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FGX sees very strong sales & earnings growth in 2007
21 Feb '08
5 min read
The Company expects to realize interest savings of approximately $13 million in 2008 compared with 2007 as a result of the debt repayments from the IPO proceeds and refinancing of the Company's remaining debt at lower interest rates.
Due to the Company's continued inability to sublease the remaining vacant space at its Miramar, Florida facility, the Company now expects the remaining space in the facility to remain vacant through April 2011, the end of the lease term.
As a result, during the fourth quarter of 2007, the Company recorded an incremental charge of $2.5 million, or $0.08 per diluted share. The total charge for 2007 was $4.4 million, or $0.17 per diluted share.
This lease was assumed as part of the Magnivision acquisition on October 1, 2004. The operations at this facility were subsequently ceased and consolidated into the Company's Smithfield, Rhode Island facility on March 31, 2005.
During the fourth quarter of 2007, the Company recorded a stock compensation charge of $0.4 million, $0.01 per diluted share, as required by SFAS 123R.
The Company's Board of Directors has authorized the repurchase of up to $12 million of its outstanding ordinary shares for a one year period or until earlier terminated by the Company's Board of Directors. These repurchases can be made from time to time in open market transactions and privately negotiated purchases depending upon market conditions.
Repurchases will be funded through cash generated from operations and borrowings under the Company's credit facility. All ordinary shares purchased will be returned to authorized and unissued status.
During the fourth quarter of 2007, in cooperation with the United States Consumer Product Safety Commission, the Company voluntarily recalled certain styles of its children's sunglasses following the discovery that some of these glasses contained lead paint in excess of allowable limits.
The Company recorded a charge of $0.2 million, or $0.01 per diluted share, in the fourth quarter of 2007 related to this recall. This charge was less than originally estimated due to a recovery of product costs from the Company's supplier as well as lower than anticipated product returns from consumers and retailers.
For the first quarter of 2008, the Company expects net sales in the range of $56 to $58 million and as reported net income of $1.5 to $2.0 million.
For the full year of 2008, EBITDA is expected to range between $54 and $59 million. Depreciation expense is expected to range from $15 to $17 million, and capital expenditures are expected to range from $16 to $18 million. Free Cash Flow is expected to range between $37 and $40 million.
The effective income tax rate for 2008 is expected to be between 37% and 38%. Earnings per diluted share guidance for the first quarter and fiscal 2008 are based upon weighted average diluted shares of 21.6 million.
Mr. Taylor concluded, "In 2008, we look forward to building upon the momentum we have generated in 2007 and we will continue to implement our overall growth strategy by investing in our core brands and focusing on generating free cash flow." The Company will host a conference call on Thursday, February 21, 2008 at 8:30 AM EST to discuss its financial results.
Due to the Company's continued inability to sublease the remaining vacant space at its Miramar, Florida facility, the Company now expects the remaining space in the facility to remain vacant through April 2011, the end of the lease term.
As a result, during the fourth quarter of 2007, the Company recorded an incremental charge of $2.5 million, or $0.08 per diluted share. The total charge for 2007 was $4.4 million, or $0.17 per diluted share.
This lease was assumed as part of the Magnivision acquisition on October 1, 2004. The operations at this facility were subsequently ceased and consolidated into the Company's Smithfield, Rhode Island facility on March 31, 2005.
During the fourth quarter of 2007, the Company recorded a stock compensation charge of $0.4 million, $0.01 per diluted share, as required by SFAS 123R.
The Company's Board of Directors has authorized the repurchase of up to $12 million of its outstanding ordinary shares for a one year period or until earlier terminated by the Company's Board of Directors. These repurchases can be made from time to time in open market transactions and privately negotiated purchases depending upon market conditions.
Repurchases will be funded through cash generated from operations and borrowings under the Company's credit facility. All ordinary shares purchased will be returned to authorized and unissued status.
During the fourth quarter of 2007, in cooperation with the United States Consumer Product Safety Commission, the Company voluntarily recalled certain styles of its children's sunglasses following the discovery that some of these glasses contained lead paint in excess of allowable limits.
The Company recorded a charge of $0.2 million, or $0.01 per diluted share, in the fourth quarter of 2007 related to this recall. This charge was less than originally estimated due to a recovery of product costs from the Company's supplier as well as lower than anticipated product returns from consumers and retailers.
For the first quarter of 2008, the Company expects net sales in the range of $56 to $58 million and as reported net income of $1.5 to $2.0 million.
For the full year of 2008, EBITDA is expected to range between $54 and $59 million. Depreciation expense is expected to range from $15 to $17 million, and capital expenditures are expected to range from $16 to $18 million. Free Cash Flow is expected to range between $37 and $40 million.
The effective income tax rate for 2008 is expected to be between 37% and 38%. Earnings per diluted share guidance for the first quarter and fiscal 2008 are based upon weighted average diluted shares of 21.6 million.
Mr. Taylor concluded, "In 2008, we look forward to building upon the momentum we have generated in 2007 and we will continue to implement our overall growth strategy by investing in our core brands and focusing on generating free cash flow." The Company will host a conference call on Thursday, February 21, 2008 at 8:30 AM EST to discuss its financial results.
FGX International Holdings Limited
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