LCA-Vision Names Michael J. Celebrezze Chief Executive Officer
Announces Senior Management Changes and Restructuring Plan
Lowers number of annual procedures required for cash-flow breakeven from Lasik
business by 10,000 procedures to approximately 58,000
CINCINNATI, Jan. 7, 2013
CINCINNATI, Jan. 7, 2013 /PRNewswire/ --LCA-Vision Inc. (NASDAQ: LCAV), a
leading provider of laser vision correction services under the LasikPlus^®
brand, announces that Michael J. Celebrezze has been named Chief Executive
Officer, effective immediately. The company also announces initiatives that
are expected to reduce annual operating expenses by approximately $5 million
and lower the number of laser vision correction procedures per year necessary
to reach cash-flow breakeven from its Lasik business (excluding restructuring
costs) to approximately 58,000 from the prior estimate of 68,000.
Mr. Celebrezze has served as LCA-Vision's Chief Financial Officer since
December 2008, and as co-leader of the company with Chief Operating Officer
David L. Thomas since September 2009. Mr. Thomas left the company effective
December 31, 2012 and will pursue a new role as a co-founder of a science and
technology company. In addition, LCA-Vision has promoted Amy Kappen to Chief
Financial Officer from Vice President, Corporate Controller and Bharat Kakar
to Senior Vice President of Operations and Marketing from Vice President of
Operations and Patient Experience, with both promotions effective immediately.
"The Board has been impressed with the co-leadership of Mike Celebrezze and
Dave Thomas, and the many actions they have taken to improve the company's
operations and financial position in the face of chronic, adverse economic
conditions," said E. Anthony Woods, Chairman of the Board of LCA-Vision. "We
have benefitted from Dave's extensive knowledge and experience, and we are
grateful for his dedication and service. The Board has full confidence in
Mike's ability to lead LCA-Vision, and we wish Dave the very best in his new
Mr. Thomas said, "I had the extraordinary opportunity at LCA-Vision as part of
an outstanding team to evaluate and implement improvements that impacted
nearly every aspect of the business. I am confident that I am leaving the
company under the leadership of a solid and competent management team."
"For the past two quarters our revenues have declined versus the same period
of the prior year on lower-than-expected procedure volume, and we have also
experienced some loss in market share. This is disappointing, particularly
following seven consecutive quarters of year-over-year growth in same-store
procedures, and four consecutive quarters of year-over-year growth in total
procedures and market share gains," said Mr. Celebrezze. "Overall weakness in
the U.S. economy that has deterred consumer discretionary spending over the
past several years continues to impact negatively LCA-Vision and our industry,
and we have little clarity on when the economic environment might change. We
are taking actions aimed at better aligning our expenses with current
procedure volume and improving our business in the current environment, while
allowing us to maintain our focus on providing the highest quality patient
experiences and outcomes.
"We believe these initiatives to further reduce expenses and improve our
business, together with our strong balance sheet and ongoing commitment to
monitor costs closely, put LCA-Vision in a solid position to face the future,"
he added. "We estimate one-time restructuring and impairment charges
associated with the restructuring plan will be approximately $2.1 million,
with approximately $1.8 million recorded in 2012 and the remaining $300,000 to
be recorded in 2013. These costs will impact cash flow in 2013 and beyond."
Initiatives to support the reduction in the number of procedures to reach
cash-flow breakeven include the following:
oImprovement in marketing and advertising, including revised media
channels, expanded social media and digital reach, and increased focus on
public relations and referral programs.
oElimination of 31 full-time-equivalent positions, with approximately half
due to terminations and half related to reductions in hours. The
terminations include both corporate and center-level positions, and were
completed in 2012.
oClosure of the vision center in Seattle, Washington.
oRelocation of the call center to the company's headquarters facility in
the first quarter of 2013.
oConversion of the LasikPlus^® vision centers in Woodbridge, New Jersey and
Chandler, Arizona to the company's satellite model to provide
pre-operative and post-operative exams for patient referrals to nearby
full-service LasikPlus^® vision centers. LCA-Vision will consider opening
new LasikPlus^® satellite centers in markets where management has
confidence that incremental patient volume can be achieved.
oRenegotiation of agreements with major suppliers.
The company intends to continue expanding the partner network of optometrists
and other eye health professionals for patient referrals and to continue
investing in its Visium Eye Institute™ to grow its cataract practice.
This news release contains forward-looking statements based on current
expectations, forecasts and assumptions of LCA-Vision that are subject to
risks and uncertainties. The forward-looking statements in this release are
based on information available to the company as of the date hereof. Actual
results could differ materially from those stated or implied in the
forward-looking statements due to risks and uncertainties associated with its
business. In addition to the risk factors discussed in the company's Form
10-K and other filings with the Securities and Exchange Commission, there are
a number of other risks and uncertainties associated with its business
including, without limitation, the success of the restructuring plan described
above in lowering costs and raising gross profits, the successful execution of
cost-effective marketing strategies to drive patients to its vision centers;
the impact of low consumer confidence and discretionary spending; competition
in the laser vision correction industry; the company's ability to attract
patients; the possibility of adverse outcomes or long-term side effects of
laser vision correction and negative publicity regarding laser vision
correction; the company's ability to operate profitable vision centers and
retain qualified personnel during periods of lower procedure volumes; the
company's success in expanding its services into the cataract and intraocular
lens (IOL) market; additional regulatory requirements, such as for Medicare,
related to cataract and IOL procedures; the continued availability of
non-recourse third-party financing for its patients on terms similar to what
it has paid historically; and the future value of revenues financed by the
company and its ability to collect on such financings, which will in turn
depend on a number of factors, including the consumer credit environment and
the company's ability to manage credit risk related to consumer debt,
bankruptcies and other credit trends.
Further, the Food and Drug Administration's (FDA) advisory board on ophthalmic
devices currently is reviewing concerns about post-LASIK quality of life
matters, and the FDA is recruiting participants for two studies on LASIK
outcomes and quality of life. The FDA or another regulatory body could take
legal or regulatory action against the company or others in the laser vision
correction industry. The outcome of this review or legal or regulatory action
potentially could impact negatively the acceptance of LASIK. In addition, the
acceptance rate of new technologies and our ability to implement successfully
new technologies on a national basis create additional risk.
Except to the extent required under the federal securities laws and the rules
and regulations promulgated by the Securities and Exchange Commission, the
company assumes no obligation to update the information included in this news
release, whether as a result of new information, future events or
circumstances, or otherwise.
About LCA-Vision Inc./LasikPlus^®
LCA-Vision Inc., a leading provider of laser vision correction services, owns
and operates 55 LasikPlus^® vision centers in the United States: 51
full-service LasikPlus^® fixed-site laser vision correction centers and four
pre- and post-operative LasikPlus^® satellite centers.
Earning Trust Every Moment; Transforming Lives Every Day.
For Additional Information
Investor Relations Contact:
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SOURCE LCA-Vision Inc.
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