CINCINNATI, Oct. 30, 2012 /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, 2012.
Third Quarter 2012 Financial and Operating Highlights
(all comparisons are with the third quarter of 2011)
- Revenues were $20.0 million
compared with $21.8 million; adjusted
revenues were $19.5 million compared
with $20.8 million.
- Procedure volume was 11,510 procedures versus 12,444
procedures.
- Operating loss narrowed to $3.7
million from $4.1 million;
adjusted operating loss narrowed to $4.2
million from $5.0 million. The
improvement reflects a decrease in variable costs, lower general
and administrative costs and a decrease in spending on marketing
and advertising, offset partially by costs incurred in connection
with the company's business expansion initiatives.
- Marketing cost per eye was $417
compared with $426.
- Net loss was $3.5 million, or
$0.19 per share, compared with a net
loss of $3.8 million, or $0.20 per share.
Year-to-Date 2012 Financial and Operating Highlights (all
comparisons are with the first nine months of 2011)
- Revenues increased 3.6% to $81.3
million from $78.5 million;
adjusted revenues increased 5.6% to $79.3
million from $75.1
million.
- Procedure volume increased 3.4% to 46,912 procedures from
45,382 procedures.
- Operating loss was $3.3 million,
a $1.6 million improvement from an
operating loss of $4.9 million;
adjusted operating loss was $5.2
million, a $2.8 million
improvement from an adjusted operating loss of $8.0 million. The improvement reflects higher
procedure revenue, lower variable costs, a decrease in general and
administrative expenses and a decline in depreciation expense,
offset partially by higher spending on marketing and advertising
and costs incurred in connection with the company's business
expansion initiatives.
- Marketing cost per eye was $390
compared with $391.
- Net loss was $2.9 million, or
$0.15 per share, a $1.6 million improvement from a net loss of
$4.5 million, or $0.24 per share.
- Cash and investments totaled $34.9
million as of September 30,
2012, compared with $44.8
million as of December 31,
2011. The cash and investment balance for the first nine
months of 2012 was impacted primarily by $4.0 million of payments to retire all
outstanding debt, $2.3 million of
investment in developing the cataract services business, and
$5.7 million of changes in working
capital, offset partially by $2.1
million of cash sources from other activity.
The company provides adjusted revenues and operating income and
loss 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 income and
loss as reported in accordance with U.S. Generally Accepted
Accounting Principles (GAAP) is provided at the end of this news
release. Management believes that the adjusted information better
reflects operating performance and, therefore, is more meaningful
to investors.
"Following four consecutive quarters of procedure volume
increases, the third quarter revenue decline resulting from lower
procedure volume is disappointing," said LCA-Vision Chief Financial
Officer Michael J. Celebrezze. "We
were up against a difficult comparison from the third quarter of
2011 in which same-store procedure volume increased 18% from the
prior year. We also were challenged by continued cautious consumer
spending, as well as by factors specific to our direct-to-consumer
marketing model that made it difficult to get our advertising
messages heard.
"Both revenues and procedure volume increased for the first nine
months of 2012 compared with the prior year. At the same time
we reduced our expenses through cost-management measures," added
Celebrezze. "However, the current environment is challenging and we
face a tough comparison with the fourth quarter of 2011 in which
year-over-year procedure volume increased by 30%."
LCA-Vision Chief Operating Officer David
L. Thomas said, "Our average price per procedure for the
third quarter increased by $22 from
the prior year to $1,690, even with
the $500-discount promotion we
offered for the majority of the quarter. We employed a
comprehensive market-by-market review of competitive pricing and
price sensitivity, which allowed us to adjust our pricing in many
LasikPlus® markets without impacting demand. Our
operational metrics for the quarter were strong due to our ability
to convert prospects to treated patients.
"We limited our marketing spend for the third quarter as we
believed the obstacles to attracting prospective patients made the
costs to do so prohibitively high," explained Thomas. "Among the
actions we are taking to support patient acquisition are optimizing
our messaging for current market conditions following insightful
market research that we conducted earlier this month and continuing
the $500-discount promotion through
mid-November. We will open a satellite
LasikPlus® vision center in Chicago during the fourth quarter to leverage
our marketing spending in that market. The satellite center
will perform pre-operative and post-operative exams, providing
added convenience for patients who live considerable distances from
our full-service LasikPlus® vision centers in
that market. Additionally, we are establishing a network of
optometrists and other eye-health professionals to co-manage their
laser vision correction and cataract patients for patient
convenience. We currently have more than 100 partner doctors in our
network."
The company offered cataract surgery and implantable collamer
lens procedures in seven markets under the Visium Eye Institute™
brand during the third quarter. The company is on track to expand
its Visium centers to 10 by the end of 2012.
Near-term Financial Outlook
LCA-Vision intends to
continue to manage expenses conservatively in 2012; its plans and
outlook for the remainder of 2012 include:
- The company does not plan to open any new full service vision
centers in the near term. The company intends to test the value of
satellite vision centers in certain established
LasikPlus® markets.
- The company anticipates an improvement in price per procedure
from the 2011 average of $1,655.
- The company expects capital expenditures for cataract-related
equipment and other capital needs to be between $1.2 million and $1.5 million.
- For the fourth quarter of 2012, the company expects marketing
and advertising expenses to be between $5.0
million and $5.5 million.
The company estimates that the number of procedures companywide
required for its laser vision correction business to achieve
breakeven free cash flow is approximately 68,000 per year. The
company expects to incur start-up losses and capital investment
during the expansion phase for its cataract business.
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:
35324861.
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 company's
success in expanding its services into the cataract and intraocular
lens (IOL) market; additional regulatory requirements, such as for
Medicare, related to cataract and IOL procedures; 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 is recruiting
participants for two studies on LASIK outcomes and quality of life.
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
potentially could 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.
For
Additional Information
|
Company
Contact:
|
Investor Relations Contact:
|
Barb
Kise
|
Jody
Cain
|
LCA-Vision
Inc.
|
LHA
|
513-792-9292
|
310-691-7100 – jcain@lhai.com
|
|
@LHA_IR_PR
|
LCA-Vision Inc.
|
Condensed Consolidated Balance Sheets
(Unaudited)
|
(Dollars
in thousands)
|
|
|
September 30, 2012
|
|
December 31, 2011
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash equivalents
|
$
31,186
|
|
$
18,568
|
Short-term investments
|
2,804
|
|
25,311
|
Patient receivables, net of allowances
of $1,034 and $1,035, respectively
|
2,998
|
|
2,366
|
Other accounts receivable,
net
|
2,043
|
|
1,974
|
Prepaid expenses and other
|
3,210
|
|
4,254
|
|
|
|
|
Total
current assets
|
42,241
|
|
52,473
|
|
|
|
|
Property
and equipment, net
|
7,788
|
|
10,637
|
Long-term
investments
|
923
|
|
902
|
Patient
receivables, net of allowances of $705 and $634
|
1,177
|
|
769
|
Other
assets
|
777
|
|
1,652
|
|
|
|
|
Total
assets
|
$
52,906
|
|
$
66,433
|
|
|
|
|
Liabilities and Stockholders'
Investment
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable
|
$
5,443
|
|
$
8,103
|
Accrued liabilities and other
|
11,283
|
|
12,175
|
Deferred revenue
|
1,229
|
|
2,516
|
Debt obligations maturing within one
year
|
-
|
|
2,978
|
|
|
|
|
Total
current liabilities
|
17,955
|
|
25,772
|
|
|
|
|
Long-term
insurance reserves, less current portion
|
5,988
|
|
6,264
|
Long-term
debt obligations, less current portion
|
-
|
|
1,026
|
Other
long-term liabilities
|
4,164
|
|
7,106
|
|
|
|
|
Stockholders' investment
|
|
|
|
Common stock ($.001 par value;
25,291,637 shares issued and
|
|
|
|
19,024,305 and
18,858,147 shares outstanding, respectively)
|
25
|
|
25
|
Contributed capital
|
178,818
|
|
177,287
|
Common stock in treasury, at cost
(6,267,332 shares and 6,433,490 shares, respectively)
|
(111,658)
|
|
(112,910)
|
Accumulated deficit
|
(43,166)
|
|
(38,720)
|
Accumulated other comprehensive
income
|
780
|
|
583
|
Total
stockholders' investment
|
24,799
|
|
26,265
|
|
|
|
|
Total
liabilities and stockholders' investment
|
$
52,906
|
|
$
66,433
|
|
|
|
|
LCA-Vision Inc.
|
Condensed Consolidated Statements of Operations
and Comprehensive Income (Unaudited)
|
(Amounts
in thousands except per share data)
|
|
|
|
|
|
|
|
|
|
Three
months ended September 30,
|
|
Nine
months ended September 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
Revenues
|
$
20,009
|
|
$
21,790
|
|
$
81,298
|
|
$
78,489
|
|
|
|
|
|
|
|
|
Operating
costs and expenses
|
|
|
|
|
|
|
|
Medical professional and license
fees
|
4,648
|
|
5,181
|
|
19,139
|
|
19,236
|
Direct costs of services
|
10,068
|
|
10,461
|
|
33,477
|
|
31,931
|
General and administrative
expenses
|
3,037
|
|
3,586
|
|
10,151
|
|
10,577
|
Marketing and advertising
|
4,803
|
|
5,305
|
|
18,283
|
|
17,730
|
Depreciation
|
1,223
|
|
1,458
|
|
3,743
|
|
4,346
|
Impairment and restructuring
charges
|
10
|
|
-
|
|
47
|
|
56
|
|
23,789
|
|
25,991
|
|
84,840
|
|
83,876
|
Gain on sale of assets
|
33
|
|
99
|
|
221
|
|
498
|
|
|
|
|
|
|
|
|
Operating
loss
|
(3,747)
|
|
(4,102)
|
|
(3,321)
|
|
(4,889)
|
|
|
|
|
|
|
|
|
Net
investment income and other
|
220
|
|
334
|
|
498
|
|
492
|
|
|
|
|
|
|
|
|
Loss
before taxes on income
|
(3,527)
|
|
(3,768)
|
|
(2,823)
|
|
(4,397)
|
|
|
|
|
|
|
|
|
Income tax
expense
|
22
|
|
32
|
|
70
|
|
149
|
|
|
|
|
|
|
|
|
Net
loss
|
$
(3,549)
|
|
$
(3,800)
|
|
$
(2,893)
|
|
$
(4,546)
|
|
|
|
|
|
|
|
|
Loss per
common share
|
|
|
|
|
|
|
|
Basic
|
$
(0.19)
|
|
$
(0.20)
|
|
$
(0.15)
|
|
$
(0.24)
|
Diluted
|
$
(0.19)
|
|
$
(0.20)
|
|
$
(0.15)
|
|
$
(0.24)
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding
|
|
|
|
|
|
|
|
Basic
|
19,017
|
|
18,838
|
|
18,968
|
|
18,798
|
Diluted
|
19,017
|
|
18,838
|
|
18,968
|
|
18,798
|
|
|
|
|
|
|
|
|
Comprehensive loss
|
$
(3,360)
|
|
$
(4,112)
|
|
$
(2,696)
|
|
$
(4,792)
|
|
|
|
|
|
|
|
|
LCA-Vision Inc.
|
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
(Dollars
in thousands)
|
|
|
|
|
|
Nine
months ended September 30,
|
|
2012
|
|
2011
|
|
|
|
|
Cash flow
from operating activities:
|
|
|
|
Net
loss
|
$
(2,893)
|
|
$
(4,546)
|
Adjustments to reconcile net loss to net cash used in
operating activities:
|
|
|
|
Depreciation
|
3,743
|
|
4,346
|
Provision for loss on doubtful
accounts
|
704
|
|
554
|
Loss on sale of investments
|
8
|
|
9
|
Impairment charges
|
37
|
|
-
|
Gain on sale of assets
|
(221)
|
|
(498)
|
Stock-based compensation
|
1,531
|
|
1,259
|
Insurance reserve
|
(318)
|
|
(223)
|
Changes in operating assets and
liabilities:
|
|
|
|
Patient accounts
receivable
|
(1,719)
|
|
(754)
|
Other accounts
receivable
|
(60)
|
|
138
|
Prepaid expenses and
other
|
870
|
|
896
|
Accounts payable
|
(2,660)
|
|
(1,311)
|
Deferred revenue, net of
professional fees
|
(1,838)
|
|
(3,094)
|
Accrued liabilities and
other
|
(2,144)
|
|
771
|
|
|
|
|
Net cash
used in operations
|
(4,960)
|
|
(2,453)
|
|
|
|
|
Cash flow
from investing activities:
|
|
|
|
Purchases of property and
equipment
|
(973)
|
|
(869)
|
Proceeds from sale of assets
|
283
|
|
1,252
|
Purchases of investment
securities
|
(39,659)
|
|
(137,480)
|
Proceeds from sale of investment
securities
|
62,064
|
|
142,716
|
|
|
|
|
Net cash
provided by investing activities
|
21,715
|
|
5,619
|
|
|
|
|
Cash flow
from financing activities:
|
|
|
|
Principal payments of loan
|
(4,004)
|
|
(2,563)
|
Shares repurchased for treasury
stock
|
(357)
|
|
(288)
|
Proceeds from exercise of stock
options
|
57
|
|
23
|
|
|
|
|
Net cash
used in financing activities
|
(4,304)
|
|
(2,828)
|
|
|
|
|
Net effect
of exchange rate changes on cash and cash equivalents
|
167
|
|
(143)
|
|
|
|
|
Increase
in cash and cash equivalents
|
12,618
|
|
195
|
|
|
|
|
Cash and
cash equivalents at beginning of period
|
18,568
|
|
19,350
|
|
|
|
|
Cash and
cash equivalents at end of period
|
$
31,186
|
|
$
19,545
|
|
|
|
|
LCA-Vision Inc.
Effect
of the Change in Accounting for Deferred Revenues on Financial
Results
(Dollars in thousands)
(Unaudited)
To supplement its Consolidated Financial Statements presented in
accordance with accounting principles generally accepted in
the United States, LCA-Vision
discusses adjusted revenues and operating income and 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,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported U.S.
GAAP
|
|
$
20,009
|
|
$
21,790
|
|
$
81,298
|
|
$
78,489
|
Adjustments
|
|
|
|
|
|
|
|
|
Amortization of prior deferred revenue
|
|
(555)
|
|
(1,031)
|
|
(2,043)
|
|
(3,437)
|
Adjusted revenues
|
|
$
19,454
|
|
$
20,759
|
|
$
79,255
|
|
$
75,052
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported U.S.
GAAP
|
|
$
(3,747)
|
|
$
(4,102)
|
|
$
(3,321)
|
|
$
(4,889)
|
Adjustments
|
|
|
|
|
|
|
|
|
Amortization of prior deferred revenue
|
|
(555)
|
|
(1,031)
|
|
(2,043)
|
|
(3,437)
|
Amortization of prior professional fees
|
|
56
|
|
103
|
|
204
|
|
344
|
Adjusted operating
loss
|
|
$
(4,246)
|
|
$
(5,030)
|
|
$
(5,160)
|
|
$
(7,982)
|
|
|
|
|
|
|
|
|
|
SOURCE LCA-Vision Inc.