Glut of Gloves Puts Squeeze on Medical Supplier’s Profit
A medical supplier that profited from an AIDS-induced shortage of latex rubber gloves says it expects to report a big loss because a glove glut has emerged, leaving it with mountains of unsold merchandise.
“We have millions of gloves--and more arriving,” said John Murray, vice president for finance at Moore Medical Corp.
Moore Medical Corp. had profits of more than $4 million a year in 1986 and 1987 and pretax earnings of $3.1 million in the first three quarters of 1988, but it has alerted stockholders to brace for a loss in the final quarter and for the year.
The company said a one-time charge in the fourth quarter would be in the range of $7 million to $11 million, or $4.3 million to $6.8 million on an after-tax basis.
Moore’s situation is typical of that of many medical supply firms.
Publicity about coming in contact with AIDS-contaminated bodily fluids created an unprecedented demand for the gloves last year. By spring, Moore Medical and other distributors were rationing gloves to customers at a few boxes per order.
“We doubled and tripled up on orders to suppliers,” Murray said. But then supplies from new factories in Asia began arriving. By late fall, he said, “all of a sudden a lot of our orders were coming in (and) what had been close to zero supply became a glut.”