LensCrafters 2005 Annual Report Download - page 67

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> 66 | ANNUAL REPORT 2005
The following table summarizes the combined effect on consolidated net sales of exchange rates and
the Cole National acquisition, to allow a comparison of operating performance on a consistent basis:
CONSOLIDATED SALES
In millions of Euro FY 2004 FY 2005 % change
U.S. GAAP results 3,255.3 4,307.7 34.3%
i) Exchange rate effect (16.9)
Constant exchange rate 3,255.3 4,353.8 33.7%
ii) Cole National results in 2004 747.7
Consistent basis comparison 4,003.0 4,353.8 8.8%
The 8.8% increase in net sales on a consistent basis in 2005 as compared to 2004, as adjusted, is mainly
attributable to the additional sales of Ray-Ban product lines, as well as to the additional sales of the Prada,
Versace and Bvlgari product lines and increased comparable store sales (2) of the retail division.
The following table summarizes the effect on consolidated income from operations of the Cole
National acquisition to allow a comparison of operating performance on a consistent basis:
CONSOLIDATED INCOME FROM OPERATIONS
In millions of Euro FY 2004 FY 2005 % change
U.S. GAAP results 492.8 602.6 22.3%
% of sales 15.1% 13.8%
i) Cole National results in 2004 (10.6)
Consistent basis comparison 482.2 602.6 25.0%
% of sales 12.0% 13.8%
On a consolidated adjusted basis, including Cole National’s results for 2004, income from operations
in 2005 would have increased by 25.0% and operating margin would have increased to 13.8% from
12.0% as compared to 2004.
LIQUIDITY AND FINANCIAL RESOURCES
The Company has relied primarily upon internally generated funds, trade credit and bank borrowings to
finance its operations and expansion.
Bank overdrafts represent negative cash balances held in banks and amounts borrowed under various
unsecured short-term lines of credit obtained by the Company and certain of its subsidiaries through
local financial institutions. These facilities are usually short-term in nature or contain evergreen clauses
with a cancellation notice period. Certain of these subsidiaries’ agreements require a guarantee from
(1) Comparable store sales reflects the change in sales from one period to another that, for comparison purposes, includes in the calculation only stores open in the more
recent period that also were open during the comparable prior period, and applies to both periods the average exchange rate for the prior period and the same
geographic area. The calculation of comparable store sales for the 2005 includes relevant stores of the former Cole National business as if the Cole National acquisition
had been completed as of January 1, 2004. Cole National results are actually consolidated with Luxottica Group results only as of the October 4, 2004 acquisition date.