an increase in sales of 6 percent to $45.2 million.
The Contact Lens Institute also evaluated sales by region. It found that the industry's revenues in EMEA and in the Americas both rose by 6 percent (CVI: 9 percent and 4 percent, respectively), and in Asia were up by 1 percent, whereas CVI had a drop of 2 percent there for the fourth quarter of the past calendar year. In the U.S., where the overall market grew by 5 percent, CVI managed an increase of 3 percent.
CVI outperformed the rest of the soft contact lens industry also for the full 2009 calendar year, raising its revenues by 5 percent in contrast with the industry's 3.4 percent increase to $5.9 billion. It underperformed its competitors in toric and multi-focal lenses, for which the global market increased by 7 percent and 21 percent, respectively. It outperformed it in the areas of single-use lenses (up by 14 percent against an industry average of 1 percent) and silicon hydrogel products (up by 112 percent for CVI and up by 20 percent for the market).
Geographically, the soft contact lens market increased by 5 percent in the Americas and by 6 percent in EMEA, but fell by 1 percent in Asia. CVI's sales increased in the three regions by 4 percent, 7 percent and 3 percent, respectively.
Looking at the products' materials, CVI's Proclear lenses grew by 11 percent to $61.9 million, making up 29 percent of sales. Silicone hydrogel lenses more than doubled, rising by 151 percent to $40.9 million, accounting for 19 percent of CVI's sales. The company noted that Luxottica recently honored CVI's silicone hydrogels with the status of «Product of Choice.»
For the Cooper Companies overall, turnover rose by 3.6 percent to $260.3 million in the quarter. Operating income rose by 12.8 percent to $37.0 million, but net income suffered, falling by 14.5 percent to $20.4 million. The gross margin rose by 0.9 percentage points to 57.5 percent. The company generated free cash flow of $43.2 million in the quarter, and most of it was used to reduce debt by $38.2 million to $743.3 million.