8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 8, 2004

OCULAR SCIENCES, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-22623	94-2985696
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1855 Gateway Boulevard, Suite 700, Concord, California	94520
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (925) 969-7000

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	ITEM 2.02. Results of Operations and Financial Condition.
	ITEM 9.01. Financial Statements and Exhibits.
SIGNATURE
EXHIBIT INDEX
EXHIBIT 99.1

ITEM 2.02. Results of Operations and Financial Condition.

     On November 8, 2004, Ocular Sciences, Inc. (the “Company”) announced its results of operations and financial condition as of and for the quarter ended September 30, 2004 in a press release that is attached hereto as Exhibit 99.1.

     The information in this Report, including the Exhibit 99.1 attached hereto, is furnished pursuant to Items 2.02 and 9.01 of this Form 8-K. Consequently, it is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that Section. It may only be incorporated by reference in another filing under the Securities Exchange Act of 1934 or Securities Act of 1933 if such subsequent filing specifically references this Form 8-K.

     The Company’s earnings release contains non-GAAP financial measures. Pursuant to the requirements of Regulation G, the Company has provided reconciliations within the press release of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

     Adjusted operating income, net income and earnings per share data is presented in the earnings release. The operating income, net income and earnings per share data is adjusted to exclude restructuring, merger and related charges that impacted the Company’s results of operations. Specifically, the Company has excluded restructuring and related charges associated with the manufacturing transition program announced in December 2002 that the Company expects to complete in 2004, and the costs associated with its pending merger with The Cooper Companies, Inc. The Company’s management uses this information excluding these charges in evaluating results of the continuing operations of the Company and believes that this information provides investors with valuable insight into the underlying results of operations of the Company and facilitates comparison between the Company and other companies.

ITEM 9.01. Financial Statements and Exhibits.

     (c) Exhibits.

Exhibit
No.	Description
99.1	Press release issued by Ocular Sciences, Inc. on November 8, 2004*

* This exhibit is intended to be furnished and shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

OCULAR SCIENCES, INC.
By:	/s/ Steven M. Neil
	Steven M. Neil
	Executive Vice President, Chief Financial Officer and Secretary

Dated:   November 8, 2004

EXHIBIT INDEX

Exhibit
No.	Description
99.1	Press release issued by Ocular Sciences, Inc. on November 8, 2004*

* This exhibit is intended to be furnished and shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended.

EX-99.1

Exhibit 99.1

APPROVED BY:
Steve Neil
Chief Financial Officer
(925) 969-7000

Contacts:
Investors & Media
EVC Group
Douglas Sherk, 415-652-9100
Jennifer Beugelmans, 415-896-6820

FOR IMMEDIATE RELEASE

OCULAR SCIENCES REPORTS THIRD QUARTER RESULTS

CONCORD, CA, November 8, 2004—Ocular Sciences, Inc. (NASDAQ: OCLR) today announced third quarter net revenue of $87.7 million, up 6% (2% in constant currency) over the same period one year ago. Net income for the quarter was $9.6 million, or $0.35 per diluted share. Prior to the after-tax restructuring and related expenses associated with the manufacturing consolidation program announced in the fourth quarter of 2002, and the after-tax expenses related to the proposed merger with The Cooper Companies, Inc. (“Cooper”) announced July 28, 2004, net income for the quarter grew by 17% to $14.2 million, or $0.53 per diluted share. The third quarter performance compares with net revenue of $82.6 million and net income of $9.3 million, or $0.38 per diluted share, for the third quarter of 2003. Prior to the after-tax restructuring and related expenses associated with the manufacturing consolidation program, net income for the third quarter of 2003 was $12.2 million, or $0.50 per diluted share. Weighted average fully diluted shares were 27.0 million for the quarter ended September 30, 2004, an increase of 11% when compared with 24.4 million for the third quarter a year ago.

     “The new aspheric product that was launched in the United States during the second quarter of this year has been widely accepted and now represents more than 75% of sales within its product category,” commented Stephen J. Fanning, President and CEO of Ocular Sciences. “We are especially pleased with this product launch, our strong earnings performance and the commitment of our customers and employees in the third quarter given the inherent uncertainty that often arises following the announcement of a pending merger, like ours with The Cooper Companies, Inc.”

     For the nine-month period ended September 30, 2004, Ocular Sciences reported net revenue of $251.6 million, up 10% (4% in constant currency) over the same period one year ago. Net income for the nine-month period was $25.2 million or $0.96 per diluted share. Prior to the after-tax restructuring and related expenses associated with the manufacturing consolidation program announced in the fourth quarter of 2002, and the after-tax expenses related to the proposed merger with Cooper announced July 28, 2004, net income for the nine-months ended September 30, 2004 increased 26% to $34.5 million, or $1.31 per diluted share. This nine-month performance compares with net revenue of $229.4 million and net income of $19.4 million, or $0.80 per diluted share, for the nine-month period ended September 30, 2003. Prior to the after-tax restructuring and related expenses associated with the manufacturing consolidation program, net income for the nine-month period ended September 30, 2003 was $27.4 million, or $1.13 per diluted share.

     Gross margin improved by 540 basis points to 59.6% for the quarter, up from 54.2% in the third quarter of last year. The successful execution of the manufacturing consolidation program was the primary factor behind this significant increase as during the quarter the

Company sold a substantial amount of product that was manufactured utilizing the new Gen II manufacturing operations, especially in the specialty daily disposable category.

     Operating expenses as a percentage of revenue, before restructuring and merger expenses, were 38.8% for quarter ended September 30, 2004, compared with 36.9% in the third quarter of last year and increased primarily due to increased investments in selling and marketing activities. Additionally, R&D expenses for the quarter increased 21% over last year as new product development efforts were expanded.

     These results led to a third quarter operating margin, before restructuring charges and merger expenses, of 20.8% and operating income of $18.3 million compared with operating margin in the third quarter of last year, before restructuring charges, of 17.3% and operating income of $14.3 million. Thus, despite increasing the investment in commercial activities and new product development, operating income, before restructuring charges and merger expenses, grew 28%, over four times as fast as revenue. The Company’s third quarter operating margin as reported was 14.6% and operating income was $12.8 million compared with as reported operating margin of 14.3% and operating income of $11.8 million in the third quarter last year.

     The effective tax rate in 2004, before consideration of restructuring and merger expenses, is estimated to be 22% compared with 19.5% last year.

     Cash flow from operations during the first nine months of the year was $52.8 million compared with $48.6 million for the same period a year ago. The net cash position improved from $17 million at the beginning of the year to more than $58 million at the end of the quarter, and the Company had no drawdown of its credit facilities at September 30, 2004.

Use of Non-GAAP Measures

     The Company believes that non-GAAP measures of operating expenses, operating income and margin, effective tax rate, net income and earnings per share before restructuring and merger expenses are appropriate measures for evaluating the operating performance of the Company because this information provides investors and others with a measure of operating results without regard to the costs associated with the manufacturing consolidation program announced in December 2002, and the pending merger with Cooper and, in turn, allows them to compare the Company’s results of operations with those of other companies on a more comparable basis.

About Ocular Sciences, Inc.

     Ocular Sciences, Inc. manufactures a broad line of high quality, competitively priced soft contact lenses marketed directly to eye-care practitioners. The Company’s lenses are brand and product differentiated by distribution channel, and Ocular’s unique lens technology makes thinner lenses that are easier to handle and more comfortable to wear than those of leading competitors.

(tables to follow)

Ocular Sciences, Inc.
(In thousands, except per share data)

CONSOLIDATED STATEMENTS OF INCOME

	Three months ended						Nine months ended
	September 30,						September 30,
	2004			2003			2004			2003
Net sales	$	87,729		$	82,587		$	251,622		$	229,395
Cost of sales		35,446			37,825			104,757			107,317
Gross profit		52,283			44,762			146,865			122,078
Selling and marketing expenses		24,340			21,383			72,316			62,864
General and administrative expenses		7,453			7,266			23,087			21,636
Research and development expenses		2,225			1,842			6,633			4,990
Restructuring and related expenses		1,691			2,440			6,864			7,433
Merger and related expenses		3,777			—			3,777			—
Income from operations		12,797			11,831			34,188			25,155
Interest expense		(97	)		(239	)		(355	)		(557	)
Interest income		133			208			392			362
Other income (expense), net		(80	)		884			(652	)		1,591
Income before taxes		12,753			12,684			33,573			26,551
Provision for income taxes		3,187			3,424			8,394			7,168
Net income	$	9,566		$	9,260		$	25,179		$	19,383
Net income per share (diluted)	$	0.35		$	0.38		$	0.96		$	0.80
Weighted average dilutive shares outstanding		27,017			24,449			26,319			24,143

CONSOLIDATED BALANCE SHEET DATA

	As of
	September 30,		December 31,
	2004		2003
Cash and cash equivalents	$	60,509	$	34,187
Total assets		430,559		399,308
Total debt		2,489		17,288
Total stockholders’ equity		366,302		301,845

CASH FLOW DATA

	Nine months ended
	September 30,
	2004		2003
Net cash provided by operating activities	$	52,799	$	48,551

NON GAAP DATA AND RECONCILIATIONS

	Three months ended						Nine months ended
	September 30,						September 30,
	2004			2003			2004			2003
Operating Income:
Income from operations	$	12,797		$	11,831		$	34,188		$	25,155
Restructuring and related expenses		1,691			2,440			6,864			7,433
Merger and related expenses		3,777			—			3,777			—
Operating income before restructuring, merger and related expenses	$	18,265		$	14,271		$	44,829		$	32,588
Operating income before restructuring, merger and related expenses as a percent of sales		20.8	%		17.3	%		17.8	%		14.2	%
EPS:
Income before taxes	$	12,753		$	12,684		$	33,573		$	26,551
Restructuring and related expenses, before taxes		1,691			2,440			6,864			7,433
Merger and related expenses		3,777			—			3,777			—
Income before restructuring, merger and related expenses and taxes		18,221			15,124			44,214			33,984
Tax rate excluding restructuring, merger and related expenses		22.0	%		19.5	%		22.0	%		19.5	%
Net income excluding restructuring, merger and related expenses	$	14,212		$	12,175		$	34,487		$	27,357
EPS excluding restructuring, merger and related expenses	$	0.53		$	0.50		$	1.31		$	1.13
After-tax impact of restructuring, merger and related expenses		4,646			2,915			9,308			7,974
GAAP net income	$	9,566		$	9,260		$	25,179		$	19,383
		—			—			—			—
GAAP EPS	$	0.35		$	0.38		$	0.96		$	0.80
Weighted average diluted shares outstanding		27,017			24,449			26,319			24,143