DRAPER, Utah, April 16 /PRNewswire-FirstCall/ --
1-800 CONTACTS, INC. (Nasdaq: CTAC), today reported results for the first
quarter ended March 30, 2002.
(Photo: http://www.newscom.com/cgi-bin/prnh/19990917/1800CONTACTS )
Net sales for the first quarter ended March 30, 2002 were $41.6 million,
compared to $42.8 million for the same period last year. Net income for the
first quarter of 2002 was $1.9 million, or $.17 per diluted share, versus
$2.3 million, or $.20 per diluted share, in the first quarter of 2001.
During the first quarter of 2002, repeat sales increased by 17 percent
over the same period in the prior year to $32.9 million which represented
79 percent of total net sales. Internet sales grew to $17.1 million, or
41 percent of total net sales, up from $16.3 million, or 38 percent of total
net sales, during the prior year period.
Jonathan Coon, Chief Executive Officer, commented, "As expected, net sales
continue to be affected by our ongoing efforts to manage our inventory of
Johnson & Johnson products. We spent about $5.5 million less on advertising
than we did in the first quarter of 2001, leading to the decline in new sales.
Still, repeat sales remained strong for the quarter, increasing almost
$5 million from the prior year quarter.
"We continue to fill nearly all requests our customers make for Johnson
& Johnson products. During the quarter, we were again able to increase our
inventory of Johnson & Johnson products. As anticipated, our increased costs
to acquire Johnson & Johnson inventory caused gross margin to decline in the
first quarter.
"As with the prior two quarters, we incurred significant costs during the
quarter associated with our ongoing effort to create a fair and open system of
competition in our industry."
During the first quarter of 2002, the company spent approximately
$2.2 million to repurchase 200,000 shares of common stock. There are
1,293,500 shares remaining of the existing three million share repurchase
authorization by the company's board of directors.
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.contacts.com , the company sells all of the most popular brands of contact
lenses. High volume, cost-efficient operations enable 1-800 CONTACTS to offer
products at competitive prices while delivering a high level of customer
service.
This news release contains forward-looking statements about the company's
future business prospects. These 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. Factors that may
cause future results to differ materially from the company's current
expectations include, among others: general economic conditions, the health
of the contact lens industry, inventory acquisition and management,
advertising spending and effectiveness, and regulatory considerations.
Company News On Call: http://www.prnewswire.com/comp/109239.html
1-800 CONTACTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
Quarter Ended
March 31, March 30,
2001 2002
NET SALES $42,817 $41,581
COST OF GOODS SOLD 25,534 28,894
Gross profit 17,283 12,687
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES:
Advertising expense 8,264 2,719
Legal and professional fees 425 1,260
Other selling, general and
administrative expenses 4,542 5,391
Total selling, general and
administrative expenses 13,231 9,370
INCOME FROM OPERATIONS 4,052 3,317
OTHER EXPENSE, net (205) (130)
INCOME BEFORE PROVISION FOR INCOME TAXES 3,847 3,187
PROVISION FOR INCOME TAXES (1,517) (1,247)
NET INCOME $2,330 $1,940
PER SHARE INFORMATION:
Basic net income per common share $0.20 $0.17
Diluted net income per common share $0.20 $0.17
WEIGHTED AVERAGE NUMBER OF COMMON SHARES:
Basic 11,577 11,521
Diluted 11,801 11,622
1-800 CONTACTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
ASSETS
December 29, March 30,
2001 2002
CURRENT ASSETS:
Cash and cash equivalents $36 $75
Inventories 43,000 44,826
Deferred income taxes 985 1,017
Other current assets 1,019 1,283
Total current assets 45,040 47,201
PROPERTY AND EQUIPMENT, net 3,309 3,477
DEFERRED INCOME TAXES 439 496
INTANGIBLE ASSETS, net 1,544 1,436
OTHER ASSETS 73 88
Total assets $50,405 $52,698
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Line of credit $12,526 $13,628
Income taxes payable 141 1,367
Accounts payable and accrued liabilities 13,985 14,180
Total current liabilities 26,652 29,175
STOCKHOLDERS' EQUITY 23,753 23,523
Total liabilities and
stockholders' equity $50,405 $52,698
SOURCE 1-800 CONTACTS, INC.
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Related links:
http://www.contacts.com
Company News On-Call:
http://www.prnewswire.com/comp/109239.html
Photo Notes:
NewsCom: http://www.newscom.com/cgi-bin/prnh/19990917/1800CONTACTS
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, 1-888-776-6555 or +1-212-782-2840
CONTACT:
Jonathan C. Coon, Chief Executive Officer,
+1-801-924-9800, or Scott S. Tanner, Chief Operating Officer,
+1-801-924-9802, investors@contacts.com, both of 1-800 CONTACTS,
INC.
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