CINCINNATI, Feb. 16, 2011 /PRNewswire/ -- LCA-Vision Inc.
(Nasdaq: LCAV), a leading provider of laser vision correction
services under the LasikPlus® brand, today announced
financial and operational results for the three and 12 months ended
December 31, 2010.
Fourth Quarter 2010 Operational and Financial Highlights
(all comparisons are with the fourth quarter of 2009)
- Revenues were $19.3 million
compared with $22.0 million; adjusted
revenues were $17.9 million compared
with $20.1 million.
- We performed 10,891 laser vision correction procedures,
compared with 11,718 procedures (68 vision centers) and 10,241
same-store procedures (54 vision centers).
- Same-store revenues decreased 1.1%; adjusted same-store
revenues increased 1.4%.
- Operating loss was $7.4 million
compared with an operating loss of $9.7
million; adjusted operating loss was $8.6 million compared with an adjusted operating
loss of $11.4 million. The
reduced operating loss and adjusted operating loss reflect the
impact of closing under-performing vision centers, reducing direct
costs per center, and lowering marketing and general and
administrative expenses. Direct costs per center for the 2010
fourth quarter averaged $55,000 per
month, compared with $65,000 per
month. Included in the 2010 quarter were restructuring
charges of $3.0 million related to
the closure of seven vision centers announced in October 2010, which was lower than the
anticipated charge of $4.3 million
due to negotiating one lease buy-out and adjustments in estimated
future rent expense and other closure costs. The 2010 quarter
also included $0.4 million in gain on
sale of assets. This compares with net restructuring and
impairment charges of $1.2 million
and $0.4 million in gain on sale of
assets in the 2009 quarter.
- Tax benefit was $91,000 compared
with $5.5 million in the prior year.
In 2010, the company was in a loss carryforward position so a
full valuation allowance was established. In 2009, the
company was in a carryback position so the tax benefit was
recorded. In addition, in the fourth quarter of 2009, several
closed vision center leases were terminated which accelerated a
deduction for tax purposes.
- Net loss was $7.3 million, or
$0.39 per share, compared with net
loss of $3.6 million, or $0.19 per share.
Full Year 2010 Operational and Financial Highlights (all
comparisons are with the full year 2009)
- Revenues were $99.8 million
compared with $129.2 million;
adjusted revenues were $93.7 million
compared with $120.1 million.
- We performed 56,720 laser vision correction procedures,
compared with 72,776 procedures and 65,944 same-store procedures.
- Operating loss was $22.0 million
compared with operating loss of $36.1
million; adjusted operating loss was $27.5 million compared with adjusted operating
loss of $44.3 million. The
reduced operating loss and adjusted operating loss resulted from
closing under-performing vision centers, lower direct costs per
center, lower marketing and general and administrative expenses,
and lower impairment charges. Direct costs per center
averaged $65,000 per month for 2010,
compared with $74,000 per month for
2009. Average marketing cost per procedure decreased to
$425 for 2010 from $464 for 2009. Operating loss and adjusted
operating loss for 2010 included $5.5
million in impairment and restructuring charges and
$2.0 million in gain on sale of
assets. Operating loss and adjusted operating loss for 2009
included $8.1 million in
restructuring and impairment charges, $0.8
million in consent revocation solicitation charges and
$0.4 million in gain on sale of
assets.
- Net loss was $20.6 million, or
$1.10 per share, compared with net
loss of $33.2 million, or
$1.79 per share.
- Net cash provided by operations was $1.5
million in 2010 compared with $1.4
million for 2009.
- Cash and investments were $51.9
million at December 31, 2010,
compared with $54.6 million at
December 31, 2009.
Since the first quarter of 2007, LCA-Vision has provided both
adjusted revenues and operating losses as a means of measuring
performance that adjusts for the non-cash impact of accounting for
separately priced extended warranties. A reconciliation of
revenues and operating losses as reported in accordance with U.S.
Generally Accepted Accounting Principles (GAAP) is provided at the
end of this news release. Management believes the adjusted
information better reflects operating performance and, therefore,
is more meaningful to investors.
"We are reporting tangible results from our actions to improve
operations in the current weakened economy while building for
future growth and profitability," stated LCA-Vision Chief Operating
Officer David L. Thomas. "Our
operational performance significantly improved in 2010, resulting
in our best appointment show rate, conversion and treatment show
rate since 2007. We were able to improve these metrics while
lowering the average acquisition cost per eye to $425 in 2010, from $464 in 2009 and $455 in 2008. We obtained an average price
per procedure of $1,652 in 2010,
compared with $1,650 in 2009 and
$1,619 in 2008.
"For the fourth quarter, we reported a year-over-year increase
in same-store procedures of more than 6% – the first increase since
the fourth quarter of 2006," Thomas added. "We attribute this
growth to acceptance of our 'Life in Focus' marketing campaign,
improved operational metrics, a greater willingness of patients to
spend on vision correction services and a discount promotion that
expired at year-end. Although the December promotion
expiration adversely impacted procedure volume in early 2011 as
some patients accelerated their procedure dates to take advantage
of the discount, we have been gaining some momentum as the first
quarter continues. We are cautiously optimistic about the
potential impact on our business of recent increases in the
consumer confidence index."
LCA-Vision Chief Financial Officer Michael J. Celebrezze said, "Our
cash-conservation initiatives resulted in a $14.1 million decline in operating loss compared
with 2009. We generated positive cash from operations, which
included an $11.8 million federal
income tax refund. For the year, we used $2.7 million in cash and investments after debt
service and capital expenditures. We ended the year with
nearly $52 million in cash and
investments and $7 million in debt
obligations. We do not anticipate receiving a federal income
tax refund this year and our cash flow will depend largely upon
procedure volume."
As a result of cash-conservation measures, the company lowered
the expected number of procedures companywide required for
breakeven cash flow, after capital expenditures and debt service,
to approximately 70,000 per year, down from 73,000 previously.
The company believes that it has sufficient cash and
investments to fund its business beyond 2012 if it performs at
least 47,000 procedures annually, compared with the previous
expectation of 52,000. The company believes that it has
sufficient cash and investments to fund its business beyond 2013 at
52,500 procedures annually. The average number of procedures
required for each vision center to reach breakeven remains at 95
per month.
"We are taking actions to diversify into related eye-health
businesses to leverage our capabilities and resources, drive more
revenue through our existing vision centers, capitalize on our more
than half-million past patients and high patient satisfaction rate,
and lessen the impact of future economic downturns," added
Celebrezze. "Our focus is on programs that require minimal
investment that can be rolled out in a modular approach, allowing
for phased introductions. As an example, during the fourth
quarter, we added over-the-counter eye drop products in our full
LasikPlus® network, which generated nearly $40,000 of revenue in January 2011. We also are evaluating a
co-management/management services offering designed to generate
revenue by attracting patients to LasikPlus® and offering
provisional services to optometrists, as well as potential
expansion into cataract and intraocular lens surgery, which targets
the fast-growing aging population."
Near-term Financial Outlook
LCA-Vision intends to manage expenses conservatively in 2011.
The company's plans and outlook for the year include:
- The company does not plan to open any new vision centers in the
near term. LCA-Vision will consider restarting its de
novo new center opening program when market conditions
improve.
- The company expects marketing and advertising spend for the
2011 first quarter to range from $6.5
million to $7.5 million.
- The company expects capital expenditures in 2011 of
$1.5 million for vision center
renovations, relocations and equipment replacement.
Conference Call and Webcast
As previously announced, a conference call and webcast will be
held today beginning at 10:00 a.m. Eastern
time. To access the conference call, dial 866-322-1352 (U.S.
and Canada) or 706-643-6246
(international callers). The webcast will also be available
in the investor relations section of LCA-Vision's website. A
replay of the call and webcast will begin approximately two hours
after the live call has ended. To access the replay, dial
800-642-1687 (U.S. and Canada) or
706-645-9291 (international callers) and enter the conference ID
number: 33127343.
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. 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 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 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 FDA's advisory board on ophthalmic devices is
currently reviewing concerns about post-LASIK quality of life
matters, and the FDA has begun a major new study on LASIK outcomes
and quality of life that is expected to end in 2012. 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 could potentially 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 under the LasikPlus® brand, operates 54
LasikPlus® fixed-site laser vision correction centers in 26
states and 41 markets in the United
States. Additional company information is available at
www.lca-vision.com and www.lasikplus.com.
Earning
Trust Every Moment; Building Relationships for a
Lifetime.
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For Additional
Information
|
|
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Company Contact:
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Investor Relations
Contact:
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Barb Kise
|
Jody Cain
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LCA-Vision Inc.
|
Lippert/Heilshorn &
Associates
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513-792-9292
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310-691-7100
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LCA-Vision
Inc.
|
|
Consolidated
Statement of Operations
|
|
(Dollars in
thousands except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended December 31,
|
|
Twelve
Months Ended December 31,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Revenues - Laser refractive
surgery
|
$ 19,259
|
|
$ 21,965
|
|
$ 99,825
|
|
$ 129,213
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
|
Medical professional and
license fees
|
4,755
|
|
5,097
|
|
24,161
|
|
28,746
|
|
Direct costs of
services
|
9,241
|
|
13,288
|
|
46,631
|
|
63,579
|
|
General and
administrative
|
3,188
|
|
3,926
|
|
13,956
|
|
16,501
|
|
Marketing and
advertising
|
4,816
|
|
5,775
|
|
24,114
|
|
33,784
|
|
Depreciation
|
2,033
|
|
2,778
|
|
9,408
|
|
14,198
|
|
Consent revocation
solicitation charges
|
-
|
|
(24)
|
|
-
|
|
780
|
|
Impairment
charges
|
-
|
|
(190)
|
|
1,694
|
|
5,414
|
|
Restructuring
charges
|
2,995
|
|
1,422
|
|
3,790
|
|
2,696
|
|
|
27,028
|
|
32,072
|
|
123,754
|
|
165,698
|
|
Gain on sale of
assets
|
385
|
|
359
|
|
1,962
|
|
385
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
(7,384)
|
|
(9,748)
|
|
(21,967)
|
|
(36,100)
|
|
|
|
|
|
|
|
|
|
|
Equity in (loss) earnings from
unconsolidated businesses
|
-
|
|
(6)
|
|
25
|
|
122
|
|
Net investment income
|
7
|
|
673
|
|
1,408
|
|
1,785
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
(7,377)
|
|
(9,081)
|
|
(20,534)
|
|
(34,193)
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense
|
(91)
|
|
(5,471)
|
|
43
|
|
(949)
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$ (7,286)
|
|
$ (3,610)
|
|
$ (20,577)
|
|
$ (33,244)
|
|
|
|
|
|
|
|
|
|
|
Loss per common share
|
|
|
|
|
|
|
|
|
Basic
|
$ (0.39)
|
|
$ (0.19)
|
|
$
(1.10)
|
|
$
(1.79)
|
|
Diluted
|
$ (0.39)
|
|
$ (0.19)
|
|
$
(1.10)
|
|
$
(1.79)
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
|
|
|
|
|
|
|
Basic
|
18,707
|
|
18,614
|
|
18,680
|
|
18,594
|
|
Diluted
|
18,707
|
|
18,614
|
|
18,680
|
|
18,594
|
|
|
|
|
|
|
|
|
|
LCA-Vision
Inc.
|
|
Consolidated
Balance Sheets
|
|
(Dollars in
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
At December
31,
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
Assets
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash
equivalents
|
$ 18,981
|
|
$ 24,049
|
|
Short-term
investments
|
31,947
|
|
28,455
|
|
Patient receivables, net
of allowances of $1,392 and $1,645
|
2,256
|
|
4,562
|
|
Other accounts
receivable
|
2,400
|
|
2,002
|
|
Assets held for
sale
|
462
|
|
1,031
|
|
Prepaid professional
fees
|
438
|
|
615
|
|
Prepaid income
taxes
|
707
|
|
12,270
|
|
Deferred compensation
plan assets
|
-
|
|
400
|
|
Prepaid expenses and
other
|
4,164
|
|
5,582
|
|
|
|
|
|
|
Total current assets
|
61,355
|
|
78,966
|
|
|
|
|
|
|
Property and
equipment
|
72,286
|
|
79,993
|
|
Accumulated depreciation and
amortization
|
(57,322)
|
|
(53,995)
|
|
Property and equipment,
net
|
14,964
|
|
25,998
|
|
|
|
|
|
|
Long-term investments
|
951
|
|
2,090
|
|
Patient receivables, net of
allowances of $330 and $674
|
413
|
|
854
|
|
Investment in unconsolidated
businesses
|
6
|
|
137
|
|
Other assets
|
3,086
|
|
4,590
|
|
|
|
|
|
|
Total assets
|
$ 80,775
|
|
$ 112,635
|
|
|
|
|
|
|
Liabilities and Stockholders'
Investment
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accounts
payable
|
$ 8,404
|
|
$ 6,504
|
|
Accrued liabilities and
other
|
12,266
|
|
11,581
|
|
Deferred
revenue
|
4,376
|
|
6,151
|
|
Deferred compensation
liability
|
-
|
|
400
|
|
Debt obligations maturing
in one year
|
3,039
|
|
3,998
|
|
|
|
|
|
|
Total current
liabilities
|
28,085
|
|
28,634
|
|
|
|
|
|
|
Long-term rent obligations and
other
|
3,368
|
|
2,395
|
|
Long-term debt obligations, less
current portion
|
4,245
|
|
9,145
|
|
Insurance reserves
|
7,406
|
|
9,154
|
|
Deferred license fee
|
3,065
|
|
4,428
|
|
Deferred revenue
|
3,476
|
|
7,852
|
|
|
|
|
|
|
Stockholders'
Investment
|
|
|
|
|
Common stock ($.001 par
value; 25,291,637 and 25,287,387 shares and
|
|
|
|
|
18,711,365
and 18,619,185 shares issued and outstanding,
respectively)
|
25
|
|
25
|
|
Contributed
capital
|
175,610
|
|
174,325
|
|
Common stock in treasury,
at cost (6,580,272 shares and 6,668,202 shares)
|
(114,033)
|
|
(114,668)
|
|
Retained
deficit
|
(31,134)
|
|
(9,729)
|
|
Accumulated other
comprehensive income
|
662
|
|
1,074
|
|
Total stockholders'
investment
|
31,130
|
|
51,027
|
|
|
|
|
|
|
Total liabilities and
stockholders' investment
|
$ 80,775
|
|
$ 112,635
|
|
|
|
|
|
LCA-Vision
Inc.
|
|
Consolidated
Statements Of Cash Flows
|
|
(Dollars in
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
Cash flow from operating
activities:
|
|
|
|
|
Net loss
|
$ (20,577)
|
|
$ (33,244)
|
|
Adjustments to reconcile net
loss to net cash provided by operating activities:
|
|
|
|
|
Depreciation
|
9,408
|
|
14,198
|
|
Provision for loss
on doubtful accounts
|
1,061
|
|
3,320
|
|
Gain on
investments
|
(943)
|
|
(48)
|
|
Impairment
charges
|
1,694
|
|
5,414
|
|
Gain on sale of
property and equipment
|
(1,962)
|
|
(385)
|
|
Deferred income
taxes
|
4
|
|
10,943
|
|
Stock-based
compensation
|
1,272
|
|
790
|
|
Insurance
reserves
|
(1,748)
|
|
(335)
|
|
Equity in earnings
from unconsolidated affiliates
|
(25)
|
|
(122)
|
|
Distributions from
unconsolidated affiliates
|
156
|
|
362
|
|
Changes in
operating assets and liabilities:
|
|
|
|
|
Patient accounts receivable
|
1,975
|
|
3,587
|
|
Other
accounts receivable
|
(122)
|
|
513
|
|
Prepaid income taxes
|
11,563
|
|
(3,313)
|
|
Prepaid expenses and other
|
1,418
|
|
773
|
|
Accounts payable
|
1,900
|
|
(1,665)
|
|
Deferred revenue, net of professional fees
|
(5,536)
|
|
(8,196)
|
|
Accrued liabilities and other
|
1,931
|
|
8,809
|
|
Net cash provided by
operations
|
1,469
|
|
1,401
|
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
Purchases of
property and equipment
|
(878)
|
|
(240)
|
|
Proceeds from sale
of assets
|
2,829
|
|
466
|
|
Purchases of
investment securities
|
(404,339)
|
|
(327,367)
|
|
Proceeds from sale
of investment securities
|
401,714
|
|
333,438
|
|
Other,
net
|
(35)
|
|
99
|
|
Net cash (used in) provided by
investing activities
|
(709)
|
|
6,396
|
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
Principal payments
of capital lease obligations and loan
|
(5,859)
|
|
(7,962)
|
|
Shares repurchased
for treasury stock
|
(193)
|
|
(36)
|
|
Proceeds from
exercise of stock options
|
13
|
|
18
|
|
Net cash used in financing
activities
|
(6,039)
|
|
(7,980)
|
|
|
|
|
|
|
Net effect of exchange rate
changes on cash and cash equivalents
|
211
|
|
584
|
|
|
|
|
|
|
(Decrease) increase in cash and
cash equivalents
|
(5,068)
|
|
401
|
|
|
|
|
|
|
Cash and cash equivalents at
beginning of year
|
24,049
|
|
23,648
|
|
|
|
|
|
|
Cash and cash equivalents at end
of year
|
$ 18,981
|
|
$ 24,049
|
|
|
|
|
|
LCA-Vision
Inc.
Effect of
the Change in Accounting for Deferred Revenues on Financial
Results
(Dollars in
thousands)
(Unaudited)
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To supplement its Condensed
Consolidated Financial Statements presented in accordance with
accounting principles generally accepted in the United States,
LCA-Vision discusses adjusted revenues and operating income.
Management utilizes this information as a means of measuring
performance that adjusts for the non-cash impact of the accounting
for separately priced extended warranties and believes that
including this additional disclosure is meaningful to investors for
the same reason.
Accordingly, this news release
contains non-GAAP financial measures within the meaning of
Regulation G promulgated by the Securities and Exchange Commission.
A reconciliation of the difference between the non-GAAP
measures with the most directly comparable financial measures
calculated in accordance with GAAP follows:
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Three Months
Ended December 31,
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Twelve
Months Ended December 31,
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2010
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2009
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2010
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2009
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Revenues
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Reported U.S.
GAAP
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$ 19,259
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$ 21,965
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$ 99,825
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$ 129,213
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Adjustments:
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Amortization of prior deferred revenue
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(1,381)
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(1,827)
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(6,151)
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(9,107)
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Adjusted
revenues
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$ 17,878
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$ 20,138
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$ 93,674
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$ 120,106
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Operating Loss
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Reported U.S.
GAAP
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$ (7,384)
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$ (9,748)
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$ (21,967)
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$ (36,100)
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Adjustments:
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Amortization of prior deferred revenue
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(1,381)
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(1,827)
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(6,151)
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(9,107)
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Amortization of prior professional fees
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138
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183
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615
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911
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Adjusted operating
loss
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$ (8,627)
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$ (11,392)
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$ (27,503)
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$ (44,296)
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SOURCE LCA-Vision Inc.