DRAPER, Utah, Dec. 16 /PRNewswire-FirstCall/ --
1-800 CONTACTS, INC. (Nasdaq: CTAC), today announced that it has signed a
letter of intent with Southfield, Michigan-based Camelot Ventures to acquire
certain assets and assume certain liabilities of Lens Express and Lens 1st,
two leading U.S. mail-order contact lens retailers.
(Photo: http://www.newscom.com/cgi-bin/prnh/19990917/1800CONTACTS )
Under the terms of the agreement, 1-800 CONTACTS will acquire certain
assets of Lens Express and Lens 1st, including databases, customer
information, web addresses, phone numbers, and intellectual property rights.
In addition, acquired assets will include certain property, equipment,
inventories and other tangible assets. The consideration to be paid includes
900,000 restricted shares of common stock, $6.5 million in cash and the
assumption of approximately $4.8 million of current liabilities.
The completion of this acquisition, which is expected to close by
January 31, 2003, will be dependant upon definitive documentation,
satisfactory outcome of due diligence, board approvals, lender approvals, and
third party consents.
The Company intends to finance the cash portion of the consideration.
Currently, the Company owes approximately $5 million on its line of credit,
down from $19.1 at the end of its second quarter and $9.9 million at the end
of its third quarter. Based on preliminary information it has received,
1-800 CONTACTS expects this transaction to contribute $30-$35 million to its
combined revenues and $6-$7 million in operating income in the twelve months
following closing.
Scott Tanner, Chief Operating Officer of 1-800 CONTACTS, commented,
"Buying directly from Johnson & Johnson should reduce our inventory and free
up capital to pay for transactions like this. Currently, Johnson & Johnson
products account for about 40% of our sales, but the approximately $23 million
of Johnson & Johnson inventory we have on hand comprises about 60% of our
total inventory balance."
Jonathan Coon, Chief Executive Officer of 1-800 CONTACTS, commented, "We
are excited about the opportunities created by bringing these contact lens
retailers together. This acquisition will leverage our existing
infrastructure while delivering additional economies of scale in purchasing,
distribution and marketing."
David Katzman to Join Board of Directors
David B. Katzman, Managing Partner for Camelot Ventures, is expected to
join 1-800 CONTACTS' Board of Directors upon completion of the transaction.
Camelot Ventures currently owns approximately 560,000 shares of
1-800 CONTACTS' common stock. Upon closing, Camelot Ventures will own
approximately 1.46 million shares, representing approximately 11% of the
outstanding shares. Camelot Ventures, founded in 1999, is a Southfield,
Michigan-based private investment group which focuses on industries in
customer relationship management (CRM), call center, catalog, traditional or
direct marketing applications, retail, electronic or financial services
sectors. Camelot's investments include Livonia, Michigan-based Quicken Loans
Inc., the nation's largest online mortgage lender.
Mr. Katzman has founded a variety of successful businesses including
Habitat, National Blinds and Wallpaper, and Lens 1st. National Blinds and
Wallpaper was the number one direct-to- consumer company in its category when
it was purchased by Home Depot in 1997. After the sale, Katzman was named
President of Home Depot S.O.C., which specializes in the processing of special
orders for the Home Depot stores nationwide. Mr. Katzman joined Camelot
Ventures full time in 2000.
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 proposed
acquisition of Lens Express and Lens 1st and any expected benefits associated
thereto. 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: the inability to agree on definitive documentation, unsatisfactory due
diligence results, failure to receive necessary debt financing, general
economic conditions, the health of the contact lens industry, inventory
acquisition and management, manufacturing issues, integration of IGEL,
integration of Lens Express and Lens 1st, exchange rate fluctuations,
advertising spending and effectiveness, unanticipated delays or difficulty
certifying with Vistakon requirements, and regulatory considerations.
SOURCE 1-800 CONTACTS, INC.
 back to top
Related links:
http://www.1800contacts.com
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.
|
