VANCOUVER, British Columbia, June 14, 2010 (GLOBE NEWSWIRE) -- Coastal Contacts
Inc. ("Coastal" or "the Company") (TSX:COA) (Stockholm:COA) today announced its
financial results for the second fiscal quarter, period ended April 30, 2010.
Coastal noted the following financial highlights for the second fiscal
quarter of 2010:
-- Sales increased $4 million or 12% and set a quarterly record of $37.3
million as compared to $33.3 million in the second fiscal quarter of
2009. Sales increased 19% excluding the impact of foreign exchange rate
fluctuations.
-- Total order volume exceeded 384,000 orders, an increase of 18% over the
comparative period in 2009.
-- Acquired 104,000 new customers in the quarter.
-- Sales of eyeglasses grew to $4.7 million (net of returns and
cancellations) an increase of 136% over the same period in 2009.
-- Sales in Canada grew 43% during the six months ended April 30, 2010.
-- Sales in the United States grew 32% during the six months ended April
30, 2010 and 55% when excluding the effects of foreign exchange rate
fluctuations.
-- Advertising expense declined to 11% of sales as compared to 13% of sales
in the same period in 2009.
-- At April 30, 2010 Coastal had $9.9 million in cash and cash equivalents
and no debt.
Sales for the second fiscal quarter increased 12% and set a quarterly
record of $37.3 million compared to $33.3 million in 2009. Exclusive of
foreign exchange fluctuations sales grew 19% during the quarter
compared to the same period in 2009. Adjusted EBITDA for the second
fiscal quarter was $1.5 million which is an 8% improvement over the
same period in 2009. Net earnings for the second fiscal quarter was
$0.4 million or $0.01 per share compared to $0.5 million or $0.01 per
share in fiscal 2009.
Mr. Roger Hardy, Coastal's President and CEO, commented, "Coastal
continues to demonstrate organic growth in the contact lens category in
key markets around the world, particularly in Canada and the United
States. Our commitment to providing the highest level of customer
service is resulting in a growing number of repeat orders and is
increasing the life time value of our customer database. The eyeglasses
category is experiencing rapid growth, again mainly in North America,
and given the overall size of the global market, we believe has the
potential to eventually become a larger business than Coastal's contact
lens business.
In approximately two years we have built a significant eyeglasses
business that culminated in over 60,000 pairs of eyeglasses being
shipped during the quarter and $4.7 million in sales, predominantly in
North America. This quarter's operating results are consistent with the
financial model we used to establish our $20 million eyeglasses sales
goal this year. We are significantly expanding the capacity of our
North American eyeglasses facility to address consumer demand."
Coastal noted the following operational highlights during the second
fiscal quarter 2010:
-- Coastal reported that the Ministry of Health in British Columbia
modernized the regulations regarding the ability of consumers to
purchase contact lenses and eyeglasses on the Internet, making vision
care products more affordable and accessible.
-- Coastal secured a $5 million revolving line of credit from the Bank of
America, bringing the total cash accessible from existing credit
facilities to $8.5 million, none of which had been drawn at April 30,
2010.
Coastal Contacts will host a conference call to review the financial
results and company operations on Monday, June 14, 2010 at 1:00 pm PT.
Participating in the call will be Roger Hardy, Chairman and CEO and
Glen Kayll, CFO.
To attend the call, participants may dial:
North American Toll Free 1-888-892-3255
Sweden 0200791989
A replay of the call will be available for 7 days. To access the replay
listeners may dial:
North American Toll Free 1-800-937-6305
Passcode 486572
Coastal's risks and uncertainties are discussed in detail in the
Company's Annual Information Form dated January 29, 2010, which is also
available on SEDAR.
Adjusted EBITDA and orders as referenced in this news release are a
Non-GAAP measure and is defined as earnings before interest, taxes,
depreciation and amortization, share based compensation and
restructuring charges. See "Supplemental Non-GAAP Measures" herein.
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 second fiscal quarter ended
April 30th, 2010 and accompanying notes and Management's Discussion and
Analysis which may be viewed on SEDAR at www.sedar.com.
COASTAL CONTACTS INC.
CONSOLIDATED BALANCE SHEETS
($000's)
April 30, October 31,
2010 2009
---------------------------------------------------------------------
(Unaudited)
ASSETS
Current
Cash and cash equivalents $ 9,878 $ 11,532
Accounts receivable 8,338 7,965
Income tax receivable 109 --
Inventory 15,591 15,701
Prepaid expenses 2,203 1,532
Future income tax 93 109
Related party promissory notes 199 374
---------------------------------------------------------------------
36,411 37,213
---------------------------------------------------------------------
Property, equipment and leasehold improvements 3,762 2,813
Intangible assets 8,287 9,517
Goodwill 7,147 7,757
---------------------------------------------------------------------
$ 55,607 $ 57,300
---------------------------------------------------------------------
LIABILITIES
Current
Accounts payable and accrued liabilities $ 17,465 $ 17,908
Income tax payable -- 615
---------------------------------------------------------------------
17,465 18,523
---------------------------------------------------------------------
Future income tax 3,186 3,614
---------------------------------------------------------------------
20,651 22,137
---------------------------------------------------------------------
Shareholders' equity
Share capital
Authorized:
Unlimited common shares without par value
Unlimited Class A preferred shares without
par value
Issued and outstanding:
56,993,719 common shares [2009 - 56,901,719] 40,393 40,248
Contributed surplus 2,555 2,294
Accumulated other comprehensive loss (5,227) (3,482)
Deficit (2,765) (3,897)
---------------------------------------------------------------------
34,956 35,163
---------------------------------------------------------------------
$ 55,607 $ 57,300
---------------------------------------------------------------------
COASTAL CONTACTS INC.
CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS (LOSS)
(Unaudited) ($000's, except share and per share amounts)
Three months ended Six months ended
April 30 April 30
---------------------- ----------------------
2010 2009 2010 2009
---------------------------------------------------------------------
Sales $ 37,318 $ 33,301 $ 73,226 $ 64,643
Cost of sales 27,062 23,423 52,659 44,747
---------------------------------------------------------------------
Gross profit 10,256 9,878 20,567 19,896
---------------------------------------------------------------------
Advertising 3,920 4,252 7,911 8,378
Selling, general and
administration 4,836 4,239 9,478 8,308
Share-based
compensation 130 148 350 296
Amortization on
property, equipment
and leasehold
improvements 286 240 568 455
Amortization on
intangible assets 391 364 790 763
Foreign exchange
(gains) losses 293 (39) 275 (241)
Interest expense
(income) 1 (14) 15 (56)
---------------------------------------------------------------------
Earnings before
income taxes 399 688 1,180 1,993
Income tax 17 160 48 497
---------------------------------------------------------------------
Net earnings $ 382 $ 528 $ 1,132 $ 1,496
Basic earnings per
share $ 0.01 $ 0.01 $ 0.02 $ 0.03
Diluted earnings per
share $ 0.01 $ 0.01 $ 0.02 $ 0.03
---------------------------------------------------------------------
Weighted average
number of common
shares outstanding
Basic 56,961,506 57,974,911 56,931,117 58,149,443
Diluted 58,324,264 57,988,378 58,286,704 58,155,121
---------------------------------------------------------------------
Supplemental Non-GAAP Measures
Coastal Contacts reports its results in accordance with Canadian GAAP,
however, it presents Adjusted EBITDA and the number of orders shipped
and the reorder rate because Coastal believes our investors use these
figures to make investment decisions about us.
Adjusted EBITDA is a non-GAAP measure that does not have any
standardized meaning prescribed by Canadian GAAP 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
Canadian GAAP.
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 GAAP measure, net earnings,
primarily because it does not include interest, income taxes,
amortization and share-based compensation expense.
For the three For the six
months months
ended April ended April
30, 30,
------------- -------------
($000's) 2010 2009 2010 2009
----------------------------- ------ ----- ------ -----
Net earnings 382 528 1,132 1,496
Depreciation and amortization 677 604 1,358 1,218
Interest (income) expense,
net 1 (14) 15 (56)
Income tax expense 17 160 48 497
Share-based compensation 130 148 350 296
Foreign exchange (gain) loss 293 (39) 275 (241)
----------------------------- ------ ----- ------ -----
Adjusted EBITDA 1,500 1,387 3,178 3,210
----------------------------- ------ ----- ------ -----
About Coastal Contacts:
Coastal Contacts Inc. is the world's leading direct-to-consumer vision
products company which designs, produces and distributes a diversified
offering of contact lenses and eyeglasses. Coastal's unique combination
of branded and private label products represent quality, value and
above all, service. Coastal sells into more than 150 countries through
proprietary web properties which reflect the culture and consumer
preference of the target market. As new markets for eyeglasses and
contact lenses evolve, the Company is positioned to become the vision
product consumer's retailer of choice owing to its compelling value
proposition combining value and service. A leader in many of its
markets, Coastal is rapidly advancing toward its goal of becoming the
"World's Optical Store".
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 January 29, 2010 and in the NASDAQ OMX Stockholm
listing prospectus dated October 14, 2009, as filed on Sedar and with
the Swedish Financial Supervisory Authority, 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: Coastal Contacts Inc.
Terry Vanderkruyk, Vice President, Corporate Development
604.676.4498
terryv@coastalcontacts.com
Eyeglasses Growth Contributes to Record Second Quarter of 2010
| Source: Coastal Contacts Inc
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