Coastal Contacts Inc.
TSX : COA

Coastal Contacts Inc.

January 16, 2008 09:00 ET

Coastal Contacts Announces Intent to Purchase up to 7,000,000 of its Common Shares

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 16, 2008) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Coastal Contacts Inc. (TSX:COA) announced today that its Board of Directors has authorized management to proceed with an offer to purchase for cancellation up to 7,000,000 of its common shares, at a price per share that is not less than $1.10 and not greater than $1.25, through a modified "Dutch auction" issuer bid. If the offer is fully taken up it will represent approximately 10% of Coastal's issued and outstanding shares.

The Dutch auction tender procedure allows shareholders to select a price, within the specified range, at which each shareholder is willing to sell all or a portion of the common shares he or she owns. Upon expiration of the offer, Coastal will select the lowest purchase price that will allow it to buy up to 7,000,000 shares (the "Purchase Price"). Shares tendered at or below the Purchase Price will be purchased at the Purchase Price subject to pro-ration to the extent that the aggregate number all of such common shares tendered exceeds 7,000,000 shares.

"The issuer bid reflects Coastal's continued commitment to enhancing shareholder value and provides an attractive use of capital given Coastal's business and current market valuation," stated Roger Hardy, Coastal's President and Chief Executive Officer. "We are pleased with our strong cash balance allowing us to return value to our shareholders while retaining sufficient working capital to pursue the Company's growth initiatives."

The Company intends to finance the purchase from its existing cash, cash equivalents and short-term investments balance of approximately $27 million as of October 31, 2007.

An offer to purchase and issuer bid circular containing full details of the offer and procedures for tendering common shares is expected to be mailed to shareholders on or about January 17, 2008. The offer, which is subject to regulatory approval, will expire at 5:00 pm (Toronto time) on or about February 22, 2008, unless extended by the Company. The offer is not conditional upon any minimum number of shares being tendered, but is subject to certain other conditions which are specified in the offer to purchase and issuer bid circular.

Neither the Company nor its Board of Directors makes any recommendation to shareholders as to whether to tender or refrain from tendering their shares into the offer. Shareholders must decide how many shares they will tender, if any, and the price within the stated range at which they will offer their shares to the Company. Shareholders are strongly encouraged to review the offer to purchase and issuer bid circular and related documents carefully and consult with their financial and tax advisors prior to making any decision with respect to the offer.

Since October 2006, Coastal has, pursuant to its two previously announced normal course issuer bids, purchased for cancellation approximately 4.1 million shares at an average price of $1.06 per share. Coastal will cease purchasing common shares pursuant to its current normal course issuer bid until at least 20 business days after the expiration or termination of the offer.

About Coastal Contacts:

Coastal Contacts is one of the world's fastest-growing vision care suppliers. Leveraging its world class operations in Europe, North America and Asia, Coastal is building a predictable recurring revenue stream in the contact lens segment and is developing complementary branded vision care products. Already No. 1 in many of its markets, Coastal is rapidly advancing toward its goal of becoming the dominant global vision care supplier.

This news release is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to buy or the solicitation of an offer to sell common shares of Coastal.

This news release may contain forward-looking statements that reflect the current views and/or expectations of Coastal Contacts Inc. with respect to its performance, business and future events. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, those relating to changes in the market, potential downturns in economic conditions, consumer credit risk, our ability to implement our business strategies, limited suppliers, inventory risk, disruption in our distribution facilities, foreign exchange fluctuations, regulatory requirements, demand for contact lenses, competition and dependence on the internet. These risks, as well as others described in detail in Coastal's Annual Information Form and other filings with Canadian securities regulatory authorities, could cause actual results and events to vary significantly. Coastal Contacts does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements.

Neither the TSX nor any other regulatory body has reviewed and therefore does not accept responsibility for the adequacy or accuracy of this release.

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