The LCA-Vision Full Value Committee Urges LCA-Vision (NASDAQ: LCAV) Stockholders to Reject the Status Quo
March 06 2009 - 9:01AM
PR Newswire (US)
Current Board and Management's History of Over-Promising &
Under-Delivering Bodes Ill for Shareholder Value Going Forward
CINCINNATI, March 6 /PRNewswire-FirstCall/ -- 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. DATASOURCE:
The LCA-Vision Full Value Committee CONTACT: Lisa Blaker,
+1-513-600-1867, for The LCA-Vision Full Value Committee
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