DRAPER, Utah, May 3 /PRNewswire-FirstCall/ -- 1-800 CONTACTS, INC.
(Nasdaq: CTAC), today reported results for its first quarter ended
April 2, 2005.
(Logo: http://www.newscom.com/cgi-bin/prnh/20040107/LACONTACTSLOGO)
Net sales for the first quarter ended April 2, 2005 were $60.3 million,
compared to $50.8 million for the comparable quarter of the prior year, a
19% increase. For the first quarter of fiscal 2005, the Company reported net
income of $0.2 million, or $0.01 per diluted common share, compared to a net
loss of $(2.2) million, or $(0.17) per diluted common share, for the first
quarter of fiscal 2004.
"We continue to see strength in our US retail business and progress in our
international manufacturing operations as we invest in capacity expansion and
in research and development for new products," said Jonathan Coon, Chief
Executive Officer.
Net sales and operating income for the Company's US retail business for
the first quarter of fiscal 2005 were $56.4 million and $4.4 million,
respectively, compared to net sales of $49.4 million and an operating loss of
$(1.1) million for the first quarter of fiscal 2004. Net sales and operating
loss for ClearLab, the Company's international manufacturing business, for the
first quarter of fiscal 2005 were $4.3 million and $(2.0) million,
respectively, compared to net sales of $1.4 million and an operating loss of
$(1.1) million for the first quarter of fiscal 2004. ClearLab's results for
the first quarter of fiscal 2005 include $1.0 million in license fees from the
Company's Japanese license agreement, and $0.4 million of intercompany sales
to the Company's US retail business.
The Company's gross margin decreased slightly from 37.9% in the first
quarter of fiscal 2004 to 37.3% in the first quarter of this year. The gross
margin for the US retail business increased to 39.4% for the first quarter of
fiscal 2005 from 38.3% in the first quarter of fiscal 2004.
Advertising expenses for the first quarter of fiscal 2005 were
$6.5 million, or 11% of net sales, compared to $8.8 million, or 17% of net
sales, for the comparable quarter of the prior year. Legal and professional
expenses for the first quarter of fiscal 2005 were $1.3 million compared to
$1.8 million for the first quarter of the prior year.
Research and development spending was constant as a percentage of net
sales at 1.8% for the first quarter of both fiscal 2005 and 2004. Other
operating expenses as a percentage of net sales decreased to 19.1% for the
first quarter of fiscal 2005 from 19.4% for the first quarter of fiscal 2004.
During the first quarter of fiscal 2005, other operating expenses as a
percentage of net sales for the US retail business also decreased to
17.9% from 18.1% in the first quarter of fiscal 2004.
For the second quarter of fiscal 2005, the Company expects US retail net
sales of $55 million to $57 million, with operating income of approximately
$3.5 million. For fiscal 2005, the Company expects to achieve US retail net
sales in the range of $225 million to $230 million and US retail operating
income of $18 million to $20 million. The Company plans to have adverting
expenses of approximately $7 million during the second quarter and $23 million
to $25 million during fiscal 2005.
The Company expects ClearLab to achieve revenue of approximately
$4.5 million to $5.0 million and an operating loss of approximately
$(1.5) million for the second quarter of fiscal 2005. The Company continues
to expect fiscal 2005 revenues for ClearLab in the range of $18 million to
$23 million and operating income of close to break-even for the year.
Mr. Coon stated, "We continue to focus on our vision of building a
seamless experience for consumers by partnering with optical retailers and eye
doctors nationwide. Our goal over the course of this year is to expand on our
initial partnership with a regional optical chain in Utah to create a seamless
experience for consumers nationwide. We are currently evaluating various
parties to identify the best partners to achieve this goal. Our referral
agreement with Cole National, which was acquired by Luxottica, was set to
expire in March, but has been extended to the first of July."
Brian Bethers, President and Chief Financial Officer, added, "To help us
with this retail network, we have recently hired Michael L. Cohen, O.D. as
Vice President of Professional Services. Dr. Cohen joins us after serving in
the same professional role from 1995 through 2004 for Cole Vision Corporation.
He has also served as the owner and principal of four professional offices, a
technical and marketing consultant to contact lens manufacturers, and lecturer
to industry organizations. Dr. Cohen has a Doctorate from the Pennsylvania
State College of Optometry in Philadelphia, Pennsylvania. His post doctorate
studies include advanced pharmacology, ocular therapy, and comprehensive
ocular therapeutics."
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 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.
ClearLab develops and manufactures a wide range of disposable contact lens
products and distributes these lenses in international markets. More
information about ClearLab can be found at its website, http://www.clearlab.com.
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, manufacturing
operations, governmental regulations, integrations and growth of the Company's
acquisitions into its business, exchange rate fluctuations, advertising
spending and effectiveness, the length of time required for completion of the
Company's obligations under the Japanese license agreement, the ability to
complete the milestones under the Japanese license agreement, the amount of
license fees and royalties that will ultimately be received under the Japanese
license agreement, unanticipated costs and expected benefits associated with
the Japanese license agreement and the Company's supply agreements and related
arrangements, development of a nationwide retail optical store network,
research and development initiatives, prescription verification requirements
of The Fairness to Contact Lens Consumers Act, and other regulatory
considerations. Information on the Company's websites shall not be deemed to
be part of this press release.
1-800 CONTACTS, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS INFORMATION
(in thousands, except per share amounts)
(unaudited)
Quarter Ended
April 3, April 2,
2004 2005
NET SALES $50,849 $60,283
COST OF GOODS SOLD 31,553 37,775
Gross profit 19,296 22,508
OPERATING EXPENSES:
Advertising 8,815 6,538
Legal and professional 1,840 1,284
Research and development 892 1,055
Purchased in-process
research and development 83 --
Other operating 9,882 11,517
Total operating expenses 21,512 20,394
INCOME (LOSS) FROM OPERATIONS (2,216) 2,114
OTHER EXPENSE, net (356) (641)
INCOME (LOSS) BEFORE PROVISION
FOR INCOME TAXES (2,572) 1,473
BENEFIT (PROVISION) FOR
INCOME TAXES 366 (1,290)
NET INCOME (LOSS) $(2,206) $183
PER SHARE INFORMATION:
Basic and diluted net income
(loss) per common share $(0.17) $0.01
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING:
Basic 13,188 13,302
Diluted 13,188 13,493
OTHER DATA:
Depreciation $889 $1,055
Amortization 787 1,071
Total depreciation and
amortization $1,676 $2,126
Depreciation and amortization
included in the following captions:
Cost of goods sold $462 $692
Research and development 18 27
Other operating 1,196 1,407
Total depreciation and
amortization $1,676 $2,126
SEGMENT INFORMATION:
Quarter Ended
April 3, 2004
U.S. International Eliminations Total
Net sales $49,451 $1,398 $-- $50,849
Gross profit 18,930 366 -- 19,296
Research and development 536 356 -- 892
Purchased in-process
research and development -- 83 -- 83
Other operating expense 8,970 912 -- 9,882
Income (loss)
from operations (1,149) (1,067) -- (2,216)
SEGMENT INFORMATION:
Quarter Ended
April 2, 2005
U.S. International Eliminations Total
Net sales $56,366 $4,288 $(371) $60,283
Gross profit 22,187 603 (282) 22,508
Research and development -- 1,055 -- 1,055
Purchased in-process
research and development -- -- -- --
Other operating expense 10,078 1,439 -- 11,517
Income (loss)
from operations 4,403 (2,007) (282) 2,114
1-800 CONTACTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
(in thousands)
(unaudited)
ASSETS
January 1, April 2,
2005 2005
CURRENT ASSETS:
Cash $3,105 $1,120
Accounts receivable, net 3,178 3,616
Inventories, net 22,206 21,655
Deferred income taxes 1,328 1,564
Other current assets 3,944 3,394
Total current assets 33,761 31,349
PROPERTY, PLANT AND EQUIPMENT, net 20,618 20,438
DEFERRED INCOME TAXES, net of
current portion 720 691
GOODWILL 34,320 34,219
DEFINITE-LIVED INTANGIBLE ASSETS,
net 17,897 16,679
OTHER ASSETS 1,669 2,168
Total assets $108,985 $105,544
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $1,632 $1,625
Current portion of capital lease
obligations 47 46
Accounts payable and accrued
liabilities 22,125 27,140
Total current liabilities 23,804 28,811
LONG-TERM LIABILITIES:
Line of credit 14,404 8,416
Long-term debt, net of current
portion 8,170 7,707
Capital lease obligations, net of
current portion 98 84
Deferred income tax liabilities 1,458 1,007
Other long-term liabilities 2,547 838
Total long-term liabilities 26,677 18,052
STOCKHOLDERS' EQUITY 58,504 58,681
Total liabilities and
stockholders' equity $108,985 $105,544
SOURCE 1-800 CONTACTS, INC.
 back to top
Related links:
http://www.contacts.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 and CFO, or
Robert G. Hunter, Vice President, Finance, both of 1-800
CONTACTS, INC., +1-801-924-9800, investors@contacts.com
|
