CINCINNATI, April 26, 2011 /PRNewswire/ -- LCA-Vision Inc.
(NASDAQ: LCAV), a leading provider of laser vision correction
services under the LasikPlus® brand, today
announced financial and operational results for the three months
ended March 31, 2011.
First Quarter 2011 Operational and Financial Highlights
(all comparisons are with the first quarter of 2010 unless
otherwise noted)
- Revenues were $32.3 million
compared with $34.0 million; adjusted
revenues were $31.0 million compared
with $32.3 million.
- Laser vision correction procedures were 18,857, compared with
19,066 procedures (62 vision centers) and 17,408 same-store
procedures (54 vision centers), an increase of 8.3% in same-store
procedures and the second consecutive quarter of year-over-year
same-store procedure growth.
- Same-store revenues increased 3.1%; adjusted same-store
revenues increased 4.8%.
- Operating income was $2.0 million
compared with an operating loss of $0.7
million; adjusted operating income was $0.8 million compared with an adjusted operating
loss of $2.2 million. The
improvement in operating income and adjusted operating income
reflects the impact of closing under-performing vision centers,
lowering marketing expenses and reducing general and administrative
expenses. Included in the 2011 quarter were restructuring
charges of $0.1 million related to
the closure of vision centers in 2010 and $0.2 million in gains on sales of assets.
This compares with restructuring charges of $0.3 million and $1.3
million in gains on sales of assets in the 2010
quarter.
- Net income was $2.0 million, or
$0.11 per share, compared with net
loss of $0.6 million, or $0.03 per share.
- Net cash provided by operations was $4.8
million, compared with $3.1
million.
- Cash and investments increased by $3.7
million to $55.9 million at March 31,
2011, compared with $52.2
million at December 31,
2010.
Adjusted revenues and operating income (losses) are provided as
a means of measuring performance that adjusts for the non-cash
impact of accounting for separately priced extended warranties.
A reconciliation of revenues and operating income (losses) as
reported in accordance with U.S. Generally Accepted Accounting
Principles (GAAP) is provided at the end of this news release.
Management believes the adjusted information better reflects
operating performance and, therefore, is more meaningful to
investors.
"We are reporting our first profitable quarter in three years,
an increase in our cash position and our second consecutive quarter
of same-store growth in procedure volume," said LCA-Vision Chief
Financial Officer Michael J.
Celebrezze. "We attribute our improved financial and
operational performance to a convergence of events, including
seasonally high procedure volume, the positive impact of our
marketing and operational actions, and an increase in the Consumer
Confidence Present Situation Index, which historically has
correlated with trends in our procedure volume. As our level
of cash flow and profit are dependent largely on procedure volume
and the first quarter is historically our strongest, we anticipate
reporting operating losses in the coming quarters. However,
compared with 2010, we expect improved financial and operational
performance in 2011, including a reduction in overall operating
loss.
"We are benefitting from our many cost control measures that
have allowed us to manage expenses, as well as our patient
acquisition initiatives, which contributed to an increase in the
number of scheduled appointments in this year's first quarter
compared with 2010, even with fewer vision centers. Our
operational efficiency measures also are trending favorably, with
appointment show rate and treatment show rate both increasing
compared with the first and fourth quarters of 2010, and conversion
rate remaining in-line sequentially and year-over-year.
Importantly, our many initiatives that are supporting
business improvements as we move through the current economic
conditions also are aimed at building a strong infrastructure to
support growth and profitability as the economy improves."
LCA-Vision Chief Operating Officer David
L. Thomas said, "We are spending our marketing dollars more
effectively than in past quarters, as evidenced by our first
quarter average acquisition cost per eye of $344. This is down considerably from
$413 in the 2010 first quarter and
$442 in the 2010 fourth quarter.
Some of the decrease was due to media buying through an
innovative advertising barter program and the balance resulted from
a shift in spending from research and creative development to more
media purchases, as well as improvements in our messaging and media
selection. In 2010, we conducted research to gain further
insight into the market and develop a new marketing campaign aimed
at the demographic group representing the most likely candidates
for laser vision correction. This year we are able to put our
knowledge and new campaign to work. We are focusing on higher
local advertising frequency within each
LasikPlus® market, with messages highlighting our
surgeons' experience and the leading technology available in all
LasikPlus® vision centers.
"We also are making progress in diversifying into related
eye-health businesses," Thomas added. "We will be offering
sunglasses and reading glasses in three additional
LasikPlus® vision centers in the next several
months as we continue to evaluate this program. In the next
several months, we plan to begin testing a management services
offering designed to generate revenue by attracting patients to
LasikPlus® and offering provisional services to
optometrists. Additionally, we plan to begin testing a
cataract and intraocular lens surgery offering in one or two
markets in the third quarter. Our business
diversification measures are not expected to generate significant
revenues in 2011; however, our objective is to support future
growth and profitability, and mitigate our exposure to future
economic downturns."
Near-term Financial Outlook
LCA-Vision intends to manage expenses conservatively in 2011.
The company's plans and outlook for the year include:
- The company does not plan to open any new vision centers in the
near term. LCA-Vision will consider restarting its de
novo center opening program when market conditions
improve.
- The company expects marketing and advertising spend for the
2011 second quarter to range from $5.5
million to $6.5 million.
- The company expects capital expenditures in 2011 of
$1.5 million for vision center
renovations, relocations and equipment replacement.
- The company does not expect to receive a tax refund in 2011.
The company affirmed its expectation that the number of
procedures companywide required for breakeven cash flow, after
capital expenditures and debt service, is approximately 70,000 per
year. The company continues to believe that it has sufficient
cash and investments to fund its business beyond 2013 at 52,500
procedures annually. The average number of procedures
required for each vision center to reach breakeven remains at 95
per month.
Conference Call and Webcast
As previously announced, a conference call and webcast will be
held today beginning at 10:00 a.m. Eastern
time. To access the conference call, dial 866-322-1352 (U.S.
and Canada) or 706-643-6246
(international callers). The webcast will also be available
in the investor relations section of LCA-Vision's website. A
replay of the call and webcast will begin approximately two hours
after the live call has ended. To access the replay, dial
800-642-1687 (U.S. and Canada) or
706-645-9291 (international callers) and enter the conference ID
number: 54936171.
Forward-Looking Statements
This news release contains forward-looking statements based on
current expectations, forecasts and assumptions of LCA-Vision that
are subject to risks and uncertainties. The forward-looking
statements in this release are based on information available to
the company as of the date hereof. Actual results could
differ materially from those stated or implied in the
forward-looking statements due to risks and uncertainties
associated with its business. In addition to the risk factors
discussed in the company's Form 10-K and other filings with the
Securities and Exchange Commission, there are a number of other
risks and uncertainties associated with its business, including,
without limitation, the successful execution of cost effective
marketing strategies to drive patients to its vision centers; the
impact of low consumer confidence and discretionary spending;
competition in the laser vision correction industry; the company's
ability to attract patients; the possibility of adverse outcomes or
long-term side effects of laser vision correction and negative
publicity regarding laser vision correction; the company's ability
to operate profitable vision centers and retain qualified personnel
during periods of lower procedure volumes; the continued
availability of non-recourse third-party financing for its patients
on terms similar to what it has paid historically; and the future
value of revenues financed by the company and its ability to
collect on such financings, which will in turn depend on a number
of factors, including the consumer credit environment and the
company's ability to manage credit risk related to consumer debt,
bankruptcies and other credit trends.
Further, the FDA's advisory board on ophthalmic devices
currently is reviewing concerns about post-LASIK quality of life
matters, and the FDA has begun a major new study on LASIK outcomes
and quality of life that is expected to end in 2012. The FDA
or another regulatory body could take legal or regulatory action
against the company or others in the laser vision correction
industry. The outcome of this review or legal or regulatory
action could potentially impact negatively the acceptance of LASIK.
In addition, the acceptance rate of new technologies and our
ability to implement successfully new technologies on a national
basis create additional risk. Except to the extent required
under the federal securities laws and the rules and regulations
promulgated by the Securities and Exchange Commission, the company
assumes no obligation to update the information included in this
news release, whether as a result of new information, future events
or circumstances, or otherwise.
About LCA-Vision
Inc./LasikPlus®
LCA-Vision Inc., a leading provider of laser vision correction
services under the LasikPlus® brand, operates 54
LasikPlus® fixed-site laser vision centers in 26
states and 41 markets in the United
States. Additional company information is available at
www.lca-vision.com and www.lasikplus.com.
Earning Trust Every Moment; Building Relationships for a
Lifetime.
For Additional
Information
|
|
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Company Contact:
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Investor Relations
Contact:
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|
Barb Kise
|
Jody Cain
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|
LCA-Vision Inc.
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Lippert/Heilshorn &
Associates
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|
513-792-9292
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310-691-7100
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LCA-Vision
Inc.
|
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
(Dollars in
thousands)
|
|
|
|
|
March 31,
2011
|
|
December 31,
2010
|
|
Assets
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash
equivalents
|
$
25,202
|
|
$
19,350
|
|
Short-term
investments
|
29,735
|
|
31,947
|
|
Patient receivables, net
of allowances of $1,316 and $1,392
|
2,320
|
|
2,256
|
|
Other accounts
receivable, net
|
2,160
|
|
1,867
|
|
Prepaid expenses and
other
|
3,874
|
|
5,641
|
|
|
|
|
|
|
Total current assets
|
63,291
|
|
61,061
|
|
|
|
|
|
|
Property and
equipment
|
72,898
|
|
72,286
|
|
Accumulated depreciation and
amortization
|
(58,761)
|
|
(57,322)
|
|
Property and equipment,
net
|
14,137
|
|
14,964
|
|
|
|
|
|
|
Long-term investments
|
962
|
|
951
|
|
Patient receivables, net of
allowances of $400 and $330
|
499
|
|
413
|
|
Other assets
|
2,725
|
|
3,092
|
|
|
|
|
|
|
Total assets
|
$
81,614
|
|
$
80,481
|
|
|
|
|
|
|
Liabilities and Stockholders'
Investment
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accounts
payable
|
$
8,645
|
|
$
8,110
|
|
Accrued liabilities and
other
|
13,559
|
|
12,266
|
|
Deferred
revenue
|
3,928
|
|
4,376
|
|
Debt obligations maturing
within one year
|
2,967
|
|
3,039
|
|
|
|
|
|
|
Total current
liabilities
|
29,099
|
|
27,791
|
|
|
|
|
|
|
Long-term rent obligations and
other
|
3,197
|
|
3,368
|
|
Long-term debt obligations, less
current portion
|
3,338
|
|
4,245
|
|
Insurance reserves
|
7,201
|
|
7,406
|
|
Deferred license fee
|
2,725
|
|
3,065
|
|
Deferred revenue
|
2,655
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|
3,476
|
|
|
|
|
|
|
Stockholders'
investment
|
|
|
|
|
Common stock ($.001 par
value; 25,291,637 shares issued and
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|
|
|
|
18,798,832
and 18,711,365 shares outstanding, respectively)
|
25
|
|
25
|
|
Contributed
capital
|
175,985
|
|
175,610
|
|
Common stock in treasury,
at cost (6,492,805 shares and 6,580,272 shares,
respectively)
|
(113,354)
|
|
(114,033)
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Retained
deficit
|
(30,058)
|
|
(31,134)
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|
Accumulated other
comprehensive income
|
801
|
|
662
|
|
Total stockholders'
investment
|
33,399
|
|
31,130
|
|
|
|
|
|
|
Total liabilities and
stockholders' investment
|
$
81,614
|
|
$
80,481
|
|
|
|
|
|
LCA-Vision
Inc.
|
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
|
(Amounts in
thousands except per share data)
|
|
|
|
|
|
|
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|
|
Three months
ended March 31,
|
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2011
|
|
2010
|
|
|
|
|
|
|
Revenues - Laser refractive
surgery
|
$ 32,282
|
|
$ 34,013
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|
|
|
|
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Operating costs and
expenses
|
|
|
|
|
Medical professional and
license fees
|
7,983
|
|
8,337
|
|
Direct costs of
services
|
11,020
|
|
13,114
|
|
General and administrative
expenses
|
3,456
|
|
3,789
|
|
Marketing and
advertising
|
6,496
|
|
7,867
|
|
Depreciation
|
1,454
|
|
2,542
|
|
Restructuring
charges
|
56
|
|
338
|
|
|
30,465
|
|
35,987
|
|
Gain on sale of
assets
|
163
|
|
1,293
|
|
|
|
|
|
|
Operating income
(loss)
|
1,980
|
|
(681)
|
|
|
|
|
|
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Net investment income and
other
|
80
|
|
176
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|
|
|
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Income (loss) before
taxes
|
2,060
|
|
(505)
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|
|
|
|
|
|
Income tax expense
|
41
|
|
59
|
|
|
|
|
|
|
Net income (loss)
|
$ 2,019
|
|
$ (564)
|
|
|
|
|
|
|
Earnings (loss) per common
share
|
|
|
|
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Basic
|
$ 0.11
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|
$ (0.03)
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Diluted
|
$ 0.11
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|
$ (0.03)
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|
|
|
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|
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Weighted average shares
outstanding
|
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|
|
|
Basic
|
18,743
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|
18,633
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|
Diluted
|
18,884
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|
18,633
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|
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|
LCA-Vision
Inc.
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
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|
(Dollars in
thousands)
|
|
|
|
|
|
Three months
ended March 31,
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|
|
2011
|
|
2010
|
|
|
|
|
|
|
Cash flows from operating
activities:
|
|
|
|
|
Net income (loss)
|
$ 2,019
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|
$ (564)
|
|
Adjustments to reconcile net
income to net cash provided by operating activities:
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|
|
|
|
Depreciation
|
1,454
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|
2,542
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|
Provision for loss on
doubtful accounts
|
155
|
|
828
|
|
Gain on sale of
investments
|
(10)
|
|
-
|
|
Gain on sale of property
and equipment
|
(163)
|
|
(1,293)
|
|
Non-cash restructuring
charge
|
20
|
|
-
|
|
Stock-based
compensation
|
375
|
|
176
|
|
Insurance
reserves
|
(205)
|
|
(551)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Patient accounts
receivable
|
(290)
|
|
44
|
|
Other accounts
receivable
|
(370)
|
|
210
|
|
Prepaid expenses
and other
|
1,406
|
|
1,709
|
|
Accounts
payable
|
535
|
|
1,558
|
|
Deferred revenue,
net of professional fees
|
(1,142)
|
|
(1,542)
|
|
Accrued
liabilities and other
|
1,031
|
|
31
|
|
|
|
|
|
|
Net cash provided by
operations
|
4,815
|
|
3,148
|
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
Purchases of property and
equipment
|
(634)
|
|
(20)
|
|
Proceeds from sale of
assets
|
570
|
|
1,124
|
|
Purchases of investment
securities
|
(40,061)
|
|
(81,771)
|
|
Proceeds from sale of
investment securities
|
42,267
|
|
73,752
|
|
Other, net
|
8
|
|
(65)
|
|
|
|
|
|
|
Net cash provided by (used in)
investing activities
|
2,150
|
|
(6,980)
|
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
Principal payments of
capital lease obligations and loan
|
(979)
|
|
(2,084)
|
|
Shares repurchased for
treasury stock
|
(288)
|
|
(192)
|
|
Proceeds from exercise of
stock options
|
23
|
|
14
|
|
|
|
|
|
|
Net cash used in financing
activities
|
(1,244)
|
|
(2,262)
|
|
|
|
|
|
|
Net effect of exchange rate
changes on cash and cash equivalents
|
131
|
|
(74)
|
|
|
|
|
|
|
Increase (decrease) in cash and
cash equivalents
|
5,852
|
|
(6,168)
|
|
|
|
|
|
|
Cash and cash equivalents at
beginning of period
|
19,350
|
|
24,529
|
|
|
|
|
|
|
Cash and cash equivalents at end
of period
|
$ 25,202
|
|
$ 18,361
|
|
|
|
|
|
LCA-Vision Inc.
Effect of the Change in Accounting for Deferred Revenues on
Financial Results
(Dollars in thousands)
(Unaudited)
To supplement its Condensed Consolidated Financial Statements
presented in accordance with accounting principles generally
accepted in the United States,
LCA-Vision discusses adjusted revenues and operating income (loss).
Management utilizes this information as a means of measuring
performance that adjusts for the non-cash impact of the accounting
for separately priced extended warranties and believes that
including this additional disclosure is meaningful to investors for
the same reason.
Accordingly, this news release contains non-GAAP financial
measures within the meaning of Regulation G promulgated by the
Securities and Exchange Commission. A reconciliation of the
difference between the non-GAAP measures with the most directly
comparable financial measures calculated in accordance with GAAP
follows:
|
|
|
|
|
|
|
|
|
|
Three Months
Ended March 31,
|
|
|
|
2011
|
|
2010
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Reported U.S.
GAAP
|
|
$ 32,282
|
|
$ 34,013
|
|
Adjustments:
|
|
|
|
|
|
Amortization of prior deferred revenue
|
|
(1,269)
|
|
(1,713)
|
|
Adjusted
revenues
|
|
$ 31,013
|
|
$ 32,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
Reported U.S.
GAAP
|
|
$ 1,980
|
|
$
(681)
|
|
Adjustments:
|
|
|
|
|
|
Amortization of prior deferred revenue
|
|
(1,269)
|
|
(1,713)
|
|
Amortization of prior professional fees
|
|
127
|
|
171
|
|
Adjusted operating
loss
|
|
$
838
|
|
$ (2,223)
|
|
|
|
|
|
|
SOURCE LCA-Vision Inc.