SOLA International Announces Fiscal 2005 Second Quarter Results; Net Sales Increase 4.8% versus Last Year; Reported Net Income Increases 37.3% versus Last Year.SAN DIEGO San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. -- Adjusted Net Income $11.5 Million versus $7.5 Million Last Year; Operating Cash Flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. $5.0 Million versus Negative $4.4 Million Last Year SOLA International Inc. (NYSE NYSE See: New York Stock Exchange :SOL) today announced the following fiscal year 2005 second quarter results. --Net sales of $166.2 million compared to $158.7 million in the prior year period, an increase of 4.8%. --Reported net income of $9.2 million compared to $6.7 million in the prior year period. --Adjusted net income of $11.5 million compared to $7.5 million in the prior year period. --Cash flow from operations of $5.0 million compared to negative $4.4 million in the prior year period. Management Commentary Commenting on the fiscal 2005 second quarter, Chief Executive Officer Jeremy Jeremy (jĕr`ĭmē), English form of Jeremiah. The Epistle of Jeremy is a title given to the sixth chapter of Baruch. Bishop said, "Our financial results are increasingly dependant on Adj. 1. dependant on - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent on, contingent upon, dependant upon, dependent on, dependent upon, depending on, contingent the performance of our growing prescription prescription In property law, the effect of the lapse of time in creating and destroying rights. Acquisitive prescription allows an individual, after unequivocal possession for a specific period, to acquire an interest in real property, such as an easement, but not the laboratory network where revenue, excluding the impact of currency, increased over 11% compared to the prior year quarter. Sales growth from our laboratories excluding the benefit of acquisitions was above 7%, which reconfirms the attractiveness of expanding our laboratory network. To this end, I hope to complete the acquisition of additional laboratories this fiscal year, with combined annual revenues between $30 million and $60 million. These transactions are expected to be accretive to earnings in the first full year after acquisition and are expected to cost between $25 million and $50 million. Further, our strong cash flows support my expectation that this acquisition program can continue in future years." "Also, our historical strength in supplying chain retailers around the world was maintained, as sales, excluding the impact of currency, increased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 10% compared to the prior year period before considering the impact of the previously announced reduced demand from Wal-Mart  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. ; including the lower sales to Wal-Mart, sales to chain
retail increased 4%."
Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight , excluding the impact of currency, increased 0.4% in the quarter with North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. decreasing 2.3%, Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). increasing 1.7% and
Rest of World increasing 3.8%.
Stated Mr. Bishop, "Europe's growth occurred despite a significant slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in demand from the German market that resulted from the German government's elimination of certain subsidies on eyeglass eye·glass n. 1. eyeglasses Glasses for the eyes. 2. A single lens in a pair of glasses; a monocle. 3. See eyepiece. 4. See eyecup. purchases effective January January: see month. 1, 2004. Excluding Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , sales growth in Europe was 5.4%. In North America, results were impacted by the reduced demand from Wal-Mart, and this will continue to affect results for at least the remainder of this fiscal year, while Rest of World continued to benefit from sales growth in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and Asia Pacific." Mr. Bishop continued by saying, "The quarter provided good sales growth from the Company's value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: product categories including: --Progressive lenses, particularly SOLAOne and AO Easy. --High index lenses including polycarbonate A category of plastic materials used to make a myriad of products, including CDs and CD-ROMs. and our recently launched 1.67 index progressive lens. --Photochromic lenses which are steadily gaining increased acceptance among consumers. --Advanced lens coatings A thin transparent coating applied to a surface of a lens element. and in particular Teflon Teflon, trade name for a solid, chemically inert polymer of tetrafluoroethylene (C2F4), F2C=CF2. Stable up to temperatures around 572°F; (300°C;), Teflon is used in electrical insulation, gaskets, and in making (R) EasyCare  The of this article or section may be compromised by "weasel words".You can help Wikipedia by removing weasel words. lenses. "Collectively, sales of recently launched new products including SOLAOne, AO Easy and Teflon EasyCare lenses are expanding at a faster rate than the sales we are losing on older designs and coatings." Second Quarter Results Net income under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting was $9.2 million in the fiscal 2005 second quarter compared to net income of $6.7 million in the prior year quarter. Restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs of $2.6 million in the quarter include expenses related to a work force reduction of 12 employees in Ireland Ireland, Irish Eire (âr`ə) [to it are related the poetic Erin and perhaps the Latin Hibernia], island, 32,598 sq mi (84,429 sq km), second largest of the British Isles. and 40 employees in Belgium Belgium (bĕl`jəm), Du. België, Fr. La Belgique, officially Kingdom of Belgium, constitutional kingdom (2005 est. pop. 10,364,000), 11,781 sq mi (30,513 sq km), NW Europe. and the impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of certain assets. Adjusted net income, which excludes restructuring costs this year and the unrealized currency translation loss on Euro-denominated bonds last year, was $11.5 million, or $0.35 earnings per share, compared with $7.5 million, or $0.30 earnings per share, in the prior year period. Gross margins were virtually unchanged in the fiscal 2005 second quarter at 39.3% compared to 39.5% in the year ago quarter. A planned reduction in manufacturing output, reflecting lost demand from Wal-Mart and a seasonal slowdown in Europe, temporarily increased production costs. Operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. on a reported basis was $47.0 million compared to $42.0 million in the year ago period. Excluding restructuring costs of $2.6 million, adjusted operating expense in the fiscal 2005 second quarter was $44.4 million. The increase of $2.4 million from the prior year quarter primarily relates to costs associated with the implementation of internal controls related to compliance with Section 404 of the Sarbanes-Oxley Act See SOX. , the increased labor costs associated with the acquisition of Great Lakes Great Lakes, group of five freshwater lakes, central North America, creating a natural border between the United States and Canada and forming the largest body of freshwater in the world, with a combined surface area of c.95,000 sq mi (246,050 sq km). Coating Laboratory in February February: see month. 2004 and the impact of a weaker U.S. Dollar when translating overseas expenses. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. on a reported basis was $18.3 million compared to $20.6 million in the year ago period. Adjusted operating income, excluding restructuring costs of $2.6 million, was $20.9 million in the fiscal 2005 second quarter. Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become , excluding restructuring costs, was $29.1 million, or 17.5% of net sales, compared to $26.5 million, or 16.7% of net sales, in the year ago period. Net interest expense in the fiscal 2005 second quarter was $3.9 million compared to $8.8 million in the comparable year ago period. The reduction in interest expense reflects the benefits of the Company's refinancing Refinancing An extension and/or increase in amount of existing debt. , which was completed in the fiscal 2004 third quarter. The effective tax rate, on an adjusted basis, in the fiscal 2005 second quarter was 35.0% compared to 29.0% in the prior year period. The increase in the year-over-year tax rate is largely due to the refinancing, which resulted in increased profitability in higher tax rate jurisdictions. Balance Sheet and Cash Flow Ron Noun 1. Ron - a Chadic language spoken in northern Nigeria Bokkos, Daffo West Chadic - a group of Chadic languages spoken in northern Nigeria; Hausa in the most important member Dutt, Executive Vice President and Chief Financial Officer of SOLA, commented, "I am encouraged by our continued improvement in working capital performance as compared to last year. Inventory at September September: see month. 30, 2004 compared to June June: see month. 30, 2004 decreased $1.1 million on a reported basis and $2.2 million on a constant currency basis. Finished goods inventory turnover was 5.4 times in the quarter, which compares to 5.2 times in the first quarter of fiscal 2005 and 4.4 times in the prior year quarter. "Receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed at September 30, 2004 compared to June 30, 2004, increased $4.6 million on a reported basis and $2.4 million on a constant currency basis. Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (`DSO') was 71.7 this quarter, which compares to 67.0 in the prior year quarter. The increased DSO See CSO. principally reflects the increased revenues from Rest of World, where longer credit terms Credit Terms The conditions under which credit will be extended to a customer. The components of credit terms are: cash discount, credit period, net period. exist." Total debt at September 30, 2004 was $282.7 million, or 40.6% of capital, compared to $285.2 million, or 41.7% of capital, at June 30, 2004 and $338.9 million, or 54.2% of capital at September 30, 2003. During the second quarter fiscal 2005, the Company repaid $2.2 million on its existing credit facility which, at September 30, 2004 had an outstanding balance of $170.6 million. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses in the quarter was $5.0 million, compared to negative $4.4 million in the prior year period, and was used to fund capital expenditures (including molds) of $3.5 million and to repay $2.8 million of debt. Cash and cash equivalents at September 30, 2004 was $122.3 million compared to $122.7 million at June 30, 2004 and $59.8 million in the prior year quarter. Net debt at September 30, 2004 was $160.4 million compared to $162.5 million at June 30, 2004 and $279.1 million at September 30, 2003. Six Month Results Net sales for the six months ended September 30, 2004 were $331.4 million compared to $312.6 million for the six months ended September 30, 2003, an increase of 6.0%. On a constant currency basis, sales increased 2.0% for the first six months of fiscal 2005 compared to the prior year period. For the six months ended September 30, 2004, sales on a constant currency basis in North America decreased 1.0%, Europe increased 3.0% and Rest of World increased 6.6% compared to the six months ended September 30, 2003. Operating income on a reported basis was $36.7 million for the six months ended September 30, 2004 compared to $40.5 million in the year ago period. Adjusted operating income, excluding restructuring costs of $3.6 million, was $40.3 million in the first six months of fiscal 2005. Adjusted EBITDA, excluding restructuring costs, was $55.0 million in the six months ended September 30, 2004 compared to $54.1 million in the year ago period. Net income on a reported basis was $18.6 million for the six months ended September 30, 2004 compared to net income of $7.2 million in the prior year period. Restructuring costs of $3.6 million year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. include expenses related to work force reductions of 29 employees in Singapore Singapore (sĭng`gəpôr, sĭng`ə–, sĭng'gəpôr`), officially Republic of Singapore, republic (2005 est. pop. 4,426,000), 240 sq mi (625 sq km). , 12 employees in Ireland and 40 employees in Belgium and the impairment of certain assets. Adjusted net income, which excludes restructuring costs and loss on debt extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. this year and the unrealized currency translation loss on Euro-denominated bonds last year, was $22.0 million, or $0.68 earnings per share, for the six months ended September 30, 2004 compared with $15.0 million, or $0.59 earnings per share, in the prior year period. Fiscal 2005 Outlook Jeremy Bishop, commenting on the Company's fiscal 2005 outlook, said, "As I highlighted in our last earnings release, in fiscal 2005 we expect to increase adjusted net income by over 30% from prior year levels and reach between $48 million and $50 million. Cash flow from operations should grow similarly and is expected to exceed $65 million. The improvement in our financial results will be underpinned by continued growth in our key product categories and our prescription laboratory business along with reduced interest expense. "Sales growth in North America will continue to benefit from last year's product launches including SOLAOne and AO Easy, increased distribution of Teflon EasyCare lenses and anticipated sales growth from our prescription laboratory network. Despite these encouraging trends, the reduction in demand from North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. chain retail will limit our growth over the coming quarters. In Europe, we expect growth to continue in most major markets, with the exception of Germany where we will be closely monitoring the business environment and the need to possibly re-align
Re-align is the follow-up EP to Stromkern's Armageddon. It includes a cover of "Anthrax" originally by Gang of Four. production at our French glass production facility whose output is largely consumed con·sume v. con·sumed, con·sum·ing, con·sumes v.tr. 1. To take in as food; eat or drink up. See Synonyms at eat. 2. a. by the German optical market. "Following normal seasonality, I expect our third quarter sales and net income to be lower than that recorded in the first two quarters. Specifically, my expectation is that net income will be approximately $10 million in the third quarter and will rise in the fourth quarter to approximately $17million, reflecting the increased revenues that we normally achieve in that period." Fiscal 2006 Mr. Bishop concluded by stating, "I anticipate that revenue, income and cash flow growth will accelerate in fiscal 2006. Providing our acquisition initiatives are realized and current expenditure on Sarbanes-Oxley compliance can be reduced, I expect to increase the distribution of our key value-added products, expand manufacturing output, improve the utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be of our fixed cost base and gain operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. . As a result, I anticipate percentage revenue growth in the upper single digit A single character in a numbering system. In decimal, digits are 0 through 9. In binary, digits are 0 and 1. digit - An employee of Digital Equipment Corporation. See also VAX, VMS, PDP-10, TOPS-10, DEChead, double DECkers, field circus. to low double digits Double Digits was a pricing game on the American television game show, The Price Is Right. Played from April 20, 1973 through May 18, 1973's show, it was played for a car and used small prizes. and income growth at a higher rate." Use of Non-GAAP Measures This press release discloses certain financial measures that are considered non-GAAP measures. Generally, a non-GAAP financial measure is a numerical numerical expressed in numbers, i.e. Arabic numerals of 0 to 9 inclusive. numerical nomenclature a numerical code is used to indicate the words, or other alphabetical signals, intended. measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). While these financial measures are not determined in accordance with GAAP and should not be viewed as an alternative to GAAP measures, we believe that they provide useful information to both management and investors. These measures may exclude the translation effect of foreign currency and certain expenses and gains and losses that may not be indicative indicative: see mood. of our core operating results. We believe these financial measures are useful to investors in allowing for greater transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. to supplemental information used by management in its financial and operational decision-making decision-making, n the process of coming to a conclusion or making a judgment. decision-making, evidence-based, n a type of informal decision-making that combines clinical expertise, patient concerns, and evidence gathered from . In addition, we have historically reported similar financial measures to our investors and believe that the inclusion of comparative numbers provides consistency Consistency can refer to:
This press release includes a presentation of earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. . Interest, taxes, depreciation and amortization can differ significantly among companies, partially due to differences in accounting policies, tax strategies, levels of indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. and interest rates. We believe that excluding these items provides insight into the underlying results of operations by excluding the effects of significant, discrete A component or device that is separate and distinct and treated as a singular unit. items and provides comparability among SOLA and other companies. In addition, EBITDA is often viewed as a reasonable approximation approximation /ap·prox·i·ma·tion/ (ah-prok?si-ma´shun) 1. the act or process of bringing into proximity or apposition. 2. a numerical value of limited accuracy. of gross cash flow and is one of the measures used for determining debt covenant covenant (kŭv`ənənt), agreement entered into voluntarily by two or more parties to do or refrain from doing certain acts. In the Bible and in theology the covenant is the agreement or engagement of God with man as revealed in the compliance. This press release also includes non-GAAP presentations of sales, operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , operating income, operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: , net income, inventory, accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying , net debt and cash taxes paid, adjusted for the translation effect of foreign currency, special charges, utilization of deferred tax assets and costs associated with SOLA's recapitalization. As is the case with EBITDA, we believe that excluding these items provides management and investors with information based on SOLA's underlying results of operations and facilitates comparisons among SOLA and other companies. Conference Call The Company will host a conference call November November: see month. 4, 2004 at 9:00 a.m. Eastern Standard Time (6:00 a.m. Pacific Standard Time). The phone number to participate in the call is 800-732-9437 for domestic callers (international callers use 415-537-1918) and the access code is 21213224. In addition, investors and interested parties may listen to the call via webcast at www.sola.com or www.companyboardroom.com. A replay of the call will be available starting at 11:00 a.m. Eastern Standard Time, November 4, 2004 through 11:00 a.m. Eastern Standard Time, November 11, 2004. The replay number for domestic callers is 800-633-8284 (international callers use 402-977-9140) and the access code is 21213224. This press release includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 21E of the Securities Exchange Act of 1934, including statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc SOLA's potential growth prospects. Such forward-looking statements are subject to various risks and uncertainties, many of which are beyond the control of SOLA. Actual results could differ materially from the forward-looking statements as a result of, among other things, the highly competitive nature of the eyeglass lens and coating industry; SOLA's need to develop new products; potential adverse developments in the domestic and foreign economic and political environment, including exchange rates, tariffs This is a list of tariffs and trade legislation:
SOLA International Inc. designs, manufactures and distributes a broad range of eyeglass lenses, primarily focusing on the faster-growing plastic lens segment of the global lens market, and particularly on higher-margin value-added products. SOLA's strong global presence includes manufacturing and distribution sites in three major regions: North America, Europe and Rest of World (primarily Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , Asia and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. ) and approximately 6,600 employees in 27 countries servicing customers in over 50 markets worldwide. For additional information, visit the Company's web site at www.sola.com.
SOLA International Inc.
Statements of Operations
(Amounts in thousands, except per share data)
(Unaudited)
Second Second
Quarter Quarter
FY 2005 FY 2004
--------- ---------
Net sales $166,241 $158,663
Cost of sales 100,941 95,989
--------- ---------
Gross profit 65,300 62,674
--------- ---------
Research and development expenses 1,945 2,419
Selling and marketing expenses 27,647 28,347
General and administrative expenses (a) 17,411 11,269
--------- ---------
Operating expenses 47,003 42,035
--------- ---------
Operating income 18,297 20,639
Interest income 462 345
Interest expense (4,363) (9,165)
Foreign currency gain/(loss) 846 (2,184)
--------- ---------
Income before provision for income taxes and
minority interest 15,242 9,635
Provision for income taxes (5,901) (2,795)
Minority interest (100) (157)
--------- ---------
Net Income $9,241 $6,683
========= =========
Net income per share - basic $0.29 $0.27
========= =========
Weighted average common shares outstanding 32,201 24,905
========= =========
Net income per share - diluted $0.28 $0.26
========= =========
Weighted average common and dilutive securities
outstanding 32,524 25,294
========= =========
(a) General and administrative expenses for the second quarter 2005
included special charges of $2,604.
SOLA International Inc.
Unaudited Statements of Operations
(Amounts in thousands, except per share data)
First First
Half Half
2005 2004
Net sales $331,397 $312,642
Cost of sales 199,023 187,607
--------- ---------
Gross profit 132,374 125,035
--------- ---------
Research and development expenses 3,776 4,902
Selling and marketing expenses 56,697 56,332
General and administrative expenses (a) 35,195 23,346
--------- ---------
Operating expenses 95,668 84,580
--------- ---------
Operating income 36,706 40,455
Interest income 766 735
Interest expense (8,558) (18,389)
Loss on early extinguishment of debt (95) -
Foreign currency gain/(loss) 1,548 (12,165)
--------- ---------
Income before provision for income taxes and
minority interest 30,367 10,636
Provision for income taxes (11,547) (3,085)
Minority interest (175) (350)
--------- ---------
Net Income $18,645 $7,201
========= =========
Net income/(loss) per share - basic $0.58 $0.29
========= =========
Weighted average common shares outstanding 32,194 24,814
========= =========
Net income per share - diluted $0.57 $0.29
========= =========
Weighted average common and dilutive securities
outstanding 32,558 25,192
========= =========
(a) General and administrative expenses for the first half FY 2005
included special charges of $3,622.
SOLA International Inc.
Condensed Balance Sheets
(Amounts in thousands)
(Unaudited)
September June 30, March 31,
30,
2004 2004 2004
(Unaudited) (Unaudited)
----------- ----------- ---------
Cash and cash equivalents $122,263 $122,729 $102,604
Trade accounts receivable, net 141,752 137,155 145,920
Inventories 89,779 90,836 86,662
Other assets 507,918 509,137 517,742
----------- ----------- ---------
Total assets $861,712 $859,857 $852,928
=========== =========== =========
Trade payables, accruals and other
current liabilities $144,825 $155,031 $149,352
Notes payable and other debt 282,715 285,165 287,383
Other liabilities 21,754 21,424 20,852
----------- ----------- ---------
Total liabilities 449,294 461,620 457,587
Stockholders' equity 412,418 398,237 395,341
----------- ----------- ---------
Total liabilities and stockholders'
equity $861,712 $859,857 $852,928
=========== =========== =========
SOLA International Inc.
Condensed Statements of Cash Flow
(Amounts in thousands)
(Unaudited)
Second Second
Quarter Quarter
FY 2005 FY 2004
--------- --------
Net income $9,241 $6,683
Depreciation and amortization 7,083 6,228
Amortization of debt issuance costs 345 831
Non-cash portion of special charges 656 -
Changes in trading assets and liabilities (12,306) (18,119)
--------- --------
Net cash provided by/(used in) operating
activities 5,019 (4,377)
--------- --------
Disposal of joint ventures (0) 38
Capital expenditures (2,485) (3,673)
Mold expenditures (1,004) (1,276)
Other (101) 1,669
--------- --------
Net cash used in investing activities (3,590) (3,242)
--------- --------
Proceeds from the exercise of stock options 327 1,278
Payments on long-term debt, net (526) (104)
Repayment of bank debt (2,187) -
Repayment of senior notes (102) -
--------- --------
Net cash provided by/(used in) financing
activities (2,488) 1,174
Effect of exchange rate changes on cash and cash
equivalents 593 227
--------- --------
Net decrease in cash and equivalents (466) (6,218)
Cash and cash equivalents at beginning of period 122,729 65,989
--------- --------
Cash and cash equivalents at end of period $122,263 $59,771
========= ========
SOLA International Inc.
Condensed Statements of Cash Flow
(Amounts in thousands)
(Unaudited)
First First
Half Half
FY 2005 FY 2004
--------- --------
Net income $18,645 $7,201
Depreciation and amortization 14,196 12,338
Amortization of debt issuance costs 690 1,650
Loss on debt extinguishment 95 -
Non-cash portion of special charges 1,091 -
Changes in trading assets and liabilities (3,767) (14,774)
--------- --------
Net cash provided by operating activities 30,950 6,415
--------- --------
Purchases of businesses - (888)
Capital expenditures (4,104) (6,753)
Mold expenditures (2,074) (2,131)
Other 824 1,906
--------- --------
Net cash used in investing activities (5,354) (7,866)
--------- --------
Proceeds from the exercise of stock options 418 2,767
Payments on long-term debt, net (1,109) (1,253)
Repayment of bank debt (4,375) (522)
Repayment of senior notes (891) -
--------- --------
Net cash provided by/(used in) financing
activities (5,957) 992
Effect of exchange rate changes on cash and cash
equivalents 20 1,551
--------- --------
Net increase in cash and equivalents 19,659 1,092
Cash and cash equivalents at beginning of period 102,604 58,679
--------- --------
Cash and cash equivalents at end of period $122,263 $59,771
========= ========
SOLA International Inc.
Reconciliation of Non-GAAP Financial Measures
(Amounts in thousands, except per share data)
(Unaudited)
Second Second
Quarter Quarter
FY 2005 FY 2004
-------- --------
Calculation of Adjusted net income:
Net income $9,241 $6,683
Adjustments to compute adjusted net income:
Foreign currency loss on net long-term Euro-
denominated debt - 1,146
Pre-tax loss on special charges 2,604 -
Tax effect of adjustments (345) (332)
-------- --------
Adjusted net income $11,500 $7,497
======== ========
Adjusted net income per adjusted share-diluted $0.35 $0.30
======== ========
Weighted average common shares outstanding 32,204 24,905
Add: Effect of dilutive securities 320 389
-------- --------
Adjusted weighted average common and dilutive
securities outstanding 32,524 25,294
======== ========
Calculation of Adjusted operating income:
Operating income, as reported $18,297 $20,639
Adjustments to compute adjusted operating income:
Special charges included in operating expenses 2,604 -
-------- --------
Adjusted operating income $20,901 $20,639
======== ========
Adjusted operating margin % 12.6% 13.0%
======== ========
Adjusted operating income % growth over prior period 1.3%
========
Calculation of Adjusted EBITDA:
Net income $9,241 $6,683
Net interest expense 3,901 8,820
Income tax provision 5,901 2,795
Amortization of debt issuance costs 345 831
Depreciation and amortization 7,083 6,228
-------- --------
EBITDA 26,471 25,357
Adjustments to compute adjusted EBITDA:
Loss on early extinguishment of debt - -
Foreign currency gain - 1,146
Special charges 2,604 -
-------- --------
Adjusted EBITDA $29,075 $26,503
======== ========
Adjusted EBITDA margin % 17.5% 16.7%
======== ========
Adjusted EBITDA % growth over prior period 9.7%
========
Second Second
Quarter Quarter
FY 2005 FY 2004
-------- --------
Calculation of Adjusted effective tax rate
Income before provision for income
taxes and minority interest $15,242 $9,635
Adjustments to compute adjusted effective tax rate:
Foreign currency loss on net long-term Euro-
denominated debt - 1,146
Special charges 2,604 -
Adjusted income before provision for income
-------- --------
taxes and minority interest $17,846 $10,781
======== ========
Provision for income taxes, as reported $(5,901) $(2,795)
Tax effect of adjustments (345) (332)
-------- --------
Total adjusted provision for income taxes $(6,246) $(3,127)
======== ========
Adjusted effective tax rate 35.0% 29.0%
======== ========
Second Second
Quarter Quarter
FY 2005 FY 2004
-------- --------
Calculation of Adjusted Operating Expense
Operating expenses, as reported $47,003 $42,035
Less special charges included in operating expenses (2,604) -
-------- --------
Adjusted operating expense $44,399 $42,035
======== ========
SOLA International Inc.
Reconciliation of Non-GAAP Financial Measures
(Amounts in thousands, except per share data)
(Unaudited)
Second
Quarter
FY 2005
---------
Calculation of constant currency accounts
receivable:
First Quarter 2005 accounts receivable, net as
reported $137,155
Impact of currency fluctuations on accounts
receivable during period (a) 2,201
---------
First Quarter 2005 accounts receivable, net
excluding currency impact 139,356
Second Quarter 2005 net trade accounts receivable,
as reported 141,752
---------
Increase in trade accounts receivable, exclusive
of foreign currency impact during period $2,396
=========
Calculation of constant currency inventories:
First Quarter 2005 inventories, as reported $90,836
Impact of currency fluctuations on inventories
during period (a) 1,173
---------
First Quarter 2005 inventories,
excluding currency impact 92,009
Second Quarter 2005 inventories, as reported 89,779
---------
Decrease in inventories, exclusive of
foreign currency impact during period $(2,230)
=========
Second Second
Quarter Quarter
FY 2005 FY 2004
--------- ---------
SOLA International calculation of constant currency
sales:
Net sales, as reported $166,242 $158,663
Impact of currency fluctuations on net sales during
period (a) - 6,836
--------- ---------
Net sales, excluding currency impact $166,242 $165,499
========= =========
Constant currency net sales % growth over prior
period 0.4%
=========
"North America" Region calculation of constant
currency sales:
Net sales, as reported $66,895 $68,574
Impact of currency fluctuations on net sales during
period (a) - (121)
--------- ---------
Net sales, excluding currency impact $66,895 $68,453
========= =========
Constant currency net sales % growth over prior
period -2.3%
=========
"Europe" Region calculation of constant currency
sales:
Net sales, as reported $67,380 $60,402
Impact of currency fluctuations on net sales during
period (a) - 5,836
--------- ---------
Net sales, excluding currency impact $67,380 $66,238
========= =========
Constant currency net sales % growth over prior
period 1.7%
=========
"Rest of World" Region calculation of constant
currency sales:
Net sales, as reported $31,967 $29,687
Impact of currency fluctuations on net sales during
period (a) - 1,121
--------- ---------
Net sales, excluding currency impact $31,967 $30,808
========= =========
Constant currency net sales % growth over prior
period 3.8%
=========
Second Second
Quarter Quarter
FY 2005 FY 2004
--------- ---------
Calculation of constant currency prescription
laboratory
sales, excluding acquisitions and dispositions:
Net prescription laboratory sales, as reported $64,004 $53,950
Less impact of acquisitions and dispositions (3,009) (582)
--------- ---------
Net prescription laboratory sales, excluding impact
of acquisitions and dispositions 60,995 53,368
Impact of currency fluctuations on net sales during
period (a) - 3,652
--------- ---------
Net prescription laboratory sales, excluding
currency impact $60,995 $57,020
========= =========
Constant currency net sales % growth over prior
period 7.0%
=========
(a) Based on Second Quarter 2005 monthly average exchange rates
SOLA International Inc.
Reconciliation of Non-GAAP Financial Measures
(Amounts in thousands, except per share data)
(Unaudited)
First First
Half Half
2005 2004
Restated
-------- --------
Calculation of Adjusted net income:
Net income, as reported $18,645 $7,201
Adjustments to compute adjusted net income:
Foreign currency loss on net long-term Euro-
denominated debt - 10,956
Pre-tax loss on early extinguishment of debt 95 -
Pre-tax loss on special charges 3,622 -
Tax effect of adjustments (382) (3,177)
-------- --------
Adjusted net income $21,980 $14,980
======== ========
Adjusted net income per adjusted share-diluted $0.68 $0.59
======== ========
Adjusted weighted average common and dilutive
securities outstanding 32,558 25,192
======== ========
Calculation of Adjusted operating income:
Operating income, as reported $36,706 $40,455
Adjustments to compute adjusted operating income:
Special charges included in operating expenses 3,622 (0)
-------- --------
Adjusted operating income $40,328 $40,455
======== ========
Adjusted operating margin % 12.2% 12.9%
======== ========
Adjusted operating income % decline over prior period -0.3%
========
Calculation of Adjusted EBITDA:
Net income $18,645 $7,201
Net interest expense 7,792 17,654
Income tax provision 11,547 3,085
Amortization of debt issuance costs 690 1,650
Depreciation and amortization 14,196 12,338
-------- --------
EBITDA 52,870 41,928
Adjustments to compute adjusted EBITDA:
Loss on early extinguishment of debt 95 -
Foreign currency gain/(loss) (1,548) 12,165
Special charges 3,622 -
-------- --------
Adjusted EBITDA $55,039 $54,093
======== ========
Adjusted EBITDA margin % 16.6% 17.3%
======== ========
Adjusted EBITDA % growth over prior period 1.8%
========
Calculation of Adjusted effective tax rate
Income before provision for income
taxes and minority interest $30,367 $10,636
Adjustments to compute adjusted effective tax rate:
Foreign currency loss on net long-term Euro-
denominated debt - 10,956
Loss on early extinguishment of debt - -
Special charges 3,622 -
Adjusted income before provision for income
-------- --------
taxes and minority interest $33,989 $21,592
======== ========
Provision for income taxes, as reported $11,547 $3,085
Tax effect of adjustments 382 3,177
-------- --------
Total adjusted provision for income taxes $11,929 $6,262
======== ========
Adjusted effective tax rate 35.0% 29.0%
======== ========
SOLA International Inc.
Reconciliation of Non-GAAP Financial Measures
(Amounts in thousands, except per share data)
(Unaudited)
First
Half
FY 2005
---------
Calculation of constant currency accounts
receivable:
Fourth Quarter 2004 accounts receivable, net as
reported $145,920
Impact of currency fluctuations on accounts
receivable during period (a) (2,309)
---------
Fourth Quarter 2004 accounts receivable, net
excluding currency impact 143,611
Second Quarter 2005 net trade accounts receivable,
as reported 141,752
---------
Decrease in trade accounts receivable, exclusive
of foreign currency impact during period $(1,859)
=========
Calculation of constant currency inventories:
Fourth Quarter 2004 inventories, as reported $86,662
Impact of currency fluctuations on inventories
during period (a) (2,164)
---------
Fourth Quarter 2004 inventories,
excluding currency impact 84,498
Second Quarter 2005 inventories, as reported 89,779
---------
Increase in inventories, exclusive of
foreign currency impact during period $5,281
=========
(a) Based on First Half 2005 monthly average exchange rates
First First
Half Half
2005 2004
--------- ---------
SOLAInternational calculation of constant currency
sales:
Net sales, as reported $331,397 $312,642
Impact of currency fluctuations on net sales during
period (e) - 12,318
--------- ---------
Fiscal year 2005 net sales, excluding currency
impact $331,397 $324,960
========= =========
Constant currency net sales % growth over prior
period 2.0%
=========
"North America" Region calculation of constant
currency sales:
Net sales, as reported $133,959 $135,598
Impact of currency fluctuations on net sales during
period (e) - (260)
--------- ---------
Fiscal year 2004 net sales, excluding currency
impact $133,959 $135,338
========= =========
Constant currency net sales % growth over prior
period -1.0%
=========
"Europe" Region calculation of constant currency
sales:
Net sales, as reported $135,724 $121,632
Impact of currency fluctuations on net sales during
period (e) - 10,105
--------- ---------
Fiscal year 2004 net sales, excluding currency
impact $135,724 $131,737
========= =========
Constant currency net sales % growth over prior
period 3.0%
=========
"Rest of World" Region calculation of constant
currency sales:
Net sales, as reported $61,714 $55,412
Impact of currency fluctuations on net sales during
period (e) - 2,473
--------- ---------
Fiscal year 2004 net sales, excluding currency
impact $61,714 $57,885
========= =========
Constant currency net sales % growth over prior
period 6.6%
=========
(e) Based on the fiscal year 2004 monthly average exchange rates
SOLA International Inc.
Reconciliation of Non-GAAP Financial Measures
Calculation of Net Debt
(Amounts in thousands)
(Unaudited)
September March 31,
30,
2004 2004
--------- ---------
Calculation of Net Debt:
Short-term debt $14,025 $11,933
Long-term debt 268,690 275,450
Less: Cash (122,263) (102,604)
--------- ---------
Net debt $160,452 $184,779
========= =========
Calculation of Adjusted Fiscal 2005 cash tax rate
Estimated fiscal 2005 income before provision for
income taxes and minority interest $76,000
Adjusted effective tax rate 35.0%
---------
Total adjusted provision for income taxes 26,600
Adjustments to compute adjusted fiscal 2005 cash
tax provision:
Utilization of deferred tax assets (9,798)
---------
Adjusted fiscal 2005 cash tax provision: $16,802
=========
Total adjusted fiscal 2005 cash tax rate 22.1%
=========
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