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LCA-Vision Reports Third Quarter 2008 Financial Results
Date:10/28/2008

e non-cash impact of the accounting for separately priced extended warranties. A reconciliation of revenue and operating income (loss) as reported in accordance with Generally Accepted Accounting Principles (GAAP) is provided on the last page of this news release. Management believes the adjusted information is more reflective of operating performance and, therefore, more meaningful to investors.

"As previously announced, declining appointment volume led to a 52% decrease in total procedure volume for the third quarter of 2008, compared with the third quarter of 2007," said Steven C. Straus, Chief Executive Officer of LCA-Vision. "That said, we saw modest improvements in appointment show rates, conversion rates and treatment show rates in this year's third quarter compared to the second quarter, which we attribute to the implementation of business initiatives aimed at driving procedure volume.

"We also reported a $100 decline in our average price-per-procedure, excluding the impact of deferred revenue, compared with the second quarter of this year. The decline reflects the rollout of market-level pricing in July. An evaluation of this pricing program indicates that it has produced mixed results, with favorable changes in conversion in some markets and less effect on conversion in other markets. We have modified the pricing in those markets that were found to be inelastic, which is expected to result in an overall increase in average price-per-procedure in coming periods. We will monitor the relationship between price and conversion in each market on a monthly basis and make adjustments as appropriate to maximize revenue.

"In the third quarter, we reduced our media expenditures to $8.3 million, or by 46% as compared with the 2008 second quarter, as we aligned spending with the current tightening we are seeing in discretionary consumer spending. The resulting benefit was a marketing-spend-per-procedure saving of 25% to $386, compared with $514 in
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SOURCE LCA-Vision Inc.
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