U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
(Mark One)
[ X ]
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 2002.
[ ]
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT.
For the transition period from __________ to __________
Commission file number0-27610
LCA-Vision Inc.
(Exact name of registrant as specified in its charter)
Delaware
11-2882328
(State or other jurisdiction of
(IRS Employer
incorporation or organization)
Identification No.)
7840 Montgomery Road, Cincinnati, Ohio 45236
(Address of principal executive offices)
(513) 792-9292
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
X
No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 42,964,762 shares as of October 24, 2002.
#
LCA-Vision Inc.
INDEX
Facing Sheet
1
Index
2
Part I.
Financial Information
Item 1.
Financial Statements
Condensed Consolidated Balance Sheets as of September 30, 2002
3
and December 31, 2001
Condensed Consolidated Statements of Income for the Three
4
and Nine Months Ended September 30, 2002 and 2001
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended
5
September 30, 2002 and 2001
Notes to Condensed Consolidated Financial Statements
6
Item 2.
Management’s Discussion and Analysis of Financial Condition and
8
Results of Operations
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
10
Item 4.
Controls and Procedures
10
Part II.
Other Information
10
Item 1.
Legal Proceedings
Item 2.
Changes in Securities and Use of Proceeds
Item 3.
Defaults Upon Senior Securities
Item 4.
Submission of Matters to a Vote of Security Holders
Item 5.
Other Information
Item 6.
Exhibits and Reports on Form 8-K
Signatures
12
#
LCA-Vision Inc. | |||
Condensed Consolidated Balance Sheets | |||
(Dollars in thousands except per share data) | |||
| |||
Assets | September 30, 2002 (1) | December 31, 2001 | |
Current Assets | |||
Cash and cash equivalents | $ 17,722 | $ 16,609 | |
Accounts receivable, net | 407 | 517 | |
Receivable from vendor | 273 | 234 | |
Prepaid expenses, inventory and other | 999 | 1,959 | |
Total current assets | 19,401 | 19,319 | |
Property and Equipment | 36,703 | 36,411 | |
Accumulated depreciation and amortization | (17,530) | (13,753) | |
Property and equipment, net | 19,173 | 22,658 | |
Goodwill, net | 275 | 275 | |
Investment in unconsolidated businesses | 335 | 290 | |
Other assets | 408 | 646 | |
Total assets | $ 39,592 | $ 43,188 | |
Liabilities and Shareholders' Investment | |||
Current liabilities | |||
Accounts payable | $ 2,406 | $ 2,645 | |
Accrued liabilities and other | 2,959 | 2,270 | |
Debt maturing in one year | 14 | 26 | |
Total current liabilities | 5,379 | 4,941 | |
Long-term debt | - | 4 | |
Minority equity interest | 199 | 41 | |
Shareholders' investment | |||
Common stock ($0.01 par value; 52,433,554 and 52,248,554 shares and | |||
42,964,762 and 46,045,525 shares issued and outstanding, respectively | 52 | 52 | |
Contributed capital | 91,314 | 91,080 | |
Warrants | 2,105 | 2,105 | |
Notes receivable from shareholders | (1,521) | (1,488) | |
Common stock in treasury, at cost (9,468,797 shares and 6,203,029 shares) | (15,462) | (13,013) | |
Accumulated deficit | (42,450) | (40,512) | |
Foreign currency translation adjustment | (24) | (22) | |
Total shareholders' investment | 34,014 | 38,202 | |
Total liabilities and shareholders' investment | $ 39,592 | $ 43,188 | |
(1) Unaudited | |||
The notes to the Condensed Consolidated Financial Statements are an integral part of this statement. |
#
LCA-Vision Inc. | |||||||
Condensed Consolidated Statements of Income | |||||||
(Dollars in thousands except per share data) | |||||||
Three months ended | Nine months ended | ||||||
September 30, | September 30, | ||||||
2002(1) | 2001(1) | 2002(1) | 2001(1) | ||||
Revenues | |||||||
Laser refractive surgery | $ 13,462 | $ 13,286 | $ 48,412 | $ 57,151 | |||
Other | - | 2 | 126 | 50 | |||
Total revenues | 13,462 | 13,288 | 48,538 | 57,201 | |||
Operating costs and expenses | |||||||
Medical professional and license fees | 2,465 | 2,531 | 9,791 | 11,497 | |||
Direct costs of services | 7,341 | 8,101 | 22,127 | 26,565 | |||
General and administrative expenses | 1,994 | 2,178 | 6,454 | 6,697 | |||
Marketing and advertising | 2,968 | 3,021 | 10,179 | 9,680 | |||
Depreciation and amortization | 1,508 | 1,401 | 4,458 | 4,239 | |||
Special charges | - | 1,774 | (174) | 1,774 | |||
Operating loss | (2,814) | (5,718) | (4,297) | (3,251) | |||
Equity in earnings from unconsolidated businesses | 23 | 45 | 228 | 309 | |||
Minority equity interest | (44) | 17 | (157) | 13 | |||
Interest (expense) | (1) | - | (3) | (7) | |||
Investment (loss) income | (170) | 208 | 110 | 814 | |||
Other income (expense) | (11) | (1) | (3) | (10) | |||
Litigation Settlement | 2,282 | - | 2,282 | - | |||
Loss before taxes on income | (735) | (5,449) | (1,840) | (2,132) | |||
Income tax expense (benefit) | 75 | 15,345 | 98 | 16,609 | |||
Net loss | $ (810) | $ (20,794) | $ (1,938) | $ (18,741) | |||
Income per common share | |||||||
Basic | $ (0.02) | $ (0.45) | $ (0.04) | $ (0.40) | |||
Diluted | $ (0.02) | $ (0.45) | $ (0.04) | $ (0.40) | |||
Weighted average shares outstanding | |||||||
Basic | 42,965 | 46,472 | 43,464 | 46,995 | |||
Diluted | 42,965 | 46,472 | 43,464 | 46,995 | |||
(1) Unaudited | |||||||
The notes to the Condensed Consolidated Financial Statements are an integral part of this statement. |
#
LCA-Vision Inc. | |||
Condensed Consolidated Statements of Cash Flow | |||
(Dollars in thousands except per share data) | |||
| |||
Nine months ended September 30, | |||
2002(1) | 2001(1) | ||
Cash flow from operating activities: | |||
Net loss | $ (1,938) | $ (18,741) | |
Adjustments to reconcile net income to net cash provided by operating activities | |||
Depreciation and amortization | 4,458 | 4,239 | |
Deferred income taxes | - | 16,606 | |
Amortization of warrant | 510 | 526 | |
Equity in earnings of unconsolidated affiliates | (228) | (309) | |
Special charges | (174) | 1,726 | |
Other, net | 3 | - | |
Changes in working capital: | |||
Accounts receivable | 110 | 749 | |
Receivable from vendor | (39) | 1,789 | |
Prepaid expenses, inventory and other | 960 | 306 | |
Accounts payable | (239) | (5,930) | |
Accrued liabilities and other | 862 | (715) | |
Net cash provided by operations | 4,285 | 246 | |
Cash flow from investing activities: | |||
Purchase of property and equipment | (986) | (5,585) | |
Proceeds from sale of property and equipment | 8 | - | |
Purchase of short-term investments | - | (4,378) | |
Maturity of short-term investments | - | 13,004 | |
Loans to shareholders | (33) | (461) | |
Other, net | (114) | 589 | |
Currency translation adjustment | 1 | (75) | |
Net cash (used in) provided by investing activities | (1,124) | 3,094 | |
Cash flows from financing activities: | |||
Principal payments of long-term notes, debt and capital lease obligations | (16) | (168) | |
Shares repurchased for treasury stock | (2,449) | (3,108) | |
Exercise of stock options and warrants | 234 | 160 | |
Distribution from (to) minority equity investees | 183 | 203 | |
|
| ||
Net cash used in financing activities | (2,048) | (2,913) | |
Increase in cash and cash equivalents | 1,113 | 427 | |
Cash and cash equivalents at beginning of period | 16,609 | 19,692 | |
Cash and cash equivalents at end of period | $ 17,722 | $ 20,119 | |
(1) Unaudited | |||
The notes to the Consolidated Condensed Financial Statements are an integral part of this statement. |
LCA-Vision Inc.
Notes to Condensed Consolidated Financial Statements
for the Three and Nine Months Ended September 30, 2002 and 2001
1.
Summary of Significant Accounting Policies
This filing includes condensed consolidated Balance Sheets as of December 31, 2001 and September 30, 2002; condensed consolidated Statements of Income for the three and nine months ended September 30, 2002 and 2001; and condensed consolidated Statements of Cash Flow for the nine months ended September 30, 2002 and 2001. In the opinion of management, these unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim period reported. We suggest that these financial statements be read together with the financial statements and notes in our annual report on Form 10-K.
Business
We are a leading developer and operator of free-standing laser refractive surgery centers. Our laser refractive surgery centers provide the staff, facilities, equipment and support services for performing laser vision correction that employ state-of-the-art laser technologies to correct nearsightedness, farsightedness and astigmatism. The Company currently utilizes three primary excimer lasers: the Bausch & Lomb Technolas 217, the VISX Star S2/S3 lasers and the Alcon LADARVision. Substantially all of the revenues from our laser vision correction procedures are derived from our North American Centers.
Operating costs and expenses consist of:
•
Medical professional and license fees, including per-procedure fees for the ophthalmologist performing laser vision correction and the license fee per procedure paid to Bausch & Lomb, VISX and Alcon
•
Direct costs of services, including center rent and utilities, equipment lease and maintenance costs, surgical supplies, center staff expense, costs related to other revenue, and all other costs associated with providing services in our centers
•
General and administrative associated with corporate overhead costs
•
Marketing and advertising costs
•
Depreciation and amortization of equipment and intangible assets recorded in the balance sheet
Consolidation Policy
We use two different methods to report our investments in our subsidiaries and other companies: consolidation and the equity method.
Consolidation
We use consolidation when we own a majority of the voting stock of the subsidiary. In addition, we are in compliance with EITF 97-2, for Professional Corporations. For a professional corporation in which LCA-Vision Inc. has a controlling financial interest through a contractual management arrangement, financial statements are consolidated. Our condensed consolidated financial statements include the accounts of:
•
LCA-Vision Inc.,
•
LCA-Vision (Canada) Inc. and Subsidiaries,
•
The Baltimore Laser Sight Center, Ltd, and
•
Columbus Eye Associates, Inc. (contract effective September 1, 2002)
Equity Method
We use the equity method to report investments in businesses where we hold a 20% to 50% voting interest, giving us the ability to exercise significant influence, but not control, over operating and financial policies. Under the equity method we report:
•
our interest in the entity as an investment in our Condensed Consolidated Balance Sheets, and
•
our percentage share of the earnings (losses) in our Condensed Consolidated Statements of Operations.
We own 43% of Silmalaseri Oy and 50% of both Cole LCA Vision LLC (through June 30, 2002) and Eyemed LCA Vision LLC and report our investments under the equity method.
Goodwill and Other Intangible Assets
Goodwill is the excess of the acquisition cost of the businesses over the fair value of the identifiable net assets acquired. Through December 31, 2001, we amortized goodwill using the straight-line method over the estimated useful life. The Company adopted Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets” effective January 1, 2002. SFAS No. 142 discontinued the amortization of goodwill and requires companies to perform an annual impairment test of goodwill. Application of the non-amortization provision of the SFAS No. 142 resulted in a decrease in annual operating expenses of $76,000. During January 2002, the Company completed the first of the required impairment tests of goodwill as of January 1, 2002, which indicated that the Company currently has no goodwill impairment.
Use of Estimates
Management makes estimates and assumptions when preparing financial statements under generally accepted accounting principles. These estimates and assumptions affect various matters including:
•
our reported amounts of assets and liabilities in our Condensed Consolidated Balance Sheets at the dates of the financial statements,
•
our disclosure of contingent liabilities at the dates of the financial statements, and
•
our reported amounts of revenues and expenses in our Condensed Consolidated Statements of Income during the reporting periods.
Actual amounts could differ from those estimates.
Per Share Data
Basic per share data is loss applicable to common shareholders divided by the weighted average common shares outstanding. Diluted per share data is income applicable to common shareholders divided by the weighted average common shares outstanding plus the potential issuance of common shares if stock options or warrants were exercised or convertible preferred stock were converted into common stock.
Following is a reconciliation of basic and diluted earnings per share for the three and nine months ended September 30, 2002 and 2001 (in thousands, except per share amounts):
Three Months Ended | Nine Months Ended | ||||
September 30, | September 30, | ||||
2002 | 2001 |
| 2002 | 2001 | |
Basic loss per share |
| ||||
Net loss | $ (810) | $ (20,794) | $ (1,755) | $ (18,741) | |
Weighted average shares outstanding | 42,965 | 46,472 | 43,464 | 46,995 | |
Basic loss per share | $ (0.02) | $ (0.45) | $ (0.04) | $ (0.40) | |
| |||||
Diluted loss per share |
| ||||
Net loss | $ (810) | $ (20,794) | $ (1,755) | $ (18,741) | |
Weighted average shares outstanding | 42,965 | 46,472 | 43,464 | 46,995 | |
Effect of dilutive securities | |||||
Stock options | - | - | - | - | |
Warrants | - | - | - | - | |
Weighted average common shares and potential dilutive shares | 42,965 | 46,472 | 43,464 | 46,995 | |
Diluted loss per share | $ (0.02) | $ (0.45) | $ (0.04) | $ (0.40) |
Shareholders' Investment
None.
Segment Information
We operate in one segment: laser refractive surgery.
Commitments and Contingencies
None.
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations.
This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of important factors. For a discussion of important factors that could affect our results, refer to the Overview and financial statement line item discussions set forth in Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A").
"MD&A" is an analysis of our operating results for the three and nine months ended September 30, 2002 and 2001 and our financial condition as of September 30, 2002. It explains why our revenues and costs changed, our overall financial condition, and other matters.
Results of Operations - Revenues
Laser refractive surgery
In most locations, laser refractive surgery revenues are the global fees charged to our patients. Certain states prohibit us from practicing medicine, employing physicians to practice medicine on our behalf or employing optometrists to render optometry services on our behalf. Revenues and direct costsfrom centers in such states which are not consolidated do not include the medical professionals fee component. The contribution from laser refractive surgery procedures for each of the three and nine months ended September 30, 2002 and 2001 were (dollars in thousands):
Three Months Ended |
| Nine Months Ended | |||||
| September 30, |
| September 30, | ||||
2002 | 2001 | 2002 | 2001 | ||||
Revenue | $13,462 | $13,286 | $48,412 | $57,151 | |||
Less: |
|
| |||||
Medical professional and license fees | 2,465 | 2,531 | 9,791 | 11,497 | |||
$10,997 | $10,755 | $38,621 | $45,654 | ||||
Contribution Margin | 81.7% | 80.9% | 79.8% | 79.9% | |||
|
|
|
|
|
|
|
The following table illustrates the number of laser vision correction procedures performed at our centers.
Consolidated | ||
2002 | 2001 | |
Q1 | 17,594 | 25,061 |
Q2 | 14,794 | 22,940 |
Q3 | 12,511 | 13,347 |
Q4 | 10,684 | |
Year | 72,032 |
Medical professional and license fees
Medical professional expenses increased by $169,000 from the third quarter of 2001 due to higher procedure revenue. License fees were lower from third quarter 2001 by $313,000 as a result of lower procedure volume.
Direct costs of services
Direct costs of services include the salary component of physician compensation, staffing, equipment, medical supplies, and facility costs to operate laser vision correction centers. These direct costs decreased in the third quarter of 2002 by $760,000 over the third quarter of 2001, largely because of a decrease in salaries and fringe benefits as a result of cost-reduction efforts in prior year, and a decrease in laser and microkeratome rent due to purchases in 2001. Costs have increased in patient financing fees and insurance. Medical supplies decreased by $116,000 in the third quarter of 2002 from the third quarter of 2001. Exclusive of medical supplies, the average direct cost per center per month increased to $68,000 in the third quarter of 2002 from $66,100 in the second quarter of 2002.
General and administrative
General and administrative expenses decreased by $184,000 in the third quarter of 2002 from the third quarter of 2001. A reduction in salaries, professional fees, and travel and entertainment of $284,000 was partially offset by increase in insurance, state and local taxes, and shareholder communications. Compared to second quarter 2002, general and administrative costs have decreased $304,000.
Marketing and advertising expenses
Marketing and advertising expenses decreased by $53,000 in the third quarter of 2002 from the third quarter of 2001. Compared to the second quarter of 2002, marketing and advertising expenditures decreased by $1,138,000 due to lower direct mail and media placement expenses.
Depreciation and amortization
Depreciation and amortization increased by $107,000 in the third quarter of 2002 from the third quarter of 2001, primarily as a result of the purchase of lasers and other equipment that had been leased in the past.
Non-operating income and expenses
Investment income decreased $378,000 in the third quarter of 2002 from the third quarter of 2001. Part of this decrease, $65,000 is the result of lower short-term investments and a decrease in interest rates. The remaining decrease, $313,000, is the result of a decrease in market value of the investment. In August 2002, a settlement of $2,282,000 was received from the Pillar Point Partners’ class-action litigation. Pillar Point Partners – a joint entity formed in 1995 by laser manufacturers VISX Inc. and Summit Technology Inc., now a subsidiary of Alcon Corporation – collected per-use royalties from all laser vision correction providers using their equipment. Last year, the manufacturers agreed to settle the various lawsuits for $37.8 million. Pillar Point was dissolved in July 1998, after the Federal Trade Commis sion filed an administrative complaint challenging the partnerships’ existence.
Income Taxes
Income tax expense of $75,000 was recorded in the third quarter of 2002 due to liability from non-U.S. operations.
Liquidity and Capital Resources
Net cash provided by operating activities in the first nine months of 2002 was $4,285,000, which exceeded cash expenditures for property and equipment of $986,000 and the Company’s repurchase of $2,449,000 of common stock.
As of September 30, 2002 we have cash and cash equivalents of $17,722,000.
During the second quarter of 2000, the directors initiated a program to encourage additional direct stock ownership by senior management of the company. The Company offered loans to nine key managers and directors for the purpose of purchasing shares in the open market. Each loan is a personal obligation of the borrower, and is evidenced by a promissory note. The interest rate on the notes is prime less one and one-half percent. The notes have a maximum term of three years, and contain provisions for early repayment. A total of $1,521,000 has been loaned under this program.
As of September 30, 2002 we maintained a $10,000,000 revolving credit facility with The Provident Bank (“Provident”). In addition to the revolving credit facility, the company has a discretionary credit line of $10,000,000 to fund acquisitions. Both of these credit arrangements expire June 30, 2003.
Factors That May Affect Future Results and Market Price of Stock
For a detailed discussion that may affect future results, please refer to the Company's last 10-K and 10-Q. No material new risks have developed since the filing of these reports.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
The carrying values of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short maturity of these instruments.
We have historically had very low exposure to changes in foreign currency exchange rates, and as such, have not used derivative financial instruments to manage foreign currency fluctuation risk.
Item 4. Controls and Procedures
The Chief Executive Officer and the Chief Financial Officer have reviewed, as of a date within 90 days of this filing, the disclosure controls and procedures that ensure that information relating to the Company required to be disclosed by the Company in the reports that it files or submits under the Securities and Exchange Act of 1934, as amended, is recorded, processed, summarized and reported in a timely and proper manner. Based upon this review, the Company believes that there are adequate controls and procedures in place. There are no significant changes in the controls or other factors that could affect the controls after the date of the evaluation.
Part II.
Other Information
Item 1.
Legal Proceedings
None
Item 2.
Changes in Securities and Use of Proceeds.
None
Item 3.
Defaults upon Senior Securities.
None
Item 4.
Submission of Matters to a Vote of Security Holders
None
Item 5.
Other Information.
None
Item 6.
Exhibits and Reports on Form 8-K.
(a)
Exhibits
Number
Description
99
CEO / CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
(a)
Reports on Form 8-K
1)
Form 8-K, dated July 3, 2002, containing a press release reporting that 14,794 procedures were performed for the second quarter ended June 30, 2002, compared with 17,594 procedures for the first quarter 2002.
2)
Form 8-K dated July 19, 2002, containing a press release announcing that the Company will release 2002 second quarter financial results before market open on Friday, July 26, 2002.
3)
Form 8-K dated July 26, 2002, containing a press release reporting financial results for the three months and six months ended June 30, 2002.
4)
Form 8-K dated August 5, 2002, containing a press release announcing the opening of the Company’s 32nd U.S.-based LasikPlus facility to serve large Raleigh-Durham, NC metro area.
5)
Form 8-K dated September 10, 2002, containing a press release disclosing that it has received a $2,282,000 settlement, representing the Company’s share of a long-pending series of anti-trust class action suits brought against Pillar Point Partners.
6)
Form 8-K dated September 10, 2002, containing a press release announcing that it will present at the Wall Street Analyst Forum in New York on Friday, September 13, 2002.
7)
Form 8-K dated September 13, 2002, containing a press release announcing it will open the Company’s newest value-priced LasikPlus Center on Monday, September 30 to serve the more than one million people residing in metropolitan Louisville, Kentucky
8)
Form 8-K dated September 19, 2002, containing a press release announcing the unanimous approval of a 1 for 4 reverse stock split of the Company’s approximately 43 million common shares.
#
Signatures
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
LCA-VISION INC.
Date: 10/25/02
/s/Stephen N. Joffe
Stephen N. Joffe
President and Chief Executive Officer
Date: 10/25/02
/s/Alan H. Buckey
Alan H. Buckey
Chief Financial Officer
#
CERTIFICATIONS
Chief Executive Officer
I, Stephen N. Joffe, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of LCA-Vision Inc.;
2.
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a)
designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b)
evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
c)
presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a)
all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6.
The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: October 25, 2002
/s/ Stephen N. Joffe
Stephen N. Joffe
#
Chief Financial Officer
I, Alan Buckey, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of LCA-Vision Inc.;
2.
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a)
designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b)
evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
c)
presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
1.
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a)
all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
1.
The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: October 25, 2002
/s/Alan H. Buckey
Alan Buckey
#
Exhibit 99
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of LCA-Vision Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Stephen N. Joffe, Chief Executive Officer, and Alan Buckey, Chief Financial Officer, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:
(1)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/Stephen N. Joffe
/s/Alan H. Buckey
Stephen N. Joffe
Alan Buckey
Chief Executive Officer
Chief Financial Officer
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