TLC Vision Corporation (NASDAQ: TLCV) (TSX: TLC), North America's
premier eye care services company, today announced results for the
second quarter ended June 30, 2009.
James B. Tiffany, President and Chief Operating Officer of
TLCVision, commented, "TLCVision posted strong operating results
during the second quarter of 2009, despite the current economic
environment. Our refractive centers procedure volume, down 28% from
the prior year's quarter, outperformed industry estimates.
Additionally, we were able to increase our market share in the
second quarter to 15% versus 14% in the prior year period.
"Our non-refractive businesses, which include other surgical
procedures and general eye care, accounted for 44% of our total
revenue for the quarter. We also continue to realize significant
cost reductions related to ongoing initiatives that generated
approximately $11.4 million of cost savings in the second quarter
of 2009 versus the prior year. Our cash balance at June 30, 2009
was $14.1 million.
"With respect to our credit facility, we recently secured a
limited waiver extension from our lenders until September 9, 2009
and we continue to work with our lenders and advisors to secure a
more flexible capital structure for the Company.
"We benefit from a strong foundation in our non-refractive
businesses as they continue to contribute positive EBITDA and cash
flow. Our better than market performance in our refractive business
is the result of our multi-channel patient acquisition model and
the dedicated effort of TLCVision employees across North America
who continue to provide the best clinical outcomes in the
industry."
Second Quarter 2009 Results
-- Revenue for the second quarter was $58.5 million, a 21% decrease over
prior year revenue of $74.1 million, with refractive revenues showing
a decline of 31%.
- Refractive Centers revenue of $27 million decreased by 31%, as
majority-owned center procedures declined by 29%, less than
estimated market declines.
- Doctor Services revenue of $24 million decreased by 4%, reflecting
weakness in the refractive access business partially offset by
growth in the cataract business.
- Eye Care revenue of $7 million decreased 26%. This decrease was due
to the timing of the Vision Source annual national meeting which was
held in Q1 2009 this year compared to Q2 2008. Excluding annual
meeting revenue in Q2 2008, Eye Care recorded an increase in revenue
of 13% for Q2 2009 due primarily to an increase in franchise revenue.
-- General and administrative and marketing costs declined by 31% or
$5.3 million below prior year due to cost reduction initiatives.
-- Other expenses increased $6.0 million due to various restructuring
activities including legal fees, consulting costs and severance
charges.
-- Consolidated net loss attributable to TLC Vision Corporation for the
second quarter was ($6.9) million, compared to ($2.2) million from the
prior year period. Net loss attributable to TLC Vision Corporation per
diluted share for the second quarter was ($0.14), compared to net a
loss of ($0.04) for the prior year period.
-- Pro-forma net loss attributable to TLC Vision Corporation for the
second quarter (excluding severance and restructuring charges) was
($1.3) million or ($0.03) per fully diluted share, compared with
($2.2) million, or ($0.04) per fully diluted share in the second
quarter of 2008.
-- Adjusted EBITDA for the second quarter was $6.0 million, or $0.12 per
fully diluted share, compared to $5.7 million, or $0.11 per fully
diluted share for the second quarter of 2008.
Six Month 2009 Results
-- Revenue for the six months ended June 30, 2009, was $127.9 million, a
22% decrease over prior year revenue of $164.5 million, with refractive
revenues showing a decline of 36%.
- Refractive Centers revenue of $63 million decreased by 36%, as
majority-owned center procedures declined by 35%.
- Doctor Services revenue of $48 million decreased by 5%, reflecting
weakness in the refractive access business partially offset by
growth in the cataract business.
- Eye Care revenue of $17 million increased 7% as a result of
increased franchises and revenue per franchisee.
-- General and administrative and marketing costs declined by 34% or
$12.5 million below prior year due to cost reduction initiatives.
-- Other expenses increased $8.7 million due to various restructuring
activities including legal fees, consulting costs and severance charges.
-- Consolidated net loss attributable to TLC Vision Corporation for the
six months ended June 30, 2009 was ($8.2) million, compared to net
income of $3.9 million from the prior year period. Net loss attributable
to TLC Vision Corporation per diluted share for the six months ended
June 30, 2009, was ($0.16), compared to net income per diluted share of
$0.08 for the prior year period.
-- Pro-forma net income attributable to TLC Vision Corporation for the six
months ended June 30, 2009 (excluding severance and restructuring
charges) was $0.1 million, or $0.00 per fully diluted share, compared
with $3.9 million, or $0.08 per fully diluted share for the prior year
period.
-- Adjusted EBITDA for the six months ended June 30, 2009 was $14.6
million, or $0.29 per fully diluted share, compared to $19.6 million,
or $0.39 per fully diluted share, for the first six months of 2008.
Use of Non-GAAP Measures
Pro-forma results are presented to facilitate a comparison of
current year and prior year results. The calculations of pro-forma
results are not specified by United States generally accepted
accounting principles ("GAAP"). Our calculations of pro-forma
results may not be comparable to similarly-titled measures of other
companies. A reconciliation of reported net income to pro-forma net
income for the quarter and six months ended June 30, 2009 and 2008,
is included in the attached Consolidated Statements of
Operations.
Adjusted EBITDA is a non-GAAP financial measure. It is used in
addition to and in conjunction with results presented in accordance
with GAAP. This non-GAAP financial measure reflects an additional
way of viewing aspects of our operations that, when viewed with our
GAAP results, provide a more complete understanding of factors and
trends affecting our business. A schedule detailing the calculation
of Adjusted EBITDA is attached to this release.
Non-GAAP measures should be considered as a supplement to, and
not as a substitute for, or superior to, the corresponding measures
calculated in accordance with generally accepted accounting
principles.
Conference Call
The company will host a conference call and live webcast with
investors and analysts on Thursday, August 13, 2009 at 5:00 p.m.
(EDT). To access, please dial 888-359-3632 or 719-785-1754
(international callers) and enter the pass code 2703574. The call
will be broadcast live on the company's website at www.tlcv.com
under the "Webcasts" link in the Investor Relations section.
A replay of the conference call will be available until August
27, 2009. To access the replay, dial 888-203-1112 or 719-457-0820
(international callers) and enter the pass code: 2703574. The call
will also be archived on the company's web site at www.tlcv.com
under the "Webcasts" link in the Investor Relations section.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of Section 27A of the U.S. Securities Act of
1933, Section 21E of the U.S. Securities Exchange Act of 1934 and
Canadian Provincial Securities Laws, which statements can be
identified by the use of forward-looking terminology, such as
"may," "will," "expect," "intend," "anticipate," "estimate,"
"predict," "plans" or "continue" or the negative thereof or other
variations thereon or comparable terminology referring to future
events or results. We caution that all forward-looking information
is inherently uncertain and that actual results may differ
materially from the assumptions, estimates or expectations
reflected in the forward-looking information. A number of factors
could cause actual results to differ materially from those in
forward-looking statements, including but not limited to economic
conditions, the level of competitive intensity for laser vision
correction, the market acceptance of laser vision correction,
concerns about potential side effects and long term effects of
laser vision correction, the ability to maintain agreements with
doctors on satisfactory terms, quarterly fluctuation of operating
results that make financial forecasting difficult, the volatility
of the market price of our common shares, profitability of
investments, successful execution of our direct-to-consumer
marketing programs, the ability to open new centers, the reliance
on key personnel, medical malpractice claims and the ability to
maintain adequate insurance therefore, claims for federal, state
and local taxes, compliance with industry regulation, compliance
with U.S. and Canadian healthcare regulations, disputes regarding
intellectual property, many of which are beyond our control.
Therefore, should one or more of theses risks materialize, or
should assumptions underlying the forward-looking statements prove
incorrect, actual results may vary significantly from what we
currently foresee. Accordingly, we warn investors to exercise
caution when considering any such forward-looking information
herein and to not place undue reliance on such statements and
assumptions. We are under no obligation (and we expressly disclaim
any such obligation) to update or alter any forward-looking
statements or assumptions whether as a result of new information,
future events or otherwise, except as required by law.
See the Company's reports filed with the Canadian Securities
Regulators and the U.S. Securities and Exchange Commission from
time to time for cautionary statements identifying important
factors with respect to such forward-looking statements, including
certain risks and uncertainties, that could cause actual results to
differ materially from results referred to in forward-looking
statements. TLCVision assumes no obligation to update the
information contained in this press release.
About TLCVision
TLCVision is North America's premier eye care services company,
providing eye doctors with the tools and technologies needed to
deliver high-quality patient care. Through its centers' management,
technology access service models, extensive optometric
relationships, direct to consumer advertising and managed care
contracting strength, TLCVision maintains leading positions in
Refractive, Cataract and Eye Care markets. Information about vision
correction surgery can be found on the TLC Laser Eye Centers'
website at www.lasik.com. More information about TLCVision can be
found on the Company's website at www.tlcv.com.
TLC VISION CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
Three months ended
June 30,
------------------
2009 2008
-------- --------
Revenues:
Refractive centers $ 26,948 $ 39,057
Doctor services 24,492 25,528
Eye care 7,019 9,512
-------- --------
Total revenues 58,459 74,097
Cost of revenues (excluding amortization):
Refractive centers 21,595 29,409
Doctor services 17,757 18,680
Eye care 3,150 4,691
-------- --------
Total cost of revenues (excluding amortization) 42,502 52,780
-------- --------
Gross profit 15,957 21,317
-------- --------
General and administrative 6,392 6,986
Marketing and sales 5,509 10,209
Amortization of intangibles 582 803
Other expense (income), net 5,628 (359)
-------- --------
Total operating costs 18,111 17,639
-------- --------
Operating (loss) income (2,154) 3,678
Interest income 34 216
Interest expense (2,462) (2,414)
Earnings (loss) from equity investments 442 (319)
-------- --------
Loss (Income) before income taxes (4,140) 1,161
Income tax expense (274) (285)
-------- --------
Net (loss) income (4,414) 876
Less: Net income attributable to noncontrolling
interest 2,445 3,076
-------- --------
Net loss attributable to TLC Vision Corporation $ (6,859) $ (2,200)
======== ========
Net loss per share attributable to TLC Vision
Corporation, diluted $ (0.14) $ (0.04)
======== ========
Weighted average number of common shares outstanding,
diluted 50,565 50,292
Calculation of Pro Forma Net Loss and EPS
Net loss attributable to TLC Vision Corporation, as
reported $ (6,859) $ (2,200)
Add: Severance and restructuring charges 5,572 0
-------- --------
Pro forma net loss attributable to TLC Vision
Corporation $ (1,287) $ (2,200)
======== ========
Pro forma net loss per share attributable to TLC
Vision Corporation, diluted $ (0.03) $ (0.04)
======== ========
Calculation of Adjusted EBITDA
Net loss attributable to TLC Vision Corporation, as
reported $ (6,859) $ (2,200)
Add: Income tax expense 274 285
Depreciation and amortization 3,997 4,982
Interest expense, net 2,428 2,198
Non-cash compensation 135 354
Foreign exchange loss 401 82
Severance and restructuring charges 5,572 -
Other 7 -
-------- --------
Adjusted EBITDA $ 5,955 $ 5,701
======== ========
Adjusted EBITDA per share, diluted $ 0.12 $ 0.11
======== ========
TLC VISION CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
Six months ended
June 30,
------------------
2009 2008
-------- --------
Revenues:
Refractive centers $ 62,948 $ 98,024
Doctor services 48,048 50,591
Eye care 16,885 15,837
-------- --------
Total revenues 127,881 164,452
Cost of revenues (excluding amortization):
Refractive centers 47,630 66,766
Doctor services 36,091 36,821
Eye care 7,922 7,513
-------- --------
Total cost of revenues (excluding amortization) 91,643 111,100
-------- --------
Gross profit 36,238 53,352
-------- --------
General and administrative 12,328 15,353
Marketing and sales 12,337 21,860
Amortization of intangibles 1,165 1,633
Other expense (income), net 8,146 (556)
-------- --------
Total operating costs 33,976 38,290
-------- --------
Operating income 2,262 15,062
Interest income 168 426
Interest expense (5,563) (4,890)
Earnings (loss) from equity investments 792 (102)
-------- --------
(Loss) income before income taxes (2,341) 10,496
Income tax expense (484) (732)
-------- --------
Net (loss) income (2,825) 9,764
Less: Net income attributable to noncontrolling
interest 5,358 5,892
-------- --------
Net (loss) income attributable to TLC Vision
Corporation $ (8,183) $ 3,872
======== ========
Net (loss) income per share attributable to TLC Vision
Corporation, diluted $ (0.16) $ 0.08
======== ========
Weighted average number of common shares outstanding,
diluted 50,542 50,293
Calculation of Pro Forma Net (Loss) Income and EPS
Net (loss) income attributable to TLC Vision
Corporation, as reported $ (8,183) $ 3,872
Add: Restructuring and severance charges 8,258 0
-------- --------
Pro forma net income attributable to TLC Vision
Corporation $ 75 $ 3,872
======== ========
Pro forma net income per share attributable to TLC
Vision Corporation, diluted $ 0.00 $ 0.08
======== ========
Calculation of Adjusted EBITDA
Net (loss) income attributable to TLC Vision
Corporation, as reported $ (8,183) $ 3,872
Add: Income tax expense 484 732
Depreciation and amortization 8,009 9,877
Interest expense, net 5,395 4,464
Non-cash compensation 343 711
Foreign exchange loss (gain) 309 (81)
Severance and restructuring charges 8,258 -
Other 7 -
-------- --------
Adjusted EBITDA $ 14,622 $ 19,575
======== ========
Adjusted EBITDA per share, diluted $ 0.29 $ 0.39
======== ========
TLC VISION CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
As of As of
June 30, December 31,
2009 2008
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 14,055 $ 4,492
Accounts receivable, net 17,697 16,870
Prepaid expenses, inventory and other 11,393 14,214
----------- -----------
Total current assets 43,145 35,576
Restricted cash 943 -
Investments and other assets, net 11,479 11,694
Goodwill 28,570 28,570
Other intangible assets, net 9,318 10,628
Fixed assets, net 46,204 50,514
----------- -----------
Total assets $ 139,659 $ 136,982
=========== ===========
LIABILITIES
Current liabilities:
Accounts payable $ 15,906 $ 17,897
Accrued liabilities 23,500 28,076
Current maturities of long-term debt
(including $76.7 million of term debt at
June 30, 2009 and $82.7 million in default
December 31, 2008) 106,837 89,081
----------- -----------
Total current liabilities 146,243 135,054
Long-term debt, less current maturities 15,749 16,500
Other long-term liabilities 4,626 5,444
----------- -----------
Total liabilities 166,618 156,998
----------- -----------
STOCKHOLDERS' DEFICIT
TLC Vision Corporation stockholders' deficit:
Common stock, no par value 339,477 339,112
Option and warrant equity 745 745
Accumulated other comprehensive loss (1,167) (1,545)
Accumulated deficit (381,841) (373,658)
----------- -----------
Total TLC Vision Corporation stockholders'
deficit (42,786) (35,346)
Noncontrolling interest 15,827 15,330
----------- -----------
Total stockholders' deficit (26,959) (20,016)
----------- -----------
Total liabilities and stockholders'
deficit $ 139,659 $ 136,982
=========== ===========
TLC VISION CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands, except per share amounts)
Six months ended
June 30,
------------------
2009 2008
-------- --------
OPERATING ACTIVITIES
Net (loss) income $ (2,825) $ 9,764
Adjustments to reconcile net (loss) income to net cash
from operating activities:
Depreciation and amortization 8,009 9,877
(Earnings) loss from equity investments (792) 102
Gain on sales and disposals of fixed assets (277) (289)
Gain on sale of businesses - (145)
Non-cash compensation expense 343 711
Other 550 354
Changes in operating assets and liabilities, net of
acquisitions and dispositions: (542) 2,173
-------- --------
Cash provided by operating activities 4,466 22,547
-------- --------
INVESTING ACTIVITIES
Purchases of fixed assets (773) (1,957)
Proceeds from sales of fixed assets 345 550
Distributions and loan payments received from equity
investments 1,071 945
Acquisitions and equity investments (4,838) (7,533)
Divestitures of businesses - 1,179
Other 104 (28)
-------- --------
Cash used in investing activities (4,091) (6,844)
-------- --------
FINANCING ACTIVITIES
Restricted cash movement (943) 893
Principal payments of debt financing and capital leases (2,924) (17,411)
Proceeds from debt financing 17,971 7,385
Capitalized debt costs (78) (534)
Distributions to noncontrolling interests (4,861) (5,175)
Proceeds from issuances of common stock 23 275
-------- --------
Cash provided by (used in) financing activities 9,188 (14,567)
-------- --------
Net increase in cash and cash equivalents during the
period 9,563 1,136
Cash and cash equivalents, beginning of period 4,492 12,925
-------- --------
Cash and cash equivalents, end of period $ 14,055 $ 14,061
======== ========
Operating cash flow per diluted share $ 0.09 $ 0.45
Contact: James J. Hyland VP Investor Relations (636) 534-2369
Email: investor.relations@tlcvision.com
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