LensCrafters 2013 Annual Report Download - page 8

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3. FINANCIAL RESULTS
We are a global leader in the design, manufacture and distribution of fashion, luxury and sport eyewear, with net
sales reaching Euro 7.3 billion in 2013, approximately 73,400 employees and a strong global presence. We operate in two
industry segments: (i) manufacturing and wholesale distribution; and (ii) retail distribution. See Note 5 of the Notes to the
Consolidated Financial Statements as of December 31, 2013 for additional disclosures about our operating segments.
Through our manufacturing and wholesale distribution segment, we are engaged in the design, manufacture, wholesale
distribution and marketing of proprietary and designer lines of mid- to premium-priced prescription frames and sunglasses.
We operate our retail distribution segment principally through our retail brands, which include, among others, LensCrafters,
Sunglass Hut, OPSM, Laubman & Pank, Oakley “O” Stores and Vaults, David Clulow, GMO and our Licensed Brands
(Sears Optical and Target Optical).
As a result of our numerous acquisitions and the subsequent expansion of our business activities in the United States
through these acquisitions, our results of operations, which are reported in Euro, are susceptible to currency rate fluctuations
between the Euro and the U.S. dollar. The Euro/U.S. dollar exchange rate has fluctuated to an average exchange rate of
Euro 1.00 = U.S. $1.3277 in 2013 and from Euro 1.00 = U.S. $1.2848 in 2012. With the acquisition of OPSM, our results of
operations have also been rendered susceptible to currency fluctuations between the Euro and the Australian dollar.
Additionally, we incur part of our manufacturing costs in Chinese Yuan; therefore, the fluctuation of the Chinese Yuan
relative to other currencies in which we receive revenues could impact the demand of our products or our consolidated
profitability. Although we engage in certain foreign currency hedging activities to mitigate the impact of these fluctuations,
they have impacted our reported revenues and expenses during the periods discussed herein.