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<font> <font> Wednesday, August 05, 2009 4:05:01 PM ET </font> </font>

<font> FGX International ( FGXI ), a leading designer and marketer of non-prescription reading glasses and sunglasses, today announced financial results for its second fiscal quarter ended July 4, 2009. </font>

<font> Highlights for the quarter include: </font>

<font> -- Net sales increased 12% to $75.1 million from $66.8 million in the second quarter of 2008. </font>

<font> -- Net income from continuing operations increased 54% to $6.1 million, or $0.27 per diluted share, compared to $3.9 million, or $0.18 per diluted share, in the second quarter of 2008. </font>

<font> -- Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations increased 24% to $15.6 million compared to $12.6 million in the second quarter of 2008. </font>

  <font> Net Sales by Segment: 
 ($ amounts in thousands)          Three Months   Three Months   $ Inc / (Dec)     % Inc / (Dec) 
                                   2009           2008 
 Non-prescription Reading Glasses  $      33,215  $      31,266  $    1,949        6      % 
 Sunglasses & Prescription Frames         35,213         25,675       9,538        37 
 International                            6,643          9,809        (3,166 )     (32    ) 
 Total                             $      75,071  $      66,750  $    8,321        12     % 
  </font>  

<font> CEO Alec Taylor commented, "We are pleased with the strong growth in revenue and earnings from continuing operations achieved in the second quarter, particularly in light of the weak economic environment. Our non-prescription reading glasses business showed particular strength, once again exhibiting the robust nature of this category and of our market-leading brands, Magnivision(R) and Foster Grant(R). Revenues improved 37% in our sun segment, largely on the strength of our Dioptics business. Finally, we showed improvement in gross margins and control of operating expenses, which contributed to these excellent results." </font>

<font> Segment highlights: </font>

<font> -- Sales of non-prescription reading glasses increased 6% in the second quarter of 2009 compared to the year ago period. Revenues in 2009 were negatively impacted by the discontinuation of an opening price point program at Wal-Mart, which contributed approximately $2.3 million to net sales in the second quarter of 2008. Excluding the effect of this program, sales of non-prescription reading glasses increased 15% due to the benefit of an updated program at a major retailer and continuing organic growth at existing customers. </font>

<font> -- Sales in the sunglasses and prescription frames segment increased 37% in the second quarter of 2009, including sales from the Dioptics product line, which was acquired in November 2008. The remainder of the sunglasses business declined due to a combination of adverse weather and the reduction in the current period of a promotional program commenced at a major retailer in 2008. </font>

<font> -- Sales in the Company’s international segment were down 32% in the second quarter, while on a constant currency basis international sales declined 17% when compared to the corresponding year ago period. The decline on a constant currency basis was principally due to a non-anniversaried reading glass roll-out to major customers in the UK in the second quarter of 2008, partially offset by improved sunglasses sales in the UK. </font>

<font> Reconciliations of EBITDA and free cash flow, which are non-GAAP measures, are included in the Consolidated Statements of Operations and Other Selected Data, and related notes thereto, attached to this release. The Company believes that these non-GAAP measures are useful for an understanding of its ongoing business. </font>

<font> Additional Q2 Details: </font>

<font> -- In the second quarter of 2009, gross profit as a percentage of net sales was 54.2%, compared to 53.1% in the second quarter of 2008. This improvement was principally due to the reduction of a low margin seasonal sunglass program at a major retailer and improved cost of goods sold in both optical segments. </font>

<font> -- In the second quarter of 2009, operating income increased to $11.2 million, or 15% of net sales, from $7.6 million, or 11% of net sales, in the second quarter of 2008. The increase in operating income was driven by increased sales and improved gross margins, partially offset by increased operating costs from the addition of our Dioptics business and advertising campaigns that concluded in the current quarter. </font>

<font> -- Capital expenditures were $1.8 million in the second quarter of 2009, compared to $2.7 million in the second quarter of 2008. The decrease relates to display fixtures placed at retailers in the second quarter of 2008 that were not anniversaried in the current period. </font>

<font> -- Days sales outstanding improved to 50 days in the current quarter from 62 days in the second quarter of 2008. This improvement was due to a continuing focus on working capital management. </font>

<font> -- Inventory days on hand were 94 days in the current quarter, compared to 95 days in the second quarter of fiscal 2008. </font>

<font> Disposal of Costume Jewelry Business </font>

<font> As previously disclosed, the Company completed the disposal of its costume jewelry business for approximately $1.3 million on July 23, 2009. As expected, the pre-tax loss relating to the divestiture of the jewelry business recorded in the second quarter was $5 million. Results for the costume jewelry business have been reported in the accompanying financial statements as discontinued operations for all periods presented. </font>

<font> New Account Update </font>

<font> The Company has been awarded expanded sunglasses and reading glasses programs at Kroger stores throughout North America. The programs are expected to begin shipping to over 700 stores during the fourth quarter of 2009 and contribute annual net revenues of $3 to $4 million. </font>

<font> Liquidity and Capital Resources </font>

<font> In the second quarter of 2009, the Company generated $14 million of free cash flow from continuing operations. At the end of the second quarter, the Company had $37 million of availability under its revolving credit facility, which matures in 2012. The Company plans to continue to use its free cash flow to make accretive acquisitions and reduce indebtedness, including $15 million of scheduled principal repayments in 2009. </font>

<font> Outlook </font>

<font> Management’s expectations for full year 2009 results from continuing operations, excluding the impact of the costume jewelry business, are unchanged from when the Company announced its 2009 outlook on February 25, 2009: net sales of $265 to $275 million, earnings per diluted share of $0.96 to $1.06 and EBITDA of $58 to $60 million. </font>

<font> For the third quarter of 2009, the Company currently expects the following results from continuing operations: net sales of $58 to $62 million, earnings per diluted share of $0.26 to $0.30 and EBITDA of $14 to $16 million. </font>

<font> Actual results may differ materially from these estimates as a result of various factors, and we refer you to the cautionary language under the heading "Forward-Looking Statements" when considering this information. </font>

<font> Conference Call Information </font>

<font> The Company will host a conference call on Thursday, August 6, 2009 at 8:30AM ET to discuss its financial results. To access the conference call information, please visit www.fgxi.com under the tab "Investors". To participate by telephone please dial 1-888-747-4680. International callers please dial 1-913-981-5543. The access code is 2103439. Investors are advised to dial into the call at least ten minutes prior to the call. </font>

<font> A replay of the conference call will be available through Thursday, August 13, 2009. To access the replay by phone, the domestic dial-in number is 1-888-203-1112 and the international dial-in is 1-719-457-0820. The access code for the replay is 2103439. To access the replay via webcast, please visit www.fgxi.com under the tab "Investors". </font>

<font> About FGX International </font>

<font> FGX International Holdings Limited is a leading designer and marketer of non-prescription reading glasses and sunglasses with a portfolio of established, highly recognized eyewear brands including Foster Grant(R), Magnivision(R), Angel (TM) , Gargoyles(R), Anarchy(R), SolarShield(R) and PolarEyes(R). FGXI also holds licenses for brands such as Ironman, Levi Strauss, Body Glove and C9 by Champion. Based in Smithfield, Rhode Island, FGXI has approximately 375 full time employees. Additional offices are located in San Luis Obispo, CA; Toronto, Canada; Stoke-on-Trent, England; Mexico City, Mexico; and Shenzhen, China. </font>

<font> Forward-Looking Statements </font>

<font> Statements in this press release that are not statements of historical fact or that express our confidence, expectations, objectives, intentions, plans, or strategies or otherwise anticipate the future, including, without limitation, statements regarding our future prospects, revenues, costs, results of operations and profitability contained in the Outlook section of this press release, are forward-looking statements. These forward-looking statements are not guarantees of future performance, and they are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. These risks and uncertainties include, but are not limited to: adverse economic conditions and low levels of consumer confidence and the resulting adverse impact on consumer discretionary spending, which could reduce our sales; adverse changes in our customers’ inventory and working capital policies; the bankruptcy or other lack of commercial success of one or more of our significant customers; the actual charges incurred for product returns and markdowns related to the divestiture of the costume jewelry business may be greater than expected; we or others may discover that our products must be recalled because of defects; consumers, retailers, shareholders and/or others may bring litigation or other claims against us related to our products that may cause us to incur substantial costs to resolve; unexpected product returns and related claims pertaining to current or prior periods; the concentration of manufacturing of our products in China, which increases our vulnerability to disruption in that region; interruptions of supply from our Asian product manufacturers; political instability or changing conditions in manufacturing or transportation services in foreign countries; other risks associated with our international operations, including foreign currency exchange rate fluctuations and the impact of quotas, tariffs, or other restrictions on the importation or exportation of our products; a material reduction, cessation, or postponement of purchases by our customers; failure to comply with federal or state regulation of the distribution or sale of our products; the expense and uncertainty of the litigation process, including the risk of an unfavorable result in current or future litigation; adverse interest rate fluctuations; our credit insurance does not cover all of our outstanding accounts receivable; our advertising strategy may not have the anticipated impact; unknown potential effects of outbreaks of communicable diseases, including swine flu, on our business; and disruption due to weather, fire or other unforeseen circumstances in our principal distribution center. </font>

<font> These and other risks and uncertainties that could cause our actual results to differ from those contemplated by any forward-looking statement are discussed in more detail in Part I, Item 1A - Risk Factors in our Form 10-K for the year ended January 3, 2009, which we may update in Part II, Item 1A - Risk Factors in Quarterly Reports on Forms 10-Q that we have filed or will file thereafter. Forward-looking statements contained in this press release speak only as of the date hereof. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. </font>

  <font> FGX INTERNATIONAL HOLDINGS LIMITED 
 CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER SELECTED DATA 
 (unaudited, in thousands, except per share data) 
                                                                      Three months ended 
                                                                      July 4, 2009       June 28, 2008 
 Net sales: 
 Non-prescription reading glasses                                     $       33,215     $       31,266 
 Sunglasses and prescription frames                                           35,213             25,675 
 International                                                                6,643              9,809 
 Total net sales                                                              75,071             66,750 
 Cost of goods sold                                                           34,395             31,273 
 Gross profit                                                                 40,676             35,477 
 Operating expenses: 
 Selling expenses                                                             21,242             20,195 
 General and administrative expenses                                          7,052              6,392 
 Amortization of acquired intangibles                                         1,178              1,296 
 Total operating expenses                                                     29,472             27,883 
 Operating income                                                             11,204             7,594 
 Other income (expense): 
 Interest expense                                                             1,278              1,450 
 Other income (expense), net                                                  21                 46 
 Income from continuing operations before income taxes                        9,947              6,190 
 Income tax expense                                                           3,780              2,179 
 Income from continuing operations                                            6,167              4,011 
 Discontinued operations, net of tax                                          (3,164  )          159 
 Net income                                                                   3,003              4,170 
 Less: Net income attributable to noncontrolling interest                     82                 80 
 Net income attributable to FGX International Holdings Limited        $       2,921      $       4,090 
 Income from continuing operations attributable to FGX International 
 Holdings Limited 
 Income from continuing operations                                    $       6,167      $       4,011 
 Less: Net income attributable to noncontrolling interest                     82                 80 
 Income from continuing operations attributable to FGX                $       6,085      $       3,931 
 International Holdings Limited 
 Basic earnings per share: 
 Income from continuing operations attributable to FGX                $       0.27       $       0.18 
 International Holdings Limited 
 Discontinued operations, net of tax                                  $       (0.14   )  $       0.01 
 Basic earnings per share attributable to FGX International           $       0.13       $       0.19 
 Holdings Limited Shareholders 
 Diluted earnings per share: 
 Income from continuing operations attributable to FGX                $       0.27       $       0.18 
 International Holdings Limited 
 Discontinued operations, net of tax                                          (0.14   )          0.01 
 Diluted earnings per share attributable to FGX International         $       0.13       $       0.19 
 Holdings Limited Shareholders 
 Basic weighted average shares outstanding                                    22,123             21,218 
 Diluted weighted average shares outstanding                                  22,321             21,358 
  </font>  

  <font> FGX INTERNATIONAL HOLDINGS LIMITED 
 CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER SELECTED DATA 
 (unaudited, in thousands, except per share data) 
                                                        Three months ended 
                                                        July 4, 2009       June 28, 2008 
 Capital expenditures from continuing operations        $       1,822      $       2,650 
 The table below reconciles EBITDA from continuing operations to 
 income from continuing operations, the most directly comparable 
 GAAP measure. 
 Income from continuing operations attributable to FGX  $       6,085      $       3,931 
 International Holdings Limited 
 Income tax expense                                             3,780              2,179 
 Interest expense, net                                          1,278              1,450 
 Depreciation and amortization                                  4,478              4,989 
 EBITDA from continuing operations (1)                  $       15,621     $       12,549 
 EBITDA margin (EBITDA / net sales)                             20.8    %          18.8    % 
 The table below reconciles Free Cash Flow to the EBITDA table 
 above. 
 EBITDA from continuing operations                      $       15,621     $       12,549 
 Less: Capital Expenditures                                     (1,822  )          (2,650  ) 
 Free Cash Flow (1)                                     $       13,799     $       9,899 
 See accompanying note to Consolidated Statements of Operations and 
 Other Selected Data. 
  </font>  

  <font> FGX INTERNATIONAL HOLDINGS LIMITED 
 CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER SELECTED DATA 
 (unaudited, in thousands, except per share data) 
                                                                      Six months ended 
                                                                      July 4, 2009       June 28, 2008 
 Net sales: 
 Non-prescription reading glasses                                     $       59,389     $       58,553 
 Sunglasses and prescription frames                                           61,446             43,794 
 International                                                                13,126             19,687 
 Total net sales                                                              133,961            122,034 
 Cost of goods sold                                                           61,406             55,812 
 Gross profit                                                                 72,555             66,222 
 Operating expenses: 
 Selling expenses                                                             42,325             37,268 
 General and administrative expenses                                          14,044             12,827 
 Amortization of acquired intangibles                                         2,356              2,591 
 Total operating expenses                                                     58,725             52,686 
 Operating income                                                             13,830             13,536 
 Other income (expense): 
 Interest expense                                                             2,594              3,222 
 Other income (expense), net                                                  88                 54 
 Income from continuing operations before income taxes                        11,324             10,368 
 Income tax expense                                                           4,343              3,881 
 Income from continuing operations                                            6,981              6,487 
 Discontinued operations, net of tax                                          (4,566  )          57 
 Net income                                                                   2,415              6,544 
 Less: Net income attributable to noncontrolling interest                     131                267 
 Net income attributable to FGX International Holdings Limited        $       2,284      $       6,277 
 Income from continuing operations attributable to FGX International 
 Holdings Limited 
 Income from continuing operations                                    $       6,981      $       6,487 
 Less: Net income attributable to noncontrolling interest                     131                267 
 Income from continuing operations attributable to FGX                $       6,850      $       6,220 
 International Holdings Limited 
 Basic earnings per share: 
 Income from continuing operations attributable to FGX                $       0.31       $       0.29 
 International Holdings Limited 
 Discontinued operations, net of tax                                  $       (0.21   )          0.01 
 Basic earnings per share attributable to FGX International           $       0.10       $       0.30 
 Holdings Limited Shareholders 
 Diluted earnings per share: 
 Income from continuing operations attributable to FGX                $       0.31       $       0.29 
 International Holdings Limited 
 Discontinued operations, net of tax                                  $       (0.21   )          0.00 
 Diluted earnings per share attributable to FGX International         $       0.10       $       0.29 
 Holdings Limited Shareholders 
 Basic weighted average shares outstanding                                    22,123             21,254 
 Diluted weighted average shares outstanding                                  22,305             21,404 
  </font>  

  <font> FGX INTERNATIONAL HOLDINGS LIMITED 
 CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER SELECTED DATA 
 (unaudited, in thousands, except per share data) 
                                                        Six months ended 
                                                        July 4, 2009       June 28, 2008 
 Capital expenditures from continuing operations        $       4,014      $       6,484 
 The table below reconciles EBITDA from continuing operations to 
 net income from continuing operations, the most directly comparable 
 GAAP measure. 
 Income from continuing operations attributable to FGX  $       6,850      $       6,220 
 International Holdings Limited 
 Income tax expense                                             4,343              3,881 
 Interest expense, net                                          2,594              3,222 
 Depreciation and amortization                                  9,462              10,073 
 EBITDA from continuing operations (1)                  $       23,249     $       23,396 
 EBITDA margin (EBITDA / net sales)                             17.4    %          19.2    % 
 The table below reconciles Free Cash Flow to the EBITDA table 
 above. 
 EBITDA from continuing operations                      $       23,249     $       23,396 
 Less: Capital Expenditures                                     (4,014  )          (6,484  ) 
 Free Cash Flow from continuing operations (1)          $       19,235     $       16,912 
 See accompanying note to Consolidated Statements of Operations and 
 Other Selected Data. 
  </font>  

  <font> FGX INTERNATIONAL HOLDINGS LIMITED 
 SELECTED CONSOLIDATED BALANCE SHEET DATA 
 (Unaudited, in thousands) 
                                                          As of          As of 
                                                          July 4, 2009   January 3, 2009 
 Cash                                                     $      4,685   $       2,097 
 Accounts receivable, net                                        46,611          50,746 
 Inventories                                                     33,535          35,543 
 Accounts payable                                                28,559          30,324 
 Revolving line of credit                                        38,000          37,500 
 Current maturities of long-term obligations                     16,419          15,199 
 Long-term obligations less current maturities                   69,136          77,863 
 FGX International Holdings Limited shareholders’ equity         45,765          41,665 
  </font>  

  <font> FGX INTERNATIONAL HOLDINGS LIMITED 
 NOTE TO CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER SELECTED DATA 
 (Unaudited) 
 1.                       EBITDA from continuing operations represents income from continuing 
                          operations before interest, income taxes, depreciation and 
                          amortization. Free cash flow represents EBITDA less capital 
                          expenditures. We believe that EBITDA and free cash flow are 
                          performance measures that provide securities analysts, investors and 
                          other interested parties with a measure of operating results 
                          unaffected by differences in capital structures, capital investment 
                          cycles and ages of related assets among otherwise comparable 
                          companies in our industry. We further believe that EBITDA is 
                          frequently used by securities analysts, investors and other 
                          interested parties in their evaluation of companies, many of which 
                          present an EBITDA measure when reporting their results. 
                          We believe EBITDA facilitates company-to-company operating 
                          performance comparisons by adjusting for potential differences 
                          caused by variations in capital structures (affecting net interest 
                          expense), taxation (such as the impact of differences in effective 
                          tax rates or net operating losses) and the age and book depreciation 
                          of facilities and equipment (affecting relative depreciation 
                          expense), which may vary for different companies for reasons 
                          unrelated to operating performance. 
                          EBITDA has limitations, including that it is not necessarily 
                          comparable to other similarly titled financial measures of other 
                          companies due to the potential inconsistencies in the method of 
                          calculation. It should not be considered either in isolation or as a 
                          substitute for analysis of our results as reported under U.S. GAAP. 
                          Because of these limitations, EBITDA should not be considered as a 
                          measure of discretionary cash available to us to invest in the 
                          growth of our business. We compensate for these limitations by 
                          relying primarily on our results presented in accordance with U.S. 
                          GAAP and using EBITDA only supplementally. 
  </font>  

<font> SOURCE: FGX International </font>

  <font> ICR Inc.  
 R. Idalia Rodriguez, 203-682-8264  
 Investor Relations  
 or  
 FGX International  
 Anthony Di Paola, 401-719-2253  
 Chief Financial Officer 
  </font>  

Every now and then, we come across a slide in some seemingly boring presentation to a group of analysts that actually catches our attention. That’s exactly what happened when we saw this 30-page presentation filed in an 8-K by eyewear manufacturer FGX International (FGXI). But it was this slide in particular: We can understand the need [...]