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 month periods ended December 31, 2009.
Fourth Quarter 2009 Operational and Financial Results (all comparisons are with the fourth quarter of 2008)
- Revenues were $22.0 million compared with $34.0 million; adjusted revenues were $20.1 million compared with $30.3 million.
- Procedure volume was 11,718 compared with 19,424.
- Same-store revenues (71 vision centers) decreased 33.3%; adjusted same-store revenues decreased 31.1%.
- Operating loss was $10.1 million compared with operating loss of $9.6 million; adjusted operating loss was $11.8 million compared with adjusted operating loss of $13.0 million. Operating loss and adjusted operating loss for the fourth quarters of 2009 and 2008 included restructuring and impairment charges of $1.2 million and $2.1 million, respectively.
- Net loss was $3.6 million, or $0.19 per share, compared with net loss of $8.2 million, or $0.44 per share. The decrease in net loss resulted primarily from charges taken in the fourth quarter of 2008 of $2.1 million for other-than-temporary impairment of investments and a decrease of $930,000 in restructuring and fixed asset impairment charges.
Full Year 2009 Operational and Financial Results (all comparisons are with the full year 2008)
- Revenues were $129.2 million compared with $205.2 million; adjusted revenues were $120.1 million compared with $186.5 million.
- Procedure volume was 72,776 compared with 115,153.
- Operating loss was $36.5 million compared with operating loss of $8.2 million; adjusted operating loss was $44.7 million compared with adjusted operating loss of $25.1 million. Operating loss and adjusted operating loss for 2009 included $8.1 million in restructuring and impairment charges and $0.8 million in consent revocation solicitation charges; operating loss and adjusted operating loss for 2008 included $3.5 million in restructuring and impairment charges.
- Net cash provided by operations was $1.4 million compared with $6.9 million.
- Net loss was $33.2 million, or $1.79 per share, compared with net loss of $6.6 million, or $0.36 per share. The 2009 net loss included a $12.2 million, or $0.66 per share, valuation allowance for deferred tax assets.
- Cash and investments totaled $54.6 million as of December 31, 2009, compared with $59.5 million as of December 31, 2008.
Since the first quarter of 2007, LCA-Vision has provided both adjusted revenues and operating losses 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 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 balancing cash conservation in the current challenging economic environment against our longer-term objective of managing to profitability and growth when the economy improves," said LCA-Vision Chief Financial Officer Michael J. Celebrezze. "Our combined cash conservation and expense reduction measures last year included closing 12 underperforming vision centers, reducing marketing expense by $18.6 million, reducing our headcount by 19%, and renegotiating our equipment contracts. The payroll and equipment cost reductions resulted in an annual savings of approximately $11 million. We ended 2009 with more than $54 million in cash and investments and currently operate a network of 62 LasikPlus® vision centers."
Chief Operating Officer David L. Thomas commented, "Our decision to reduce fourth quarter marketing and advertising spending to less than $6 million in an effort to align marketing expenses with perceived consumer demand resulted in less than desired procedure volume. We are increasing marketing and advertising spending in the first quarter of 2010 to $9 million. Consumer marketing is critical to driving procedure volume and, in the past several months, we have conducted an extensive analytical evaluation of all marketing drivers with the objective of taking a more comprehensive data-driven approach to marketing. With the support of a top-line, full-service advertising agency, we are refining our branding to better differentiate LCA-Vision / LasikPlus® from others in our category and developing more compelling messages. We also are changing our focus toward competing with individual surgeon practices, which control nearly two-thirds of our market. Early this year we hired a Vice President of Marketing with considerable senior-level experience in customer-centric organizations who is now leading our marketing initiatives.
"During the fourth quarter, we expanded our Advanced Eye Health Analysis, or AEHA, program to 14 LasikPlus® vision centers. We also decided to offer the exam free of charge to prospective LASIK patients after determining that fees for the stand-alone procedure were negatively impacting appointment show rates. We expect to complete an evaluation of this program in the second quarter of 2010."
Near-term Financial Outlook
LCA-Vision intends to continue to manage cash flow conservatively in 2010. The Company's plans and outlook for 2010 include:
- The company does not plan to open any new vision centers in the near term. LCA-Vision will consider restarting its de novo new center opening program when market conditions improve.
- The company will continue to manage general and administrative expenses aggressively, which it expects will decline slightly in 2010 from 2009 levels, following a 19% decline in 2009 from 2008.
- The company expects direct costs per center to decline slightly in 2010 from 2009, following an 18% decline in 2009 from 2008.
- The company expects marketing and advertising spend for the 2010 first quarter to be approximately $9.0 million.
- The company expects capital expenditures of $1.2 million in 2010 for vision center renovations and equipment replacement.
As a result of aggressive efforts to reduce costs, the number of procedures per vision center required to reach breakeven has declined to 95 per month. LCA-Vision estimates the number of procedures companywide required for breakeven cash flow, after capital expenditures and debt service, to be approximately 95,000 per year. The company believes that it has sufficient cash and investments to fund its business beyond 2012 if it performs at least 65,000 procedures annually. Procedure volume for 2009 was 72,776.
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 (United States and Canada) or 706-643-6246 (international callers). The webcast will be available at 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 (United States and Canada) or 706-645-9291 (international callers) and enter the conference ID number: 493 358 95.