Essilor Acquires CSC Laboratories and Professional Ophthalmic Laboratories
Essilor International has acquired CSC Laboratories, the second largest independent laboratory company in the U.S. The purchase price was not announced.
Based in Watsonville, Calif., CSC Laboratories was owned by the Kim family which retains a minority share. The company is headed by D.K. Kim (pictured here), who founded the company in 1967. CSC Laboratories, which also operates a lab in San Jose, Calif., generated net sales of $34.5 million in 2011, with Rx sales of $32.8 million, according to Vision Monday's Top Labs Report. It produces about 1,860 jobs a day and has 170 employees. In addition to being a major producer of ophthalmic lenses and coating, CSC distributes an extensive line of private label ophthalmic frames. CSC serves the U.S. market, Central and South America and the Caribbean.
Kim will remain with CSC for the next three years, according to sources close to the company.
Essilor also announced that it has acquired Professional Ophthalmic Laboratories in Roanoke, Va. The lab, owned by Diane Strickler, has revenue of around $3 million, according to Essilor.
Toledo Optical Sells Minority
Interest to Walman Optical
Toledo Optical, an independently owned wholesale laboratory based here, has sold a minority share to Walman Optical, the largest independent laboratory company in the U.S. The terms of the transaction were not disclosed.
According to Vision Monday's 2011 Top Labs Report, Toledo Optical generated an estimated $9.9 million in net sales in 2011, with Rx sales of $9.2 million. Walman Optical, which is based in Minneapolis and operates 36 branch labs throughout the U.S., generated estimated net sales of $230 million in 2011, and Rx sales of $108 million.
ImageWear Signs License for London Fog Eyewear
ImageWear, a division of Walman Optical, has entered into an eyewear licensing agreement with the London Fog brand for the design, manufacture and distribution of London Fog branded eyewear to eyecare professionals. The initial collection is scheduled to launch this month and features Nicole Scherzinger, from the popular band Pussycat Dolls and X Factor TV show, in its ad campaign.
Living Within Your Means:
Current Account Management
The recession has slowly waned on a macro level, but unfortunately there may be trouble lingering for some business owners. What arguably caused the recession (spending beyond limits) will continue to be an issue to plague some labs for a while. The situation does not unfold overnight. Cash becomes a little tight because the business is growing fast, or a large investment in equipment does not begin to pay back as quickly as the vendor predicted.Lines of credit with banks are drawn on. Then when the line is maxed, the company gets a little behind on the payables with vendors. Then out comes the American Express card to pay current payables along with the realization that the company may be one bad customer receivable away from financial Armageddon.
Every company is unique, but a good rule of thumb in the wholesale lab industry for managing current accounts is that the ratio of vendor payables (including credit card balances) to current receivables should approximate the percentage of cost of goods to net sales. For example, if net sales for a month is $200,000, and cost of sales is $100,000 (50 percent of net sales), then payables should only be about 50 percent of current accounts receivable. If cost of sales is much higher than 50 percent of net sales, the company runs the risk of not having enough gross profit to cover labor and other operating expenses, as well as debt service.
You can't always avoid the cash crunch, but by analyzing your financials regularly and comparing the results to rules you set, you can identify a problem and correct it before it is too late.—Jason A. Meyer, managing director, HPC Puckett & Company
Based in San Diego, Calif., HPC Puckett & Company specializes in mergers and acquisitions of companies in the optical sector. You can send comments or questions about this article or any other Dollars & Sense articles to Jason A. Meyer at firstname.lastname@example.org.
Central Optical's Lloyd Yazbek
By Judith Lee
To survive, and certainly to thrive, independent labs have to do it all: invest in technology, retrain workers, offer private label lenses and coatings, and harness the internet and social media. For Central Optical, that's really not a problem.
"This is how we provide the eye care providers (ECPs) with the latest in lens technology, education on new technology (all levels), unique products and superior customer service as well as competitive pricing," noted Lloyd Yazbek, president and CEO of the Youngstown, Ohio lab.
It's that "can-do" attitude that has produced the company's greatest growth in the past five years, and also landed it a spot on the cable TV program (YooToo TV, formerly known as American Life TV Network) "Moving America Forward," hosted by William Shatner.
Central Optical's faith in value-added products is evident in its AR offerings(Oc2, Oc2+, all Crizal, industrial coatings and special applications), and free-form, installed two years ago.
Now Central offers the "iChoice" family of lenses, available in 14 materials. In cooperation with the Block Buying Group, Central has the ability to reach 3500 ECPs and provide them private label free-form in single vision, progressives, office and anti-fatigue designs.
Supporting this bold approach is Central's investment in equipment. Examples include an MEI Bisphera-XDD-Double Head Industrial Edger and Santinelli International's AES-1500 robotic edging system.
Yazbek noted that his team has tamed the learning curve with a commitment to continuous learning: "The learning curve has become very manageable with the level of expertise our team has gained since our commitment to implement the latest technology into our lab. We have encouraged our associates to take advantage of the opportunity to learn how to operate and maintain the new equipment, and we compensate them for doing so."
Central Optical is installing a comprehensive conveyor system that ties the entire lab together, increasing productivity, reducing breakage, and enabling better through-put.
Along with online ordering through a state-of-the art website, Central connects with customers via Facebook and Twitter. The TV interview has been uploaded to YouTube (viewable from Central's homepage)
"The use of social networks is a never-ending process," Yazbek said. "Facebook and Twitter are outstanding means of reaching the masses with the click of a button. By utilizing YouTube, Facebook and Twitter, we have been able to gain national exposure."
What's ahead for Central Optical? More of the same, and more of the same results; the company expects to double in size in the next three years.
Specialty Lenses: A Goldmine of Opportunity
By Julie Bos
Perhaps you're not interested in increasing your profit margins. Maybe you've already got plenty of loyal clients. Perhaps business growth isn't among your top priorities for 2012. If so, feel free to stop reading. But if you're intrigued by the notions of growth and profitability, it may be time to take a closer look at an often-ignored market niche—the growth-inducing and profit-building world of specialty lenses.
Not convinced? Consider these facts.
Specialty lenses are a great way to differentiate your lab from competitors.
According to Jon Torrey, president of Morex Vision in Dallas, Texas, "Lots of labs can produce good lenses and provide good service for basic product categories; but specialty lenses are an opportunity for your lab staff to really build loyalty among your customers—by being the resident experts when a doctor or optician needs to help a patient who requires multiple pairs."
Specialty lenses can build a barrier-to-entry for competitive labs seeking to steal your accounts. If your customers are routinely using your lab for specialty products, they will be much more reluctant to switch to another lab offering "me-too" products or nothing but a lower price.
Specialty lenses can be highly profitable.
"If done right, specialty lenses can add 25 percent to 30 percent to your basic core lens sales," said Steve Sutherlin, president of Sutherlin Optical in Kansas City, Mo. "I look at the added margins to the lab as a bonus. The real value occurs when our partner ECPs look like heroes because they have recommended products that really deliver on the promise stated in their optometric oath—to 'advise my patients fully of all which may...restore, maintain or enhance their vision.' Those patients then become evangelists for that practice—and that's advertising money can't buy."
To find out more reasons to promote specialty lenses and to find a list of current offerings, read the article labtalkonline.com. Go to the FEATURES section where you will find this complete article.