CINCINNATI, April 26, 2011 /PRNewswire/ --LCA-Vision Inc. (NASDAQ: LCAV), a leading provider of laser vision correction services under the LasikPlus® brand, today announced financial and operational results for the three months ended March 31, 2011.
First Quarter 2011 Operational and Financial Highlights (all comparisons are with the first quarter of 2010 unless otherwise noted)
- Revenues were $32.3 million compared with $34.0 million; adjusted revenues were $31.0 million compared with $32.3 million.
- Laser vision correction procedures were 18,857, compared with 19,066 procedures (62 vision centers) and 17,408 same-store procedures (54 vision centers), an increase of 8.3% in same-store procedures and the second consecutive quarter of year-over-year same-store procedure growth.
- Same-store revenues increased 3.1%; adjusted same-store revenues increased 4.8%.
- Operating income was $2.0 million compared with an operating loss of $0.7 million; adjusted operating income was $0.8 million compared with an adjusted operating loss of $2.2 million. The improvement in operating income and adjusted operating income reflects the impact of closing under-performing vision centers, lowering marketing expenses and reducing general and administrative expenses. Included in the 2011 quarter were restructuring charges of $0.1 million related to the closure of vision centers in 2010 and $0.2 million in gains on sales of assets. This compares with restructuring charges of $0.3 million and $1.3 million in gains on sales of assets in the 2010 quarter.
- Net income was $2.0 million, or $0.11 per share, compared with net loss of $0.6 million, or $0.03 per share.
- Net cash provided by operations was $4.8 million, compared with $3.1 million.
- Cash and investments increased by $3.7 million to $55.9 million at March 31, 2011, compared with $52.2 million at December 31, 2010.
Adjusted revenues and operating income (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 income (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 our first profitable quarter in three years, an increase in our cash position and our second consecutive quarter of same-store growth in procedure volume," said LCA-Vision Chief Financial Officer Michael J. Celebrezze. "We attribute our improved financial and operational performance to a convergence of events, including seasonally high procedure volume, the positive impact of our marketing and operational actions, and an increase in the Consumer Confidence Present Situation Index, which historically has correlated with trends in our procedure volume. As our level of cash flow and profit are dependent largely on procedure volume and the first quarter is historically our strongest, we anticipate reporting operating losses in the coming quarters. However, compared with 2010, we expect improved financial and operational performance in 2011, including a reduction in overall operating loss.
"We are benefitting from our many cost control measures that have allowed us to manage expenses, as well as our patient acquisition initiatives, which contributed to an increase in the number of scheduled appointments in this year's first quarter compared with 2010, even with fewer vision centers. Our operational efficiency measures also are trending favorably, with appointment show rate and treatment show rate both increasing compared with the first and fourth quarters of 2010, and conversion rate remaining in-line sequentially and year-over-year. Importantly, our many initiatives that are supporting business improvements as we move through the current economic conditions also are aimed at building a strong infrastructure to support growth and profitability as the economy improves."
LCA-Vision Chief Operating Officer David L. Thomas said, "We are spending our marketing dollars more effectively than in past quarters, as evidenced by our first quarter average acquisition cost per eye of $344. This is down considerably from $413 in the 2010 first quarter and $442 in the 2010 fourth quarter. Some of the decrease was due to media buying through an innovative advertising barter program and the balance resulted from a shift in spending from research and creative development to more media purchases, as well as improvements in our messaging and media selection. In 2010, we conducted research to gain further insight into the market and develop a new marketing campaign aimed at the demographic group representing the most likely candidates for laser vision correction. This year we are able to put our knowledge and new campaign to work. We are focusing on higher local advertising frequency within each LasikPlus® market, with messages highlighting our surgeons' experience and the leading technology available in all LasikPlus® vision centers.
"We also are making progress in diversifying into related eye-health businesses," Thomas added. "We will be offering sunglasses and reading glasses in three additional LasikPlus® vision centers in the next several months as we continue to evaluate this program. In the next several months, we plan to begin testing a management services offering designed to generate revenue by attracting patients to LasikPlus® and offering provisional services to optometrists. Additionally, we plan to begin testing a cataract and intraocular lens surgery offering in one or two markets in the third quarter. Our business diversification measures are not expected to generate significant revenues in 2011; however, our objective is to support future growth and profitability, and mitigate our exposure to future economic downturns."
Near-term Financial Outlook
LCA-Vision intends to manage expenses conservatively in 2011. The company's plans and outlook for 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 center opening program when market conditions improve.
- The company expects marketing and advertising spend for the 2011 second quarter to range from $5.5 million to $6.5 million.
- The company expects capital expenditures in 2011 of $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 affirmed its expectation that the number of procedures companywide required for breakeven cash flow, after capital expenditures and debt service, is approximately 70,000 per year. The company continues to believe that it has sufficient cash and investments to fund its business beyond 2013 at 52,500 procedures annually. 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 800-642-1687 (U.S. and Canada) or 706-645-9291 (international callers) and enter the conference ID number: 54936171.
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 FDA's advisory board on ophthalmic devices currently is reviewing concerns about post-LASIK quality of life matters, and the FDA has begun a major new 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 54 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.
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Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
March 31, 2011
December 31, 2010
Cash and cash equivalents
Patient receivables, net of allowances of $1,316 and $1,392
Other accounts receivable, net
Prepaid expenses and other
Total current assets
Property and equipment
Accumulated depreciation and amortization
Property and equipment, net
Patient receivables, net of allowances of $400 and $330
Liabilities and Stockholders' Investment
Accrued liabilities and other
Debt obligations maturing within one year
Total current liabilities
Long-term rent obligations and other
Long-term debt obligations, less current portion
Deferred license fee
Common stock ($.001 par value; 25,291,637 shares issued and