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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

(Mark One)ý

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended April 4, 2009oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from                        to


Commission File Number: 001-33760

FGX International Holdings Limited(Exact name of Registrant as specified in its charter)

British Virgin Islands(State or other jurisdiction of incorporation)

98-0475043(IRS Employer Identification Number)


500 George Washington Highway
Smithfield, RI 02917(Address of principal executive offices, including zip code)

(401) 231-3800(Registrant's telephone number, including area code)

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ý    No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and
post such files). Yes o    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o

Accelerated filer ý

Non-accelerated filer o (Do not check if a smaller reporting company)

Smaller reporting company o


Indicate
by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the
Act). Yes o    No ý

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

The
number of ordinary shares outstanding as of May 11, 2009 was 22,122,900.



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Forward-Looking Statements

This report and the information incorporated by reference in it include forward-looking statements. These include, but are not limited
to, statements about our expectations, hopes, beliefs, intentions or strategies regarding the future, as well as statements that refer to projections, forecasts or other characterizations of future
events or circumstances, including any underlying assumptions. They may refer, without limitation, to retail and brand initiatives, upcoming product releases, operational improvements, market growth
or acceptance of our products, and future revenue, costs, results of operations, or profitability. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may,"
"might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may, but are not necessary to, identify forward-looking statements.

The
forward-looking statements contained or incorporated by reference in this report are based on our current expectations and beliefs concerning future developments and their potential
effects on us and speak only as of the date of this report. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements
involve a number of risks, uncertainties (some of which are beyond our control) or other factors that may cause actual results or performance to be materially different from those expressed or implied
by these forward-looking statements. These risks and uncertainties include, but are not limited to: deteriorating economic conditions and continued decreases in consumer confidence and resulting
changes in consumer discretionary spending; adverse changes in customers' inventory and working capital policies; the bankruptcy or other lack of commercial success of one or more of the Company's
customers; the Company may be unable to complete the sale of its costume jewelry business; the actual charges anticipated for the second quarter relating to the sale of the costume jewelry business
may be greater
than expected; the Company or others may discover that the Company's products must be recalled because of defects; consumers, retailers, shareholders and/or others may bring litigation or other claims
against the Company related to its products that may cause it to incur substantial costs to resolve; the concentration of manufacturing of the Company's products in China; interruptions of supply from
our Asian product manufacturers; political instability or changing conditions in 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 uncertainty of the litigation process including the risk of an
unfavorable result in current or future litigation; depending upon market conditions, the Company may not complete the stock buyback program; interest rate fluctuations; the Company's credit insurance
may not cover all of our outstanding accounts receivable; our advertising strategy may not have the anticipated impact; unknown potential effects of the swine flu outbreaks on our business; and
disruption due to weather, fire or other unforeseen circumstances in our principal distribution center, as well as those factors described or referred to under the heading "Risk Factors" below. We
undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable law.

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FGX International Holdings Limited    Form 10-Q    Index



PART IFINANCIAL INFORMATION

4ITEM 1.

Financial Statements

4Condensed Consolidated Balance Sheets at April 4, 2009 (unaudited) and January 3, 2009

4Condensed Consolidated Statements of Operations for the three months ended April 4, 2009 and March 29, 2008 (unaudited)

5Condensed Consolidated Statements of Cash Flows for the three months ended April 4, 2009 and March 29, 2008 (unaudited)

6Notes to Condensed Consolidated Financial Statements

7ITEM 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

15ITEM 3.

Quantitative and Qualitative Disclosures about Market Risk

22ITEM 4.

Controls and Procedures

23PART IIOTHER INFORMATION

24ITEM 1.

Legal Proceedings

24ITEM 1A.

Risk Factors

24ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds

24ITEM 3.

Defaults Upon Senior Securities

24ITEM 4.

Submission of Matters to a Vote of Security Holders

24ITEM 5.

Other Information

24ITEM 6.

Exhibits

24SIGNATURES

25Exhibit List

26


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PART IFINANCIAL INFORMATION

ITEM 1.    Financial Statements.



FGX INTERNATIONAL HOLDINGS LIMITED        Condensed Consolidated Balance Sheets        April 4, 2009 (unaudited) and January 3, 2009        (in
thousands)

April 4, 2009

January 3, 2009ASSETSCurrent assets:Cash

$
3,054

$
2,097Accounts receivable, less allowances of $27,415 and $26,144 at April 4, 2009 and January 3, 2009, respectively


36,489


52,263Inventories


39,771


38,223Prepaid expenses and other current assets


18,261


15,817Deferred tax assets


16,025


16,013Total current assets


113,600


124,413Property, plant and equipment, net


19,269


21,011Other assets:Goodwill


45,590


46,747Intangible assets, net of accumulated amortization of $32,271 and $29,642 at April 4, 2009 and January 3, 2009, respectively


67,679


68,856Other assets


13,275


11,988Total assets

$
259,413

$
273,015LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:Revolving line of credit

$
43,000

$
37,500Current maturities of long-term obligations


15,821


15,199Accounts payable


28,627


31,964Accrued expenses


21,752


27,690Accrued income taxes





6,005Total current liabilities


109,200


118,358Long-term obligations, less current maturities


73,468


77,863Deferred tax liabilities


18,168


18,156Other long term liabilities


15,023


15,284Commitments and contingencies (note 11)Equity:FGX International Holdings Limited shareholders' equity:Common stock, no par value. Authorized 101,000 shares; issued 22,886 shares and outstanding 22,123 shares at April 4, 2009 and January 3,
2009





Additional paid-in capital


107,830


107,048Accumulated other comprehensive income (loss)


(2,604
)

(2,611
)Accumulated deficit


(60,899
)

(60,259
)Treasury stock, at cost, 630 shares at April 4, 2009 and January 3, 2009


(2,513
)

(2,513
)Total FGX International Holdings Limited shareholders' equity


41,814


41,665Noncontrolling interest


1,740


1,689Total equity


43,554


43,354Total liabilities and equity

$
259,413

$
273,015


See accompanying notes to condensed consolidated financial statements.

4

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FGX INTERNATIONAL HOLDINGS LIMITED        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS        Three months ended April 4, 2009 and March 29, 2008        (unaudited, in thousands, except per share amounts)

Three months endedApril 4, 2009

March 29, 2008Net sales

$
61,133

$
59,223Cost of goods sold


28,676


27,346Gross profit


32,457


31,877Operating expenses:Selling expenses


22,148


18,538General and administrative expenses


7,035


6,479Amortization of acquired intangibles


1,178


1,295Loss on impairment


1,819


Operating income


277


5,565Other income (expense):Interest expense


(1,317
)

(1,771
)Other income, net


67


8Income (loss) before income taxes


(973
)

3,802Income tax expense (benefit)


(385
)

1,431Net income (loss)


(588
)

2,371Less: Net income attributable to noncontrolling interest


49


187Net income (loss) attributable to FGX International Holdings Limited

$
(637
)
$
2,184Basic earnings (loss) per share attributable to FGX International Holdings Limited

$
(0.03
)
$
0.10Basic weighted average shares outstanding


22,123


21,290Diluted earnings (loss) per share attributable to FGX International Holdings Limited

$
(0.03
)
$
0.10Diluted weighted average shares outstanding


22,123


21,446


See
accompanying notes to condensed consolidated financial statements.

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FGX INTERNATIONAL HOLDINGS LIMITED        Condensed Consolidated Statements of Cash Flows        Three months ended April 4, 2009 and March 29, 2008        (unaudited, in thousands)

Three months endedApril 4, 2009

March 29, 2008Cash flows from operating activities:Net income (loss) attributable to FGX International Holdings Limited

$
(637
)
$
2,184Adjustments to reconcile net income (loss) to net cash provided by operating activities:Depreciation and amortization


5,042


5,131Loss on impairment


1,819


Stock-based compensation


782


538Noncontrolling interest


49


187Deferred income taxes


(9
)

(162
)Loss on disposal of property, plant, and equipment


87


154Changes in assets and liabilities:Accounts receivable


16,714


12,770Inventories


(1,461
)

(386
)Prepaid expenses and other current assets


(3,331
)

(3,734
)Other assets


(1,425
)

(2,134
)Accounts payable


(3,386
)

1,998Accrued expenses and other long-term liabilities


(6,728
)

(6,829
)Accrued income taxes


(6,031
)

(267
)Net cash provided by operating activities


1,485


9,450Cash flows from investing activities:Purchases of property, plant and equipment


(2,223
)

(3,990
)Net cash used in investing activities


(2,223
)

(3,990
)Cash flows from financing activities:Net borrowings (repayments) under revolving line of credit


5,500


(5,000
)Payments on long-term obligations


(3,771
)

(43
)Share repurchase





(505
)Net cash provided by (used in) financing activities


1,729


(5,548
)Effect of exchange rate changes on cash


(34
)

(55
)Net increase (decrease) in cash


957


(143
)Cash, beginning of period


2,097


4,567Cash, end of period

$
3,054

$
4,424


See
accompanying notes to condensed consolidated financial statements.

6

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FGX International Holdings Limited        Notes to Condensed Consolidated Financial Statements        (unaudited)

(1) Reporting Entity and Nature of Business

FGX International Holdings Limited (the "Company") is a leading designer and marketer of non-prescription reading glasses, sunglasses and costume jewelry with distribution
primarily through mass retail channels, which include mass merchandisers, chain drug stores, chain grocery stores and variety stores in North America and the United Kingdom. The Company is
incorporated as a business company under the laws of the British Virgin Islands.

The
accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for
interim financial reporting and as required by Regulation S-X, Rule 10-01. Accordingly, they do not include all of the information and footnotes required by GAAP
for complete financial statements. In the opinion of management, all adjustments (including only adjustments which are normal and recurring) considered necessary for a fair presentation of the interim
financial information have been included. When preparing financial statements in conformity with GAAP, the Company must make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues, expenses and related disclosures at the date of the financial statements. Actual results could differ from those estimates. Additionally, operating results for the three months
ended April 4, 2009 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending January 2, 2010.

The
Company's accounting policies are the same as those described in Note 3 to the financial statements included in the Company's Annual Report on Form 10-K for
the fiscal year ended January 3, 2009.

The
accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements included in the
Company's Annual Report on Form 10-K for the fiscal year ended January 3, 2009.

(2) Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157,Fair Value Measurements("SFAS No. 157"), which defines fair value,
establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS No. 157 was applicable for the Company
as of the beginning of fiscal 2008, except that the effective date of the Statement was deferred for certain nonfinancial assets and liabilities until fiscal 2009. The impact of the adoption of SFAS
No. 157 was not material to the Company's condensed consolidated financial statements.

In
December 2007, the FASB issued SFAS No. 141 (revised 2007),Business Combinations("SFAS No. 141R"). SFAS No. 141R
establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest
in the acquiree and the goodwill acquired. SFAS No. 141R changes the accounting for acquisitions by eliminating the step acquisition model, providing that contingent consideration be recognized
at the time of acquisition (instead of being recognized when it is probable), disallowing the capitalization of transaction costs, and changing when restructurings related to acquisitions can be
recognized. SFAS No. 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. The Company will apply

7

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Table of Contents

FGX International Holdings Limited

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

(2) Recent Accounting Pronouncements (Continued)

SFAS
No. 141R to business combinations for which the acquisition date is after the beginning of fiscal 2009.

In
December 2007, the FASB issued SFAS No. 160,Noncontrolling Interests in Consolidated Financial Statements("SFAS
No. 160"), which requires noncontrolling (minority) interests in subsidiaries to be initially measured at fair value and presented as a separate component of shareholders' equity. Previous
practice was to present noncontrolling interests as a liability or other item outside of equity. This Statement was required to be applied prospectively after the beginning of fiscal 2009, although
the presentation and disclosure requirements are required to be applied on a retrospective basis. SFAS No. 160 changed the accounting for and reporting of minority interests (now called
noncontrolling interests) in the Company's consolidated financial statements. Upon adoption, certain prior period amounts were reclassified to conform to the current period financial statement
presentation. These reclassifications had no material effect on previously reported consolidated financial statements.

In
March 2008, the FASB issued SFAS No. 161,Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement
No. 133("SFAS No. 161"), which requires enhanced disclosures about the Company's derivative and hedging activities. The Company adopted the provisions of SFAS
No. 161 at the beginning of fiscal 2009. See Note 9 for disclosures related to the Company's interest rate swap agreement.

(3) Disposal of Costume Jewelry Business

In the second quarter of 2009, the Company entered into a non-binding letter of intent to sell substantially all of the assets related to its costume jewelry business for a
purchase price of approximately $1.5 million, subject to execution of a definitive purchase and sale agreement. The transaction is expected to close in the second quarter of 2009, and the
Company anticipates presenting the costume jewelry business as a discontinued operation beginning with its fiscal second quarter 2009 financial statements.

The
Company has recorded a non-cash pre-tax goodwill impairment charge of $1.8 million related to the entire goodwill balance of the jewelry segment. The
Company expects to incur additional charges related to the discontinuation of the costume jewelry business in the second quarter of 2009. Expected charges relate to an inventory
write-down, incremental product returns as required by the letter of intent and severance costs, which total, pre-tax, $4 to $6 million, net of proceeds.

(4) Loss on Impairment

The Company received an offer to sell the assets of its costume jewelry business and concluded that the offer, in conjunction with the decision to dispose of the costume jewelry
business, was a trigger of an additional impairment review of that reporting unit as of April 4, 2009 under the provisions of SFAS No. 142,Goodwill and Other
Intangible Assets. Based on the Company's conclusion that the estimated future cash flow of the costume jewelry segment is below the book value, the Company recorded a goodwill
impairment charge of $1.8 million, all of the reporting unit goodwill, in the first quarter of 2009.

8

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FGX International Holdings Limited

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

(5) Comprehensive Income (Loss)

Comprehensive income (loss) for the three months ended April 4, 2009 and March 29, 2008 consist of the following:

Three Months EndedApril 4, 2009

March 29, 2008(in thousands)Net income (loss)

$
(588
)
$
2,371Other comprehensive income (loss), net of taxForeign currency translation adjustments


(7
)

(70
)Gain (loss) on cash flow hedging activities


14


(515
)Total comprehensive income (loss), net of tax


(581
)

1,786Less: Comprehensive income attributable to noncontrolling interest


49


187Comprehensive income (loss) attributable to the Company

$
(630
)
$
1,599


(6) Net Income Per Share

The Company calculates net income per share in accordance with SFAS No. 128,Earnings Per Share. Basic net income per share is
computed by dividing net income by the weighted average number of common shares outstanding. Diluted net income per share is computed by dividing net income by the weighted average number of common
shares outstanding and potentially dilutive securities outstanding during the period. Potentially dilutive securities include restricted stock units and stock options, using the treasury stock method.
Securities are excluded from the computations of diluted net income per share if their effect would be antidilutive.

Three Months EndedApril 4, 2009

March 29, 2008(in thousands, except
per share amounts)Net income (loss) attibutable to the Company

$
(637
)
$
2,184Shares used in computing basic net income (loss) per share


22,123


21,290Effect of dilutive securities





156Shares used in computing diluted net income (loss) per share


22,123


21,446Basic earnings (loss) per share attributable to the Company's shareholders

$
(0.03
)
$
0.10Diluted earnings (loss) per share attributable to the Company's shareholders

$
(0.03
)
$
0.10Antidilutive potential common shares excluded from the computation above


2,736


1,168


9

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FGX International Holdings Limited

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

(7) Share Repurchase Program

In February 2008, the Board of Directors of the Company authorized a $12.0 million ordinary share repurchase program for a one-year period or until earlier terminated
by the Company's Board of Directors. In February 2009, the share repurchase program was extended to February 2010. During the three months ended April 4, 2009, the Company did not repurchase
any shares. At April 4,
2009, the Company had approximately $10.5 million of remaining availability under the $12.0 million share repurchase program.

(8) Credit Agreement

The Company is party to a senior secured credit facility ("December 2007 Credit Agreement") that is comprised of (a) a $75.0 million revolving credit facility, which may be
increased with the consent of our existing or additional lenders by up to an additional $50.0 million; and (b) a $100.0 million term loan facility. Interest rates for borrowings
under the credit facility are determined based upon the Company's defined leverage ratio. Interest rates were initially priced at 1.75% above the London Interbank Offered Rate (LIBOR) and then range
from 1.00% to 2.25% above LIBOR for Eurodollar-based borrowings, and from 0.00% to 1.25% above the defined base rate for base rate borrowings. Amounts due under both facilities are collateralized by a
pledge of 100% of the Company's tangible and intangible assets. The Company also is required to pay commitment and other customary fees. These commitment fees will range from 0.20% to 0.50% per annum
depending upon the Company's leverage ratio.

As
of April 4, 2009, the term loan facility bore interest at LIBOR plus 1.75% (2.97% in aggregate as of April 4, 2009). The term loan facility is due in 20 consecutive
quarterly graduating installments ranging from $1.9 million to $8.1 million, which commenced on March 31, 2008. The term loan facility and the revolving credit facility will
mature on December 19, 2012. As of April 4, 2009, the Company had outstanding indebtedness of $88.8 million under the term loan facility, $43.0 million outstanding under
the revolving credit facility and $0.3 million outstanding under letters of credit. Our borrowing availability under the revolving credit facility was $31.7 million.

The
December 2007 Credit Agreement requires the Company to comply with a leverage ratio covenant and a fixed charge ratio covenant. This facility contains customary affirmative and
negative covenants that, among other things, limit the ability of the Company and its subsidiaries to pay certain dividends; incur additional indebtedness or liens; make certain investments,
restricted payments, or acquisitions and dispositions; and enter into certain transactions with affiliates. The Company must also comply with certain administrative covenants, including furnishing
audited financial statements to the lenders
within 90 days of fiscal year end. As of April 4, 2009, the Company was in compliance with the required covenants.

(9) Swap Agreement

On March 10, 2008, the Company entered into an interest rate swap agreement (the "Swap") to manage its exposure to floating interest rate risk on its term loan facility. The Swap
had an initial notional amount of approximately $49.1 million and is scheduled to decline to reflect certain scheduled principal payments under the term loan facility. Currently, the Company is
borrowing under the term loan facility at a floating interest rate based on 3-month LIBOR (plus 1.75% under the terms of our

10

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FGX International Holdings Limited

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

(9) Swap Agreement (Continued)

term
loan facility) and will pay under the Swap a fixed interest rate of 3.22% (plus 1.75% under the terms of our term loan facility) through December 19, 2012.

The
Swap has been designated as a cash flow hedge under SFAS No. 133 and the Company records the effective portion of any change in the fair value as other comprehensive income
(loss), net of tax.

The
following table summarizes the balance of the interest rate swap, the Company's only derivative instrument:

April 4, 2009

January 3, 2009Balance sheet
location

Fair
value

Balance sheet
location

Fair
value(in thousands)Derivatives designated as hedging instruments under SFAS No. 133:Interest rate swap agreement

Other long-term liabilities


1,472

Other long-term liabilities


1,497Total




1,472




1,497


The
following table summarizes the effects of our interest rate swap agreement:

Amount of gains (losses)
recognized in other
comprehensive incomeThree months endedApril 4, 2009

March 29, 2008(in thousands)Derivatives designated as cash flow hedges under SFAS No. 133:Interest rate swap agreement, net of tax


14


(515
)Total


14


(515
)


(10) Income Taxes

The Company and its subsidiaries file income tax returns in the United States and various state and international jurisdictions. The Company's major tax jurisdiction is the United
States. As of April 4, 2009, the federal tax years that remain subject to examination in the United States were 2005 through 2008. As of April 4, 2009, the Company had a gross tax
liability for uncertain tax benefits of $9.5 million, of which approximately $4.9 million would decrease the effective tax rate in the period in which each of the benefits is recognized
and the remainder would be offset by the reversal of related deferred tax assets. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax
expense. As of April 4, 2009, the Company had accrued approximately $1.9 million of interest and penalties related to uncertain tax positions. The Company does not anticipate significant
changes to the total amount of unrecognized tax benefits within the next 12 months.

11

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FGX International Holdings Limited

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

(11) Commitments and Contingencies



In the ordinary course of business, the Company is party to various types of litigation. The Company maintains insurance to mitigate
certain of these risks. The Company believes it has meritorious defenses to all litigation currently pending or threatened, and, in its opinion, none will have a material effect on the Company's
financial position or results of operations.

(12) Segments

The Company operates primarily in the eyewear and costume jewelry markets. The Company's four reportable segments are Non-Prescription Reading Glasses, Sunglasses and
Prescription Frames, Costume Jewelry and International. These segments have been determined based upon the nature of the products offered and availability of discrete financial information, and are
consistent with the way the Company organizes and evaluates financial information internally for the purposes of making operating decisions and assessing performance.

The
Non-Prescription Reading Glasses, Sunglasses and Prescription Frames and Costume Jewelry segments represent sales of these product lines in the United States. The
International segment sells similar product lines outside the United States. The Company measures profitability of its segments based on gross profit.

Expenditures
for additions to long-lived assets are not tracked or reported by the operating segments, except for display fixtures. Depreciation expense on display fixtures
is specific to each segment. Non-display fixture depreciation is not allocable to a specific segment and is included in corporate and unallocated. Amortization of intangible assets that
relate to acquired businesses is included in the specific segment to which they relate. The identifiable assets of the international segment consist of assets of the Company's international
subsidiaries. For the other reportable segments the identifiable assets include inventories and intangible assets. The Company does
not segregate other assets on a product line basis for internal management reporting and therefore, such information is not presented. Assets included in corporate and unallocated principally are
cash, accounts receivable, prepaid expenses, deferred income taxes, other assets, and property, plant and equipment.

As
a result of the planned disposal of the costume jewelry business in the second quarter of 2009 (see Note 3), the Company anticipates presenting the Costume Jewelry segment and
a portion of the International segment as discontinued operations beginning with its fiscal second quarter 2009 financial statements. There will no longer be a Costume Jewelry segment presented in
future financial statements, assuming the consummation of the sale in the second quarter.

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FGX International Holdings Limited

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

(12) Segments (Continued)

Three Months EndedApril 4, 2009

March 29, 2008(in thousands)Segment Net SalesNon-prescription Reading Glasses

$
26,174

$
27,287Sunglasses and Prescription Frames


26,233


18,119Costume Jewelry


2,019


3,395International


6,707


10,422Total Net Sales

$
61,133

$
59,223Gross ProfitNon-prescription Reading Glasses

$
15,805

$
15,796Sunglasses and Prescription Frames


12,342


8,579Costume Jewelry


505


792International


3,805


6,710Total Gross Profit

$
32,457

$
31,877Segment Profits (Losses)Non-prescription Reading Glasses

$
10,914

$
10,750Sunglasses and Prescription Frames


6,499


5,276Costume Jewelry


(1,985
)

(116
)International


841


2,651Corporate / Unallocated expenses


(15,992
)

(12,996
)Operating Income

$
277

$
5,565DepreciationNon-prescription Reading Glasses

$
1,301

$
1,582Sunglasses and Prescription Frames


1,370


1,097Costume Jewelry


89


26International


807


890Corporate / Unallocated


297


241Total Depreciation

$
3,864

$
3,836Amortization of IntangiblesNon-prescription Reading Glasses

$
908

$
1,295Sunglasses and Prescription Frames


270


Total Amortization of Intangibles

$
1,178

$
1,295Loss on ImpairmentCostume Jewelry

$
1,819

$
Total Loss on Impairment

$
1,819

$



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FGX International Holdings Limited

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

(12) Segments (Continued)



As of
April 4, 2009

As of
January 3, 2009(in thousands)Identifiable AssetsNon-prescription Reading Glasses

$
67,507

$
71,282Sunglasses and Prescription Frames


77,537


72,672Costume Jewelry


2,473


4,498International


16,688


16,108Corporate / Unallocated


95,208


108,455Total Identfiable Assets

$
259,413

$
273,015


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Table of Contents

ITEM 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations.

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is designed to provide a reader of our
financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results.

We
are a leading designer and marketer of non-prescription reading glasses, sunglasses and costume jewelry with a portfolio of established, highly recognized eyewear brands
includingFoster Grant(1)andMagnivision. We sell ourFoster
Grantbrand in the U.S. popular priced sunglasses market and both ourFoster Grantand Magnivisionbrands in the domestic
non-prescription reading glasses market. Our products are sourced through low-cost Asian
manufacturers and sold primarily through mass channels, which include mass merchandisers, chain drug stores, chain grocery stores and variety stores. Some of our products are sold to ophthalmic
retailers, mid-tier department stores and other specialty retailers. We also sell costume jewelry to mass merchandisers, chain drug stores and variety stores.

With
the acquisition of Dioptics Medical Products in November 2008, we added a portfolio of proprietary brands of sunglasses and associated eye care products and accessories, including
theSolarShieldandPolarEyesbrands. These products and accessories are primarily sold through mass
merchandisers and chain drug stores, as well as medical supply stores and ophthalmic retailers.

Our
company-owned portfolio also includes theAnarchy,Angeland Gargoylesbrands, which target different
demographic groups and distribution channels at a premium price point (generally $50-$170). We
believe our premium brands have a strong niche consumer appeal. We promote these brands through endorsements from well-recognized action sports athletes and sponsorship of professional
surfing contests and similar sporting events.

To
complement our proprietary brands, we market both popular priced and premium eyewear under nationally-recognized licensed brands includingIronman Triathlon,
Levi Strauss Signature, Body Glove, C9 by ChampionandField & Stream.We also sell a line of prescription frames.

We
believe that we have the capital structure in place that will enable us to enhance our market leadership positions through the continued investment in our core brands. We will seek to
continue to add to our domestic and international customer base as well as consider selective acquisitions that fit strategically into our business model. Our future results may be negatively affected
by risks and trends, including without limitation those referred to in Part II, Item 1A., "Risk Factors" and elsewhere in this report.

Recent Developments

In the second quarter of 2009, the Company entered into a non-binding letter of intent to sell substantially all of the
assets related to its costume jewelry business for a purchase price of approximately $1.5 million, subject to execution of a definitive purchase and sale agreement. The transaction is expected
to close in the second quarter of 2009, and the Company anticipates presenting the costume jewelry business as a discontinued operation beginning with its fiscal second quarter 2009 financial
statements. The decision to divest the costume jewelry business allows the Company to focus on its core optical business segments.

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Table of Contents

The
Company has recorded a non-cash pre-tax goodwill impairment charge of $1.8 million related to the entire goodwill balance of the jewelry segment. The
Company expects to incur additional charges related to the discontinuation of the costume jewelry business in the second quarter 2009. Expected charges relate to an inventory write-down,
incremental product returns as required by the letter of intent and severance costs, which total, pre-tax, $4 to $6 million, net of proceeds.

Overview

The following is a summary of the Company's operating results for the three months ended April 4,
2009:



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Results of Operations

The following table sets forth, for the periods indicated, selected statement of operations data as a percentage of net sales:

Three Months EndedApril 4, 2009

March 29, 2008(unaudited)Net sales


100.0
%

100.0
%Cost of goods sold


46.9


46.2Gross profit


53.1


53.8Operating expenses:Selling expenses


36.2


31.3General and administrative expenses


11.5


10.9Amortization of acquired intangibles


1.9


2.2Goodwill impairment


3.0


Operating income


0.5


9.4Other income (expense):Interest expense


(2.2
)

(3.0
)Other income, net


0.1


Income (loss) before income taxes


(1.6
)

6.4Income tax expense (benefit)


(0.6
)

2.4Net income (loss)


(1.0
)

4.0Less: net income attributable to noncontrolling interest


0.1


0.3Net income (loss) attributable to the Company


(1.1
)%

3.7
%


The
following table sets forth, for the periods indicated, selected segment data as a percentage of net sales:

Three Months EndedSegment

April 4, 2009

March 29, 2008(unaudited, dollars in thousands)Non-prescription reading glasses

$
26,174


42.8
%
$
27,287


46.1
%Sunglasses and prescription frames


26,233


42.9


18,119


30.6Costume jewelry


2,019


3.3


3,395


5.7International


6,707


11.0


10,422


17.6Net sales

$
61,133


100.0
%
$
59,223


100.0
%


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Table of Contents

The
following table sets forth, for the periods indicated, selected operating results by segment.

Three Months EndedSegment

April 4, 2009

March 29, 2008(unaudited, dollars in thousands)Non-prescription reading glassesNet sales

$
26,174


100.0
%
$
27,287


100.0
%Cost of goods sold


10,369


39.6


11,491


42.1Gross profit

$
15,805


60.4
%
$
15,796


57.9
%Sunglasses and prescription framesNet sales

$
26,233


100.0
%
$
18,119


100.0
%Cost of goods sold


13,891


53.0


9,540


52.7Gross profit

$
12,342


47.0
%
$
8,579


47.3
%Costume jewelryNet sales

$
2,019


100.0
%
$
3,395


100.0
%Cost of goods sold


1,514


75.0


2,603


76.7Gross profit

$
505


25.0
%
$
792


23.3
%InternationalNet sales

$
6,707


100.0
%
$
10,422


100.0
%Cost of goods sold


2,902


43.3


3,712


35.6Gross profit

$
3,805


56.7
%
$
6,710


64.4
%


Three Months Ended April 4, 2009 Compared to Three Months Ended March 29, 2008

Net Sales.Net sales increased by $1.9 million, or 3.2%, from $59.2 million in the three months ended March 29, 2008 to
$61.1 million in the three months ended April 4, 2009.

In
the non-prescription reading glasses segment, net sales decreased by $1.1 million, or 4.1%, from $27.3 million in the three months ended March 29,
2008 to $26.2 million in the three months
ended April 4, 2009. This decrease in net sales was due to the $2.1 million impact of the loss of an opening price point program at a major customer, partially offset by organic growth
at existing customers.

In
the sunglasses and prescription frames segment, net sales increased by $8.1 million, or 44.8%, from $18.1 million in the three months ended March 29, 2008 to
$26.2 million in the three months ended April 4, 2009. This increase was due to $8.1 million in sales of Dioptics products, which were acquired in November 2008.

In
the costume jewelry segment, net sales decreased by $1.4 million, or 40.5%, from $3.4 million in the three months ended March 29, 2008 to $2.0 million in
the three months ended April 4, 2009. This decrease was due to the continuing deterioration of retail sales at most major customers.

In
the international segment, net sales decreased by $3.7 million, or 35.6%, from $10.4 million in the three months ended March 29, 2008 to $6.7 million in
the three months ended April 4, 2009. This decrease in net sales was attributed to the impact of approximately $2.1 million in unfavorable foreign exchange as well as a
non-anniversaried sunglasses roll-out to a major UK customer in the first quarter of 2008.

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Gross Profit.Gross profit increased $0.6 million, or 1.8%, from $31.9 million in the three months ended March 29, 2008
to
$32.5 million in the three months ended April 4, 2009. As a percentage of net sales, gross profit decreased from 53.8% to 53.1% during the corresponding periods.

In
the non-prescription reading glasses segment, gross profit was $15.8 million in both the three months ended March 29, 2008 and the three months ended
April 4, 2009. As a percentage of net sales, gross profit increased from 57.9% in the first quarter of 2008 to 60.4% during the current quarter. The increase in gross profit as a percentage of
net sales was due to higher margin product assortments at several major retailers and a change in pricing structure at another major customer, partially offset by the discontinuation of a high gross
margin opening price point program at a major retailer.

In
the sunglasses and prescription frames segment, gross profit increased by $3.7 million, or 43.9%, from $8.6 million in the three months ended March 29, 2008 to
$12.3 million in the three months ended
April 4, 2009. As a percentage of net sales, gross profit decreased from 47.3% to 47.0% during the corresponding periods. The dollar increase in gross profit was due to the increase in net
sales described above. The decrease in gross profit as a percentage of net sales was due to a lower margin promotional program at a major customer, partially offset by sales of the higher gross margin
Dioptics products.

In
the costume jewelry segment, gross profit decreased by $0.3 million, or 36.2%, from $0.8 million in the three months ended March 29, 2008 to $0.5 million
in the three months ended April 4, 2009. As a percentage of net sales, gross profit increased from 23.3% to 25.0% during the corresponding periods. The dollar decrease in gross profit was due
to the decrease in net sales described above. The increase in gross profit as a percentage of net sales was primarily due to sourcing efficiencies achieved in the current period.

In
the international segment, gross profit decreased by $2.9 million, or 43.3%, from $6.7 million in the three months ended March 29, 2008 to $3.8 million in
the three months ended April 4, 2009. As a percentage of net sales, gross profit decreased from 64.4% to 56.7% in the corresponding periods. The dollar decrease in gross profit and the decrease
in gross profit as a percentage of net sales were due to unfavorable foreign exchange and a non-anniversaried sunglasses rollout to a major U.K. customer.

Selling Expenses.Selling expenses increased by $3.6 million, or 19.5%, from $18.5 million in the three months ended
March 29,
2008 to $22.1 million in the three months ended April 4, 2009. As a percentage of net sales, selling expenses increased from 31.3% to 36.2% in the corresponding periods. The dollar
increase in selling expenses includes $1.6 million associated with sales of Dioptics products, which we acquired in November 2008. The remaining $2.0 million was due to television
advertising costs of $2.9 million for our reading glasses brands and increased field service costs of $1.3 million due to a higher number of serviced customer store locations, offset by
a $1.4 million decrease in freight costs along with other expense reductions.

General and Administrative Expenses.General and administrative expenses increased by $0.5 million, or 8.6%, from $6.5 million
in the
three months ended March 29, 2008 to $7.0 million in the three months ended April 4, 2009. As a percentage of net sales, general and administrative expenses increased from 10.9%
to 11.5% in the corresponding periods. The dollar increase included $0.8 million in expenses associated with the Dioptics business, offset by a $0.3 million decrease in Sarbanes-Oxley
implementation costs and other new public company related costs.

Amortization of Acquired Intangibles.Amortization of acquired intangibles decreased by $0.1 million, or 9.0%, from
$1.3 million in the
three months ended March 29, 2008 to $1.2 million in the three months ended April 4, 2009. This decrease was due to certain intangible assets associated with the 2004
acquisition of Magnivision being amortized on an accelerated basis over their economic lives, partially offset by amortization of the newly acquired Dioptics Medical Products intangibles.

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Table of Contents

Loss on Impairment.We recognized a charge for goodwill impairment of $1.8 million in the three months ended April 4, 2009.
In the
second quarter of 2009, we entered into a non-binding letter of intent to sell substantially all of the assets related to the costume jewelry business, which triggered an additional
impairment review of that reporting unit as of April 4, 2009, under the provisions of SFAS No. 142,Goodwill and Other Intangible Assets.
Based on our conclusion that the estimated future cash flow of the costume jewelry segment is below the book value, we recorded a goodwill impairment charge for all of the reporting unit goodwill.

Interest Expense.Interest expense decreased $0.5 million, or 25.6%, from $1.8 million in the three months ended
March 29, 2008
to $1.3 million in the three months ended April 4, 2009. The decrease was the result of lower borrowing costs.

Income Taxes.Provision for income taxes was a benefit of $0.4 million, or 39.5% of income (loss) before income taxes in the three
months
ended April 4, 2009, compared to expense of $1.4 million, or 37.6%, in the three months ended March 29, 2008. The change in income tax rate was due to the mix of earnings among
federal, state and foreign jurisdictions with various statutory tax rates.

Net Income (Loss).For the reasons described above, our net income decreased by $2.8 million, from income of $2.2 million
during the
three months ended March 29, 2008 to a loss of $0.6 million for the three months ended April 4, 2009.

Liquidity and Capital Resources

Our primary liquidity needs are for working capital, capital expenditures (specifically display fixtures) and debt service. Our primary
sources of cash have been cash flow from operations, proceeds from our initial public offering and borrowings under our credit facility. As of April 4, 2009, we had $3.1 million of cash
and $31.7 million available under our revolving credit facility.

We
believe that our cash flow from operations, available cash and borrowings available under our credit facility will be adequate to meet our liquidity needs through at least fiscal
2009. However, our ability to make scheduled payments of principal, pay the interest on or refinance our indebtedness or fund planned capital expenditures will depend on our future performance, which,
to a certain extent, is subject to general economic, financial, competitive and other factors that are beyond our control. In addition, current worldwide economic conditions, including without
limitation the reduction in credit available to businesses and consumers, the destruction of value in investment portfolios, and the deepening unemployment and corresponding reductions in consumer
spending, may substantially reduce demand for our products, which could have a materially adverse effect on our liquidity and results of operations.

To
the extent we decide to pursue one or more acquisitions, we may need to incur additional indebtedness or sell additional equity to finance those acquisitions.

Cash Flows

The following table summarizes our cash flow activities for the periods indicated:

Three Months EndedApril 4, 2009

March 29, 2008(unaudited, in thousands)Net cash provided by (used in):Operating activities

$
1,485

$
9,450Investing activities


(2,223
)

(3,990
)Financing activities


1,729


(5,548
)Effect of exchange rates on cash balances


(34
)

(55
)Net increase (decrease) in cash

$
957

$
(143
)


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We purchase finished goods from our contract manufacturers in Asia and typically take title upon delivery to the freight consolidator. Transit times range from 10
to 30 days. Our payment terms with our eyewear suppliers range from 45 to 120 days, while payment terms with our costume jewelry suppliers are approximately 30 days.

Operating Activities.Net cash provided by operating activities decreased by $8.0 million from $9.5 million in the three
months ended
March 29, 2008 to $1.5 million in the three months ended April 4, 2009. The decrease in operating cash flow was primarily due to $2.8 million lower net income (loss) as
well as a $5.8 million change in the activities related to accrued income taxes and a $5.4 million change in the activities related to accounts payable. The change in accrued income
taxes was the result of tax payments related to the 2008 tax year. The change in accounts payable was the result of timing of payments to suppliers.

Investing Activities.Net cash used in investing activities decreased from $4.0 million in the three months ended March 29,
2008 to
$2.2 million in the three months ended April 4, 2009. The decrease relates to display fixtures purchased and placed at retailers in the first quarter of 2008 that did not anniversary in
the current period.

Financing Activities.Net cash provided by financing activities increased by $7.2 million from a use of $5.5 million in the
three
months ended March 29, 2008 to $1.7 million provided in the three months ended April 4, 2009. The increase in net cash provided by financing activities was primarily due to
$5.5 million of proceeds under the revolving line of credit compared to net repayments of $5.0 million in 2008, partially offset by a $3.7 million increase in payments on
long-term obligations.

Capital Expenditures

Our capital expenditures were $2.2 million and $4.0 million for the three months ended April 4, 2009 and
March 29, 2008, respectively. The decrease relates to display fixtures placed at retailers in the first quarter of 2008 that did not anniversary in the current period. The majority of our
capital expenditures in both periods related to permanent display fixtures, which we provide in our customers' retail locations. We depreciate our fixtures using an estimated useful life of two to
three years. The future timing and volume of such capital expenditures will be affected by new business, customer contract renewals and replacements of existing fixtures at existing retail customers.

At
April 4, 2009, we had outstanding commitments for capital expenditures of $2.6 million relating to permanent display fixtures. We intend to fund these expenditures
primarily from operating cash flow and borrowings under our revolving credit facility.

Credit Agreement

Our credit facility is comprised of (a) a $75.0 million revolving credit facility, which may be increased with the
consent of our existing or additional lenders by up to an additional $50.0 million; and (b) a $100.0 million term loan facility. Interest rates for borrowings under the new
facility are determined based upon our leverage ratio. Interest rates were initially priced at 1.75% above LIBOR and then range from 1.00% to 2.25% above LIBOR for Eurodollar-based borrowings, and
from 0.00% to 1.25% above the defined base rate for base rate borrowings, depending upon our leverage ratio. The term loan facility is due in 20 consecutive quarterly graduating installments ranging
from $1.9 million to $8.1 million. Payment of these installments commenced on March 31, 2008. The term loan facility and the revolving credit facility will mature on
December 19, 2012. Amounts due under both facilities are collateralized by a pledge of 100% of our tangible and intangible assets. We are also required to pay commitment and other customary
fees. These commitment fees will range from 0.20% to 0.50% per annum depending upon our leverage ratio.

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Our
credit facility contains covenants limiting, among other things, mergers, consolidations, liquidations and dissolutions; sales of assets; investments and acquisitions; indebtedness;
liens and other encumbrances; dividends and other restricted payments; payment and modification of material subordinated debt instruments; transactions with affiliates; changes in fiscal year;
negative pledge clauses; restrictions on subsidiary distributions; sale and leaseback transactions; factoring arrangements and changes in lines of business; and capital expenditures. Our credit
facility also requires that we comply with leverage ratio and fixed charge coverage ratio covenants.

As
of April 4, 2009, we had outstanding indebtedness of $88.8 million under our term loan facility, $43.0 million outstanding under the revolving credit facility and
$0.3 million committed under standby letters of credit. Our borrowing availability under the revolving credit facility was $31.7 million. The interest rate on the term loan facility is
at the three-month LIBOR rate plus 1.75% (2.97% in aggregate as of April 4, 2009). The interest rate on $30.0 million of the revolving credit facility is at the one-month
LIBOR rate plus 1.75% (2.28% in aggregate as of April 4, 2009). The remaining balance of the revolving credit facility is subject to an interest rate of prime plus 0.75% (4.0% in aggregate as
of April 4, 2009).

Interest Rate Swap Agreement

On March 10, 2008, we entered into an interest rate swap as described in Item 3 below.

Critical Accounting Estimates

We prepare our condensed consolidated financial statements in accordance with accounting principles generally accepted in the United
States of America. As such, management is required to make certain estimates, judgments and assumptions that it believes are reasonable based on the information available. These estimates and
assumptions affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of net sales and expenses for the periods
presented. These critical accounting policies are the same as those detailed in the Annual Report on Form 10-K for the fiscal year ended January 3, 2009.

Off-Balance Sheet Arrangements

As of April 4, 2009, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of
SEC Regulation S-K.

ITEM 3.    Quantitative and Qualitative Disclosures about Market Risk.

We are exposed to market risk from changes in interest rates and foreign currency exchange rates, which may adversely affect our
results of operations and financial condition.

Our
exposure to interest rate risk currently relates to amounts outstanding under our revolving and term loan credit facility. This facility is comprised of a $100.0 million term
loan facility and a $75.0 million revolving credit facility. As of April 4, 2009, we had $88.8 million outstanding under the term loan facility and $43.0 million
outstanding under the revolving credit facility. The term loan facility bore interest of 1.75% above three-month LIBOR, or 2.97% in aggregate, at April 4, 2009. $30.0 million of the
revolving credit facility bore interest of 1.75% above one-month LIBOR, or 2.28% in aggregate, at April 4, 2009. The remaining balance of the revolving credit facility bore interest
of 0.75% above prime, or 4.0% in aggregate, at April 4, 2009. A hypothetical change in the interest rate of 100 basis points would have an effect on our results of operations and cash flows of
approximately $0.8 million over the next four quarters.

On
March 10, 2008, we entered into an interest rate swap agreement (the "Swap") to manage our exposure to floating interest rate risk on our credit facility. The Swap has an
initial notional amount of

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Table of Contents

$49.1 million
and is scheduled to decline to reflect certain scheduled principal payments under the term loan facility. Currently, we are borrowing under the term loan facility at a floating
interest rate based on three-month LIBOR (plus 1.75% under the terms of our term loan facility) and will pay under the Swap a fixed interest rate of 3.22% (plus 1.75% under the terms of our term loan
facility) through December 19, 2012.

The
Swap has been designated as a cash flow hedge under SFAS No. 133 and we record the effective portion of any change in the fair value as other comprehensive income (loss), net
of tax.

We
are subject to risk from changes in the foreign exchange rates relating to our Canadian and U.K. subsidiaries, and our Mexico joint venture. Assets and liabilities of these entities
are translated to U.S. dollars at period-end exchange rates. Income and expense items are translated at average rates of exchange prevailing during the period. Translation adjustments are
accumulated as a separate component of shareholders' equity. Gains and losses, which result from foreign currency transactions, are included as other income (expense) in the accompanying condensed
consolidated statements of operations. The potential loss resulting from a hypothetical 10.0% adverse change in the quoted foreign currency exchange rate amounts would not have a material impact on
our annual results of operations and cash flows.

ITEM 4.    Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) as of the last day of the period covered by this report, April 4, 2009 (the "Evaluation Date"). Based on this evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective.

Our
management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial
reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control
system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the
Company have been detected.

Changes in Internal Control over Financial Reporting

There were no changes during the fiscal quarter ended April 4, 2009 in our internal control over financial reporting (as such
term is defined in Exchange Act Rule 13a-15(f)) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

23

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Table of Contents

PART IIOTHER INFORMATION

ITEM 1.    Legal Proceedings.

From time to time we are a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business.
We do not believe that we are subject to any proceedings that, individually or in the aggregate, would be expected to materially adversely affect our results of operations or financial condition.

ITEM 1A.    Risk Factors.

There have been no material changes in our Risk Factors from those disclosed in our Annual Report on Form 10-K for
the fiscal year ended January 3, 2009.

ITEM 2.    Unregistered Sales of Equity Securities and Use of Proceeds.

None.

ITEM 3.    Defaults Upon Senior Securities.

Not applicable.

ITEM 4.    Submission of Matters to a Vote of Security Holders.

None.

ITEM 5.    Other Information.

In connection with his election to the Board of Directors on February 23, 2009, Alfred J. Verrecchia executed an indemnification
agreement with the Company in the form executed by all directors and executive officers.

ITEM 6.    Exhibits.

The exhibits listed in the Exhibit Index following the signature page are filed herewith.

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Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.

May 13, 2009

FGX INTERNATIONAL HOLDINGS LIMITEDBy:

/s/ ANTHONY DI PAOLA Anthony Di PaolaTitle:

Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)


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Table of Contents

Exhibit List

Exhibit
Number

Exhibit Description3.1

Amended and Restated Memorandum of Association(1)3.2

Amended and Restated Articles of Association(2)10.1

Summary of 2009 Cash Bonus Plan10.2

Form of Director and Officer Indemnification Agreement between the Company and Alfred J. Verrecchia, dated February 23, 2009(3)31.1

Section 302 Certification of CEO31.2

Section 302 Certification of CFO32.1

Section 906 Certification of CEO32.2

Section 906 Certification of CFO


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26

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