NVI National Vision

/C O R R E C T I O N -- National Vision, Inc./ In the news release, National Vision Reports Record Results for Fiscal 2004, issued yesterday, March 22, by National Vision, Inc. (Amex: NVI) over PR Newswire, we are advised by the company that several items in the financial statements were reported incorrectly. In the table "CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS" the following line items in the column "Three Months Ended January 3, 2004" should read: LAWRENCEVILLE, Ga., March 22 /PRNewswire-FirstCall/ -- National Vision, Inc. (AMEX:NVI) today announced operating results for its fourth quarter and fiscal year ended January 1, 2005. Total net revenue from continuing operations for the 2004 fourth quarter was $55.0 million in comparison with total net revenue from continuing operations of $55.8 million in the 2003 fourth quarter. In 2003, the fourth quarter included fourteen weeks' operations whereas 2004's fourth quarter was a thirteen-week fiscal period. Fourth quarter 2004 comparable store sales growth, which is computed excluding the additional week in 2003, was +7.1%. Net earnings for the current year fourth quarter were $732,000, or $0.13 per diluted share, in comparison to net earnings of $545,000, or $0.10 per diluted share, in the fourth quarter of the previous year. EBITDA, adjusted as defined in the Company's debt instruments, was $5.4 million in the 2004 fourth quarter versus $6.1 million in the prior year's fourth quarter. For the full year, fiscal 2004 total net revenue from continuing operations was $228.9 million, an increase of 5.6% over 2003 net revenue from continuing operations of $216.7 million. Fiscal 2004 was a 52-week year and fiscal 2003 was a 53-week year. Full year comparable sales growth, excluding the effect of the 2003 additional week, was +6.5%. Current year net earnings of $12.4 million, or $2.21 per diluted share, compare to a net loss of $3.9 million, or $0.77 per share, in 2003. In 2004, adjusted EBITDA increased to $32.8 million from $24.1 million in the previous year. Reade Fahs, the Company's President and Chief Executive Officer, stated, "2004 has been an extremely gratifying year for the National Vision team. Our strong comp sales growth of +6.5% followed a year in which comp sales growth was also quite strong, at +5.7%. The total year-to-year profit turnaround was $16.2 million and adjusted EBITDA was an all-time record for the Company. We are exceptionally proud of the combined efforts of our store teams in achieving these results." National Vision, Inc. operates retail vision centers primarily within host environments in the United States and Mexico. Our vision centers sell a wide range of optical products including eyeglasses, contact lenses and sunglasses. As of March 22, 2005, the Company operated 409 vision centers, including 297 located inside domestic Wal-Mart stores. We depend on our domestic Wal-Mart locations for substantially all of our revenues and cash flow. Investments in the debt and equity securities of National Vision, Inc. are subject to substantial risks as described in the Company's public filings with the Securities and Exchange Commission. NATIONAL VISION, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share information) Three Months Ended Year Ended January 1, January 3, January 1, January 3, 2005 2004 2005 2004 Sales of optical products and services $52,946 $54,107 $220,759 $210,368 Fees from managed vision care services 1,885 1,679 7,835 6,346 Sales of home medical products and services 134 258 Total net revenue 54,965 55,786 228,852 216,714 Cost of goods sold 26,159 25,115 101,167 97,532 Gross profit 28,806 30,671 127,685 119,182 Selling, general & administrative expense 27,249 29,457 111,119 113,804 Operating income 1,557 1,214 16,566 5,378 Other income (expense), net: Interest expense (2,392) (3,064) (10,595) (12,913) Gain on repurchase of Senior Subordinated Notes 83 2,321 3,166 2,321 Other income (expense), net (30) (56) 164 50 Earnings (loss) before taxes, discontinued operations and cumulative effect of a change in accounting principle (782) 415 9,301 (5,164) Income tax expense (benefit) (1,499) 136 (822) 136 Net earnings (loss) before discontinued operations and cumulative effect of a change in accounting principle 717 279 10,123 (5,300) Discontinued operations: Operating income (loss) from discontinued operations (10) 325 2,344 2,204 Gain (loss) on disposal 25 3 (57) (146) Income tax expense (62) (35) (62) Earnings from discontinued operations 15 266 2,252 1,996 Earnings (loss) before cumulative effect of a change in accounting principle 732 545 12,375 (3,304) Cumulative effect of a change in accounting principle (564) Net earnings (loss) $732 $545 $12,375 $(3,868) Earnings (loss) per common share: Basic $0.14 $0.11 $2.43 $(0.77) Diluted $0.13 $0.10 $2.21 $(0.77) NATIONAL VISION, INC. COMPUTATION OF CONSOLIDATED EBITDA Three Month Periods and Years Ended January 1, 2005 and January 3, 2004 (In thousands) Three Months Ended Year Ended Jan. 1, Jan. 3, Jan. 1, Jan. 3, 2005 2004 2005 2004 Net earnings (loss) $732 $545 $12,375 $(3,868) Adjustment to net earnings (loss): Interest expense 2,392 3,064 10,595 12,913 Income tax expense (benefit) (1,499) 198 (787) 198 Depreciation and amortization 3,432 3,968 13,542 15,962 Cumulative effect of a change in accounting principle 564 Gain on repurchase of Notes (83) (2,321) (3,166) (2,321) Impairment of long-lived assets 336 550 336 550 Other 56 139 (63) 66 EBITDA $5,366 $6,143 $32,832 $24,064 NATIONAL VISION, INC. CONDENSED CONSOLIDATED BALANCE SHEETS January 1, 2005 and January 3, 2004 (In thousands) January 1, 2005 January 3, 2004 ASSETS CURRENT ASSETS: Cash and cash equivalents $7,858 $3,545 Accounts receivable (net of allowance: 2004 - $423; 2003 - $769) 2,561 3,078 Inventories 14,065 17,387 Other current assets 2,405 1,278 Deferred income tax asset 9,394 7,305 Total current assets 36,283 32,593 PROPERTY AND EQUIPMENT, net 12,271 13,619 INTANGIBLE VALUE OF CONTRACTUAL RIGHTS (net of accumulated amortization: 2004 - $26,974; 2003 - $19,466) 85,771 93,279 OTHER ASSETS AND DEFERRED COSTS (net of accumulated amortization: 2004 - $1,193; 2003 - $964) 785 806 $135,110 $140,297 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $3,446 $3,506 Accrued expenses and other current liabilities 23,772 25,132 Senior Subordinated Notes - current portion 4,858 545 Total current liabilities 32,076 29,183 DEFERRED INCOME TAX LIABILITY 8,191 7,305 OTHER LONG TERM LIABILITIES 491 SENIOR SUBORDINATED NOTES 72,930 94,939 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Preferred stock, $1 par value; 5,000,000 shares authorized, none issued Common stock, $0.01 par value; 10,000,000 shares authorized, 5,390,679 and 5,243,047 shares issued and outstanding at January 1, 2005 and January 3, 2004, respectively 54 52 Additional paid-in capital 25,592 25,129 Deferred stock compensation (407) (108) Retained deficit (3,557) (15,932) Accumulated other comprehensive loss (260) (271) Total shareholders' equity 21,422 8,870 $135,110 $140,297 DATASOURCE: National Vision, Inc. CONTACT: Paul A. Criscillis, Jr., Senior Vice President and CFO of National Vision, Inc. +1-770-822-4262 Web site: http://www.nationalvision.com/

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