Bausch & Lomb sales increase in third quarter

ROCHESTER, N.Y. — Bausch & Lomb worldwide sales increased 7% during the third quarter of 2005 compared with the previous year, but the company said in a news release that these results are preliminary pending the completion of an investigation into improper conduct by management in a subsidiary.

The subsidiary in question, Brazil’s BL Industria Otica, accounted for about $20 million in net sales during 2004, less than 1% of B&L’s consolidated revenues, the company noted.

Net income dropped to $17.9 million during the third quarter of 2005 from $43.3 million during the same quarter in 2004, the release noted.

Third quarter worldwide net sales were $588.7 million, up 7% from $548.9 million in the same period in 2004. Gains were reported in vision care, pharmaceuticals and cataract and vitreoretinal surgery products for all geographic regions, while refractive surgery revenues declined.

Contact lens sales growth was led by the PureVision brand of spherical and toric silicone hydrogel contact lenses. Pharmaceutical sales growth was led by higher sales of prescription products for the treatment of inflammation, dry eye and glaucoma, as well as from over-the-counter general eye care and nutritional products. Higher sales of cataract and vitreoretinal products were driven by a 9% increase in IOLs and higher sales of viscoelastics, the company said. IOL revenues reflected continued double-digit gains for the SofPort and Akreos lines of foldable IOLs. Refractive surgery revenues declined “mainly due to lower laser and microkeratome blade sales, partially offset by higher procedure card fees and service contract revenues,” the release noted.

An internal audit committee’s independent investigation into allegations of misconduct by the management of BL Industria Otica “has determined that the general manager, the controller and other employees of [the company], in violation of company policies, engaged in improper management and accounting practices, including, among other things, the mischaracterization of about $600,000 in expenses to fund an approximately $1.15 million, unauthorized local pension arrangement for the benefit of themselves and other members of local management, the avoidance of Brazilian payroll tax obligations, the amount of which has not yet been determined, and the misuse of company assets for personal benefit,” the release said.