VLI Corp. Posts Smallest Yearly Loss Since ’83

Cutting back on marketing costs, especially advertising, enabled VLI Corp. to post its smallest annual loss since the Irvine contraceptive maker went public in 1983, the company said Tuesday.

VLI reported that its net loss for 1985 was $1.4 million, an improvement over the $6.1 million loss in the previous year. At the same time, sales of VLI’s Today brand sponge, the nation’s leading over-the-counter female contraceptive, totaled a record $16.7 million in 1985, a 34.6% increase from $12.4 million.

For the fourth quarter, VLI reported a loss of $555,898, compared to a $3.16-million loss in the previous year’s last quarter. Sales for the period slipped to $3.67 million from $3.8 million.

“Our total marketing costs were lower, and we reduced our heavy advertising,” said Robert Hobbs, VLI’s senior vice president of finance. “We had no television ads in 1985. In retrospect, we probably made a mistake because the awareness of our product did not go higher last year as it had each year since the Today sponge has been out (since 1983).”

But the company is going to return to the airwaves this year as it inaugurates an advertising campaign on television and radio and in print later this month.

“Having a consumer product, we’ve got to make sure the consumers are aware of our product,” Hobbs said.

While saying he could not make any predictions about the coming year, Hobbs did say he was “optimistic” that this year’s sales figures will surpass last year’s.

“Whether or not we’re profitable depends on the level of sales we have to offset the advertising campaign we’re going to engage in this year,” Hobbs said.

VLI started as a research and development operation in 1976 to develop the sponge. It won Federal Drug Administration approval to market its contraceptive in 1983, the same year it went public. It lost $2.9 million in its first year as a public corporation.

“It’s an evolving type of operation,” Hobbs said. “As soon as we achieve certain levels of market share, we do other R&D; on other products. We’re working on a medicinal sponge to treat vaginal diseases, and we have a government contract to research and test a spermicide.”