SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                           ---------------------------


                                    FORM 10-Q


(Mark one)
|X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                  For the Quarterly Period Ended April 4, 1998

| |  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934 For the Transition Period From to .

                         Commission File Number: 0-23633
                                                ---------

                              1-800 CONTACTS, INC.
           (Exact name of registrant as specified in its certificate)

            Delaware                                      87-0571643
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)

13751 S. Wadsworth Park Drive, Suite D-140
                Draper, UT                                   84020
------------------------------------------         --------------------------
 (Address of principal executive offices)                 (Zip Code)

                                 (801) 572-8225
             ------------------------------------------------------
              (Registrant's telephone number, including area code)



         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days.
                                | | Yes    |X| No
                                                     

         As of May 19,  1998,  the  Registrant  has  6,430,568  shares of Common
Stock, par value $0.01 per share outstanding.

<PAGE>

                              1-800 CONTACTS, INC.

                                     INDEX



PART I.   FINANCIAL INFORMATION                                         Page No.
                                                                        --------
Item 1.   Financial Statements
          Condensed Balance Sheets as of April 4, 1998 (unaudited)
               and December 31, 1997 . . . . . . . . . . . . . . . . . . . .   3
          Condensed Statements of Operations for the 13 Weeks Ended
               April 4, 1998 (unaudited) and the Three Months Ended
               March 31, 1997 (unaudited) . . . . . . . . . . . . . . . . . .  4
          Condensed Statements of Stockholders' Equity for the 13 Weeks
               Ended April 4, 1998 (unaudited)  . . . . . . . . . . . . . . .  5
          Condensed Statements of Cash Flows for the 13 Weeks Ended 
               April 4, 1998 (unaudited) and the Three Months Ended 
               March 31, 1997 (unaudited) . . . . . . . . . . . . . . . . . .  6
          Notes to Condensed Financial Statements. . . . . . . . . . . . . .   8
Item 2.   Management's Discussion and Analysis of Financial Condition
               and Results of Operations . . . . . . . . . . . . . . . . . .  10

PART II.  OTHER INFORMATION
Item 1.   Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 13
Item 2.   Changes in Securities and Use of Proceeds. . . . . . . . . . . . .  13
Item 3.   Defaults upon Senior Securities . . . . . . . . . . . . . . . . . . 13
Item 4.   Submission of Matters to a Vote of Security Holders . . . . . . . . 13
Item 5.   Other Information . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 6.   Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . 14


<PAGE>
PART I.   FINANCIAL INFORMATION

Item 1.     Financial Statements

<TABLE>
                              1-800 CONTACTS, INC.
                            CONDENSED BALANCE SHEETS

                                     ASSETS

<CAPTION>
                                                                 April 4,       December 31,
                                                                   1998             1997
                                                               ------------    ------------
                                                                (Unaudited)
<S>                                                            <C>             <C>       
CURRENT ASSETS:
         Cash and cash equivalents                             $ 17,264,867    $       --
         Inventories                                              5,475,106       4,811,855
         Prepaid advertising                                      1,221,364         127,696
         Deferred income tax asset                                   13,055            --
         Other current assets                                       222,533          54,968
                                                               ------------    ------------
                  Total current assets                           24,196,925       4,994,519
DEFERRED ADVERTISING COSTS                                        3,268,231       1,705,695
PROPERTY AND EQUIPMENT, net:                                        638,738         562,503
OTHER ASSETS                                                        421,804         518,347
                                                               ------------    ------------
                  Total assets                                 $ 28,525,698    $  7,781,064
                                                               ============    ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
         Line of credit                                        $       --      $  1,055,640
         Notes payable to stockholders                                 --         1,370,000
         Current portion of capital lease obligation                 27,182          23,532
         Accounts payable                                         4,228,117       3,762,158
         Accrued liabilities                                        555,959         300,439
         Unearned revenue                                           160,897         104,272
                                                               ------------    ------------
                  Total current liabilities                       4,972,155       6,616,041
                                                               ------------    ------------
LONG-TERM LIABILITIES:
         Notes payable to stockholders                                 --           243,788
         Capital lease obligation, less current portion              58,055          66,877
         Deferred income tax liability                              966,963            --
                                                               ------------    ------------
                  Total long-term liabilities                     1,025,018         310,665
                                                               ------------    ------------
STOCKHOLDERS' EQUITY:
         Common stock                                                64,306          46,595
         Additional paid-in capital                              22,971,890          93,688
         Retained earnings (deficit)                               (507,671)      1,286,220
         Notes receivable from stockholders                            --          (572,145)
                                                               ------------    ------------
                  Total stockholders' equity                     22,528,525         854,358
                                                               ------------    ------------
                  Total liabilities and stockholders' equity   $ 28,525,698    $  7,781,064
                                                               ============    ============
</TABLE>

            The accompanying notes to condensed financial statements
               are an integral part of these condensed statements.


                                       3

<PAGE>

<TABLE>
                              1-800 CONTACTS, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                  (Unaudited)

<CAPTION>
                                                                  13 Weeks      Three Months
                                                                   Ended            Ended
                                                                   April 4,        March 31,
                                                                    1998             1997
                                                                ------------    ------------

<S>                                                             <C>             <C>         
NET SALES                                                       $ 10,429,304    $  2,845,989
                                                                ------------    ------------
COST OF GOODS SOLD                                                 6,628,913       1,858,340
                                                                ------------    ------------
         Gross profit                                              3,800,391         987,649
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                       3,137,926         777,538
                                                                ------------    ------------
INCOME FROM OPERATIONS                                               662,465         210,111
                                                                ------------    ------------
OTHER (EXPENSE) INCOME:
         Interest expense                                            (73,633)         (4,103)
         Interest income                                             143,869            --
         Other, net                                                   10,000            --
                                                                ------------    ------------
                  Total other, net                                    80,236          (4,103)
                                                                ------------    ------------
INCOME BEFORE PROVISION FOR INCOME TAXES                             742,701         206,008
PROVISION FOR INCOME TAXES                                          (953,908)           --
                                                                ------------    ------------
NET INCOME (LOSS)                                               $   (211,207)   $    206,008
                                                                ============    ============

PER SHARE INFORMATION:
         Basic and diluted net income (loss) per common share   $      (0.04)   $       0.04
                                                                ============    ============

PRO FORMA INFORMATION:
         Income before provision for income taxes                    742,701         206,008
         Provision for income taxes                                 (278,337)        (79,313)
                                                                ------------    ------------
         Net income                                             $    464,364    $    126,695
                                                                ============    ============

         Basic and diluted net income per common share          $       0.08    $       0.03
                                                                ============    ============
</TABLE>


            The accompanying notes to condensed financial statements
               are an integral part of these condensed statements.



                                       4
<PAGE>

<TABLE>
                              1-800 CONTACTS, INC.
                  CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
                      For the 13 Weeks Ended April 4, 1998
                                  (Unaudited)

<CAPTION>
                                                                                                            Notes
                                                     Common Stock           Additional     Retained       Receivable
                                             --------------------------      Paid-in       Earnings         From
                                                Shares        Amount         Capital       (Deficit)     Stockholders      Total
                                             -----------   ------------   ------------   ------------   ------------   ------------
<S>                                            <C>         <C>            <C>         
BALANCE, December 31, 1997                     4,659,469   $     46,595   $     93,688   $  1,286,220   $   (572,145)  $    854,358
         Advances to stockholders                   --             --             --             --          (27,544)
         Distributions to stockholders, net         --             --             --       (1,582,684)       599,689       (982,995)
         Sale of common stock,
                  net of offering costs        2,213,750         22,138     24,773,775           --             --       24,795,913
         Repurchase of common stock             (442,651)        (4,427)    (1,895,573)          --             --       (1,900,000)
         Net loss                                   --             --             --         (211,207)          --         (211,207)
                                             -----------   ------------   ------------   ------------   ------------   ------------
BALANCE, April 4, 1998                         6,430,568   $     64,306   $ 22,971,890   $   (507,671)  $       --     $ 22,528,525
                                             ===========   ============   ============   ============   ============   ============
</TABLE>


            The accompanying notes to condensed financial statements
              are an integral part of these condensed statements.


                                       5
<PAGE>

<TABLE>
                              1-800 CONTACTS, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

                Increase (Decrease) In Cash And Cash Equivalents

<CAPTION>
                                                                                   13 Weeks     Three Months
                                                                                    Ended          Ended
                                                                                   April 4,       March 31,
                                                                                     1998           1997
                                                                                 -----------    -----------

<S>                                                                              <C>            <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
         Net income (loss)                                                       $  (211,207)   $   206,008
         Adjustments to reconcile net income (loss) to net cash
                  provided by (used in) operating activities:
         Depreciation and amortization                                                63,536         24,756
         Deferred income taxes                                                       953,908           --
         Changes in operating assets and liabilities:
                  Inventories                                                       (663,251)        69,833
                  Prepaid advertising                                             (1,093,668)       (28,800)
                  Other current assets                                              (167,565)         1,848
                  Deferred advertising costs                                      (1,562,536)      (242,650)
                  Accounts payable                                                   465,959        323,215
                  Accrued liabilities                                                255,520         48,904
                  Unearned revenue                                                    56,625         47,617
                                                                                 -----------    -----------
                           Net cash provided by (used in) operating activities    (1,902,679)       450,731
                                                                                 -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
         Net increase in notes receivable from stockholders                          (27,544)       (65,221)
         Purchase of property and equipment                                         (131,030)      (162,081)
         Deposits                                                                   (287,396)          --
                                                                                 -----------    -----------
                           Net cash used in investing activities                    (445,970)      (227,302)
                                                                                 -----------    -----------
</TABLE>


            The accompanying notes to condensed financial statements
               are an integral part of these condensed statements.


                                       6
<PAGE>

<TABLE>
                              1-800 CONTACTS, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

                Increase (Decrease) In Cash And Cash Equivalents

<CAPTION>
                                                                                       13 Weeks      Three Months
                                                                                         Ended          Ended
                                                                                        April 4,       March 31,
                                                                                          1998           1997
                                                                                      ------------    ------------


<S>                                                                                     <C>                     
CASH FLOWS FROM FINANCING ACTIVITIES:
         Sale of common stock, net of underwriting discounts and commissions            25,734,844            --
         Stock offering costs                                                             (563,733)           --
         Stock repurchase                                                               (1,900,000)           --
         Net repayments on line of credit                                               (1,055,640)           --
         Borrowings from stockholders                                                         --            40,000
         Principal payments on notes payable to stockholders                            (1,613,788)           --
         Principal payments on notes payable for distributions to stockholders, net       (982,995)           --
         Principal payments on long-term debt                                                 --           (25,236)
         Principal payments on capital lease                                                (5,172)         (3,131)
         Repayment of bank overdraft                                                          --           (68,543)
                                                                                      ------------    ------------
                           Net cash provided by (used in) financing activities          19,613,516         (56,910)
                                                                                      ------------    ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                               17,264,867         166,519
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                              --              --
                                                                                      ------------    ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                            $ 17,264,867    $    166,519
                                                                                      ============    ============

SUPPLEMENTAL CASH FLOW INFORMATION:
         Cash paid for interest                                                       $    199,645    $     11,294

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:

During the period ended April 4, 1998, the Company distributed $1,582,684 to its
S Corporation  stockholders.  This  distribution  (net of notes  receivable from
stockholders  of  $599,689)  was in  the  form  of  promissory  notes,  totaling
$982,995,  issued by the Company.  The promissory notes were paid in full during
the period ended April 4, 1998.
</TABLE>


            The accompanying notes to condensed financial statements
              are an integral part of these condensed statements.


                                       7
<PAGE>


                              1-800 CONTACTS, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)


NOTE 1.  PRESENTATION OF CONDENSED FINANCIAL STATMENTS

         The accompanying  condensed financial  statements have been prepared by
the  Company,  without  audit,  pursuant  to the  rules and  regulations  of the
Securities and Exchange Commission. Certain information and disclosures normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles have been condensed or omitted pursuant to such rules and
regulations.  These  condensed  financial  statements  reflect  all  adjustments
(consisting  only of normal  recurring  adjustments),  which in the  opinion  of
management,  are  necessary to present  fairly the results of  operations of the
Company  for  the  periods  presented.  It is  suggested  that  these  condensed
financial  statements be read in conjunction  with the financial  statements and
the notes thereto included in the Company's  Registration  Statement on Form S-1
(registration number is 333-41055).

         The results of  operations  for the period  ended April 4, 1998 are not
necessarily indicative of the results to be expected for the full year.

NOTE 2.  CHANGE IN ACCOUNTING PERIOD

         Effective January 1, 1998, the Company changed from a calendar year end
to a 52/53 week year ending on the Saturday  nearest to December 31. Due to this
change,  the first quarter of 1998 represents 13 weeks and 3 days,  covering the
period January 1, 1998 to April 4, 1998.  The remaining  quarters for the fiscal
year 1998 will each be 13 weeks.

NOTE 3.  INITIAL PUBLIC OFFERING

         During February 1998, the Company completed its initial public offering
of common stock. In connection therewith, the Company issued 2,213,750 shares of
common stock, which included 288,750 shares issued pursuant to the underwriters'
over-allotment   option.  The  proceeds  received  from  the  offering,  net  of
underwriting commissions and offering costs, totaled approximately $24,796,000.

NOTE 4.  S CORPORATION DISTRIBUTIONS

         Immediately  prior to the  consummation of its initial public offering,
the Company entered into an agreement to distribute to its existing stockholders
an amount equal to the  Company's  retained  earnings  from its  formation  date
through the date of the termination of the Company's S Corporation  status.  The
distribution  (net of notes receivable from stockholders of $599,689) was in the
form of  promissory  notes,  totaling  $982,995,  issued by the  Company.  These
promissory notes were paid in full during the period ended April 4, 1998.

NOTE 5.  INCOME TAXES AND PRO FORMA INFORMATION

         Effective  February 9, 1998 the  Company's S  Corporation  election was
terminated.  As a result,  the Company recorded a net deferred tax liability and
the related deferred tax provision of approximately  $791,000 for the tax effect
of the differences  between  financial  statement and income tax basis of assets
and  liabilities  that  existed  at the  termination  date of the S  Corporation
election.

         The pro forma net income  presents the pro forma  effects on historical
net income  adjusted for a pro forma  provision for income taxes.  The pro forma
provision  for income  taxes has been  determined  assuming the Company had been
taxed as a C Corporation for federal and state income tax purposes.  


                                       8
<PAGE>

NOTE 6.  NET INCOME PER COMMON SHARE

         Basic net income per common share ("Basic EPS")  excludes  dilution and
is  computed  by dividing  net income by the  weighted-average  number of common
shares  outstanding  during the  period.  Diluted  net  income per common  share
("Diluted  EPS")  reflects  the  potential  dilution  that could  occur if stock
options or other  common stock  equivalents  were  exercised  or converted  into
common stock.

         The pro forma  Basic  and  Diluted  EPS  gives  effect to the pro forma
effects on historical net income  adjusted for a pro forma  provision for income
taxes  assuming  the Company had been taxed as a C  Corporation  for federal and
state income tax purposes.  In addition,  it takes into consideration the shares
deemed to be  outstanding  at the initial  public  offering  price of $12.50 per
share,  sufficient  to fund  the S  Corporation  distribution  of  approximately
$983,000 (see Note 4).

         The following is a reconciliation of the numerator and denominator used
to calculate Basic and Diluted EPS:

<TABLE>
<CAPTION>
                               Quarter Ended April 4, 1998              Quarter Ended March 31, 1997
                          ----------------------------------------  ----------------------------------------
                             Income                   Per-Share        Income                   Per-Share
                             (Loss)       Shares        Amount         (Loss)       Shares        Amount
                          ------------- ------------ -------------  ------------- ------------ -------------
Historical:
<S>                        <C>            <C>         <C>             <C>           <C>         <C>        
  Basic EPS                $ (211,207)    5,649,263   $    (0.04)     $  206,008    4,659,469   $      0.04
  Effect of stock options                                                               9,369
                          ------------- ------------ -------------  ------------- ------------ -------------
  Diluted EPS              $ (211,207)    5,649,263   $    (0.04)     $  206,008    4,668,838   $      0.04
                          ============= ============ =============  ============= ============ =============

Pro Forma:
  Basic EPS                $  464,364     5,649,263   $     0.08      $  126,695    4,659,469   $      0.03
  Effect of stock options                    59,422                                     9,369
  Assumed distribution                                                                 78,640
                          ------------- ------------ -------------  ------------- ------------ -------------
  Diluted EPS              $  464,364     5,708,685   $     0.08      $   126,695   4,747,478   $      0.03
</TABLE>



NOTE 7.  ADVERTISING COSTS

         The  Company  capitalizes  certain  direct-mail  advertising  costs and
amortizes  those costs over the period for which the revenues  are  generated in
accordance  with  Statement of Position  ("SOP") 93-7.  Based upon the Company's
past  direct-response  information,  the Company amortizes those costs over a 12
month  period.  The  Company  recorded  direct-response  advertising  expense of
approximately  $1,876,000  and $362,000 for the quarters ended April 4, 1998 and
March 31, 1997,  respectively.  The Company expenses all other advertising costs
when the advertising takes place. These advertising costs totaled  approximately
$127,000  and $3,000 for the  quarters  ended April 4, 1998 and March 31,  1997,
respectively.

NOTE 8.  LEGAL MATTERS

         Subsequent  to April 4, 1998,  a claim  against the Company by a former
applicant was settled.  The settlement  amount was recorded in the quarter ended
April 4, 1998.

         From time to time the Company is involved  in legal  matters  generally
incidental to its business.  It is the opinion of management,  after  discussion
with legal  counsel,  that the ultimate  dispositions  of these matters will not
have a  material  impact on the  financial  condition,  liquidity  or results of
operations of the Company.



                                       9
<PAGE>


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations.

Overview

         The Company is a rapidly growing direct marketer of replacement contact
lenses. The Company was formed in February 1995 and is the successor to the mail
order  business  founded by the Company's  Vice President of Operations in March
1991.  Since its formation,  the Company has experienced  significant  growth in
revenues and net income.  The  Company's  net sales have grown rapidly from $2.8
million in the first  quarter of 1997 to $10.4  million in the first  quarter of
1998.

         Prior  to  consummation  of its  initial  public  offering  ("IPO")  in
February 1998, the Company  operated as an S corporation  and, as a result,  had
not been subject to federal or certain  state income taxes.  In connection  with
the  consummation  of the IPO,  the Company  revoked its S  Corporation  status,
became   subject  to  federal  and  state  income   taxes,   and   recognized  a
non-recurring,  non-cash charge to earnings of approximately  $791,000 to record
deferred  income taxes for the tax effect of  cumulative  temporary  differences
between financial and tax reporting.

         Effective January 1, 1998, the Company changed from a calendar year end
to a 52/53 week year ending on the Saturday  nearest to December 31. Due to this
change,  the first quarter of 1998 represents 13 weeks and 3 days,  covering the
period January 1, 1998 to April 4, 1998.  The remaining  quarters for the fiscal
year 1998 will each be 13 weeks.

         Quarter-to-quarter  comparisons  are  impacted  by  the  timing  of the
mailing  of  the   Company's   advertisements   within  and  between   quarters.
Approximately  40% of the revenue  related to a particular  mailing is generated
within 60 to 90 days  after  such  mailing.  The  Company  engages in an ongoing
mailing campaign. The volume of mailings may vary in different quarters and from
year-to-year   depending  on  the  Company's  assessment  of  prevailing  market
opportunities.  The  Company  expects  to begin  advertising  through  radio and
television in the second quarter of 1998. The costs of such  advertising will be
expensed as incurred and not  capitalized  like its  direct-mailing  advertising
costs.  As a result,  quarter-to-quarter  comparisons  will be  impacted  by the
timing of such radio and television advertisements.

         The sale and delivery of contact lenses is generally  governed by state
laws and regulations. The Company sells to customers in nearly all 50 states and
each sale is likely to be subject to the laws of the state where the customer is
located.  The  Company's  operating  practice  is to  attempt  to obtain a valid
prescription from each of its customers or his/her eye care practitioner. If the
Company is unable to obtain a copy of or verify the customer's prescription, the
Company's  practice  is to  ship  the  lenses  to  the  customer,  based  on the
information  that the customer has provided.  The Company retained legal counsel
to identify and summarize the applicable laws of each of the states in which the
Company  generates  material sales.  The Company  compared its operations to the
applicable  requirements of the laws contained in such summaries.  Based on such
comparison,  the Company estimates that approximately one-third of its net sales
appeared  to  conform  to  the   requirements  of  applicable   state  laws  and
regulations.


                                       10
<PAGE>


Results of Operations

13 Weeks Ended April 4, 1998 Compared to Three Months Ended March 31, 1997

         The  following  table  presents  the  Company's  results of  operations
expressed as a percentage of net sales:

<TABLE>
<CAPTION>
                                                               13 Weeks          Three Months
                                                                 Ended               Ended
                                                               April 4,            March 31,
                                                                 1998                1997
                                                           -----------------   -----------------
<S>                                                                  <C>                 <C>   
Net sales                                                            100.0%              100.0%
Cost of sales                                                          63.6                65.3
                                                           -----------------   -----------------
Gross profit                                                           36.4                34.7
Selling, general and administrative expenses                           30.1                27.3
                                                           -----------------   -----------------
Income from operations                                                  6.3                 7.4
Other (expense) income, net                                             0.8               (0.1)
                                                           -----------------   -----------------
Income before provision for income taxes                                7.1                 7.3
Pro forma provision for income taxes                                  (2.6)               (2.8)
                                                           -----------------   -----------------
Pro forma net income                                                   4.5%                4.5%
                                                           =================   =================
</TABLE>

         Net sales. Net sales for the quarter ended April 4, 1998 increased $7.6
million,  or 266%,  to $10.4  million  from $2.8  million for the quarter  ended
December 31, 1997.  This  increase was  primarily  attributable  to higher sales
volumes resulting from the acquisition of new customers through additional sales
and marketing efforts and from reorders from a growing customer base.

         Gross profit.  Gross profit as a percentage of sales increased to 36.4%
for the quarter  ended April 4, 1998 from 34.7% for the quarter  ended March 31,
1997. This increase is largely due to a decrease in inventory procurement cost.

         Selling,  general and  administrative  expenses.  Selling,  general and
administrative  expenses  for the  quarter  ended April 4, 1998  increased  $2.4
million,  or 304%,  from the quarter ended December 31, 1997. As a percentage of
net sales,  selling,  general and administrative  expenses increased to 30.1% in
the first  quarter  of 1998 from  27.3% in the 1997  period.  The  increases  in
expense and as a  percentage  of net sales are due to the  increase in sales and
marketing activity and the related increase in expenditures necessary to support
the increased sales. Advertising as a percentage of sales was 19.2% in the first
quarter of 1998 as compared to 12.8% for the first quarter of 1997.

         Other (expense) income, net. For the quarter ended April 4, 1998, other
(expense)  income increased to $80,236 from $(4,103) for the quarter ended March
31, 1997.  This  increase is due to interest  income from funds  received in the
initial  public  offering  of common  stock in excess  of the  interest  expense
incurred prior to the initial public offering.

         Income  taxes.  The pro  forma  provision  for  income  taxes  has been
determined  assuming the Company had been taxed as a C  Corporation  for federal
and state income tax purposes. The Company anticipates that its future effective
income tax rate will be approximately 38%.


Liquidity and Capital Resources

         The Company has historically funded its growth through a combination of
funds  generated  from  operations  and  borrowings.  During  February 1998, the


                                       11


<PAGE>

Company  completed its initial  public  offering of common stock.  In connection
therewith,  the Company issued 2,213,750 shares of common stock,  which included
288,750 shares pursuant to the underwriters' over-allotment option. The proceeds
received from the offering, net of underwriting  commissions and offering costs,
totaled  approximately  $24.8 million.  The Company uses funds to enhance growth
through increased  advertising  expenditures and to increase inventory levels in
anticipation of future sales.

         For the  quarters  ended  April 4, 1998 and March  31,  1997,  net cash
provided by (used in) operations was  approximately  $(1,903,000)  and $451,000,
respectively.  In 1998,  cash was used  primarily to fund increases in inventory
and advertising  assets (prepaid  advertising and deferred  advertising).  These
increases  were  partially  offset by  increases  in accounts  payable,  accrued
liabilities and net income before  provision for deferred income taxes. In 1997,
cash used to fund the  increase  in  advertising  assets was more than offset by
cash provided through increases in accounts payable, accrued liabilities and net
income, and a decrease in inventory.

         The Company used  approximately  $446,000  and  $227,000 for  investing
activities   for  the  quarters   ended  April  4,  1998  and  March  31,  1997,
respectively. The amounts related to capital expenditures and increases in notes
receivable from shareholders.  The Company received payment in full on the notes
receivable  during the period ended April 4, 1998, as the notes were netted with
the S Corporation  distribution  paid during the period.  The amount  related to
capital  expenditures for the 1998 and 1997 periods were approximately  $418,000
(including approximately $287,000 in deposits) and $162,000,  respectively.  The
Company anticipates  additional capital  expenditures for infrastructure such as
expanded  and  improved   operating   facilities,   and  expanded  and  upgraded
telecommunications and management information systems.

         For the 1998  period,  the  Company  had  approximately  $19.6  million
provided by financing activities,  resulting from net proceeds received from its
initial  public  offering,  offset  by  repayments  of  debt,  distributions  to
stockholders  and  repurchase  of stock.  For the 1997 period,  the Company used
approximately  $57,000 in  financing  activities,  including  debt  payments and
repayment of a bank overdraft, offset by borrowings from stockholders.

         In August 1997, the Company  established a revolving credit facility to
provide for working  capital  requirements  and other  corporate  purposes  (the
"Credit Facility").  The Company amended the Credit Facility in January 1998. As
a result,  the Credit  Facility  provided for borrowings  equal to the lesser of
$3.0  million  or 50% of  eligible  inventory,  declining  to the lesser of $1.5
million or 50% of eligible  inventory  upon  completion of a successful  initial
public  offering of $10 million or more.  The  scheduled  maturity of the Credit
Facility is July 31, 1998. The Credit Facility bears interest at a floating rate
equal to the lender's prime  interest rate plus 1.5% (10% at April 4, 1998).  As
of April 4, 1998,  the Company had no  outstanding  borrowings  under the Credit
Facility.  The Credit Facility is secured by substantially  all of the Company's
assets and contains financial covenants customary for this type of financing.

         The Company is moving into its new call center  during June and July of
1998 and expects to incur some additional  labor and other costs associated with
the move.  In  addition,  to ease the  transition  to the new call  center,  the
Company will maintain and pay for both facilities for about two months.

         The Company believes that its cash on hand after the IPO, together with
cash generated from operations, will be sufficient to support current operations
and future  growth  through  fiscal  1998.  The  Company may be required to seek
additional  sources of funds for  accelerated  growth or continued  growth after
that point,  and there can be no assurance  that such funds will be available on
satisfactory terms.  Failure to obtain such financing could delay or prevent the
Company's planned growth,  which could adversely affect the Company's  business,
financial condition and results of operations.

         As a result of state regulatory requirements,  the Company's liquidity,
capital  resources and results of operations  may be negatively  impacted in the
future if the  Company  incurs  increased  costs or fines,  is  prohibited  from
selling  its  products  in a  particular  state(s)  or  experiences  losses of a
substantial portion of the Company's customers for whom the Company is unable to
obtain or verify a prescription  due to the enforcement of requirements by state
regulatory agencies.


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<PAGE>

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

          Subsequent  to April 4, 1998, a claim  against the Company by a former
applicant was settled.  The settlement  amount was recorded in the quarter ended
April 4, 1998.

         From time to time the Company is involved  in legal  matters  generally
incidental to its business.  It is the opinion of management,  after  discussion
with legal  counsel,  that the ultimate  dispositions  of these matters will not
have a  material  impact on the  financial  condition,  liquidity  or results of
operations of the Company.


Item 2.  Changes in Securities and Use of Proceeds

         (b)  Use of Proceeds from Registered Securities.

         A  Registration  Statement  on  Form  S-1  (File  No.  333-41055)  (the
"Registration  Statement") registering shares of the Company's Common Stock, par
value $0.01 per share,  filed in connection with the Company's IPO, was declared
effective by the Securities and Exchange Commission on February 9, 1998. The IPO
commenced  on the  effective  date  and  terminated  after  all  the  securities
registered under such Registration Statement were sold.

         Pursuant to the  Registration  Statement,  the Company  sold  2,213,750
shares  of  Common  Stock  (including   288,750  shares  sold  pursuant  to  the
underwriter's  over-allotment  option)  for its own  account,  for an  aggregate
offering price of  $27,671,875,  and 316,250  shares of Common Stock  (including
41,250 shares sold pursuant to the underwriter's  over-allotment option) for the
account  of  the  selling   stockholder  for  an  aggregate  offering  price  of
$3,953,125.  The  managing  underwriters  of the IPO  were  McDonald  &  Company
Securities, Inc. and Morgan Keegen & Company, Inc.

         In  connection  with  the  IPO,  the  Company   incurred   expenses  of
$2,875,962,  including  underwriting discounts and commissions of $1,937,031 and
other expenses of $938,931. After such expenses, the Company's net proceeds from
the IPO were approximately  $24.8 million.  Since completion of the IPO, through
April 4, 1998,  the  approximate  amounts of net offering  proceeds  used by the
Company were as follows:  (i) $1.0 million for the payment of the S  Corporation
distribution, net of notes receivable from stockholders,  (which was paid to the
shareholders who were shareholders of the Company prior to the IPO, some of whom
are directors and officers of the Company);  (ii) $3.0 million for the repayment
of debt (a portion of which was repaid to a director of the Company); (iii) $1.9
million to exercise an option to purchase  442,651 shares of Common Stock from a
director  of the  Company  and (iv) $1.6  million  for  operations  and  capital
expenditures.

Item 3.  Defaults upon Senior Securities

         None.

Item 4.  Submission of Matters to a Vote of Security Holders

         Pursuant to Section 228 of the General  Corporation Law of the State of
Delaware,  on February 9, 1998,  the  stockholders  of the  Company,  by written
consent without a meeting, adopted resolutions:

         1.  Approving the Agreement and Plan of Merger  whereby the Company was
             merged with and into its present corporation, 1-800 CONTACTS, INC.,
             a  Utah  corporation,   and  in  connection  with  the  merger  the
             adjustment  of the number of shares of common  stock of the Company
             to be outstanding after the IPO.


                                       13

<PAGE>

         2.  Approving the Amended and Restated Certificate of Incorporation and
             the Amended and Restated By-Laws of the Company.

         3.  Approving the  appointment  of Arthur  Andersen LLP to serve as the
             Company's  outside  independent  public  accounting  firm  for  the
             Company's 1998 fiscal year.

         4.  Approving a form of  Indemnification  Agreement  for  directors and
             officers of the Company.

         5.  Approving  the  adoption  of  the  1-800 CONTACTS, INC. 1998  Stock
             Option Incentive Plan.

         6.  Electing as directors  the following  persons:  (i) Scott S. Tanner
             and  John  F.  Nichols  to  serve  until  the  annual   meeting  of
             stockholders  in 1999,  (ii) E. Dean Butler and Stephen A. Yacktman
             to serve until the annual meeting of stockholders in 2000 and (iii)
             Jonathan  C. Coon and Donald A.  Yacktman to serve until the annual
             meeting of stockholders in 2001.

         Votes cast for the above matters: 11,250    against: 0   abstaining:  0

Item 5.  Other Information

         From time to time the  Company  receives  notices,  inquiries  or other
correspondence  from states or its regulatory bodies charged with overseeing the
sale of contact  lenses.  The Company's  practice is to review such notices with
legal counsel to determine the appropriate  response on a case-by-case basis. It
is the opinion of management,  after  discussion  with legal  counsel,  that the
Company is taking the appropriate steps to address the various notices received.
To date, no formal complaints have been filed against the Company concerning its
business practices.

Item 6.  Exhibits and Reports on Form 8-K

             (A)  Exhibit Index


                  Exhibit No.       Description of Exhibit
                  -----------       ----------------------

                  3.1(i)            Restated Certificate of Incorporation of the
                                    Company.

                  3.1(ii)           Restated By-Laws of the Company.
                                    
                  27.1              Financial Data Schedule.

             (B)  No reports on Form 8-K were filed by the Registrant during the
                  13 weeks ended April 4, 1998.




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<PAGE>


                                   SIGNATURES

             Pursuant to the  requirements  of the  Securities  Exchange  Act of
1934,  the  Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.


                                    1-800 CONTACTS, INC.


Dated: May   , 1998                 By:      
           --                                -----------------------------------
                                    Name:    Jonathan C. Coon
                                    Title:   President & Chief Executive Officer


                                    By:      
                                             -----------------------------------
                                    Name:    Scott S. Tanner
                                    Title:   Chief Financial Officer

















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