SOLA International Announces Fiscal 2003 Fourth Quarter Results
SOLA International Inc. today announced fiscal year 2003 fourth quarter results. Net sales in the fourth quarter were $153.8 million compared with $137.8 million in the year ago period, an increase of 11.7%. Net sales in the fourth quarter, on a constant currency basis, increased 5.1%, with North America and Europe increasing 12.2% and 0.4%, respectively, and Rest of World ("ROW") decreasing 2.3%. Operating income in the fourth quarter was $22.8 million, or 14.8% of sales, compared with $17.0 million, or 12.3%, in the fourth fiscal quarter last year, an increase of 34.1%.
Including the unrealized translation effect of foreign currency on the company's net long-term Euro-denominated debt, the company recorded net income of $5.6 million in the fiscal 2003 fourth quarter compared to net income of $9.2 million in the year ago period. Excluding the unrealized translation effect of foreign currency on the company's net long-term Euro-denominated debt, the company reported adjusted net income of $10.4 million, or $.42 earnings per diluted share, compared to consensus First Call estimates of $10.0 million, or $.40 earnings per diluted share, and year ago adjusted net income of $7.2 million, or $.29 earnings per diluted share.
Company management believes that adjusted net income provides a better representation of true operating results because the re-measurement into U.S. Dollars of the principal amount of the company's Euro-denominated debt has no near term impact on the company's cash flows or its ability to conduct business and can cause reported results to fluctuate significantly from period to period. Sales from the company's global prescription laboratory network, excluding the impact of currency, increased approximately 19% in the fourth quarter compared to the year ago period. Value-added products represented 73.0% of fiscal 2003 fourth quarter sales compared with 69.0% in the comparable year ago period. Fiscal 2003 fourth quarter polycarbonate volume and sales increased 36.1% and 47.5%, respectively, compared to the year ago period, continuing the company's gains in this product category. Sales of progressive lenses increased approximately 8% from the year ago quarter and increased approximately 15% compared to the third quarter this fiscal year. Excluding the impact of currency, progressive lens sales increased 3.7% compared to the year ago quarter.
Jeremy C. Bishop, president and chief executive officer of SOLA, commented, "I am very pleased with our fourth quarter results which met or exceeded our expectations in nearly all areas. Our continuing ability to grow revenues and, in particular, the exceptional growth of our North American business in the quarter, sits at the core of our much improved performance. Globally, our product mix was good, so gross margin increased; expenses were well managed, so operating profit was higher; working capital was well managed, so cash flow improved. In summary, we ended the quarter with a financial performance that met my objectives and generally exceeded investment community expectations."
