National Vision Reports Third Quarter and Nine Month Results for
the Period Ended September 27, 2003 LAWRENCEVILLE, Ga., Nov. 18
/PRNewswire-FirstCall/ -- National Vision, Inc. , a national retail
optical company, today announced results for the third quarter and
nine months ended September 27, 2003. For the quarter, the Company
recorded net sales of $65.1 million and gross profit of $34.6
million, versus net sales of $57.9 million and gross profit of
$32.3 million, recorded in the comparable period last year from the
Company's continuing operations. Comparable store sales for the
domestic businesses that are part of continuing operations
increased 11.0% from levels recorded in the comparable period last
year. The Company recorded a net income of $356,000 in the current
period versus a net loss of $753,000 in the comparable period last
year. Earnings before interest, taxes, depreciation, and
amortization (EBITDA) in the current period were $7.4 million
versus EBITDA of $7.0 million achieved in the comparable period
last year. For the nine months ended September 27, 2003, the
Company recorded net sales of $185.6 million and gross profit of
$100.6 million, versus net sales of $173.2 million and gross profit
of $97.2 million, recorded in the comparable period last year from
the Company's continuing operations. Sales from domestic stores
that are part of continuing operations increased 4.5% from levels
recorded in the comparable period last year. The Company recorded a
net loss of $4.4 million in the current period versus a $3.7
million net loss in the comparable period last year. The current
nine-month period includes a net loss of $564,000 relating to a
cumulative effect of a change in accounting principle. Earnings
before interest, taxes, depreciation, and amortization (EBITDA) in
the current nine-month period were $17.9 million, versus EBITDA of
$21.0 million achieved in the comparable period last year. At the
end of the third quarter, the Company operated 481 vision centers,
versus 518 vision centers at the end of the third quarter a year
ago. Of the Company's vision centers open and operating at
September 27, 2003, 373 are in domestic Wal-Mart stores, 37 are in
Wal-Mart de Mexico stores, 47 are located in Fred Meyer stores, and
24 are in military bases throughout the United States. In
conjunction with the third quarter results, the Company will hold
an Investor Relations Conference Call on November 19, 2003 at 11:00
a.m. EDT. The general public can access this conference call via
the Company's web site at http://www.nationalvision.com/ . At the
conclusion of the prepared remarks by management, the Company will
accept and address questions from institutional investors. The
general public can access the Company's 10-Q for the period ended
September 27, 2003 and the Company's 10-K financial reports and
press releases via the Company's web site. Additionally, the
general public can access all of the Company's public documents
filed with the Securities and Exchange Commission ("SEC") via their
web site at http://www.sec.gov/ . The Company's common stock and
senior notes are listed on the American Stock Exchange. The common
stock of the Company trades under the symbol "NVI" and the senior
notes trade under the symbol "NVI.A". In addition, on November 7,
2003 the Company resolved the final outstanding claim in its
Chapter 11 proceeding. Pursuant to its plan of reorganization, the
Company had deposited common stock and senior secured notes in a
disputed claim reserve. As of November 10, 2003, approximately
325,000 shares of common stock and $12.2 million in notes remained
in the reserve. The plan of reorganization provides that, upon
resolution of all outstanding claims, these securities will be
distributed on a pro rata basis to the holders of claims in the
Chapter 11 case. The Company is in the process of calculating the
distribution amounts and expects that the final distribution will
take place later in the fourth quarter. The distribution of these
securities could have an adverse impact on the trading prices of
the securities of the Company. We frequently refer to EBITDA
because it is the basis for the calculation of the excess cash flow
principal repayment under our senior notes; and it is a widely
accepted financial indicator of a company's ability to service or
incur indebtedness. EBITDA is calculated as net earnings before
interest, taxes, depreciation and amortization, extraordinary
items, and cumulative effect of a change in accounting principle,
as defined in the terms of our Senior Subordinated Debt agreement.
A reconciliation of net earnings to EBITDA is presented in the
attached financial tables. This release includes statements
concerning the Company's plans, beliefs and expectations for future
periods. These "forward-looking statements" may be identified by
the use of words such as "intends," "contemplates," "believes,"
"anticipates," "expects," "should," "could," "would" and words of
similar import. These forward-looking statements involve known and
unknown risks and uncertainties that could cause actual results to
differ materially from the expectations expressed or implied in
such statements. With respect to such forward-looking statements
and others that may be made by, or on behalf of, the Company, the
factors described as "Risk Factors" in the Company's Reports
previously filed with the SEC, could materially affect the
Company's actual results. These risks and uncertainties include,
among others, impaired relationships with the Company's vendors or
customers as a result of the Company's recent emergence from
bankruptcy, the Company's high leverage and its potential inability
to repay its debt, an adverse change in the Company's relationship
with Wal*Mart, changes in economic conditions (including an
increase in interest rates), financial markets or customer demand,
the level of competition in the retail eyecare industry, federal
and state regulation of the healthcare and insurance industries
(particularly in California), the Company's financial condition and
other risks and uncertainties set forth in the Company's filings
with the Securities and Exchange Commission. All forward-looking
statements included in this release are based upon management's
present expectations and the information available at this time.
The Company does not undertake any obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or other factors. National Vision, Inc.
Condensed Consolidated Statements of Operations (unaudited) Three
Months Ended Nine Months Ended Sept. 27, Sept. 28, Sept. 27, Sept.
28, 2003 2002 2003 2002 Retail sales, net $63,434 $57,254 $180,919
$171,903 Premium revenue 1,681 637 4,670 1,290 Total net sales
65,115 57,891 185,589 173,193 Cost of goods sold 30,479 25,548
84,997 75,978 Total gross profit 34,636 32,343 100,592 97,215
Selling, general & administrative expense 30,535 30,415 93,683
91,893 Restructuring expense 484 - 484 - Operating income 3,617
1,928 6,425 5,322 Interest expense, net (a) 3,199 2,992 9,745
10,136 Income / (loss) from continuing operations before income
taxes 418 (1,064) (3,320) (4,814) Income tax expense - - - - Income
/ (loss) from continuing operations 418 (1,064) (3,320) (4,814)
Discontinued operations: Operating income / (loss) from
discontinued operations (98) 311 (479) 1,085 Gain / (loss) on
disposal 36 - (50) - Income / (loss) from discontinued operations,
net of income taxes (62) 311 (529) 1,085 Income / (loss) before
cumulative effect 356 (753) (3,849) (3,729) Cumulative effect of a
change in accounting principle - - (564) - Net income / (loss) $356
$(753) $(4,413) $(3,729) Reconciliation of Net Income/(loss) to
EBITDA Addback: Interest expense, net $3,199 $2,992 $9,745 $10,136
Income taxes - - - - Cumulative effect of a change in accounting
principle - - 564 - Depreciation and amortization expense -
continuing operations 3,861 4,685 11,725 14,322 Depreciation and
amortization expense - discontinued operations 27 106 268 290
EBITDA (b) $7,443 $7,030 $17,888 $21,019 Capital expenditures $834
$825 $2,425 $2,978 (a) As a result of the adoption of Financial
Accounting Standards Board Statement No. 145, the Company has
reclassified the prior period gain on the repurchase of debt from
extraordinary income to income from continuing operations as a
component of the "Interest expense" line item included in the
Condensed Consolidated Statement of Operations. The Company
realized a gain of $547,000 during the third quarter of 2002
related to the repurchase of bonds. (b) EBITDA is calculated as net
earnings before interest, taxes, depreciation and amortization,
extraordinary items, cumulative effect of a change in accounting
principle, and reorganization items as defined in the terms of our
Senior Subordinated Debt agreement. We refer to EBITDA because: -
it is the basis for the calculation of the excess cash flow
principal repayment under our senior notes; and - it is a widely
accepted financial indicator of a company's ability to service or
incur indebtedness. EBITDA does not represent cash flow from
operations as defined by generally accepted accounting principles,
is not necessarily indicative of cash available to fund all cash
flow needs, should not be considered an alternative to net income
or to cash flow from operations (as determined in accordance with
GAAP) and should not be considered an indication of our operating
performance or as a measure of liquidity. EBITDA is not necessarily
comparable to similarly titled measures for other companies.
National Vision, Inc. Condensed Consolidated Balance Sheets (in
thousands) As of As of Sept. 28, 2003 Dec. 28, 2002 (unaudited)
Assets: Cash $4,750 $9,020 Accounts receivable, net 2,711 2,164
Inventories 18,544 17,928 Other current assets 727 979 Current
deferred income tax asset - 975 Net property and equipment 13,982
17,992 Other assets and deferred costs, net 761 1,004 Intangible
value of contractual rights, net 95,425 100,960 $136,900 $151,022
Liabilities and Shareholders' Equity: Accounts payable $5,994
$3,445 Accrued expenses and other current liabilities 21,093 24,067
Current portion of long-term debt - 3,824 Deferred income tax
liability - 975 Senior subordinated notes 101,546 105,882 Total
shareholders' equity 8,267 12,829 $136,900 $151,022 DATASOURCE:
National Vision, Inc. CONTACT: Angus Morrison, Sr. VP & Chief
Financial Officer of National Vision, Inc., +1-770-822-4295 Web
site: http://www.nationalvision.com/
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