TLCVision Reports Full-Year 2008 ResultsST. LOUIS, MO -- (Marketwire - March 31, 2009) - TLC Vision Corporation (NASDAQ: TLCV) (TSX: TLC), North America's premier eye care services company, today announced results for the fourth quarter and full year ended December 31, 2008.
Jim Wachtman, President and Chief Executive Officer of TLCVision, commented, "Although we find ourselves in the midst of the worst consumer discretionary spending environment in the last 40 years, our company was able to achieve adjusted EBITDA of $18.6 million for 2008 and operating cash flow of $15.8 million on the strength of our two diversified businesses, Doctor Services and Eye Care."
"TLCVision recorded market-leading LASIK procedure growth during the first quarter of 2008. The company then experienced market weakness in April and May that continued to deteriorate throughout the remainder of the year. Laser vision correction demand is a function of consumer discretionary spending. We entered 2008 with a consumer confidence index at 90, ended the year with the index at 38, and today the index stands at 25, an all-time low."
"During 2008 we removed significant cost from the business. Marketing spend was reduced 22% from plan, and we achieved salary and benefit savings from an 18% reduction in full-time equivalents and the elimination of annual incentive programs. Fixed field and overhead costs were reduced as well as professional fees and other discretionary spending. Overall, total cost reductions for 2008 were over $20 million."
Full-Year 2008 Results
- -- Revenue for the year ended December 31, 2008 was $275.7 million,
compared to $298.4 million for the prior year period, a decrease of
8%, with refractive revenues showing a decline of 14% while our current
non-refractive businesses grew by a combined 10%.
-- Refractive Centers revenue of $151.4 million decreased by 14% as
majority-owned center procedures declined by 16% in a market that is
estimated to have declined by 26%.
-- Doctor Services revenue of $95.6 million decreased by 1%, as growth
in the non-refractive businesses was more than offset by weakness in
the mobile refractive offering.
-- Eye Care revenue of $28.6 million increased by 8%.
- -- The Company implemented aggressive cost reduction initiatives that
reduced the cost run rate by over $20 million.
- -- The full year results include a non-cash goodwill and other assets
impairment charge of $85.0 million (of which $83.5 million was recorded
in the fourth quarter) due to the deterioration of the equity markets
and the resulting reduction in the Company's market capitalization.
- -- The resulting consolidated net loss was $98.3 million compared to a net
loss of $43.5 million for the prior year period.
- -- Year-to-date operating cash flow was $15.8 million, or $0.31 per share,
compared to $31.3 million, or $0.53 per share, in the prior year period.
Fourth Quarter 2008 Results
- -- Revenue for the fourth quarter was $53.7 million, a 19% decrease over
prior year revenue of $66.3 million, with refractive revenues showing
a decline of 32% while our current non-refractive businesses grew by a
combined 8%.
-- Refractive Centers revenue of $24.9 million decreased by 32%, as
majority-owned center procedures declined by 32% in a market that is
estimated to have declined by 39%.
-- Doctor Services revenue of $22.4 million decreased by 3.5%,
reflecting weakness in the mobile refractive offering, as the
non-refractive businesses showed growth of 8%.
-- Eye Care revenue of $6.4 million decreased 4%.
- -- The fourth quarter results include a $83.5 million noncash goodwill and
other assets impairment charge noted earlier
- -- The resulting consolidated net loss for the fourth quarter was $95.4
million, compared to a net loss of $25.3 million from the prior year
period.
Capital Structure
Continued Wachtman, "As a result of the economic crisis and the sharp decline in consumer discretionary spending during 2008, the Company's financial performance deteriorated during the fourth quarter. This has resulted in the Company falling out of compliance with its primary financial covenants under its credit facility as of December 31, 2008. We are in final negotiations with our lenders for an amendment to existing loan documents that should be completed within the next several days. Our shared goal is to secure a more flexible capital structure to bridge the company through the current weak economy."
It is unlikely the company will remain in compliance with the existing covenants for the balance of 2009 unless amended. Since those amendments are not yet completed, the company has been advised by its independent auditor, Ernst & Young LLP, that its opinion on TLC's consolidated financial statements for the fiscal year ended December 31, 2008, will include an explanatory paragraph relating to going concern.
"We remain focused on delivering quality customer service and surgical outcomes and we are confident that our day-to-day operations will remain unaffected. We are working constructively with our lenders and advisors to secure more financial flexibility and we will continue to implement cost reduction initiatives to keep them in balance with demand. We have ample liquidity in the near term, and remain confident that we can reach a prompt resolution with our lenders."
Conference Call
TLCVision invites all interested parties to participate in a conference call during which time the financial and operating results will be discussed. The call will be held today, at 9:00 a.m. Eastern Daylight Time. To participate, please dial 877-874-1586 or 719-325-4748 (international callers) and enter the pass code: 4046513. The call will be broadcast live on the Company's web site at www.tlcv.com under the "Webcasts" link in the Investor Relations section.
A replay of the conference call will be available until April 14, 2009. To access the replay, dial 888-203-1112 or 719-457-0820 (international callers) and enter the pass code: 4046513. The call will also be archived on the Company's web site at www.tlcv.com under the "Webcasts" link in the Investor Relations section.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, Section 21E of the U.S. Securities Exchange Act of 1934 and Canadian Provincial Securities Laws, which statements can be identified by the use of forward-looking terminology, such as "may," "will," "expect," "intend," "anticipate," "estimate," "predict," "plans" or "continue" or the negative thereof or other variations thereon or comparable terminology referring to future events or results. We caution that all forward-looking information is inherently uncertain and that actual results may differ materially from the assumptions, estimates or expectations reflected in the forward-looking information.
A number of factors could cause actual results to differ materially from those in forward-looking statements, including but not limited to economic conditions, the level of competitive intensity for laser vision correction, the market acceptance of laser vision correction, concerns about potential side effects and long term effects of laser vision correction, the ability to maintain agreements with doctors on satisfactory terms, quarterly fluctuation of operating results that make financial forecasting difficult, the volatility of the market price of our common shares, profitability of investments, successful execution of our direct-to-consumer marketing programs, the ability to open new centers, the reliance on key personnel, medical malpractice claims and the ability to maintain adequate insurance therefore, claims for federal, state and local taxes, compliance with industry regulation, compliance with U.S. and Canadian healthcare regulations, disputes regarding intellectual property, many of which are beyond our control.
Therefore, should one or more of theses risks materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary significantly from what we currently foresee. Accordingly, we warn investors to exercise caution when considering any such forward-looking information herein and to not place undue reliance on such statements and assumptions. We are under no obligation (and we expressly disclaim any such obligation) to update or alter any forward-looking statements or assumptions whether as a result of new information, future events or otherwise, except as required by law.
See the Company's reports filed with the Canadian Securities Regulators and the U.S. Securities and Exchange Commission from time to time for cautionary statements identifying important factors with respect to such forward looking statements, including certain risks and uncertainties, that could cause actual results to differ materially from results referred to in forward looking statements. TLCVision assumes no obligation to update the information contained in this press release.
About TLCVision
TLCVision is North America's premier eye care services company, providing eye doctors with the tools and technologies needed to deliver high-quality patient care. Through its centers management, and technology access service models, extensive optometric relationships, aggressive consumer advertising and managed care contracting strength, TLCVision maintains leading positions in Refractive, Cataract and Eye Care markets. More information about TLCVision can be found on the website at www.tlcv.com. Information about vision correction surgery can be found on the TLC Laser Eye Centers website at www.tlcvision.com.
TLC VISION CORPORATION
CONSOLIDATING STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Three Months Ended December
December 31, 2008 December 31, 2007
---------------------------- ------------------------------
Results Results
Before Before
AMD AMD Total AMD AMD Total
Segment Segment TLCVision Segment Segment TLCVision
--------- ------- --------- --------- -------- ---------
Revenues:
Refractive
centers $ 24,902 $ - $ 24,902 $ 36,424 $ - $ 36,424
Doctor
services 22,390 - 22,390 23,208 - 23,208
Eye care 6,390 - 6,390 6,662 - 6,662
--------- ------- --------- --------- -------- ---------
Total
revenues 53,682 - 53,682 66,294 - 66,294
Cost of
revenues
(excluding
amortization):
Refractive
centers 21,813 - 21,813 29,458 - 29,458
Doctor
services 17,665 - 17,665 16,991 - 16,991
Eye care 2,901 - 2,901 2,940 - 2,940
--------- ------- --------- --------- -------- ---------
Total cost of
revenues
(excluding
amortization) 42,379 - 42,379 49,389 - 49,389
--------- ------- --------- --------- -------- ---------
Gross profit 11,303 - 11,303 16,905 - 16,905
--------- ------- --------- --------- -------- ---------
General and
administrative 5,815 - 5,815 8,606 - 8,606
Marketing and
sales 11,417 - 11,417 12,389 - 12,389
Amortization
of
intangibles 801 - 801 844 - 844
Impairment 83,547 - 83,547 4,550 - 4,550
Other
expense, net 364 - 364 1,771 - 1,771
--------- ------- --------- --------- -------- ---------
Total
operating
expenses 101,944 - 101,944 28,160 - 28,160
--------- ------- --------- --------- -------- ---------
Operating
loss (90,641) - (90,641) (11,255) - (11,255)
Loss on sale
of
OccuLogix,
Inc. stock - - - - (34) (34)
Interest
income 186 - 186 227 - 227
Interest
expense (2,605) - (2,605) (2,370) - (2,370)
Minority
interest
expense (1,506) - (1,506) (1,979) - (1,979)
Loss from
equity
investments (925) - (925) (81) (6,573) (6,654)
--------- ------- --------- --------- -------- ---------
Loss from
continuing
operations
before
income taxes (95,491) - (95,491) (15,458) (6,607) (22,065)
Income tax
benefit
(expense) 76 - 76 (3,445) - (3,445)
--------- ------- --------- --------- -------- ---------
Loss from
continuing
operations (95,415) - (95,415) (18,903) (6,607) (25,510)
Income from
discontinued
operations,
net of tax - - - 226 - 226
--------- ------- --------- --------- -------- ---------
Net loss $ (95,415) $ - $ (95,415) $ (18,677) $ (6,607) $ (25,284)
========= ======= ========= ========= ======== =========
Loss per
share -
diluted $ (1.89) $ - $ (1.89) $ (0.37) $ (0.13) $ (0.51)
========= ======= ========= ========= ======== =========
Weighted
average
number of
common
shares
outstanding
- diluted 50,398 50,398 50,398 49,928 49,928 49,928
Calculation
of Adjusted
EBITDA
Net loss,
as
reported $ (95,415) $ (18,677)
Add: Income
tax
(benefit)
expense (76) 3,445
Depreciation
and
amortization 4,825 5,031
Interest
expense,
net 2,419 2,143
Non-cash
compensation 290 155
Impairment
and
restructuring
charges 84,097 6,513
--------- ---------
Adjusted
EBITDA $ (3,860) $ (1,390)
========= =========
Adjusted
EBITDA per
share $ (0.08) $ (0.03)
========= =========
Note: The AMD segment includes the Company's interest in OccuLogix, Inc.
TLC VISION CORPORATION
CONSOLIDATING STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Year Ended December 31, 2008 Year Ended December 31, 2007
---------------------------- -------------------------------
Results Results
Before Before
AMD AMD Total AMD AMD Total
Segment Segment TLCVision Segment Segment TLCVision
--------- ------- --------- --------- --------- ---------
Revenues:
Refractive
centers $ 151,442 $ - $ 151,442 $ 175,206 $ - $ 175,206
Doctor
services 95,615 - 95,615 96,697 - 96,697
Eye care 28,611 - 28,611 26,511 - 26,511
--------- ------- --------- --------- --------- ---------
Total
revenues 275,668 - 275,668 298,414 - 298,414
Cost of
revenues
(excluding
amortization):
Refractive
centers 110,824 - 110,824 127,024 - 127,024
Doctor
services 71,104 - 71,104 70,061 - 70,061
Eye care 13,010 - 13,010 11,999 - 11,999
--------- ------- --------- --------- --------- ---------
Total cost
of revenues
(excluding
amortization) 194,938 - 194,938 209,084 - 209,084
--------- ------- --------- --------- --------- ---------
Gross profit 80,730 - 80,730 89,330 - 89,330
--------- ------- --------- --------- --------- ---------
General and
admin-
istrative 28,016 - 28,016 34,819 - 34,819
Marketing
and sales 42,725 - 42,725 42,979 - 42,979
Amortization
of
intangibles 3,233 - 3,233 3,398 - 3,398
Impairment 85,047 - 85,047 7,659 - 7,659
Other
(income)
expense,
net (339) - (339) 2,753 - 2,753
--------- ------- --------- --------- --------- ---------
Total
operating
expense 158,682 - 158,682 91,608 - 91,608
--------- ------- --------- --------- --------- ---------
Operating
loss (77,952) - (77,952) (2,278) - (2,278)
Gain on sale
of
OccuLogix,
Inc. stock - - - - 899 899
Interest
income 734 - 734 1,621 - 1,621
Interest
expense (10,072) - (10,072) (5,778) - (5,778)
Minority
interest
expense (9,530) - (9,530) (8,921) - (8,921)
(Loss)
earnings
from equity
investments (560) - (560) 1,029 (13,396) (12,367)
--------- ------- --------- --------- --------- ---------
Loss from
continuing
operations
before
income
taxes (97,380) - (97,380) (14,327) (12,497) (26,824)
Income tax
expense (874) - (874) (8,476) - (8,476)
--------- ------- --------- --------- --------- ---------
Loss from
continuing
operations (98,254) - (98,254) (22,803) (12,497) (35,300)
Loss from
discontinued
operations,
net of
tax - - - (8,214) - (8,214)
--------- ------- --------- --------- --------- ---------
Net loss $ (98,254) $ - $ (98,254) $ (31,017) $ (12,497) $ (43,514)
========= ======= ========= ========= ========= =========
Loss per
share -
diluted $ (1.95) $ - $ (1.95) $ (0.53) $ (0.21) $ (0.74)
========= ======= ========= ========= ========= =========
Weighted
average
number of
common
shares
outstanding
- diluted 50,319 50,319 50,319 59,139 59,139 59,139
Calculation
of Adjusted
EBITDA
Net loss,
as
reported $ (98,254) $ (31,017)
Add: Income
tax
expense 874 8,476
Depreciation
and
amort-
ization 19,670 18,859
Interest
expense,
net 9,338 4,157
Non-cash
compen-
sation 1,391 1,115
Impairment
and
restruct-
uring
charges 85,597 20,987
--------- ---------
Adjusted
EBITDA $ 18,616 $ 22,577
========= =========
Adjusted
EBITDA
per share $ 0.37 $ 0.38
========= =========
Note: The AMD segment includes the Company's interest in OccuLogix, Inc.
TLC VISION CORPORATION
CONSOLIDATING BALANCE SHEETS
(In thousands)
December 31, 2008 December 31, 2007
----------------------------- -----------------------------
Results Results
Before Before AMD
AMD AMD Total AMD Segment Segment Total
Segment Segment TLCVision (Unaudited)(Unaudited) TLCVision
--------- ------- --------- --------- --------- ---------
ASSETS
Current
assets
Cash and cash
equivalents $ 4,492 $ - $ 4,492 $ 12,925 $ - $ 12,925
Accounts
receivable,
net 16,870 - 16,870 18,076 - 18,076
Prepaid
expenses,
inventory
and other 14,214 - 14,214 14,882 - 14,882
--------- ------- --------- --------- ------- ---------
Total current
assets 35,576 - 35,576 45,883 - 45,883
Restricted
cash - - - 1,101 - 1,101
Investments
and other
assets 11,694 - 11,694 17,524 - 17,524
Goodwill 28,570 - 28,570 94,346 - 94,346
Other
intangible
assets, net 10,628 - 10,628 17,020 - 17,020
Fixed assets,
net 50,514 - 50,514 61,936 - 61,936
--------- ------- --------- --------- ------- ---------
Total assets $ 136,982 $ - $ 136,982 $ 237,810 $ - $ 237,810
========= ======= ========= ========= ======= =========
LIABILITIES
Current
liabilities
Accounts
payable $ 17,897 $ - $ 17,897 $ 17,177 $ - $ 17,177
Accrued
liabilities 28,076 - 28,076 28,115 - 28,115
Current
maturities
of long-term
debt 89,081 - 89,081 11,732 - 11,732
--------- ------- --------- --------- ------- ---------
Total current
liabilities 135,054 - 135,054 57,024 - 57,024
Long-term
debt, less
current
maturities 16,500 - 16,500 98,417 - 98,417
Other
long-term
liabilities 5,444 - 5,444 5,023 - 5,023
Minority
interests 15,330 - 15,330 15,224 - 15,224
--------- ------- --------- --------- ------- ---------
Total
liabilities 172,328 - 172,328 175,688 - 175,688
--------- ------- --------- --------- ------- ---------
STOCKHOLDERS'
(DEFICIT)
EQUITY
Common stock 310,611 28,501 339,112 308,972 28,501 337,473
Option and
warrant
equity 745 - 745 837 - 837
Other
comprehensive
income (1,545) - (1,545) (784) - (784)
Accumulated
deficit (345,157) (28,501) (373,658) (246,903) (28,501) (275,404)
--------- ------- --------- --------- ------- ---------
Total
stockholders'
(deficit)
equity (35,346) - (35,346) 62,122 - 62,122
--------- ------- --------- --------- ------- ---------
Total
liabilities
and
stockholders'
(deficit)
equity $ 136,982 $ - $ 136,982 $ 237,810 $ - $ 237,810
========= ======= ========= ========= ======= =========
Note: The AMD segment includes the Company's interest in OccuLogix, Inc.
TLC VISION CORPORATION
CONSOLIDATING STATEMENTS OF CASH FLOWS
(In thousands, except per share amounts)
Year Ended December 31, 2008 Year Ended December 31, 2007
--------------------------- -------------------------------
Results Results
Before Before
AMD AMD Total AMD AMD Total
Segment Segment TLCVision Segment Segment TLCVision
--------- ------ --------- --------- --------- ---------
OPERATING
ACTIVITIES
Net loss $ (98,254) $ - $ (98,254) $ (31,017) $ (12,497) $ (43,514)
Adjustments
to reconcile
net loss to
net cash
provided by
operating
activities:
Depreciation
and
amortization 19,670 - 19,670 18,859 - 18,859
Impairment
loss 85,047 - 85,047 16,950 - 16,950
Deferred
taxes - - - 7,172 - 7,172
Minority
interests 9,530 - 9,530 9,423 - 9,423
Loss (income)
from equity
investments 560 - 560 (1,029) 13,396 12,367
Gain on sales
and
disposals of
fixed assets (269) - (269) (11) - (11)
Gain on sale
of
Occulogix,
Inc. stock - - - - (899) (899)
(Gain) loss
on sale of
businesses (139) - (139) 233 - 233
Non-cash
compensation
expense 1,391 - 1,391 1,115 - 1,115
Other 561 - 561 275 - 275
Changes in
operating
assets and
liabilities,
net of
acquisitions
and
dispositions: (2,274) - (2,274) 9,360 - 9,360
--------- ------ --------- --------- --------- ---------
Cash provided
by operating
activities 15,823 - 15,823 31,330 - 31,330
--------- ------ --------- --------- --------- ---------
INVESTING
ACTIVITIES
Purchases of
fixed assets (3,534) - (3,534) (13,279) - (13,279)
Proceeds from
sales of
fixed assets 1,259 - 1,259 1,114 - 1,114
Proceeds from
sale of
Occulogix,
Inc. stock,
net - - - 2,000 - 2,000
Distributions
and loan
payments
received
from equity
investments 2,107 - 2,107 2,846 - 2,846
Acquisitions
and equity
investments (8,862) - (8,862) (4,815) - (4,815)
Divestitures
of business 1,281 - 1,281 1,619 - 1,619
Proceeds from
sales of
short-term
investments - - - 17,375 - 17,375
Purchases of
short-term
investments - - - (5,800) - (5,800)
Other 144 - 144 123 - 123
--------- ------ --------- --------- --------- ---------
Cash (used
in) provided
by investing
activities (7,605) - (7,605) 1,183 - 1,183
--------- ------ --------- --------- --------- ---------
FINANCING
ACTIVITIES
Restricted
cash
movement 1,101 - 1,101 (66) - (66)
Principal
payments of
debt
financing
and capital
leases (33,070) - (33,070) (11,998) - (11,998)
Proceeds from
debt
financing 25,392 - 25,392 89,717 - 89,717
Capitalized
debt costs (534) - (534) (1,960) - (1,960)
Distributions
to minority
interests (9,895) - (9,895) (9,454) - (9,454)
Purchases of
treasury
stock - - - (117,569) - (117,569)
Proceeds from
issuances of
common stock 355 - 355 2,825 - 2,825
--------- ------ --------- --------- --------- ---------
Cash used in
financing
activities (16,651) - (16,651) (48,505) - (48,505)
--------- ------ --------- --------- --------- ---------
Net decrease
in cash and
cash
equivalents
during the
period (8,433) - (8,433) (15,992) - (15,992)
Cash and cash
equivalents,
beginning of
period 12,925 - 12,925 28,917 - 28,917
--------- ------ --------- --------- --------- ---------
Cash and cash
equivalents,
end of
period $ 4,492 $ - $ 4,492 $ 12,925 $ - $ 12,925
========= ====== ========= ========= ========= =========
Operating
cash flow
per diluted
share $ 0.31 $ - $ 0.31 $ 0.53 $ - $ 0.53
Note: The AMD segment includes the Company's interest in OccuLogix, Inc.
Contact:
James J. Hyland
VP Investor Relations
(636) 534-2369
Email: investor.relations@tlcvision.com
