National Vision Reports Third Quarter Operating Results

National Vision Reports Third Quarter Operating Results 


LAWRENCEVILLE, Ga., Nov. 15  /PRNewswire-FirstCall/ -- National Vision, Inc.
(AMEX:NVI) today announced operating results for its fiscal third quarter and
the nine-month year-to-date period ended October 2, 2004.

Total net revenue from continuing operations for the 2004 third quarter was
$57.9 million compared with $57.5 million in the prior year's third quarter. 
Comparable store sales declined -1.4% in the current year third quarter
compared to the prior year third quarter.  As detailed in the following
paragraph, this decline was significantly affected by the timing of the
Company's annual summer contact lens sales event.

The prior year's third quarter revenues from continuing operations include
sales of $3.5 million generated during a three-day promotional event.  The
Company held this contact lens sales event earlier during 2004, recognizing
revenues from the sale in its second fiscal quarter.  If such revenues had been
recognized in the third quarter of the current year, the Company would have
reported a comparable store sales increase of +5.7%.

Current year third quarter net income was $3.8 million, including approximately
$168,000 in after-tax gains on Note repurchases, compared with net income of
$356,000 in the prior year third quarter.  The previous year's third quarter
income was reduced by a $484,000 restructuring charge.

Diluted earnings per share were $0.67 in the current year third quarter
compared with $0.07 in the prior year third quarter.  EBITDA for the current
year quarter was $9.5 million versus EBITDA of $7.5 million in the prior year
quarter.  These results were achieved on an average base of 435 stores, 50
fewer than in the prior year quarter.

"We continue to be exceptionally proud of the performance of our store teams,"
stated Reade Fahs, President and Chief Executive Officer.  "Profit growth
remains strong despite the lower store count."

For the current year nine-month period, total net revenue from continuing
operations of $176.7 million was 8.0% higher than 2003's net revenue from
continuing operations of $163.7 million, on same store sales growth of +6.4%.
Year-to-date same store sales growth is not affected by the timing of the
summer contact lens sales event described above.

Net income for the first nine months of 2004 was $11.6 million, including
approximately $2.9 million of after-tax gains on Note repurchases, a $16.1
million improvement over the prior year's loss of $4.4 million for the same
period.

Current year diluted earnings per share were $2.09 for the nine months,
compared with a loss of $0.88 per share in the 2003 nine-month period.  EBITDA
for the current year-to-date period was $27.5 million versus $17.9 million in
the first three quarters of the previous year.

The Company will hold an Investor Relations Conference Call on Tuesday,
November 16, 2004, at 2:00 p.m. EST to discuss its third quarter results. The
general public can access this conference call via the Company's website at
http://www.nationalvision.com/ .  Following the conclusion of the prepared
remarks by management, the Company will accept and address questions from
institutional investors.

The Company's financial disclosures refer to EBITDA because it is the basis for
calculating excess cash flow principal repayments required under the Company's
Senior Subordinated Notes, and it is a widely accepted financial indicator of a
company's ability to service or incur indebtedness.  EBITDA is calculated as
net earnings before interest, taxes, depreciation, amortization, the cumulative
effect of a change in accounting principle, non-cash items and reorganization
items as defined under the Senior Subordinated Debt Indenture. A reconciliation
of net earnings (loss) to EBITDA is presented in the attached financial tables.

National Vision, Inc. is a retail optical company that operates vision centers
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 November 15, 2004, the Company operated a total of 422
vision centers, of which 311 were located inside domestic Wal-Mart stores, 35
were located within Wal-Mart de Mexico stores, 47 were located inside Fred
Meyer stores and 27 were located on military bases within the United States and
two stores were in freestanding locations.  In 2004, through November 15, the
Company has closed 53 stores (including 48 domestic Wal-Mart stores), opened
five stores on military bases and opened two freestanding stores relocated from
inside Wal-Mart.  As of November 15, 2004, the Company also operated two home
medical equipment stores inside domestic Wal-Mart stores.  The Company depends
on its domestic Wal-Mart vision centers for substantially all of its revenues
and cash flow.  The Company's agreement with Wal-Mart gave it the right to open
400 vision centers, the last of which opened in 2001.  The Company does not
currently expect Wal-Mart to renew any of the Company's vision center leases
upon their expirations (other than automatic renewals occurring upon relocation
of current Company locations in connection with conversions to SuperCenters). 
For the remainder of 2004, the Company expects an additional 7 leases for
domestic Wal-Mart vision centers to expire.  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.

- FINANCIAL TABLES TO FOLLOW -

This release includes statements concerning the Company's plans, beliefs and
expectations for future periods.  These "forward-looking statements" may be
identified by the use of words such as "intends," "contemplates," "believes,"
"anticipates," "expects," "should," "could," "would" and words of similar
import.  These forward-looking statements involve known and unknown risks and
uncertainties that could cause actual results to differ materially from the
expectations expressed or implied in such statements.  With respect to such
forward-looking statements and others that may be made by, or on behalf of, the
Company, the factors described as "Risk Factors" in the Company's Reports filed
with the SEC, could materially affect the Company's actual results.

These risks and uncertainties include, among others, impaired relationships
with the Company's vendors or customers as a result of the Company's high
leverage and its potential inability to repay its debt, an adverse change in
the Company's relationship with Wal-Mart, changes in economic conditions
(including an increase in interest rates), financial markets or customer
demand, the level of competition in the retail eyecare industry, federal and
state regulation of the healthcare and insurance industries (particularly in
California), the Company's financial condition and other risks and
uncertainties set forth in the Company's filings with the Securities and
Exchange Commission.

All forward-looking statements included in this release are based upon
management's present expectations and the information available at this time.
The Company does not undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or other factors.

                            NATIONAL VISION, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands except per share information)
                                 (Unaudited)

                               Three Months Ended      Nine Months Ended
                            October 2, September 27 October 2, September 27,
                               2004        2003        2004         2003
  Retail sales, net           $55,427    $55,454     $169,603     $157,962
  Premium revenue               1,943      1,679        5,663        4,666
  Other revenue                   536        413        1,409        1,029

  Total net revenue            57,906     57,546      176,675      163,657
  Cost of goods sold           24,851     26,536       76,306       73,730

  Gross profit                 33,055     31,010      100,369       89,927
  Selling, general &
   administrative expense      27,235     27,581       84,780       84,791
  Restructuring expense                      484                       484
  Operating income              5,820      2,945       15,589        4,652
  Other income (expense), net:
    Interest expense           (2,455)    (3,226)      (8,206)      (9,849)
    Gain on repurchase of
     Senior Subordinated Notes    181                   3,083
    Other income, net             129         27          197          104

  Earnings (loss) before taxes,
   discontinued operations and
   cumulative effect of a
   change in accounting
   principle                    3,675       (254)      10,663       (5,093)
  Income tax expense              266                     614

  Net earnings (loss) before
   discontinued operations and
   cumulative effect of a
   change in accounting
   principle                    3,409       (254)      10,049       (5,093)

  Discontinued operations:
    Operating income from
    discontinued operations       384        593        1,749        1,393
    Gain (loss) on disposal         9         17          (57)        (149)
    Income tax expense            (28)                    (98)
  Earnings from discontinued
   operations                     365        610        1,594        1,244

  Earnings (loss) before
   cumulative effect of a
   change in accounting
   principle                    3,774        356       11,643       (3,849)
  Cumulative effect of a change
    in accounting principle                                           (564)

  Net earnings (loss)          $3,774       $356      $11,643      $(4,413)

  Earnings (loss) per common
   share:

       Basic                    $0.73      $0.07        $2.29       $(0.88)

       Diluted                  $0.67      $0.07        $2.09       $(0.88)


                               NATIONAL VISION, INC.
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                        October 2, 2004 and January 3, 2004
          (In thousands except share and par value information)

                                         October 2, 2004
                                           (unaudited)     January 3, 2004
        ASSETS
        CURRENT ASSETS:
             Cash and cash equivalents           $10,092            $3,545
             Accounts receivable
                  (net of allowance:
                   2004 - $741;
                   2003 - $769)                    3,067             3,078
             Inventories                          15,143            17,387
             Other current assets                  1,122             1,278
             Deferred income tax asset             7,202             7,305
                  Total current assets            36,626            32,593
        PROPERTY AND EQUIPMENT, net               11,736            13,619
        INTANGIBLE VALUE OF CONTRACTUAL
         RIGHTS
             (net of accumulated
              amortization:
              2004 - $25,097;
              2003 - $19,466)                     87,648            93,279
        OTHER ASSETS AND DEFERRED COSTS
             (net of accumulated
              amortization:
              2004 - $1,133;
              2003 - $964)                           684               806
                                                $136,694          $140,297

        LIABILITIES AND SHAREHOLDERS' EQUITY
        CURRENT LIABILITIES:
             Accounts payable                     $5,253            $3,506
             Accrued expenses and other
              current liabilities                 25,065            25,132
              Senior Subordinated Notes -
               current portion                         -               545
                 Total current liabilities        30,318            29,183
        DEFERRED INCOME TAX LIABILITY              7,571             7,305
        OTHER LONG TERM LIABILITIES                  117
        SENIOR SUBORDINATED NOTES                 78,114            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,
              5,355,679 and 5,243,047 shares
              issued and outstanding at
              October 2, 2004 and January 3, 2004,
              respectively                            54                52
             Additional paid-in capital           25,378            25,129
             Deferred stock compensation            (250)             (108)
             Retained deficit                     (4,289)          (15,932)
             Accumulated other
               comprehensive loss                   (319)             (271)
                 Total shareholders' equity       20,574             8,870
                                                $136,694          $140,297


                          NATIONAL VISION, INC.
                    COMPUTATION OF CONSOLIDATED EBITDA
Three and Nine Month Periods Ended October 2, 2004 and September 27, 2003
                              (In thousands)

                                Three Months Ended       Nine Months Ended
                               Oct. 2,    Sept. 27,    Oct. 2,     Sept. 27,
                                2004         2003       2004          2003

   Net earnings (loss)         $3,774         $356    $11,643       $(4,413)
   Adjustment to net earnings
    (loss):
     Interest expense, net      2,326        3,199      8,019         9,745
     Income tax expense           294                     712
     Gain on repurchase of
      Notes                      (181)                 (3,083)
     Deferred stock compensation   33           27         75            27
     Cumulative effect of a
      change in accounting
      principle                                                         564
     Depreciation and
      amortization              3,255        3,888     10,105        11,993

   EBITDA                      $9,501       $7,470    $27,471       $17,916


DATASOURCE: National Vision, Inc.



CONTACT:  Paul A. Criscillis, Jr., Senior Vice President and CFO of

National Vision, Inc., [phone]



Web site:  http://www.nationalvision.com/ 

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