VLI Sales Up, but Product Promotion Hikes Net Loss

Its continuing escalation of advertising and marketing efforts has increased sales of the Today Vaginal Contraceptive Sponge for VLI Inc., but the cost of those programs also has boosted the company’s net losses.

For its third quarter, the Irvine-based maker of contraceptives for women posted a loss of $697,573, compared to a net loss of $117,899 for the same period last year.

Quarterly sales increased 24.4% to $5.1 million from $4.1 million, but the company spent $2.9 million in the third quarter on advertising and marketing to boost the market share for its contraceptive sponge, said Robert Hobbs, VLI’s senior vice president for finance.

During the first nine months of its 1986 fiscal year, VLI incurred a net loss of $3.3 million--a nearly four-fold increase over a loss of $864,489 during the first nine months of 1985.

Sales for the three quarters totaled $13.5 million, but the company spent nearly $9 million on advertising during the period, Hobbs said.

Figures published by the A.C. Nielsen Co. for July and August showed VLI’s contraceptive sponge with a 28.7% share of the national market for over-the-counter contraceptives for women--the fourth increase in market share for the product this year, Hobbs said.

During the third quarter, the company also entered into an agreement with Unipath Ltd., a subsidiary of Unilever PLC, to exclusively distribute the British company’s Clearblue pregnancy test kit in the United States, beginning in January. The addition of the new product line--combined with sales remaining at least at their current level--should make VLI profitable during its next fiscal year, Hobbs said.