Sola International is anticipating further gains in profitability this year, but no major increases in revenues. The portion taken up by value-added products in its turnover should rise further from the 71 percent rate of the 4th quarter ended March 31. Furthermore, the massive relocation of manufacturing operations to low-cost countries should continue to benefit the gross margin, which showed an increase in the quarter to 42.9 percent as compared to 4.1 percent in the year-ago period, not including costs related to Sola's transition to the new manufacturing set-up.
In the 4th quarter, the US-based company managed to post a net profit of $7.2 million, excluding special one-time charges and transition costs, which compares with net income of $4.3 million in the same period one year ago. On the same basis, the net profit for the whole fiscal year improved to $25.8 million from $22.7 million the year before. Including charges and transition costs, the company still posted net losses of $2.4 million in the 4th quarter and $66.5 million for the year. No additional special charges are expected for this year, but the company is budgeting further transition costs of $20 million, up from $16.5 million in the past fiscal year.
As previously indicated, Sola's revenues grew by 2.4 percent to $141.3 million in the 4th quarter. In terms of constant currencies, they rose by 7.1 percent, with a strong 14.5 percent increase in Europe. That increase was partly the result of Sola's and American Optical's improving relations with numerous European clients, particularly in Italy, Belgium and France where the two sister companies have prescription laboratories. Sola has now opened its first prescription lab in the USA, where its sales have stopped declining.
For the whole fiscal year, revenues were up 0.4 percent to $545.4 million, with a 5.5 percent gain in local currencies. Solalens, the sunwear operation which has been transferred to Italy, contributed sales increases of 25.7 percent in value and 42.6 percent in volume during the year. Thanks to the recent acquisition of Oracle Lens, polycarbonate sales increased by 34 percent in value and 60.6 percent volume in the latest quarter.