LCA-Vision Reports Fourth Quarter and Year-End 2012 Financial Results

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CINCINNATI— LCA-Vision Inc. (NASDAQ: LCAV) announced financial and operating results for the fourth quarter and full year for the 12 months ended Dec. 31, 2012.

Revenues for the three months ended Dec. 31, 2012, were $20.2 million compared with $24.5 million for the same period year ago; adjusted revenues for the fourth quarter were $19.7 million compared with $23.6 million year ago. Procedure volume for the fourth quarter 2012 was 11,613 procedures compared with 14,205 procedures for the same period year ago.

Operating loss for the fourth quarter was $6.0 million compared with operating loss of $1.6 million; adjusted operating loss was $6.4 million compared with adjusted operating loss of $2.5 million year ago. Operating loss and adjusted operating loss for the fourth quarter of 2012 reflected lower procedure volume and revenues, and included $1.7 million in restructuring and impairment charges, according to an announcement from the company.

Marketing cost per eye was $411 for Q4 2012, compared with $348 for Q4 2011.

Revenues for the 12 months ended Dec. 31, 2012 were $101.5 million compared with $103.0 million for 2011; adjusted revenues increased slightly to $99.0 million from $98.6 million year ago.

Procedure volume for the year-end period was 58,525 procedures compared with 59,587 procedures for year-end 2011.
 
Year-end operating loss was $9.3 million compared with operating loss of $6.5 million year ago; adjusted operating loss for 2012 was $11.6 million compared with adjusted operating loss of $10.5 million in 2011.

For the 12 months ended Dec. 31, 2012, marketing cost per eye was $394 compared with $381.

"In reviewing our 2012 performance, we reported year-over-year growth in procedure volume for the first half of the year followed by declines in the second half as we attracted fewer prospective patients," said LCA-Vision CEO Michael J. Celebrezze.

"Among the bright spots for 2012, we took actions that resulted in improvements in appointment show rate and conversion rate, while treatment show rate remained strong throughout the year. We also increased our average price per procedure by $36, and effectively controlled costs within our core business. The increase in operating expenses from 2011 related largely to an investment in developing our cataract services business. Importantly, we have a strong balance sheet with $34.5 million of cash and investments and no debt.

"Late last year, we began taking actions to further lower the number of procedures required to reach cash-flow breakeven from our LASIK business by 10,000 to approximately 58,000 procedures annually. These measures include reducing headcount by eliminating the equivalent of 31 full-time positions from across all segments of our company, reducing our costs with select vendors, relocating the call center to the company's headquarters facility, converting two full-service LasikPlus vision centers to satellite operations that perform pre-operative and post-operative exams and one full-service vision center to a license arrangement, all while maintaining an infrastructure aligned with current market conditions and patient volumes."

The company announced that it is taking actions aimed at improving patient prospecting through its direct-to-consumer marketing model. These include optimizing media buys and refreshing advertising messaging with increased focus on hyper-localization to compete better with local ophthalmologists who control about 60 percent of the LASIK market.

"We are further expanding our partner network of optometrists for both LASIK and cataract patient referrals, which reached 160 practices at the close of 2012. We are refining our approach to identify additional suitable candidates for partnering and to improve patient care," said Celebrezze. "Finally, our intention is to limit our cataract surgery offering under our Visium Eye Institute brand to the current 10 centers while we evaluate marketing programs to generate patient interest. We performed 61 cataract and implantable collamer lens procedures during the fourth quarter."