LCA-Vision to Restate Financial Statements to Increase Deferred Revenues for Separately Priced Extended Warranties
April 18 2007 - 6:00AM
Business Wire
LCA-Vision Inc. (Nasdaq: LCAV), a leading provider of laser vision
correction services under the LasikPlus brand, today announced it
will restate financial results for 2004, 2005 and 2006 to reflect a
change in revenue recognition for the Company�s separately priced
extended warranties. This change is expected to reduce 2006
revenues and net income by approximately $18 million and $10
million, respectively. This reflects a reduction in revenues of
approximately 7 percent for the year. The proposed accounting also
is expected to reduce shareholders� equity as of December 31, 2006
by approximately $30 million, of which approximately $9 million
relates to periods prior to 2004. The proposed adjustment in
revenue recognition is expected to increase revenues and earnings
in future periods as deferred revenues are amortized back into
income. There will be no change to cash provided by operating
activities or to cash and cash equivalents on the balance sheet for
any period affected. Management is analyzing the restatement
adjustments and the estimated changes outlined above are
preliminary and are subject to further review and audit. This
action resulted from analysis performed following the Company�s
receipt of a comment letter from the Securities and Exchange
Commission (SEC) pursuant to their review of our 2006 10-K. The
single issue raised in this letter addressed the Company�s revenue
recognition policy. The Company�s historical policy has been to
defer revenues for separately priced extended warranties for those
patients expected to receive treatment under the warranty.
Historical data indicates that only 7% of patients elected to
receive treatment under the warranty. Because LCA-Vision has
offered separately priced extended warranties, it is subject to
FASB Technical Bulletin 90-1. Under this Bulletin 100 percent of
revenues from extended warranties are to be deferred and these
deferred revenues are to be amortized back into income on a
straight-line basis unless the Company has sufficient experience to
indicate that the costs to provide the service will be incurred
other than on a straight-line basis. The Company believes it has
sufficient experience to show that future enhancements are not
expected to be performed on a straight-line basis and should be
amortized over seven years. �We have provided the SEC with a
response to its comment letter and we look forward to resolving
this issue as soon as is practical,� said Steven C. Straus,
LCA-Vision's Chief Executive Officer. �Since we started offering
separately priced extended vision acuity plans, we have
consistently applied our interpretation of the relevant accounting
rules and deferred a portion of the revenue from acuity plans
consistent with the percentage of patients who return to LasikPlus
vision centers for enhancement procedures. �We plan to limit or
eliminate the use of separately priced extended warranties in the
near future,� added Mr. Straus. �Therefore, we expect the impact of
the restated financial statements will be to increase revenues and
pretax income in future periods as the deferred revenue is
amortized back into income. At present, we are comfortable with our
2007 revenue guidance growth of 20 to 25 percent compared with
2006, and our 2007 earnings per share guidance of $2.05 to $2.15.�
The Company�s decision to restate prior-period financial statements
was made by LCA-Vision management with the concurrence of the Audit
Committee of its Board of Directors and its independent auditors,
Ernst & Young LLP. In light of the restatement, investors
should rely on LCA-Vision�s forthcoming restated financial
statements and other financial information rather than the
previously filed financial statements and other financial
information. Conference Call & Webcast A conference call and
webcast will be held today, Wednesday, April 18, 2007 at 8:30 a.m.
Eastern time to answer analyst and investor questions. To access
the conference call, dial 888-803-7404 (within the United States
and Canada), or 706-634-1308 (international callers). To access the
replay, dial 800-642-1687 (within the United States and Canada), or
706-645-9291 (international callers) and enter the conference ID
number: 6321144. A replay of the conference call will be available
at the investor relations section of LCA-Vision's website. First
Quarter 2007 Financial Results The Company will file its Form 10-Q
for the first quarter of 2007 with finalized first quarter 2007
financial results as well as its restated financial statements in
amendments to prior reports with the Securities and Exchange
Commission as soon as it is practical. The final changes to
deferred revenues, net income, and earnings per share will be
available in these filings. Forward-Looking Statements This news
release contains forward-looking statements based on current
expectations, forecasts and assumptions of LCA-Vision that are
subject to risks and uncertainties. Forward-looking statements in
this release are based on information available to us as of the
date hereof. Actual results could differ materially from those
stated or implied in such forward-looking statements due to risks
and uncertainties associated with our business, including, without
limitation, those concerning economic, political and sociological
conditions; market acceptance of our services; the successful
execution of marketing strategies to cost effectively drive
patients to our vision centers, which recent results would indicate
are no longer as effective as they have been in prior periods;
competition in the laser vision correction industry; an inability
to attract new patients; the possibility of long-term side effects
and adverse publicity regarding laser vision correction;
operational and management instability, which we have recently
experienced including at the executive management level; regulatory
action against us or others in the laser vision correction
industry; and the relatively high fixed cost structure of our
business. For a further discussion of the factors that may cause
actual results to differ materially from current expectations,
please review our filings with the Securities and Exchange
Commission, including but not limited to our Forms 10-K and 10-Q.
Except to the extent required under the federal securities laws and
the rules and regulations promulgated by the Securities and
Exchange Commission, we assume 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. is a leading
provider of laser vision correction services under the LasikPlus
brand. We own and operate 63 LasikPlus fixed-site laser vision
correction centers in the United States and participate in a joint
venture in Canada. LasikPlus vision centers are located in 48
markets in 29 states. Additional information is available at our
corporate websites: www.lca-vision.com and www.lasikplus.com. It's
Not Just LASIK. It's LasikPlus!
(MM) (NASDAQ:LCAV)
Historical Stock Chart
From Jun 2024 to Jul 2024
(MM) (NASDAQ:LCAV)
Historical Stock Chart
From Jul 2023 to Jul 2024
Real-Time news about (MM) (NASDAQ): 0 recent articles
More LCA-Vision Inc. News Articles