N@N

TLC Vision Corporation: TLCVision Reports Second Quarter 2009 Results

^{Published on 2009-08-13 13:10:23, Last Modified on 2009-08-13 13:10:34 - Market Wire}
 

ST. LOUIS, MO--(Marketwire - August 13, 2009) - TLC Vision Corporation (NASDAQ: [ TLCV ]) (TSX: [ TLC ]), North America's premier eye care services company, today announced results for the second quarter ended June 30, 2009.

James B. Tiffany, President and Chief Operating Officer of TLCVision, commented, "TLCVision posted strong operating results during the second quarter of 2009, despite the current economic environment. Our refractive centers procedure volume, down 28% from the prior year's quarter, outperformed industry estimates. Additionally, we were able to increase our market share in the second quarter to 15% versus 14% in the prior year period.

"Our non-refractive businesses, which include other surgical procedures and general eye care, accounted for 44% of our total revenue for the quarter. We also continue to realize significant cost reductions related to ongoing initiatives that generated approximately $11.4 million of cost savings in the second quarter of 2009 versus the prior year. Our cash balance at June 30, 2009 was $14.1 million.

"With respect to our credit facility, we recently secured a limited waiver extension from our lenders until September 9, 2009 and we continue to work with our lenders and advisors to secure a more flexible capital structure for the Company.

"We benefit from a strong foundation in our non-refractive businesses as they continue to contribute positive EBITDA and cash flow. Our better than market performance in our refractive business is the result of our multi-channel patient acquisition model and the dedicated effort of TLCVision employees across North America who continue to provide the best clinical outcomes in the industry."

 Second Quarter 2009 Results -- Revenue for the second quarter was $58.5 million, a 21% decrease over prior year revenue of $74.1 million, with refractive revenues showing a decline of 31%. - Refractive Centers revenue of $27 million decreased by 31%, as majority-owned center procedures declined by 29%, less than estimated market declines. - Doctor Services revenue of $24 million decreased by 4%, reflecting weakness in the refractive access business partially offset by growth in the cataract business. - Eye Care revenue of $7 million decreased 26%. This decrease was due to the timing of the Vision Source annual national meeting which was held in Q1 2009 this year compared to Q2 2008. Excluding annual meeting revenue in Q2 2008, Eye Care recorded an increase in revenue of 13% for Q2 2009 due primarily to an increase in franchise revenue. -- General and administrative and marketing costs declined by 31% or $5.3 million below prior year due to cost reduction initiatives. -- Other expenses increased $6.0 million due to various restructuring activities including legal fees, consulting costs and severance charges. -- Consolidated net loss attributable to TLC Vision Corporation for the second quarter was ($6.9) million, compared to ($2.2) million from the prior year period. Net loss attributable to TLC Vision Corporation per diluted share for the second quarter was ($0.14), compared to net a loss of ($0.04) for the prior year period. -- Pro-forma net loss attributable to TLC Vision Corporation for the second quarter (excluding severance and restructuring charges) was ($1.3) million or ($0.03) per fully diluted share, compared with ($2.2) million, or ($0.04) per fully diluted share in the second quarter of 2008. -- Adjusted EBITDA for the second quarter was $6.0 million, or $0.12 per fully diluted share, compared to $5.7 million, or $0.11 per fully diluted share for the second quarter of 2008. Six Month 2009 Results -- Revenue for the six months ended June 30, 2009, was $127.9 million, a 22% decrease over prior year revenue of $164.5 million, with refractive revenues showing a decline of 36%. - Refractive Centers revenue of $63 million decreased by 36%, as majority-owned center procedures declined by 35%. - Doctor Services revenue of $48 million decreased by 5%, reflecting weakness in the refractive access business partially offset by growth in the cataract business. - Eye Care revenue of $17 million increased 7% as a result of increased franchises and revenue per franchisee. -- General and administrative and marketing costs declined by 34% or $12.5 million below prior year due to cost reduction initiatives. -- Other expenses increased $8.7 million due to various restructuring activities including legal fees, consulting costs and severance charges. -- Consolidated net loss attributable to TLC Vision Corporation for the six months ended June 30, 2009 was ($8.2) million, compared to net income of $3.9 million from the prior year period. Net loss attributable to TLC Vision Corporation per diluted share for the six months ended June 30, 2009, was ($0.16), compared to net income per diluted share of $0.08 for the prior year period. -- Pro-forma net income attributable to TLC Vision Corporation for the six months ended June 30, 2009 (excluding severance and restructuring charges) was $0.1 million, or $0.00 per fully diluted share, compared with $3.9 million, or $0.08 per fully diluted share for the prior year period. -- Adjusted EBITDA for the six months ended June 30, 2009 was $14.6 million, or $0.29 per fully diluted share, compared to $19.6 million, or $0.39 per fully diluted share, for the first six months of 2008. 

Use of Non-GAAP Measures

Pro-forma results are presented to facilitate a comparison of current year and prior year results. The calculations of pro-forma results are not specified by United States generally accepted accounting principles ("GAAP"). Our calculations of pro-forma results may not be comparable to similarly-titled measures of other companies. A reconciliation of reported net income to pro-forma net income for the quarter and six months ended June 30, 2009 and 2008, is included in the attached Consolidated Statements of Operations.

Adjusted EBITDA is a non-GAAP financial measure. It is used in addition to and in conjunction with results presented in accordance with GAAP. This non-GAAP financial measure reflects an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. A schedule detailing the calculation of Adjusted EBITDA is attached to this release.

Non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with generally accepted accounting principles.

Conference Call

The company will host a conference call and live webcast with investors and analysts on Thursday, August 13, 2009 at 5:00 p.m. (EDT). To access, please dial 888-359-3632 or 719-785-1754 (international callers) and enter the pass code 2703574. The call will be broadcast live on the company's website at [ www.tlcv.com ] under the "Webcasts" link in the Investor Relations section.

A replay of the conference call will be available until August 27, 2009. To access the replay, dial 888-203-1112 or 719-457-0820 (international callers) and enter the pass code: 2703574. 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, technology access service models, extensive optometric relationships, direct to consumer advertising and managed care contracting strength, TLCVision maintains leading positions in Refractive, Cataract and Eye Care markets. Information about vision correction surgery can be found on the TLC Laser Eye Centers' website at [ www.lasik.com ]. More information about TLCVision can be found on the Company's website at [ www.tlcv.com ].

 TLC VISION CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except per share amounts) Three months ended June 30, ------------------ 2009 2008 -------- -------- Revenues: Refractive centers $ 26,948 $ 39,057 Doctor services 24,492 25,528 Eye care 7,019 9,512 -------- -------- Total revenues 58,459 74,097 Cost of revenues (excluding amortization): Refractive centers 21,595 29,409 Doctor services 17,757 18,680 Eye care 3,150 4,691 -------- -------- Total cost of revenues (excluding amortization) 42,502 52,780 -------- -------- Gross profit 15,957 21,317 -------- -------- General and administrative 6,392 6,986 Marketing and sales 5,509 10,209 Amortization of intangibles 582 803 Other expense (income), net 5,628 (359) -------- -------- Total operating costs 18,111 17,639 -------- -------- Operating (loss) income (2,154) 3,678 Interest income 34 216 Interest expense (2,462) (2,414) Earnings (loss) from equity investments 442 (319) -------- -------- Loss (Income) before income taxes (4,140) 1,161 Income tax expense (274) (285) -------- -------- Net (loss) income (4,414) 876 Less: Net income attributable to noncontrolling interest 2,445 3,076 -------- -------- Net loss attributable to TLC Vision Corporation $ (6,859) $ (2,200) ======== ======== Net loss per share attributable to TLC Vision Corporation, diluted $ (0.14) $ (0.04) ======== ======== Weighted average number of common shares outstanding, diluted 50,565 50,292 Calculation of Pro Forma Net Loss and EPS Net loss attributable to TLC Vision Corporation, as reported $ (6,859) $ (2,200) Add: Severance and restructuring charges 5,572 0 -------- -------- Pro forma net loss attributable to TLC Vision Corporation $ (1,287) $ (2,200) ======== ======== Pro forma net loss per share attributable to TLC Vision Corporation, diluted $ (0.03) $ (0.04) ======== ======== Calculation of Adjusted EBITDA Net loss attributable to TLC Vision Corporation, as reported $ (6,859) $ (2,200) Add: Income tax expense 274 285 Depreciation and amortization 3,997 4,982 Interest expense, net 2,428 2,198 Non-cash compensation 135 354 Foreign exchange loss 401 82 Severance and restructuring charges 5,572 - Other 7 - -------- -------- Adjusted EBITDA $ 5,955 $ 5,701 ======== ======== Adjusted EBITDA per share, diluted $ 0.12 $ 0.11 ======== ======== TLC VISION CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except per share amounts) Six months ended June 30, ------------------ 2009 2008 -------- -------- Revenues: Refractive centers $ 62,948 $ 98,024 Doctor services 48,048 50,591 Eye care 16,885 15,837 -------- -------- Total revenues 127,881 164,452 Cost of revenues (excluding amortization): Refractive centers 47,630 66,766 Doctor services 36,091 36,821 Eye care 7,922 7,513 -------- -------- Total cost of revenues (excluding amortization) 91,643 111,100 -------- -------- Gross profit 36,238 53,352 -------- -------- General and administrative 12,328 15,353 Marketing and sales 12,337 21,860 Amortization of intangibles 1,165 1,633 Other expense (income), net 8,146 (556) -------- -------- Total operating costs 33,976 38,290 -------- -------- Operating income 2,262 15,062 Interest income 168 426 Interest expense (5,563) (4,890) Earnings (loss) from equity investments 792 (102) -------- -------- (Loss) income before income taxes (2,341) 10,496 Income tax expense (484) (732) -------- -------- Net (loss) income (2,825) 9,764 Less: Net income attributable to noncontrolling interest 5,358 5,892 -------- -------- Net (loss) income attributable to TLC Vision Corporation $ (8,183) $ 3,872 ======== ======== Net (loss) income per share attributable to TLC Vision Corporation, diluted $ (0.16) $ 0.08 ======== ======== Weighted average number of common shares outstanding, diluted 50,542 50,293 Calculation of Pro Forma Net (Loss) Income and EPS Net (loss) income attributable to TLC Vision Corporation, as reported $ (8,183) $ 3,872 Add: Restructuring and severance charges 8,258 0 -------- -------- Pro forma net income attributable to TLC Vision Corporation $ 75 $ 3,872 ======== ======== Pro forma net income per share attributable to TLC Vision Corporation, diluted $ 0.00 $ 0.08 ======== ======== Calculation of Adjusted EBITDA Net (loss) income attributable to TLC Vision Corporation, as reported $ (8,183) $ 3,872 Add: Income tax expense 484 732 Depreciation and amortization 8,009 9,877 Interest expense, net 5,395 4,464 Non-cash compensation 343 711 Foreign exchange loss (gain) 309 (81) Severance and restructuring charges 8,258 - Other 7 - -------- -------- Adjusted EBITDA $ 14,622 $ 19,575 ======== ======== Adjusted EBITDA per share, diluted $ 0.29 $ 0.39 ======== ======== TLC VISION CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) As of As of June 30, December 31, 2009 2008 ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 14,055 $ 4,492 Accounts receivable, net 17,697 16,870 Prepaid expenses, inventory and other 11,393 14,214 ----------- ----------- Total current assets 43,145 35,576 Restricted cash 943 - Investments and other assets, net 11,479 11,694 Goodwill 28,570 28,570 Other intangible assets, net 9,318 10,628 Fixed assets, net 46,204 50,514 ----------- ----------- Total assets $ 139,659 $ 136,982 =========== =========== LIABILITIES Current liabilities: Accounts payable $ 15,906 $ 17,897 Accrued liabilities 23,500 28,076 Current maturities of long-term debt (including $76.7 million of term debt at June 30, 2009 and $82.7 million in default December 31, 2008) 106,837 89,081 ----------- ----------- Total current liabilities 146,243 135,054 Long-term debt, less current maturities 15,749 16,500 Other long-term liabilities 4,626 5,444 ----------- ----------- Total liabilities 166,618 156,998 ----------- ----------- STOCKHOLDERS' DEFICIT TLC Vision Corporation stockholders' deficit: Common stock, no par value 339,477 339,112 Option and warrant equity 745 745 Accumulated other comprehensive loss (1,167) (1,545) Accumulated deficit (381,841) (373,658) ----------- ----------- Total TLC Vision Corporation stockholders' deficit (42,786) (35,346) Noncontrolling interest 15,827 15,330 ----------- ----------- Total stockholders' deficit (26,959) (20,016) ----------- ----------- Total liabilities and stockholders' deficit $ 139,659 $ 136,982 =========== =========== TLC VISION CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands, except per share amounts) Six months ended June 30, ------------------ 2009 2008 -------- -------- OPERATING ACTIVITIES Net (loss) income $ (2,825) $ 9,764 Adjustments to reconcile net (loss) income to net cash from operating activities: Depreciation and amortization 8,009 9,877 (Earnings) loss from equity investments (792) 102 Gain on sales and disposals of fixed assets (277) (289) Gain on sale of businesses - (145) Non-cash compensation expense 343 711 Other 550 354 Changes in operating assets and liabilities, net of acquisitions and dispositions: (542) 2,173 -------- -------- Cash provided by operating activities 4,466 22,547 -------- -------- INVESTING ACTIVITIES Purchases of fixed assets (773) (1,957) Proceeds from sales of fixed assets 345 550 Distributions and loan payments received from equity investments 1,071 945 Acquisitions and equity investments (4,838) (7,533) Divestitures of businesses - 1,179 Other 104 (28) -------- -------- Cash used in investing activities (4,091) (6,844) -------- -------- FINANCING ACTIVITIES Restricted cash movement (943) 893 Principal payments of debt financing and capital leases (2,924) (17,411) Proceeds from debt financing 17,971 7,385 Capitalized debt costs (78) (534) Distributions to noncontrolling interests (4,861) (5,175) Proceeds from issuances of common stock 23 275 -------- -------- Cash provided by (used in) financing activities 9,188 (14,567) -------- -------- Net increase in cash and cash equivalents during the period 9,563 1,136 Cash and cash equivalents, beginning of period 4,492 12,925 -------- -------- Cash and cash equivalents, end of period $ 14,055 $ 14,061 ======== ======== Operating cash flow per diluted share $ 0.09 $ 0.45