LCA-Vision revenues increase 2.1% to $20.6 million in Q4 2013

Published on February 18, 2014 at 8:01 AM · No Comments

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 months ended December 31, 2013.

Fourth Quarter 2013 Financial and Operating Highlights (all comparisons are with the fourth quarter of 2012)

  • Revenues increased 2.1% to $20.6 million from $20.2 million; adjusted revenues increased 4.0% to $20.5 million from $19.7 million.
  • Procedure volume increased 3.6% to 12,033 from 11,613.
  • Medical professional and license fees remained unchanged at $4.6 million. Medical professional and license fees for the 2013 fourth quarter included higher fees due to an increase in procedure volume, offset by lower license fees related to renegotiated costs.
  • Vision center direct costs decreased by $1.2 million to $9.7 million from $10.9 million. The decrease was a result of favorable insurance experience, lower employee-related costs, lower financing fees from finance plan mix and renegotiated rates for third-party financing plans. These reductions were partially offset by higher variable operating expenses associated with higher procedure volumes, including laser maintenance costs, as well as higher professional services and other operating expense.
  • General and administrative expense decreased by $0.5 million to $2.8 million from $3.3 million, due primarily to reductions in employee-related costs as a result of restructuring initiatives implemented early in 2013.
  • Marketing expense remained unchanged at $4.7 million. Marketing cost per eye was $392, compared with $411.
  • Depreciation expense decreased by $0.5 million to $0.5 million from $1.0 million.
  • Operating loss was $1.7 million, a $4.3 million improvement from an operating loss of $6.0 million; adjusted operating loss was $1.8 million, a $4.6 million improvement from an adjusted operating loss of $6.4 million. Operating loss in the fourth quarter of 2012 included restructuring charges of $1.1 million and impairment charges of $0.6 million.
  • Net loss narrowed to $1.5 million, or $0.08 per share, a $4.1 million improvement from a net loss of $5.6 million, or $0.30 per share.

2013 Financial and Operating Highlights (all comparisons are with 2012)

  • Revenues were $92.2 million compared with $101.5 million; adjusted revenues were $91.3 million compared with $99.0 million.
  • Procedure volume was 53,231 compared with 58,525.
  • Medical professional and license fees decreased by $3.6 million to $20.1 million from $23.7 million. The decrease resulted from lower procedure volume coupled with the impact of renegotiated license fees and lower enhancement costs.
  • Vision center direct costs decreased by $5.2 million to $39.1 million from $44.3 million. The decrease was a result of lower variable costs associated with procedure volume combined with other cost savings. These savings primarily included lower financing fees from renegotiated rates and a shift in portfolio mix, reductions in employee-related costs and lower insurance costs from favorable claims experience.
  • General and administrative expense decreased by $1.7 million to $11.7 million from $13.4 million, due primarily to reductions in employee-related costs and rent from the relocation of the company's call center as a result of restructuring initiatives implemented in early 2013, and reductions in travel and telecommunications expenses.
  • Marketing expense decreased by $1.5 million to $21.6 million from $23.1 million. Marketing cost per eye was $406 compared with $394.
  • Depreciation expense decreased by $2.6 million to $2.1 million from $4.7 million, due primarily to lower capital expenditures in recent years.
  • Restructuring charges of $0.2 million resulted primarily from the relocation of the company's call center during the first quarter of 2013.
  • Operating loss was $2.4 million, a $6.9 million improvement from an operating loss of $9.3 million; adjusted operating loss was $3.2 million, an $8.4 million improvement from an adjusted operating loss of $11.6 million.
  • Net loss was $1.4 million, or $0.07 per share, a $7.1 million improvement from a net loss of $8.5 million, or $0.45 per share.
  • Cash and investments were $28.7 million as of December 31, 2013, compared with $34.5 million as of December 31, 2012. Cash used in operations included approximately $1.2 million of investment in expansion efforts related to the company's refractive lens and cataract business, $1.8 million of restructuring payments related to previously announced actions, and additional working capital changes of $4.1 million primarily related to reductions in accounts payable and accrued liabilities related to timing of payments, and increased accounts receivable for self-financed patients, offset by positive earnings from the core LASIK business.

The company provides adjusted revenues and operating loss 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 loss as reported in accordance with U.S. Generally Accepted Accounting Principles (GAAP) is provided at the end of this news release.  Management believes that the adjusted information better reflects operating performance and, therefore, is more meaningful to investors.

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