1-800 CONTACTS to Acquire Lens Express and Lens 1st

DRAPER, Utah, December 16, 2002 /PRNewswire/ - 1-800 CONTACTS, INC. (Nasdaq: CTAC), today announced that it has signed a letter of intent with Southfield, Michigan-based Camelot Ventures to acquire select assets of Lens Express and Lens 1st, two leading U.S. mail-order contact lens retailers.

Under the terms of the agreement, 1-800 CONTACTS will acquire certain assets of Lens Express and Lens 1st, including databases, customer information, web addresses, phone numbers, and intellectual property rights. In addition, acquired assets will include certain property, equipment, inventories and other tangible assets with an expected total value at closing of more than $5 million. The consideration to be paid includes 900,000 restricted shares of common stock, $6.5 million in cash and the assumption of current liabilities with an expected value at closing of approximately $4.8 million.

The completion of this acquisition will be dependant upon definitive documentation, satisfactory outcome of due diligence, board approvals, lender approvals, and third party consents.

The company intends to finance the cash portion of the consideration. Currently, the company owes approximately $6 million on its revolving credit facility which allows for borrowings up to $20 million. 1-800 CONTACTS expects this transaction to contribute $30-$35 million to its combined revenues and $7-$8 million in operating income in the twelve months following closing.

Scott Tanner, Chief Operating Officer of 1-800 CONTACTS, commented, "Buying directly from Johnson & Johnson should reduce our inventory and free up capital to pay for transactions like this. Currently, Johnson & Johnson products account for about 40% of our sales, but the $24 million of Johnson & Johnson inventory we have on hand comprises about 60% of our total inventory balance. By comparison, CIBA Vision products represent about 32% of our sales but less than $5 million of inventory."

Jonathan Coon, Chief Executive Officer of 1-800 CONTACTS, commented, "We are excited about the opportunities created by bringing these contact lens retailers together. The acquisition of these two companies' key assets will leverage existing infrastructure while delivering additional economies of scale in purchasing, distribution and marketing."

About Camelot Ventures
Camelot Ventures is a Michigan-based private investment group comprised of entrepreneurs and executives who enjoy unparalleled success in their respective businesses, adding unique value to the companies they invest or acquire. Many of its principals are accomplished Presidents and CEOs, including David Katzman, former President of Home Depot S.O.C., and Dan Gilbert, CEO of Quicken Loans. Camelot's goal is to assist in building upon the vision and to help strengthen the position within the marketplace of the companies in which it invests or acquires. Camelot Ventures focuses on industries in customer relationship management (CRM), call center, catalog, traditional or direct marketing applications, retail, electronic or financial services sectors.

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