DRAPER, Utah, Jan. 31 /PRNewswire-FirstCall/ -- 1-800 CONTACTS, INC.
(Nasdaq: CTAC), today announced that it has resolved its longstanding
supply issue.
(Logo: http://www.newscom.com/cgi-bin/prnh/20040107/LACONTACTSLOGO)
The Company has recently signed long-term supply agreements with its
three largest contact lens suppliers. The Company has purchased directly
from Bausch & Lomb, its fourth largest supplier, without a written
agreement since 2001. Based on this longstanding relationship and recent
discussions with Bausch & Lomb, the Company does not expect this direct
relationship to change.
Jonathan Coon, Chief Executive Officer, commented, "For the first time
in the Company's history, we can now purchase directly, as an authorized
account, every lens marketed by the four largest manufacturers. We believe
these four manufacturers represent approximately 98% of all soft contact
lenses sold in the United States.
"Six years ago, our small company began dedicating tremendous resources
to support the right of consumers to have an automatic right to their
prescriptions and the right to use their prescriptions wherever they choose
-- because we want to be one of those choices. We spent years engaged in
litigation to support this right. We then spent years longer supporting,
and working for, federal and state legislation aimed at guaranteeing this
right.
"Today, 36 million Americans who wear contact lenses are protected by
the Fairness to Contact Lens Consumers Act (FCLCA) which grants them an
automatic right to their prescriptions, and the right to have their
prescriptions verified when they purchase from a seller other than their
eye doctor. In passing the FCLCA, Congress said in the accompanying report
language, 'The consumer's right to a copy of their contact lens
prescription means nothing unless consumers can fill that prescription at
the business of their choice.'
"In its most recent session, to ensure that consumers could fill their
prescriptions from the business of their choice, Congress considered
legislation regarding contact lens distribution practices. We supported
that legislation. However, we believe the market solution embodied in these
recent supply agreements is adequate to ensure a competitive market --
making legislation unnecessary at this time.
"As the eye care industry focuses more on consumer needs, the entire
industry, and, more importantly, the 36 million Americans who wear contact
lenses, will benefit. This focus on consumers is apparent on the part of
manufacturers, who over the past few years have introduced innovative new
products that provide real, consumer-noticeable benefits. We believe these
changes in the regulatory and industry environment will create a
competitive market that results in more contact lens wearers, fewer
dropouts, and better patient compliance (more frequent replacement)."
Brian Bethers, President, added, "We also need to update our
shareholders on a recent development with one of our top selling lenses
that represents approximately 4% of our sales. On January 12th, one of our
largest suppliers announced manufacturing difficulties with this lens (
http://www.jan12statement.com ). This supplier states in this notice that
it expects significant supply constraints and backorders into the second
quarter. We are already experiencing difficulties filling orders for this
lens and are uncertain how this supply disruption will affect our customers
and our business in the first half of the year."
Mr. Bethers continued, "This resolution to our years of legal and
legislative efforts allows us to refocus the Company's resources and
management's time on serving customers and growing our business. We expect
the large amounts of our selling, general, and administrative expenses that
have for years been dedicated to legislative and legal initiatives will
decrease. However, it will take time to rebuild our business with customers
we have not been able to serve for years. For this reason, and due to the
uncertainty associated with the supply disruption for one of our top
selling lenses, we are not revising our prior guidance for 2007."
About 1-800 CONTACTS, INC.
1-800 CONTACTS offers consumers an attractive alternative for obtaining
replacement contact lenses in terms of convenience, price and speed of
delivery. Through its easy-to-remember, toll-free telephone number, "1-800
CONTACTS" (1-800-266-8228), and its Internet web site,
http://www.1800contacts.com, the Company sells almost all of the popular brands of
contact lenses. 1-800 CONTACTS offers products at competitive prices, while
delivering a high level of customer service. The Company has delivered more
than 15 million orders to over 5 million customers.
Forward-looking Statements
This news release contains a number of forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such statements include, but are not limited to: statements relating to
resolution of longstanding supply issues; our anticipated ability to
purchase contact lenses directly from our largest contact lens suppliers;
our expectation that our ability to purchase lenses directly from Bausch &
Lomb will not change; our belief that the agreements referred to in this
news release reflect a market solution making legislation unnecessary at
this time; our belief that regulatory and industry changes will create a
competitive market that results in more frequent lens replacement; our
anticipated ability to refocus the Company's resources on serving customers
and growing our business; our expectation that the resources we dedicate to
legislative and legal initiatives will decrease; our prior guidance for
2007; and all other statements that are not purely historical. All such
forward-looking statements are based upon information available to us as of
the date hereof, and we disclaim any intention or obligation to update any
such forward-looking statements. All of our forward-looking statements are
subject to risks and uncertainties that could cause actual results to
differ materially from those set forth in or implied by such
forward-looking statements. These risks and uncertainties include, among
others: general economic conditions, the health and size of the contact
lens industry, inventory acquisition and management, manufacturing
operations, governmental regulations, exchange rate fluctuations,
advertising spending and effectiveness, unanticipated costs and expected
benefits associated with the Japanese license agreement and our supply
agreements and related arrangements, research and development initiatives,
prescription verification requirements of The Fairness to Contact Lens
Consumers Act, other regulatory considerations, and the other risks and
uncertainties identified in the reports we have filed from time to time
with the U.S. Securities and Exchange Commission, including our most recent
Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Information
on our websites, other than the information specifically referenced in this
press release, shall not be deemed to be part of this press release.
SOURCE 1-800 CONTACTS, INC.
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Related links:
http://www.1800contacts.com
http://www.jan12statement.com
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20040107/LACONTACTSLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Brian W. Bethers, President, or Robert G.
Hunter, CFO, both of 1-800 CONTACTS, INC., +1-801-316-5000,
investors@contacts.com
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