Exhibit 99.1

                   FACTORS AFFECTING FUTURE OPERATING RESULTS

     This Form 10-K, the Company's Annual Report to Shareholders,  any Form 10-Q
or any Form 8-K of the Company or any other written or oral  statements  made by
or on  behalf of the  Company  include  forward-looking  statements  within  the
meaning of Section 21E of the Securities  Exchange Act of 1934 which reflect the
Company's current views with respect to future events and financial performance.
These forward-looking statements are subject to certain risks and uncertainties,
including  those  discussed  below,  that could cause  actual  results to differ
materially from historical  results or those  anticipated.  The words "believe",
"expect",   "anticipate"  and  similar  expressions   identify   forward-looking
statements.  Readers  are  cautioned  not  to  place  undue  reliance  on  these
forward-looking  statements,  which  speak only as of their  dates.  The Company
undertakes  no  obligation  to  publicly  update or revise  any  forward-looking
statements, whether as a result of new information, future events or otherwise.

     Although  the  Company  believes  that it has  the  product  offerings  and
resources  needed for  continuing  success,  future net sales and margin  trends
cannot be reliably predicted and may cause the Company to adjust its operations.
Factors external to the Company can result in volatility of the Company's common
stock price.  Because of the  foregoing  factors,  recent  trends  should not be
considered reliable indicator of future stock prices or financial results.

     The  following  factors  could  cause  actual  operating  results to differ
materially from historical results or those anticipated:

Highly Competitive Industry and Affect of New Products on Results

     The eyeglass lens and coating industry is highly  competitive.  The Company
competes  principally on the basis of customer service,  the quality and breadth
of product  offerings,  and price.  The  eyeglass  lens and coating  industry is
characterized  by price  competition,  which can be severe in  certain  markets,
particularly for standard products.  Sola attempts,  to the extent possible,  to
counter  competition  on the basis of price by  focusing  on  providing  a rapid
response to orders,  maintaining high fill rates, developing  differentiated new
products, and educating processing laboratories and eyecare practitioners on the
benefits of Sola lenses and coatings.  There can be no assurance,  however, that
the Company's  competitors  will not develop  products or services that are more
effective or less  expensive  than the Company's  products or which could render
certain of the Company's  products less  competitive.  Since  recently-developed
products  comprise a substantial  portion of the Company's  sales, the Company's
performance  and future  growth are  dependent  upon its  continuing  ability to
develop and market new products. The Company's quarterly results can be affected
by the ability to generate sales from new products as anticipated  and the costs
of such introductions.

     Some of the Company's  competitors  have  significantly  greater  financial
resources than the Company to fund expansion and research and  development.  See
"--Substantial  Indebtedness"  and  "--Management's  Discussion  and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources".
Within a particular  market,  certain of the Company's  competitors  may enjoy a
"home-country"  advantage  over foreign  competition.  In  addition,  in certain
markets (primarily Europe),  the Company also faces competition from a number of
its  principal  competitors  which are  vertically  integrated  with  processing
centers  to a  greater  extent  than the  Company,  enabling  them to  customize
prescription  lenses.  This  limits the number of  independent  lens  processing
customers to which the Company can market its products.

International Operations

     The Company operates  manufacturing  and distribution  sites in three major
regions of the world--North America (including Mexico), Europe and Rest of World
(comprising   primarily   Australia,   Asia  and  South  America)--and   derived
approximately  half of its net  sales in fiscal  1997 from the sale of  products



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outside the United States.  As a result, a significant  portion of the Company's
sales  and  operations  are  subject  to  certain   risks,   including   adverse
developments in the foreign political and economic environment,  exchange rates,
tariffs and other trade barriers,  staffing and managing foreign  operations and
potentially adverse tax consequences.  Although the Company and its predecessors
have been  successfully  conducting  business outside of the United States since
its inception in 1960,  there can be no assurance that any of these factors will
not have a material  adverse  effect on the  Company's  financial  condition  or
results of operations in the future.

     The  Company's  interest  expense  is  denominated  predominantly  in  U.S.
dollars;  its cash flow,  however,  is  comprised  of a variety  of  currencies.
Although the Company may enter into  currency  swap  agreements  with  financial
institutions to reduce its exposure to  fluctuations in foreign  currency values
relative to its debt obligations,  such hedging  transactions,  if entered into,
will not eliminate  that risk entirely.  As a result of the Company's  worldwide
operations,  currency  exchange rate  fluctuations  tend to affect the Company's
results of  operations  and  financial  position.  The Company  has  significant
operations   in   Brazil,    which   has,   until   recently,    experienced   a
hyper-inflationary  environment  and whose  currency risk may not be effectively
hedged.  The  functional  currency of the Company's  operations in Brazil is the
U.S.  dollar.   Under  U.S.   generally  accepted   accounting   principles  for
hyper-inflationary  countries,  all translation  and transaction  adjustments of
foreign operations are reflected in the Company's statements of operations.  The
Company's  historical  statements of operations reflect  significant  charges to
income  primarily  attributable  to  significant  devaluations  of the Brazilian
currency. There can be no assurance that hyper-inflationary  conditions will not
return to Brazil or be  present  in other  countries  in which the  Company  has
significant operations. See "--Management's Discussion and Analysis of Financial
Condition and Results of Operations--Currency Exchange Rates" and "--Inflation".

Restrictions on Payment of Dividends from Subsidiaries

     The Company's  foreign  operations are conducted  through its subsidiaries.
These   operations   contribute   significantly   to  the  Company's  sales  and
profitability.  The payment of dividends and the making of loans and advances to
the Company by its  subsidiaries may be subject to statutory  restrictions,  are
contingent  upon the earnings of those  subsidiaries  and are subject to various
business  considerations.  Dividends  and other  payments  to the  Company  from
subsidiaries in certain  jurisdictions are subject to legal restrictions and may
have  adverse tax  consequences  to the  Company.  The Company  intends to remit
dividends from its foreign  operations  subject to local cash  requirements  and
legal  restrictions.  Management  reviews the need for cash distributions to the
Company from its foreign  subsidiaries  on a case by case basis. If the need for
cash distributions from the subsidiaries  should arise in the future,  there can
be no  assurance  that the  subsidiaries  will be  permitted  to make  such cash
distributions  without legal  restrictions  or adverse tax  consequences  to the
Company.  Commencing in fiscal 1996,  the Company has provided for U.S.  federal
and state income taxes on unremitted earnings of certain foreign subsidiaries.

Substantial Indebtedness

     Although the Company's outstanding  indebtedness was reduced by application
of the proceeds of the  Company's  initial  public  offering in March 1995,  the
Company continues to have substantial  indebtedness.  The Company's  substantial
indebtedness may limit its capacity to respond to market  conditions  (including
its  ability  to  satisfy  capital  expenditure  requirements)  or to  meet  its
contractual  or  financial  obligations.  In  addition,  pursuant  to  the  debt
instruments  governing  the  Company's  indebtedness,  the Company is subject to
restrictive  covenants  that could limit its  ability to conduct  its  business.
Furthermore,  the  ability of the  Company to satisfy  its  obligations  will be
dependent  upon its future  performance,  which  will be  subject to  prevailing
economic  conditions  and to financial,  business and other  factors,  including
factors beyond the control of the Company.  The Company  entered into a new bank
credit   agreement  with  The  Bank  of  America   National  Trust  and  Savings
Association,  for  itself  and as  agent  for a  syndicate  of  other  financial
institutions,  covering an  aggregate  amount of $180  million.  As of March 31,
1997, $72.6 million was outstanding under this agreement, and $105.5 million was
available  for future  borrowings.  Through and  including  December  15,  1998,
interest  on the  Company's 



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9 5/8% Senior  Subordinated Notes due 2003 (the "Notes") will be payable in cash
semiannually at the rate of 6% per annum of the principal  amount at maturity of
the Notes.  After  December 15,  1998,  interest on the Notes will accrue and be
payable in cash  semiannually  at the rate of 9 5/8% per annum of the  principal
amount at maturity of the Notes.  Although the Company  believes  that cash flow
from operations will be sufficient to meet all of its debt service  requirements
and to fund its capital expenditure requirements, there can be no assurance that
this will be the case.

Reliance on Key Management

     The operation of the Company requires managerial and operational expertise.
Although all of the key management  employees have employment contracts with the
Company,  there can be no assurance that such  individuals  will remain with the
Company.  If, for any reason, such key personnel do not continue to be active in
the Company's management, operations could be adversely affected.


Risks in the Operation of Recently Acquired Facilities

     In June 1996 the Company acquired from American Optical Corporation ("AOC")
substantially  all of AOC's worldwide  ophthalmic  business  ("AO").  The future
success  of the AO  Acquisition  and the  effect  of the AO  Acquisition  on the
financial  and  operating  results  of the  Company  will  depend in part on the
ability of the Company to operate AO successfully as a stand-alone business and,
where  possible,  to engage in  cooperative  and joint  activities  with AO. The
ability of the Company to accomplish  its  objectives in connection  with the AO
Acquisition is, like any acquisition,  subject to certain risks including, among
others,  the  possible  inability  to retain  certain  AO  personnel,  potential
negative effects of diverting  management  resources and the possible failure to
retain AO customers.

Dividend Policy; Restrictions on Payment of Dividends

     The Company has not declared or paid any cash dividends on any class of its
capital  stock,  and does not intend to pay dividends on its Common Stock in the
foreseeable future. The Company's Bank Credit Agreement with The Bank of America
National Trust and Savings  Association,  and the Indenture  governing the Notes
(the  "Indenture"),  restrict  and limit the payment of  dividends on the Common
Stock. See "--Price Range of Common Stock and Dividend Policy".

Antitakeover Provisions

     The Company's Amended and Restated Certificate of Incorporation and Amended
and Restated  By-Laws contain certain  provisions that could make more difficult
the  acquisition  of the Company by means of a tender offer,  a proxy contest or
otherwise.  These provisions  include advance notice procedures for stockholders
to  nominate  candidates  for  election  as  directors  of the  Company  and for
stockholders to submit proposals for consideration at stockholders' meetings. In
addition,  the  Company  is  subject  to  Section  203 of the  Delaware  General
Corporation Law, which limits  transactions  between a publicly held company and
"interested  stockholders"  (generally,  those  stockholders  who, together with
their  affiliates  and  associates,  own 15% or more of a company's  outstanding
capital  stock).  This  provision  of  Delaware  law also may have the effect of
deterring certain potential acquisitions of the Company.