FGX profit more than triples

SMITHFIELD – Eyewear and accessories designer FGX International Holdings Ltd. (Nasdaq: FGXI) posted a record annual profit of $17.02 million, an increase of 261 percent from the $4.71 million it posted for fiscal 2007, on revenue that rose 6.40 percent to $256.10 million.
Earnings per diluted share rose 172 percent in the year ended Jan. 3, to 79 cents from the year-ago 29 cents.
Among FGX segments, sales of non-prescription reading glasses rose 7.55 percent last year to $126.76 million, while sales of sunglasses and prescription-eyewear frames rose 27.99 percent to $78.99 million. But international sales fell 5.93 percent to $33.82 million and costume jewelry sales continued to decline, falling 33.70 percent to $16.53 million, FGX said in its report.
“We are extremely pleased to have capped our first full year as a public company with another strong performance in the fourth quarter,” said CEO Alec Taylor. “Despite the unprecedented economic turbulence affecting most consumer products companies and retailers, we were able to capitalize on our leading market positions and achieve impressive growth and profitability.
“The strength of our brands Foster Grant and Magnivision continues to provide us with the competitive advantage to perform successfully in difficult market conditions,” Taylor continued. “Further, we continued to closely manage expenses, maintain gross margins and strengthen our balance sheet, all of which contributed to our record annual profitability.”
The company posted a fourth-quarter profit of $6.83 million, a 422 percent increase from the year-ago $1.31 million, on revenue that grew 5.46 percent to $66.21 million. Earnings per diluted share rose to 31 cents from the FY 2007 fourth quarter’s 7 cents.
Fourth-quarter highlights included the signing of a contract with office-supplies OfficeMax, which agreed to carry FGX reading glasses at about 1,000 retail outlets. They also included FGX’s November acquisition of Dioptics Medical Products Inc., a California-based maker of sunglasses and safety glasses, in a cash-and-shares deal valued at about $42.7 million. (READ MORE)
“The integration of the two organizations [FGX and Dioptics] is ahead of schedule, both from achieving synergies and capitalizing on cross-selling opportunities,” Taylor said yesterday. Moreover, “we continue to evaluate other opportunities for accretive acquisitions that will enhance our optical business.”
The company this month launched its first national advertising campaign for its Foster Grant and Magnivision brands, with Racquel Welch returning as the Foster Grant spokesperson. And last week, FGX announced the addition to its board of Alfred J. Verrecchia, the chairman and former president and CEO of Hasbro Inc. (READ MORE)
Going forward, FGX currently predicts it will achieve FY 2009 earnings of 98 cents to $1.10 per diluted share on net sales of $283 to $295 million, but adds that it is continuing its strategic review of the jewelry segment, which may result in additional charges.
“We are cautiously optimistic about 2009, although predicting financial results in the current macroeconomic environment is very difficult,” Taylor said. Still, he added, “We are confident about the soundness of our business model and strategy and will continue to invest in our brands and business, which we believe will result in the creation of long-term shareholder value.”
FGX International Holdings Ltd. (Nasdaq: FGXI) is a designer and marketer of non-prescription eyewear – including reading glasses and sunglasses under the Anarchy, Angel, Foster Grant, Gargoyles, Magnivision, PolarEyes, SolarShield and other brands – and costume jewelry. FGX has about 375 full-time employees at its headquarters in Smithfield and offices in Bentonville, Ark.; New York City; San Luis Obispo, Calif; Toronto; Mexico City; Stoke-on-Trent in the United Kingdom; and Shenzhen, China. Additional information is available at www.fgxi.com.