Coastal Reports Record Revenue of $196 Million in Fiscal 2012

Coastal Reports Record Revenue of $196 Million in Fiscal 2012

VANCOUVER, British Columbia, Dec. 19, 2012 (GLOBE NEWSWIRE) -- Coastal
Contacts Inc. ("Coastal" or "the Company") (Nasdaq:COA) (TSX:COA)
(Stockholm:COA), the largest online retailer of vision care products in the
world, announced today its financial results for the fourth quarter and fiscal
year ended October 31, 2012.

For the year ended October 31, 2012:

  *Total eyeglasses sales increased 22% to $48 million from $39 million
    during the same period in 2011.
  *Sales increased by $13.4 million or 7% to $196.1 million from $182.7
    million during the same period in 2011.
  *Total contact lens sales increased 3% to $148.2 million from $143.5
    million during the same period in 2011.
  *Gross profit increased 11% to $84.5 million and as a percentage of sales,
    gross margin increased to 43% compared with 42% during the same period in
  *Adjusted EBITDA* was $1.4 million compared with $0.7 million during the
    same period in 2011.
  *Cash and equivalents of $19.2 million compared with $16.9 million at the
    end of the same period in 2011.

* Adjusted EBITDA is a non-IFRS measure that does not have a standardized
meaning prescribed by IFRS and is therefore unlikely to be comparable to
similar measures presented by other companies. Refer to table for a
reconciliation of net earnings to Adjusted EBITDA.

The Company noted the following operating highlights for 2012:

  *Total order volume was approximately 2.3 million orders in fiscal 2012.
  *Customer base grew to 4.3 million vision corrected customers.
  *Eyeglasses shipments grew to 987,000 pairs, an increase of 27% over 2011.
  *Splash™, Coastal's proprietary contact lens brand, comprised 6% of contact
    lens unit sales during the period.
  *Exclusive designer eyeglasses frames accounted for 72% of overall
    eyeglasses sales.

For the fourth quarter ended October 31, 2012:

  *Total eyeglasses sales increased 27% to $13.8 million from $10.9 million
    during the same period in 2011.
  *Sales increased to $50.7 million from $48.7 million during the same period
    of 2011.
  *Gross profit increased 18% to $23.3 million and as a percentage of sales,
    gross margin increased to 46% compared with 40% during the same period in
  *Adjusted EBITDA was a loss of $0.4 million compared with $0.1 million
    during the same period in 2011.
  *Net loss for the period was $2.6 million compared with $1.5 million during
    the same period in 2011.
  *Eyeglasses sales into the United States market increased by 100% when
    compared with the same period in 2011.

Mr. Roger Hardy, Coastal's founder and CEO, commented, "Coastal is changing
the way the world buys eyewear and doing it in a way that serves customers the
way they want to be served.We continually survey our customers to gain
current feedback on how we are doing using Net Promoter Score (NPS)
methodology. We believe our ratings are well ahead of traditional eyewear
retailers and we are convinced this difference will continue to propel the
shift from traditional eyewear channels to Coastal.We are well positioned to
benefit from this emerging change in consumer habits.

We are fortunate to have built a team of experts in internet marketing,
customer acquisition, social media, business development, information systems,
finance and logistics.This talented team is using one of the world's most
technologically advanced eyeglasses labs to drive Coastal forward with leading
edge solutions on every front.

We continue to leverage the predictable recurring revenue and earnings
generated in the contact lens category and invest in the rapidly growing and
higher margin eyeglasses business.We shipped approximately one million pairs
of eyeglasses during 2012, which is a significant milestone for Coastal after
launching this category in 2009.

In 2012 our eyeglasses business grew 22% to $47.9 million and we increased
units shipped by 27% in units shipped during 2012 when compared to 2011.A
particular highlight was growth of 100% year over year in the U.S. eyeglasses
market during the fourth quarter, which was in line with our expectations and
remains a key focus for the Company. We believe the eyeglasses category holds
significant potential for both rapid growth and earnings expansion as markets

During the fourth fiscal quarter of 2012 gross profit increased to $23.3
million or 46% of sales, compared to $19.7 million or 40% of sales for the
same period in 2011.This margin expansion is the result of favorable product
mix changes, the success of Coastal's exclusive branded eyeglasses and contact
lenses and increased contribution by the higher margin eyeglasses business.

Coastal ended fiscal 2012 with $19.2 million in cash and equivalents compared
to $16.9 million at the end of fiscal 2011. We have sufficient working
capital to execute on our business plan going forward.

It has been a year of significant contribution and achievements throughout the
Company and I would like to thank each team member for their commitment to
building the service leader in the online eyewear industry."

Key figures:

Salesfor fiscal 2012 increased to $196.1 million compared to $182.7 million
in fiscal 2011.Adjusted EBITDA for fiscal 2012 was $1.4 million compared with
$0.7 million for fiscal 2011. Net loss for the fiscal year was $4.9 million or
$0.17 per share compared with a net loss of $5.3 million or $0.19 per share in
fiscal 2011.

Sales for the fourth quarter of 2012 increased to $50.7 million compared with
$48.7 million in the same period last year.Adjusted EBITDA during the quarter
was a loss of $0.4 million compared to $0.1 million in the fourth quarter of
2011. Net loss for the fourth quarter of 2012 was $2.6 million or $0.09 per
share, compared with a net loss of $1.5 million, or $0.05 per share in the
fourth quarter of 2011.

(Expressed in Thousands of Canadian Dollars)
                                          October 31, October 31, November 1,
                                          2012        2011        2010
Current assets                                                   
Cash and cash equivalents                  $19,153   $16,864   $18,266
Trade and other receivables                6,681      6,013      9,070
Inventories                                25,435     27,749     18,276
Prepaid expenses                           2,250      3,125      3,109
Income tax receivable                      --        79         --
Total current assets                       53,519     53,830     48,721
Non-current assets                                               
Deferred tax assets                        --        97         97
Property, equipment and leasehold          9,887      8,960      4,160
Intangible assets                          11,376     10,882     10,306
Goodwill                                  8,322      8,518      7,715
Total non-current assets                   29,585     28,457     22,278
TOTAL ASSETS                               $83,104   $82,287   $70,999
LIABILITIES AND EQUITY                                           
Current liabilities                                              
Trade and other payables                   $40,144   $36,098   $26,348
Provisions                                 1,284      1,057      664
Income taxes payable                       839        --        44
Finance lease obligations                  101        2,646      811
Term loan                                  3,300      --        --
Credit facilities                          1,715      --        --
Other current liabilities                  3,210      2,939      1,364
Total current liabilities                  50,593     42,740     29,231
Non-current liabilities                                          
Other long-term liabilities                270        859        425
Finance lease obligations                  457        1,911      2,508
Credit facilities                          --        1,500      --
Deferred tax liabilities                   2,905      3,306      3,359
Total non-current liabilities              3,632      7,576      6,292
Total liabilities                          54,225     50,316     35,523
Shareholders' Equity                                             
Share capital                              42,501     40,667     39,176
Share-based payments reserve               3,395      2,934      2,610
Accumulated other comprehensive income     (137)      372        --
Deficit                                    (16,880)   (12,002)   (6,310)
Total Shareholders' Equity                 28,879     31,971     35,476
TOTAL LIABILITIES AND EQUITY               $83,104   $82,287   $70,999

(Expressed in Thousands of Canadian Dollars, except share and per share
For the years ended October 31               2012             2011
Sales                                        $196,085       $182,714
Cost of sales                                111,558         106,279
Gross profit                                 84,527          76,435
Fulfillment                                  19,167          17,522
Selling and marketing                        47,927          43,645
General and administration                   20,926          20,505
Results from operating activities            (3,493)         (5,237)
Financing costs                             825             127
Loss before income taxes                     (4,318)         (5,364)
Income tax expense - current                 927             30
Income tax recovery - deferred               (367)           (89)
Net income tax expense (recovery)            560             (59)
Net loss for the year                        (4,878)         (5,305)
Other comprehensive income (loss)                            
Foreign currency translation differences     (509)           372
Total comprehensive loss for the year        $(5,387)       $(4,933)
Basic and diluted loss per share             $(0.17)        $(0.19)
Weighted average number of common shares                     
outstanding - basic and diluted              28,290,127      27,745,446

Coastal will host a conference call to review the financial results and
Company operations on Wednesday, December 19, 2012 at 1:30 p.m. Pacific
time. Participating in the call will be Roger Hardy, founder and CEO, Gary
Collins, President and Nick Bozikis, CFO.

To attend the call, participants may dial:
North American Toll Free                        1-888-892-3255
Sweden                                          46 852 503 436
A replay of the call will be available for 7 days.To access the replay
listeners may dial:
Local/International                             1-800-937-6305
Passcode                                        477096

To view the Company presentation that will be reviewed during the call, please
log into Illustrate FX.

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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 fiscal year ended October 31, 2012 and accompanying notes
and Management's Discussion and Analysis which may be viewed on SEDAR at and EDGAR at

Coastal's risks and uncertainties are discussed in detail in the Company's
Annual Information Form dated December 19, 2012 which is also available on

Adjusted EBITDA as referenced in this news release is a Non-IFRS measure and
is defined as earnings before interest, taxes, depreciation and amortization,
share based compensation, listing and financing costs and restructuring
charges. See "Supplemental Non-IFRS Measures" herein.

The following table provides a reconciliation of net earnings to adjusted

($000's)                                       2012    2011    2010
Net earnings (loss)                            (4,878) (5,305) 2,566
Amortization                                   2,920   2,825   2,272
Interest expense (income), net                 517     275     96
Income tax expense (recovery)                  560     (59)    (53)
Share-based compensation                       967     823     485
Foreign exchange (gain) loss                   308     (151)   97
Listing, financing and management change costs 987     2,335   1,784
Adjusted EBITDA                                1,381   743     7,247

Supplemental Non-IFRS Measures

Coastal Contacts reports its results in accordance with IFRS, however, it
presents Adjusted EBITDA and the number of orders shipped in our filings
because the Company believes our investors use these figures to make
investment decisions about us.

Adjusted EBITDA is a non-IFRS measure that does not have any standardized
meaning prescribed by IFRS 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 IFRS.

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 IFRS measure, net earnings, primarily because it does not include
interest, income taxes, amortization, restructuring cost and share-based
compensation expense.

New orders, reorders, shipped orders and active customers are non-IFRS
measures that do not have a standardized meaning prescribed by IFRS and are
therefore unlikely to be comparable to similar measures presented by other
companies.New orders are orders shipped to new customers, net of
returns.Reorders are orders shipped to returning customers, net of
returns.Active customers are customers who have placed an order with us in
the last 24 months

About Coastal Contacts

Coastal Contacts Inc. is one of the largest online retailers of vision care
products in the world. Coastal empowers customers to easily browse, try on and
buy eyewear—saving time, money and sanity. With every pair of qualifying
frames purchased, Coastal donates a pair to someone in need through its Change
the View project. Founded in 2000, Coastal designs, produces and distributes
the largest selection of glasses and contact lenses on the Internet, including
a unique combination of designer glasses, contact lenses, sunglasses, and
vision care accessories. Coastal serves customers in more than 150 countries
through the Coastal Contacts family of websites including:,,,,,,,,, and

Cautionary Note Regarding Forward-Looking Statements

All statements made in the News Release which are not current statements or
historical facts constitute "forward-looking information" within the meaning
of applicable Canadian securities laws and "forward-looking statements" as
defined in Section 27A of the United States Securities Act of 1933, Section
21E of the United States Securities Exchange Act of 1934, the Private
Securities Litigation Reform Act of 1995, or in releases made by the United
States Securities and Exchange Commission, all as may be amended from time to
time, and 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 information
and statements.Examples of such forward-looking information and statements
within this News Release include information and statements relating to:
Coastal's perceptions of the contact lens and eyeglasses industry or market
and anticipated trends in that market in any of the countries in which Coastal
does business; Coastal's anticipated ability to procure products and supplies,
or the terms under which it may procure its products and supplies; Coastal's
anticipated business operations, inventory levels, ability to fill and ship
orders in a timely manner, ability to achieve greater marketing efficiency or
similar statements; Coastal's ability to increase production; Coastal's
capital expenditure plans; the results of further investments in Coastal's
retail brands; Coastal's relationships with suppliers; Coastal's anticipated
results of operations, including but not limited to anticipated sales,
revenues, earnings, tax benefits or similar matters; the effects of
seasonality; sufficiency of cash flows; Coastal's perceptions regarding
volatility in and impact of foreign currency exchange rates; the effect of the
current economic climate on Coastal's business and consumer behavior; and
Coastal's ability to address challenges and opportunities resulting from
current economic conditions.

Forward-looking information and statements are based on the then-current
expectations, beliefs, assumptions, estimates and forecasts about Coastal's
business and the industry and markets in which it operates.Forward-looking
information and statements are not guarantees of future performance and
involve risks, uncertainties and assumptions which are difficult to
predict.Assumptions underlying Coastal's expectations regarding
forward-looking information and statements contained within this News Release
include, among others: that Coastal will maintain its position in the markets
it operates in and expand into other markets in a favourable manner; that
Coastal will have sufficient capital to continue making investments in
advertising, inventory, property, equipment and leasehold improvements as well
as personnel to support its business and new product lines, including its
eyeglasses business; that Coastal will be able to generate and maintain
sufficient cash flows to support its operations; that Coastal will be
successful in complying with industry regulatory requirements in British
Columbia and other jurisdictions in which it operates; that Coastal will be
able to establish and/or maintain necessary relationships with suppliers; and
that Coastal will retain key personnel.The foregoing list of assumptions is
not exhaustive.

You are cautioned that forward-looking information and statements are subject
to a number of known and unknown risks, uncertainties and other factors, many
of which are beyond Coastal's control, that could cause Coastal's actual
future results or performance to be materially different from those that are
disclosed in or implied by the forward-looking information.These factors
include, but are not limited to changes in the market; potential downturns in
economic conditions; consumer credit risk; Coastal's ability to implement its
business strategies; competition from traditional and online retailers;
limited suppliers; limited availability of inventory; disruption in Coastal's
distribution facilities; mergers and acquisitions; foreign currency exchange
rate fluctuations; regulatory requirements;  demand for contact
lenses, eyeglasses and related vision care products; the risk that Coastal
will not be successful in defending against litigation; dependence on the
Internet; and the other risks detailed in Coastal's filings with the Canadian
securities regulatory authorities.

You should not place undue reliance on forward-looking information and
statements which are qualified in their entirety by this cautionary note.For
a complete discussion of the assumptions, risks and uncertainties related to
Coastal's business, you are encouraged to review Coastal's filings with the
Canadian securities regulatory authorities filed on SEDAR at

CONTACT: For Further Information:
         Terry Vanderkruyk
         Vice President, Corporate Development
         Coastal Contacts Inc.
         Liolios Group Inc.
         Scott Liolios or Cody Slach
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