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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2003

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

|                               |  |  |  |    |  | 
|------------------------------ |  |  |  | -- |  | 
|For the Transition Period from |  |  |  | to |  | 
|                               |  |  |  |    |  | 

Commission File No. 0-22623

OCULAR SCIENCES, INC.

(Exact name of registrant as specified in its charter)


|                                                                                               |  |                                                
|---------------------------------------------------------------------------------------------- |  | -----------------------------------------------
|Delaware
(State or other jurisdiction of
incorporation or organization)                        |  | 94-2985696
(I.R.S. Employer
Identification No.)
|                                                                                               |  |                                                
|1855 Gateway Boulevard, Suite 700
Concord, California
(Address of principal executive offices) |  | 94520
(Zip Code)                               

(925) 969-7000
(Registrants telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. YES x NO o.

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). YES x NO o.

As of July 28, 2003, there were outstanding 23,833,186 shares of the
registrants Common Stock, par value $0.001 per share.





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TABLE OF CONTENTS



|                               |                                                                                               |                                                               |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | ------------------------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | ITEM 1. Financial Statements                                                                 
|                               |                                                                                               | Condensed Consolidated Balance Sheets                        
|                               |                                                                                               | Condensed Consolidated Statements of Income  (unaudited)    
|                               |                                                                                               | Condensed Consolidated Statements of Cash Flows  (unaudited)
|                               |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS         
|                               | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                               | Item 3. Quantitative And Qualitative Disclosures About Market Risk                           
|                               | Item 4. Controls and Procedures                                                              
|Part II  OTHER INFORMATION   
|                               | Item 1. Legal Proceedings                                                                    
|                               | Item 2. Changes in Securities and Use of Proceeds                                            
|                               | Item 3. Defaults Upon Senior Securities                                                      
|                               | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                               | Item 5. Other Information                                                                    
|                               | Item 6. Exhibits and Reports on Form 8-K                                                     
|                               | SIGNATURES                                                                                   
|Exhibit 10.3                  
|Exhibit 31.1                  
|Exhibit 32.1                  



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OCULAR SCIENCES, INC.

INDEX

|          |  |                                                                                       |  |                                                                                                 |    |      |    | 
|--------- |  | ------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------- | -- | ---- | -- | 
|          |  |                                                                                       |  |                                                                                                 |    | Page
|          |  |                                                                                       |  |                                                                                                 |    |     
|PART I -  |  | FINANCIAL INFORMATION                                                                 |  |                                                                                                 |    |     
|Item 1.   |  | Financial Statements (Unaudited)                                                      |  |                                                                                                 |    |     
|          |  |                                                                                       |  | Condensed Consolidated Balance Sheets  June 30, 2003 and December 31, 2002                     |    |      | 3  | 
|          |  |                                                                                       |  | Condensed
Consolidated Statements of Income  Three and Six Months Ended June 30, 2003 and 2002 |    |      | 4  | 
|          |  |                                                                                       |  | Condensed Consolidated Statements of Cash Flows  Six Months Ended June 30, 2003 and 2002       |    |      | 5  | 
|          |  |                                                                                       |  | Notes to Condensed Consolidated Financial Statements                                            |    |      | 6  | 
|Item 2.   |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  |                                                                                                 | 11 |     
|Item 3.   |  | Quantitative and Qualitative Disclosures about Market Risk                            |  |                                                                                                 | 17 |     
|Item 4.   |  | Controls and Procedures                                                               |  |                                                                                                 | 18 |     
|PART II - |  | OTHER INFORMATION                                                                     |  |                                                                                                 |    |     
|Item 1.   |  | Legal Proceedings                                                                     |  |                                                                                                 | 18 |     
|Item 2.   |  | Changes in Securities and Use of Proceeds                                             |  |                                                                                                 | 18 |     
|Item 3.   |  | Defaults Upon Senior Securities                                                       |  |                                                                                                 | 18 |     
|Item 4.   |  | Submission of Matters to a Vote of Security Holders                                   |  |                                                                                                 | 18 |     
|Item 5.   |  | Other Information                                                                     |  |                                                                                                 | 19 |     
|Item 6.   |  | Exhibits and Reports on Form 8-K                                                      |  |                                                                                                 | 19 |     
|          |  |                                                                                       |  | Signatures and Certifications                                                                   |    |      | 20 | 

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PART I  FINANCIAL INFORMATION




ITEM 1. Financial Statements




OCULAR SCIENCES, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)

|                                                                                                                                                      |                                                                                                                                  |                                            |         |             |         |              |         |        |         | 
|----------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ----------- | ------- | ------------ | ------- | ------ | ------- | 
|                                                                                                                                                      |                                                                                                                                  |                                            |         | June 30,    |         | December 31,
|                                                                                                                                                      |                                                                                                                                  |                                            |         | 2003        |         | 2002*       
|                                                                                                                                                      |                                                                                                                                  |                                            |         |             |         |             
|                                                                                                                                                      |                                                                                                                                  |                                            |         | (Unaudited) |         |              |         |       
|ASSETS                                                                                                                                                |                                                                                                                                  |                                            |         |             |         |              |         |       
|Current Assets:                                                                                                                                       |                                                                                                                                  |                                            |         |             |         |              |         |       
|                                                                                                                                                      | Cash and cash equivalents                                                                                                        |                                            | $       | 17,889      |         |              | $       | 11,414 |        
|                                                                                                                                                      | Accounts receivable, less allowance for
sales returns and doubtful accounts of
$4,341 and $3,818 for 2003 and 2002,
respectively |                                            |         | 53,482      |         |              |         | 56,416 |        
|                                                                                                                                                      | Inventories                                                                                                                      |                                            |         | 79,285      |         |              |         | 74,515 |        
|                                                                                                                                                      | Prepaid expenses and other current assets                                                                                        |                                            |         | 27,960      |         |              |         | 28,572 |        
|                                                                                                                                                      |                                                                                                                                  |                                            |         |             |         |              |         |        |        
|                                                                                                                                                      |                                                                                                                                  | Total Current Assets                       |         |             | 178,616 |              |         |        | 170,917 | 
|Property and equipment, net                                                                                                                           |                                                                                                                                  |                                            | 124,506 |             |         |              | 119,941 |       
|Intangible assets, net                                                                                                                                |                                                                                                                                  |                                            | 56,953  |             |         |              | 55,815  |       
|Loans to officers and employees                                                                                                                       |                                                                                                                                  |                                            | 772     |             |         |              | 956     |       
|Other assets                                                                                                                                          |                                                                                                                                  |                                            | 4,227   |             |         |              | 4,460   |       
|                                                                                                                                                      |                                                                                                                                  |                                            |         |             |         |              |         |        |        
|                                                                                                                                                      |                                                                                                                                  | Total assets                               |         | $           | 365,074 |              |         | $      | 352,089 | 
|                                                                                                                                                      |                                                                                                                                  |                                            |         |             |         |              |         |        |        
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                  |                                                                                                                                  |                                            |         |             |         |              |         |       
|Current Liabilities:                                                                                                                                  |                                                                                                                                  |                                            |         |             |         |              |         |       
|                                                                                                                                                      | Accounts Payable                                                                                                                 |                                            | $       | 10,383      |         |              | $       | 10,009 |        
|                                                                                                                                                      | Accrued liabilities                                                                                                              |                                            |         | 61,468      |         |              |         | 55,838 |        
|                                                                                                                                                      | Current portion of long-term debt                                                                                                |                                            |         | 389         |         |              |         | 420    |        
|                                                                                                                                                      |                                                                                                                                  |                                            |         |             |         |              |         |        |        
|                                                                                                                                                      |                                                                                                                                  | Total current liabilities                  |         |             | 72,240  |              |         |        | 66,267  | 
|Deferred income taxes                                                                                                                                 |                                                                                                                                  |                                            | 4,317   |             |         |              | 4,200   |       
|Other liabilities                                                                                                                                     |                                                                                                                                  |                                            | 2,008   |             |         |              | 942     |       
|Long-term debt, less current portion                                                                                                                  |                                                                                                                                  |                                            | 21,080  |             |         |              | 30,730  |       
|                                                                                                                                                      |                                                                                                                                  |                                            |         |             |         |              |         |        |        
|                                                                                                                                                      |                                                                                                                                  | Total liabilities                          |         |             | 99,645  |              |         |        | 102,139 | 
|                                                                                                                                                      |                                                                                                                                  |                                            |         |             |         |              |         |        |        
|Commitments and Contingencies                                                                                                                         |                                                                                                                                  |                                            |         |             |         |              |         |       
|Stockholders Equity:                                                                                                                                 |                                                                                                                                  |                                            |         |             |         |              |         |       
|Preferred stock, $0.001 par value; 4,000,000
shares authorized; none issued                                                                           |                                                                                                                                  |                                            |        |             |         |              |        |       
|Common stock, $0.001 par value; 80,000,000
shares authorized; 23,830,586 and 23,811,638
shares issued and outstanding for 2003 and
2002, respectively |                                                                                                                                  |                                            | 24      |             |         |              | 24      |       
|Additional paid-in capital                                                                                                                            |                                                                                                                                  |                                            | 91,567  |             |         |              | 91,632  |       
|Retained earnings                                                                                                                                     |                                                                                                                                  |                                            | 165,960 |             |         |              | 155,837 |       
|Accumulated other comprehensive income                                                                                                                |                                                                                                                                  |                                            | 7,878   |             |         |              | 2,457   |       
|                                                                                                                                                      |                                                                                                                                  |                                            |         |             |         |              |         |        |        
|                                                                                                                                                      |                                                                                                                                  | Total stockholders equity                 |         |             | 265,429 |              |         |        | 249,950 | 
|                                                                                                                                                      |                                                                                                                                  |                                            |         |             |         |              |         |        |        
|                                                                                                                                                      |                                                                                                                                  | Total liabilities and stockholders equity |         | $           | 365,074 |              |         | $      | 352,089 | 
|                                                                                                                                                      |                                                                                                                                  |                                            |         |             |         |              |         |        |        



| |  | The consolidated balance sheet at December 31, 2002 has been derived from
the Companys audited consolidated financial statements at that date, but
does not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See accompanying notes to condensed consolidated financial statements.

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OCULAR SCIENCES, INC.
Condensed Consolidated Statements of Income  (unaudited)
(In thousands, except share and per share data)

|                                                                                  |                                |   |                    |        |                  |   |            |        |      |   |            |        |  |   |            |        | 
|--------------------------------------------------------------------------------- | ------------------------------ | - | ------------------ | ------ | ---------------- | - | ---------- | ------ | ---- | - | ---------- | ------ |  | - | ---------- | ------ | 
|                                                                                  |                                |   | Three Months ended |        | Six Months ended
|                                                                                  |                                |   | June 30,           |        | June 30,        
|                                                                                  |                                |   |                    |        |                 
|                                                                                  |                                |   | 2003               |        | 2002             |   | 2003       |        | 2002
|                                                                                  |                                |   |                    |        |                  |   |            |        |     
|Net sales                                                                         |                                | $ | 76,117             |        |                  | $ | 65,677     |        |      | $ | 146,808    |        |  | $ | 126,488    |       
|Cost of sales                                                                     |                                |   | 36,278             |        |                  |   | 29,137     |        |      |   | 69,492     |        |  |   | 56,467     |       
|                                                                                  |                                |   |                    |        |                  |   |            |        |      |   |            |        |  |   |            |       
|                                                                                  | Gross profit                   |   |                    | 39,839 |                  |   |            | 36,540 |      |   |            | 77,316 |  |   |            | 70,021 | 
|Selling and marketing expense                                                     |                                |   | 21,108             |        |                  |   | 18,545     |        |      |   | 41,481     |        |  |   | 32,098     |       
|General and administrative expense                                                |                                |   | 7,494              |        |                  |   | 6,330      |        |      |   | 14,370     |        |  |   | 12,946     |       
|Research and development expense                                                  |                                |   | 1,432              |        |                  |   | 1,346      |        |      |   | 3,148      |        |  |   | 2,364      |       
|Restructuring and related expenses                                                |                                |   | 3,807              |        |                  |   |           |        |      |   | 4,993      |        |  |   |           |       
|                                                                                  |                                |   |                    |        |                  |   |            |        |      |   |            |        |  |   |            |       
|                                                                                  | Income from operations         |   |                    | 5,998  |                  |   |            | 10,319 |      |   |            | 13,324 |  |   |            | 22,613 | 
|Interest expense                                                                  |                                |   | (126               | )      |                  |   | (272       | )      |      |   | (318       | )      |  |   | (613       | )     
|Interest income                                                                   |                                |   | 83                 |        |                  |   | 258        |        |      |   | 154        |        |  |   | 284        |       
|Other income                                                                      |                                |   | 561                |        |                  |   | 763        |        |      |   | 707        |        |  |   | 1,093      |       
|                                                                                  |                                |   |                    |        |                  |   |            |        |      |   |            |        |  |   |            |       
|                                                                                  | Income before income taxes     |   |                    | 6,516  |                  |   |            | 11,068 |      |   |            | 13,867 |  |   |            | 23,377 | 
|Income taxes                                                                      |                                |   | (2,311             | )      |                  |   | (1,992     | )      |      |   | (3,744     | )      |  |   | (4,208     | )     
|                                                                                  |                                |   |                    |        |                  |   |            |        |      |   |            |        |  |   |            |       
|                                                                                  | Net Income                     |   | $                  | 4,205  |                  |   | $          | 9,076  |      |   | $          | 10,123 |  |   | $          | 19,169 | 
|                                                                                  |                                |   |                    |        |                  |   |            |        |      |   |            |        |  |   |            |       
|Net income per share data:                                                        |                                |   |                    |        |                  |   |            |        |      |   |            |        |  |   |            |       
|                                                                                  | Net income per share (basic)   |   | $                  | 0.18   |                  |   | $          | 0.38   |      |   |            | 0.43   |  |   | $          | 0.81   | 
|                                                                                  | Net income per share (diluted) |   | $                  | 0.17   |                  |   | $          | 0.37   |      |   |            | 0.42   |  |   | $          | 0.78   | 
|Weighted average common shares outstanding                                        |                                |   | 23,821,160         |        |                  |   | 23,602,259 |        |      |   | 23,816,549 |        |  |   | 23,550,901 |       
|Weighted average dilutive potential
common shares under the treasury stock
method |                                |   | 313,214            |        |                  |   | 1,017,594  |        |      |   | 197,879    |        |  |   | 984,013    |       
|                                                                                  |                                |   |                    |        |                  |   |            |        |      |   |            |        |  |   |            |       
|Total weighted average common and
dilutive potential common shares
outstanding    |                                |   | 24,134,374         |        |                  |   | 24,619,853 |        |      |   | 24,014,428 |        |  |   | 24,534,914 |       
|                                                                                  |                                |   |                    |        |                  |   |            |        |      |   |            |        |  |   |            |       

See accompanying notes to condensed consolidated financial statements.

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OCULAR SCIENCES, INC.
Condensed Consolidated Statements of Cash Flows  (unaudited)
(In thousands)

|                                                             |                                                                                   |                                                        |                                                     |         |                           |         |        |         |        |         |  
|------------------------------------------------------------ | --------------------------------------------------------------------------------- | ------------------------------------------------------ | --------------------------------------------------- | ------- | ------------------------- | ------- | ------ | ------- | ------ | ------- | -
|                                                             |                                                                                   |                                                        |                                                     |         | Six months ended June 30,
|                                                             |                                                                                   |                                                        |                                                     |         |                          
|                                                             |                                                                                   |                                                        |                                                     |         | 2003                      |         | 2002  
|                                                             |                                                                                   |                                                        |                                                     |         |                           |         |       
|Cash flows from operating activities                         |                                                                                   |                                                        |                                                     |         |                           |         |        |        
|                                                             | Net income                                                                        |                                                        | $                                                   | 10,123  |                           |         | $      | 19,169  |       
|                                                             | Adjustments to reconcile net income to net cash provided
by operating activities: |                                                        |                                                     |         |                           |         |        |         |       
|                                                             |                                                                                   | Depreciation and amortization                          |                                                     |         | 12,592                    |         |        |         | 10,151 |        
|                                                             |                                                                                   | Amortization of loans to officers                      |                                                     |         | 184                       |         |        |         | 198    |        
|                                                             |                                                                                   | Income tax benefits from stock options exercised       |                                                     |         | 10                        |         |        |         | 658    |        
|                                                             |                                                                                   | Provision for sales returns and doubtful accounts      |                                                     |         | 523                       |         |        |         | (106   | )      
|                                                             |                                                                                   | Exchange gain                                          |                                                     |         | (617                      | )       |        |         | (1,189 | )      
|                                                             |                                                                                   | Deferred income taxes                                  |                                                     |         | 117                       |         |        |         | 901    |        
|                                                             | Changes in operating assets and liabilities:                                      |                                                        |                                                     |         |                           |         |        |         |       
|                                                             |                                                                                   | Accounts receivable                                    |                                                     |         | 2,411                     |         |        |         | (9,564 | )      
|                                                             |                                                                                   | Inventories                                            |                                                     |         | (4,770                    | )       |        |         | (8,734 | )      
|                                                             |                                                                                   | Prepaid expenses, other current and non-current assets |                                                     |         | 845                       |         |        |         | 2,759  |        
|                                                             |                                                                                   | Accounts payable                                       |                                                     |         | 374                       |         |        |         | (2,267 | )      
|                                                             |                                                                                   | Accrued and other liabilities                          |                                                     |         | 6,205                     |         |        |         | 4,600  |        
|                                                             |                                                                                   |                                                        |                                                     |         |                           |         |        |         |       
|                                                             |                                                                                   |                                                        | Net cash provided by operating activities           |         |                           | 27,997  |        |         |        | 16,576  |  
|                                                             |                                                                                   |                                                        |                                                     |         |                           |         |        |         |       
|Cash flows from investing activities:                        |                                                                                   |                                                        |                                                     |         |                           |         |        |        
|                                                             | Purchases of property and equipment                                               |                                                        |                                                     | (13,503 | )                         |         |        | (20,640 | )     
|                                                             | Other                                                                             |                                                        |                                                     |        |                           |         |        | (79     | )     
|                                                             |                                                                                   |                                                        |                                                     |         |                           |         |        |         |       
|                                                             |                                                                                   |                                                        | Net cash used in investing activities               |         |                           | (13,503 | )      |         |        | (20,719 | )
|                                                             |                                                                                   |                                                        |                                                     |         |                           |         |        |         |       
|Cash flows from financing activities                         |                                                                                   |                                                        |                                                     |         |                           |         |        |        
|                                                             | Proceeds from issuance of debt                                                    |                                                        |                                                     | 32,000  |                           |         |        | 39,000  |       
|                                                             | Repayment of short-term and long-term debt                                        |                                                        |                                                     | (41,681 | )                         |         |        | (26,461 | )     
|                                                             | Proceeds from issuance of common stock                                            |                                                        |                                                     | 414     |                           |         |        | 3,236   |       
|                                                             |                                                                                   |                                                        |                                                     |         |                           |         |        |         |       
|                                                             |                                                                                   |                                                        | Net cash (used in) provided by financing activities |         |                           | (9,267  | )      |         |        | 15,775  |  
|                                                             |                                                                                   |                                                        |                                                     |         |                           |         |        |         |       
|Effect of exchange rate changes on cash and cash
equivalents |                                                                                   |                                                        | 1,248                                               |         |                           |         | (652   | )      
|                                                             |                                                                                   |                                                        | Net increase in cash and cash equivalents           |         |                           | 6,475   |        |         |        | 10,980  |  
|Cash and cash equivalents at the beginning of year           |                                                                                   |                                                        | 11,414                                              |         |                           |         | 7,789  |        
|                                                             |                                                                                   |                                                        |                                                     |         |                           |         |        |         |       
|Cash and cash equivalents at the end of period               |                                                                                   | $                                                      | 17,889                                              |         |                           | $       | 18,769 |        
|                                                             |                                                                                   |                                                        |                                                     |         |                           |         |        |         |       
|Supplemental cash flow disclosures:                          |                                                                                   |                                                        |                                                     |         |                           |         |        |        
|                                                             | Cash paid during the period for:                                                  |                                                        |                                                     |         |                           |         |        |         |       
|                                                             |                                                                                   | Interest                                               |                                                     | $       | 346                       |         |        | $       | 496    |        
|                                                             |                                                                                   | Taxes                                                  |                                                     | $       | 2,446                     |         |        | $       | 4,890  |        

See accompanying notes to condensed consolidated financial statements.

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OCULAR SCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1  Basis of Preparation

The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. Accordingly, they do not contain all of the
information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements. The
accompanying unaudited condensed consolidated financial statements have been
prepared on the same basis as the audited consolidated financial statements at
and for the year ended December 31, 2002 and, in the opinion of management,
include all adjustments, consisting only of normal recurring adjustments,
necessary for the fair presentation of the companys financial condition as of
June 30, 2003, the results of the companys operations for the three and
six-month periods ended June 30, 2003 and 2002, and its cash
flows for the six months ended June 30, 2003 and 2002. These unaudited
condensed consolidated financial statements should be read in conjunction with
the companys audited consolidated financial statements as of December 31, 2002
and 2001 and for each of the three years ended December 31, 2002, including
notes thereto, included in the companys Annual Report on Form 10-K for the
year ended December 31, 2002. Operating results for the
six-months ended June 30, 2003 are not necessarily indicative of the results that may be expected for
the year ending December 31, 2003.

Certain prior year amounts have been changed to conform to current year
presentation.

All amounts, unless otherwise indicated are in U.S. dollars.

Note 2  New Accounting Standards

The Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 146, Accounting for Costs Associated
with Exit or Disposal Activities in June 2002. SFAS No. 146 addresses
accounting and reporting for costs associated with exit and disposal activities
and supercedes EITF No. 94-3, Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring). SFAS No. 146 requires that a liability for
a cost associated with an exit or disposal activity be recognized when the
liability is incurred, as defined by the Statement. Under EITF 94-3, an exit
cost was recognized at the date an entity committed to an exit plan.
Additionally, SFAS No. 146 provides that exit and disposal costs should be
measured at fair value and that the associated liability be adjusted for
changes in estimated cash flows. The company adopted SFAS No. 146 effective
January 1, 2003 on a prospective basis.

In November 2002, the FASB issued Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness to Others, an interpretation of FASB Statements No.
5, 57 and 107 and a rescission of FASB Interpretation No. 34. This
interpretation elaborates on the disclosures to be made by guarantor in its
interim and annual financial statements about its obligations under guarantees
issued. The interpretation also clarifies that a guarantor is required to
recognize, at inception of a guarantee, a liability for the fair value of the
obligation undertaken. The initial recognition and measurement provisions of
the interpretation are applicable to guarantees issued or modified after
December 31, 2002 and have not had a material effect on the companys financial
statements.

In December 2002, the FASB issued SFAS No. 148 Accounting for Stock-Based
Compensation  Transition and Disclosure, which amends SFAS No. 123,
Accounting for Stock-Based Compensation. SFAS 148 provides alternative
methods of transition for a voluntary change to the fair value method of
accounting for stock-based compensation. In addition, SFAS No. 148 amends the
disclosure requirements of SFAS No. 123 to require prominent disclosure in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The company has adopted SFAS No. 148 effective January 1, 2003 and the
company has made the disclosure requirements under Critical Accounting Policies
of the Management discussion and analysis of financial conditions and results
of operations section of this Form 10-Q.

In April 2003, the FASB issued SFAS No. 149, Amendments of Statement 133
on Derivative Instruments and Hedging Activities, which amends and clarifies
financial accounting and reporting for derivative instruments, including
certain derivative instruments embedded in other contracts and for hedging
activities under SFAS No. 133. This statement is effective for contracts

6



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entered into or modified after June 30, 2003, with certain exceptions, and
for hedging relationships designated after June 30, 2003. The Company does not
expect adoption of SFAS No. 149 to have a material impact on its consolidated
financial statements.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity,
which establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity.
Financial instruments that are within the scope of the statement, which
previously were often classified as equity, must now be classified as
liabilities. This statement is effective for financial instruments entered into
or modified after May 31, 2003, and otherwise shall be effective at the
beginning of the first interim period beginning after June 15, 2003. The
company does not expect adoption of SFAS No. 150 to have a material impact on
its consolidated financial statements.

Note 3  Balance Sheet Items

Inventories consisted of the following (in thousands):

|                |  |          |        |              |  |   |        | 
|--------------- |  | -------- | ------ | ------------ |  | - | ------ | 
|                |  | June 30, |        | December 31,
|                |  | 2003     |        | 2002        
|                |  |          |        |             
|Raw materials   |  | $        | 8,142  |              |  | $ | 6,339  | 
|Work in process |  |          | 2,891  |              |  |   | 2,376  | 
|Finished goods  |  |          | 68,252 |              |  |   | 65,800 | 
|                |  |          |        |              |  |   |        | 
|                |  | $        | 79,285 |              |  | $ | 74,515 | 
|                |  |          |        |              |  |   |        | 

Prepaid expenses and other current assets consisted of the following (in
thousands):

|                             |  |          |        |              |  |   |        | 
|---------------------------- |  | -------- | ------ | ------------ |  | - | ------ | 
|                             |  | June 30, |        | December 31,
|                             |  | 2003     |        | 2002        
|                             |  |          |        |             
|Refundable income taxes      |  | $        | 16,461 |              |  | $ | 16,131 | 
|Deferred income taxes        |  |          | 2,679  |              |  |   | 2,679  | 
|Value added taxes receivable |  |          | 3,258  |              |  |   | 3,079  | 
|Prepaid insurance            |  |          | 1,714  |              |  |   | 1,709  | 
|Other prepaid expenses       |  |          | 2,530  |              |  |   | 2,567  | 
|Other current assets         |  |          | 1,318  |              |  |   | 2,407  | 
|                             |  |          |        |              |  |   |        | 
|                             |  | $        | 27,960 |              |  | $ | 28,572 | 
|                             |  |          |        |              |  |   |        | 

Accrued liabilities consisted of the following (in thousands):

|                                             |  |          |        |              |  |   |        | 
|-------------------------------------------- |  | -------- | ------ | ------------ |  | - | ------ | 
|                                             |  | June 30, |        | December 31,
|                                             |  | 2003     |        | 2002        
|                                             |  |          |        |             
|Accrued expenses                             |  | $        | 25,215 |              |  | $ | 19,419 | 
|Restructuring and acquisition accruals       |  |          | 16,003 |              |  |   | 17,287 | 
|Accrued cooperative merchandising allowances |  |          | 9,708  |              |  |   | 9,896  | 
|Income taxes payable                         |  |          | 10,542 |              |  |   | 9,236  | 
|                                             |  |          |        |              |  |   |        | 
|                                             |  | $        | 61,468 |              |  | $ | 55,838 | 
|                                             |  |          |        |              |  |   |        | 

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Other liabilities consisted of the following (in thousands):

|                             |  |          |       |              |  |   |     | 
|---------------------------- |  | -------- | ----- | ------------ |  | - | --- | 
|                             |  | June 30, |       | December 31,
|                             |  | 2003     |       | 2002        
|                             |  |          |       |             
|Restructuring accruals       |  | $        | 1,010 |              |  | $ |    | 
|Other miscellaneous accruals |  |          | 998   |              |  |   | 942 | 
|                             |  |          |       |              |  |   |     | 
|                             |  | $        | 2,008 |              |  | $ | 942 | 
|                             |  |          |       |              |  |   |     | 

Note 4  Comprehensive Income

Comprehensive income consisted of (in thousands):

|                                        |  |                             |       |                           |  |      |       |      |  |   |        |  |  |   |        |  
|--------------------------------------- |  | --------------------------- | ----- | ------------------------- |  | ---- | ----- | ---- |  | - | ------ |  |  | - | ------ | -
|                                        |  | Three months ended June 30, |       | Six months ended June 30,
|                                        |  |                             |       |                          
|                                        |  | 2003                        |       | 2002                      |  | 2003 |       | 2002
|                                        |  |                             |       |                           |  |      |       |     
|Net Income                              |  | $                           | 4,205 |                           |  | $    | 9,076 |      |  | $ | 10,123 |  |  | $ | 19,169 |  
|Foreign Currency
Translation Adjustment |  |                             | 5,307 |                           |  |      | 905   |      |  |   | 5,421  |  |  |   | (688   | )
|                                        |  |                             |       |                           |  |      |       |      |  |   |        |  |  |   |        |  
|Comprehensive Income                    |  | $                           | 9,512 |                           |  | $    | 9,981 |      |  | $ | 15,544 |  |  | $ | 18,481 |  
|                                        |  |                             |       |                           |  |      |       |      |  |   |        |  |  |   |        |  

Note 5  Goodwill and Other Intangible Assets

Goodwill and other intangible assets (gross) consisted of the following
(in thousands):

|                                              |  |          |        |              |  |   |        | 
|--------------------------------------------- |  | -------- | ------ | ------------ |  | - | ------ | 
|                                              |  | June 30, |        | December 31,
|                                              |  | 2003     |        | 2002        
|                                              |  |          |        |             
|Goodwill                                      |  | $        | 41,840 |              |  | $ | 39,814 | 
|Intangible assets subject to amortization     |  |          | 22,505 |              |  |   | 22,150 | 
|Intangible assets not subject to amortization |  |          | 3,630  |              |  |   | 3,630  | 
|                                              |  |          |        |              |  |   |        | 
|                                              |  | $        | 67,975 |              |  | $ | 65,594 | 
|                                              |  |          |        |              |  |   |        | 

Accumulated amortization consisted of the following (in thousands):

|                                              |  |          |        |              |  |   |       | 
|--------------------------------------------- |  | -------- | ------ | ------------ |  | - | ----- | 
|                                              |  | June 30, |        | December 31,
|                                              |  | 2003     |        | 2002        
|                                              |  |          |        |             
|Goodwill                                      |  | $        | 2,104  |              |  | $ | 2,067 | 
|Intangible assets subject to amortization     |  |          | 8,443  |              |  |   | 7,237 | 
|Intangible assets not subject to amortization |  |          | 475    |              |  |   | 475   | 
|                                              |  |          |        |              |  |   |       | 
|                                              |  | $        | 11,022 |              |  | $ | 9,779 | 
|                                              |  |          |        |              |  |   |       | 

Goodwill and other intangible assets, net of accumulated amortization,
consisted of the following (in thousands):

|                                              |  |          |        |              |  |   |        | 
|--------------------------------------------- |  | -------- | ------ | ------------ |  | - | ------ | 
|                                              |  | June 30, |        | December 31,
|                                              |  | 2003     |        | 2002        
|                                              |  |          |        |             
|Goodwill                                      |  | $        | 39,736 |              |  | $ | 37,747 | 
|Intangible assets subject to amortization     |  |          | 14,062 |              |  |   | 14,913 | 
|Intangible assets not subject to amortization |  |          | 3,155  |              |  |   | 3,155  | 
|                                              |  |          |        |              |  |   |        | 
|                                              |  | $        | 56,953 |              |  | $ | 55,815 | 
|                                              |  |          |        |              |  |   |        | 

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The total weighted average amortization period of intangible assets subject to
amortization is approximately 11 years.

Intangible assets subject to amortization consist primarily of marketing
rights, patents, customer lists, core technology and trade names. Amortization
expense for intangible assets subject to amortization amounted to approximately
$0.5 million and $1.0 million for the three and six months ended June 30, 2003,
respectively and approximately $0.3 million and $0.5 million for the three and
six months ended June 30, 2002, respectively.

Amortization expense for each of the five succeeding fiscal years will
amount to approximately (in thousands):

|                         |  |              |       | 
|------------------------ |  | ------------ | ----- | 
|                         |  | Amortization
|Year ending December 31, |  | expense     
|                         |  |             
|2003                     |  | $            | 2,100 | 
|2004                     |  |              | 2,100 | 
|2005                     |  |              | 2,000 | 
|2006                     |  |              | 2,000 | 
|2007                     |  |              | 1,500 | 
|                         |  |              |       | 
|Total                    |  | $            | 9,700 | 
|                         |  |              |       | 

Note 6  Net Income Per Share

In accordance with SFAS No. 128, Earnings Per Share, basic earnings per
share is calculated using the weighted average number of common shares
outstanding during the period. Diluted earnings per share is calculated using
the weighted average number of common shares and dilutive potential common
shares outstanding during the period. Dilutive potential common shares
represent shares issuable upon the exercise of outstanding options and are
calculated using the treasury stock method.

Options to purchase 2,631,391 and 2,863,431 shares of the companys common
stock were not included in the computation of diluted earnings per share
because their exercise prices were greater than the average market price of the
companys common stock of $17.22 and $15.47 per share for the three and
six-months ended June 30, 2003 respectively. Options to purchase 126,300 and
212,700 shares of the companys common stock for the three and six months ended
June 30, 2002, respectively, were not included in the computation of diluted
earnings per share because their exercise prices were greater than the average
market price of our common stock of $27.55 and $26.85 per share, respectively.

Note 7  Acquisitions

Acquisition of the Contact Lens Business of Essilor

On February 12, 2001, the company acquired the contact lens business of
Essilor International (Compagnie Generale dOptique) S. A. (Essilor). The
company acquired Essilors sales and distribution assets of the contact lens
business in Europe and the United States and manufacturing facilities in
France, the United Kingdom and the United States. The primary reasons for this
acquisition were to expand the companys presence in Europe and to increase its
breadth of product offerings.

Included in the liabilities assumed are accruals for costs associated with
exiting certain activities and facilities of the acquired Essilor operations
that were considered duplicative. This includes accruals for severance costs
related to workforce reductions across all functions and exit costs associated
with exiting certain facilities, dismantling equipment and other miscellaneous
exit costs. Details of the exit costs and severance costs paid and charged
against the accrual are presented in the following table (in thousands):

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|                                |  |               |       |          |  |             |        |             |  |             |      |          |  |   |     |               |  |   |       | 
|------------------------------- |  | ------------- | ----- | -------- |  | ----------- | ------ | ----------- |  | ----------- | ---- | -------- |  | - | --- | ------------- |  | - | ----- | 
|                                |  | Accrual as of |       |          |  |             |        |             |  |             |      |          |  |   |     | Accrual as of
|                                |  | December 31,  |       |          |  |             |        | Adjustment  |  | Translation |      | June 30,
|                                |  | 2002          |       | Payments |  | to Goodwill |        | Adjustments |  | 2003       
|                                |  |               |       |          |  |             |        |             |  |            
|Severance costs                 |  | $             | 4,555 |          |  | $           | (892   | )           |  | $           | (254 | )        |  | $ | 331 |               |  | $ | 3,740 | 
|Facility costs                  |  |               | 783   |          |  |             | (129   | )           |  |             |     |          |  |   | 63  |               |  |   | 717   | 
|Equipment and
dismantling costs |  |               | 278   |          |  |             |       |             |  |             |     |          |  |   | 27  |               |  |   | 305   | 
|Miscellaneous costs             |  |               | 102   |          |  |             | (82    | )           |  |             |     |          |  |   | 2   |               |  |   | 22    | 
|                                |  |               |       |          |  |             |        |             |  |             |      |          |  |   |     |               |  |   |       | 
|Total                           |  | $             | 5,718 |          |  | $           | (1,103 | )           |  | $           | (254 | )        |  | $ | 423 |               |  | $ | 4,784 | 
|                                |  |               |       |          |  |             |        |             |  |             |      |          |  |   |     |               |  |   |       | 

Acquisition of Assets of Seiko Contactlens, Inc.

On March 11, 2002, the company entered into an agreement to acquire
certain assets of Seiko Contactlens, Inc. (Seiko). The purchase was completed
on April 1, 2002. The primary reasons for this acquisition were to strengthen
the companys presence and enhance its competitive positioning in Japan.

Included in the liabilities assumed are accruals for costs associated with
exiting certain activities and facilities of the acquired Seiko operations that
were considered duplicative. This includes accruals for severance costs related
to workforce reductions across all functions and exit costs associated with
exiting certain activities and facilities. Details of the severance and exit
costs paid and charged against the accrual are presented in the following table
(in thousands):

|                              |  |                   |       |          |  |             |      |             |  |               |     |               |  |   |    |  |  |   |       | 
|----------------------------- |  | ----------------- | ----- | -------- |  | ----------- | ---- | ----------- |  | ------------- | --- | ------------- |  | - | -- |  |  | - | ----- | 
|                              |  | Accrual as of     |       |          |  |             |      | Translation |  | Accrual       |     | Accrual as of
|                              |  | December 31, 2002 |       | Payments |  | Adjustments |      | Adjustment  |  | June 30, 2003
|                              |  |                   |       |          |  |             |      |             |  |              
|Severance costs               |  | $                 | 46    |          |  | $           | (88  | )           |  | $             |    |               |  | $ | 51 |  |  | $ | 9     | 
|Facility and other
exit costs |  |                   | 1,906 |          |  |             | (119 | )           |  |               | (13 | )             |  |   | 18 |  |  |   | 1,792 | 
|                              |  |                   |       |          |  |             |      |             |  |               |     |               |  |   |    |  |  |   |       | 
|Total                         |  | $                 | 1,952 |          |  | $           | (207 | )           |  | $             | (13 | )             |  | $ | 69 |  |  | $ | 1,801 | 
|                              |  |                   |       |          |  |             |      |             |  |               |     |               |  |   |    |  |  |   |       | 

Management began formulating the plans to exit certain activities and
facilities of the acquired Seiko operations at the time of the acquisition and
expects to complete all actions under such plans by December 31, 2003.

Note 8  Restructuring and related expenses

During the fourth quarter of 2002, the company accelerated the
implementation of its second-generation manufacturing process throughout its
high volume product lines. Given the lower labor and space requirements of
these processes, the company will consolidate its manufacturing operations into
a smaller total plant structure. The initiative will allow the company to meet
volume production goals in substantially less space with lower manufacturing
overhead. The company believes that this initiative will result in an annual
cost savings of $40 million by 2005. The company expects the initiative to be
completed by 2004 and cost a total of approximately $50 million, $25 million of
which is non-cash.

As a result of this initiative, the company recorded a restructuring
charge of approximately $34.5 million in the fourth quarter of 2002. Of the
$34.5 million, approximately $24.7 million related to impairment of property
and equipment, $4.7 million related to employee severance and benefit costs,
$4.4 million related to leased facilities that will be abandoned within one
year and the remaining $0.7 million relates to miscellaneous costs, such as
professional fees related to the initiative.

The company recorded additional charges of approximately $3.8 million and
$5.0 million during the three and six-months ended June 30, 2003, respectively.
Of the $3.8 million charged during the three months ended June 30, 2003,
approximately $2.8 million related to severance and other salary related and
benefit costs, and $1.0 million related to other miscellaneous costs. Of the
$5.0 million charged

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during the six months ended June 30, 2003, approximately $3.7 million related
to severance and other salary related and benefit costs, and $1.3 million
related to other miscellaneous costs.

Of the $39.5 million of restructuring charges incurred since the inception
of the restructuring initiative, $4.6 million of cash has been spent.

For leased facilities that will be abandoned and subleased, the lease
costs represent future lease payments subsequent to abandonment less estimated
sublease income. For owned property and equipment, the impairment loss
recognized was based on the estimated fair value of the equipment.

The following table summarizes the restructuring and related expense
accrual activity from the initiation of the companys activities (in
thousands):

|                                        |  |               |        |            |  |       |       |       |  |   |      |   |  |   |        |  
|--------------------------------------- |  | ------------- | ------ | ---------- |  | ----- | ----- | ----- |  | - | ---- | - |  | - | ------ | -
|                                        |  |               |        |            |  | Lease |       |       |  |   |      |   |  |  
|                                        |  | Severance and |        | Payment of |  |       |       |       |  |   |      |  
|                                        |  | Benefits      |        | Facilities |  | Other |       | Total
|                                        |  |               |        |            |  |       |       |      
|Balance of accrual at December 31, 2002 |  | $             | 4,720  |            |  | $     | 4,397 |       |  | $ | 500  |   |  | $ | 9,617  |  
|Additions                               |  |               | 2,974  |            |  |       |      |       |  |   |     |   |  |   | 2,974  |  
|Payments                                |  |               | (2,063 | )          |  |       | (68   | )     |  |   | (276 | ) |  |   | (2,407 | )
|Translation Adjustment                  |  |               | 129    |            |  |       | 111   |       |  |   | 4    |   |  |   | 244    |  
|                                        |  |               |        |            |  |       |       |       |  |   |      |   |  |   |       
|Balance of accrual at June 30, 2003     |  | $             | 5,760  |            |  | $     | 4,440 |       |  | $ | 228  |   |  | $ | 10,428 |  
|                                        |  |               |        |            |  |       |       |       |  |   |      |   |  |   |       

Note 9  Credit Facility

On April 16, 2002, the company completed a new $50 million credit facility
with two banks. Revolving loans under this facility mature on April 16, 2005,
and bear interest at 0.50% below one of the banks prime rate or 1.00% to 1.50%
above the eurodollar rate depending on its ratio of total funded debt to
earnings before interest and taxes plus non-cash charges. The facility provides
an option to convert any outstanding revolving loans not to exceed $40 million
at the maturity date to a four-year term loan. The term loan, once repaid, may
not be reborrowed. This credit agreement contains covenants, which, among other
things, require the company to maintain certain financial ratios. As of June
30, 2003, there was $18.5 million of revolving loans outstanding under this
credit agreement and the interest rate was 2.23%. This revolving loan is
included in long-term liabilities in the accompanying balance sheet as of June
30, 2003 based on the companys ability and intent to defer payment beyond June
30, 2004. Borrowings under this agreement are secured by a pledge of 100% of
the outstanding common stock of Ocular Sciences Puerto Rico and Sunsoft, Inc.
and 65% of the outstanding common stock of its Barbados and Canadian
subsidiaries. As of June 30, 2003, the company was in compliance with its
covenants.




ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the unaudited
condensed consolidated financial statements and notes thereto included in Part
I  Item 1 of this Quarterly Report and the audited consolidated financial
statements and notes thereto and Managements Discussion and Analysis of
Financial Condition and Results of Operations contained in our Annual Report on
Form 10-K for the year ended December 31, 2002.

This Quarterly Report on Form 10-Q contains forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and Section 27A of the Securities Act of 1933, as amended. Such
statements relate to our future performance and plans, results of operations,
capital expenditures, acquisitions and operating improvements and costs. You
can identify forward-looking statements by the use of forward-looking
terminology such as believes, expects, may, will, should, seeks,
approximately, intends, plans, pro forma, estimates or anticipates
or the negative of these words and phrases or similar words or phrases. You can
also identify forward-looking statements by discussions of strategy, plans or
intentions. Forward-looking statements involve numerous risks and uncertainties
and you should not rely upon them as predictions of future events. There is no
assurance that the events or circumstances reflected in forward-looking
statements will be achieved or will occur.

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Forward-looking statements are necessarily dependent on assumptions, data,
or methods that may be incorrect or imprecise and we may not be able to realize
them. Factors that could cause actual results and future events to differ
materially from those set forth or contemplated in the forward-looking
statements include risks associated with the overall economic environment, the
integration of the Essilor and Seiko Contactlens businesses, the impact of
competitive products and pricing, product demand both domestically and
overseas, market receptiveness to various product launches, higher than
expected employee turnover, extended manufacturing difficulties, customer bad
debts, currency fluctuations, other risks of doing business internationally and
the other risks detailed in the sections entitled Item 1, Business  Risk
Factors, and Item 7, Managements Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in our Annual Report on Form
10-K for the year ended December 31, 2002, and from time to time our other
reports filed with the Securities and Exchange Commission. We caution you not
to place undue reliance on forward-looking statements, which reflect our
analysis only and speak as of the date of this report or as of the dates
indicated in the statements. Unless the context otherwise requires, the terms
we, us, and our refer to Ocular Sciences, Inc. and its subsidiaries.

Acquisition

On April 1, 2002, we acquired certain assets of Seiko Contactlens, Inc.
(Seiko). The purchase price was $21.6 million. Seiko had been our distributor
in Japan. We have accounted for the acquisition under the purchase method.
Accordingly, the operating results of Seiko have been included in our operating
results from April 1, 2002. The $21.6 million purchase price was comprised of
an exchange of accounts receivable of $11.2 million, cash of $8.8 million and
acquisition costs of $1.6 million. There were no contingent payments,
pre-acquisition contingencies or other commitments specified in the acquisition
agreement.

Critical Accounting Policies

Our critical accounting policies are as follows:



| |  |  | revenue recognition;                                       
| | - |  | -----------------------------------------------------------
|
| |  |  | estimating valuation allowances;                           
|
| |  |  | accounting for income taxes;                               
|
| |  |  | valuation of long-lived and intangible assets and goodwill;
|
| |  |  | estimates inherent in purchase accounting; and             
|
| |  |  | stock-based compensation                                   

Revenue Recognition

Revenue is recognized based on the terms of sale with the customer,
generally upon product shipment. We have established programs that, under
specified conditions, enable our customers to return product. We establish
reserves for estimated returns and allowances at the time revenues are
recognized. In addition, accruals for customer discounts and rebates are
recorded when revenues are recognized. Amounts billed to customers in sale
transactions related to shipping and handling are classified as revenue.

Estimating Valuation Allowances

The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.

We specifically analyze the aging of accounts receivable and historical
bad debts, customer concentrations, customer credit-worthiness, current
economic trends and changes in customer payment terms and sales returns when
evaluating the adequacy of the allowance for doubtful accounts and sales
returns in any accounting period. We sell our products to a diverse group of
optometrists, optical retailers, optical product distributors and
ophthalmologists, and therefore the concentration of credit risk with respect
to accounts

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receivable is limited due to the large number and diversity of customers across
broad geographic areas. Accounts receivable from customers are
uncollateralized. To reduce credit risk, we perform ongoing credit evaluations
of significant customers respective financial conditions. We establish an
allowance for doubtful accounts based upon factors surrounding the credit risk
of specific customers, historical trends and other information.

We assess the need for reserves on inventory generally based on monthly
forward projections of sales of products that are updated periodically.
Inventories are recorded at the lower of cost (first-in, first-out method) or
market. Cost includes material, labor and applicable factory overhead. The
reported value of our inventory includes saleable products, promotional
products, raw materials and componentry that will be sold or used in future
periods. Provision for potentially obsolete or slow moving inventory is made
based upon our analysis of inventory levels and forecasted sales. Once
inventory is reserved, the reserve can only be relieved by the subsequent sale
or disposal of the inventory.

Material differences may result in the amount and timing of revenue and/or
expenses for any period if different judgments had been made or different
estimates utilized.

Accounting for Income Taxes

Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax effects
attributable to differences between financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.

In preparing our consolidated financial statements, we are required to
estimate our income taxes in each of the jurisdictions in which we operate.
This process involves estimating actual current tax liability together with
assessing temporary differences resulting from differing treatment of items for
tax and accounting purposes. These differences result in deferred tax assets
and liabilities, which are included within the consolidated balance sheet.
Significant management judgment is required in determining the provision for
income taxes and deferred tax assets and liabilities. In the event that actual
results differ from these estimates or we adjust these estimates in future
periods, our financial position and results of operations could be materially
impacted.

Valuation of Long-Lived and Intangible Assets and Goodwill

We periodically review long-lived assets and certain identifiable
intangible assets for impairment in accordance with Statement of Financial
Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal
of Long-lived Assets. Goodwill and certain intangible assets, which are not
subject to amortization, are periodically reviewed for impairment in accordance
with SFAS No. 142, Goodwill and Other Intangible Assets.

For assets to be held and used, including acquired intangibles, we
initiate our review whenever events or changes in circumstances indicate that
the carrying amount of goodwill and intangible assets may not be recoverable.
Recoverability of an asset is measured by comparison of its carrying amount to
the expected future undiscounted cash flows (without interest charges) that the
asset is expected to generate. Any impairment to be recognized is measured by
the amount by which the carrying amount of the asset exceeds its fair market
value. Significant management judgment is required in this process.

In January 2002, SFAS No. 142 became effective and as a result, we have
ceased to amortize goodwill and assembled workforce beginning January 1, 2002.
As of June 30, 2003, unamortized goodwill and assembled workforce was
approximately $43 million. In lieu of amortization, we were required to perform
an initial impairment review of goodwill in 2002 and an annual impairment
review thereafter. We completed the first step of SFAS No. 142 transitional
goodwill impairment test and determined that as of January 1, 2002 our goodwill
had not been impaired. During the fourth quarter of 2002, we performed our
annual impairment test and concluded that there is no impairment of our
goodwill. In the future, we will perform the annual impairment test required by
SFAS No. 142 in the fourth quarter of each year. We cannot assure you that a
material impairment charge will not be recorded in the future.

13



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##### Table of Contents



Estimates Inherent in Purchase Accounting

Purchase accounting requires extensive use of accounting estimates and
judgments to allocate the purchase price to the fair value of the assets
purchased and liabilities assumed. In our recording of the acquisitions of the
assets of Essilor and Seiko Contactlens, values were assigned to identifiable
intangible assets based on managements forecasts and projections that include
assumptions related to future revenues and cash flows generated from the
acquired assets.

Stock-Based Compensation

We account for stock-based compensation using methods prescribed in
Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock
Issued to Employees, and related Interpretations. We have adopted the
disclosure-only provisions of SFAS No. 123 Accounting for Stock-Based
Compensation.

In accordance with SFAS No. 123, as amended by SFAS No. 148, Accounting
for Stock-Based Compensation-Transition and Disclosure, we have provided,
below, the pro forma disclosures of the effect on net income and earnings per
share as if SFAS No. 123 had been applied in measuring compensation expense for
all periods presented.

The following table illustrates, pursuant to SFAS No. 123, as amended by
SFAS No. 148, the effect on net income and related net income per share for the
three and six months ended June 30, 2003 and 2002, had compensation cost for
stock-based compensation plans been determined based upon the fair value method
prescribed under SFAS No. 123:

|                                                                                                                                    |             |   |                    |       |                  |   |       |       |      |   |        |       |  |   |        |        | 
|----------------------------------------------------------------------------------------------------------------------------------- | ----------- | - | ------------------ | ----- | ---------------- | - | ----- | ----- | ---- | - | ------ | ----- |  | - | ------ | ------ | 
|                                                                                                                                    |             |   | Three Months ended |       | Six Months ended
|                                                                                                                                    |             |   | June 30,           |       | June 30,        
|                                                                                                                                    |             |   |                    |       |                 
|                                                                                                                                    |             |   | 2003               |       | 2002             |   | 2003  |       | 2002
|                                                                                                                                    |             |   |                    |       |                  |   |       |       |     
|Net Income:                                                                                                                         |             |   |                    |       |                  |   |       |       |      |   |        |       |  |   |        |       
|As reported                                                                                                                         |             | $ | 4,205              |       |                  | $ | 9,076 |       |      | $ | 10,123 |       |  | $ | 19,169 |       
|Total stock-based employee
compensation expense determined under
fair value based method for all
awards, net of related tax effects |             |   | 699                |       |                  |   | 611   |       |      |   | 1,372  |       |  |   | 2,109  |       
|                                                                                                                                    |             |   |                    |       |                  |   |       |       |      |   |        |       |  |   |        |       
|                                                                                                                                    | Pro forma   |   | $                  | 3,506 |                  |   | $     | 8,465 |      |   | $      | 8,751 |  |   | $      | 17,060 | 
|                                                                                                                                    |             |   |                    |       |                  |   |       |       |      |   |        |       |  |   |        |       
|Net Income per common share (basic):                                                                                                |             |   |                    |       |                  |   |       |       |      |   |        |       |  |   |        |       
|                                                                                                                                    | As reported |   | $                  | 0.18  |                  |   | $     | 0.38  |      |   | $      | 0.43  |  |   | $      | 0.81   | 
|                                                                                                                                    | Pro forma   |   |                    | 0.15  |                  |   |       | 0.36  |      |   |        | 0.37  |  |   |        | 0.72   | 
|Net Income per common share (diluted):                                                                                              |             |   |                    |       |                  |   |       |       |      |   |        |       |  |   |        |       
|                                                                                                                                    | As reported |   | $                  | 0.17  |                  |   | $     | 0.37  |      |   | $      | 0.42  |  |   | $      | 0.78   | 
|                                                                                                                                    | Pro forma   |   |                    | 0.15  |                  |   |       | 0.34  |      |   |        | 0.36  |  |   |        | 0.70   | 

New Accounting Pronouncements Adopted

See Note 2 to Notes to Condensed Consolidated Financial Statements which
are incorporated herein by reference.

Results of Operations

The following table summarizes certain items on the consolidated
statements of income as a percentage of sales:

14



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##### Table of Contents



|                                   |                            |  |                    |      |                  |  |       |      |      |  |       |      |   |  |       |      |  
|---------------------------------- | -------------------------- |  | ------------------ | ---- | ---------------- |  | ----- | ---- | ---- |  | ----- | ---- | - |  | ----- | ---- | -
|                                   |                            |  | Three months ended |      | Six months ended
|                                   |                            |  | June 30,           |      | June 30,        
|                                   |                            |  |                    |      |                 
|                                   |                            |  | 2003               |      | 2002             |  | 2003  |      | 2002
|                                   |                            |  |                    |      |                  |  |       |      |     
|Net sales                          |                            |  | 100.0              | %    |                  |  | 100.0 | %    |      |  | 100.0 | %    |   |  | 100.0 | %   
|Cost of sales                      |                            |  | 47.7               | %    |                  |  | 44.4  | %    |      |  | 47.3  | %    |   |  | 44.6  | %   
|                                   |                            |  |                    |      |                  |  |       |      |      |  |       |      |   |  |       |     
|                                   | Gross profit               |  |                    | 52.3 | %                |  |       | 55.6 | %    |  |       | 52.7 | % |  |       | 55.4 | %
|Selling and marketing expense      |                            |  | 27.7               | %    |                  |  | 28.2  | %    |      |  | 28.3  | %    |   |  | 25.4  | %   
|General and administrative expense |                            |  | 9.8                | %    |                  |  | 9.6   | %    |      |  | 9.8   | %    |   |  | 10.2  | %   
|Research and development expense   |                            |  | 1.9                | %    |                  |  | 2.0   | %    |      |  | 2.1   | %    |   |  | 1.9   | %   
|Restructuring and related expenses |                            |  | 5.0                | %    |                  |  | 0.0   | %    |      |  | 3.4   | %    |   |  | 0.0   | %   
|                                   |                            |  |                    |      |                  |  |       |      |      |  |       |      |   |  |       |     
|                                   | Income from operations     |  |                    | 7.9  | %                |  |       | 15.7 | %    |  |       | 9.1  | % |  |       | 17.9 | %
|Interest and other income, net     |                            |  | 0.7                | %    |                  |  | 1.1   | %    |      |  | 0.4   | %    |   |  | 0.6   | %   
|                                   |                            |  |                    |      |                  |  |       |      |      |  |       |      |   |  |       |     
|                                   | Income before income taxes |  |                    | 8.6  | %                |  |       | 16.9 | %    |  |       | 9.4  | % |  |       | 18.5 | %
|Income taxes                       |                            |  | -3.0               | %    |                  |  | -3.0  | %    |      |  | -2.6  | %    |   |  | -3.3  | %   
|                                   |                            |  |                    |      |                  |  |       |      |      |  |       |      |   |  |       |     
|                                   | Net Income                 |  |                    | 5.5  | %                |  |       | 13.8 | %    |  |       | 6.9  | % |  |       | 15.2 | %
|                                   |                            |  |                    |      |                  |  |       |      |      |  |       |      |   |  |       |     

Net Sales

Net sales were $76.1 million and $146.8 million for the three and six
months ended June 30, 2003 compared to $65.7 million and $126.5 million for the
corresponding periods in 2002. This represents increases of 15.9% and 16.1%,
respectively for the three and six months ended June 30, 2003 from the
corresponding periods of 2002. The increases were primarily due to our
continued growth in the international markets.

U.S. sales were $33.5 million and $65.7 million for the three and six
months ended June 30, 2003 compared to $32.3 million and $65.5 million for the
corresponding periods in 2002. This represents increases of 3.7% and 0.3%,
respectively for the three and six months ended June 30, 2003 from the
corresponding periods of 2002. The net increases were primarily due to the
continued growth of our disposable Torics sales in the U.S. market offset by
declines in certain other product lines.

International sales were $42.6 million and $81.1 million for the three and
six months ended June 30, 2003 compared to $33.4 million and $61.0 million for
the corresponding periods in 2002. This represents increases of 27.7% and
33.0%, respectively for the three and six months ended June 30, 2003 from the
corresponding periods of 2002. Excluding the effects of favorable foreign currency
exchange, our international growth was 13.3% and
17.7% for the three and six months ended June 30, 2003 over the corresponding
periods of 2002. The increase for the three months ended June 30, 2003 was
primarily due to the strong growth in the European and Japanese
markets. In addition, the
increase during the six months ended June 30, 2003 compared to the
corresponding period of 2002, was partly due to the Seiko acquisition in
April 2002.

Gross Profit

Gross margins were $39.8 million and $77.3 million for the three and six
months ended June 30, 2003 compared to $36.5 million and $70.0 million for the
corresponding periods in 2002. Gross margins, as a percentage of net sales,
were 52.3% and 52.7% for the three and six months ended June 30, 2003 compared
to 55.6% and 55.4% for the corresponding periods in 2002. The decreases in
gross margins, as a percentage of sales, for the three and six months ended
June 30, 2003 reflect the strength of our international sales, which typically
generate lower gross margins than domestic sales. Our margins during the three
months ended June 30, 2003 were further affected by the adverse effect of
charges associated with excess inventories that impacted gross margins by 170
basis points or $1.3 million.

Selling and Marketing Expenses

Selling and marketing expenses were $21.1 million and $41.5 million for
the three and six months ended June 30, 2003 compared to $18.5 million and
$32.1 million for the corresponding periods in 2002. This represents increases
of 13.8% and 29.2%, respectively for the three and six months ended June 30,
2003 from the corresponding periods of 2002. As a percentage of net sales,
selling and marketing expenses were 27.7% and 28.3% for the three and six
months ended June 30, 2003 compared to 28.2% and 25.4% for the corresponding
periods in 2002. The increase in absolute dollars, for the three months ended
June 30, 2003 was primarily due to increased distribution costs as a result of
higher sales and increases in expenditures related to new product launches and
promotional programs, primarily in the U.S. The increase in absolute dollars,
for the six months ended June 30, 2003 was also due to the additional

15



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##### Table of Contents



sales expense in Japan as a result of the Seiko acquisition. As a
percentage of sales, selling and marketing expenses for the six months ended
June 30, 2003 increased compared to same period in 2002 primarily due to new
product launches and promotional programs.

General and Administrative Expenses

General and Administrative expenses were $7.5 million and $14.4 million
for the three and six months ended June 30, 2003 compared to $6.3 million and
$12.9 million for the corresponding periods in 2002. This represents increases
of 18.4% and 11.0%, respectively for the three and six months ended June 30,
2003 from the corresponding periods of 2002. As a percentage of net sales,
general and administrative expenses were 9.8% for each of the three and six
months ended June 30, 2003 compared to 9.6% and 10.2% for the corresponding
periods in 2002.

Research and Development Expenses

Research and development expenses were $1.4 million and $3.1 million for
the three and six months ended June 30, 2003 compared to $1.3 million and $2.4
million for the corresponding periods in 2002. This represents increases of
6.4% and 33.2%, respectively for the three and six months ended June 30, 2003
from the corresponding periods of 2002. As a percentage of net sales, research
and development expenses were 1.9% and 2.1% for the three and six months ended
June 30, 2003 compared to 2.0% and 1.9% for the corresponding periods in 2002.

Restructuring and Related Expenses

During the fourth quarter of 2002, we accelerated the implementation of
our second-generation manufacturing process throughout our high volume product
lines. Given the lower labor and space requirements of these processes, we will
consolidate our manufacturing operations into a smaller total plant structure.
The initiative will allow us to meet volume production goals in substantially
less space with lower manufacturing overhead. We believe that this initiative
will result in an annual cost savings of $40.0 million by 2005. We expect the
initiative to be completed by 2004 and cost a total of approximately $50.0
million, $24.7 million of which is non-cash.

As a result of this initiative, we recorded a restructuring charge of
approximately $34.5 million in the fourth quarter of 2002. Of the $34.5
million, approximately $24.7 million related to impairment of property and
equipment, $4.7 million related to employee severance and benefit costs, $4.4
million related to leased facilities that will be abandoned within one year and
the remaining $0.7 million relates to miscellaneous costs, such as professional
fees related to the initiative.

We recorded additional charges of approximately $3.8 million and $5.0
million during the three and six-months ended June 30, 2003. Of the $3.8
million charged during the three month period ended June 30, 2003,
approximately $2.8 million related to severance and other salary related and
benefit costs, and $1.0 million related to other miscellaneous costs. Of the
$5.0 million charged during the six month period ended June 30, 2003,
approximately $3.7 million related to severance and other salary related and
benefit costs, and $1.3 million related to other miscellaneous costs.

Of the $39.5 million of restructuring charges incurred since the inception
of the restructuring initiative, $4.6 million of cash has been spent.

For leased facilities that will be abandoned and subleased, the lease
costs represent future lease payments subsequent to abandonment less estimated
sublease income. For owned property and equipment, the impairment loss
recognized was based on the estimated fair value of the equipment.

Other Income

Other
income primarily consists primarily of net foreign exchange gains and losses.

Provision for Income Taxes

Income taxes were $2.3 million and $3.7 million for the three and six
months ended June 30, 2003 compared to $2.0 million and $4.2 million for the
corresponding periods in 2002. Our effective tax rates were 35.5% and 27.0% for
the three and six-months ended

16



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##### Table of Contents



June 30, 2003 compared to 18.0% for the corresponding periods in 2002,
respectively. The effective rate in 2003 is higher than 2002 as a result of
incurring restructuring and other charges in lower tax jurisdictions. Without
such charges, our tax rate would have been 19.5% in 2003.

Liquidity and Capital Resources

Our capital requirements have generally been funded from operations, cash
and investments on hand, and debt borrowings. Our cash and cash equivalents,
are invested in a diversified portfolio of financial instruments, including
money market instruments and government or government agency securities and
other debt securities issued by financial institutions and other issuers with
strong credit ratings. By policy, the amount of credit exposure to any one
institution is limited. Investments are generally not collateralized and
primarily mature within three years.

Sources and Uses of Cash

Cash and cash equivalents at June 30, 2003 of $17.9 million increased $6.5
million from a December 31, 2002 balance of $11.4 million. Working capital
increased to $106.4 million in June 30, 2003 from $104.7 million in December
31, 2002.

The increase in cash and cash equivalents in the first six months of 2003
was primarily due to cash flow from operations of $28.0 million primarily net
income adjusted for non-cash depreciation and amortization ($22.9 million). We
used $9.3 million on financing activities, mostly to pay down our short-term
and long-term borrowings. Approximately $13.5 million of cash was spent on
capital expenditures.

The following table summarizes our contractual cash obligations as of June
30, 2003 (in thousands):

|                         |            |       |        |           |        |           |        |       |       | 
|------------------------ | ---------- | ----- | ------ | --------- | ------ | --------- | ------ | ----- | ----- | 
|                         |            |       |        | Long-term |        | Operating
|                         |            |       |        | Debt      |        | Leases   
|                         |            |       |        |           |        |          
|Year Ending December 31, |            |       |        |           |        |           |        |      
|                         |            | 2003* |        | $         | 266    |           |        | $     | 3,398 | 
|                         |            | 2004  |        |           | 413    |           |        |       | 6,241 | 
|                         |            | 2005  |        |           | 18,846 |           |        |       | 5,465 | 
|                         |            | 2006  |        |           | 360    |           |        |       | 3,469 | 
|                         |            | 2007  |        |           | 375    |           |        |       | 3,360 | 
|                         | Thereafter |       |        | 1,209     |        |           |        | 8,323 |      
|                         |            |       |        |           |        |           |        |       |       | 
|                         |            | $     | 21,469 |           |        | $         | 30,256 |      
|                         |            |       |        |           |        |           |        |      

*Represents commitments for the remaining six months of 2003

On April 16, 2002, we completed a new $50 million credit facility with two
banks. Revolving loans under this facility mature on April 16, 2005, and bear
interest at 0.50% below one of the banks prime rate or 1.00% to 1.50% above
the eurodollar rate depending on our ratio of total funded debt to earnings
before interest and taxes plus non-cash charges. The facility provides an
option to convert any outstanding revolving loans not to exceed $40 million at
the maturity date to a four-year term loan. The term loan, once repaid, may not
be reborrowed. This credit agreement contains covenants, which, among other
things, require us to maintain certain financial ratios. As of June 30, 2003,
there was $18.5 million of revolving loans outstanding under this credit
agreement and the interest rate was 2.23%. This revolving loan is included in
long-term liabilities in the accompanying balance sheet as of June 30, 2003
based on our ability and intent to defer payment beyond June 30, 2004.
Borrowings under this agreement are secured by a pledge of 100% of the
outstanding common stock of Ocular Sciences Puerto Rico and Sunsoft, Inc. and
65% of the outstanding common stock of our Barbados and Canadian subsidiaries.
As of June 30, 2003, we were in compliance with our covenants.




Item 3. Quantitative And Qualitative Disclosures About Market Risk

17



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##### Table of Contents



We have debt outstanding, which is carried at cost, with an interest rate
referenced to market rates. Interest rate changes generally do not affect the
fair value of variable rate debt instruments, but do impact future earnings and
cash flows. As of June 30, 2003, we had $18.5 million in revolving loans
outstanding under our credit agreement. See terms of loan agreement in
Liquidity and Capital Resource section in Item 2. Holding debt levels
constant, a one-percentage point increase in interest rates would decrease
income before income taxes and cash flows for variable rate debt by
approximately $185,000 in the year ended December 31, 2003.

We operate multiple foreign subsidiaries that manufacture and/or sell our
products worldwide. As a result, our earnings, cash flows and financial
position are exposed to foreign currency risk from foreign-currency-denominated
receivables and payables, forecasted sales transactions, and net investments in
certain foreign operations. We have not normally engaged in foreign currency
hedging activities. We continue to evaluate the potential use of such
activities.

Unless otherwise noted above, there has been no additional material change
in our assessment of our sensitivity to market risk from the information set
forth in Item 7A, Quantitative and Qualitative Disclosures About Market Risk
in our Annual Report on Form 10-K for the fiscal year ended December 31, 2002.




Item 4. Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure
that information required to be disclosed in the our Exchange Act reports is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commissions rules and forms and that such
information is accumulated and communicated to our management, including our
Chief Executive Officer and Chief Financial Officer, as appropriate, to allow
for timely decisions regarding required disclosure. In designing and evaluating
the disclosure controls and procedures, management recognizes that any controls
and procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and
management is required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.

As required by SEC Rule 13a-15(b), we carried out an evaluation, under the
supervision and with the participation of our management, including the our
Chief Executive Officer and our Chief Financial Officer, of the effectiveness
of the design and operation of our disclosure controls and procedures as of the
end of the quarter covered by this report. Based on the foregoing our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures were effective at the reasonable assurance level.

There has been no change in our internal controls over financial reporting
during our most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, our internal controls over financial
reporting.




Part II  OTHER INFORMATION




Item 1. Legal Proceedings

On November 6, 2002, CIBA Vision Corporation and its subsidiary, Wesley
Jessen Corporation (Wesley Jessen) filed a lawsuit against us in the U.S.
District Court for the Northern District of California alleging that our color
contact lenses infringe patents owned by Wesley Jessen. The complaint seeks an
award of damages, including unspecified punitive damages, attorneys fees and
costs and an injunction preventing the alleged infringement. We have filed an
answer to the complaint and are in the discovery phase. We believe the lawsuit
is without merit and we intend to defend this action vigorously.




Item 2. Changes in Securities and Use of Proceeds

None.




Item 3. Defaults Upon Senior Securities

None.




Item 4. Submission of Matters to a Vote of Security Holders

18



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##### Table of Contents



We held our Annual Meeting of Stockholders on May 1, 2003. Three matters
were voted upon. A description of each matter and a tabulation of votes are as
follows:



|1. |  | To elect seven (7) directors, each to serve until the next annual meeting
of stockholders and until his successor has been elected and qualified or
until his earlier resignation or removal.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The stockholders votes with respect to the election of directors were as
follows:

|                       |  |       |            |          |  |           |         |           |  |  |   |        |  |  |   | 
|---------------------- |  | ----- | ---------- | -------- |  | --------- | ------- | --------- |  |  | - | ------ |  |  | - | 
|                       |  | Votes
|                       |  |      
|                       |  |       |            |          |  | Abstained |         |           |  |  |   |        |  | 
|                       |  |       |            |          |  | or        |         |           |  |  |   | Broker
|                       |  | For   |            | Withheld |  | Against   |         | Non-Votes
|                       |  |       |            |          |  |           |         |          
|John D. Fruth          |  |       | 21,128,499 |          |  |           | 778,728 |           |  |  |  |        |  |  |  | 
|Edgar J. Cummins       |  |       | 20,968,741 |          |  |           | 938,486 |           |  |  |  |        |  |  |  | 
|Stephen J. Fanning     |  |       | 21,128,499 |          |  |           | 778,728 |           |  |  |  |        |  |  |  | 
|Terence M. Fruth       |  |       | 21,128,499 |          |  |           | 778,728 |           |  |  |  |        |  |  |  | 
|William R. Grant       |  |       | 21,227,839 |          |  |           | 679,388 |           |  |  |  |        |  |  |  | 
|Terrance H. Gregg      |  |       | 21,227,839 |          |  |           | 679,388 |           |  |  |  |        |  |  |  | 
|Francis R. Tunney, Jr. |  |       | 21,227,839 |          |  |           | 679,388 |           |  |  |  |        |  |  |  | 



|2. |  | To ratify the selection of KPMG LLP as our independent auditors for the
fiscal year ending December 31, 2003.
|-- |  | -------------------------------------------------------------------------------------------------------------

The stockholders votes with respect to the selection of KPMG LLP as our
independent auditors were as follows:

|           |  |           |       |         |  |           |         |        |  |  |   | 
|---------- |  | --------- | ----- | ------- |  | --------- | ------- | ------ |  |  | - | 
|Votes     
|          
|           |  | Abstained |       |         |  |           |         |        |  | 
|           |  | or        |       |         |  |           |         | Broker
|For        |  | Withheld  |       | Against |  | Non-Votes
|           |  |           |       |         |  |          
|21,573,057 |  |           | 3,780 |         |  |           | 350,390 |        |  |  |  | 




Item 5. Other Information

None.




Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits

| |      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.3 |  | Employment Agreement dated May 19, 2003 between Steve Neil and the
Company.                                                                                                                                                                                                                                                                                                                                                                                     
| |      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 31.1 |  | Rule 13a-14 (a)/15d-14 (a) Certifications dated August 14, 2003                                                                                                                                                                                                                                                                                                                                                                                                 
| |      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 32.1 |  | 18 U.S.C § 1350 Certifications dated August 14, 2003. The
certifications in this exhibit are being furnished solely to accompany
this report pursuant to 18 U.S.C § 1350, and are not being filed for
purposes of Section 18 of Securities Exchange Act of 1934, as amended,
and are not to be incorporated by reference into any of our filings,
whether made before or after the date hereof, regardless of any general
incorporation language in such filing.

(b)  Reports on Form 8-K

On May 8, 2003, we filed a Current Report on Form 8-K regarding the press
release issued on the same day, announcing the companys earnings for the quarter ended
March 31, 2003.

On July 30, 2003, we filed a Current Report on Form 8-K regarding the
press release issued on the same day, announcing the companys earnings for the
quarter ended June 30, 2003.

19



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                      |  |                                                                                                                                                         
|--------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
|                      |  | OCULAR SCIENCES, INC.
(Registrant)                                                                                                                      
|                      |  |                                                                                                                                                         
|                      |  |                                                                                                                                                         
|Date: August 14, 2003 |  | /s/ Steve Neil

Steve Neil
Executive Vice-President and Chief Financial Officer
(Duly Authorized Officer and Principal
Financial and Accounting Officer)

20



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##### Table of Contents



Exhibit Index

| |      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.3 |  | Employment Agreement dated May 19, 2003 between Steve Neil and the
Company.                                                                                                                                                                                                                                                                                                                                                                                     
| |      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 31.1 |  | Rule 13a-14 (a)/15d-14 (a) Certifications dated August 14, 2003                                                                                                                                                                                                                                                                                                                                                                                                 
| |      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 32.1 |  | 18 U.S.C § 1350 Certifications dated August 14, 2003. The
certifications in this exhibit are being furnished solely to accompany
this report pursuant to 18 U.S.C § 1350, and are not being filed for
purposes of Section 18 of Securities Exchange Act of 1934, as amended,
and are not to be incorporated by reference into any of our filings,
whether made before or after the date hereof, regardless of any general
incorporation language in such filing.