Navigation Links
LCA-Vision Announces Fourth Quarter and Full Year 2008 Financial Results

Sequential quarter decline in procedure volume rate shows signs of stabilization; December 2008 to January 2009 procedure volume up 48%

Provides near-term financial outlook

CINCINNATI, Feb. 10 /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 and 12 months ended December 31, 2008.

Fourth Quarter 2008 Results (all comparisons are versus the fourth quarter of 2007)

  • Revenue was $34.0 million compared with $69.7 million; adjusted revenue was $30.3 million compared with $62.9 million.
  • Procedure volume was 19,424 compared with 39,888.
  • Same-store revenue (69 vision centers) decreased 54.2%; adjusted same-store revenue decreased 55.3%.
  • Operating loss was $9.6 million compared with operating income of $5.9 million; adjusted operating loss was $13.0 million compared with adjusted operating loss of $0.3 million.
  • Operating loss and adjusted operating loss included $2.1 million in restructuring and impairment charges.
  • Net loss was $8.2 million or $0.44 per share, compared with net income of $4.1 million or $0.22 per diluted share.

Full Year 2008 Results (all comparisons are versus the full year 2007)

  • Revenue was $205.2 million compared with $292.6 million; adjusted revenue was $186.5 million compared with $284.6 million.
  • Procedure volume was 115,153 compared with 192,204.
  • Operating loss was $8.2 million compared with operating income of $45.6 million; adjusted operating loss was $25.1 million compared with adjusted operating income of $38.4 million.
  • Operating loss and adjusted operating loss included $3.5 million in restructuring and impairment charges.
  • Net loss was $6.6 million or $0.36 per share, compared with net income of $32.5 million or $1.64 per diluted share.

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 better reflects operating performance and, therefore, is more meaningful to investors.

"During the fourth quarter, we began to benefit from our numerous business initiatives implemented throughout 2008, even though the decline in the overall U.S. economy and weakening consumer confidence continued to impact discretionary spending and led to what we believe was additional deterioration in overall industry procedure volume," said Steven C. Straus, Chief Executive Officer of LCA-Vision. "Notably, the year-over-year procedure volume decline rate in the fourth quarter showed stabilization compared with the 2008 third quarter, and our procedure volume for January 2009 was up 48% compared with December 2008. Although January is typically our highest volume month, this significant increase compares favorably to our 14% procedure volume increase in January 2008 versus December 2007."

Straus added, "We are building on a strengthened infrastructure based on the many processes and procedures put in place since November 2006. We have professionalized the operations of LCA-Vision, taking us from a start-up enterprise to an industry leader. We have a leadership team with deep expertise in healthcare, expense and cash management, multi-site operational management, consumer marketing and human resources development. Importantly, we are implementing a strategic plan with the full support of our Board of Directors that addresses all aspects of LCA-Vision's business, and many of these initiatives started to provide benefits in 2008 and early 2009, both in terms of procedure volume and cash conservation."

The accomplishments implemented by current management of LCA-Vision to respond to the current operating environment and position the company for future success with the goal of profitable growth include the following, among others:

  • In the area of patient care, the company has upgraded the laser technology in all of its vision centers and empowered decision-making at the vision center level to be more responsive to patient needs in individual markets;
  • In the area of staff development, management has introduced various training, recruitment and succession planning programs for surgeons, optometrists and staff, which have resulted in improvements in exam show-rate, patient conversion and treatment show-rate;
  • In the area of operations, management has reorganized and strengthened the company's organizational structure, including the hiring of senior executives with responsibility for operations and call center management, the opening of state-of-the-art national call and data centers, and the evaluation in collaboration with its Medical and Optometric Advisory Boards of the company's excimer laser platforms to simplify surgical processes;
  • In the area of financial/accounting management, management created the first-ever detailed annual operating budget process, improved the timeliness of financial reporting, and negotiated a five-year, $19.2 million term loan with a fixed interest rate below 5% and other favorable terms; and
  • In the area of leadership, management has created the Optometric Advisory Board, comprised of a group of LasikPlus(R) optometrists, created strong partnerships between field staff and corporate support departments, and increased and improved communication across the entire company, which helps all members stay connected and improve morale.

"We have executed agreements with major managed health care and vision plans, a major source of patients in our LasikPlus(R) vision centers, and we have exclusive or preferred agreements with seven of the top eight vision plans in the United States," added Straus. "We recently initiated our affiliation with the well-respected National Vision Administrators, L.L.C. to provide its members with access to substantial discounts on laser vision correction through our National Lasik Network."

"Additionally, our fresh marketing approach is producing highly encouraging initial results," he said. "Following research and a segmentation study, we developed cost-effective, market-specific plans, which deliver a message that clearly differentiates LasikPlus(R) to targeted audiences, while building brand awareness through integrated marketing materials. Our test of this new concept in 13 markets over a three-week period late in 2008 resulted in a 34% increase in eye procedures performed compared to the prior four weeks. We expect to roll out the new campaigns nationally in March 2009."

LCA-Vision's Chief Financial Officer Michael Celebrezze commented, "The benefits of our cost-control and cash-conservation measures began to have impact on our 2008 financial results and we expect additional impact from these measures in 2009. We reduced marketing spend from $66.5 million in 2007 to $52.4 million in 2008, cut general and administrative overhead expense from $22.7 million in 2007 to $20.3 million in 2008, and reduced capital expenditures from $28.6 million in 2007 to $14.9 million in 2008. Expense-reduction initiatives, such as our 35% headcount reduction, which yielded labor cost reductions annualized at $14 million, generated substantial savings while preserving positive patient experiences and clinical outcomes. More aggressive cash management initiatives, such as improved management of vendor terms, generated $3 million in cash flow in 2008.

"Ongoing initiatives are expected to reduce further our costs in the coming year," he added. "These include negotiations to rationalize the number of excimer lasers in each vision center to reduce royalty fees and maintenance costs, steps to further improve collection results from internally financed patients including the use of credit scores to qualify patients for appropriate financing options, and continued migration toward an increasingly part-time workforce to complement a core group of full-time employees. Additionally, after carefully analyzing the performance of our vision centers in Little Rock and Tulsa, we have closed those facilities. These decisions, as well as the previously announced closure of Boise, were based on a number of factors that included an evaluation of the anticipated timing of improvement in procedure volume and the extent of the expected improvement as well as the costs associated with closing a center."

Celebrezze added, "The quarter was impacted negatively by restructuring and impairment charges that totaled $2.1 million. We closed three vision centers and recorded a $1.4 million charge for abandoned assets and future rent accruals. Severance charges related to workforce reductions totaled $0.1 million, and a thorough analysis of assets resulted in a $0.6 million impairment charge. For the year, restructuring and impairment charges, which included severance for previously announced headcount reductions, were $3.5 million."

"Lifetime Vision" Model

"During 2008, our executive management team completed the first strategic plan in LCA-Vision's history. A key feature of our business strategy for 2009 is to build upon the improvements implemented by instituting a 'Lifetime Vision' model, which is intended to allow us to leverage our currently installed fixed asset base and to utilize fully 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 rejects the old 'Catch & Release' model implemented by previous management that did not allow for repeat sources of revenue. The advancement and development of the 'Lifetime Vision' model, including intraocular lens surgery, will be a management focus in 2009."

Cash & Investments

Net cash provided by operating activities in 2008 was $7.6 million. Cash and investments totaled $59.5 million as of December 31, 2008, compared with cash and investments of $62.4 million as of December 31, 2007, and $67.1 million as of September 30, 2008. The change in cash and investments during the fourth quarter included cash used in operations of $2.3 million, capital expenditures of $1.3 million, payments on capital leases and loans of $2.1 million, fair value reductions on investments of $1.2 million and other uses of $0.7 million. In late April, the company borrowed $19.2 million to finance the majority of its IntraLase(R) lasers. The loan requires monthly payments over a five-year period at a fixed interest rate of 4.96%. As of December 31, 2008, the remaining outstanding balance of this loan was $16.9 million.

The par value of auction rate securities held by the company as of December 31, 2008 was $5.6 million, compared with $18.3 million as of December 31, 2007. All 2008 redemptions of auction rate securities were at par value. Based on a valuation of the remaining auction rate securities, LCA-Vision has recorded a $0.8 million loss on these investments within the consolidated statement of operations during the fourth quarter of 2008. An additional $1.1 million loss was recorded in the third quarter of 2008. The company also recorded a $1.2 million loss on its $3.0 million in original cost value equity investments in the fourth quarter. Overall, non-operating income includes $3.1 million of fair value adjustments for investments in the full year 2008 results.

LCA-Vision did not repurchase any shares of its common stock during 2008. Approximately $40 million remains available for repurchase under the company's stock repurchase program approved by the Board of Directors.

Near-Term Financial Outlook

LCA-Vision will continue to manage cash and investments conservatively in 2009.

  • No new vision centers are currently planned for the year. LCA-Vision plans to restart its successful de novo center opening program following improvements in the economy;
  • The company will continue to manage general and administrative expenses aggressively, which are expected to remain relatively unchanged in 2009 compared with 2008;
  • Center direct costs per center are expected to decline in 2009;
  • We will monitor the efficiency of marketing spending and modify our spending based on effectiveness, taking it up if demand improves and reducing it if demand declines, and
  • Capital expenditures are expected to be approximately $2.0 million in 2009, down significantly from $14.9 million in 2008.

Comparing 2009 (the first full year to benefit from cost reductions) with 2007 (prior to cost reductions), vision center breakeven eyes per month are expected to decline to 105 from 125, and the number of procedures per year required for company cash flow to be breakeven is expected to decline to approximately 110,000 from 170,000.

The company has been repositioned to be cash-flow positive at 2008 procedure volume levels. Current cash and investment resources provide the company significant staying power should the current recession be prolonged. Current cash and investment resources are sufficient to fund operations for more than three years even if procedure volumes decline as much as 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, February 10, 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: 827 39 174.

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 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 operate vision centers profitably 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 implement successfully 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 and

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.
                      (Dollars in thousands except per share data)

                                       Three Months Ended Twelve Months Ended
                                          December 31,         December 31,
                                        2008      2007       2008      2007

    Revenue -- Laser refractive
     surgery                          $34,029   $69,702   $205,176  $292,635

    Operating costs and expenses
      Medical professional and
       license fees                     7,575    11,574     41,797    49,312
      Direct costs of services         15,504    25,024     77,474    97,423
      General and administrative
       expenses                         5,125     7,432     20,262    22,657
      Marketing and advertising         8,685    16,369     52,429    66,469
      Depreciation                      4,597     3,451     17,972    11,209
      Restructuring expense             1,584         -      2,923         -
       Impairment of fixed assets         553         -        553         -

    Operating (loss) income            (9,594)    5,852     (8,234)   45,565

    Equity in earnings from
     unconsolidated businesses             24       217        477       814
    Net investment (loss) income       (2,366)    1,075     (1,524)    5,953
    Other income (loss), net                5      (598)        23      (607)

    (Loss) income before taxes        (11,931)    6,546     (9,258)   51,725

    Income tax (benefit) expense       (3,711)    2,400     (2,623)   19,221

    Net (loss) income                 $(8,220)   $4,146    $(6,635)  $32,504

    Net (loss) income per common
      Basic                            $(0.44)    $0.22     $(0.36)    $1.66
      Diluted                          $(0.44)    $0.22     $(0.36)    $1.64

    Dividends declared per share           $-     $0.18      $0.24     $0.72

    Weighted average shares
      Basic                            18,548    18,790     18,526    19,572
      Diluted                          18,548    18,862     18,526    19,858

                                    LCA-VISION INC.
                               CONSOLIDATED BALANCE SHEETS

                                                             At December 31,
                                                             2008      2007
                            (Dollars in thousands, except per share amounts)
    Current assets
      Cash and cash equivalents                             $23,648   $17,614
      Short-term investments                                 32,687    42,534
      Patient receivables, net of allowance for doubtful
       accounts of $1,465 and $2,987                          9,678    12,712
      Other accounts receivable                               2,515     5,941
      Prepaid professional fees                                 911     1,872
      Prepaid income taxes                                    8,957     6,391
      Deferred tax assets                                     4,708     3,450
      Prepaid expenses and other                              5,299     5,076

    Total current assets                                     88,403    95,590

    Property and equipment                                  121,734   106,788
    Accumulated depreciation and amortization               (70,235)  (52,872)
    Property and equipment, net                              51,499    53,916

    Long-term investments                                     3,126     2,250
    Accounts receivables, net of allowance for                2,645     4,556
     doubtful accounts of $1,662 and $2,130
    Deferred compensation plan assets                         2,196     5,540
    Investment in unconsolidated businesses                     377       590
    Deferred tax assets                                       7,027    13,561
    Other assets                                              2,209     3,644

    Total assets                                           $157,482  $179,647

    Liabilities and Stockholders' Investment
    Current liabilities
      Accounts payable                                       $8,169   $10,396
      Accrued liabilities and other                           8,608    13,861
      Deferred revenue                                        9,107    18,719
      Debt obligations maturing in one year                   6,985     3,941

    Total current liabilities                                32,869    46,917

    Long-term rent obligations                                1,820         -
    Long-term debt obligations (less current portion)        14,120     2,012
    Deferred compensation liability                           2,196     5,516
    Insurance reserve                                         9,489     8,493
    Deferred revenue                                         14,003    23,110

    Stockholders' Investment
      Common stock ($.001 par value;  25,199,734 and
       25,114,244 shares and 18,552,985 and 18,482,658
       shares issued and outstanding, respectively)              25        25
      Contributed capital                                   174,206   172,965
      Common stock in treasury, at cost (6,646,449         (114,632) (114,427)
       shares and 6,631,586 shares)
      Retained earnings                                      23,515    34,597
      Accumulated other comprehensive (loss) income            (129)      439
    Total stockholders' investment                           82,985    93,599

    Total liabilities and stockholders' investment         $157,482  $179,647

                                    LCA-VISION INC.

                                                     Years Ended December 31,
                                                            2008      2007
                                                       (dollars in thousands)
    Cash flow from operating activities:
    Net (loss) income                                      $(6,635)  $32,504
    Adjustments to reconcile net income to net cash
     provided by operating activities:
      Depreciation                                          17,972    11,209
      Provision for loss on doubtful accounts                5,355     7,675
      Loss on investment                                     3,125         -
      Restructuring expense                                  1,426         -
      Impairment of fixed assets                               553         -
      Deferred income taxes                                  4,965     5,369
      Stock-based compensation                               1,878     5,024
      Insurance reserve                                        996     2,330
      Equity in earnings from unconsolidated affiliates       (477)     (814)
      Distributions from unconsolidated affiliates             690     1,128
      Changes in operating assets and liabilities
        Patient receivable                                    (410)  (11,500)
        Other accounts receivable                            3,426     1,080
        Prepaid income taxes                                (2,566)   (4,035)
        Prepaid expenses and other                            (223)    1,338
        Accounts payable                                    (2,227)    5,132
        Deferred revenue, net of professional fees         (16,847)   (7,212)
        Accrued liabilities and other                       (3,432)    5,751
    Net cash provided by operations                          7,569    54,979

    Cash flows from investing activities:
      Purchases of property and equipment                  (14,860)  (28,586)
      Purchases of investment securities                  (391,026) (330,826)
      Proceeds from sale of investment securities          396,674   356,874
      Net cash used in investing activities                 (9,212)   (2,538)
    Cash flows from financing activities:
      Principal payments of capital lease obligations
       and debt                                             (6,410)   (5,782)
      Proceeds from loan                                    19,184         -
      Shares repurchased for treasury stock                   (205)  (44,940)
      Tax benefits related to stock-based compensation        (638)    1,949
      Exercise of stock options                                193     3,499
      Dividends paid to stockholders                        (4,447)  (13,984)
    Net cash provided by (used in) financing activities      7,677   (59,258)

    Increase (decrease) in cash and cash equivalents         6,034    (6,817)

    Cash and cash equivalents at beginning of year          17,614    24,431

    Cash and cash equivalents at end of year               $23,648   $17,614




(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   Twelve Months Ended
                                         December 31,         December 31,
                                       2008      2007       2008       2007

      Reported                       $34,029   $69,702   $205,176   $292,635
        Warranty revenue deferred
         into future                       -         -          -     20,054
        Amortization of prior
         deferred revenue             (3,769)   (6,836)   (18,719)   (28,067)
      Adjusted revenue               $30,260   $62,866   $186,457   $284,622

    Operating (Loss) Income

      Reported                       $(9,594)   $5,852    $(8,234)   $45,565
        Impact of warranty revenue
         deferral                     (3,769)   (6,836)   (18,719)    (8,013)
        Professional fees deferred
         into future                       -         -          -     (2,005)
        Amortization of prior
         professional fees               377       684      1,872      2,807
      Adjusted operating (loss)
       income                       $(12,986)    $(300)  $(25,081)   $38,354

SOURCE LCA-Vision Inc.
Copyright©2009 PR Newswire.
All rights reserved

Related medicine news :

1. Law Offices of Howard G. Smith Announces Class Action Lawsuit Against LCA-Vision Inc.
2. LCA-Vision Announces Upcoming Investment Community Events
3. LCA-Vision Reports Fourth Quarter and Full-Year 2007 Financial Results
4. LCA-Vision Announces Quarterly Dividend Payment
5. LCA-Vision Announces the Opening of its 74th LasikPlus Vision Center in Des Moines, Iowa
6. LCA-Vision Announces the Opening of its 75th LasikPlus(R) Vision Center in Tulsa, Oklahoma
7. LCA-Vision Announces the Opening of its 76th LasikPlus(R) Vision Center in Woodbridge, New Jersey
8. LCA-Vision to Present at the Bank of America 2008 Health Care Conference
9. LCA-Vision Conducts 2008 Annual Stockholder Meeting
10. LCA-Vision Announces Upcoming Investment Community Events
11. LCA-Vision Announces CFO Change
Post Your Comments:
(Date:10/13/2017)... (PRWEB) , ... October 13, 2017 , ... The American ... to become its next President and Chief Executive Officer, succeeding Dr. James C. Puffer ... Elect beginning July 1, 2018 until Dr. Puffer’s retirement at the end of 2018. ...
(Date:10/13/2017)... (PRWEB) , ... October 13, ... ... School of Pharmacy (SOP) alumni Hannah Randall, PharmD ‘17, and Jennifer Huggins, ... professionals on guideline updates for the primary prevention of cardiovascular diseases during ...
(Date:10/13/2017)... ... October 13, 2017 , ... Many families have long-term insurance that covers ... companies have a waiver for care if the client has a cognitive impairment diagnosis. ... pays for care, is often waived, so the benefits from their insurance start immediately,” ...
(Date:10/13/2017)... , ... October 13, 2017 , ... Global Healthcare Management’s ... Alexandria Park in Milford, NJ. This free event, sponsored by Global Healthcare Management’s ... The fun run is geared towards children of all ages; it is a ...
(Date:10/13/2017)... (PRWEB) , ... October 13, 2017 , ... ... DevOps and Agile Software Development, has been awarded a contract by the Center ... Purchase Agreement (BPA) aims to accelerate the enterprise use of Agile methodologies in ...
Breaking Medicine News(10 mins):
(Date:10/2/2017)... , Oct. 2, 2017  Eli Lilly and Company ... results for the third quarter of 2017 on Tuesday, ... call on that day with the investment community and ... The conference call will begin at 9 a.m. ... access a live webcast of the conference call through ...
(Date:9/28/2017)... , Sept. 28, 2017 Cohen Veterans Bioscience ... the use of wearable and home sensors for real-time ... Early Signal Foundation, a nonprofit organization focused on disruptive ... provide an affordable analytical system to record and integrate ... ...
(Date:9/23/2017)... Pa. , Sept. 22, 2017 Janssen ... a complete response letter from the U.S. Food and ... seeking approval of sirukumab for the treatment of moderately ... letter indicates additional clinical data are needed to further ... moderately to severely active RA. ...
Breaking Medicine Technology: