UNILENS VISION INC (OTC:UVIC)

UVIC ($10.25) is to beacquired for $12.75 per share by Valeant Pharmaceuticals.  We coded UVIC as a GeoBargain on the radar on 2/19/2014 at $5.50, so the acquisition price marks a 131% premium from our initial coding.  We first disclosed our long position on 6/17/2013 when the stock was trading at $3.77. We will lock in our profits of nearly 238% in today’s trading session. 

Reported First Quarter 2015 Results

• Product sales for the first quarter, which ended September 30, 2014 (Q1 of FY2015) increased 3.5% to $1,635,236, compared with $1,579,205 in the first quarter of the previous fiscal year (FY2014), due primarily to a 9.8% increase in C-Vue custom soft lens sales and a 4.1% increase in the C-Vue disposable category lens sales.
• Diluted earnings per share increased 66.7% in the first quarter of FY2015 to $0.15, compared with $0.09 in the prior-year period, reflecting higher net income and a 24% reduction in the weighted average number of diluted shares outstanding due primarily to the stock repurchase in October 2013.

Management Comments

"We are pleased to report our sixth consecutive quarter of higher C-Vue brand specialty lens product sales and our fourth consecutive quarter of growth in royalty income from our licensee, Bausch + Lomb," noted Michael Pecora, Chief Executive Officer of Unilens Vision Inc. "The 26% increase in royalty income in the most recent quarter was comparable with the 28% increase that we reported in the fourth quarter of FY2014 and compared favorably with a 7% rise in royalty income for the fiscal year ended June 30, 2014. We attribute the double-digit percentage increases in royalty income during the past three quarters to Bausch + Lomb's October 2013 launch of its PureVision2® for Presbyopia multifocal lens, which features the next-generation multifocal design licensed from Unilens."

"First quarter sales of our specialty contact lens products increased 3.5% relative to the prior-year period, primarily due to continued growth of our C-Vue custom lens category as well as increases in our C-Vue disposable category," continued Pecora. "Growth in disposable lens sales strengthened relative to the fourth quarter of FY2014 as we benefited from the availability of our new C-Vue® ADDvantage™ Multifocal for Presbyopia. This new lens, which was introduced in June, 2014 incorporates our next-generation multifocal technology. Our new C-Vue ADDvantage Multifocal for Presbyopia has been well received by independent eye care professionals and their patients, and we believe will continue to contribute to the Company's future sales and earnings growth."

Fourth Quarter 2014 Results

• Product sales for the fourth quarter ended June 30, 2014 (FY2014) increased 1.7% to $1,614,899, compared with $1,587,926 in the fiscal year ended June 30, 2013 (FY2013) fourth quarter, due primarily to a 6.8% increase in custom soft lens sales and a 2.1% increase in disposable multifocal lens sales.
• 
  Diluted earnings per share increased 220% in the FY2014 fourth quarter to $0.16, compared with $0.05 in the prior-year period, reflecting higher net income and a 25% reduction in the weighted average number of shares outstanding due to the stock repurchase in October 2013.

Management Comments

"Our fourth quarter reflects a continued acceleration in royalty income from our licensee Bausch + Lomb that began in the second quarter of Fiscal 2014," noted Michael Pecora, Chief Executive Officer of Unilens Vision Inc. "The 28% increase in royalty income in the fourth quarter outpaced the 13% increase in the third quarter and the 0.7% improvement in the second quarter. For the year as a whole, royalty income rose over 7%, which represented the first full year of royalty income growth since Fiscal 2010. We attribute the acceleration in royalty income to Bausch + Lomb's October 2013 launch of its PureVision2® for Presbyopia multifocal lens which features the next generation multifocal design licensed from Unilens."

"Fourth quarter sales of our branded specialty contact lens products increased for the fifth consecutive quarter," continued Pecora, "primarily due to continued robust growth of our C-Vue® Advanced custom lens business, as well as initial sales associated with the June 2014 launch of our, C-Vue® ADDvantage™ Multifocal for Presbyopia. We anticipate that our C-Vue ADDvantage multifocal which incorporates our next generation multifocal technology will continue to contribute to the Company's future revenue and earnings growth."

Third Quarter 2014 Results

• For the three months ended March 31, 2014, total revenue including royalty income increased 4.5% to $2,118,392, compared with total revenue of $2,027,694 in the third quarter of FY2013.
• Diluted earnings per share increased 87.5% to $0.15 in the three months ended March 31, 2014, compared with $0.08 in the three months ended March 31, 2013. Majority of the increase is related to its royalty income from Bausch + Lomb.

Management Comments

"Our third quarter operating results benefited significantly from a 13.1% increase in royalties from our licensee, Bausch + Lomb," noted Mike Pecora, Chief Executive Officer of Unilens Vision Inc. "This was the second consecutive quarterly improvement in royalty income, which rose a modest 0.7% in the second quarter of Fiscal 2014, following six consecutive quarters of declining royalty income. We believe the strengthening trend in royalty growth is largely attributable to Bausch + Lomb's October 2013 U.S. launch of its PureVision2® for Presbyopia multifocal lens, which features a next-generation multifocal design licensed from Unilens Vision."

"We are very pleased to report continued sales increases in our specialty contact lens products for the fourth consecutive quarter, led by double-digit growth in our custom soft lens category," continued Pecora. "Over the next several months, we will begin the national roll-out of our next generation of disposable multifocal technology under the C-Vue® brand. We anticipate that this new product line will contribute to the Company's future revenue and earnings growth."

Second Quarter 2014 Results

• For the three months ended December 31, 2013, total revenue including royalty income was largely unchanged at $2,016,702, compared with total revenue of $2,012,049 in the second quarter of FY2013.
• Diluted earnings per share increased 9.1% to $0.12 in the three months ended December 31, 2013, compared with $0.11 in the three months ended December 31, 2012.

"We are very encouraged by certain 'leading indicators' that suggest we are approaching a turnaround in our financial performance and a resumption in revenue and earnings growth," stated Michael Pecora, the Company's Chief Executive Officer. "In particular, we are pleased to report that royalty income increased during the second quarter, for the first time in the past six quarters. In addition, our branded lens sales increased for the third consecutive quarter, following an extended period of lower sales during the past several years. We attribute this encouraging trend to incremental growth of our new C-Vue® HydraVUE™ Multifocal disposable lenses, along with continued growth in the popularity of our C-Vue® Advanced HydraVUE™ line of completely customizable silicone hydrogel contact lenses for monthly replacement."

"We continue our work on new technological improvements that have the potential to generate future incremental licensing income and/or product sales," continued Pecora. "The demand for effective multi-focal vision-correction products that can address the challenges of presbyopia should continue to increase well into the next decade with the aging of America's 'baby boom' generation, and our goal is to enhance shareholder value by capturing a larger share of this market."

"In early October 2013, we repurchased 618,522, or approximately 26% of the Company's total common shares outstanding, from the Company's largest outside shareholder, at an aggregate purchase price of approximately $3.1 million, or $4.97 per share. This transaction was accretive to earnings per share in the most recent quarter, and we believe it reflects our commitment to the enhancement of long-term shareholder value. We funded the repurchase through a $3.3 million expansion and modification of our existing term loan with Hancock Bank. The term loan bank facility will be amortized over a longer seven-year period and bears interest at a floating rate of 30-day LIBOR plus 3.5%. The elimination of cash dividend payments on the repurchased shares, which were returned to the treasury, when combined with a seven-year principal amortization schedule, should allow Unilens to service the expanded debt facility without limiting our ability to fund new growth initiatives."