UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark one)
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 2, 2004
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number: 0-23633
1-800 CONTACTS, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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87-0571643 |
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(State
or other jurisdiction of |
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(I.R.S. Employer Identification No.) |
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66 E. Wadsworth Park Drive, |
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84020 |
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(Address of principal executive offices) |
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(Zip Code) |
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(801) 924-9800 |
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(Registrant’s telephone number, including area code) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
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Yes |
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No |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange act).
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Yes |
o |
No |
As of November 5, 2004, the Registrant had 13,288,593 shares of Common Stock, par value $0.01 per share, outstanding.
1-800 CONTACTS, INC.
INDEX
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Condensed Consolidated Balance Sheets as of January 3, 2004 and October 2, 2004 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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1-800 CONTACTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
ASSETS
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January 3, 2004 |
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October 2, 2004 |
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CURRENT ASSETS: |
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Cash |
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$ |
1,075 |
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$ |
373 |
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Accounts receivable, net |
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944 |
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1,638 |
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Inventories, net |
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24,127 |
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23,832 |
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Prepaid income taxes |
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797 |
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— |
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Deferred income taxes |
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548 |
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971 |
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Other current assets |
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1,752 |
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3,158 |
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Total current assets |
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29,243 |
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29,972 |
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PROPERTY, PLANT AND EQUIPMENT, net |
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13,183 |
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18,078 |
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DEFERRED INCOME TAXES |
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710 |
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723 |
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GOODWILL |
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33,853 |
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33,937 |
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DEFINITE-LIVED INTANGIBLE ASSETS, net |
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9,207 |
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18,400 |
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OTHER ASSETS |
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735 |
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1,070 |
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Total assets |
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$ |
86,931 |
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$ |
102,180 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES: |
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Current portion of long-term debt |
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$ |
3,381 |
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$ |
1,426 |
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Current portion of capital lease obligations |
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191 |
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108 |
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Accounts payable |
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8,558 |
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7,721 |
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Accrued liabilities |
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4,847 |
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9,618 |
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Total current liabilities |
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16,977 |
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18,873 |
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LONG-TERM LIABILITIES: |
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Line of credit |
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— |
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16,351 |
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Long-term debt, less current portion |
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14,683 |
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8,295 |
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Capital lease obligations, less current portion |
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64 |
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54 |
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Deferred income tax liabilities |
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— |
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2,071 |
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Total long-term liabilities |
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14,747 |
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26,771 |
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STOCKHOLDERS’ EQUITY |
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Common stock, 13,113 and 13,288 issued, respectively |
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131 |
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133 |
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Additional paid-in capital |
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42,346 |
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45,799 |
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Retained earnings |
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12,834 |
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10,833 |
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Accumulated other comprehensive loss |
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(104 |
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(229 |
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Total stockholders’ equity |
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55,207 |
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56,536 |
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Total liabilities and stockholders’ equity |
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$ |
86,931 |
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$ |
102,180 |
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See accompanying notes to condensed consolidated financial statements.
3
1-800 CONTACTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
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Quarter Ended |
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Three Quarters Ended |
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September 27, |
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October 2, |
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September 27, |
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October 2, |
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2003 |
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2004 |
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2003 |
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2004 |
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NET SALES |
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$ |
48,400 |
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$ |
56,893 |
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$ |
141,416 |
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$ |
157,713 |
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COST OF GOODS SOLD |
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29,489 |
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34,889 |
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88,629 |
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97,140 |
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Gross profit |
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18,911 |
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22,004 |
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52,787 |
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60,573 |
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OPERATING EXPENSES: |
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Advertising |
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7,171 |
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6,533 |
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14,551 |
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22,572 |
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Legal and professional |
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1,601 |
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1,026 |
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4,977 |
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4,207 |
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Research and development |
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777 |
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567 |
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2,777 |
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1,902 |
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Purchased in-process research and development |
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— |
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— |
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— |
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83 |
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Other operating |
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9,316 |
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10,789 |
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28,069 |
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31,437 |
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Total operating expenses |
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18,865 |
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18,915 |
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50,374 |
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60,201 |
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INCOME FROM OPERATIONS |
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46 |
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3,089 |
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2,413 |
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372 |
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OTHER EXPENSE, net |
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