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This article was originally published in The Gray Sheet

Executive Summary

BAUSCH & LOMB SALES OF CONTACT LENS CARE PRODUCTS INCREASED 13% in the second quarter (ended June 26) "in response to continued excellent demand for the ReNu and Boston lines in the U.S., Asia and the Western Hemisphere," the firm said in a July 15 release. Contact lens care products are part of the firm's personal health sector; the sector also includes oral care products, which experienced a 20% increase in sales over the year- ago quarter "due to sharply improved U.S. results for the Interplak line of plaque removal devices and the continuing introduction of Clear Choice mouthwash in the U.S." The personal health sector also benefited from "significantly higher shipments of general eye care products" and recently acquired therapeutic skin care products. Overall, revenues from the company's healthcare segment, which includes the company's medical, biomedical and personal health sectors, increased 12% to $281.5 mil. in the quarter. In the medical sector, the firm's SeeQuence and Medalist "disposable or frequent replacement" contact lenses turned in a stellar performance, generating a greater than 70% increase in worldwide sales. B&L says rigid gas permeable lens shipments also made headway; however "these gains were partially offset by lower shipments of conventional soft contact lenses, which moderated the increase in total lens sales to 5%" for the quarter. The firm's total corporate sales for the quarter rose 7.1% to $479.4 mil. Earnings climbed 14.5% to $47 mil. Geographically, U.S. sales advanced 15%, while revenues for the entire Western Hemisphere jumped 20%. Due to economic weakness in Japan, total sales for Asia rose "only modestly from the year-ago quarter." Revenues in Europe declined "almost 8% due to the effects of weak economies and the strengthening of the U.S. dollar." The firm notes that "on a worldwide basis, currency exchange rate movements reduced consolidated sales by 2%." Stryker's 25% increase in second quarter (ended June 30) international sales helped push overall volume up 19.6% over the comparable period last year to $140 mil. The international growth was "led by Osteonics orthopedic and Dimso spinal implant sales by the Pacific and Europe divisions and endoscopic system sales by the Pacific and Americas divisions." Stryker sales of medical group products increased 32% for the three months over the comparable quarter a year ago. "The medical sales gain resulted from increased shipments of patient-handling equipment and increased revenues from physical therapy services," according to the firm. Sales of surgical group products were up 17%, mainly due to gains in sales of "orthopedic implants, endoscopic systems and powered surgical instruments." For the quarter, net earnings rose 26.7% to $14 mil. Abbott Laboratories reported an 8.7% sales gain to $2.1 bil. in the second quarter ended June 30. Earnings rose 9.1% to $346.1 mil. for the three months. Hospital and laboratory product sales were $1 bil., a 7.3% gain over the year-ago quarter. Interspec recorded a 3.9% sales gain in the second quarter (ended May 31) to $15 mil. and a 2.3% advance to $29.5 mil. in the half. "Results for the first six months of fiscal 1993 benefited from the increase in sales and higher margins of the Apogee CX200, introduced in late 1992 to meet the need in the hospital cardiovascular market for a high performance, moderately priced ultrasound system," according to the firm. The device "offers an innovative digital archival and built-in stress echocardiography capability," the company says. An increase in ultrasound instrument sales "was largely offset by a decline in sales in our component business due to a reduction in orders from ultrasound OEM customers," according to Edward Ray, chairman and CEO of the firm. Earnings declined 66.3% for the quarter to $253,000. For the six months, earnings were down 42.2% to $838,000. Earnings were affected by investments in sales and R&D expansion, according to the firm. The Ambler, Pennsylvania-based company notes that it plans to begin U.S. deliveries of its Apogee RX400 "late in the fourth quarter." The ultrasound system received FDA marketing clearance in June and is "designed for the hospital radiology and multi-purpose markets," according to the firm. International shipments began in 1992. Spacelabs Medical reported roughly flat sales for the second quarter ended June 25: $62.7 mil. compared to sales of $62.6 mil. in the same period last year. Earnings were up 56.3% to $4.6 mil. from $2.9 mil. in the year-ago quarter; the 1992 second quarter income included nonrecurring charges of about $1.4 mil. relating to the firm's spin-off from Westmark International. U.S. Surgical reported a loss of $22 mil. for the second quarter ended June 30 compared to income of $34.8 mil. in the year-ago quarter. Sales dropped 24.9% to $228.8 mil. The firm had announced June 11 that it expected to report a loss for the quarter on sales that would fall below last year's second quarter ("The Gray Sheet" June 21, I&W-1). Explaining the poor results, Leon Hirsch, chairman of U.S. Surgical, said in a July 15 press release: "The sales and earnings shortfall is primarily attributed to larger than anticipated inventories on the shelves of hospitals that switched to just-in-time (JIT) distribution over the past several months" ("The Gray Sheet" April 12, I&W-8). "Other factors included increased competitive pressure and accruals connected with a pending acquisition." Better results are expected in the third quarter with "further improvement in the fourth quarter as hospitals use up their inventories and begin reordering," Hirsch said.

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