LCA-Vision Fourth Quarter 2004 Earnings Soar 92% to 23 Cents Per
Share Driven by Record Procedure Volume, Revenue Rises 58%, Marking
the Sixth Consecutive Quarter of Revenue Growth Exceeding 50%
CINCINNATI, Feb. 23 /PRNewswire-FirstCall/ -- LCA-Vision Inc.
(NASDAQ:LCAV), a leading provider of laser vision correction
services under the LasikPlus brand, announced today fourth quarter
and full-year financial results for the period ended December 31,
2004. All prior financial data has been adjusted to reflect the
3-for-2 stock split on December 15, 2004. Fourth Quarter Highlights
* EPS soared 92% to $0.23 from $0.12 in 2003's fourth quarter. *
Revenues rose 58% to approximately $33 million from approximately
$21 million in 2003's fourth quarter, marking the 6th consecutive
quarter of revenue growth exceeding 50%. * Procedure volume
increased 51% to 24,224, from 16,060 procedures in 2003's fourth
quarter. * Same-store revenue grew 35% at vision centers open at
least 12 months, marking the 6th consecutive quarter of strong
same-store revenue growth exceeding 35%. Full Year Highlights * Net
income, EPS and revenue reached record levels. * EPS, which also
reflect certain tax benefits, climbed 250% to $1.54 from $0.44 in
2003. * Revenues grew 56% to over $127 million from approximately
$81 million in 2003. * Procedure volume rose 46% to 95,835 from
65,485 procedures in 2003. * 7 new vision centers opened throughout
the year -- 6 in new markets. * 3-for-2 stock split declared in the
fourth quarter. * Quarterly dividend initiated in the third
quarter. Net Income & Earnings Per Share In the fourth quarter
of 2004, net income increased 121% to approximately $4.9 million
from approximately $2.2 million in the fourth quarter of 2003.
Earnings per diluted share increased 92% to $0.23 from $0.12 in the
fourth quarter of 2003. For the full year of 2004, net income was
approximately $32.0 million, or $1.54 per diluted share, compared
with approximately $7.3 million, or $0.44 per diluted share for the
full-year of 2003. 2004 financial results include a one time $16.4
million income tax benefit to utilize and reverse the valuation
allowance of the company's deferred tax assets. Excluding this tax
benefit, full-year 2004 net income was approximately $15.6 million
and earnings per diluted share were $0.75, compared with net income
of approximately $7.3 million and earnings per diluted share of
$0.44 for the full-year of 2003. To facilitate a more meaningful
comparison between 2004 and future periods, the company believes it
is helpful to exclude the utilization and reversal of the tax
deferred valuation allowance from net income and earnings per
share. Stephen N. Joffe, Chairman and Chief Executive Officer of
LCA-Vision commented, "We are pleased to report another quarter and
year of exceptional financial and operational performance. We
reported higher levels of net income and earnings per share for
both the quarter and the year, even with a higher effective tax
rate. Quarterly and annual revenues grew to record levels, and
procedure volume also exceeded all prior levels. Quarterly revenue
growth surpassed 50% for the sixth consecutive quarter and for the
second year in a row, fourth quarter revenues exceeded first
quarter revenues, an accomplishment we are particularly proud of
given the historical seasonality of our business. "Throughout the
year, LCA-Vision saw favorable growth trends in the laser vision
correction industry, and we believe we continued to gain market
share in virtually all the LasikPlus markets we serve. We opened
seven vision centers in 2004 -- six in new markets. The response we
received in these markets has been strong, with each vision center
reaching profitability ahead of the six-month target we establish.
Same-store revenues at vision centers open at least 12 months
increased 35% over 2003's fourth quarter, reflecting successful
execution of our marketing strategies, as well as continued strong
demand for laser vision correction procedures. We remain focused on
growing same-store revenues as well as expanding into new markets,
and plans are currently underway to open 10 to 12 vision centers
throughout 2005." Strong Revenue Growth Driven by Record Procedure
Volume In the fourth quarter of 2004, revenues increased 58% to
approximately $32.7 million from approximately $20.8 million in
2003's fourth quarter. The operating margin was 17.2% compared with
10.8% in the fourth quarter of 2003. Fourth quarter procedure
volume increased 51% to 24,224 from 16,060 procedures performed in
the fourth quarter of 2003, and revenue per procedure increased 4%
to $1,351, from $1,293 in the fourth quarter of 2003. For the
full-year of 2004, revenues increased 56% to approximately $127.1
million from approximately $81.4 million in 2003. The operating
margin was 19.0% compared with 8.8% for 2003. The number of
procedures performed in 2004 increased 46% to 95,835, from 65,485
procedures performed in 2003. Balance Sheet Positioned to Support
Long-Term Growth Cash provided by operations for the full year of
2004 increased to approximately $28.5 million as of December 31,
2004 from approximately $12.5 million as of December 31, 2003. Cash
and cash equivalents increased to approximately $86.6 million as of
December 31, 2004 from approximately $64.9 million as of December
31, 2003. Board of Directors Approve Dividend Payment LCA-Vision's
Board of Directors approved a dividend of $0.08 per share, payable
on March 14, 2005 to shareholders of record as of March 7, 2005.
2005 Guidance LCA-Vision is increasing its earnings guidance for
2005. The company now expects 2005 earnings per diluted share to be
in the range of $1.00 to $1.05, compared with prior guidance of
$0.97 to $1.02. The effective tax rate for 2005 is expected to be
between 40% and 41%. Conference Call & Webcast A conference
call and webcast to discuss the contents of this news release will
be held today, Wednesday, February 23, 2005 at 10:00 a.m. (ET). To
access the call, dial 866-322-1352 (within the United States and
Canada), or 706-758-1564 (international callers). To access the
replay, dial 800-642-1687 (within the United States and Canada), or
706-645-9291 (international callers) and enter the conference ID
number: 385 79 15. To access the webcast, go to the "Investors"
section of LCA-Vision's website at http://www.lca-vision.com/ .
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. Forward-looking statements in this release,
including statements regarding our belief that revenues and
earnings will exhibit healthy year-over-year growth for fiscal
2005, among others, are based on information available to us as of
the date hereof. Actual results could differ materially from those
stated or implied in such forward-looking statements due to risks
and uncertainties associated with our business, including, without
limitation, those concerning global and local economic, political
and sociological conditions; market acceptance of our services; the
successful execution of marketing strategies; competition in the
laser vision correction industry; an inability to attract new
patients; the possibility of long-term side effects and adverse
publicity regarding laser vision correction; adverse financial
consequences in connection with the expensing of stock options or
other equity-based compensation; regulatory action against us or
others in the laser vision correction industry; and the relatively
high fixed cost structure of our business. 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 Forms 10-K and 10-Q. 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 LCA-Vision Inc. is a
leading provider of laser vision correction services under the
LasikPlus brand. We own and operate 41 LasikPlus fixed-site laser
vision correction centers in the United States, and three centers
in a joint venture in Canada. We are one of the only
publicly-traded companies within the United States that focuses
exclusively on laser vision correction services. Since laser vision
correction surgery was first approved by the FDA in the United
States in 1995, we have performed over 400,000 procedures. Our
LasikPlus laser vision correction centers are generally staffed
with independent, highly skilled, board-certified ophthalmologists
and optometrists. State-of-the-art diagnostic equipment and
multiple laser brands are used to customize the treatment of
nearsightedness, farsightedness and astigmatism. Our LasikPlus
laser vision correction centers are located in major cities
throughout the United States, and within a one-hour drive of
approximately 30% of the country's population. We are often the #1
or #2 provider of laser vision correction services in many of the
markets we serve. Our corporate headquarters are located in
Cincinnati, Ohio. For Additional Information Patricia Forsythe V.P.
Investor Relations 513-792-5629 LCA-Vision Inc. Condensed
Consolidated Statements of Income (dollars in thousands except per
share data) Three months ended Twelve months ended December 31,
December 31, 2004 2003 2004 2003 Revenues -- Laser refractive
surgery $32,716 $20,762 $127,122 $81,423 Operating costs and
expenses Medical professional and license fees 6,185 3,934 24,275
15,779 Direct costs of services 10,336 7,525 40,842 31,507 General
and administrative expenses 3,465 1,969 10,292 8,043 Marketing and
advertising 5,288 3,402 20,468 12,566 Depreciation and amortization
1,812 1,684 7,045 6,377 Operating income 5,630 2,248 24,200 7,151
Equity in earnings from unconsolidated businesses 85 72 369 317
Minority equity interest (89) (157) (544) (372) Interest expense
(12) (1) (24) (18) Investment income 634 260 2,161 540 Other income
237 189 238 242 Income before taxes on income 6,485 2,611 26,400
7,860 Income tax expense (benefit) 1,629 410 (5,629) 591 Net income
$4,856 $2,201 $32,029 $7,269 Income per common share Basic $0.24
$0.13 $1.59 $0.44 Diluted $0.23 $0.12 $1.54 $0.44 Weighted average
shares outstanding Basic 20,191 17,160 20,099 16,391 Diluted 20,995
17,648 20,814 16,616 LCA-Vision Inc. Consolidated Balance Sheets
(dollars in thousands) At December 31, 2004 2003 Assets Current
assets Cash and cash equivalents $86,588 $64,908 Accounts
receivable, net of allowance for doubtful accounts of $2,260 and
$1,480 8,662 3,255 Receivables from vendors 1,077 802 Prepaid
expenses, inventory and other 2,420 1,422 Deferred tax asset 8,608
- Total current assets 107,355 70,387 Property and equipment 50,374
41,967 Accumulated depreciation and amortization (31,743) (24,622)
Property and equipment, net 18,631 17,345 Accounts receivable, net
of allowance for doubtful accounts of $605 and $416 1,171 749
Goodwill 275 275 Deferred compensation plan assets 1,187 461
Investment in unconsolidated businesses 168 385 Other assets 790
435 Total assets $129,577 $90,037 Liabilities and Stockholders
Investment Current liabilities Accounts payable $4,964 $4,883
Accrued liabilities and other 7,574 4,518 Debt maturing in one year
542 - Total current liabilities 13,080 9,401 Capital lease
obligations 376 - Deferred compensation liability 1,215 457
Insurance reserve 2,568 963 Minority equity interest 501 414
Stockholders' investment Common stock ($.001 par value; 23,768,529
and 23,465,342 shares and 20,217,735 and 19,914,548 shares issued
and outstanding, respectively) 24 16 Contributed capital 134,708
131,203 Common stock in treasury, at cost (3,550,794 shares and
3,550,794 shares) (15,462) (15,462) Accumulated deficit (7,732)
(37,069) Accumulated other comprehensive income (loss) 299 114
Total stockholders' investment 111,837 78,802 Total Liabilities and
Stockholders' Investment $129,577 $90,037 LCA-Vision Inc.
Consolidated Statements of Cash Flows (dollars in thousands) Years
Ended December 31, 2004 2003 Cash flow from operating activities
Net income (loss) $32,029 $7,269 Adjustments to reconcile net
income (loss) to net cash provided by (used in) operating
activities: Depreciation and amortization 7,045 6,377 Warrant
amortization - - Provision for loss on doubtful accounts 969 1,781
Gain on disposal of assets - (190) Deferred income taxes (8,608) -
Deferred compensation 758 328 Insurance reserve 1,605 908
Restructuring/impairment provision - - Equity in earnings from
unconsolidated businesses (369) (317) Other, net - - Changes in
assets and liabilities: Accounts receivables (6,798) (5,191)
Receivables from vendors (275) (465) Prepaid expenses, inventory
and other (998) 40 Accounts payable 81 1,028 Accrued liabilities
and other 3,057 912 Net cash provided by operating activities
28,496 12,480 Cash flow from investing activities Purchase of
property and equipment (8,307) (5,231) Proceeds from sale of
property and equipment - 225 Deferred compensation plan (726) (334)
Other, net (108) 204 Net cash (used in) investing activities
(9,141) (5,136) Cash flow from financing activities Principal
payments of long-term debt and capital lease obligations (176) (10)
Capitalized lease obligations 1,094 - Loan payments made by
shareholders - 1,353 Loans to shareholders - (22) Shares
repurchased for treasury stock - - Stock offering - 36,727
Dividends paid to Stockholders (2,692) - Exercise of stock options
and warrants 2,202 1,023 Deferred tax benefit on disqualified stock
options 1,311 - Distribution from minority equity investees 586 195
Net cash provided by (used in) financing activities 2,325 39,266
Increase in cash and cash equivalents 21,680 46,610 Cash and cash
equivalents at beginning of year 64,908 18,298 Cash and cash
equivalents at end of year $86,588 $64,908 DATASOURCE: LCA-Vision
Inc. CONTACT: Patricia Forsythe, V.P. Investor Relations of
LCA-Vision Inc., +1-513-792-5629, or Web site:
http://www.lca-vision.com/
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