Increased sales and marketing efforts, combined with strong sales of polycarbonate lenses, AO Compact and other new products, helped to generate sales increases of 20.8 percent in Europe and 25.8 percent in other regions outside North America in the company's first quarter, ended June 30. Instead, North American sales dropped by 4.4 percent.
Overall, Sola International's sales reached $140,835,000 in the quarter, recording increases of 9.4 percent excluding the impact of currency changes, 5.6 percent excluding acquisitions, and 5.4 percent including the impact of currency adjustments. The only major acquisition was a raise from 35 to 100 percent in Sola's stake in Optical Eyewear, a major group of lens surfacing laboratories operating in Australia and New Zealand. Sola's sales of polycarbonate lenses are still relatively low, but they are up 37 percent from the first quarter of 1999.
Despite the sales increases and a move to lower-cost manufacturing locations that is being gradually implemented, the group's gross profit declined slightly, and its operating and net profit was cut in half, due primarily to special charges of $6,832,000 related to severance payments and other costs related to the restructuring of Sola's global manufacturing base. Net income was down to $2,353,000 from $5,918,000 in the year-ago period. Additional special charges will be necessary over the balance of the fiscal year.
Meanwhile, another top executive of Sola, Jim Cox, has resigned. The group's new CEO, Jeremy Bishop, is assuming temporarily the responsibilities of Cox, who had worked for the company for 15 years, most recently as vice president of business and product development. Another executive, Les Kocsis, left recently as vice president and general manager of Sola Sunlens. He has been replaced by Gaetano Sciuto, former commercial director of Sola Sunlens Italy.