1 800 Contacts Inc 10-Q Quarterly Report August 2007

Contacts:
For 1-800 CONTACTS, INC.	For Fenway Partners:
Brian W. Bethers, President	Anna Cordasco/Brooke Morganstein
Robert G. Hunter, CFO	Sard Verbinnen & Co.
801-316-5000	212-687-8080
investors@contacts.com

For Immediate Release

1-800 CONTACTS Announces Second Quarter Results

DRAPER, Utah, August 14, 2007 /PRNewswire-FirstCall/ — 1-800 CONTACTS, INC. (Nasdaq: CTAC) (“the Company”) today reported results for its second quarter ended June 30, 2007.

Second Quarter Results

For the second quarter of fiscal 2007, the Company reported consolidated net income, including discontinued operations, of $11.6 million, or $0.85 per diluted common share, compared to a consolidated net loss of $(2.0) million, or $(0.15) per diluted common share, for the second quarter of fiscal 2006. The Company reported net income from continuing operations of $3.0 million, or $0.22 per diluted common share, for the second quarter of fiscal 2007, compared to net income of $3.0 million, or $0.23 per diluted common share, for the second quarter of fiscal 2006.

U.S. Retail (Continuing Operations)

Net sales and operating income for the second quarter of fiscal 2007 were $63.4 million and $6.7 million, respectively, compared to net sales of $57.7 million and operating income of $5.8 million for the second quarter of fiscal 2006. Results for the second quarter of fiscal 2007 include approximately $2.5 million in advisor fees and other expenses relating to the strategic review and proposed merger of the Company. Excluding these advisor fees and other expenses relating to the strategic review and proposed merger, operating income for the second quarter of fiscal 2007 was $9.2 million.

Gross margin increased to 41.7 % for the second quarter of fiscal 2007 from 39.4% for the second quarter of fiscal 2006. The gross margin was positively impacted by a shipping credit totaling approximately $0.4 million.

Advertising expense for the second quarter of fiscal 2007 was $1.2 million more than for the second quarter of fiscal 2006.

Legal and professional fees were $2.4 million for the second quarter of fiscal 2007 compared to $1.0 million for the same quarter of 2006. A majority of these costs in the second quarter of fiscal 2007 relate to the strategic review of the U.S. retail business and

The following information was filed by 1 800 Contacts Inc on Tuesday, August 14, 2007 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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CIK: 1050122
Form Type: 10-Q Quarterly Report
Accession Number: 0001104659-07-062539
Submitted to the SEC: Tue Aug 14 2007 4:54:19 PM EST
Accepted by the SEC: Tue Aug 14 2007
Period: Saturday, June 30, 2007
Industry: Retail Catalog And Mail Order Houses