LensCrafters 2007 Annual Report Download - page 163

> 162 | ANNUAL REPORT 2007
13. SEGMENTS AND RELATED INFORMATION
In accordance with SFAS No. 131, Disclosures About Segments of an Enterprise and Related
Information, the Company operates in two industry segments: (1) manufacturing and wholesale
distribution and (2) retail distribution. Through its manufacturing and wholesale distribution
operations, the Company is engaged in the design, manufacture, wholesale distribution and
marketing of house brand and designer lines of mid- to premium-priced prescription frames and
sunglasses. The Company operates in the retail segment through its Retail Division, consisting of
LensCrafters, Sunglass Hut International, OPSM Group Limited and Cole National Corporation. For
2007 Oakley is viewed as a stand alone segment since it has not yet been integrated into the
wholesale and retail segments.
The following tables summarize the segment and geographic information deemed essential by the
Company’s management for the purpose of evaluating the Company’s performance and for making
decisions about future allocations of resources.
The “Inter-segment transactions and corporate adjustments” column includes the elimination of
inter-segment activities which consist primarily of sales of product from the manufacturing and
wholesale segment to the retail segment and corporate related expenses not allocated to reportable
segments. This has the effect of increasing reportable operating profit for the manufacturing and
wholesale and retail segments. Identifiable assets are those tangible and intangible assets used in
operations in each segment. Corporate identifiable assets are principally cash, goodwill and trade
names.
Year ended Manufacturing Retail Oakley Inter-segments Consolidated
December 31 and wholesale transactions and
(Euro/000) corporate adjustments
2005
Net sales 1,310,273 3,061,690 (237,700) (1) 4,134,263
Income from operations 304,333 355,238 (78,170) (2) 581,401
Capital expenditure 81,070 138,946 0 220,016
Depreciation & amortization 48,720 103,596 32,336 (3) 184,652
Total assets 1,590,091 1,308,174 2,075,257 (4) 4,973,522
2006
Net sales 1,715,369 3,294,161 (333,374) (1) 4,676,156
Income from operations 445,843 431,547 (121,403) (2) 755,987
Capital expenditure 108,117 164,063 0 272,180
Depreciation & amortization 57,331 122,403 41,063 (3) 220,797
Total assets 1,853,144 1,343,482 1,772,252 (4) 4,968,878
2007
Net sales 1,992,740 3,233,802 86,964 (347,452) (1) 4,966,054
Income from operations 527,991 361,809 3,717 (60,204) (2) 833,313
Capital expenditure 112,973 213,293 8,503 0 334,769
Depreciation & amortization 68,981 118,100 7,682 38,050 (3) 232,813
Total assets 2,321,204 1,405,299 1,937,292 1,493,471 (4) 7,157,266
(1) Inter-segment elimination of net revenues relates to intercompany sales from the manufacturing and wholesale segment to the retail segment.
(2) Inter-segment elimination of operating income mainly relates to depreciation and amortization of corporate identifiable assets and profit-in-stock elimination
for frames manufactured by the wholesale business and included in the retail segment inventory.
(3) Corporate adjustments of depreciation and amortization relate to depreciation and amortization of corporate assets.
(4) Corporate adjustments of total assets include mainly the net value of goodwill and trade names of acquired retail businesses.