CINCINNATI, Oct. 25, 2011 /PRNewswire/ -- LCA-Vision Inc.
(NASDAQ: LCAV), a leading provider of laser vision correction
services under the LasikPlus® brand, today announced
financial and operating results for the three and nine months ended
September 30, 2011.
Third Quarter 2011 Financial and Operating Highlights
(all comparisons are with the third quarter of 2010)
- Revenues increased 7.5% to $21.8
million compared with $20.3
million; adjusted revenues increased 10.5% to $20.8 million compared with $18.8 million.
- Procedure volume was 12,444, compared with 11,497 procedures
(60 vision centers) and 10,569 same-store procedures (53 vision
centers), marking the fourth consecutive quarter of year-over-year
growth in same-store procedures.
- Same-store revenues increased 15.6%; adjusted same-store
revenues increased 19.5%.
- Operating loss decreased to $4.1
million from $8.5 million;
adjusted operating loss decreased to $5.0
million from $9.8 million. The
improvement in operating loss and adjusted operating loss reflects
increased procedure volume and revenue, the closing of
under-performing vision centers, and lower depreciation expense
from assets that are now fully depreciated. The 2010 quarter
included $1.8 million in impairment
and restructuring charges. Marketing cost per eye was
$426 compared with $444.
- Net loss was $3.8 million, or
$0.20 per share, compared with net
loss of $8.4 million, or $0.45 per share.
Year-to-Date 2011 Financial and Operating Highlights (all
comparisons are with the same period of 2010)
- Revenues were $78.5 million
compared with $80.6 million; adjusted
revenues were $75.1 million compared
with $75.8 million.
- Procedure volume was 45,382, compared with 45,829 procedures
and 41,920 same-store procedures.
- Same-store revenues increased 5.4%; adjusted same-store
revenues increased 7.7%.
- Operating loss decreased to $4.9
million from $14.6 million;
adjusted operating loss decreased to $8.0
million from $18.9 million.
The improvement in operating loss and adjusted operating loss
reflects increased same-store procedure volume, the closing of
under-performing vision centers, lower marketing and advertising
expense and lower depreciation expense. The year-to-date
results of 2011 included $498,000 of
gain on sales of assets from closed visions centers and
$56,000 in impairment and
restructuring charges. The year-to-date results of 2010
included $1.6 million of gain on sale
of assets and $2.5 million in
impairment and restructuring charges. Marketing cost per eye
decreased to $391 from $421.
- Net loss was $4.5 million, or
$0.24 per share, compared with net
loss of $13.3 million, or
$0.71 per share.
- Net cash used in operations was $2.4
million compared with net cash provided by operations of
$4.6 million. The net cash
provided by operations for 2010 included an $11.8 million tax refund. We are now in a
net operating loss carryforward position and did not receive a tax
refund in 2011.
- Cash and investments totaled $47.1
million as of September 30,
2011, compared with $52.2
million as of December 31,
2010.
Adjusted revenues and operating 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 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 significant improvements in financial and
operating results, although we recognize that further improvement
is needed," said LCA-Vision Chief Financial Officer Michael J. Celebrezze. "Revenue growth reflects
our first year-over-year increase in total procedure volume in four
years, as well as a higher average price per procedure. The
18% increase in same-store procedure volume was significantly
higher than the single-digit year-over-year increases in the past
three quarters. We accomplished these results despite
continued low consumer confidence levels and cautious discretionary
spending by consumers. Further, our actions to control
expenses resulted in a substantial reduction in our operating
loss."
Adjusted price per procedure for the third quarter of 2011
increased to $1,668, up $15 from the second quarter of 2011 and
$34 from the third quarter of 2010.
Marketing expense for the third quarter of 2011 was
$5.3 million, bringing marketing
spend per procedure to $426, up
$5 from the second quarter of 2011
and down $18 from the third quarter
of 2010 when the company launched its new marketing campaign.
LCA-Vision Chief Operating Officer David
L. Thomas said, "Our marketing programs drove considerably
more scheduled and attended pre-operative appointments compared
with the prior year. Conversion and treatment show rates
declined for a second consecutive quarter as we attracted many
prospective patients earlier in their decision-making process;
however, we are executing new training activities to improve these
metrics and better educate prospective patients about the
procedure.
"We face a more difficult prior-year comparison in the fourth
quarter. We began this year's fourth quarter by offering the
same $500 discount promotion as last
year to maximize procedure volume prior to the seasonally strong
first quarter, in which we have historically benefitted from flex
spending. Even with the price discount, we expect that price
per procedure for the fourth quarter will be in the $1,630 to $1,650 range.
"Over the past six weeks, we have begun offering cataract
surgery in two markets under our new Visium Eye Institute™ cataract
brand, although we have yet to treat any cataract patients.
This offering marks a major step in our business
diversification programs to support future growth and
profitability, and lessen our exposure to economic downturns,"
added Thomas. "We now accept Medicare in these two markets
and have taken a number of preparatory steps, including training
staff, developing marketing materials, incorporating electronic
medical record capabilities and launching a website. We are
employing a multi-pronged marketing campaign for this offering that
includes print advertising, direct contact with past patients and
community outreach."
Near-term Financial Outlook
LCA-Vision intends to manage expenses conservatively in 2011.
The company's plans and outlook for the remainder of 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
vision center opening program when market conditions improve.
- The company expects marketing and advertising spend for the
2011 fourth quarter to be between $5.0
million and $5.5 million.
- The company expects capital expenditures in 2011 to be between
$1.2 million and $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 affirms that the number of procedures companywide
required for breakeven cash flow, after capital expenditures and
debt service, is approximately 70,000 per year. 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 855-859-2056 (U.S. and
Canada) or 404-537-3406
(international callers) and enter the conference ID number:
99896255
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 Food and Drug Administration's (FDA) advisory board
on ophthalmic devices currently is reviewing concerns about
post-LASIK quality of life matters, and the FDA has undertaken a
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 53
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; Transforming Lives Every
Day.
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For Additional
Information
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Company Contact:
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Investor Relations
Contact:
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Barb Kise
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Jody Cain
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LCA-Vision Inc.
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LHA
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513-792-9292
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310-691-7100
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LCA-Vision
Inc.
|
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Condensed
Consolidated Balance Sheets (Unaudited)
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(Dollars in
thousands)
|
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|
|
September
30,
2011
|
|
December
31,
2010
|
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Assets
|
|
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|
|
Current assets
|
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|
|
Cash and cash
equivalents
|
$
19,545
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$
19,350
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Short-term
investments
|
26,616
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31,947
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Patient receivables, net
of allowances of $1,124 and $1,392, respectively
|
2,209
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|
2,256
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Other accounts
receivable, net
|
1,385
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|
1,867
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Prepaid expenses and
other
|
4,196
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|
5,641
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Total current assets
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53,951
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|
61,061
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|
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|
Property and
equipment
|
72,235
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|
72,286
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|
Accumulated depreciation and
amortization
|
(60,754)
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|
(57,322)
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Property and equipment,
net
|
11,481
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|
14,964
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Long-term investments
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933
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|
951
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Patient receivables, net of
allowances of $595 and $330 respectively
|
725
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|
413
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|
Other assets
|
2,036
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|
3,092
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|
|
|
|
|
|
Total assets
|
$
69,126
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|
$
80,481
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|
|
|
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|
|
Liabilities and Stockholders'
Investment
|
|
|
|
|
Current liabilities
|
|
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|
|
Accounts
payable
|
$
6,799
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|
$
8,110
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|
Accrued liabilities and
other
|
13,947
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|
12,266
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|
Deferred
revenue
|
2,981
|
|
4,376
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|
Debt obligations maturing
within one year
|
2,937
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|
3,039
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|
|
|
|
|
|
Total current
liabilities
|
26,664
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|
27,791
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|
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|
|
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|
Long-term rent obligations and
other
|
2,685
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|
3,368
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|
Long-term debt obligations, less
current portion
|
1,784
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|
4,245
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|
Insurance reserves
|
7,183
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|
7,406
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Deferred license fee
|
2,044
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|
3,065
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Deferred revenue
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1,433
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|
3,476
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|
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|
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|
|
Stockholders'
investment
|
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Common stock ($.001 par
value; 25,291,637 shares issued and
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18,849,527
and 18,711,365 shares outstanding, respectively)
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25
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25
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Contributed
capital
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176,869
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|
175,610
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Common stock in treasury,
at cost (6,442,110 shares and 6,580,272 shares,
respectively)
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(112,974)
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(114,033)
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Retained
deficit
|
(37,003)
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|
(31,134)
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Accumulated other
comprehensive income
|
416
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|
662
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Total stockholders'
investment
|
27,333
|
|
31,130
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|
|
|
|
|
|
Total liabilities and
stockholders' investment
|
$
69,126
|
|
$
80,481
|
|
|
|
|
|
LCA-Vision
Inc.
|
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Condensed
Consolidated Statements of Operations (Unaudited)
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(Amounts in
thousands except per share data)
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|
|
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Three months
ended September 30,
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Nine months
ended September 30,
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2011
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2010
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2011
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2010
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Revenues
|
$
21,790
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$
20,263
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$
78,489
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$
80,566
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Operating costs and
expenses
|
|
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Medical professional and
license fees
|
5,181
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4,966
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|
19,236
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|
19,406
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Direct costs of
services
|
10,461
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|
11,499
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|
31,931
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|
37,390
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|
General and administrative
expenses
|
3,586
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|
3,336
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|
10,577
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|
10,768
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Marketing and
advertising
|
5,305
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|
5,100
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|
17,730
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|
19,298
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|
Depreciation
|
1,458
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|
2,379
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|
4,346
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|
7,375
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|
Impairment
charges
|
-
|
|
1,608
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-
|
|
1,694
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Restructuring
charges
|
-
|
|
145
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|
56
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|
794
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|
25,991
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|
29,033
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|
83,876
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|
96,725
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|
Gain on sale of
assets
|
99
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|
266
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|
498
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|
1,577
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|
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|
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Operating loss
|
(4,102)
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(8,504)
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(4,889)
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(14,582)
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|
Net investment income and
other
|
334
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|
103
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|
492
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|
1,424
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Loss before taxes on
income
|
(3,768)
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(8,401)
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(4,397)
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(13,158)
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Income tax expense
|
32
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|
39
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|
149
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|
134
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Net loss
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$
(3,800)
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$
(8,440)
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$
(4,546)
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$
(13,292)
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Loss per common share
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Basic
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$
(0.20)
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$
(0.45)
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$
(0.24)
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$
(0.71)
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Diluted
|
$
(0.20)
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$
(0.45)
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$
(0.24)
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|
$
(0.71)
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|
|
|
|
|
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|
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Weighted average shares
outstanding
|
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|
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Basic
|
18,838
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18,703
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|
18,798
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|
18,672
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|
Diluted
|
18,838
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|
18,703
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|
18,798
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|
18,672
|
|
|
|
|
|
|
|
|
|
LCA-Vision
Inc.
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
Nine months
ended September 30,
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|
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2011
|
|
2010
|
|
|
|
|
|
|
Cash flow from operating
activities:
|
|
|
|
|
Net loss
|
$
(4,546)
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|
$
(13,292)
|
|
Adjustments to reconcile net
loss to net cash provided by operating activities:
|
|
|
|
|
Depreciation
|
4,346
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|
7,375
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Provision for loss on
doubtful accounts
|
554
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|
1,333
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Loss (gain) on sale of
investments
|
9
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|
(1,008)
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Impairment
charges
|
-
|
|
1,694
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Gain on sale of property
and equipment
|
(498)
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|
(1,577)
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|
Deferred income
taxes
|
-
|
|
377
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|
Stock-based
compensation
|
1,259
|
|
957
|
|
Insurance
reserve
|
(223)
|
|
(796)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Patient accounts
receivable
|
(754)
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|
1,311
|
|
Other accounts
receivable
|
138
|
|
237
|
|
Prepaid income
taxes
|
397
|
|
11,651
|
|
Prepaid expenses
and other
|
499
|
|
1,385
|
|
Accounts
payable
|
(1,311)
|
|
543
|
|
Deferred revenue,
net of professional fees
|
(3,094)
|
|
(4,293)
|
|
Accrued
liabilities and other
|
777
|
|
(1,284)
|
|
|
|
|
|
|
Net cash (used in) provided by
operations
|
(2,447)
|
|
4,613
|
|
|
|
|
|
|
Cash flow from investing
activities:
|
|
|
|
|
Purchases of property and
equipment
|
(869)
|
|
(176)
|
|
Proceeds from sale of
assets
|
1,252
|
|
1,721
|
|
Purchases of investment
securities
|
(137,480)
|
|
(328,120)
|
|
Proceeds from sale of
investment securities
|
142,716
|
|
325,133
|
|
Other
|
(6)
|
|
(34)
|
|
|
|
|
|
|
Net cash provided by (used in)
investing activities
|
5,613
|
|
(1,476)
|
|
|
|
|
|
|
Cash flow from financing
activities:
|
|
|
|
|
Principal payments of
capital lease obligations and loan
|
(2,563)
|
|
(4,089)
|
|
Shares repurchased for
treasury stock
|
(288)
|
|
(192)
|
|
Proceeds from exercise of
stock options
|
23
|
|
14
|
|
|
|
|
|
|
Net cash used in financing
activities
|
(2,828)
|
|
(4,267)
|
|
|
|
|
|
|
Net effect of exchange rate
changes on cash and cash equivalents
|
(143)
|
|
82
|
|
|
|
|
|
|
Increase (decrease) in cash and
cash equivalents
|
195
|
|
(1,048)
|
|
|
|
|
|
|
Cash and cash equivalents at
beginning of period
|
19,350
|
|
24,529
|
|
|
|
|
|
|
Cash and cash equivalents at end
of period
|
$
19,545
|
|
$
23,481
|
|
|
|
|
|
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 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 September 30,
|
|
Nine Months
Ended September 30,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported U.S.
GAAP
|
|
$
21,790
|
|
$
20,263
|
|
$
78,489
|
|
$
80,566
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
Amortization of prior deferred revenue
|
|
(1,031)
|
|
(1,475)
|
|
(3,437)
|
|
(4,770)
|
|
Adjusted
revenues
|
|
$
20,759
|
|
$
18,788
|
|
$
75,052
|
|
$
75,796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported U.S.
GAAP
|
|
$
(4,102)
|
|
$
(8,504)
|
|
$
(4,889)
|
|
$
(14,582)
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
Amortization of prior deferred revenue
|
|
(1,031)
|
|
(1,475)
|
|
(3,437)
|
|
(4,770)
|
|
Amortization of prior professional fees
|
|
103
|
|
148
|
|
344
|
|
477
|
|
Adjusted operating
loss
|
|
$
(5,030)
|
|
$
(9,831)
|
|
$
(7,982)
|
|
$
(18,875)
|
|
|
|
|
|
|
|
|
|
|
SOURCE LCA-Vision Inc.