News Release | Contact: | |
For Immediate Release | Anna Austin, EVP, Corporate Communications (314) 523-8354 Ian Chadsey, Manager, Investor Relations (416) 436-5949 Email: investor.relations@tlcvision.com |
TLCVisionReports Record First Quarter
St. Louis, Missouri, May 5, 2005: TLC Vision Corporation (NASDAQ:TLCV; TSX:TLC), North America’s premier eye care services company, today announced its financial results for the three month period ended March 31, 2005. All dollar amounts are expressed in U.S. currency and results are reported in accordance with U.S. generally accepted accounting principles (U.S. GAAP) unless otherwise noted.
To provide maximum transparency in the release for our shareholders, consolidated results excluding the impact of the AMD segment, principally our investment in OccuLogix Inc., will be differentiated usingitalicstext.
First Quarter 2005 Highlights
• | Revenues improved to $71 million, a 9% year-over-year increase |
• | Net income increased 19% to $9.6 million oNet income increased 31% (excludes AMD) |
• | Earnings per share rose to $0.13 compared to $0.12 per share year-over-year oEPS was $0.16 versus $0.12 per share year over year (excludes AMD) |
• | Cash and short-term investments are $142.3 million |
• | Cash and short-term investments are $93.3 million, up 11% from the previous quarter (excludes AMD) |
Revenues
Total revenues for the first quarter 2005 rose 9% to $71 million compared to $65 million for the same period a year ago. Revenues for the first quarter increased as a result of higher refractive procedure volumes, growing custom mix and continued strong performance from the other healthcare services segment.
Refractive Revenues: Refractive revenues for the first quarter 2005 increased to $55.2 million compared to $50.9 million in 2004, led by 11% revenue growth in the corporate owned centers business.
Other Healthcare Revenues: The company continues to have strong growth from our other healthcare services. Other healthcare revenues were up 11% for the first quarter year-over-year comparisons, and generated 22% of total net revenues. The cataract business continues to drive strong growth, in both mobile and ASC operations.
Earnings
TLCVisionexperienced its 5th consecutive quarter of record, year-over-year earnings which is attributable to higher refractive and cataract procedure volumes and improved gross margins, increasing the leverage in the business model.
First quarter earnings of $9.6 million or $0.13 per share increased 19% from the previous year.
Net income, excluding the AMD segment, was up 31% to $11.2 million versus $8.6 million last year. Earnings per share were $0.16 for the quarter versus $0.12 last year.
Cash
The Company ended the first quarter in a strong financial position. Cash and short-term investments were $142.3 million at the end of the period.
Cash and short-term investments, excluding the AMD segment, totaled $93.3 million, 11% higher than at year-end.
Operating cash flow was $0.08 per share for the first quarter of 2005.
Excluding the AMD segment, operating cash flow was $0.16 per share which was the same as the first quarter last year. Cash generation in the current quarter was impacted by seasonally higher working capital, which should have a positive impact on second quarter cash generation.
“This represents five consecutive quarters of record, year-over-year, earnings for the company,” commented Jim Wachtman, President and Chief Executive Officer. “We continue to deliver impressive earnings growth as a result of higher procedure volumes and a disciplined approach to managing costs. The earnings growth coupled with strong cash flow generation has put us in a very strong financial position to drive our strategic initiatives for the future.”
Other Refractive Operating Metrics
Procedure Volume and Margins:Refractive volumes and gross profit margins increased again this quarter. Total paid laser procedures increased to 58,700. Same store centers refractive volumes increased 9% year-over-year. Surgical procedures continue to favor the centers business, which represent 60% of total refractive volume. Refractive gross profit margins increased to 35% as a result of higher refractive volume and improved custom mix.
CustomLASIK:TLCVisioncontinued to outperform the industry with respect to CustomLASIK adoption. CustomLASIK procedures represented 58% of center volumes, and exited the quarter at 61%.
Conference Call
TLCVisionis pleased to invite all interested parties to participate in a conference call during which these results will be discussed. The call will be held today, May 5, at 10:30 a.m. Eastern Time at 888-694-1321. The call will also be broadcast live and archived on the Company’s web site atwww.tlcv.com under the “Webcasts” link in the Investor Relations section. In addition, the live web cast will be available at various other popular portals and financial web sites.
AboutTLCVision
TLCVisionis North America’s premier eye care services company, providing eye doctors with the tools and technologies needed to deliver high-quality care. We maintain leading positions in Refractive, Cataract and Optometric Services markets, plus the AMD market through our significant ownership in OccuLogix, Inc (NASDAQ: RHEO, TSX: RHE). The key drivers of TLCVision‘s strategy are our affiliated network of over 13,000 eye doctors, proven corporate and consumer marketing and education programs, and access to state of the art clinical technologies. We are supported by strong financial performance, a culture of operational excellence and an experienced management team. The Company’s common shares trade on the NASDAQ National Market under the symbol ‘TLCV’ and on the Toronto Stock Exchange under the symbol ‘TLC’. More information about the Company can be found on the TLCVisionweb site at www.tlcv.com.
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 and Section 21E of the U.S. Securities Exchange Act of 1934, 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. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous factors, including the timing of expenditures, effects of competition, changes to pricing, acquisitions and expansion opportunities, any of which could cause actual results to vary materially from current results or TLCVision’s anticipated future results. 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.
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TLC VISION CORPORATION
CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands except per share amounts)
Three Months Ended March 31, 2005 | Three Months Ended March 31, 2004 | |||||||||||||||||||||||
Results Before | ||||||||||||||||||||||||
AMD | AMD | Total | Results Before AMD | AMD | Total | |||||||||||||||||||
Segment | Segment | TLCVision | Segment | Segment | TLCVision | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Refractive: | ||||||||||||||||||||||||
Centers | $ | 43,291 | $ | — | $ | 43,291 | $ | 38,838 | $ | — | $ | 38,838 | ||||||||||||
Access | 11,880 | — | 11,880 | 12,049 | — | 12,049 | ||||||||||||||||||
Other healthcare services | 15,447 | 431 | 15,878 | 14,079 | 209 | 14,288 | ||||||||||||||||||
Total revenues | 70,618 | 431 | 71,049 | 64,966 | 209 | 65,175 | ||||||||||||||||||
Cost of revenues: | ||||||||||||||||||||||||
Refractive: | ||||||||||||||||||||||||
Centers | 28,099 | — | 28,099 | 26,152 | — | 26,152 | ||||||||||||||||||
Access | 7,837 | — | 7,837 | 8,172 | — | 8,172 | ||||||||||||||||||
Other healthcare services | 9,635 | 519 | 10,154 | 8,915 | 223 | 9,138 | ||||||||||||||||||
Total cost of revenues | 45,571 | 519 | 46,090 | 43,239 | 223 | 43,462 | ||||||||||||||||||
Gross profit (loss) | 25,047 | (88 | ) | 24,959 | 21,727 | (14 | ) | 21,713 | ||||||||||||||||
General and administrative | 8,228 | 3,223 | 11,451 | 7,256 | 97 | 7,353 | ||||||||||||||||||
Marketing | 3,350 | 185 | 3,535 | 2,872 | 22 | 2,894 | ||||||||||||||||||
Research and development | -- | — | — | — | 374 | 374 | ||||||||||||||||||
Amortization of intangibles | 1,011 | — | 1,011 | 1,012 | — | 1,012 | ||||||||||||||||||
Total operating costs | 12,589 | 3,408 | 15,997 | 11,140 | 493 | 11,633 | ||||||||||||||||||
Operating income (loss) | 12,458 | (3,496 | ) | 8,962 | 10,587 | (507 | ) | 10,080 | ||||||||||||||||
Other income | 255 | — | 255 | — | — | — | ||||||||||||||||||
Interest income | 716 | 356 | 1,072 | 478 | — | 478 | ||||||||||||||||||
Interest expense | (457 | ) | (1 | ) | (458 | ) | (881 | ) | — | (881 | ) | |||||||||||||
Minority interests | (2,185 | ) | 1,499 | (686 | ) | (1,874 | ) | — | (1,874 | ) | ||||||||||||||
Earnings from equity investments | 659 | — | 659 | 399 | — | 399 | ||||||||||||||||||
Income (loss) before income taxes | 11,446 | (1,642 | ) | 9,804 | 8,709 | (507 | ) | 8,202 | ||||||||||||||||
Income tax expense | (198 | ) | — | (198 | ) | (150 | ) | — | (150 | ) | ||||||||||||||
Net income (loss) | $ | 11,248 | $ | (1,642 | ) | $ | 9,606 | $ | 8,559 | $ | (507 | ) | $ | 8,052 | ||||||||||
Earnings (loss) per share – diluted | $ | 0.16 | $ | (0.03 | ) | $ | 0.13 | $ | 0.12 | $ | 0.00 | $ | 0.12 | |||||||||||
Weighted average number of common shares outstanding – diluted | 72,045 | 72,045 | 72,045 | 69,433 | 69,433 | 68,433 | ||||||||||||||||||
Note: The AMD segment includes OccuLogix, Inc. (formerly Vascular Sciences Corporation), OccuLogix, L.P. and RHEO Clinic, Inc. |
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TLC VISION CORPORATION
CONSOLIDATING BALANCE SHEETS
(In thousands)
March 31, 2005 (Unaudited) | December 31, 2004 | |||||||||||||||||||||||
Results Before | Results Before AMD | AMD | ||||||||||||||||||||||
AMD | AMD | Total | Segment | Segment | Total | |||||||||||||||||||
Segment | Segment | TLCVision | (Unaudited) | (Unaudited) | TLCVision | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 54,496 | $ | 6,631 | $ | 61,127 | $ | 15,847 | $ | 17,588 | $ | 33,435 | ||||||||||||
Short-term investments | 38,850 | 42,278 | 81,128 | 68,515 | 42,500 | 111,015 | ||||||||||||||||||
Accounts receivable | 19,806 | 657 | 20,463 | 16,489 | 954 | 17,443 | ||||||||||||||||||
Prepaids and other current assets | 12,557 | 3,511 | 16,068 | 12,212 | 1,609 | 13,821 | ||||||||||||||||||
Total current assets | 125,709 | 53,077 | 178,786 | 113,063 | 62,651 | 175,714 | ||||||||||||||||||
Intercompany | 1,955 | (1,955 | ) | — | 1,877 | (1,877 | ) | — | ||||||||||||||||
Restricted cash | 909 | — | 909 | 932 | — | 932 | ||||||||||||||||||
Investments and other assets | 10,629 | 5,383 | 16,012 | 10,482 | — | 10,482 | ||||||||||||||||||
Goodwill | 52,751 | — | 52,751 | 53,774 | — | 53,774 | ||||||||||||||||||
Intangibles, net | 17,026 | 103 | 17,129 | 18,037 | 103 | 18,140 | ||||||||||||||||||
Fixed assets, net | 45,060 | 563 | 45,623 | 45,636 | 563 | 46,199 | ||||||||||||||||||
Total assets | $ | 254,039 | $ | 57,171 | $ | 311,210 | $ | 243,801 | $ | 61,440 | $ | 305,241 | ||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Accounts payable | $ | 10,494 | $ | 560 | $ | 11,054 | $ | 8,491 | $ | 225 | $ | 8,716 | ||||||||||||
Accrued liabilities | 20,995 | 2,514 | 23,509 | 23,425 | 3,714 | 27,139 | ||||||||||||||||||
Current portion of long-term debt | 6,327 | — | 6,327 | 8,664 | — | 8,664 | ||||||||||||||||||
Total current liabilities | 37,816 | 3,074 | 40,890 | 40,580 | 3,939 | 44,519 | ||||||||||||||||||
Long-term debt, less current maturities | 9,654 | — | 9,654 | 9,991 | — | 9,991 | ||||||||||||||||||
Other long-term liabilities | 3,166 | — | 3,166 | 2,242 | 480 | 2,722 | ||||||||||||||||||
Minority interests | 9,397 | 26,522 | 35,919 | 9,307 | 27,915 | 37,222 | ||||||||||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||
Capital stock | 430,731 | 30,193 | 460,924 | 428,877 | 30,082 | 458,959 | ||||||||||||||||||
Option and warranty equity | 2,095 | — | 2,095 | 2,872 | — | 2,872 | ||||||||||||||||||
Accumulated deficit | (238,820 | ) | (2,618 | ) | (241,438 | ) | (250,068 | ) | (976 | ) | (251,044 | ) | ||||||||||||
Total shareholders’ equity | 194,006 | 27,575 | 221,581 | 181,681 | 29,106 | 210,787 | ||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 254,039 | $ | 57,171 | $ | 311,210 | $ | 243,801 | $ | 61,440 | $ | 305,241 | ||||||||||||
Note: The AMD segment includes OccuLogix, Inc. (formerly Vascular Sciences Corporation), OccuLogix, L.P. and RHEO Clinic, Inc. |
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TLC VISION CORPORATION
CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands except per share amounts)
Three Months Ended March 31, 2005 | Three Months Ended March 31, 2004 | |||||||||||||||||||||||
Results Before | ||||||||||||||||||||||||
AMD | AMD | Total | Results Before AMD | AMD | Total | |||||||||||||||||||
Segment | Segment | TLCVision | Segment | Segment | TLCVision | |||||||||||||||||||
OPERATING ACTIVITIES | ||||||||||||||||||||||||
Net Income (loss) | $ | 11,248 | $ | (1,642 | ) | $ | 9,606 | $ | 8,559 | $ | (507 | ) | $ | 8,052 | ||||||||||
Adjustments to reconcile net income (loss) to net cash from operating activities: | ||||||||||||||||||||||||
Depreciation and amortization | 3,971 | 46 | 4,017 | 4,546 | 11 | 4,557 | ||||||||||||||||||
Write-off of investment in research and development arrangement | — | — | — | — | 374 | 374 | ||||||||||||||||||
Minority interests | 2,185 | (1,499 | ) | 686 | 1,874 | — | 1,874 | |||||||||||||||||
Earnings from equity investments | (659 | ) | — | (659 | ) | (399 | ) | — | (399 | ) | ||||||||||||||
Loss (gain) on disposal of fixed assets | (96 | ) | — | (96 | ) | 730 | — | 730 | ||||||||||||||||
Gain on sale of subsidiaries | (319 | ) | — | (319 | ) | (1,278 | ) | — | (1,278 | ) | ||||||||||||||
Compensation expense | 69 | — | 69 | 420 | — | 420 | ||||||||||||||||||
Changes in operating assets and liabilities, net of acquisitions and dispositions | (4,627 | ) | (2,872 | ) | (7,499 | ) | (3,576 | ) | 107 | (3,469 | ) | |||||||||||||
Cash from operating activities | 11,772 | (5,967 | ) | 5,805 | 10,876 | (15 | ) | 10,861 | ||||||||||||||||
INVESTING ACTIVITIES | ||||||||||||||||||||||||
Purchases of fixed assets | (2,681 | ) | (46 | ) | (2,727 | ) | (1,570 | ) | — | (1,570 | ) | |||||||||||||
Proceeds from sale of fixed assets | 454 | — | 454 | 147 | — | 147 | ||||||||||||||||||
Proceeds from divestitures of investments and subsidiaries, net | 3,430 | — | 3,430 | (271 | ) | — | (271 | ) | ||||||||||||||||
Distributions and loan payments received from equity investments | 556 | — | 556 | — | — | — | ||||||||||||||||||
Investment in research and development arrangements | — | — | — | (374 | ) | — | (374 | ) | ||||||||||||||||
Acquisitions and investments | (443 | ) | — | (443 | ) | (4,210 | ) | — | (4,210 | ) | ||||||||||||||
Proceeds from sale of short-term investments | 34,350 | 4,400 | 38,750 | — | — | — | ||||||||||||||||||
Purchases of short-term investments | (4,685 | ) | (4,178 | ) | (8,863 | ) | (7,125 | ) | — | (7,125 | ) | |||||||||||||
Purchases of long-term investments | — | (5,383 | ) | (5,383 | ) | — | — | — | ||||||||||||||||
Other | (125 | ) | — | (125 | ) | 544 | — | 544 | ||||||||||||||||
Cash from investing activities | 30,856 | (5,207 | ) | 25,649 | (12,859 | ) | — | (12,859 | ) | |||||||||||||||
FINANCING ACTIVITIES | ||||||||||||||||||||||||
Restricted cash movement | 23 | — | 23 | 7 | — | 7 | ||||||||||||||||||
Principal payments of debt financing and capital leases | (4,219 | ) | — | (4,219 | ) | (4,566 | ) | — | (4,566 | ) | ||||||||||||||
Proceeds from debt financing | 1,117 | — | 1,117 | — | — | — | ||||||||||||||||||
Distributions to minority interests | (1,977 | ) | — | (1,977 | ) | (1,355 | ) | — | (1,355 | ) | ||||||||||||||
Proceeds from issuance of common stock | 1,077 | — | 1,077 | 8,287 | — | 8,287 | ||||||||||||||||||
Proceeds from issuance of OccuLogix, Inc. common stock | — | 217 | 217 | — | — | — | ||||||||||||||||||
Cash from financing activities | (3,979 | ) | 217 | (3,762 | ) | 2,373 | — | 2,373 | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents during the period | 38,649 | (10,957 | ) | 27,692 | 390 | (15 | ) | 375 | ||||||||||||||||
Cash and cash equivalents, beginning of period | 15,847 | 17,588 | 33,435 | 21,554 | 26 | 21,580 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 54,496 | $ | 6,631 | $ | 61,127 | $ | 21,944 | $ | 11 | $ | 21,955 | ||||||||||||
Operating cash flow per diluted share | $ | 0.16 | $ | (0.08 | ) | $ | 0.08 | $ | 0.16 | $ | (0.00 | ) | $ | 0.16 | ||||||||||
Note: The AMD segment includes OccuLogix, Inc. (formerly Vascular Sciences Corporation), OccuLogix, L.P. and RHEO Clinic, Inc. |
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