SMITHFIELD, R.I..—FGX International (NASDAQ:FGXI), a leading designer and marketer of non-prescription reading glasses and sunglasses, reported that its net sales rose 5 percent to $66.2 million in the fourth quarter ending Jan. 3, 2009 from the comparable quarter a year ago. Its net income for the period increased to $6.8 million from $1.3 billion in the fourth quarter of 2007.
For the full fiscal year, FGX’s total net sales rose 7 percent to $256.1 million from $240.5 million in fiscal 2007 while net income increased substantially to $17 million for fiscal 2008 compared to $4.7 million in the prior year.
CEO Alec Taylor commented, “We are extremely pleased to have capped our first full year as a public company with another strong performance in the fourth quarter. 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. 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 also benefited from approximately $2 million of sales by Dioptics Medical Products, Inc., which was acquired Nov. 26, 2008. The aggregate consideration for the acquisition, subject to post-closing adjustments, was 952,380 FGX ordinary shares, which closed at $10.52 per share on the acquisition date, and $35.0 million in cash ($32.7 million, net of Dioptics existing cash balance). Dioptics is a designer and marketer of sunglasses and related accessories primarily sold under the SolarShield and PolarEyes brand names. Also, in February 2009, the company launched the first-ever national television advertising campaign for its Magnivision and Foster Grant reading glass brands. The campaign will air approximately 6,000 spots and is anticipated to run through the second quarter of 2009.
For the full year 2009 the company currently expects net sales of $283 to $295 million and for the first quarter of 2009, the company currently expects net sales of $57 million to $62 million. Earnings are expected to be lower during the first quarter of 2009 compared to the corresponding period of 2008 principally as a result of the costs associated with the company’s reading glasses advertising campaign mentioned above. These costs are expected to be approximately $3.0 million higher in the first quarter of 2009 compared to the first quarter of 2008.
The above outlook excludes any unforeseen charges or events including further deterioration of general economic conditions and includes anticipated results of the costume jewelry segment. As mentioned above, the company is continuing its strategic review of the jewelry segment and may incur charges related to the outcome of that review.