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LUXOTTICA GROUP ANNOUNCES RECORD RESULTS FOR THE YEAR ENDED DEC. 31, 1991

               LUXOTTICA GROUP ANNOUNCES RECORD RESULTS
                    FOR THE YEAR ENDED DEC. 31, 1991
    AGORDO, Italy, Feb. 4 /PRNewswire/ -- Luxottica Group S.p.A. (NYSE: LUX) today reported record results for the year ended Dec. 31, 1991, confirming, once again, its budget and estimates for the year. The company's results, as stated herein, are in accordance with US GAAP and all dollar amounts are calculated at the exchange rate of $1.00 equals Lire 1,151.5 in effect on Dec. 31, 1991.
    The company has restated fiscal year 1990 results in order to account for the acquisition of Florence Line and its pooling effects on the profit and loss statements since it was merged into Luxottica at the end of 1990.
    Highlights for 1991 include:
    -- Sales increased 23.7 percent to Lire 462.2 billion (US $401.7 million) from Lire 347.0 billion in the previous year.  (Without restating Florence Lines's sales into 1990 figures, the increase would have been 29.1 percent).  Unit sales were up 5.5 percent to almost 10 million pairs of frames.
    -- Net income amounted to Lire 60.1 billion (US $52.2 million), an average increase of 21.2 percent from Lire 49.6 billion in 1990.
    -- Earnings per ADS were Lire 2,668, equivalent to US $2.32 (calculated at the exchange rate of Dec. 31, 1991) vs. Lire 2,201, equivalent to US $1.95 (calculated at the exchange rate of Dec. 30, 1990).
    1991 Strategic Actions.
    1991 was a year of sound consolidation.  The company, in line with its strategy, continued to work and carry forward what was implemented in 1990.
    More specifically, the designer lines contributed approximately 38.1 percent to net sales, compared to 28.6 percent a year ago.  Those lines carried from 1988 -- Giorgio Armani, Genny, Byblos, Giugiaro -- performed well and up to customer satisfaction in the countries in which they are distributed through a Luxottica subsidiary, despite the recessionary environment.  Valentino, including Oliver, and Yves Saint Laurent, though at their commercial beginning, met the group's expectations.  The company succeeded in creating individual characters and styles that differentiate one line from another and are easily distinguishable by the clientele.
    On the commercial side, the group fortified its marketing position in every country where the products are sold.  In those nations where Luxottica distributes frames, the key to growth in each market was the continual fulfillment of stock in order to solve the back order problems that were experienced during the year.
    In the fourth quarter, Luxottica strengthened its presence in the United Kingdom by acquiring the 50 percent stake of its partner in Luxottica United Kingdom, which became 100 percent owned by the company. In keeping with its strategy, the group signed, with a majority stake interest, two new distributing joint ventures:  one in Belgium and one in Greece.  Belgium has been operative since the beginning of the fourth quarter 1991, while the operation in Greece began in January 1992.
    Investments for the year, excluding the commercial side, mainly concerned production facilities, plant and equipment, with the purpose of reaching higher production efficiencies.
    As a consequence of the above actions, the most outstanding results are the improvements in both the gross margin to 66.7 percent vs. 64.9 percent in 1990 and the operating margin to 24 percent from 19.2 percent in 1990.
    Review of 1991 Results.
    Sales rose to Lire 462.6 billion from Lire 374.0 billion, up 23.7 percent.  In real terms, the increase in units was 5.5 percent, representing almost 10 million pairs of frames produced and sold, compared to 9.4 million in 1990.  The geographical breakdown of turnover shows that the Italian sales were 24.6 percent over the total, rising 27.0 percent; U.S. sales accounted for 40.0 percent with an increase of 10.0 percent (denominated in dollars, up 6 percent); while the rest of the world weighted 35.4 percent with a growth of 42.0 percent.  In spite of the recession, Luxottica's U.S. results were good, thanks to an efficient and extensive distribution network, highly diversified product mix and the group's commitment to customer service.
    Mirari Japan, the Japanese branch, accounted for 2.3 percent over Luxottica's total sales, amounting to Lire 10.5 billion, in line with the group's expectations.
    Gross profit for the year rose by 27.2 percent to Lire 308.5 billion.  The gross margin, as mentioned, grew to 66.7 percent from 64.9 percent reflecting a substantial improvement in production efficiencies and, partially, the higher margins on designer lines and on metal frames.
    Operating income soared 55.0 percent to Lire 111.2 billion. Selling, General & Administrative expenses, at Lire 197.3 billion, rose by only 15.5 percent, which is lower than the percentage rise of net sales.  Therefore, the comparison of operating income to total sales improved to 24.0 percent vs. 19.2 percent in the previous year.  Within SG&A, royalties were the only expense that rose more than proportionally to sales, passing from 2.8 percent in 1990 to 3.8 percent of 1991 total sales, as a direct consequence of the increase in the designer lines sales.
    Net income before taxes and minority interest rose 22.0 percent, to Lire 107.3 billion, 23.2 percent over sales, mostly in line with 1990. The company noted that in 1991, as in the previous year, the currency risks associated with future dollar denominated revenues have been hedged by selling the currency forward.  Due to the hedging operation, the company reported in 1991 an extraordinary loss of Lire 1.1 billion, while in 1990 the hedging operation resulted in extraordinary income of Lire 17 billion.
    Commenting on the results, Leonardo Del Vecchio, founder of Luxottica and chairman of the board, said, "We are very pleased with these results.  The negative economic environment did not effect the group's activity, thanks to our board product lines, efficient manufacturing facilities and worldwide distribution network achieved over 30 years of operation.  We successfully increased our market stake in all the countries in which we are present.
    "Sales rose more than what we forecasted one year ago during the Gulf War, and margins, that in 1990 were slightly squeezed because of the investments made, returned to the historical levels of the group. We are also satisfied that Luxottica's ADRs on the NYSE have performed in line with the company's results.  Should the international economic situation remain as in 1991, Luxottica will further expand in 1992."
    Luxottica Group is the world leader in the design, manufacture and marketing of high quality eyeglass frames in the mid- and premium-priced categories.  The company's products, which are designed and manufactured in four facilities based in Italy and include over 1,200 models available in a wide array of colors, and sizes, are sold through 12 branches, nine of which are wholly owned in the U.S., Canada, Italy, France, Spain, Portugal, Sweden, United Kingdom and West Germany; two of which are majority owned in Belgium and Greece; and one, a 50 percent owned distributor in Japan.
                LUXOTTICA GROUP S.P.A. AND SUBSIDIARIES
              Consolidated Statement of Income (Unaudited)
                 (Prepared in accordance with U.S. GAAP)
                          (Millions of Lire)(A)
                                                            Percent
    Year Ended Dec. 31              1991        1990         Change
    Net Sales                      462,613     374,001        23.7
    Cost of Sales                 (154,098)   (131,369)
    Gross Profit                   308,515     242,632        27.2
    Selling, General and
     Administrative Expenses      (197,339)   (170,848)
    Income from Operations         111,176      71,784        54.9
    Interest Expense                (6,776)     (9,854)
    Interest Income                  4,047       4,915
    Other - Net                     (1,151)     21,174
    Income before Provision        107,296      88,019        21.9
     Income Taxes
    Provision for Income Taxes     (46,383)    (37,690)
    Net Income before Minority      60,913      50,329
     Interests
    Minority Interests - Net          (823)       (753)
    Net Income                      60,090      49,576        21.2
    Earnings Per ADS                 2,668       2,201
    Number of Shares
     Outstanding(B)             22,525,000  22,525,000
                 LUXOTTICA GROUP S.P.A. AND SUBSIDIARIES
              Consolidated Statements of Income (Unaudited)
                 (Prepared in accordance with U.S. GAAP)
                          (Millions of Lire)(A)
                                                         Percent
    Three Months Ended Dec. 31       1990      1990       Change
    Net Sales                      125,920    97,819        28.7
    Cost of Sales                  (44,395)  (33,374)
    Gross Profit                    81,525    644,445       26.5
    Selling, General and
     Administrative Expenses       (49,993)  (47,086)
    Income from Operations          31,532    17,360        81.6
    Interest Expense                (1,641)   (2,531)
    Interest Income                  1,276     1,065
    Other - Net                       (937)    8,158
    Income before Provision         30,230    24,052        25.7
     Income Taxes
    Provision for Income Taxes     (13,295)   (9,456)
    Net Income before Minority      16,935    14,496
     Interests
    Minority Interests - Net           358      (295)
    Net Income                      17,293    14,301        20.9
    Earnings per ADS                   768       635
    Number of ADRS Outstanding(B)  25,525,000  25,525,000
    (A) Except per ADS amounts which are in lire, and except number of ADS.
    (B) Each ADS represents two ordinary shares.
    NOTE: Luxottica Group noted that its figures in Lire are the more accurate gauge of its results due to the distorted effects caused by the currency translation at the end of the period exchange rates.
                 LUXOTTICA GROUP S.P.A. AND SUBSIDIARIES
              Consolidated Statements of Income (Unaudited)
                 (Prepared in accordance with U.S. GAAP)
         (In thousands of US dollars -- except earnings per ADS)
    Year Ended Dec. 31             1991(A)      1990(B)
    Net Sales                     $401,748     $330,711
    Net Income                      52,184       43,838
    Earnings per ADS:                 2.32         1.95
    Three Months Ended Dec. 31     1991(A)      1990(B)
    Net Sales                     $109,353     $ 86,497
    Net Income                      15,018       12,646
    Earnings per ADS:                 0.67         0.56
    (A) US$1 equal Lire 1,151.5 as of Dec. 31, 1991.
    (B) US$1 equal Lire 1,130.9 as of Dec. 31, 1990.
    NOTE: Luxottica Group noted that its figures in Lire are the more accurate gauge of its results due to the distorted effects caused by the currency translation at the end of the period exchange rate.
    -0-        2/4/92
    /CONTACT:  Susi Belli of Luxottica Group, 212-688-6840/
    (LUX) CO:  Luxottica Group S.p.A. ST: IN:  REA SU:  ERN SM-ST -- NY014 -- 6654 02/04/92 11:37 EST
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No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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