| Ocular Sciences, Inc. | |||
| Ticker: | OCLR | 475 Eccles Avenue | |
| Exchange: | NASDAQ-National Market | South San Francisco, CA 94080 | |
| Industry: | Manufacturing (SIC Code 3851) | (415) 583-1400 | |
| Type of Shares: | Common Shares | Filing Date: | 6/4/97 | |
| U.S. Shares: | 7,200,000 | Offer Date: | 8/4/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $15.00 - $17.00 | |
| Primary Shares: | 3,600,000 | Offer Price: | $16.50 | |
| Secondary Shares: | 3,600,000 | Gross Spread: | $1.15 | |
| Offering Amount: | $115,200,000 | Selling: | $0.69 | |
| Expenses: | $1,080,000 | Reallowance: | $0.10 | |
| Shares Out After: | 20,426,326 |
| Manager | Tier | Phone |
| Morgan Stanley Dean Witter Discover & Co. | Lead Manager | (212) 761-5900 |
| Bear, Stearns & Co. Inc. | Co-manager | (212) 272-4850 |
| Cowen & Company | Co-manager | (212) 495-6000 |
| Issuer's Law Firm: | Fenwick & West |
| Bank's Law Firm: | Gunderson Dettmer Stough Villeneuve Franklin |
| Auditor: | KPMG Peat Marwick |
| Registrar/Transfer Agent: | American Stock Transfer & Trust Co |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/30/97 | 6/30/96 | 6/30/97 | ||
| Revenue: | $90.51 | $52.97 | $38.85 | Assets: | $74.41 |
| Net Income: | $10.09 | $6.72 | $3.22 | Curr Assets: | $35.87 |
| EPS: | $0.52 | $0.35 | Liabilities: | $43.92 | |
| Prior EPS: | $10.66 | $3.09 | Curr Liabilities: | $31.92 | |
| Cash Flow/Oper: | $12.70 | -$2.41 | $2.53 | Equity: | $30.49 |
| Cash Flow/Fin: | -$0.32 | -$8.13 | -$6.51 | Cash: | $4.47 |
| Cash Flow/Inv: | -$11.47 | -$8.13 | Working Cap: | $3.96 | |
| Business Description |
| The company is a rapidly growing manufacturer and marketer of soft contact lenses. The company manufactures a broad line of soft contact lenses for annual and disposable replacement regimens. The company believes that its lebs designs provide wearers with a higher level of comfort and greater ease of handling than those of its leading competitors. The company's manufacturing technologies permit consistent, cost-effective reporduction of these designs, allowing the company to offer its lenses at competitive prices. In addition, the company has implemented marketing strategies designed to assist eyecare practitioners, both in independent practice and in retail chains, in retaining their patients and monitoring their patients' ocular health, thereby providing a significant incentive for practitioners to prescribe the company's lenses. Furthermore, the company has continuously focused on lowering its non-manufacturing costs, or "cost-to-serve," enabling it to increase its profitability and its flexibility to reduce prices. To minimize its cost-to-serve, the company utilizes a telemarketing sales force and directs its marketing efforts toward eyecare practitioners rather than consumers. |
| Competition |
| The market for soft contact lenses is intensely competitive and is characterized by decreasing prices for many products. The company's products compete with the products offered by a number of larger companies including Johnson & Johnson, Ciba-Geigy, Bausch & Lomb and Wesley Jessen. Most of the company's competitors have substantially greater financial, manufacturing, marketing and technical resources, greater market penetration and larger manufacturing volumes than the company. Among other things, these advantages may afford the company's competitors greater security to manufacture large volumes of lenses, reduce product prices and influence customer buying decisions. The company believes that certain of its competitors are expanding, or are planning to expand, their manufacturing capacity, and to implement new, more automated manufacturing processes in order to support anticipated increases in volume. The company's ability to respond to competitive pressures by decreasing its prices without adversely affecting its gross margins and operating results will depend on its ability to decrease its costs per lens. The market for contact lenses is shifting from lenses marketed for annual replacement regimens, where the company has significant experience and a leading market position, to lenses for disposable replacement regimens, where the company is less experienced and has a smaller market share.The failure of the company to respond to competitive pressures, and particularly price competition, in a timely manner would have a material adverse effect on the company's business, financial condition and results of operations. In addition, in response to competition, the company may reduce prices, increase cooperative merchandising allowances or otherwise increase spending, any of which may also adversely affect its business, financial condition and results of operations. |
| Business Plan |
| The company has successfully implemented a strategy based on addressing the needs of eyecare practitioners. The principal elements of the company's strategy include: (I) Focus Marketing on Eyecare Practitioners, (ii) Employ Unique Brand Segmentation by Channel and (iii) Produce Superior Performing Products. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used for repayment of indebtedness and certain accrued liabilities outstanding, expansion and automation of manufacturing facilities and general corporate purposes. |
| Name of Shareholder | % Owned Before | % Owned After |
| John D. Fruth | 45.90% | 34.90% |
| Galen Partners, L.P. and affiliates | 23.40% | 16.70% |
| William R. Grant | 22.40% | 16.70% |
| Officer Name | Title | Age |
| Terence M. Fruth | Director and Corporate Secretary | 59 |
| John D. Fruth | President, Chief Executive Officer and Chairman of the Board of Directors | 53 |
| Gregory E. Lichtwardt | Vice President, Finance, Chief Financial Officer and Treasurer | 42 |
| John Lilley | Vice President, Manufacturing | 50 |
| Daniel J. Kunst | Vice President, Sales and Marketing, and Director | 44 |