Exhibit 99.1
[LCA VISION LOGO]
Company Contacts: | Investor Relations Contacts: | |
LCA-Vision Inc. | Lippert/Heilshorn & Associates, Inc. | |
Stephen N. Joffe, Chairman and CEO | Jody Cain | |
Alan H. Buckey, CFO | (310) 691-7100 | |
(513) 792-9292 | jcain@lhai.com | |
www.lasikplus.com | www.lhai.com |
LCA-VISION REPORTS FOURTH QUARTER EPS OF $0.19 ON SIGNIFICANT MARKET SHARE GAIN
Company raises 2004 EPS guidance to $0.90-$0.95
CINCINNATI (February 18, 2004) – LCA-Vision Inc. (Nasdaq NM: LCAV), a leading provider of laser vision correction services under the LasikPlusbrand, today reported net income for the three months ended December 31, 2003 of $2,201,000, or $0.19 per diluted share, compared with a net loss of $1,888,000, or $0.18 per share, for the three months ended December 31, 2002.
For the fourth quarter of 2003, total revenues grew approximately 56% to $20,762,000, compared with $13,300,000 in the fourth quarter of 2002. The Company reported that revenues at vision centers open at least 12 months increased by 44% during the quarter. Fourth quarter procedure volume rose 32% to 16,060, and average price per procedure increased 19% to $1,293, both compared with the fourth quarter of 2002.
For the year ended December 31, 2003, the Company reported net income of $7,269,000, or $0.66 per diluted share, compared with a net loss of $3,826,000, or $0.35 per share, for the year ended December 31, 2002. Total revenues grew approximately 32% to $81,423,000 in 2003, compared with $61,838,000 in 2002.
Net cash provided by operations during the year ended December 31, 2003 was $12,480,000. Cash and short-term investments were $64,908,000 as of December 31, 2003, reflecting both the completion of a public offering of common stock in December 2003 that raised approximately $37 million in proceeds for the Company and the cash provided by operations.
“We are pleased with our exceptional financial and operational performance in the fourth quarter of a very strong year for the Company,” said Stephen N. Joffe, chairman and CEO of LCA-Vision. “The fact that in 2003 fourth quarter revenues surpassed first quarter revenues is particularly impressive, given the historic seasonality of our business. Procedure volume growth for the fourth quarter was up over four-fold compared with the 7% growth estimated by laser vision correction industry sources for the market as a whole. For the quarter, Custom LASIK represented approximately 12% of our procedure volume, up from 7% in the third quarter of 2003. With the price premium Custom LASIK commands, it accounted for approximately 16% of our total revenues.
“We are confident in our ability to capture additional market share in the large, expanding market for laser vision correction,” added Mr. Joffe. “With our value pricing and the range of technology options available to our patients, we plan to continue opening LasikPlusvision centers in select markets that we believe can contribute to growth in the Company’s profitability and cash flow. With approximately $65 million in cash at the end of 2003, strong cash flow and seasoned management, we believe we have the resources to execute this strategy successfully.”
Revised 2004 EPS Guidance
Based on the Company’s strong financial results during 2003 and market share gain, as well as a proven business model and growth strategy, LCA-Vision is increasing guidance for full-year 2004 diluted EPS to $0.90-$0.95, up from our prior guidance of $0.80-$0.85.
Conference Call Information
LCA-Vision has scheduled an investor conference call to be held today beginning at 10:00 a.m. Eastern Time. Individuals interested in listening to the conference call may do so by dialing (888) 803-7404 within the U.S. and Canada, or +(706) 634-1308 for international callers. A telephone replay will be available for 48 hours by dialing (800) 642-1687 within the U.S. and Canada, or +(706) 645-9291 for international callers. All callers should enter reservation number 5259436.
Individual investors are invited to listen to the conference call live over the Internet by going to the “Investors” section of the Company’s Web site atwww.lasikplus.com. A replay of the call will be available for 30 days.
About LCA-Vision
LCA-Vision operates 40 laser vision correction centers, including 36 wholly-owned LasikPlusvision centers located in large metropolitan markets throughout the United States, three joint ventures in Canada and one joint venture in Europe.
This press release contains forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially from current expectations. For a discussion of risks and uncertainties that we face, please refer to LCA-Vision’s filings with the Securities and Exchange Commission including, but not limited to, its Forms 10-K and 10-Q.
[Tables to Follow]
LCA-Vision Inc.
Condensed Consolidated Statements of Income
(Dollars in thousands except per share data)
Three months ended | Twelve months ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||||
Revenues — Laser refractive surgery | 20,762 | 13,300 | 81,423 | 61,838 | ||||||||||||
Operating costs and expenses | ||||||||||||||||
Medical professional and license fees | 3,933 | 2,479 | 15,779 | 12,270 | ||||||||||||
Direct costs of services | 7,525 | 6,669 | 31,507 | 28,796 | ||||||||||||
General and administrative expenses | 1,970 | 1,873 | 8,043 | 8,327 | ||||||||||||
Marketing and advertising | 3,402 | 2,644 | 12,566 | 12,823 | ||||||||||||
Depreciation and amortization | 1,685 | 1,539 | 6,377 | 5,997 | ||||||||||||
Special charges (benefit) | — | — | — | (174 | ) | |||||||||||
Operating income (loss) | 2,247 | (1,904 | ) | 7,151 | (6,201 | ) | ||||||||||
Equity in earnings from unconsolidated businesses | 72 | 13 | 317 | 241 | ||||||||||||
Minority equity interest | (157 | ) | (32 | ) | (372 | ) | (189 | ) | ||||||||
Interest expense | (1 | ) | (1 | ) | (18 | ) | (4 | ) | ||||||||
Investment income (loss) | 260 | 115 | 540 | 225 | ||||||||||||
Other income (expense) | 190 | (3 | ) | 242 | (6 | ) | ||||||||||
Litigation settlement | — | — | — | 2,282 | ||||||||||||
Income (loss) before taxes on income | 2,611 | (1,812 | ) | 7,860 | (3,652 | ) | ||||||||||
Income tax expense | 410 | 76 | 591 | 174 | ||||||||||||
Net income (loss) | $ | 2,201 | $ | (1,888 | ) | $ | 7,269 | $ | (3,826 | ) | ||||||
Income (loss) per common share | ||||||||||||||||
Basic | $ | 0.19 | $ | (0.18 | ) | $ | 0.67 | $ | (0.35 | ) | ||||||
Diluted | $ | 0.19 | $ | (0.18 | ) | $ | 0.66 | $ | (0.35 | ) | ||||||
Weighted average shares outstanding | ||||||||||||||||
Basic | 11,440 | 10,744 | 10,927 | 10,794 | ||||||||||||
Diluted | 11,765 | 10,744 | 11,077 | 10,794 |
LCA-Vision Inc.
Consolidated Balance Sheets
(Dollars in thousands)
At December 31, | ||||||||
2003 | 2002 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 64,908 | $ | 18,298 | ||||
Accounts receivable, net of allowance for doubtful accounts of $1,480,000 and $231,000 | 3,255 | 393 | ||||||
Receivables from vendors | 802 | 337 | ||||||
Prepaid expenses, inventory and other | 1,422 | 1,462 | ||||||
Total current assets | 70,387 | 20,490 | ||||||
Property and equipment | 41,967 | 37,301 | ||||||
Accumulated depreciation and amortization | (24,622 | ) | (18,868 | ) | ||||
Property and equipment, net | 17,345 | 18,433 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $416,000 | 749 | — | ||||||
Goodwill | 275 | 275 | ||||||
Deferred compensation plan assets | 461 | 127 | ||||||
Investment in unconsolidated businesses | 385 | 263 | ||||||
Other assets | 435 | 408 | ||||||
Total assets | $ | 90,037 | $ | 39,996 | ||||
Liabilities and Shareholders’ Investment | ||||||||
Current liabilities | ||||||||
Accounts payable | 4,883 | $ | 3,855 | |||||
Accrued liabilities and other | 4,518 | 3,605 | ||||||
Debt maturing in one year | — | 10 | ||||||
Total current liabilities | 9,401 | 7,470 | ||||||
Deferred compensation liability | 457 | 129 | ||||||
Insurance Reserve | 963 | 55 | ||||||
Minority equity interest | 414 | 230 | ||||||
Shareholders’ investment | ||||||||
Common stock ($.001 par value; 15,643,561 and 13,110,306 shares and 13,276,364 and 10,743,109 shares issued and outstanding, respectively) | 16 | 13 | ||||||
Contributed capital | 131,203 | 91,474 | ||||||
Warrants | — | 1,982 | ||||||
Notes receivable from shareholders | — | (1,532 | ) | |||||
Common stock in treasury, at cost (2,367,197 shares and 2,367,197 shares) | (15,462 | ) | (15,462 | ) | ||||
Accumulated deficit | (37,069 | ) | (44,338 | ) | ||||
Accumulated other comprehensive income (loss) | 114 | (25 | ) | |||||
Total shareholders’ investment | 78,802 | 32,112 | ||||||
Total liabilities and shareholders’ investment | $ | 90,037 | $ | 39,996 | ||||
LCA-Vision Inc.
Consolidated Statements of Cash Flow
(Dollars in thousands)
Years Ended December 31, | |||||||||||||
2003 | 2002 | 2001 | |||||||||||
Cash flow from operating activities | |||||||||||||
Net Income (loss) | $ | 7,269 | $ | (3,826 | ) | $ | (23,375 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||||
Depreciation and amortization | 6,377 | 5,997 | 5,625 | ||||||||||
Warrant amortization | — | 510 | 701 | ||||||||||
Provision for loss on doubtful accounts | 1,781 | — | — | ||||||||||
Gain on disposal of assets | (190 | ) | — | — | |||||||||
Deferred Compensation | 328 | 129 | — | ||||||||||
Insurance reserve | 908 | — | — | ||||||||||
Deferred income taxes | — | — | 16,606 | ||||||||||
Restructuring/impairment provision | — | (174 | ) | 1,774 | |||||||||
Equity in earnings from unconsolidated businesses | (317 | ) | (241 | ) | (372 | ) | |||||||
Other, net | — | 6 | 39 | ||||||||||
Changes in assets and liabilities: | |||||||||||||
Accounts receivables | (5,191 | ) | 124 | 900 | |||||||||
Receivables from vendors | (465 | ) | (103 | ) | 2,046 | ||||||||
Prepaid expenses, inventory and other | 40 | 497 | 29 | ||||||||||
Accounts payable | 1,028 | 1,210 | (4,942 | ) | |||||||||
Accrued liabilities and other | 912 | 1,564 | (1,024 | ) | |||||||||
Net cash provided by (used in) operating activities | 12,480 | 5,693 | (1,993 | ) | |||||||||
Cash flows from investing activities | |||||||||||||
Purchase of property and equipment | (5,231 | ) | (1,789 | ) | (7,061 | ) | |||||||
Proceeds from sale of property and equipment | 225 | 8 | 5 | ||||||||||
Purchase of held-to-maturity investments | — | — | (4,378 | ) | |||||||||
Maturities of held-to-maturity investments | — | — | 13,004 | ||||||||||
Deferred Compensation Plan | (334 | ) | (127 | ) | — | ||||||||
Other, net | 204 | (83 | ) | 610 | |||||||||
Net cash (used in) provided by investing activities | (5,136 | ) | (1,991 | ) | 2,180 | ||||||||
Cash flows from financing activities | |||||||||||||
Principal payments of long-term debt and capital lease obligations | (10 | ) | (20 | ) | (196 | ) | |||||||
Loan payments made by shareholders | 1,353 | — | — | ||||||||||
Loans to shareholders | (22 | ) | (44 | ) | (475 | ) | |||||||
Shares repurchased for treasury stock | — | (2,449 | ) | (3,138 | ) | ||||||||
Stock offering | 36,727 | — | — | ||||||||||
Exercise of stock options and warrants | 1,023 | 232 | 162 | ||||||||||
Distribution from minority equity investees | 195 | 268 | 377 | ||||||||||
Net cash provided by (used in) financing activities | 39,266 | (2,013 | ) | (3,270 | ) | ||||||||
Increase (decrease) in cash and cash equivalents | 46,610 | 1,689 | (3,083 | ) | |||||||||
Cash and cash equivalents at beginning of year | 18,298 | 16,609 | 19,692 | ||||||||||
Cash and cash equivalents at end of year | $ | 64,908 | $ | 18,298 | $ | 16,609 | |||||||