CINCINNATI, Feb. 18, 2014 /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 12
months ended December 31, 2013.
Fourth Quarter 2013 Financial and Operating Highlights
(all comparisons are with the fourth quarter of 2012)
- Revenues increased 2.1% to $20.6
million from $20.2 million;
adjusted revenues increased 4.0% to $20.5
million from $19.7
million.
- Procedure volume increased 3.6% to 12,033 from 11,613.
- Medical professional and license fees remained unchanged at
$4.6 million. Medical professional
and license fees for the 2013 fourth quarter included higher fees
due to an increase in procedure volume, offset by lower license
fees related to renegotiated costs.
- Vision center direct costs decreased by $1.2 million to $9.7
million from $10.9 million.
The decrease was a result of favorable insurance experience, lower
employee-related costs, lower financing fees from finance plan mix
and renegotiated rates for third-party financing plans. These
reductions were partially offset by higher variable operating
expenses associated with higher procedure volumes, including laser
maintenance costs, as well as higher professional services and
other operating expense.
- General and administrative expense decreased by $0.5 million to $2.8
million from $3.3 million, due
primarily to reductions in employee-related costs as a result of
restructuring initiatives implemented early in 2013.
- Marketing expense remained unchanged at $4.7 million. Marketing cost per eye was
$392, compared with $411.
- Depreciation expense decreased by $0.5
million to $0.5 million from
$1.0 million.
- Operating loss was $1.7 million,
a $4.3 million improvement from an
operating loss of $6.0 million;
adjusted operating loss was $1.8
million, a $4.6 million
improvement from an adjusted operating loss of $6.4 million. Operating loss in the fourth
quarter of 2012 included restructuring charges of $1.1 million and impairment charges of
$0.6 million.
- Net loss narrowed to $1.5
million, or $0.08 per share, a
$4.1 million improvement from a net
loss of $5.6 million, or $0.30 per share.
2013 Financial and Operating Highlights (all comparisons
are with 2012)
- Revenues were $92.2 million
compared with $101.5 million;
adjusted revenues were $91.3 million
compared with $99.0 million.
- Procedure volume was 53,231 compared with 58,525.
- Medical professional and license fees decreased by $3.6 million to $20.1
million from $23.7 million.
The decrease resulted from lower procedure volume coupled with the
impact of renegotiated license fees and lower enhancement
costs.
- Vision center direct costs decreased by $5.2 million to $39.1
million from $44.3 million.
The decrease was a result of lower variable costs associated with
procedure volume combined with other cost savings. These savings
primarily included lower financing fees from renegotiated rates and
a shift in portfolio mix, reductions in employee-related costs and
lower insurance costs from favorable claims experience.
- General and administrative expense decreased by $1.7 million to $11.7
million from $13.4 million,
due primarily to reductions in employee-related costs and rent from
the relocation of the company's call center as a result of
restructuring initiatives implemented in early 2013, and reductions
in travel and telecommunications expenses.
- Marketing expense decreased by $1.5
million to $21.6 million from
$23.1 million. Marketing cost per eye
was $406 compared with $394.
- Depreciation expense decreased by $2.6
million to $2.1 million from
$4.7 million, due primarily to lower
capital expenditures in recent years.
- Restructuring charges of $0.2
million resulted primarily from the relocation of the
company's call center during the first quarter of 2013.
- Operating loss was $2.4 million,
a $6.9 million improvement from an
operating loss of $9.3 million;
adjusted operating loss was $3.2
million, an $8.4 million
improvement from an adjusted operating loss of $11.6 million.
- Net loss was $1.4 million, or
$0.07 per share, a $7.1 million improvement from a net loss of
$8.5 million, or $0.45 per share.
- Cash and investments were $28.7
million as of December 31,
2013, compared with $34.5
million as of December 31,
2012. Cash used in operations included approximately
$1.2 million of investment in
expansion efforts related to the company's refractive lens and
cataract business, $1.8 million of
restructuring payments related to previously announced actions, and
additional working capital changes of $4.1
million primarily related to reductions in accounts payable
and accrued liabilities related to timing of payments, and
increased accounts receivable for self-financed patients, offset by
positive earnings from the core LASIK business.
The company provides adjusted revenues and operating 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 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.
"We are delighted that our core LASIK business returned to
profitability in 2013, earning nearly $400,000, our first operating profit since
2007. This achievement followed a focused effort to
right-size our cost structure and benefitted from improved
procedure volumes in the second half of the year. Entering
2014, we were able to lower cash flow breakeven for our core LASIK
business to 54,000 procedures annually, down from 56,000 procedures
previously.
"As we reported earlier, the number of procedures we performed
during the fourth quarter rose for the second consecutive
quarter. Our financial results are particularly gratifying as
fourth quarter procedures got off to a slow start due to
uncertainty created in October by the shutdown of the federal
government," said LCA-Vision Chief Executive Officer Michael J. Celebrezze. "We have been
diligent in controlling expenses, including our patient-acquisition
costs, and note that marketing costs per eye during the quarter was
$392, down from $417 in the third quarter of 2013 and
$411 a year ago. Our average
adjusted revenue per procedure increased slightly to $1,704 from $1,698
in the fourth quarter of last year, but down from $1,718 in the third quarter of 2013 due to a
promotion in the fourth quarter. In addition, based on input from
industry sources, we believe that during the fourth quarter we
again took market share from our competitors."
Mr. Celebrezze added, "We continue to increase the number of
cataract and other intraocular procedures, and remain positive
about the long-term prospects that this service brings to the
company."
Near-Term Financial Outlook
LCA-Vision intends to
continue to manage expenses conservatively throughout 2014; its
plans and current outlook for the year include:
- The company plans to open one satellite vision center in the
first quarter and one additional full-service vision center late in
the third quarter of 2014.
- The company expects 2014 capital expenditures to be between
$1.1 million and $1.3 million.
- For the first quarter of 2014, the company expects marketing
and advertising expenses to be between $6.4
million and $6.8 million.
"The first quarter of 2014 appointment bookings have been
running behind last year due to a combination of factors. Due to
the expiring promotion at the end of 2013 and to allow demand to
rebuild, we delayed marketing spending and did not run a promotion
in January 2014, compared to running
a promotion that began in mid-January 2013. In addition,
severe winter weather impacted January bookings and procedures,
with 11 vision centers closing 16 days and 16 vision centers having
22 shortened days, including some in our largest markets. To
compensate for these challenges, we began a promotion on
February 3rd offering a $500-off-discount. We will also begin
testing television advertising in six markets this week," Mr.
Celebrezze concluded.
LCA-Vision is lowering its estimate for the annual number of
procedures companywide necessary to reach cash-flow breakeven from
its LASIK business to approximately 54,000, down from 56,000
previously. This cash-flow estimate does not include
restructuring payments, debt service or start-up losses and capital
expenditures for its refractive lens and cataract business.
The company expects to continue to incur start-up costs for its
business expansion initiatives.
Conference Call and Webcast
Following last week's
announcement that the company has signed a definitive agreement to
be acquired by PhotoMedex, Inc. for $5.37 per share in cash, the company is
cancelling its conference call and webcast, which was to have been
held this morning.
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 (SEC), there
are a number of other risks and uncertainties associated with its
business including, without limitation, PhotoMedex's ability to
consummate the announced acquisition of the company, unexpected
costs or unexpected liabilities that may arise from the announced
acquisition and PhotoMedex's failure to realize the anticipated
benefits of the announced acquisition, and the general risks
associated with the businesses of PhotoMedex and LCA-Vision; the
successful execution of cost-effective marketing strategies to
attract patients to its vision centers; the impact of low consumer
confidence and discretionary spending; the impact of changes in
government regulations related to medical expenses; competition in
the laser vision correction industry; 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 refractive lens and
cataract market; additional regulatory requirements, such as for
Medicare, related to cataract and other refractive procedures; the
continued availability of non-recourse third-party financing for
its patients on terms similar to what it has paid historically; the
company's ability to achieve profitability in its developing
business expansion initiatives; 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 U.S. 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 conducting a
three-phase study on LASIK outcomes and quality of life. The
FDA or another regulatory body could take legal action against the
company or others in the laser vision correction industry. The
outcome of this review or legal action potentially could impact
negatively the acceptance of LASIK. In addition, the
acceptance rate of new technologies and the company's 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 SEC, 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 62
LasikPlus® vision centers in the U.S., including
52 full-service LasikPlus® fixed-site laser
vision correction centers and 10 pre- and post-operative
LasikPlus® satellite centers. LCA-Vision has
performed more than 1.3 million procedures since FDA approval of
photorefractive keratectomy (PRK) in late 1995.
Additional Information and Where to Find
It
PhotoMedex, LCA-Vision and their respective directors
and officers may be deemed to be participants in the solicitation
of proxies for the special meeting of LCA-Vision stockholders to be
held to approve the merger further discussed in the 8-K filed by
the company on February 13,
2014. In connection with the proposed acquisition, LCA-Vision
will file with the Securities and Exchange Commission a Proxy
Statement. The stockholders of LCA-Vision are advised to read, when
available, the Proxy Statement and other documents filed with the
Securities and Exchange Commission in connection with the
solicitation of proxies for the special meetings because these
documents will contain important information. The proxy statement
will be mailed to stockholders of LCA-Vision as of the record date
to be established for voting on the acquisition. The
preliminary proxy statement and definitive proxy statement, once
available, can be obtained, without charge, at the Securities and
Exchange Commission's website at www.sec.gov. In
addition, the proxy statement (when available) and such other
documents may be obtained free of charge by directing a request to
LCA-Vision Inc., 7840 Montgomery Road, Cincinnati, Ohio 45236, Attn: Corporate
Secretary, or (513)792-9292.
Earning Trust Every Moment; Transforming
Lives Every Day.
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|
For Additional
Information
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|
|
|
Company
Contact:
|
Investor Relations
Contact:
|
LCA-Vision
Inc.
|
LHA
|
Barb
Kise
|
Kim
Golodetz
|
513-792-5629
|
212-838-3777
|
|
kgolodetz@lhai.com
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|
or
|
|
Bruce
Voss
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|
310-691-7100
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|
bvoss@lhai.com
|
|
@LHA_IR_PR
|
|
|
|
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|
LCA-Vision
Inc.
|
Consolidated
Balance Sheets
|
(Dollars in
thousands)
|
(Unaudited)
|
|
|
|
|
|
At December
31,
|
|
2013
|
|
2012
|
|
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and
cash equivalents
|
$
26,689
|
|
$
31,653
|
Short-term investments
|
1,984
|
|
2,804
|
Patient
receivables, net of allowances of $719 and $1,019
|
3,026
|
|
2,810
|
Other
accounts receivable, net
|
950
|
|
443
|
Prepaid
expenses and other
|
1,820
|
|
3,318
|
|
|
|
|
Total current
assets
|
34,469
|
|
41,028
|
|
|
|
|
Property and
equipment
|
67,594
|
|
64,964
|
Accumulated
depreciation
|
(60,557)
|
|
(58,584)
|
Property and
equipment, net
|
7,037
|
|
6,380
|
|
|
|
|
Patient receivables,
net of allowances of $423 and $634
|
1,186
|
|
1,059
|
Other
assets
|
223
|
|
501
|
|
|
|
|
Total
assets
|
$
42,915
|
|
$
48,968
|
|
|
|
|
Liabilities and
Stockholders' Investment
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
7,218
|
|
$
8,046
|
Accrued
liabilities and other
|
6,868
|
|
11,930
|
Debt
obligations maturing within one year
|
777
|
|
-
|
|
|
|
|
Total current
liabilities
|
14,863
|
|
19,976
|
|
|
|
|
Long-term insurance
reserves, less current portion
|
5,714
|
|
5,741
|
Other long-term
liabilities
|
2,127
|
|
3,454
|
Long-term debt
obligations, less current portion
|
1,080
|
|
-
|
|
|
|
|
Stockholders'
investment
|
|
|
|
Common
stock ($.001 par value; 25,291,637 shares issued and
|
|
|
|
19,254,175 and
19,050,504 shares outstanding, respectively)
|
25
|
|
25
|
Contributed capital
|
180,790
|
|
179,543
|
Common
stock in treasury, at cost (6,037,462 shares and 6,241,133 shares,
respectively)
|
|
(110,034)
|
|
(111,395)
|
Accumulated deficit
|
(52,013)
|
|
(49,053)
|
Accumulated other comprehensive income
|
363
|
|
677
|
Total stockholders'
investment
|
19,131
|
|
19,797
|
|
|
|
|
Total liabilities and
stockholders' investment
|
$
42,915
|
|
$
48,968
|
|
|
|
|
|
|
|
|
|
|
|
|
LCA-Vision
Inc.
|
Consolidated
Statement of Operations
|
(Amounts in thousands
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
Revenues
|
$
20,616
|
|
$
20,195
|
|
$
92,185
|
|
$
101,493
|
|
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
Medical
professional and license fees
|
|
4,573
|
|
4,576
|
|
20,091
|
|
23,715
|
Direct
costs of services
|
9,716
|
|
10,870
|
|
39,092
|
|
44,348
|
General
and administrative
|
2,838
|
|
3,292
|
|
11,684
|
|
13,442
|
Marketing and advertising
|
4,715
|
|
4,773
|
|
21,635
|
|
23,055
|
Depreciation
|
495
|
|
992
|
|
2,050
|
|
4,736
|
Impairment charges
|
-
|
|
580
|
|
-
|
|
617
|
Restructuring charges
|
-
|
|
1,120
|
|
214
|
|
1,130
|
|
22,337
|
|
26,203
|
|
94,766
|
|
111,043
|
Gain on
sale of assets
|
18
|
|
18
|
|
198
|
|
239
|
|
|
|
|
|
|
|
|
Operating
loss
|
(1,703)
|
|
(5,990)
|
|
(2,383)
|
|
(9,311)
|
|
|
|
|
|
|
|
|
Net investment income
and other
|
214
|
|
158
|
|
890
|
|
656
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
(1,489)
|
|
(5,832)
|
|
(1,493)
|
|
(8,655)
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
(14)
|
|
(208)
|
|
(125)
|
|
(138)
|
|
|
|
|
|
|
|
|
Net loss
|
$
(1,475)
|
|
$
(5,624)
|
|
$
(1,368)
|
|
$
(8,517)
|
|
|
|
|
|
|
|
|
Loss per common
share
|
|
|
|
|
|
|
|
Basic
and Diluted
|
$
(0.08)
|
|
$
(0.30)
|
|
$
(0.07)
|
|
$
(0.45)
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
Basic
and Diluted
|
19,248
|
|
19,024
|
|
19,199
|
|
18,982
|
|
|
|
|
|
|
|
|
|
|
|
|
LCA-Vision
Inc.
|
Consolidated
Statements of Cash Flows
|
(Dollars in
thousands)
|
(Unaudited)
|
|
|
For the Years
Ended December 31,
|
|
2013
|
|
2012
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$
(1,368)
|
|
$
(8,517)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
Depreciation
|
2,050
|
|
4,736
|
Provision for loss on
doubtful accounts
|
416
|
|
914
|
Loss on
investments
|
-
|
|
68
|
Gain on sale of property and
equipment
|
(198)
|
|
(239)
|
Impairment
charges
|
-
|
|
617
|
Stock-based
compensation
|
1,247
|
|
2,060
|
Insurance
reserves
|
(31)
|
|
(604)
|
Changes in operating assets
and liabilities:
|
|
|
|
Patient
accounts receivable
|
(782)
|
|
(1,610)
|
Other
accounts receivable
|
(496)
|
|
1,522
|
Prepaid
expenses and other
|
437
|
|
793
|
Accounts
payable
|
(828)
|
|
(57)
|
Deferred
revenue, net of professional fees
|
(783)
|
|
(2,264)
|
Accrued
liabilities and other
|
(3,952)
|
|
(2,507)
|
Net cash used in
operations
|
(4,288)
|
|
(5,088)
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchases of property and
equipment
|
(700)
|
|
(1,160)
|
Proceeds from sale of
assets
|
240
|
|
305
|
Purchases of investment
securities
|
(1,984)
|
|
(39,656)
|
Proceeds from sale of
investment securities
|
2,804
|
|
62,883
|
Net cash provided by
investing activities
|
360
|
|
22,372
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Principal payments on
loan
|
(491)
|
|
(4,004)
|
Shares repurchased for
treasury stock
|
(231)
|
|
(357)
|
Proceeds from exercise of
stock options
|
-
|
|
57
|
Net cash used in
financing activities
|
(722)
|
|
(4,304)
|
|
|
|
|
Net effect of
exchange rate changes on cash and cash equivalents
|
(314)
|
|
105
|
|
|
|
|
(Decrease) increase
in cash and cash equivalents
|
(4,964)
|
|
13,085
|
|
|
|
|
Cash and cash
equivalents at beginning of year
|
31,653
|
|
18,568
|
|
|
|
|
Cash and cash
equivalents at end of year
|
$
26,689
|
|
$
31,653
|
|
|
|
|
|
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 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
December 31,
|
|
Twelve Months
Ended December 31,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Revenues
|
|
|
|
|
|
|
|
|
Reported U.S.
GAAP
|
|
$
20,616
|
|
$
20,195
|
|
$
92,185
|
|
$
101,493
|
Adjustments
|
|
|
|
|
|
|
|
|
Amortization of prior deferred revenue
|
|
(114)
|
|
(473)
|
|
(870)
|
|
(2,516)
|
Adjusted revenues
|
|
$
20,502
|
|
$
19,722
|
|
$
91,315
|
|
$
98,977
|
|
|
|
|
|
|
|
|
|
Operating
Loss
|
|
|
|
|
|
|
|
|
Reported U.S.
GAAP
|
|
$
(1,703)
|
|
$
(5,990)
|
|
$
(2,383)
|
|
$
(9,311)
|
Adjustments
|
|
|
|
|
|
|
|
|
Amortization of prior deferred revenue
|
|
(114)
|
|
(473)
|
|
(870)
|
|
(2,516)
|
Amortization of prior professional fees
|
|
11
|
|
47
|
|
87
|
|
252
|
Adjusted operating
loss
|
|
$
(1,806)
|
|
$
(6,416)
|
|
$
(3,166)
|
|
$
(11,575)
|
|
|
|
|
|
|
|
|
|
SOURCE LCA-Vision Inc.