VANCOUVER, British Columbia, 2012-03-13 14:00 CET (GLOBE NEWSWIRE) -- Coastal Contacts Inc. ("Coastal" or "the Company") (TSX:COA) (Stockholm:COA) the planet's biggest online eyewear company today announced its financial results for the first fiscal quarter ended January 31, 2012.
For the first quarter ended January 31, 2012 compared to same period of 2011:
- Sales increased 15% to $46.8 million from $40.6 million.
- Total eyeglasses sales increased 63% to $10.3 million from $6.3 million.
- Total eyeglasses units shipped increased 85% to approximately 196,000 units.
- Total contact lens sales increased 7% to $36.6 million from $34.3 million.
- Adjusted EBITDA was $1.0 million compared with $0.3 million.
- Loss for the period was $0.2 million or $0.00 per share compared with a loss of $2.4 million or $0.04 per share.
- Total order volume was approximately 527,000 orders, a 16% increase.
- Coastal has grown its base of vision corrected customers to approximately 3.5 million compared with 2.9 million.
- Coastal's exclusive brands of eyewear comprised 60% of total units.
Mr. Roger Hardy, Coastal's Founder and CEO, commented, "We are excited about the record first quarter results given this is historically our seasonally weakest period. Our focus on operations during the quarter resulted in reduced selling and marketing expenses, reduced fulfillment expenses while improving service times to customers and growing the top and bottom lines. The investments we have made in the past year have positioned Coastal to grow our business while continuing to deliver a level of customer service that cannot be matched by anyone in our industry. We were also excited to ship more glasses to the United States market this quarter than any other market we serve which we believe supports the belief that customers in the United States are receptive to the savings and convenience of our offering. We look forward to reporting continued progress in the coming quarters."
Key financial metrics for the first quarter of 2012 compared with the same period in 2011:
- Gross profit increased to $19.0 million and remained constant at 41% of sales.
- Selling and Marketing expenses declined to 22% of sales from 23%.
- Fulfillment expenses declined to 9% of sales from 10%.
- General and Administration expenses declined to 10% from 15%.
Coastal reported cash and cash equivalents of $14.3 million compared with $16.9 million at the end of the previous quarter ended October 31, 2011.
| COASTAL CONTACTS INC. | |||
| CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (unaudited) | |||
| (Stated in Thousands of Canadian Dollars) | |||
| January 31, | October 31, | November 1, | |
| 2012 | 2011 | 2010 | |
| ASSETS | |||
| Current assets | |||
| Cash and cash equivalents | $ 14,330 | $ 16,864 | $ 18,266 |
| Trade and other receivables | 6,167 | 6,013 | 9,070 |
| Inventory | 24,691 | 26,228 | 17,536 |
| Prepaid expenses | 4,021 | 3,125 | 3,109 |
| Income tax receivable | -- | 79 | -- |
| Total current assets | 49,209 | 52,309 | 47,981 |
| Non-current assets | |||
| Deferred tax asset | 73 | 97 | 97 |
| Property, equipment and leasehold improvements | 9,112 | 8,960 | 4,160 |
| Intangible assets | 10,757 | 10,882 | 10,306 |
| Goodwill | 8,164 | 8,518 | 7,715 |
| Total non-current assets | 28,106 | 28,457 | 22,278 |
| Total assets | $ 77,315 | $ 80,766 | $ 70,259 |
| LIABILITIES AND EQUITY | |||
| Current liabilities | |||
| Trade and other payables | $ 32,470 | $ 36,098 | $ 26,348 |
| Provisions | 846 | 1,057 | 664 |
| Income taxes payable | 486 | -- | 44 |
| Finance lease obligation | 1,025 | 2,646 | 811 |
| Other current liabilities | 237 | 280 | 88 |
| Total current liabilities | 35,064 | 40,081 | 27,955 |
| Non-current liabilities | |||
| Other long-term liabilities | 815 | 859 | 425 |
| Finance lease obligation | 1,988 | 1,911 | 2,508 |
| Long-term debt | 3,799 | 1,500 | -- |
| Deferred tax liability | 2,980 | 3,306 | 3,359 |
| Total non-current liabilities | 9,582 | 7,576 | 6,292 |
| Total liabilities | 44,646 | 47,657 | 34,247 |
| Equity | |||
| Share capital | |||
| Authorized: | |||
| Unlimited common shares without par value | |||
| Unlimited Class A preferred shares without par value | |||
| Issued and outstanding: | |||
| 56,404,157 common shares [2011- 56,221,157] | 40,937 | 40,667 | 39,176 |
| Share-based payments reserve | 3,166 | 2,934 | 2,610 |
| Accumulated other comprehensive earnings (loss) | (374) | 372 | -- |
| Deficit | (11,060) | (10,864) | (5,774) |
| Total Equity | 32,669 | 33,109 | 36,012 |
| TOTAL LIABILITIES AND EQUITY | $ 77,315 | $ 80,766 | $ 70,259 |
| COASTAL CONTACTS INC. | ||
| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited) | ||
| (Stated in Thousands of Canadian Dollars, except per share amounts) | ||
| Three months ended January 31 | 2012 | 2011 |
| Sales | $ 46,849 | $ 40,612 |
| Cost of sales | 27,833 | 24,159 |
| Gross profit | 19,016 | 16,453 |
| Fulfillment | 4,153 | 4,006 |
| Selling and marketing | 10,114 | 9,327 |
| General and administration | 4,692 | 5,976 |
| Results from operating activities | 57 | (2,856) |
| Financing costs | 191 | 218 |
| Loss before income taxes | (134) | (3,074) |
| Income tax expense - current | 329 | 44 |
| Income tax recovery - deferred | (267) | (736) |
| Net loss for the period | (196) | (2,382) |
| Other comprehensive earnings (loss) | ||
| Currency translation differences | (746) | 391 |
| Total comprehensive loss for the period | $ (942) | $ (1,991) |
| Basic loss per share | $ (0.00) | $ (0.04) |
| Diluted loss per share | $ (0.00) | $ (0.04) |
| Weighted average number of common shares | ||
| outstanding - basic | 56,267,005 | 55,417,298 |
| Weighted average number of common shares | ||
| outstanding - diluted | 56,267,005 | 55,417,298 |
Coastal Contacts will host a conference call to review the financial results and Company operations on Tuesday, March 13, 2012 at 10:00am ET. Participating in the call will be Roger Hardy, Founder and CEO, and Gordon Howie, CFO.
To attend the call, participants may dial:
North American Toll Free 1-888-892-3255
Sweden 46 852 503 436
A replay of the call will be available for 7 days. To access the replay listeners may dial:
Local/International 1-800-937-6305
Passcode 704217
The following selected financial information is qualified in its entirety by, and should be read in conjunction with our audited consolidated financial statements for the fiscal year ended October 31, 2011 and accompanying notes and Management's Discussion and Analysis which may be viewed on SEDAR at www.sedar.com.
Coastal's risks and uncertainties are discussed in detail in the Company's Annual Information Form dated December 14, 2011, which is also available on SEDAR.
Adjusted EBITDA as referenced in this news release is a Non-IFRS measure and is defined as earnings before interest, taxes, depreciation and amortization, share based compensation and restructuring charges. See "Supplemental Non-IFRS Measures" herein.
The following table provides a reconciliation of net income to Adjusted EBITDA:
| For the three months ended January 31, | ||
| ($000's) | 2012 | 2011 |
| Net earnings (loss) | $ (196) | $(2,382) |
| Amortization and depreciation | 656 | 624 |
| Interest expense, net | 121 | 61 |
| Income tax expense (recovery) | 62 | (692) |
| Share-based compensation | 312 | 177 |
| Foreign exchange loss | 70 | 157 |
| Management change cost | -- | 2,335 |
| Adjusted EBITDA | $ 1,025 | $ 280 |
Transition to International Financial Reporting Standards
Coastal adopted IFRS for the 2012 fiscal year as required by the CICA Accounting Standards Board. The financial statements, including the fiscal 2011 comparative figures are prepared in accordance with IFRS and IAS 34, Interim Financial Reporting. Reconciliations prepared in accordance with IFRS 1, First-time Adoption of International Financial Reporting Standards are provided in note 15 of the unaudited condensed consolidated interim financial statements. The transition to IFRS did not result in a material impact on the Coastal's business functions or activities.
Coastal's significant accounting policies under IFRS are summarized in note 3 of the unaudited condensed consolidated interim financial statements and are substantively unchanged from the policies under previous CGAAP.
Supplemental Non-IFRS Measures
Adjusted EBITDA is a non-IFRS measure that does not have any standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other companies. Adjusted EBITDA should be considered in addition to, and not as a substitute for, net earnings, cash flows and other measures of financial performance and liquidity reported in accordance with IFRS.
Adjusted EBITDA is a measure we believe is useful in assessing performance and highlighting trends on an overall basis. Adjusted EBITDA differs from the most comparable IFRS measure, net earnings, primarily because it does not include interest, income taxes, amortization, depreciation, restructuring cost and share-based compensation expense.
New orders, reorders, shipped orders and active customers are non-IFRS measures that do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. New orders are orders shipped to new customers, net of returns. Reorders are orders shipped to returning customers, net of returns.
About Coastal Contacts Inc.:
Coastal Contacts, Inc. is the planet's biggest online eyewear company. Coastal empowers customers to easily browse, try on and buy eyewear—saving time, money and sanity. With every pair of qualifying frames purchased, Coastal donates a pair to someone in need through its Change the View project. Founded in 2000, Coastal designs, produces and distributes the largest selection of eyeglasses and contact lenses on the Internet, including a unique combination of designer eyeglasses, contact lenses, sunglasses, and vision care accessories. Coastal services customers in more than 150 countries through the Coastal Contacts family of websites including: Coastal.com, ClearlyContacts.ca, Lensway.com, Lensway.co.uk, Lensway.se, ClearlyContacts.com.au, ClearlyContacts.co.nz, Contactsan.com, and Coastallens.com.
Forward Looking Statements
All statements made in this news release, other than statements of historical fact, are forward-looking statements. The words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", "goal", "target", "should," "likely," "potential," "continue," "project," "forecast," "prospects," and similar expressions typically are used to identify forward-looking statements.
Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about our business and the industry and markets in which we operate. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict.
Persons reading this news release are cautioned that forward-looking statements or information are only predictions, and that our actual future results or performance may be materially different due to a number of factors. Reference should also be made to the section entitled "Risk Factors" contained in our most recently filed Annual Information Form dated December 14, 2011 for a detailed description of the risks and uncertainties relating to our business. These risks, as well as others, could cause actual results and events to vary significantly. Accordingly, readers should not place undue reliance on forward-looking statements and information, which are qualified in their entirety by this cautionary statement. These forward-looking statements are made as of the date of this news release and we expressly disclaim any intent or obligation to update these forward-looking statements, unless we specifically state otherwise and except as required by applicable law.
CONTACT: Terry Vanderkruyk
Vice President, Corporate Development
Coastal Contacts Inc.
604.676.4498
terryv@coastal.com
or
Budd Zuckerman
Genesis Select Corp
303.415.0200
bzuckerman@genesisselect.com
