Despite Revenue Gain, LCA-Vision Posts Net Loss in 2Q ’12

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CINCINNATI—For the three months ending June 30, 2012, LCA-Vision Inc. (NASDAQ: LCAV) generated revenue of $25.2 million, up 3 percent from year-ago; adjusted revenues increased 5.2 percent to $24.5 million. Procedure volume increased 2.4 percent to 14,415 procedures, the company said.

LCA-Vision reported an operating loss of $3.3 million compared with $2.8 million year-ago; adjusted operating loss was $3.9 million compared with $3.8 million. The increased operating loss and adjusted operating loss reflected an increase in direct costs of services, higher spending on marketing and advertising, and costs incurred in connection with developing the company's cataract services business, according to the company. Marketing cost per eye was $460 compared with $421 year-ago. Net loss was $3.2 million compared with a net loss of $2.8 million in the first three months of 2011.

For the six months ending June 30, 2012, LCA-Vision posted revenue of $61.3 million, up 8.1 percent from year-ago; adjusted revenues increased 10.1 percent to $59.8 million. Procedure volume increased 7.5 percent to 35,402 procedures. Operating income was $0.4 million, a $1.2 million improvement from an operating loss of $0.8 million in the first six months of 2011; adjusted operating loss was $0.9 million, a $2.1 million improvement from an adjusted operating loss of $3.0 million.

The improvement reflected higher procedure revenue offset partially by increases in variable costs, higher general and administrative costs and costs incurred in connection with developing the company's cataract services business, LCA-Vision said. Marketing cost per eye was $381 compared with $377. Net income was $0.7 million, a $1.4 million improvement from a net loss of $0.7 million year-ago.

"We are pleased to report our fourth consecutive quarter of growth in revenues and procedure volume," said LCA-Vision chief financial officer Michael J. Celebrezze. "Our procedure volume gain was not as robust as in recent quarters as consumer concerns about the economic recovery affected discretionary spending. However, discussions with industry sources lead us to believe that we gained market share for the fourth consecutive quarter as the industry contracted slightly. In addition to outpacing industry volume, we increased our average price per procedure compared with both the prior year and the prior quarter, despite a discount promotion. We attribute this improvement to a comprehensive market-by-market review of competitive pricing and price sensitivity that allowed us to adjust our procedure price in many LasikPlus markets.

"We achieved positive operating and net income for the first half of this year, which is in keeping with our focus on returning to sustained profitability. We also took the opportunity during the second quarter to retire our debt obligation. We saw this as a practical move based on our strong cash position and the absence of any impending liquidity concerns," Celebrezze added.

LCA-Vision said it intends to continue to manage expenses conservatively in 2012, and does not plan to open any new vision centers in the near term.