LUXOTTICA GROUP ANNOUNCES THIRD QUARTER AND NINE MONTHS RESULTS
AGORDO, Italy, Nov. 4 /PRNewswire/ -- Luxottica Group S.p.A. (NYSE: LUX) today announced its results for the third quarter and nine months ended Sept. 30, 1991. 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 1,245.2 lire in effect on Sept. 30, 1991.
The company has restated the September 1990 third quarter and nine month 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.
Net sales for the third quarter increased 21.3 percent to 104,112 million lire (US$83.6 million) from 85,860 million lire. Net income rose 32.7 percent to 12,311 million lire ($9.9 million) compared with 9,278 million lire in the comparable period of the previous year.
Earnings per American Depositary Share (ADS) for the third quarter of 1991 were 547 lire, equivalent to approximately $0.44 (1 ADS is equivalent to two ordinary shares).
For the nine month period ended Sept. 30, 1991, net sales increased 21.9 percent to 336,693 million lire ($270.3 million) from 276,182 million lire in the comparable 1990 period. Net income rose 21.3 percent to 42,797 million lire ($34.4 million) compared with 35,274 million lire in the comparable period last year.
Earnings per ADS for the nine month period of 1991 were 1,900 lire, equivalent to approximately $1.53.
Commenting on the results, Leonardo Del Vecchio, founder of Luxottica and chairman of the board, said, "As usual, the third quarter was characterized by the shutdown of our industrial facilities for a month of summer holiday. Nevertheless, the reported performance shows that the company is once again exactly on track with its budget. I am glad to note that the U.S. market is getting better and the group is conquering a higher market share thanks to its good quality and prompt service."
Regarding the geographical breakdown in the first nine months, U.S. sales, which reported an increase of 7 percent in dollar terms, accounted for 43 percent over total consolidated revenues. Italy and the rest of the world were 22 percent and 35 percent, respectively.
A breakdown of sales reveals that designer frames contributed 37.8 percent of total sales in the nine month period compared with 25.7 percent in the same period of 1990.
The company also reported that the number of frames sold through Sept. 30, 1991, was over 7.4 million units, an increase of 6.4 percent from the comparable 1990 period.
Gross profit in the nine month period of 1991 increased 27.4 percent to 226,990 million lire compared to 178,187 million lire the year before. It has been noted by the company that gross margins for this nine month period reached 67.4 percent from 64.5 percent in the comparable nine month period. If referred solely to the third quarter 1991, it was 68.9 percent, reflecting a further improvement in production efficiencies and, partially, the higher margins on designer lines.
Selling, general and administrative expenses, at 147,346 million lire, rose by 19 percent, which is lower than the percentage rise of net sales. Therefore, the comparison to total sales improved to 43.8 percent versus 44.8 percent in the previous year. Within SG&A, royalties were the only expense that rose more than proportionally to sales, passing from 2.6 percent to 3.8 percent as a direct consequence of the increase in the designer lines sales.
Operating income amounted to 79,644 million lire, rising by 46.3 percent and, as a consequence, operating margins rose to 23.7 percent from 19.7 percent. Net income, at 42,797 million lire, as a percentage of sales was 12.7 percent, in line with the comparable 1990 period.
Commenting on the activity of the company, Del Vecchio added, "These results show that despite the recession, Luxottica's products are very well positioned in the market. We are very pleased with the improvements in both industrial and operating margins that show how the company is run and managed."
Luxottica also announced some commercial events. Recently, the group took over the 50 percent stake of its partner in Luxottica United Kingdom, which therefore became 100 percent owned by the group. In order to keep in line with its commercial strategy, Luxottica Group signed two new distributing joint ventures in Belgium and in Greece.
Luxottica's interest in both companies is a majority stake. The Belgian joint venture has been operative since the beginning of the fourth quarter of 1991 while the operations in Greece will begin in January 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, are sold through wholly owned distributors in the United States, Canada, Italy, France, Spain, Portugal, Sweden, the United Kingdom and West Germany and a 50 percent owned distributor in Japan.
LUXOTTICA GROUP S.P.A. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
(Prepared in accordance with U.S. GAAP)
(Millions of lire except per ADS amounts)
Three months ended Sept. 30 1991 1990 Pct. Chng.
Net sales 104,112 85,860 21.3
Cost of sales (32,401) (28,829)
Gross profit 71,711 57,031 25.7
Selling, general and admin. exps. (46,161) (40,636)
Income from operations 25,550 16,395 55.8
Interest expense (1,576) (2,207)
Interest income 985 1,334
Other - net (2,264) 1,725
Inc. before provision for inc. taxes 22,695 17,247 31.6
Provision for income taxes (10,010) (7,877)
Net income before minority interests 12,685 9,370
Minority interests - net (374) (92)
Net income 12,311 9,278 32.7
Earnings per ADS 547 412
Number of shares outstanding 45,050 45,050
Nine months ended Sept. 30 1991 1990 Pct. Chng.
Net sales 336,693 276,182 21.9
Cost of sales (109,703) (97,995)
Gross profit 226,990 178,187 27.4
Selling, general and admin. exps. (147,346) (123,764)
Income from operations 79,644 54,423 46.3
Interest expense (5,135) (7,323)
Interest income 2,771 3,850
Other - net (214) 13,016
Inc. before provision for inc. taxes 77,066 63,966 20.5
Provision for income taxes (33,088) (28,234)
Net income before minority interests 43,978 35,732
Minority interests - net (1,181) (458)
Net income 42,797 35,274 21.3
Earnings per ADS 1,900 1,566
Number of shares outstanding 45,050 45,050
Key Figures in Thousands of U.S. Dollars
Quarter ended Sept. 30 1991(A) 1990(B)
Net sales $ 83,611 $ 73,341
Net income $ 9,887 $ 7,924
Earnings per ADS $0.44 $0.35
Nine months ended Sept. 30 1991(A) 1990(B)
Net sales $270,393 $235,912
Net income $ 34,370 $ 30,130
Earnings per ADS $1.53 $1.34
(A) -- US$1 equals Lire 1,245.2 as of Sept. 30, 1991.
(B) -- US$1 equals Lire 1,170.7 as of Sept. 30, 1990.
NOTE: Luxottica Group noted that its figures in Lire are the more accurate gauge of its results due to the distorting effects caused by the currency translation at the end of the period exchange rates.
/CONTACT: Susi Belli of Luxottica Group, c/o Dewe Rogerson, 212-688-6840, or after Nov. 11 in Italy, 011-39-437-62941/
(LUX) CO: Luxottica Group S.p.A. ST: New York IN: SU: ERN GK-OS -- NY010 -- 0628 11/04/91 10:07 EST