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 develop.

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." 

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