eResearch

eResearch

July 07, 2008 14:05 ET

eResearch Issues Update Report on Coastal Contacts Inc.; Target Raised

TORONTO, ONTARIO--(Marketwire - July 7, 2008) - Coastal Contacts Inc. is a direct-to-consumer marketer and distributor of replacement contact lenses, eyewear, and related vision-care products and services. The Company has become one of the fastest-growing and largest "e-tailers" of contact lenses, marketing its products primarily via its websites.

Highlights from our Update Report are as follows:

- Emerging global vision products leader looking for an earnings breakout.

- Poised to disrupt the high-margin prescription eyeglass market with its direct to consumer model.

- Implemented a successful trial campaign and launch of direct to consumer prescription glasses product offering.

- Demonstrated ability to maintain healthy, organic, contact-lens revenue growth with reorder rates exceeding 60%, providing a stable core of annuity-type revenue.

- Customer base growing by approximately 1,400 new customer accounts each day, on top of the approximately 3,000 repeat orders placed daily.

- Aggressively buying back its own stock for cancellation, signaling management's confidence in its ability to execute.

With sales momentum building and EBITDA margins expanding, the Company's financial outlook is improving rapidly. Accordingly, we have increased our one-year Target Price to $3.30 per share from $1.50. We continue to rate the shares as a Speculative Buy, suitable for risk-tolerant investors.

This Press Release was prepared by eResearch and was not vetted by Coastal Contacts Inc. Further, the Recommendation and Target Prices contained in this Press Release and in the Update Report are strictly those of eResearch and, due to securities laws, are not endorsed by Coastal Contacts Inc.

eResearch is a primary source for professional investment research, focused primarily on small- and mid-cap companies. Our research and analysis is of institutional quality, and has the potential of reaching millions of global investors through our extensive electronic distribution network.

Coastal Contacts Inc. paid eResearch a fee of $17,500 + GST to conduct research on the Company, on an Annual Continuous Coverage basis.

For FREE access to all eResearch reports and articles, go to www.eresearch.ca.

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