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**UNITED STATESSECURITIES AND EXCHANGE COMMISSION****WASHINGTON, D.C. 20549**

**Form 10-Q**

** **

**(MarkOne)**
| **ý** | **Quarterly report  pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934** |
|------------|----------------------------------------------------------------------------------------------|

 

**For the quarterly period endedJune 30, 2001.**

**OR**
| **o** | **Transition report  pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934** |
|-------|-----------------------------------------------------------------------------------------------|

 

Commissionfile number  **33 - 70572**

**EYECARE CENTERS OF AMERICA, INC.******(Exact name of registrant as specified inits charter)

 

** **
| **TEXAS**                        | **74-2337775**         |
|----------------------------------|------------------------|
| (State or other  jurisdiction of | (I.R.S. Employer       |
| incorporation or  organization)  | Identification number) |

**11103 WEST AVENUESAN ANTONIO, TEXAS 78213**(Address of principal executive offices,including zip code)

**(210) 340-3531**(Registrant’s telephone number, includingarea code)

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Indicate by check mark whether the registrant has (1) filed all reportsrequired to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days:

             Yes ý                                                       No o                              

Indicate the number of shares outstandingof each of the issuer’s classes of common stock as of the latest practicabledate:
| Class                         | Outstanding at August  3, 2001 |
|-------------------------------|--------------------------------|
|                               |                                |
| Common Stock, $.01 par  value | 7,410,133  shares         |

 

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**EYE CARE CENTERS OF AMERICA,INC.**

**INDEX**

|                                                                                                 |                                                                                                                                                              |   |   |
|------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
| **Part I - Financial  Information**                                                                  |                                                                                                                                                              |
|                                                                                                 |                                                                                                                                                              |   |   |
| Item 1. Financial  Statements                                                                        |                                                                                                                                                              |
|                                                                                                 |                                                                                                                                                              |   |
|                                                                                                 | Condensed  Consolidated Balance Sheets at December 30, 2000 and June 30, 2001  (Unaudited)                                                                        |   |
|                                                                                                 |                                                                                                                                                              |   |
|                                                                                                 | Condensed  Consolidated Statements of Operations for the Thirteen Weeks and Twenty-Six  Weeks Ended July 1, 2000  (Unaudited)  and June 30, 2001 (Unaudited) |   |
|                                                                                                 |                                                                                                                                                              |   |
|                                                                                                 | Condensed  Consolidated Statements of Cash Flows for the Twenty-Six Weeks Ended July 1,  2000 (Unaudited) and June 30, 2001 (Unaudited)                           |   |
|                                                                                                 |                                                                                                                                                              |   |
|                                                                                                 | Notes  to Condensed Consolidated Financial Statements                                                                                                             |   |
|                                                                                                 |                                                                                                                                                              |   |
| Item  2. Management’s Discussion and Analysis of Financial Condition and Results of  Operations |                                                                                                                                                              |
|                                                                                                 |                                                                                                                                                              |   |
| Item  3.  Quantitative and Qualitative Disclosures  About Market Risk.                          |                                                                                                                                                              |
|                                                                                                 |                                                                                                                                                              |   |
| **Part II - Other Information**                                                                      |                                                                                                                                                              |
|                                                                                                 |                                                                                                                                                              |   |
| Item  1.  Legal Proceedings                                                                     |                                                                                                                                                              |
|                                                                                                 |                                                                                                                                                              |   |
| Item 6.  Exhibits and Reports on Form 8-K                                                       |                                                                                                                                                              |

**PART I. FINANCIAL INFORMATION**

**Item 1. FinancialStatements**

**EYE CARE CENTERSOF AMERICA, INC.CONDENSED CONSOLIDATED BALANCESHEETS**(dollars inthousands)

|                                           | **December 30,  2000**               |     | **June 30,  2001** |     |
|------------------------------------------------|--------------------------------------|----------|--------------------|----------|
|                                           | ****                                 |     | ****               |     |
| **ASSETS**                                     |                                 |     | (Unaudited)        |     |
| CURRENT ASSETS:                                |                                 |     |               |     |
|                                           | Cash and cash equivalents            | $        | 3,971              |     | $ | 1,079 |   |
|                                           | Accounts and notes receivable, net   | 13,479   |               | 13,669   |   |
|                                           | Inventory                            | 25,690   |               | 25,350   |   |
|                                           | Prepaid expenses and other           | 3,796    |               | 3,596    |   |
|                                           | Deferred income taxes                | 1,297    |               | 1,297    |   |
|                                           |                                 |          |               |          |   |
| Total current assets                           | 48,233                               |     | 44,991             |     |
|                                           |                                 |     |               |     |
| PROPERTY & EQUIPMENT, net                  | 73,987                               |     | 66,502             |     |
| INTANGIBLE ASSETS, net                         | 118,237                              |     | 113,866            |     |
| OTHER ASSETS                                   | 9,846                                |     | 8,931              |     |
|                                           |                                      |     |                    |     |
| Total assets                                   | $                                    | 250,303  |               | $        | 234,290 |   |
|                                           |                                      |     |                    |     |
|                                           |                                 |     |               |     |
| **LIABILITIES AND SHAREHOLDERS’ DEFICIT** |                                 |     |               |     |
| CURRENT LIABILITIES:                           |                                 |     |               |     |
|                                           | Accounts payable                     | $        | 20,860             |     | $ | 19,938 |   |
|                                           | Current maturities of long-term debt | 13,070   |               | 13,634   |   |
|                                           | Deferred revenue                     | 6,658    |               | 7,096    |   |
|                                           | Accrued payroll expense              | 4,527    |               | 4,763    |   |
|                                           | Accrued interest                     | 4,029    |               | 3,330    |   |
|                                           | Other accrued expenses               | 8,270    |               | 7,292    |   |
|                                           |                                 |          |               |          |   |
| Total current liabilities                      | 57,414                               |     | 56,053             |     |
|                                           |                                 |     |               |     |
| DEFERRED INCOME TAXES                          | 1,297                                |     | 1,297              |     |
| LONG-TERM DEBT, less current maturities        | 278,306                              |     | 266,406            |     |
| DEFERRED RENT                                  | 3,771                                |     | 3,791              |     |
| DEFERRED GAIN                                  | 2,233                                |     | 2,130              |     |
|                                           |                                      |     |                    |     |
| Total liabilities                              | 343,021                              |     | 329,677            |     |
|                                           |                                      |     |                    |     |
|                                           |                                 |     |               |     |
| SHAREHOLDERS’ DEFICIT:                    |                                 |     |               |     |
|                                           | Common stock                         | 74       |               | 74       |   |
|                                           | Preferred stock                      | 42,354   |               | 45,152   |   |
|                                           | Additional paid-in capital.          | 49,963   |               | 46,588   |   |
|                                           | Accumulated deficit                  | (185,109 | )                  | (187,201 | ) |
|                                           |                                 |          |               |          |   |
| Total shareholders’ deficit               | (92,718                              | )        | (95,387            | )        |
|                                           |                                      |     |                    |     |
|                                           | $                                    | 250,303  |               | $        | 234,290 |   |
|                                           |                                      |     |                    |     |

See Notes to Condensed Consolidated FinancialStatements.
**EYE CARECENTERS OF AMERICA, INC.CONDENSED CONSOLIDATEDSTATEMENTS OF OPERATIONS**(dollars in thousands)
 **Thirteen Weeks Ended** **Twenty-Six Weeks Ended**  **** ****  **July 1,  2000** **June 30,  2001** **July 1,  2000** **June 30,  2001**  **** **** **** ****  (Unaudited) (Unaudited) (Unaudited) (Unaudited) NET REVENUES:         Optical sales$84,194 $80,641 $179,213 $173,292  Management fee640 927 1,256 1,840       Total net revenues84,834 81,568 180,469 175,312          OPERATING COSTS AND EXPENSES:         Cost of goods sold26,905 25,763 57,217 54,227  Selling, general and administrative expenses52,307 50,133 105,266 103,913  Amortization of intangibles1,733 2,123 3,582 4,371       Total operating costs and expenses80,945 78,019 166,065 162,511               INCOME FROM OPERATIONS3,889 3,549 14,404 12,621          INTEREST EXPENSE, NET6,800 6,830 13,704 14,359          INCOME TAX EXPENSE831 209 966 354               NET LOSS$(3,742)$(3,490)$(266)$(2,092)     
SeeNotes to Condensed Consolidated Financial Statements
**EYE CARE CENTERS OF AMERICA, INC.****CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS******(dollars inthousands)
 **Twenty-Six Weeks Ended  July 1,  2000** **Twenty-Six Weeks Ended  June 30,  2001**  **** ****  (Unaudited) (Unaudited**)**** ****CASH FLOWS FROM OPERATING ACTIVITIES:**     Net loss$(266)$(2,092) Adjustments to reconcile net income to net cash provided by  operating activities:     Depreciation and amortization13,943 14,917  Loan cost amortization788 913  Deferred liabilities and other(569)458  Loss on disposition of property and equipment51 145  Increase/(decrease) in operating assets and liabilities1,712 (2,637)    Net cash provided by operating activities15,659 11,704         **CASH FLOWS FROM INVESTING ACTIVITIES:**     Acquisition of property and equipment(11,823)(3,385) Proceeds from sale of property and equipment50 -  Payments received on notes receivable23 3     Net cash used for investing activities(11,750)(3,382)   **CASH FLOWS FROM FINANCING ACTIVITIES:**     Payments on debt and capital leases(4,457)(20,927) Proceeds from issuance of debt- 9,566  Payments related to debt issuance- 680  Distribution to affiliated OD(260)(533) Redemption of common stock(18)-     Net cash used for financing activities(4,735)(11,214)   NET DECREASE IN CASH(826)(2,892)CASH AND CASH EQUIVALENTS, beginning of period2,955 3,971    CASH AND CASH EQUIVALENTS, end of period$2,129 $1,079    
See Notes to Condensed ConsolidatedFinancial Statements.****EYECARE CENTERS OF AMERICA, INC.NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS**

**1.  *Basis ofPresentation***

             Thecondensed consolidated financial statements include the accounts of Eye CareCenters of America, Inc., its wholly owned subsidiaries and certain privateoptometrists for whom the Company performs management services  (the “ODs”).  All significant intercompany accounts and transactions have beeneliminated in consolidation. Certain reclassifications have been made to theprior period statements to conform to the current period presentation.  Unless the context otherwise requires, theterm “Company” shall refer to Eye Care Centers of America, Inc. and itssubsidiaries, collectively.

             Theaccompanying unaudited Condensed Consolidated Financial Statements have beenprepared in accordance with generally accepted accounting principles forinterim financial information and with the instructions to Form 10-Q andArticle 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotesrequired by generally accepted accounting principles for complete financialstatements.   In the opinion ofmanagement, all adjustments considered necessary for a fair presentation havebeen included and are of a normal, recurring nature.  Operating results for the thirteen week and twenty-six weekperiods ended June 30, 2001 are not necessarily indicative of the results thatmay be expected for the fiscal year ended December 29, 2001 (“fiscal2001”).  For further information, referto the consolidated financial statements and footnotes thereto included in theEye Care Centers of America, Inc.’s annual report on Form 10-K for the yearended December 30, 2000 (“fiscal 2000”). 

**2.  *RelatedParty Transactions***

             TheCompany and Thomas H. Lee Company (“THL Co.”) entered into a managementagreement as of April 24, 1998 (as amended, the “Management Agreement”). TheManagement Agreement was amended as of December 31, 2000 to reduce the managementfees to $250,000 per year plus expenses for management and other consultingservices provided to the Company.  Aftera term of ten years from April 24, 1998, the Management Agreement isautomatically renewable on an annual basis unless either party serves notice oftermination at least ninety days prior to the renewal date. For the twenty-sixweek periods ended July 1, 2000 and June 30, 2001, the Company incurred$250,000 and $125,000, respectively, related to the agreement.

***3.  Income Taxes***

             Deferredtax assets and liabilities are determined based on differences betweenfinancial reporting and tax basis of assets and liabilities and are measuredusing the enacted tax rates and laws that will be in effect when thedifferences are expected to reverse. The Company currently has a net deferred tax asset related to itstemporary differences.  Based upon theweight of available evidence allowed under the criteria set forth under FASStatement No. 109, including the lack of carryback potential, uncertaintiesexist as to the future realization of the deferred tax asset.  These uncertainties include lack ofcarryback potential as the Company has incurred taxable losses in past years.The Company has established a full valuation allowance for its deferred tax assets.
**4.***  **SupplementalDisclosure of Cash Flow Information******(dollars inthousands)***
 **Twenty-Six Weeks Ended  July 1,  2000** **Twenty-Six Weeks Ended  June 30,  2001**  **** ****  (Unaudited) (Unaudited)   ** ** ** **Cash paid for interest$12,097 $13,957 Dividends accrued on preferred stock$2,462 $2,798 Obligations incurred for capital lease$665 $- 
***5.  New Accounting Pronouncements***

             TheCompany adopted Statement of Financial Standards No. 133 (FAS 133), “Accountingfor Derivative Instruments and Hedging Activities,” and its amendments,Statements 137 and 138, on December 31, 2000. FAS 133 requires that all derivative instruments be recorded on thebalance sheet at fair value.  TheCompany’s swap agreements matured on May 1, 2001 therefore the Company does notcurrently hold any derivative instruments. 

             InJuly 2001, the Financial Standards Board (“FASB”) issued SFAS No.’s 141 and142, “Business Combinations” and “Goodwill and Other Intangibles”.  FASB 141 requires all business combinationsinitiated after June 30, 2001 to be accounted for using the purchasemethod.  Under FASB 142, goodwill is nolonger subject to amortization over its estimated useful life.  Rather, goodwill is subject to at least anannual assessment for impairment applying a fair-value based test.  Additionally, an acquired intangible assetshould be separately recognized if the benefit of the intangible asset isobtained through contractual or other legal rights, or if the intangible assetcan be sold, transferred, licensed, rented, or exchanged, regardless of theacquirer’s intent to do so.  The Companywill adopt both statements on December 29, 2001 and are currently evaluatingthe impact of these statements.  TheCompany has not yet quantified the impact of these statements on the operationsof its equity investments; however, other existing and embedded goodwillamortization expense was approximately $1.2 million in the second quarter and$2.6 million for the first six months of 2001. During 2002, the Company will perform the first of the requiredimpairment test of goodwill as of January 1, 2002, and has not yet determinedwhat the effect of these tests will be on earnings and its financialposition.  Any impairment resulting fromthe initial application of the statements will be recorded as a cumulativeeffect of accounting change as of January 1, 2002.  

***6.  Option Cancellation Agreement***

             OnJune 15, 2001, the Company entered into Option Cancellation Agreements (the“Cancellation Agreements”) with certain employees and directors (the“Optionees”) to cancel all outstanding options which were granted under theCompany’s 1998 Stock Option Plan (the “Plan”) due to changes in the fair marketvalue of the Company’s common stock. The Company provided all of the Optionees with an option cancellationnotice detailing the Company’s offer for the Optionees to cancel and terminatetheir respective options in exchange for the commitment of the Company to grantnew options under the Plan (the “New Options”), such new grant to be made noearlier than six months and a day after the effective date of the cancellationof the options and at an exercise equal to the fair market value of the commonstock as of the effective date of the grant of the New Options.  The Cancellation Agreements provide that, inJanuary 2002 (the “Grant Date”) the Company will grant to each of the Optioneesa New Option to purchase the number of shares of common stock subject to theoptions being terminated and cancelled, such New Option to have an exerciseprice equal to the fair market value of the common stock as of the Grant Date,as will then be determined by the Board of Directors in its solediscretion.  The vesting period for theNew Options granted to employees will be 40% on the Grant Date, and anadditional 20% will vest on each of the first, second and third anniversary ofthe Grant Date.  The vesting period forthe New Options granted to outside directors will be 50% vested on the GrantDate, and an additional 25% will vest on each of the first and second anniversaryof the Grant Date. The grant of the New Options is also subject to certainemployment and “active” status restrictions listed in the CancellationAgreements.
***7.  Condensed Consolidating Information***

             The$100.0 million in principal amount of 9 1/8% Senior Subordinated Notes due 2008and $50.0 million in principal amount of Floating Interest Rate SubordinatedTerm Securities due 2008 (collectively, the “Notes”) were issued by the Companyand are guaranteed by its subsidiaries (the “Guarantor Subsidiaries”) but arenot guaranteed by the ODs. The Guarantor Subsidiaries are wholly-owned by theCompany and the guarantees are full, unconditional, joint and several. Thefollowing condensed consolidating financial information presents the financialposition, results of operations and cash flows of (i) Eye Care Centers ofAmerica, Inc. as parent, as if it accounted for its subsidiaries on the equitymethod, (ii) the Guarantor Subsidiaries, and (iii) the ODs. There were notransactions between the Guarantor Subsidiaries during any of the periodspresented. Separate financial statements of the Guarantor Subsidiaries are notpresented herein as management does not believe that such statements would bematerial to investors.*****Consolidating Balance SheetDecember 30, 2000**
**ASSETS**Parent Guarantor  Subsidiaries ODs Eliminations Consolidated  Company       Current assets:           Cash and cash  equivalents$2,215 $1,187 $569 $- $3,971  Accounts and notes  receivable126,619 32,119 4,403 (149,662)13,479  Inventory14,782 9,242 1,666 - 25,690  Prepaid expenses and  other2,284 1,466 46 - 3,796  Deferred income taxes1,297 - - - 1,297        Total current assets147,197 44,014 6,684 (149,662)48,233            Property and equipment44,215 29,772 - - 73,987 Intangibles17,749 100,397 91 - 118,237 Other assets8,921 925 - - 9,846 Investment in  subsidiaries(16,124)- - 16,124 -       Total Assets$201,958 $175,108 $6,775 $(133,538)$250,303       ***LIABILITIES AND SHAREHOLDERS’ DEFICIT***          Current liabilities:           Accounts payable$16,114 $145,517 $8,891 $(149,662)$20,860  Current portion of  long-term debt12,511 559 - - 13,070  Deferred revenue 3,976 2,676 6 - 6,658  Accrued payroll  expense1,754 2,769 4 - 4,527  Accrued interest3,542 487 - - 4,029  Other accrued expenses5,906 2,159 205 - 8,270        Total current  liabilities43,803 154,167 9,106 (149,662)57,414            Deferred income taxes1,297 - - - 1,297 Long-term debt, less  current maturities245,749 32,457 100 - 278,306 Deferred rent2,533 1,238 - - 3,771 Deferred gain1,690 543 - - 2,233       Total liabilities295,072 188,405 9,206 (149,662)343,021       Shareholders’ deficit:           Common stock74 - - - 74  Preferred stock42,354 - - - 42,354  Additional paid-in  capital49,567 1,092 (696)- 49,963  Accumulated deficit(185,109)(14,389)(1,735)16,124 (185,109)       Total shareholders’  deficit(93,114)(13,297)(2,431)16,124 (92,718)       $201,958 $175,108 $6,775 $(133,538)$250,303       
 

**Consolidating Statements ofOperationsFor the Twenty-Six Weeks Ended July 1, 2000**
 Parent Guarantor  Subsidiaries ODs Eliminations Consolidated  Company       Net Revenues:           Optical sales$90,137 $61,439 $27,637 $- $179,213  Management fee- 10,834 - (9,578) 1,256  Investment earnings in  subsidiaries7,240 - - (7,240) -        Total net revenues97,377 72,273 27,637 (16,818)180,469 Operating costs and  expenses:           Cost of goods sold27,979 23,408 5,830 - 57,217  Selling, general and  administrative expenses56,282 37,401 21,161 (9,578)105,266  Amortization of  intangibles528 3,052 2 - 3,582        Total operating costs  and expenses84,789 63,861 26,993 (9,578)166,065       Income (loss) from  operations12,588 8,412 644 (7,240)14,404 Interest expense, net12,933 767 4 - 13,704 Income tax expense(79)1,045 - - 966       Net income (loss)$(266)$6,600 $640 $(7,240)$(266)      
 

**Consolidating Statements ofOperationsFor the Thirteen Weeks Ended July 1, 2000**
 Parent Guarantor  Subsidiaries ODs Eliminations Consolidated  Company       Net Revenues:           Optical sales$42,434 $29,433 $12,327 $- $84,194  Management fee- 4,812 - (4,172) 640  Investment earnings in  subsidiaries1,660 - - (1,660) -        Total net revenues44,094 34,245 12,327 (5,832)84,834 Operating costs and  expenses:           Cost of goods sold12,978 11,281 2,646 - 26,905  Selling, general and  administrative expenses27,997 18,717 9,765 (4,172)52,307  Amortization of  intangibles214 1,518 1 - 1,733        Total operating costs  and expenses41,189 31,516 12,412 (4,172)80,945       Income (loss) from  operations2,905 2,729 (85)(1,660)3,889 Interest expense, net6,822 (24)2 - 6,800 Income tax expense(175)1,006 - - 831       Net income (loss)$(3,742)$1,747 $(87)$(1,660)$(3,742)      
**Consolidating Statements ofCash FlowsFor the Twenty-Six Weeks Ended July 1, 2000**
 Parent Guarantor  Subsidiaries ODs Eliminations Consolidated  Company       Cash flows from  operating activities:          Net income (loss)$(266)$6,600 $640 $(7,240)$(266)Adjustments to  reconcile net income (loss) to net cash provided by operating activities:           Depreciation and  amortization6,994 6,947 2 - 13,943  Loan cost amortization646 142 - - 788  Deferred liabilities  and other345 (918)4 - (569) Loss on disposition of  property and equipment64 (13)- - 51              Increase/(decrease) in  operating assets and liabilities11,210 (9,152)(346)- 1,712                   Net cash provided by  operating activities18,993 3,606 300 (7,240)15,659                  Cash flows from  investing activities:           Acquisition of  property and equipment(7,947)(3,876)- - (11,823) Proceeds from sale of  property and equipment29 21 - - 50  Payment received on  notes receivable- 23 - - 23  Investment in  Subsidiaries(7,240)- - 7,240 -                   Net cash used in  investing activities(15,158)(3,832)- 7,240 (11,750)                 Cash flows from  financing activities:           Payments on debt and  capital leases(4,000)(457)- - (4,457) Distribution to  affiliated OD- - (260)- (260) Redemption of common  stock(18)- - - (18)                  Net cash used in  financing activities(4,018)(457)(260)- (4,735)                 Net increase  (decrease) in cash and cash equivalents(183)(683)40 - (826)           Cash and cash  equivalents at beginning of period862 1,656 437 - 2,955                  Cash and cash  equivalents at end of period$679 $973 $477 $- $2,129       
 

**Consolidating Balance SheetJune 30, 2001**
**ASSETS**Parent Guarantor  Subsidiaries ODs Eliminations Consolidated  Company       Current assets:           Cash and cash  equivalents$(13)$692 $400 $- $1,079  Accounts and notes  receivable110,150 33,464 5,093 (135,038)13,669  Inventory15,051 8,382 1,917 - 25,350  Prepaid expenses and  other1,946 1,590 60 - 3,596  Deferred income taxes1,297 - - - 1,297        Total current assets128,431 44,128 7,470 (135,038)44,941            Property and equipment39,722 26,780 - - 66,502 Intangibles17,221 96,566 89 - 113,866 Other assets8,092 839 - - 8,931 Investment in  subsidiaries(8,424)- - 8,424 -       Total assets$185,042 $168,303 $7,559 $(126,614)$234,290                  ***LIABILITIES AND SHAREHOLDERS’ DEFICIT***          Current liabilities:           Accounts payable16,645 127,542 10,789 (135,038)19,938  Deferred revenue13,010 624 - - 13,634  Current maturities of  long-term debt3,976 3,140 (20)- 7,096  Accrued payroll  expense1,833 2,876 4 - 4,763  Accrued interest2,832 498 - - 3,330  Other accrued expenses2,404 4,676 212 - 7,292        Total current  liabilities40,750 139,356 10,985 (135,038)56,053 Deferred income taxes1,297 - - - 1,297 Long-term debt, less  current maturities234,104 32,202 100 - 266,406 Deferred rent2,517 1,274 - - 3,791 Deferred gain1,624 506 - - 2,130       Total liabilities280,292 173,338 11,085 (035,038)329,677       Shareholders’  equity/(deficit):           Common stock74 - - - 74  Preferred stock45,152 - - - 45,152  Additional paid-in  capital46,725 1,092 (1,229)- 46,588  Accumulated deficit(185,109)(14,391)(1,685)16,076 (187,201)       Total shareholders’  deficit(95,250)(5,035)(3,526)8,424 (95,387)       $185,042 $168,303 $7,559 $(126,614)$234,290       
 

**Consolidating Statements ofOperationsFor the Twenty-Six Weeks Ended June 30, 2001**
 Parent Guarantor  Subsidiaries ODs Eliminations Consolidated  Company       Net Revenues:           Optical sales$86,060 $57,096 $30,136 $- $173,292  Management fee528 11,528 - (10,216)1,840  Investment earnings in  subsidiaries7,652 - - (7,652)-        Total net revenues94,240 68,624 30,136 (17,868)175,132 Operating costs and  expenses:           Cost of goods sold28,303 19,884 6,040 - 54,227  Selling, general and  administrative expenses54,791 34,636 24,702 (10,216)103,913  Amortization of  intangibles528 3,841 2 - 4,371        Total operating costs  and expenses83,622 58,361 30,744 (10,216)162,511       Income (loss) from  operations10,618 10,263 (608)(7,652)12,621 Interest expense, net12,602 1,753 4 - 14,359 Income tax expense108 246 - - 354       Net income (loss)$(2,092)$8,264 $(612)$(7,652)$(2,092)      
 

**Consolidating Statements ofOperationsFor the Thirteen Weeks Ended June 30, 2001**
 Parent Guarantor  Subsidiaries ODs Eliminations Consolidated  Company       Net Revenues:           Optical sales$40,316 $26,593 $13,732 $- $80,641  Management fee258 5,300 - (4,631) 927  Investment earnings in  subsidiaries2,436 - - (2,436) -        Total net revenues43,010 31,893 13,732 (7,067)81,568 Operating costs and  expenses:           Cost of goods sold13,577 9,296 2,890 - 25,763  Selling, general and  administrative expenses26,627 16,462 11,675 (4,631)50,133  Amortization of  intangibles264 955 1 - 2,123        Total operating costs  and expenses40,468 27,616 14,566 (4,631)78,019       Income (loss) from  operations2,542 4,277 (834)(2,436)3,549 Interest expense, net5,945 883 2 - 6,830 Income tax expense87 122 - - 209       Net income (loss)$(3,490)$3,272 $(836)$(2,436)$(3,490)      
** **

**Consolidating Statements ofCash FlowsFor the Twenty-Six Weeks Ended June 30, 2001**
 Parent Guarantor  Subsidiaries ODs Eliminations Consolidated  Company       Cash flows from  operating activities:          Net income (loss)$(2,092)$8,264 $(612)$(7,652)$(2,092)Adjustments to  reconcile net income (loss) to net cash provided by operating activities:           Depreciation and  amortization7,047 7,868 2 - 14,917  Loan cost amortization(41)954 - - 913  Deferred liabilities  and other(16)500 (26)- 458  Loss on disposition of  property and equipment67 78 - - 145  Increase/(decrease) in  operating assets and liabilities13,845 (17,482)1,000 - (2,637)                 Net cash provided by  (used in) operating activities18,810 182 364 (7,652)11,704                  Cash flows from  investing activities:           Acquisition of  property and equipment(2,215)(1,170)- - (3,385) Proceeds from sale of  property and equipment- - - - -  Payment received on  notes receivable- 3 - - 3  Investment in  Subsidiaries(7,652)- - 7,652 -                  Net cash used in  investing activities(9,867)(1,167)- 7,652 (3,382)                 Cash flows from financing  activities:           Payments on debt and  capital leases(20,671)(256)- - (20,927) Proceeds from issuance  of debt9,500 66 - - 9,566  Payments related to  debt issuance- 680 - - 680  Distribution to  affiliated OD- - (533)- (533)           Net cash provided by  (used in) financing activities(11,171)490 (533)- (11,214)                 Net decrease in cash  and cash equivalents(2,228)(495)(169)- (2,892)           Cash and cash  equivalents at beginning of period2,215 1,187 569 - 3,971                  Cash and cash  equivalents at end of period$(13)$692 $400 $- $1,079       
** **

**Item2.   MANAGEMENT’S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS**

***Introduction***

             The Company is the third largest retail optical chain inthe United States as measured by net revenues, operating 360 stores, of which287 are optical superstores. The Company operates predominately under the tradename “EyeMasters,” and in certain geographical regions under the trade names“Binyon’s,” “Visionworks,” “Hour Eyes,” “Dr. Bizer’s VisionWorld,” “Dr. Bizer’sValuVision,” “Doctor’s VisionWorld,” “Doctor’s ValuVision,” “Stein Optical,”“Vision World”, “Doctor’s VisionWorks” and “Eye DRx.”  The Company operates in the $5.0 billion retail optical chainsector of the $16.0 billion optical retail market. Management believes that keydrivers of growth for retail optical chains include (i) the aging of the UnitedStates population, (ii) the increasing role of managed vision care, (iii) theconsolidation of the industry and (iv) new product innovations.

          EffectiveJuly 2, 2001, the Company announced that Bernard W. Andrews retired as ChiefExecutive Officer of the Company.  DavidE. McComas, previously President and Chief Operating Officer, succeeded Mr.Andrews as Chief Executive Officer and became a director, on July 2, 2001.  Mr. Andrews will continue to serve as Chairmanof the Board of Directors.

             Theindustry is highly fragmented and has undergone significant consolidation.Since September 1996, the Company has acquired and integrated fouracquisitions. 
•In  September 1996, the Company acquired Visionworks Holdings, Inc. and its  subsidiaries, a sixty store optical retailer located along the Atlantic Coast  from Florida to Washington, D.C.  •In  September 1997, the Company acquired The Samit Group, Inc. and its  subsidiaries with ten Hour Eyes stores in Maryland and Washington, D.C., and  certain of the assets of Hour Eyes Doctors of Optometry, P.C., a Virginia  professional corporation formerly known as Dr. Samit’s Hour Eyes Optometrist,  P.C. (the “PC”), and simultaneously entered into long-term management  agreements with the PC to manage the PC’s twelve stores in Virginia.   •In  September 1998, the Company acquired (the “Bizer Acquisition”) certain of the  assets of Dr. Bizer’s VisionWorld, PLLC and related entities, a nineteen  store optical retailer located primarily in Kentucky and Tennessee, and  simultaneously entered into long-term management agreements with a private  optometrist to manage such optometrist’s nineteen stores.   •In  August 1999, the Company acquired from Vision Twenty-One, Inc. (“Vision  Twenty-One”) substantially all of the assets used to operate an aggregate of  76 retail eyewear outlets (the “VTO Retail Acquisition”) located in  Minnesota, North Dakota, Iowa, South Dakota and Wisconsin operating under the  trade name “Vision World,” in Wisconsin operating under the trade name “Stein  Optical,” and in New Jersey operating under the trade name “Eye DRx.”  Simultaneously, the Company assumed the  rights and obligations under a management agreement with a private  optometrist to manage the nineteen Eye DRx stores.
             Managementbelieves that optical retail sales through managed vision care programs willcontinue to increase over the next several years. As a result, management hasmade a strategic decision to pursue managed vision care contracts aggressivelyin order to help the Company’s retail business grow and over the years hasdevoted significant management resources to the development of its managed carebusiness. While the average ticket price on products purchased under managedcare reimbursement plans is typically lower, managed care transactionsgenerally earn comparable operating profit margins, as they require lesspromotional spending and advertising support. The Company believes that theincreased volume resulting from managed vision care contracts compensates forthe lower average ticket price. During the twenty-six weeks ended June 30,2001, approximately 37.7% of the Company’s total revenues were derived frommanaged vision care programs, compared to 29.3% for the twenty-six weeks endedJuly 1, 2000. Management believes that the increasing role of managed visioncare will continue to benefit the Company and other large retail optical chainswith strong local markets shares, broad geographic coverage and sophisticatedinformation management and billing systems. 

**Resultsof Operations**

The following table sets forth for theperiods indicated certain statement of income data as a percentage of netrevenues.
 **Thirteen Weeks Ended** **Twenty-Six Weeks Ended**  **** ****  **July 1,  2000** **June 30,  2001** **July 1,  2000** **June 30,  2001**  **** **** **** **** **Statement of Income Data:**        NET REVENUES:         Optical sales99.2%99.0%99.3%99.0% Management fee0.8 1.0 0.7 1.0       Total net revenues100.0 100.0 100.0 100.0          OPERATING COSTS AND EXPENSES:         Cost of goods sold32.0*31.9*31.9*31.3* Selling, general and administrative expenses62.1*62.2*58.7*60.0* Amortization of intangibles2.1 2.6 2.0 2.5                Total operating costs and expenses96.1 95.6 92.7 92.8               INCOME FROM OPERATIONS4.6 4.4 8.0 7.2          INTEREST EXPENSE, NET8.1 8.4 7.6 8.2          INCOME TAX EXPENSE1.0 0.3 0.5 0.2               NET LOSS(4.4)%(4.3)%(0.1)%(1.2)%     
 

*** **Percentagesbased on optical sales only

**The Thirteen Weeks Ended June 30, 2001 Compared to theThirteen Weeks Ended July 1, 2000.**

*Net Revenues. *Thedecreaseinnet revenues to $81.6 million for the thirteen weeks ended June 30, 2001 from$84.8 million for the thirteen weeks ended July 1, 2000 was largely the resultof a decrease in comparable store sales of 4.6%.  The average ticket price for the thirteen weeks ended June 30,2001 was relatively equal to the average ticket price for the thirteen weeksended July 1, 2000 and the number of comparable transactions decreased comparedto the second quarter of 2000.  Inaddition, managed vision care sales increased substantially for the thirteenweeks ended June 30, 2001 as compared to the thirteen weeks ended July 1,2000.  The Company opened two stores andclosed three stores during the second quarter of 2001.
* 

*Gross Profit. *Grossprofit decreased to $54.9 million for the thirteen weeks ended June 30, 2001from $57.3 million for the thirteen weeks ended July 1, 2000. Gross profit as apercentage of optical sales increased to 68.1% for the thirteen weeks endedJune 30, 2001 as compared to 68.0% for the thirteen weeks ended July 1,2000.  This percentage increase waslargely due to a continuation of improved buying efficiencies.

*Selling General & Administrative Expenses(SG&A). *SG&Adecreased to $50.1 million for the thirteen weeks ended June 30, 2001 from$52.3 million for the thirteen weeks ended July 1, 2000. SG&A as apercentage of optical sales increased to 62.2% for the thirteen weeks endedJune 30, 2001 from 62.1% for the thirteen weeks ended July 1, 2000. Thispercentage increase was primarily due to the addition of noncomparable doctorpractices in three of the Company’s markets which has resulted in increaseddoctor payroll expenditures which were offset by a reduction in advertising andoverhead expenditures.

*Amortization Expense. *Amortization expenseincreased to $2.1 million for the thirteen weeks ended June 30, 2001 from $1.7million for the thirteen weeks ended July 1, 2000.  This increase was due to the accelerated amortization of thenon-compete agreement related to the VTO Retail Acquisition.

*Net Interest Expense. *Net interest expense was$6.8 million for the thirteen weeks ended June 30, 2001 and the thirteen weeksended July 1, 2000, respectively.

*Net Loss. *Netloss decreased to $3.5 million for the thirteen weeks ended June 30, 2001 froma net loss of $3.7 million for the thirteen weeks ended July 1, 2000.

**The Twenty-Six Weeks Ended June 30, 2001 Compared to theTwenty-Six Weeks Ended July 1, 2000.**

*Net Revenues. *Thedecreaseinnet revenues to $175.3 million for the twenty-six weeks ended June 30, 2001from $180.5 million for the twenty-six weeks ended July 1, 2000 was largely theresult of a decrease in comparable store sales of 4.0%.  The average ticket price for the twenty-sixweeks ended June 30, 2001 was relatively equal to the average ticket price forthe twenty-six weeks ended July 1, 2000 and the number of comparabletransactions for the twenty-six weeks ended June 30, 2001 decreased compared tothe twenty-six weeks ended July 1, 2000. In addition, managed vision care sales increased substantially for thetwenty-six weeks ended June 30, 2001 as compared to the twenty-six weeks endedJuly 1, 2000.  The Company opened fivestores and closed six stores during the twenty-six weeks ended June 30, 2001.

*Gross Profit. *Grossprofit decreased to $119.1 million for the twenty-six weeks ended June 30, 2001from $122.0 million for the twenty-six weeks ended July 1, 2000.  Gross profit as a percentage of opticalsales increased to 68.7% for the twenty-six weeks ended June 30, 2001 ascompared to 68.1% for the twenty-six weeks ended July 1, 2000.  This percentage increase was due primarilyto a continuation of the improved buying efficiencies.

*Selling General & Administrative Expenses(SG&A). *SG&Adecreased to $103.9 million for the twenty-six weeks ended June 30, 2001 from$105.3 million for the twenty-six weeks ended July 1, 2000.   SG&A as a percentage of optical salesincreased to 60.0 % for the twenty-six weeks ended June 30, 2001 from 58.7 %for the twenty-six weeks ended July 1, 2000.  This percentage increase was due primarily to increased occupancy anddoctor payroll expenditures.  Theaddition of noncomparable doctor practices in three of the Company’s marketshas resulted in increased doctor payroll expenditures.**Amortization Expense. *Amortization expenseincreased to $4.4 million for the twenty-six weeks ended June 30, 2001 from$3.6 million for the twenty-six weeks ended July 1, 2000. This increase was dueto the accelerated amortization of the non-compete agreement related to the VTORetail Acquisition.

*Net Interest Expense. *Net interest expenseincreased to $14.4 million for the twenty-six weeks ended June 30, 2001 from$13.7 million for the twenty-six weeks ended July 1, 2000. This increase wasprimarily due to an increase in prevailing interest rates during the firstquarter of fiscal 2001 which affected the Company’s floating rate debt.

*Net Loss. *Netloss increased to $2.1 million for the twenty-six weeks ended June 30, 2001from a net loss of $0.3 million for the twenty-six weeks ended July 1, 2000.

**Liquidity and Capital Resources**

             Cashflows from operating activities have provided net cash of $11.7 million for thetwenty-six weeks ended June 30, 2001 as compared to $15.7 million for thetwenty-six weeks ended July 1, 2000.  Asof June 30, 2001, the Company had $1.1 million of cash available to meet theCompany’s obligations.

             Capitalexpenditures are related to the construction of new stores, repositioning ofexisting stores in some markets, new computer systems for stores and maintenanceof existing facilities.  Capitalexpenditures for the twenty-six weeks ended June 30, 2001 were $3.4million.  The aggregate capitalexpenditures for 2001 are anticipated to be approximately  $9.0 million, of which approximately $4.0million are related to commitments to new stores and approximately $5.0 millionare expected to be for systems and improvements to existing facilities.

             OnApril 24, 1998, the Company entered into a credit agreement (the “New CreditFacility”) which consists of (i) the $55.0 million term loan facility (the“Term Loan Facility”); (ii) the $35.0 million revolving credit facility (the“Revolving Credit Facility”); and (iii) the $100.0 million acquisition facility(the “Acquisition Facility”). The proceeds of the New Credit Facility were usedto pay long-term debt outstanding under the previous credit facility. At June30, 2001, the Company had $36.0 million in term loans outstanding under theTerm Loan Facility, $23.5 million outstanding under the Revolving CreditFacility, $67.9 million outstanding under the Acquisition Facility which fundedthe Bizer Acquisition and the VTO Retail Acquisition, $149.7 million in notespayable outstanding evidenced by the Notes and $2.9 million in capital leaseand equipment obligations. On December 27, 2000 the Company amended the NewCredit Facility.  As a result of theamendment to the New Credit Facility, interest on borrowings was increased by100 basis points from the original interest rates under the New Credit Facilityand various financial covenants and scheduled principal payments wererevised.  Borrowings made under the NewCredit Facility (as amended) bear interest at a rate equal to, at the Company’soption, LIBOR plus 2.25% to 3.25% or the Base Rate (as defined in the NewCredit Facility) plus 1.25% to 2.25%. At June 30, 2001, the Company’s New Credit Facility bore interest atLIBOR plus 3.25% and the Base Rate plus 2.25%. Under the amended New CreditFacility, the Term Loan Facility matures five years from the closing date ofthe New Credit Facility, the $45.0 million outstanding balance will amortizequarterly in aggregate annual principal amounts of approximately $15.0 million,$13.0 million, and $17.0 million, respectively, for fiscal years 2001 through2003 and the Acquisition Facility will amortize quarterly in aggregateprincipal amounts of approximately $0.5 million, $0.7 million, and $67.0million, respectively, for fiscal years 2001 through 2003.
             Futureprincipal maturities for long-term debt and capital lease obligations as ofJune 30, 2001 are as follows:
2001$6,737 200214,058 2003107,491 2004148 2005232 Beyond 2005151,374   Total future principal  payments on debt$280,040   
             Basedupon current operations, anticipated cost savings and future growth, theCompany believes that its cash flow from operations, together with currentlyavailable borrowings under the Revolving Credit Facility, will be adequate tomeet its anticipated requirements for working capital, capital expenditures andscheduled principal and interest payments through the next twelve (12)months.    The ability of the Company tosatisfy its financial covenants within its amended New Credit Facility, meetits debt service obligations and reduce its debt will be dependent on the futureperformance of the Company, which in turn, will be subject to general economicconditions and to financial, business, and other factors, including factorsbeyond the Company’s control.  In theevent the Company does not achieve its financial covenants within the amendedNew Credit Facility, renegotiations with the Company’s banks may occur.  The Company believes that its ability torepay the Notes and amounts outstanding under the Revolving Credit Facility andthe Acquisition Facility at maturity may require additional financing.  A portion of the Company’s debt bearsinterest at floating rates; therefore, its financial condition is and willcontinue to be affected by changes in prevailing interest rates.

**Inflation**

             Theimpact of inflation on the Company’s operations has not been significant todate.  While the Company does notbelieve its business is highly sensitive to inflation, there can be noassurance that a high rate of inflation would not have an adverse impact on theCompany’s operations.

**Seasonality and Quarterly Results**

             TheCompany’s sales fluctuate seasonally. Historically, the Company’s highest salesand earnings occur in the first and third fiscal quarters; however, the openingof new stores may affect seasonal fluctuations.  Hence, quarterly results are not necessarily indicative ofresults for the entire year.
**Forward-Looking Statements**

             Certainstatements contained herein constitute “forward-looking statements within themeaning of Section 27A of the Securities Act of 1933, as amended, and Section21E of the Securities Exchange Act of 1934, as amended.” All statements otherthan statements of historical facts included in this report regarding theCompany’s financial position, business strategy, budgets and plans andobjectives of management for future operations are forward-lookingstatements.  Although the management ofthe Company believes that the expectations reflected in such forward-lookingstatements are reasonable, it can give no assurance that such expectations willprove to have been correct.  Suchforward-looking statements involve known and unknown risks, uncertainties andother factors that may cause the actual results, performance or achievements ofthe Company, or industry results, to be materially different from those contemplatedor projected, forecasted, estimated or budgeted in or expressed or implied bysuch forward-looking statements. Such factors include, among others, the riskand other factors set forth under “Risk Factors” in the Company’s RegistrationStatement on Form S-4 filed with the Commission and under the heading“Government Regulation” in the Company’s Annual Report on Form 10-K for 2000 aswell as the following: general economic and business conditions; industrytrends; the loss of major customers or suppliers; cost and availability of rawmaterials; changes in business strategy or development plans; availability andquality of management; and availability, terms and deployment of capital.SPECIAL ATTENTION SHOULD BE PAID TO THE FACT THAT STATEMENTS ARE FORWARD-LOOKINGSTATEMENTS INCLUDING, BUT NOT LIMITED TO, STATEMENTS RELATING TO (I) THECOMPANY’S ABILITY TO EXECUTE ITS BUSINESS STRATEGY (INCLUDING, WITHOUTLIMITATION, WITH RESPECT TO NEW STORE OPENINGS AND INCREASING THE COMPANY’SPARTICIPATION IN MANAGED VISION CARE PROGRAMS), (II) THE COMPANY’S ABILITY TOOBTAIN SUFFICIENT RESOURCES TO FINANCE ITS WORKING CAPITAL AND CAPITALEXPENDITURE NEEDS AND PROVIDE FOR ITS OBLIGATIONS, (III) THE CONTINUING SHIFTIN THE OPTICAL RETAIL INDUSTRY OF MARKET SHARE FROM INDEPENDENT PRACTITIONERSAND SMALL REGIONAL CHAINS TO LARGER OPTICAL RETAIL CHAINS, (IV) INDUSTRY SALESGROWTH AND CONSOLIDATION, (V) IMPACT OF REFRACTIVE SURGERY AND OTHER CORRECTIVEVISION TECHNIQUES, (VI) DEMOGRAPHIC TRENDS, (VII) THE COMPANY’S MANAGEMENTARRANGEMENTS WITH PROFESSIONAL CORPORATIONS AND (VIII) THE ABILITY OF THECOMPANY TO SATISFY ITS FINANCIAL COVENANTS UNDER ITS CREDIT FACILITY AND/ORRENEGOTIATE THE TERMS OF ITS NEW CREDIT FACILITY WITH THE LENDERS.

**ITEM 3.            QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKETRISK**

             TheCompany is exposed to various market risks. Market risk is the potential loss arising from adverse changes in marketprices and rates.  The Company does notenter into derivative or other financial instruments for trading or speculativepurposes.  There have been no materialchanges in the Company’s market risk during the second quarter of fiscal2001.  For further discussion, refer tothe Eye Care Centers of America, Inc.’s annual report on Form 10-K for the yearended December 30, 2000.

**PARTII. OTHER INFORMATION**

**ITEM 1.LEGAL PROCEEDINGS**

             TheCompany is a party to routine litigation in the ordinary course of itsbusiness. There have been no such pending matters, individually or in theaggregate, that the management of the Company has deemed to be material to thebusiness or financial condition of the Company that have arisen during thesecond quarter of fiscal 2001.  Forfurther discussion, refer to the Company’s annual report on Form 10-K for theyear ended December 30, 2000.
**Item 6.Exhibits and Reports on Form 8-K**

(a) The following documents are filed aspart of this report.
2.1Stock  Purchase Agreement dated August 15, 1996 by and between Eye Care Centers  of America, Inc., Visionworks Holdings, Inc. and the sellers listed therein. (a)  2.2Stock  Purchase Agreement, dated September 30 1997, by and among Eye Care  Centers of America, Inc., a Texas corporation, Robert A. Samit, O. D. and  Michael Davidson, O. D. (a)  2.3Recapitalization  Agreement dated as of March 6, 1998 among ECCA Merger Corp., Eye Care  Centers of America, Inc. and the sellers listed therein. (a)  2.4Amendment  No. 1 to the Recapitalization Agreement dated as of April 23, 1998 among  ECCA Merger Corp., Eye Care Centers of America, Inc, and the sellers listed  therein. (a)  2.5Amendment  No. 2 to the Recapitalization Agreement dated as of April 24, 1998 among  ECCA Merger Corp., Eye Care Centers of America, Inc. and the sellers listed  therein. (a)  2.6Articles  of Merger of ECCA Merger Corp. with and into Eye Care Centers of America,  Inc. dated April 24, 1998. (a)  2.7Master  Asset Purchase Agreement, dated as of August 22, 1998, by and among Eye  Care Centers of America, Inc., Mark E. Lynn, Dr. Mark Lynn & Associates,  PLLC; Dr. Bizer’s Vision World, PLLC and its affiliates. (a)  2.8Letter  Agreement, dated October 1, 1998, amending and modifying that certain  Master Asset Purchase Agreement, dated as of August 22, 1998, by and  among Eye Care Centers of America, Inc.; Mark E. Lynn; Dr. Mark Lynn &  Associates, PLLC; Dr. Bizer’s VisionWorld, PLLC and its affiliates. (a)  2.9Asset  Purchase Agreement, date July 7,1999, by and among Eye Care Centers of  America, Inc., Vision Twenty-One, Inc., and The Complete Optical Laboratory,  Ltd., Corp. † (c)   2.10Letter  Agreement, dated August 31,1999, amending and modifying that certain Asset  Purchase Agreement, date July 7,199 by and among Eye Care Centers of America,  Inc., Vision Twenty-One, Inc., and The Complete Optical Laboratory, Inc.,  Corp. (d)  2.11Agreement  Regarding Strategic Alliance. (d)
 
  3.1Restated  Articles of Incorporation of Eye Care Centers of America,  Inc. (a)  3.2Statement  of Resolution of the Board of Directors of Eye Care Centers of America, Inc.  designating a series of Preferred Stock. (a)  3.3Amended  and Restated By-laws of Eye Care Centers of America, Inc. (a)  4.1Indenture  dated as of April 24, 1998 among Eye Care Centers of America, Inc., the  Guarantors named therein and United States Trust Company of New York, as  Trustee for the 9 1/8% Senior Subordinated Notes Due 2008 and Floating  Interest Rate Subordinated Term Securities. (a)  4.2Form  of Fixed Rate Exchange Note (included in Exhibit 4.1 Hereto). (a)  4.3Form  of Floating Rate Exchange Note (included in Exhibit 4.1 Hereto).(a)  4.4Form  of Guarantee (included in Exhibit 4.1 hereto). (a)  4.5Registration  Rights Agreement dated April 24, 1998 between Eye Care Centers of  America, Inc., the subsidiaries of the Company named as guarantors therein,  BT Alex. Brown Incorporated and Merrill Lynch, Pierce, Fenner & Smith  Incorporated. (a)  10.1Form  of Stock Option Cancellation Agreement dated June 15, 2001 by and between Eye  Care Centers of America, Inc, and the employees granted options under the  Company’s 1998 Stock Option Plan. (e)  10.2Form  of Stock Option Cancellation Agreement dated June 15, 2001 by and between Eye  Care Centers of America, Inc, and the board of directors granted options  under the Company’s 1998 Stock Option   Plan. (e)  10.3Employment  Agreement dated July 2, 2001 by and between Eye Care Centers of America, Inc.  and David E. McComas. (e)  10.4Employment  Agreement dated July 2, 2001 by and between Eye Care Centers of America, Inc.  and Alan E. Wiley. (e)†Portions  of this Exhibit have been omitted pursuant to an application for an order  declaring confidential treatment filed with the Securities and Exchange  Commission.(a)Incorporated  by reference from the Registration Statement on Form S-4 (File No. 333 –  56551).(b)Incorporated  by reference from the Company’s Annual Report on Form 10-K for the year ended  January 2, 1999.(c)Incorporated  by reference from the Company’s Quarterly Report on Form 10-Q for the quarter  ended July 3, 1999.(d)Previously provided  with, and incorporated by reference from, the Company’s Quarterly Report on  Form 10-Q for the quarter ended October 2,1999.(e)Filed herewith.
 
(b)The  Company filed no current reports on Form 8-K with the Securities and Exchange  Commission during the thirteen weeks ended June 30, 2001.
 

SIGNATURES

             Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly authorized.
 EYE  CARE CENTERS OF AMERICA, INC.      August  10, 2001/s/  Alan E. Wiley  DatedAlan  E. Wiley Executive  Vice President and   Chief Financial Officer
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