SOLA International's European sales grew by only 2.8 percent in local currencies in the 3rd quarter ended Dec. 31. Sales of progressive lenses rose by 3 percent. Strong results from its prescription laboratories in France, Italy and Spain were partially offset by weaker results from its wholesale business in Germany and the UK.
Instead, sales in North America continued to grow rapidly, with a 7.2 percent increase in the quarter, helping the group to post an overall sales increase of 7.1 percent to $135.2 million, with a 15.7 percent jump in lab revenues and increases of 69 percent in polycarbonate and 6 percent in progressive lenses. The management says Sola will place more emphasis in the future on its lab network in North America and Europe as it offers the prospect of superior growth.
The group's operating income improved by 10.4 percent in the quarter to $14.0 million, with a higher gross margin of 41.4 percent. However, unrealised foreign exchange losses on its debt led to a net loss of $5.2 million in the quarter as compared to net income of $7.3 million a year ago. Excluding foreign exchange losses, the company recorded a higher net profit of $17.3 million in the first 9 months of its current fiscal year on 4 percent higher sales of $408.9 million, as compared to $10.5 million in the year-ago period. Adjusted net income of $10.1 million is predicted for the 4th quarter.