CINCINNATI, April 30, 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 months
ended March 31, 2014.
First Quarter 2014 Financial and Operating Highlights
(all comparisons are with the first quarter of 2013)
- Revenues were $25.5 million, down
9.8% from $28.3 million; adjusted
revenues declined 8.9% to $25.5
million from $27.9
million.
- Procedure volume declined 8.4% to 14,898 from 16,272.
- Average adjusted revenue per procedure declined to $1,709 from $1,717,
due primarily to a $500-off price
promotion in the 2014 quarter.
- Medical professional and license fees were $5.8 million compared with $6.7 million. The decrease is due to lower
procedure volume and favorable per-procedure fee negotiations with
a key vendor in the second quarter of 2013.
- Vision center direct costs were $10.1
million in both periods with increases in rent and bad debt
expense in 2014 offset by reductions in laser maintenance and state
and local taxes.
- General and administrative expense decreased by $0.2 million to $2.9
million from $3.1 million, due
primarily to lower employee-related costs.
- Marketing and advertising expense of $6.0 million decreased by $0.6 million. Marketing cost per eye was
$400, compared with $404.
- Depreciation expense decreased slightly to $0.5 million from $0.6
million, due to slightly lower capital expenditures.
- Operating loss was $0.3 million
compared with operating profit of $1.0
million. Adjusted operating loss was $0.4 million compared with adjusted operating
income of $0.7 million. Operating
loss and adjusted operating loss for the first quarter of 2014
reflected lower procedure volume and revenues, transaction costs of
$0.6 million related to the merger
agreement with PhotoMedex, partially offset by other expense
reductions. The first quarter of 2013 included $0.2 million of restructuring charges related to
relocating the patient call center.
- Net loss was $0.2 million, or
$0.01 per share, compared with net
income of $1.2 million, or
$0.06 per share.
- Cash and investments were $29.8
million as of March 31, 2014,
compared with $28.7 million as of
December 31, 2013.
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.
"As we previously reported, inclement weather during the quarter
disrupted our operations and negatively impacted procedure volume
as demonstrated by 100 closed days or partially closed days among a
number of our vision centers. We believe our results also
were negatively impacted by the timing of our price promotions and
changes in marketing compared with last year. The number of
cataract and intraocular lens procedures increased compared with
the first quarter of 2013 but were lower than the fourth quarter of
2013," said LCA-Vision Chief Executive Officer Michael J. Celebrezze.
On February 13, 2014, LCA-Vision
Inc. and PhotoMedex, Inc. entered into an Agreement and Plan of
Merger providing for the acquisition of LCA-Vision by PhotoMedex.
Pursuant to the terms of the merger agreement, a wholly owned
subsidiary of PhotoMedex will be merged with and into LCA-Vision,
with LCA-Vision surviving the merger as a wholly owned subsidiary
of PhotoMedex. A Special Meeting of LCA-Vision Stockholders is
scheduled to be held on May 7, 2014
at the Queen City Club, 331 East Fourth Street, Cincinnati, OH 45202 at 9:00 a.m., Eastern Time, to consider and vote on
a proposal to adopt the merger agreement and related
matters.
About LCA-Vision
Inc./LasikPlus®
LCA-Vision Inc., a leading
provider of laser vision correction services under the
LasikPlus® brand, operates 60
LasikPlus® vision centers in the U.S., including
51 full-service LasikPlus® fixed-site laser
vision correction centers and nine 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.
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, 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.
Participants in the Solicitation
LCA-Vision Inc.
("LCA-Vision") and its 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 on May
7, 2014 to approve the merger of LCA-Vision with a
subsidiary of PhotoMedex, Inc. ("PhotoMedex"). In connection with
the proposed merger, LCA-Vision has filed with the Securities and
Exchange Commission a Proxy Statement. The stockholders of
LCA-Vision are advised to read in full the Proxy Statement and
other documents filed with the Securities and Exchange Commission
in connection with the solicitation of proxies for the special
meeting because these documents contain important information. The
Proxy Statement was mailed on or about March
28, 2014 to stockholders of LCA-Vision as of March 20, 2014, the record date for voting on the
merger. The Proxy Statement can be obtained, without charge, at the
Securities and Exchange Commission's website at www.sec.gov. In
addition, the Proxy Statement and other documents relating to the
special meeting may be obtained free of charge by directing a
request to LCA-Vision Inc., 7840 Montgomery Road, Cincinnati, Ohio 45236, Attn: Assistant
Secretary, or (513) 792-9090.
(TABLES TO FOLLOW)
LCA-Vision
Inc.
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(Dollars in
thousands)
|
|
|
March
31, 2014
|
|
December 31,
2013
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and
cash equivalents
|
$
27,822
|
|
$
26,689
|
Investments
|
1,984
|
|
1,984
|
Patient
receivables, net of allowances of $774 and $719,
respectively
|
3,148
|
|
3,026
|
Other
accounts receivable, net
|
692
|
|
950
|
Prepaid
expenses and other
|
2,168
|
|
1,820
|
|
|
|
|
Total current
assets
|
35,814
|
|
34,469
|
|
|
|
|
Property and
equipment, net
|
6,629
|
|
7,037
|
Patient receivables,
net of allowances of $490 and $423
|
1,294
|
|
1,186
|
Other
assets
|
223
|
|
223
|
|
|
|
|
Total
assets
|
$
43,960
|
|
$
42,915
|
|
|
|
|
Liabilities and
Stockholders' Investment
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
7,760
|
|
$
7,218
|
Accrued
liabilities and other
|
8,240
|
|
6,868
|
Debt
obligations maturing within one year
|
784
|
|
777
|
|
|
|
|
Total current
liabilities
|
16,784
|
|
14,863
|
|
|
|
|
Long-term insurance
reserves, less current portion
|
5,521
|
|
5,714
|
Long-term debt
obligations, less current portion
|
881
|
|
1,080
|
Other long-term
liabilities
|
1,917
|
|
2,127
|
|
|
|
|
Stockholders'
investment
|
|
|
|
Common
stock ($.001 par value; 25,291,637 shares issued and
|
|
|
|
19,347,554 and 19,254,175
shares outstanding, respectively)
|
25
|
|
25
|
Contributed capital
|
181,084
|
|
180,790
|
Common
stock in treasury, at cost (5,944,083 shares and 6,037,462 shares,
respectively)
|
(109,674)
|
|
(110,034)
|
Accumulated deficit
|
(52,796)
|
|
(52,013)
|
Accumulated other comprehensive income
|
218
|
|
363
|
Total stockholders'
investment
|
18,857
|
|
19,131
|
|
|
|
|
Total liabilities and
stockholders' investment
|
$
43,960
|
|
$
42,915
|
|
|
|
|
LCA-Vision
Inc.
|
Condensed
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
|
(Amounts in thousands
except per share data)
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
Revenues
|
$
25,531
|
|
$
28,304
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
Medical professional
and license fees
|
5,793
|
|
6,734
|
|
Direct costs of
services
|
10,113
|
|
10,059
|
|
General and
administrative expenses
|
2,929
|
|
3,149
|
|
Marketing and
advertising
|
5,958
|
|
6,570
|
|
Depreciation
|
490
|
|
556
|
|
Transaction
costs
|
598
|
|
-
|
|
Restructuring
charges
|
(6)
|
|
219
|
|
|
25,875
|
|
27,287
|
|
Gain on sale of
assets
|
-
|
|
6
|
|
|
|
|
|
|
Operating (loss)
income
|
(344)
|
|
1,023
|
|
|
|
|
|
|
Net investment income
and other
|
221
|
|
216
|
|
|
|
|
|
|
(Loss) income before
taxes on income
|
(123)
|
|
1,239
|
|
|
|
|
|
|
Income tax
expense
|
28
|
|
34
|
|
|
|
|
|
|
Net (loss)
income
|
$
(151)
|
|
$
1,205
|
|
|
|
|
|
|
(Loss) earnings per
common share
|
|
|
|
|
Basic
|
$
(0.01)
|
|
$
0.06
|
|
Diluted
|
$
(0.01)
|
|
$
0.06
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
Basic
|
19,284
|
|
19,093
|
|
Diluted
|
19,284
|
|
19,283
|
|
|
|
|
|
|
Other comprehensive
loss:
|
|
|
|
|
Foreign
currency translation
|
$
(145)
|
|
$
(97)
|
|
Total other
comprehensive loss
|
$
(145)
|
|
$
(97)
|
|
|
|
|
|
|
Comprehensive (loss)
income
|
$
(296)
|
|
$
1,108
|
|
|
|
|
|
|
LCA-Vision
Inc.
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(Dollars in
thousands)
|
|
|
|
|
|
Three months ended
March 31,
|
|
2014
|
|
2013
|
|
|
|
|
Cash flow from
operating activities:
|
|
|
|
Net (loss)
income
|
$
(151)
|
|
$
1,205
|
Adjustments to
reconcile net (loss) income to net cash provided by (used in)
operating activities:
|
|
|
Depreciation
|
490
|
|
556
|
Provision for loss on doubtful accounts
|
374
|
|
87
|
Gain on
sale of assets
|
-
|
|
(6)
|
Stock-based compensation
|
294
|
|
346
|
Insurance reserve
|
(222)
|
|
(212)
|
Changes
in operating assets and liabilities:
|
|
|
|
Patient accounts
receivable
|
(579)
|
|
(708)
|
Other accounts
receivable
|
229
|
|
(1,699)
|
Prepaid expenses and
other
|
(387)
|
|
(984)
|
Accounts payable
|
542
|
|
193
|
Deferred revenue, net of
professional fees
|
(63)
|
|
(332)
|
Accrued liabilities and
other
|
1,291
|
|
525
|
|
|
|
|
Net cash provided by
(used in) operations
|
1,818
|
|
(1,029)
|
|
|
|
|
Cash flow from
investing activities:
|
|
|
|
Purchases of property and equipment
|
(80)
|
|
(135)
|
Proceeds
from sale of assets
|
4
|
|
11
|
Proceeds
from sale of investment securities
|
-
|
|
2,804
|
|
|
|
|
Net cash (used in)
provided by investing activities
|
(76)
|
|
2,680
|
|
|
|
|
Cash flow from
financing activities:
|
|
|
|
Principal payments on loan
|
(192)
|
|
-
|
Shares
repurchased for treasury stock
|
(272)
|
|
(231)
|
|
|
|
|
Net cash used in
financing activities
|
(464)
|
|
(231)
|
|
|
|
|
Net effect of
exchange rate changes on cash and cash equivalents
|
(145)
|
|
(97)
|
|
|
|
|
Increase in cash and
cash equivalents
|
1,133
|
|
1,323
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
26,689
|
|
31,653
|
|
|
|
|
Cash and cash
equivalents at end of period
|
$
27,822
|
|
$
32,976
|
|
|
|
|
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
March 31,
|
|
|
2014
|
|
2013
|
Revenues
|
|
|
|
|
Reported U.S.
GAAP
|
|
$
25,531
|
|
$
28,304
|
Adjustments
|
|
|
|
|
Amortization of prior deferred revenue
|
|
(70)
|
|
(369)
|
Adjusted revenues
|
|
$
25,461
|
|
$
27,935
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)
income
|
|
|
|
|
Reported U.S.
GAAP
|
|
$
(344)
|
|
$
1,023
|
Adjustments
|
|
|
|
|
Amortization of prior deferred revenue
|
|
(70)
|
|
(369)
|
Amortization of prior professional fees
|
|
7
|
|
37
|
Adjusted operating (loss)
income
|
|
$
(407)
|
|
$
691
|
|
|
|
|
|
SOURCE LCA-Vision, Inc.