SOURCE: TLCVision Corporation

August 05, 2008 07:00 ET

TLCVision Reports Second Quarter 2008 Results

ST. LOUIS, MO--(Marketwire - August 5, 2008) - TLCVision Corporation (NASDAQ: TLCV) (TSX: TLC), North America's premier eye care services company, today reported second quarter earnings for the quarter ended June 30, 2008.

Jim Wachtman, President and Chief Executive Officer of TLCVision, commented, "Our results this quarter in our Lasik businesses were significantly impacted by the weak economy, as evidenced by a consumer confidence index that has declined to a level not seen since the early 1990s.

"In the first quarter, we recorded strong growth in all three of our refractive center patient acquisition channels, and posted record results. In the second quarter, however, we experienced a significant weakening in procedure volume, although our performance was ahead of the overall industry that experienced a decline estimated at 25% to 30%. We continue to gain market share despite lower volumes, with our same-store, majority-owned centers posting a 6.2% procedure decline through the first half of 2008 compared to an industry that is estimated to have declined 20% during the same six month period.

"It is also important to remember that approximately 30% of our business volume is in non-discretionary sectors which are less susceptible to economic pressures. Those businesses continue to show solid growth. We continue to remain focused on managing costs, paying down debt and delivering the best clinical care in the industry."

Second Quarter 2008 Results

--  Revenue for the second quarter was $74.1 million, compared to $80.1
    million for the prior year period, a decrease of 7.5%
    --  Refractive Centers revenue was $39.1 million, down 16.9% due to a
        shortfall in same-store, majority-owned center procedures, which
        totaled 21,333 in the second quarter, a 22.8% decrease from the
        prior year period. Average revenue per center procedure increased
        to $1,726, up 4% from the prior year period.
    --  Doctor Services revenue increased 2.7% to $25.5 million on the
        strength of higher surgical and product unit volumes.
    --  Eye Care revenue increased 15.8% to $9.5 million as a result of
        increased franchises and revenue per franchisee.
--  Consolidated net loss for the second quarter was ($2.2) million,
    compared to net income of $0.9 million for the prior year period. Loss
    per diluted share for the second quarter was ($0.04), compared to
    earnings per diluted share of $0.01 for the prior year period.
--  Operating cash flow for the quarter ended June 30, 2008, was ($0.3)
    million, reflecting a reversal of working capital benefits from the
    first quarter of 2008.
--  Total debt was reduced during the second quarter by $1.1 million.

Six Month 2008 Results

--  Revenue for the six months ended June 30, 2008 was $164.5 million,
    compared to $162.4 million for the prior year period, an increase of
    1.2%.
    --  Refractive Centers revenue was $98.0 million, a decrease of $0.8
        million from the prior year period. Same-store, majority-owned
        center procedures totaled 54,109, a decrease of 6.2%. Average
        revenue per center procedure increased to $1,713, up 4% from the
        prior year period.
    --  Doctor Services revenue increased 1.5% to $50.6 million.
    --  Eye Care revenue increased 14.9% to $15.8 million.
    --  Consolidated income for the six months ended June 30, 2008, was
        $3.9 million, compared to $4.4 million for the prior year period.
        Earnings per diluted share for the first six months were $0.08
        compared to $0.06 for the prior year period.
--  Operating cash flow for the six months ended June 30, 2008, was $22.5
    million, or $0.45 per diluted share, compared to $21.7 million, or
    $0.31 per diluted share, in the prior year period, up 45% on a per
    diluted share basis.
--  Total debt was reduced during the first six months of 2008 by $7.9
    million, or 7.2%.

Second Quarter 2008 Earnings Call

TLCVision invites all interested parties to participate in a conference call during which time the financial and operating results will be discussed. The company will host a conference call and live webcast with investors and analysts on Tuesday, August 5, 2008 at 9:00 am (EDT). To access, please dial 866-303-7746 or 416-641-6141 (international callers). The call will be broadcast live on the company's web site at www.tlcv.com under the "Webcasts" link in the Investor Relations section.

A replay of the conference call will be available until August 19, 2008. To access the replay, dial 800-408-3053 or 416-695-5800 (international callers) and enter the pass code: 3266437. 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 and Section 21E of the U.S. Securities Exchange Act of 1934, 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. The Company's actual results could differ materially from those anticipated in these forward looking statements as a result of numerous factors, including the timing of expenditures, effects of competition, changes to pricing, acquisitions and expansion opportunities, any of which could cause actual results to vary materially from current results or TLCVision's anticipated future results. 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
CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)

                     Three Months Ended June   Three Months Ended June 30,
                            30, 2008                       2007
                    -------------------------  ---------------------------
                    Results                    Results
                     Before                    Before
                      AMD      AMD     Total     AMD       AMD      Total
                    Segment  Segment TLCVision Segment   Segment  TLCVision
                    --------  ------ --------  --------  -------  --------
Revenues:
  Refractive
   centers          $ 39,057  $    - $ 39,057  $ 47,006  $     -  $ 47,006
  Doctor services     25,528       -   25,528    24,861        -    24,861
  Eye care             9,512       -    9,512     8,214        -     8,214
                    --------  ------ --------  --------  -------  --------
Total revenues        74,097       -   74,097    80,081        -    80,081

Cost of revenues
 (excluding
 amortization):
  Refractive
   centers            29,409       -   29,409    32,705        -    32,705
  Doctor services     18,680       -   18,680    17,659        -    17,659
  Eye care             4,691       -    4,691     3,959        -     3,959
                    --------  ------ --------  --------  -------  --------
Total cost of
 revenues
 (excluding
 amortization)        52,780       -   52,780    54,323        -    54,323
                    --------  ------ --------  --------  -------  --------

Gross profit          21,317       -   21,317    25,758        -    25,758
                    --------  ------ --------  --------  -------  --------

General and
 administrative        6,986       -    6,986     8,940        -     8,940
Marketing and sales   10,209       -   10,209    10,686        -    10,686
Amortization of
 intangibles             803       -      803       918        -       918
Other (income)
 expense, net           (359)      -     (359)       96        -        96
                    --------  ------ --------  --------  -------  --------
  Total operating
   expenses           17,639       -   17,639    20,640        -    20,640
                    --------  ------ --------  --------  -------  --------
  Operating income     3,678       -    3,678     5,118        -     5,118

Gain on sale of
 OccuLogix, Inc.
 stock                     -       -        -         -      933       933
Interest income          216       -      216       579        -       579
Interest expense      (2,414)      -   (2,414)     (689)       -      (689)
Minority interest
 expense              (3,076)      -   (3,076)   (2,643)       -    (2,643)
(Loss) earnings
 from equity
 investments            (319)      -     (319)      499   (1,614)   (1,115)
                    --------  ------ --------  --------  -------  --------
(Loss) income from
 continuing
 operations before
 income taxes         (1,915)      -   (1,915)    2,864     (681)    2,183
Income tax expense      (285)      -     (285)   (1,653)       -    (1,653)
                    --------  ------ --------  --------  -------  --------
(Loss) income from
 continuing
 operations           (2,200)      -   (2,200)    1,211     (681)      530
Income from
 discontinued
 operations, net of
 tax                       -       -        -       346        -       346
                    --------  ------ --------  --------  -------  --------

Net (loss) income   $ (2,200) $    - $ (2,200) $  1,557  $  (681) $    876
                    ========  ====== ========  ========  =======  ========

(Loss) earnings per
 share - diluted    $  (0.04) $    - $  (0.04) $   0.02  $ (0.01) $   0.01
                    ========  ====== ========  ========  =======  ========

Weighted average
 number of common
 shares outstanding
 - diluted            50,292  50,292   50,292    68,581   68,581    68,581

Note: The AMD segment includes the Company's interest in OccuLogix, Inc.




TLC VISION CORPORATION
CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)

                   Six Months Ended June 30,    Six Months Ended June 30,
                             2008                         2007
                   -------------------------  ----------------------------
                    Results                    Results
                     Before                    Before
                      AMD     AMD     Total     AMD       AMD      Total
                    Segment Segment TLCVision Segment   Segment  TLCVision
                   --------  ------ --------  --------  --------  --------
Revenues:
  Refractive
   centers         $ 98,024  $    - $ 98,024  $ 98,790  $      -  $ 98,790
  Doctor services    50,591       -   50,591    49,851         -    49,851
  Eye care           15,837       -   15,837    13,786         -    13,786
                   --------  ------ --------  --------  --------  --------
Total revenues      164,452       -  164,452   162,427         -   162,427

Cost of revenues
 (excluding
 amortization):
  Refractive
   centers           66,766       -   66,766    66,941         -    66,941
  Doctor services    36,821       -   36,821    35,460         -    35,460
  Eye care            7,513       -    7,513     6,434         -     6,434
                   --------  ------ --------  --------  --------  --------
Total cost of
 revenues
 (excluding
 amortization)      111,100       -  111,100   108,835         -   108,835
                   --------  ------ --------  --------  --------  --------

Gross profit         53,352       -   53,352    53,592         -    53,592
                   --------  ------ --------  --------  --------  --------

General and
 administrative      15,353       -   15,353    18,857         -    18,857
Marketing and
 sales               21,860       -   21,860    19,121         -    19,121
Amortization of
 intangibles          1,633       -    1,633     1,702         -     1,702
Other (income)
 expense, net          (556)      -     (556)      534         -       534
                   --------  ------ --------  --------  --------  --------
  Total operating
   expense           38,290       -   38,290    40,214         -    40,214
                   --------  ------ --------  --------  --------  --------
  Operating income   15,062       -   15,062    13,378         -    13,378

Gain on sale of
 OccuLogix, Inc.
 stock                    -       -        -         -       933       933
Interest income         426       -      426     1,147         -     1,147
Interest expense     (4,890)      -   (4,890)   (1,129)        -    (1,129)
Minority interest
 expense             (5,892)      -   (5,892)   (5,091)        -    (5,091)
(Loss) earnings
 from equity
 investments           (102)      -     (102)    1,310    (4,131)   (2,821)
                   --------  ------ --------  --------  --------  --------
Income (loss) from
 continuing
 operations before
 income taxes         4,604       -    4,604     9,615    (3,198)    6,417
Income tax expense     (732)      -     (732)   (2,604)        -    (2,604)
                   --------  ------ --------  --------  --------  --------
Income (loss) from
 continuing
 operations           3,872       -    3,872     7,011    (3,198)    3,813
Income from
 discontinued
 operations, net
 of tax                   -       -        -       541         -       541
                   --------  ------ --------  --------  --------  --------

Net income (loss)  $  3,872  $    - $  3,872  $  7,552  $ (3,198) $  4,354
                   ========  ====== ========  ========  ========  ========

Earnings (loss)
 per share -
 diluted           $   0.08  $    - $   0.08  $   0.11  $  (0.05) $   0.06
                   ========  ====== ========  ========  ========  ========

Weighted average
 number of common
 shares
 outstanding -
 diluted             50,293  50,293   50,293    69,104    69,104    69,104

Note: The AMD segment includes the Company's interest in OccuLogix, Inc.




TLC VISION CORPORATION
CONSOLIDATING BALANCE SHEETS
(In thousands)

                         June 30, 2008              December 31, 2007
                  ---------------------------  ---------------------------
                                               Results
                                                Before
                  Results                        AMD       AMD
                   Before                      Segment   Segment
                    AMD       AMD      Total  (Unaudi-  (Unaudi-    Total
                  Segment   Segment  TLCVision   ted)      ted)   TLCVision
                  --------  -------  --------  --------  -------  --------
ASSETS
Current assets
Cash and cash
 equivalents      $ 14,061  $     -  $ 14,061  $ 12,925  $     -  $ 12,925
Accounts
 receivable, net    18,655        -    18,655    18,076        -    18,076
Prepaid expenses,
 inventory and
 other              14,771        -    14,771    14,882        -    14,882
                  --------  -------  --------  --------  -------  --------
Total current
 assets             47,487        -    47,487    45,883        -    45,883

Restricted cash        208        -       208     1,101        -     1,101
Investments and
 other assets       17,711        -    17,711    17,524        -    17,524
Goodwill           101,895        -   101,895    94,346        -    94,346
Other intangible
 assets, net        15,474        -    15,474    17,020        -    17,020
Fixed assets, net   57,505        -    57,505    61,936        -    61,936
                  --------  -------  --------  --------  -------  --------
Total assets      $240,280  $     -  $240,280  $237,810  $     -  $237,810
                  ========  =======  ========  ========  =======  ========

LIABILITIES
Current
 liabilities
Accounts payable  $ 23,427  $     -  $ 23,427  $ 17,177  $     -  $ 17,177
Accrued
 liabilities        22,270        -    22,270    28,115        -    28,115
Current
 maturities of
 long-term debt      7,716        -     7,716    11,732        -    11,732
                  --------  -------  --------  --------  -------  --------
Total current
 liabilities        53,413        -    53,413    57,024        -    57,024

Long-term debt,
 less current
 maturities         94,524        -    94,524    98,417        -    98,417
Other long-term
 liabilities         9,878        -     9,878     5,023        -     5,023
Minority
 interests          15,941        -    15,941    15,224        -    15,224
                  --------  -------  --------  --------  -------  --------
Total liabilities  173,756        -   173,756   175,688        -   175,688
                  --------  -------  --------  --------  -------  --------

STOCKHOLDERS'
 EQUITY
Common stock       310,049   28,501   338,550   308,972   28,501   337,473
Option and
 warrant equity        745        -       745       837        -       837
Other
 comprehensive
 income             (1,239)       -    (1,239)     (784)       -      (784)
Accumulated
 deficit          (243,031) (28,501) (271,532) (246,903) (28,501) (275,404)
                  --------  -------  --------  --------  -------  --------
Total
 stockholders'
 equity             66,524        -    66,524    62,122        -    62,122
                  --------  -------  --------  --------  -------  --------

Total liabilities
 and
 stockholders'
 equity           $240,280  $     -  $240,280  $237,810  $     -  $237,810
                  ========  =======  ========  ========  =======  ========

Note: The AMD segment includes the Company's interest in OccuLogix, Inc.




TLC VISION CORPORATION
CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands, except per share amounts)

                  Six Months Ended June 30,     Six Months Ended June 30,
                             2008                         2007
                  --------------------------  ----------------------------
                  Results                      Results
                   Before                      Before
                    AMD       AMD     Total      AMD       AMD     Total
                  Segment   Segment TLCVision  Segment   Segment  TLCVision
                  --------  ------- --------  --------  --------  --------
OPERATING
 ACTIVITIES
Net income (loss) $  3,872  $     - $  3,872  $  7,552  $ (3,198) $  4,354

Adjustments to
 reconcile net
 income (loss) to
 net cash
 provided by
 operating
 activities:
Depreciation and
 amortization        9,877        -    9,877     9,134         -     9,134
Deferred taxes           -        -        -     1,939         -     1,939
Minority
 interests           5,892        -    5,892     5,300         -     5,300
Loss from equity
 investments           102        -      102    (1,310)    4,131     2,821
Gain on sales and
 disposals of
 fixed assets         (289)       -     (289)      (81)        -       (81)
Gain on sale of
 Occulogix, Inc.
 stock                   -        -        -         -      (933)     (933)
Gain on sale of
 businesses           (145)       -     (145)        -         -         -
Non-cash
 compensation
 expense               711        -      711       731         -       731
Other                  354        -      354       117         -       117
Changes in
 operating assets
 and liabilities,
 net of
 acquisitions and
 dispositions:       2,173        -    2,173    (1,681)        -    (1,681)
                  --------  ------- --------  --------  --------  --------
Cash provided by
 operating
 activities         22,547        -   22,547    21,701         -    21,701
                  --------  ------- --------  --------  --------  --------
                         -                           -
INVESTING
 ACTIVITIES              -                           -
Purchases of
 fixed assets       (1,957)       -   (1,957)   (7,281)        -    (7,281)
Proceeds from
 sales of fixed
 assets                550        -      550       268         -       268
Proceeds from
 sale of
 Occulogix, Inc.
 stock, net              -        -        -     2,000         -     2,000
Distributions and
 loan payments
 received from
 equity
 investments           945        -      945     1,857         -     1,857
Acquisitions and
 equity
 investments        (7,533)       -   (7,533)   (3,889)        -    (3,889)
Divestitures of
 business            1,179        -    1,179         -         -         -
Proceeds from
 sales of
 short-term
 investments             -        -        -    17,375         -    17,375
Purchases of
 short-term
 investments             -        -        -    (5,800)        -    (5,800)
Other                  (28)       -      (28)       33         -        33
                  --------  ------- --------  --------  --------  --------
Cash (used in)
 provided by
 investing
 activities         (6,844)       -   (6,844)    4,563         -     4,563
                  --------  ------- --------  --------  --------  --------
                         -                           -
FINANCING
 ACTIVITIES              -                           -
Restricted cash
 movement              893        -      893         -         -         -
Principal
 payments of debt
 financing and
 capital leases    (17,411)       -  (17,411)   (3,497)        -    (3,497)
Proceeds from
 debt financing      7,385        -    7,385    85,317         -    85,317
Capitalized debt
 costs                (534)       -     (534)   (1,631)        -    (1,631)
Distributions to
 minority
 interests          (5,175)       -   (5,175)   (4,560)        -    (4,560)
Purchases of
 treasury stock          -        -        -  (115,748)        -  (115,748)
Proceeds from
 issuances of
 common stock          275        -      275     2,154         -     2,154
                  --------  ------- --------  --------  --------  --------
Cash used in
 financing
 activities        (14,567)       -  (14,567)  (37,965)        -   (37,965)
                  --------  ------- --------  --------  --------  --------
                         -                           -
Net increase in
 cash and cash
 equivalents
 during the
 period              1,136        -    1,136   (11,701)        -   (11,701)
Cash and cash
 equivalents,
 beginning of
 period             12,925        -   12,925    28,917         -    28,917
                  --------  ------- --------  --------  --------  --------
Cash and cash
 equivalents, end
 of period        $ 14,061  $     - $ 14,061  $ 17,216  $      -  $ 17,216
                  ========  ======= ========  ========  ========  ========

Operating cash
 flow per diluted
 share            $   0.45  $     - $   0.45  $   0.31  $      -  $   0.31

Note: The AMD segment includes the Company's interest in OccuLogix, Inc.


Contact Information