The LCA-Vision Full Value Committee Urges LCA-Vision (NASDAQ: LCAV) Stockholders to Reject the Status Quo: Current Board & Ma...
March 06 2009 - 8:32AM
Business Wire
The LCA-Vision Full Value Committee announced today that it has
released the following letter to the stockholders of LCA-Vision,
Inc.
March 6, 2009
Dear Fellow Shareholder:
As one of the largest shareholders at LCAV, with over 11% of the
stock, we believe that the stockholders� investment in LCAV has
reached a crisis point. In the face of one of the worst recessions
in recent history, with no end clearly in sight, we are saddled
with a Board and management team with a history of over-promising
and under-delivering. While they express confidence in their plans
and strategies, based on our experience in building LCAV into the
pre-eminent laser vision company and successfully weathering the
last recession, unfortunately we do not at all share that
confidence.
As stockholders with a significant amount of money at stake and
the benefit of a long memory and deep operational knowledge of the
business, we urge stockholders not to fall victim to the hollow
promises you are hearing, yet again, from the Board and management
team. To protect the remaining value of your investment, we
strongly urge you to vote the WHITE proxy card to remove the
current members of the Board and to elect the Full value
Committee�s highly qualified, experienced nominees. If elected, our
nominees will restore the management team that helped build LCAV
into one of the fastest growing small cap companies in the United
States, according to both Fortune magazine and Business Week.
Perhaps you do not share our concerns about LCAV�s viability
under the current Board and management in the current economic
climate. You may take comfort from their track record, as they
would like to portray it. We certainly do not.
If:
- You are satisfied with the
Company�s loss of approximately 90% of stockholder value, you
should vote to keep the current Board and management team
- You are satisfied with losing
national market share while at the same time much of your money has
been spent to open 19 more vision centers, you should vote to keep
the current Board and management team
- You are satisfied with the Board
continuing to significantly dilute shareholders with generous
equity awards to themselves and the management team, including
approximately 2% of the outstanding shares in a single grant
just last Monday that we believe may have been a violation of the
caps in the Company�s own stock incentive plans, you should vote to
keep the current Board and management team
- You are satisfied with the
Company�s same store procedure volume lagging the industry as it
has done for the last seven quarters, you should vote to keep the
current Board and management team
- You are satisfied with the
Company continuing to rapidly burn through its remaining cash
reserves, which it appears they will do far more rapidly than they
have told you, you should vote to keep the current Board and
management team
- You are comfortable with the
Company diversifying into new business lines with questionable
revenues and uncertain margins while at the same time the core
LASIK business is hemorrhaging $2.5 million of cash per month, you
should vote to keep the current Board and management team
- You want to suffer the same fate
as the stockholders of MSO Medical (Mr. Straus�s last venture)
which filed for bankruptcy, you should vote to keep the current
Board and management team
- You are comfortable with the
Company continuing to promise you a rosy future while yet again
justifying its subpar performance, you should vote to keep the
current Board and management team
You may have seen that a proxy advisory firm recently
recommended that shareholders not replace the current Board at this
time. Naturally, we are disappointed that this firm - which does
not have any in-depth knowledge of LCAV or the laser correction
industry and is not an LCAV investor - took this position. You
should know, however, that their support of the current Board was
tepid, at best, acknowledging the Company�s decline under Steve
Straus�s management, as well as expressing concerns regarding Board
compensation and the poison pill that the Board adopted without
shareholder approval, among other issues.
If on the other hand, you�re ready for a change, the time is
now.
Under Mr. Straus and the Board, LCAV has missed consensus
estimates every single quarter of 2008 and six of the eight
quarters that Mr. Straus has served as CEO. Needless to say, the
unbroken record of over-promising and under-delivering has severely
damaged the value of all of our LCAV investments. Although they
acknowledge there were some mishaps in the past, the Board and Mr.
Straus would now like you to believe that business has
�stabilized,� implying that LCAV will be able to achieve 2008
procedural volume levels in 2009, a prospect we find highly
unrealistic.
In addition, they have told you that LCAV has a three-year cash
position at the 90,000 annual procedural level. Yet, deep within a
filing with the Securities and Exchange Commission, they recently
acknowledged for the first time that the Company now expects that
the first quarter 2009 procedural volume will be down �about 35%�
from the first quarter of 2008, seriously jeopardizing their own
prediction of a three-year cash position.
What else is the Company not telling stockholders? As
you decide how to vote your shares, consider the following
concerns, which are based on our intimate understanding of the
business and the industry:
- We believe the Company�s first
quarter 2009 procedure volume will decline well in excess of the
35% projected by management, compared to the first quarter
2008.
- We believe the Company�s new
marketing initiatives are NOT working. In fact, we believe the
Company may report one of its highest marketing costs per procedure
in the first quarter 2009, ever, possibly even exceeding $500.
- We believe that for the first
time in over a decade, LCAV will likely report a significant
adjusted loss in the first quarter 2009, seasonally the
Company�s strongest and most profitable quarter. If so, this does
not bode well for the rest of the year and management�s latest set
of promises.
Everything we have heard from the current Board and management
demonstrates that they lack a fundamental understanding of LCAV�s
business and the core drivers of the Company�s profitability. They
lack an understanding of the major problems confronting our
Company, and have minimal insight into how to fix them. As they
make vapid promises of future performance, they are asking
stockholders for more time and patience.
But for stockholders, there can be no more time, there can be
no more patience. In the race between the cash running out
and the key physician and employee asset base crumbling, on the one
hand, and the Board and management scrambling to learn the
business, on the other, the stockholders stand to be the ultimate
losers.
Time is of the essence. Please sign date and return your
WHITE consent card as soon as possible with a vote to remove
the existing members of the Board and to replace them with our
highly qualified nominees. As the Company�s largest shareholders,
with unique insights and unparalleled industry and Company-specific
knowledge, we can tell you the status quo is NOT working. We
believe the Company�s very existence as a going concern may soon be
in question unless stockholders act NOW.
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