Second consecutive quarter of market share gains; Reports positive cash flow
CINCINNATI, April 28 /PRNewswire-FirstCall/ -- LCA-Vision Inc. (Nasdaq: LCAV), a leading provider of laser vision correction services under the LasikPlus(R) brand, today announced financial and operating results for the three months ended March 31, 2009.
First Quarter 2009 Results (all comparisons are versus the first quarter of 2008)
First Quarter 2009 Operational and Financial Highlights
LCA-Vision is providing both adjusted revenue and operating income as a means of measuring performance that adjusts for the non-cash impact of accounting for separately priced extended warranties. A reconciliation of revenue and operating income (loss) 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 is more reflective of operating performance and, therefore, more meaningful to investors.
"Although our business and our industry continue to be affected adversely by the recession, we are pleased to report a second consecutive quarter of market-share gains," said Steven C. Straus, Chief Executive Officer of LCA-Vision. "We attribute our ability to gain share to our business and marketing initiatives, and the support and dedication of our Medical Advisory Board, Optometric Advisory Board, surgeons and optometrists, and the full staff at LCA-Vision and LasikPlus(R) vision centers.
"We are making measurable progress on our new, methodical approach to marketing that is designed to produce results, while conforming with our cash-conscious and cash-conservative strategy," Straus added. "We are now delivering integrated marketing messages within all markets served by LasikPlus(R) vision centers, following testing of this program in selected LasikPlus(R) markets in the fourth quarter. We also have completed comprehensive market research that included a marketing segmentation analysis to identify a target audience who represent our highest opportunity to purchase surgical services during the next year and focus group interviews with members of this audience to gain insights into their decision-making process. Based on this research, we have developed and are in the process of refining marketing messages to maximize their impact in the marketplace."
LCA-Vision's Chief Financial Officer Michael Celebrezze commented, "We benefited from cost reduction and cash conservation measures that we began implementing early last year to better align our expenses with procedure volume. Both our direct costs per vision center and general and administrative costs were reduced compared to the same quarter last year. Our financial results for this year's first quarter were impacted negatively by $0.9 million in costs associated with the previously announced closure of two underperforming vision centers and $0.8 million related to our successful consent revocation.
"Following our announced decision in March, we have reduced the number of excimer laser platforms from three to two in 22 LasikPlus(R) vision centers so far and expect to complete this program in all of our 75 vision centers in the third quarter," he said. "When fully implemented, this program will reduce our annual operating expenses in excess of $3 million, while allowing us to achieve industry-leading clinical outcomes and to retain our competitive advantage of offering prospective patients a choice of state-of-the-art Abbott Medical Optics VISX Star S4 IR and Alcon Laboratories ALLEGRETTO WAVE(R) Eye-Q 400Hz laser platforms. In conjunction with this program, we entered into new agreements with these manufacturers that will permit us to retire $2.1 million of capital lease obligations and add cash to our balance sheet over the next few quarters.
"We also expect to improve collections and to continue moving toward an increasing part-time workforce to complement our core group of full-time employees so as to continue to reduce compensation expenses throughout 2009."
"Lifetime Vision" Model
"Among our priorities this year is to institute a 'Lifetime Vision' model, which is intended to allow us to more fully utilize the highly trained and skilled ophthalmic surgeons and optometrists within the company," stated Straus. "The 'Lifetime Vision' model is based on the concept that an individual should be a patient of LCA-Vision for life and thereby become a repeat source of revenue. We are pursuing an Advanced Ocular Exam procedure, which constitutes a comprehensive eye exam using new diagnostic tools to screen for various eye diseases and irregularities, as well as determining a patient's candidacy for laser vision correction and other refractive surgical procedures. This program fits our business strategy as it provides a source of incremental revenue from our existing centers and staff, it supports our laser vision correction business by becoming a potential source of referrals and it requires a minimal capital expenditure. We expect to begin testing the Advanced Ocular Exam procedure later this year. We also are evaluating additional opportunities including premium intraocular lens surgery."
Near-Term Financial Outlook
LCA-Vision affirmed its intent to continue to manage cash and investments conservatively in 2009.
Comparing 2009 (the first full year of benefit from cost reductions) with 2007 (prior to cost reductions), the company expects vision center breakeven eyes per month to decline to 105 in 2009 from 125 in 2007, and expects the number of procedures per year required for its cash flow to be breakeven to decline to approximately 110,000 from 170,000.
Management has repositioned the company to be cash-flow positive at 2008 procedure volume levels. Management believes that its current cash and investment resources provide it with significant staying power should the current recession be prolonged. For example, the company believes that current cash and investment resources are sufficient to fund operations for more than three years even if annual procedure volumes decline 22% from 2008 levels to 90,000 procedures annually.
Conference Call and Webcast
As previously announced, a conference call and webcast will be held today, Tuesday, April 28, 2009, beginning at 10:00 a.m. Eastern time. To access the conference call, dial 866-322-1352 (United States and Canada) or 706-634-1308 (international callers). The webcast will be available at 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 (United States and Canada) or 706-645-9291 (international callers) and enter the conference ID number: 926 47 070.
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 us as of the date hereof. Actual results could differ materially from those stated or implied in our forward-looking statements due to risks and uncertainties associated with our business, including, without limitation, those concerning economic, political and sociological conditions; the successful execution of marketing strategies to cost-effectively drive patients to our vision centers; an inability to attract new patients; our ability to profitably operate vision centers and retain qualified personnel during periods of lower procedure volumes; the relatively high fixed cost structure of our business; the acceptance rate of new technology, and our ability to successfully implement new technology on a national basis; market acceptance of our services; competition in the laser vision correction industry; the possibility of long-term side effects and adverse publicity regarding laser vision correction; operational and management instability; legal or regulatory action against us or others in the laser vision correction industry; the continued availability of non-recourse third-party financing for our patients on terms similar to what we have paid historically; and the future value of revenues financed by us and our ability to collect on such financings, which will depend on a number of factors including the worsening consumer credit environment and our ability to manage credit risk related to consumer debt, bankruptcies and other credit trends. In addition, an ongoing FDA study about post-Lasik quality-of-life matters could impact negatively the acceptance of LASIK. For a further discussion of the factors that may cause actual results to differ materially from current expectations, please review our filings with the Securities and Exchange Commission, including but not limited to our reports on Forms 10-K, 10-Q and 8-K. Except to the extent required under the federal securities laws and the rules and regulations promulgated by the Securities and Exchange Commission, we assume 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(R)
LCA-Vision Inc., a leading provider of laser vision correction services under the LasikPlus(R) brand, operates 75 LasikPlus(R) fixed-site laser vision correction centers in 32 states and 57 markets in the United States and a joint venture in Canada. Additional company information is available at www.lca-vision.com and www.lasikplus.com.
Earning Trust Every Moment.
Transforming Lives Every Day.
For Additional Information Company Contact: Investor Relations Contact: Barb Kise Jody Cain LCA-Vision Inc. Lippert/Heilshorn & Associates 513-792-9292 310-691-7100
LCA-Vision Inc. Condensed Consolidated Statements of Operations (Unaudited) (Amounts in thousands except per share data) Three months ended March 31, ------------------ 2009 2008 ---- ---- Revenues - Laser refractive surgery $47,921 $79,568 Operating costs and expenses Medical professional and license fees 10,776 14,761 Direct costs of services 17,816 24,451 General and administrative expenses 4,418 5,191 Marketing and advertising 13,026 19,984 Depreciation 4,358 4,254 Consent revocation expenses 804 - Restructuring expense 902 456 --- --- Operating (loss) income (4,179) 10,471 Equity in earnings from unconsolidated businesses 27 56 Net investment (loss) income (177) 736 Other income, net 2 18 - -- (Loss) income before taxes on income (4,327) 11,281 Income tax (benefit) expense (1,483) 4,405 ------ ----- Net (loss) income $(2,844) $6,876 ======= ====== (Loss) income per common share Basic $(0.15) $0.37 Diluted $(0.15) $0.37 Dividends declared per share $- $0.18 Weighted average shares outstanding Basic 18,561 18,495 Diluted 18,561 18,587 LCA-Vision Inc. Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands) Assets March 31, 2009 December 31, 2008 -------------- ----------------- Current assets Cash and cash equivalents $29,214 $23,648 Short-term investments 32,087 32,687 Patient receivables, net of allowance for doubtful accounts of $1,186 and $1,465 8,625 9,678 Other accounts receivable 3,842 2,515 Prepaid professional fees 776 911 Prepaid income taxes 7,558 8,957 Deferred tax assets 4,385 4,708 Prepaid expenses and other 5,371 5,299 ----- ----- Total current assets 91,858 88,403 Property and equipment 120,282 121,734 Accumulated depreciation and amortization (73,039) (70,235) ------- ------- Property and equipment, net 47,243 51,499 Long-term investments 3,155 3,126 Accounts receivable, net of allowance for doubtful accounts of $1,394 and $1,662 2,237 2,645 Deferred compensation plan assets 2,071 2,196 Investment in unconsolidated businesses 396 377 Deferred tax assets 7,407 7,027 Other assets 1,942 2,209 ----- ----- Total assets $156,309 $157,482 ======== ======== Liabilities and Stockholders' Investment Current liabilities Accounts payable $9,278 $8,169 Accrued liabilities and other 11,839 8,608 Deferred revenue 7,761 9,107 Debt obligations maturing in one year 6,171 6,985 ----- ----- Total current liabilities 35,049 32,869 Long-term rent obligations 2,557 1,820 Long-term debt obligations (less current portion) 13,081 14,120 Deferred compensation liability 2,071 2,196 Insurance reserve 9,656 9,489 Deferred revenue 12,290 14,003 Other liabilities 2,000 - Stockholders' investment Common stock ($0.001 par value; 25,207,465 and 25,199,734 shares and 18,581,953 and 18,552,985 shares issued and outstanding, respectively) 25 25 Contributed capital 173,668 174,206 Common stock in treasury, at cost (6,625,512 shares and 6,646,749 shares) (114,668) (114,632) Retained earnings 20,671 23,515 Accumulated other comprehensive loss (91) (129) --- ---- Total stockholders' investment 79,605 82,985 ------ ------ Total liabilities and stockholders' investment $156,309 $157,482 ======== ======== LCA-Vision Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (Dollars in thousands) Three months ended March 31, ---------------- 2009 2008 ---- ---- Cash flow from operating activities: Net (loss) income $(2,844) $6,876 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 4,358 4,254 Provision for loss on doubtful accounts 1,175 2,080 Loss on investments 365 - Restructuring expense 872 - Deferred income taxes (136) 980 Stock based compensation (8) (101) Insurance reserve 167 1,305 Equity in earnings of unconsolidated affiliates (27) (56) Changes in operating assets and liabilities: Patient accounts receivable 286 (3,796) Other accounts receivable (1,327) (1,039) Prepaid income taxes 1,399 6,218 Prepaid expenses and other (72) (2,944) Accounts payable 1,109 (2,003) Deferred revenue, net of professional fees (2,753) (5,038) Income taxes payable 11 2,827 Accrued liabilities and other 4,756 (674) ----- ---- Net cash provided by operations 7,331 8,889 Cash flow from investing activities: Purchases of property and equipment (157) (9,330) Purchases of investment securities (81,478) (54,942) Proceeds from sale of investment securities 81,841 67,287 Other, net (82) 480 --- --- Net cash provided by investing activities 124 3,495 Cash flow from financing activities: Principal payments of capital lease obligations and loan (1,853) (570) Shares repurchased for treasury stock (36) (205) Exercise of stock options - 148 Dividends paid to stockholders - (3,335) --- ------ Net cash used in financing activities (1,889) (3,962) ------ ------ Increase in cash and cash equivalents 5,566 8,422 Cash and cash equivalents at beginning of period 23,648 17,614 ------ ------ Cash and cash equivalents at end of period $29,214 $26,036 ======= =======
LCA-VISION INC. EFFECT OF THE CHANGE IN OUR ACCOUNTING FOR DEFERRED REVENUES ON FINANCIAL RESULTS (dollars in thousands) 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. 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, 2009 2008 Revenue Reported $47,921 $79,568 Adjustments Amortization of prior deferred revenue (3,059) (5,599) ------ ------ Adjusted revenue $44,862 $73,969 ======= ======= Operating (Loss) Income Reported $(4,179) $10,471 Adjustments Impact of warranty revenue deferral (3,059) (5,599) Amortization of prior professional fees 306 560 --- --- Adjusted operating (loss) income $(6,932) $5,432 ======= ======
|SOURCE LCA-Vision Inc.|
Copyright©2009 PR Newswire.
All rights reserved