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Coastal Reports Record Q3, 2012 Revenue Of $50.3 Million

It is an exciting time at Coastal and we look forward to reporting continued progress in the coming quarters."

Key financial metrics for the third quarter of 2012 compared to the same period in 2011:

  • Gross profit was $21.4 million or 43% of sales, compared to $21.1 million or 43% of sales
  • Fulfillment expenses remained constant at 10% of sales
  • Selling and Marketing expenses decreased to $12.2 million or 24% of sales compared with $12.6 or 25% of sales
  • General and Administration expenses were $5.2 million or 10% of sales compared with $5.2 or 11% of sales
  • Adjusted EBITDA was ($0.1) million, compared to ($0.4) million
  • Loss for the period was $1.9 million or $0.07 per share, compared to a loss of $1.5 million or $0.06 per share (earnings per share for the period were calculated based on the number of outstanding shares after the one new for two old share consolidation that was effected September 5, 2012)
  • Non-cash share-based compensation remained steady at $0.2 million for the quarter
  • Cash and cash equivalents of $15.4 million at the end of the quarter

Subsequent to the end of the third fiscal quarter, Coastal announced a share consolidation effective September 5, 2012.   The consolidation was made on the basis of two pre-consolidation common shares for each one post-consolidation common share. Shareholders of the Company authorized the Consolidation at the Company's Annual and Special Meeting of Shareholders held on April 20, 2012. Company shares trade under the symbol "COA" and new CUSIP number 19044R207.

The Consolidation reduces the number of outstanding common shares of the Company from approximately 56.7 million to approximately 28.4 million.

COASTAL CONTACTS INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (unaudited)
(Stated in Thousands of Canadian Dollars)
     
     
     
   July 31,   October 31, 
  2012 2011
     
ASSETS    
Current assets    
Cash and cash equivalents  $ 15,403  $ 16,864
Trade and other receivables  8,059  6,013
Inventory  21,510  26,228
Prepaid expenses  3,391  3,125
Income tax receivable  --   79
Total current assets  48,363  52,309
Non-current assets    
Deferred tax asset  85  97
Property, equipment and leasehold improvements  8,844  8,960
Intangible assets  10,928  10,882
Goodwill   8,177  8,518
Total non-current assets  28,034  28,457
TOTAL ASSETS  $ 76,397  $ 80,766
     
LIABILITIES AND EQUITY    
Current liabilities    
Trade and other payables  $ 33,107  $ 36,098
Provisions  1,063  1,057
Income taxes payable  519  -- 
Finance lease obligation  2,252  2,646
Operating line of credit  3,799  -- 
Other current liabilities  252  280
Total current liabilities  40,992  40,081
Non-current liabilities    
Other long-term liabilities  723  859
Finance lease obligation  490  1,911
Long-term operating line of credit  --   1,500
Deferred tax liability  2,992  3,306
Total non-current liabilities  4,205  7,576
Total liabilities  45,197  47,657
     
Equity    
Share capital    
Authorized:    
Unlimited common shares without par value    
Unlimited Class A preferred shares without par value    
Issued and outstanding:    
28,355,745 common shares [2011- 28,110,579]  41,368  40,667
Share-based payments reserve  3,468  2,934
Accumulated other comprehensive earnings (loss)  (473)  372
Deficit  (13,163)  (10,864)
Total Equity  31,200  33,109
TOTAL LIABILITIES AND EQUITY  $ 76,397  $ 80,766

 

         
COASTAL CONTACTS INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited)
(Stated in Thousands of Canadian Dollars, except per share amounts)
         
         
  Three months ended July 31 Nine months ended July 31
 Notes 2012 2011 2012 2011
         
         
Sales  $ 50,324  $ 49,589  $ 145,385  $ 134,036
Cost of sales  28,898  28,482  84,130  77,291
Gross profit  21,426  21,107  61,255  56,745
         
Fulfillment  5,090  4,666  13,964  13,066
Selling and marketing  12,180  12,582  33,483  31,978
General and administration  5,227  5,221  14,919  15,757
Results from operating activities  (1,071)  (1,362)  (1,111)  (4,056)
         
Financing costs (income)  848  (261)  917  (119)
         
Loss before income taxes  (1,919)  (1,101)  (2,028)  (3,937)
         
Income tax expense (recovery) - current  (43)  406  527  643
Income tax recovery - deferred  (15)  (22)  (256)  (781)
Net income tax expense (recovery)  (58)  384  271  (138)
         
Net loss for the period  (1,861)  (1,485)  (2,299)  (3,799)
         
Other comprehensive loss        
Foreign currency translation differences  (33)  (624)  (845)  (125)
Total comprehensive loss for the period  $ (1,894)  $ (2,109)  $ (3,144)  $ (3,924)
         
         
Basic and diluted loss per share  $ (0.07)  $ (0.06)  $ (0.08)  $ (0.14)
         
         
Weighted average number of common shares outstanding - basic and diluted  28,335,556  27,704,882  28,226,417  27,663,191

Coastal Contacts will host a conference call to review the financial results and Company operations on Thursday, September 13, 2012 at 4:30pm ET.   Participating in the call will be Roger Hardy, Founder and CEO, Gary Collins, President and Nick Bozikis, CFO. 

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