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"We've been selling those (Baylis) products in the U.S. as their exclusive distributor since 2001," Thomas Falk, chairman and CEO, told analysts during a Web conference call. "We looked at it as an opportunity to retain the value of what we had and even integrate it further into our business."
The more recent deal, a pending tender offer to purchase all the outstanding shares of common stock of I-Flow Corp. for $324 million, also makes sense given "substantial capacity" in the I-Flow sales force.
"We can bring it a broader bundle of innovation and we should be able to increase our scale and our call point access," Falk said. "We think both deals are on trend and consistent with our health care strategy."
The firm posted $611 million in overall net third-quarter income, a 36 percent gain compared to the same 2008 quarter, despite a slight dip in sales, according to its financial report released before market opening Thursday.
The maker of Huggies diapers and Kleenex tissue reported net sales of $4.91 billion, off about 2 percent compared to the same period a year ago.
The quarterly sales results were bolstered strongly by results in the health care business, said Mark Buthman, chief financial officer.
"Approximately 40 percent of the total health care volume came from global demand for face masks as a result of the H1N1 flu virus," he said.
K-C employs about 4,000 in the Fox Cities.
The company said income per share of $1.40 was an all-time record on the quarter, a figure significantly better than the $1.14 per share forecast in a survey of analysts. Earnings per share in 2009 were projected to range from $4.50 to $4.60, up sharply from the previous estimate of $4.10 to $4.25.
The company said deflation of $270 million in key cost inputs, including a drop in fiber costs of $130 million, figured strongly in an increase in operating profits for the quarter.
K-C is now projecting organic sales growth of 3 percent, up from a previous 1-to 2 percent range, while anticipated sales volumes are expected to be flat to down slightly on the year.
Pete Bach: 920-993-1000, ext. 1430, or pbach@postcrescent.com
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