LensCrafters 2005 Annual Report Download - page 66

Download and view the complete annual report

Please find page 66 of the 2005 LensCrafters annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 158

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158

MANAGEMENT’S
DISCUSSION AND ANALYSIS | 65 <
NON-GAAP FINANCIAL MEASURES
The Company uses certain measures of financial performance that exclude the impact of fluctuations
in currency exchange rates in the translation of operating results into Euro, and include the results of
operations of Cole National for the full year 2004. The Company believes that these adjusted financial
measures provide useful information to both management and investors by allowing a comparison of
operating performance on a consistent basis. In addition, since the Company has historically reported
such adjusted financial measures to the investment community, the Company believes that their
inclusion provides consistency in its financial reporting. Further, these adjusted financial measures are
one of the primary indicators management uses for planning and forecasting in future periods.
Operating measures that assume constant exchange rates between the full year 2005 and the full year
2004 are calculated using for each currency the average exchange rate for the full year 2004.
Operating measures that exclude the impact of fluctuation in currency exchange rates are not
measures of performance under U.S. GAAP. These non-GAAP measures are not meant to be
considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. In
addition, the Company’s method of calculating operating performance excluding the impact of
changes in exchange rates may differ from methods used by other companies. See the table below
for a reconciliation of the operating measures excluding the impact of fluctuations in currency
exchange rates to their most directly comparable U.S. GAAP financial measures. The adjusted financial
measures should be used as a supplement to results reported under U.S. GAAP to assist the reader in
better understanding the operational performance of the Company.
In millions of Euro FY 2004 FY 2005 FY 2005
U.S. GAAP results U.S. GAAP results Adjustment for constant adjusted results
exchange rates
Consolidated net sales 3,255.3 4,370.7 (16.9) 4,353.8
Manufacturing/Wholesale
net sales 1,094.8 1,310.3 (7.5) 1,302.8
Retail net sales 2,346.7 3,298.2 (10.3) 3,287.9
The Company has included the following table of consolidated adjusted sales and operating income for
2004. The Company believes that the adjusted amounts may be of assistance in comparing the
Company’s operating performance between the 2004 and 2005. However, adjusted financial information
should not be viewed as a substitute for measures of performance calculated in accordance with generally
accepted accounting principles. The consolidated adjusted amounts reflect the following adjustments:
1. the inclusion in the adjusted amounts of the consolidated results of Cole National for the full year
2004; and
2. the elimination of wholesale sales to Cole National from Luxottica Group entities for the full year 2004.
This information is being provided for comparison purposes only and does not purport to be
indicative of the actual results that would have been achieved had the Cole National acquisition
been completed as of January 1, 2004.
The following table reflects the Company’s consolidated net sales and income from operations for 2004
as reported and as adjusted:
In millions of Euro FY 2004 FY 2004 results
U.S. GAAP results Adjustment including Cole National
for Cole National
Consolidated sales 3,255.3 747.7 4,003.0
Consolidated income from operations 492.8 (10.6) 482.2