LCAVision Inc. (LCAV) filed Quarterly Report for the period ended 2009-09-30.
LCA-Vision Inc. provides laser vision correction at affordable prices. Lcavision Inc. has a market cap of $84.8 million; its shares were traded at around $4.56 with and P/S ratio of 0.4. Lcavision Inc. had an annual average earning growth of 44.2% over the past 5 years.
Highlight of Business Operations:
Medical professional and license fees in the third quarter of 2009 decreased by $2,314,000, or 28.2%, from the third quarter of 2008. The decrease was due to decreased license fees of $1,302,000 and physician fees of $708,000 associated with decreased revenues. The amortization of the deferred medical professional fees attributable to prior years was $193,000 in the third quarter of 2009 and $440,000 in the third quarter of 2008.
Net investment income in the third quarter of 2009 increased $1,333,000, or 184.1%. This is due primarily to the $1,074,000 other-than-temporary impairment related to our auction rate securities recognized in the third quarter of 2008. The remaining $259,000 increase is due to an increase of $577,000 in investment income, partially offset by a decrease in patient financing income of $318,000.
Medical professional and license fees in the nine months ended September 30, 2009 decreased by $10,573,000, or 30.9%, from the nine months ended September 30, 2008. The decrease was due to lower physician fees of $5,803,000 and license fees of $4,089,000 associated with decreased revenues. The amortization of the deferred medical professional fees attributable to prior years was $728,000 in the nine months ended September 30, 2009 and $1,495,000 in the nine months ended September 30, 2008.
In the third quarter of 2009, we recorded an impairment charge to reduce the carrying amount of long-lived assets by $4,377,000. This impairment charge recognized during the third quarter of 2009 reflects our decision in October 2009 to close 10 underperforming vision centers by December 31, 2009 in order to preserve cash. Based on this evaluation, we determined that lease-hold improvements with a carrying amount of $1,925,000 and excimer lasers with a carrying amount of $3,655,000 were no longer recoverable and were in fact impaired. The lease-hold improvements were written down to their estimated fair value of zero. We adjusted the carrying value of the excimer lasers to their fair value, which we determined based on discounted cash flows and estimated market prices of similar assets. Because of deteriorating market conditions (i.e., rising interest rates and less marketplace demand), it is reasonably possible that our estimate of discounted cash flows may change in the near term resulting in the need to adjust our determination of fair value. In addition, during 2009 we recorded $889,000 for impairment charges primarily related to reducing the use of microkeratomes and other impaired assets.
Net investment income in the nine months ended September 30, 2009 increased $223,000, or 26.5%, due to an increase in investment income of $327,000, other-than-temporary impairment of $709,000 related to our auction rate securities and equity investments in 2008, and a decrease of $813,000 in patient financing income.
Cash flows generated from operating activities amounted to $7,793,000 and $9,305,000 for the nine months ended September 30, 2009 and 2008, respectively. The $1,512,000 decrease was due primarily to lower earnings. Our cost control and cash conservation measures are having the desired results as we continue to take actions that we believe are prudent given the current economic environment. Among these, we reduced headcount in the vision centers, national call center and corporate offices during 2009 and 2008, reduced marketing spend significantly, and are reducing costs in all other discretionary areas. We also are managing closely working capital with particular focus on ensuring timely collection of outstanding patient receivables and the management of our trade payable obligations. Patient receivables decreased $2,474,000 in the nine months ended September 30, 2009. At September 30, 2009, working capital (excluding debt due within one year) amounted to $55,380,000 compared to $62,519,000 at December 31, 2008. Liquid assets (cash and cash equivalents, short-term investments, and accounts receivable) amounted to 199.0% of current liabilities, compared to 200.8% at December 31, 2008.
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