LensCrafters 2006 Annual Report Download - page 151

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Year ended Italy USA Asia Other Adjustments Consol-
December 31, (6) & Canada -Pacific (6) and idated
(Euro/000) (6) (6) eliminations
2004
Net sales (5) 832,813 2,007,873 464,905 486,630 (612,608) 3,179,613
Income from operations 189,944 244,582 40,717 44,690 (40,434) 479,499
Long lived assets, net 196,088 302,557 67,973 8,228 - 574,846
Identifiable assets 1,086,274 2,584,916 549,096 239,965 95,807 4,556,058
2005
Net sales (5) 998,420 2,811,860 516,793 575,196 (768,006) 4,134,263
Income from operations 258,391 291,438 46,993 51,200 (66,621) 581,401
Long lived assets, net 228,841 375,776 92,335 8,214 - 705,166
Identifiable assets 1,294,955 2,932,483 662,926 270,169 (187,011) 4,973,522
2006
Net sales (5) 1,321,887 3,076,503 603,640 761,955 (1,087,828) 4,676,156
Income from operations 389,275 292,902 13,420 79,397 (19,007) 755,987
Long lived assets, net 280,692 387,861 110,099 8,549 - 787,201
Identifiable assets 1,380,758 2,725,910 752,196 388,594 (332,433) 4,915,025
(5) No single customer represents 5% or more of sales in any year presented.
(6) Sales, income from operations and identifiable assets are the result of combination of legal entities located in the same geographic area.
14. FINANCIAL INSTRUMENTS
Concentration of credit risk
Financial instruments which potentially expose the Company to concentration of credit risk consist
primarily of cash investments, accounts receivable and a Euro 19.8 million note received in
connection with the sale of its Things Remembered specialty gift business (see Note 4). The
Company attempts to limit its credit risk associated with cash equivalents by placing the
Company’s investments with highly rated banks and financial institutions. With respect to accounts
receivable, the Company limits its credit risk by performing ongoing credit evaluations. As of
December 31, 2005 and 2006, no single customer balances comprised 10% or more of the overall
accounts receivable balance. However, included in accounts receivable as of December 31, 2006,
is approximately Euro 14.0 million due from the host stores of our license brands retail division.
These receivables represent cash proceeds from sales deposited into the host stores bank
accounts, which are subsequently forwarded to the Company on a weekly or monthly basis
depending on the contract. These receivables are based on contractual arrangements that are
short term in length. The Company believes no significant concentration of credit risk exists with
respect to these cash investments and accounts receivable.
Concentration of sales under license agreement
In the second half of 2003, a license agreement was signed for the production and distribution of
products with the Prada and Miu Miu trade names. The Prada license agreement expires in 2013.
The sales realized through the Prada and Miu Miu trade names represented approximately 4.4%
and 5.5% of total sales in 2005 and 2006, respectively.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS |151 <