Coastal.com Announces First Quarter 2013 Financial Results
*Reports First Quarter Record Net Sales of $54.9 million, up 17%
*Contact lens sales increased 12% to $41.0 million from same period last
*Glasses sales increased 35% to $13.9 million from same period last year
*U.S. glasses sales and units increased 95% from same period last year
VANCOUVER, British Columbia, March 11, 2013 (GLOBE NEWSWIRE) -- Coastal
Contacts Inc. ("Coastal.com" or "the Company") (Nasdaq:COA) (TSX:COA), the
leading online provider of eyewear, today reported financial results for the
first fiscal quarter ended January 31, 2013.
Total sales for the first quarter increased 17% to $54.9 million. Net loss
totaled $3.4 million, or $0.12 per basic and diluted share. Non-IFRS adjusted
EBITDA for the quarter totaled ($1.8 million). For the fiscal quarter ended
January 31, 2013, net cash used in operating activities was $2.7 million.
"The first quarter was a solid start to the year for us with strength across
both product categories and growth in all of our segmented regions. We
continue to build on sequential growth in our early stage glasses business. A
year ago we launched a plan to accelerate growth in the United States and our
plan is on track. As expected, our financial results reflect the cost of these
investments. We have experienced an increase in the number of returning
glasses customers which reaffirms our overall strategy. The first quarter of
2013 has been an excellent start to the year and we look forward to reporting
continued highlights as the year unfolds," said Roger Hardy, Founder and Chief
First Quarter 2013 Financial Highlights
*Sales totaled $54.9 million, a 17% year-over-year increase.
*Gross profit was $22.7 million or 41% of sales.
*Adjusted EBITDA was ($1.8 million) compared with $1 million during the
same period in 2012.
*Cash and equivalents of $14.6 million compared with $19.2 million at
October 31, 2012.
Contact Lens Business
*Sales totaled $41.0 million, 12% year-over-year increase.
*Gross profit was $16.3 million or 40% of sales.
*Adjusted EBITDA for the contact lens category was 11% during the period.
*Sales totaled $13.9 million, 35% year-over-year increase.
*Gross profit was $6.4 million or 46% of sales.
First Quarter 2013 Operating Metrics
*Orders totaled 601,167, an 18% increase year-over-year.
*Average order size was $91.32 compared to $92.19 in the same period in
Contact Lens Business
*Over 70% of our contact lens revenues and orders were derived from repeat
*Orders totaled 362,130, a 7% increase year-over-year.
*Average order size was $113.28 compared to $107.58 in the same period in
*In-house Coastal.com brand, Splash™ products comprised 5% of contact lens
units during the period.
*Orders totaled 239,037, a 42% increase year-over-year.
*Average order size was $58.04 compared to $61.05 in the same period in
*Frames shipped were 277,159 compared to 195,513 in the same period in
*Private brand label frames represented 70% of frames shipped during the
Recent Operating Highlights
*U.S. glasses sales and units increased 95% compared to the same period in
*Significant improvements in our Net Promoter Scores ("NPS") across all
regions and product categories. In particular, ratings for glasses
customers in the U.S. increased to 77%.
*Ranked #3 in the Internet Retailer Social 300 for our innovative use of
*Successful product placement of our new Derek Cardigan™ "Grammar
Collection" glasses frames in two highly ranked music videos, Alicia Keys,
"Brand New Me" and Flo Rida, "I Cry".
*Signed a multi-year licensing agreement with the widely recognized
actress, Alyssa Milano to develop a line of eyeglasses and sunglasses
called "Touch by Alyssa".
COASTAL CONTACTS INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
January 31, October 31,
Cash and cash equivalents $14,628 $19,153
Trade and other receivables 8,312 6,681
Inventories 26,619 25,435
Prepaid expenses 2,601 2,250
Total current assets 52,160 53,519
Property, equipment and leasehold improvements 9,957 9,887
Intangible assets 12,073 11,376
Goodwill 8,637 8,322
Total non-current assets 30,667 29,585
TOTAL ASSETS $82,827 $83,104
LIABILITIES AND EQUITY
Trade and other payables $45,616 $40,144
Provisions 1,480 1,284
Income taxes payable 801 839
Finance lease obligations, current 116 101
Term loan 3,111 3,300
Credit facilities, current -- 1,715
Other current liabilities 404 3,210
Total current liabilities 51,528 50,593
Other long-term liabilities 246 270
Finance lease obligations 529 457
Credit facilities 1,011 --
Deferred tax liabilities 3,067 2,905
Total non-current liabilities 4,853 3,632
Total liabilities 56,381 54,225
Share capital 42,677 42,501
Share-based payments reserve 3,387 3,395
Accumulated other comprehensive income (loss) 637 (137)
Deficit (20,255) (16,880)
Total shareholders' equity 26,446 28,879
TOTAL LIABILITIES AND EQUITY $82,827 $83,104
COASTAL CONTACTS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
For the three months ended January 31 2013 2012
Sales $54,898 $46,849
Cost of sales 32,163 27,833
Gross profit 22,735 19,016
Fulfillment 5,311 4,153
Selling and marketing 14,671 10,114
General and administration 5,449 4,692
Results from operating activities (2,696) 57
Financing costs 424 191
Loss before income taxes (3,120) (134)
Income tax expense - current 217 329
Income tax expense (recovery) - deferred 38 (267)
Net income tax expense 255 62
Net loss for the period (3,375) (196)
Other comprehensive income (loss)
Foreign currency translation differences 774 (746)
Comprehensive loss for the period $(2,601) $(942)
Basic and diluted loss per share $(0.12) $0.00
Weighted average number of common sharesoutstanding - 28,616,460 28,133,503
basic and diluted
Coastal.com will host a conference call to review the financial results and
Company operations on Monday, March 11, 2013 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
A replay of the call will be available for 7 days. To access the replay
listeners may dial:
To listen live and view the Coastal.com presentation via your PC log into:
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
www.sedar.com and EDGAR at http://www.sec.gov/edgar/searchedgar/webusers.htm.
Coastal.com's risks and uncertainties are discussed in detail in the Company's
Annual Information Form dated December 19, 2012 which is also available on
SEDAR and EDGAR.
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
For the three months ended January 31
($000's) 2013 2012
Net (loss) (3,375) (196)
Depreciation and Amortization 879 656
Interest expense , net 121 121
Income tax expense (recovery) 256 62
Share-based compensation 52 312
Foreign exchangeloss 303 70
Management change costs -- --
Adjusted EBITDA (1,764) 1,025
Supplemental Non-IFRS Measures
Coastal.com 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
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
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.
Coastal.com is one of the largest online retailers of vision care products in
the world. Coastal.com empowers customers to easily browse, try on and buy
eyewear—saving time, money and sanity. With every pair of qualifying frames
purchased, Coastal.com donates a pair to someone in need through its Change
the View project. Founded in 2000, Coastal.com 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.com serves customers in more
than 150 countries through the Coastal Contacts family of websites including:
Coastal.com, ClearlyContacts.ca, Lensway.com, Lensway.co.uk, Lensway.se,
Lensway.com.br, ClearlyContacts.com.au, ClearlyContacts.co.nz, Contactsan.com,
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.com'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.com does business; Coastal.com's anticipated ability to procure
products and supplies, or the terms under which it may procure its products
and supplies; Coastal.com's anticipated business operations, inventory levels,
ability to handle specific order and call volumes, ability to fill and ship
orders in a timely manner, ability to achieve greater marketing efficiency or
similar statements; Coastal.com's ability to increase production;
Coastal.com's capital expenditure plans; the results of further investments in
Coastal.com's retail brands; Coastal.com's relationships with suppliers;
Coastal.com'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.com's perceptions
regarding volatility in and impact of foreign currency exchange rates; the
effect of the current economic climate on Coastal.com's business and consumer
behavior; and Coastal.com'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.com'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.com's expectations
regarding forward-looking information and statements contained within this
News Release include, among others: that Coastal.com will maintain its
position in the markets it operates in and expand into other markets in a
favourable manner; that Coastal.com 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.com will be
able to generate and maintain sufficient cash flows to support its operations;
that Coastal.com 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.com 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.com's control, that could cause Coastal.com'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.com'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.com
will not be successful in defending against litigation; dependence on the
Internet; and the other risks detailed in Coastal.com'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.
Forward-looking information and statements in this news release are made as of
the date hereof and Coastal.com expressly disclaims any intent or obligation
to update such forward-looking information or statements, unless Coastal.com
specifically states otherwise or as required by applicable law.
For a complete discussion of the assumptions, risks and uncertainties related
to Coastal.com's business, you are encouraged to review Coastal.com's filings
with the Canadian securities regulatory authorities filed on SEDAR at
CONTACT: Terry Vanderkruyk
Vice President, Corporate Development
Coastal Contacts Inc.
Liolios Group Inc.
Scott Liolios or Cody Slach
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