Investor Presentation January, 2007

Transcription

1 Investor Presentation January, 2007

2 Forward-Looking Statements This presentation contains forward-looking statements that are subject to risks and uncertainties including, but not limited to, the impact of competition and pricing, procedure demand and marketplace acceptance, and unforeseen fluctuations in operating results and other risks detailed from time to time in the company s filings with the Securities and Exchange Commission, including but not limited to, the company s registration statement and its Forms 10-K and 10-Q. page 2

3 Corporate Overview Leading provider of laser vision correction services under the LasikPlus brand Owner and operator of 60 LasikPlus vision centers in the U.S. Plans to open12 to 15 centers in centers in centers centers 2004 page 3

4 U.S. Center Locations 60 LasikPlus Vision Centers 45 Markets 28 States 2007 Openings Westbury, New York 2006 Openings Paramus, New Jersey Grand Rapids, Michigan Seattle, Washington Sugar Land, Texas Denver, Colorado New Haven, Connecticut Dallas, Texas Oakdale, Minnesota Lexington, Kentucky Lincoln Park, Illinois 2007 Openings page 4

5 Investment Considerations Large Market with Low Penetration Growing Market Share Proven Business Strategy High Patient Satisfaction & Quality Outcomes Operating Leverage Opportunity for Expansion & Growth Financial Overview & Guidance

6 Large U.S. Market with Low Penetration Over 150 million wear eyeglasses and/or contact lenses 60 million eligible for laser vision correction Approximately 5.4 million patients treated Candidate pool grows faster than treatments Industry estimates obtained from Market Scope page 6

7 Corporate Timeline Laser Centers of Americas, a multi-specialty laser surgery and hospital administration business, and LCA-Vision s corporate predecessor, is formed The FDA approves the first laser for use for laser vision correction in the U.S.; Laser Centers of Americas merges into LCA-Vision Shares of LCA-Vision begin trading on the Nasdaq Stock market under the symbol LCAV LCA-Vision continues to expand its number of vision centers throughout the U.S. quickly becoming one of the largest providers of laser vision correction LCA-Vision opens its 50 th LasikPlus vision center in the U.S. LCA-Visions opens its 60 th LasikPlus vision center in the U.S Late 90s Laser Centers of Americas begins applying its laser operating expertise to the field of refractive surgery in Canada LCA-Vision opens its 1 st laser vision correction center in the U.S. in Cincinnati LCA-Vision begins to phase out its multi-specialty laser surgery business to focus exclusively on laser vision correction as consumer demand for the procedure continues to grow The LasikPlus name is introduced LCA-Vision/LasikPlus becomes the #1 provider of laser vision correction in the U.S. based on procedures, revenue and income! page 7

8 Organizational Structure page 8

9 Procedure Volume Procedures Performed in the United States (in thousands) 1,176 1,150 1,337 1,410 1, (e) (e) = estimate; data obtained from Market Scope page 9

10 Investment Considerations Large Market with Low Penetration Growing Market Share Proven Business Strategy High Patient Satisfaction & Quality Outcomes Operating Leverage Opportunity for Expansion & Growth Financial Overview & Guidance

11 Highly Fragmented Market = Opportunity Procedures Performed by Market Segment* Individual Surgeons 57% Hospitals/ Universities 4% LCA-Vision/ LasikPlus 13% All Other Corporate 26% * Industry estimates obtained from Market Scope page 11

12 Corporate Provider Advantage Continued gains in procedure volume and market share Procedures performed by market segment* (first nine mo nths) LCA-Vision/LasikPlus 6% 7% 10% 13% All other Corporate 26% 26% 24% 26% Total Corporate 32% 33% 34% 39% Hospitals/Universities 7% 6% 7% 4% Individual Surgeons 61% 61% 59% 57% Direct-to-consumer marketing strategies and economies of scale Patient-friendly hours and financing options Word-of-mouth referrals at center level and across markets Establishing LasikPlus as a national consumer brand * Industry estimates obtained from Market Scope page 12

13 Growing Market Share TLCV 16.6% 15.5% 14.4% 14.3% 15.1% 14.8% 14.5% 14.2% 14.2% 13.0% 13.0% 13.8% 13.8% 13.3% 13.3% 13.1% 12.8% 13.1% 11.9% 10.5% LCAV 5.3% 5.7% 5.9% 6.0% 6.4% 6.9% 7.4% 8.1% 9.1% 9.4% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q In 3Q-06 LCAV became the #1 provider of laser vision correction in the United States based on procedures, revenue and income Data to determine market share gains obtained from Market Scope and company reports page 13

14 Procedure Volume Growth 43% 47% 46% 51% 55% 49% 47% 41% 42% 32% 28% 17% 7% 6% 21% 16% 11% 10% 10% 4% -3% -1% -3% 31% 24% -2% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Industry LCAV Industry comparison data obtained from Market Scope page 14

15 Investment Considerations Large Market with Low Penetration Growing Market Share Proven Business Strategy High Patient Satisfaction & Quality Outcomes Operating Leverage Opportunity for Expansion & Growth Financial Overview & Guidance

16 Proven Business Strategy LCAV Other Industry Providers Closed Access Open Access Co-Managed Mobile Surgeon LASIK specialist part-time full-time part-time Pre- & Post- Operative Care in center outside center outside center in/outside center Lasers multiple no choice may be choices limited (VISX) fixed site fixed site Patient Access direct-to-consumer doctor fee for referral doctor marketing page 16

17 Systems Track Key Operating Metrics Patient Acquisition (marketing, managed care) Patient Calls Patient Refers Others Schedule Exam Perform Surgery Best Practices Attend Exam Schedule Surgery Determine Candidacy Convert to Patient page 17

18 Investment Considerations Large Market with Low Penetration Growing Market Share Proven Business Strategy High Patient Satisfaction & Quality Outcomes Operating Leverage Opportunity for Expansion & Growth Financial Overview & Guidance

19 High Patient Satisfaction & Quality Outcomes Careful patient screening Multiple excimer laser platforms Highly trained and customer-driven staff Expertly executed operational and surgical processes page 19

20 Investment Considerations Large Market with Low Penetration Growing Market Share Proven Business Strategy High Patient Satisfaction & Quality Outcomes Operating Leverage Pricing Volume Opportunity for Expansion & Growth Financial Overview & Guidance

21 Significant Center Pricing Leverage Price Average Price $ 1,300 $ 1,400 Procedures Per Month Revenue $ 455,000 $ 490,000 Variable Costs 104, ,800 Contribution Margin $ 350,700 $ 382,200 Contribution Margin % 77% 78% Center Costs $ 125,000 $ 125,000 Marketing 105, ,000 Depreciation 15,000 15,000 Operating Income $ 105,700 $ 137,200 Operating Income % 23% 28% page 21

22 Price Per Procedure $2,100 $1,900 $1,700 $1,500 $1,300 $1,100 $900 $700 $500 $300 $100 LCAV Industry Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q $2,100 $1,900 $1,700 $1,500 $1,300 $1,100 $900 $700 $500 $300 $100 page 22

23 Significant Center Volume Leverage Volume Procedures Per Month Average Price $ 1,300 $ 1,300 Revenue 455, ,000 Variable Costs 104, ,200 Contribution Margin $ 350,700 $ 400,800 Contribution Margin % 77% 77% Center Costs $ 125,000 $ 125,000 Marketing 105, ,000 Depreciation 15,000 15,000 Operating Income $ 105,700 $ 140,800 Operating Income % 23% 27% page 23

24 Volume Drivers Same-Center Growth Industry Growth Procedure Volume New Markets page 24

25 Investment Considerations Large Market with Low Penetration Growing Market Share Proven Business Strategy High Patient Satisfaction & Quality Outcomes Operating Leverage Opportunity for Expansion & Growth Financial Overview & Guidance

26 Opportunity for Expansion & Growth Market Demographics Competition Managed Care Advertising Costs page 26

27 New Center Investment & Profitability Investment range is between $1.2 and $1.5 million Lasers $ 500,000 Microkeratome 80,000 Diagnostic 100,000 Office Equipment 25,000 Tenant Improvements 250,000 Capital Expenditures $ 955,000 Startup Expenses $ 70,000 Grand Opening Advertising 200,000 $ 1,225,000 Six-month goal for new centers to reach profitability levels page 27

28 Financial Overview & Guidance

29 Key Operating Metrics Number of Procedures Per Center Revenue Per Procedure Marketing & Advertising Expense Per Procedure page 29

30 Business Drivers Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Procedures Per Center Per Month Revenue Per Procedure ($) 1,173 1,231 1,281 1,293 1,304 1,310 1,342 1,351 1,336 1,344 1,376 1,367 1,375 1,384 1,394 Marketing & Advertising Per Procedure ($) page 30

31 Key Financial Metrics Three-Year Compound Annual Growth Rates 45% Growth in Revenues 92% Growth in Cash provided by Operations 2005 Return on Invested Capital: 133% a/o December 31, 2005 page 31

32 Third Quarter 2006 Growth Rates 26% 24% 6% Total Revenue Same Store Revenue Total Procedure Volume page 32

33 Selected Balance Sheet Data Strong financial resources Positioned to support long-term growth strategy Period ended September 30, 2006 ($ in thousands) Cash Equivalents & Short-Term Investments $ 130,039 Capitalized Lease Obligations 4,537 Shareholders' Investment $ 164,922 page 33

34 Share Repurchase Plan Recently completed 1,000,000 share repurchase plan Dates Value of Repurchase ($ in thousands) Shares Purchased Average Price 05/17/05 through 11/21/06 $ 38,516 1,000,000 $ Announced new share repurchase plan on November 22, 2006 Authorized to purchase up to $50 million of LCAV common shares page 34

35 Dividend Growth Initiated first quarterly dividend payment in third quarter 2004 Increased quarterly dividend 50% three times over the past three years 2% current annual dividend yield Q1 Q2 Q3 Q4 Total 2004 $ - $ - $ 0.05 $ 0.08 $ $ 0.08 $ 0.08 $ 0.08 $ 0.12 $ $ 0.12 $ 0.12 $ 0.12 $ 0.18 $ 0.54 Adjusted to reflect 3-for-2 stock split on 12/15/04 page 35

36 Selected Cash Flow Data Net Cash Provided by Operating Activities Full-Year 2005 Growth % Growth % over Year-to-Date over 2006* Full-Year 2004 Year-to-Date 2005* $ 41,060 38% $ 48,301 48% Capital Expenditures 10,748 6,449 Dividends Paid 7,407 7,484 Value of Share Repurchase 2,209 16,823 Increase in Cash, Cash Equivalents & Short-Term Investments 24,443 19,498 * January 1 through September 30 page 36

37 Financial Summary & Outlook Year-to-Date 2006 % increase over Year-to-Date Guidance Revenue $ 81,423 $ 127,122 $ 192,397 $ 198,152 36% 25% - 30% * Pre-Tax Income $ 7,860 $ 26,400 $ 52,784 $ 52,532 24% Net Income $ 7,269 $ 32,029 $ 31,653 $ 31,214 24% Earnings Per Share GAAP $ 0.44 $ 1.54 $1.47 # $ % $ $1.70 # Fully Taxed * $ 0.28 $ 0.75 n/a n/a n/a # Oustanding Shares 16,616 20,814 21,492 21,405 Guidance first provided on September 29, 2006 and re-confirmed on October 24, 2006 * Revenue growth for the second half of 2006 # Year-to-date 2006 net income includes the after-tax cost of approximately $3.5 million, or $0.16 per diluted share for the expensing of equity-based compensation that became effective on January 1, 2006; 2006 guidance includes the expected full-year impact of approximately $0.20 to $0.22 per diluted share for the expensing of equity-based compensation * Excludes a one-time $16.4 million income tax benefit recorded in 2004; management believes that this is a meaningful disclosure as it allows for year-over-year comparisons of financial results on a consistent basis, and is more reflective of the operating results of the business page 37

38 Vision for the Future Target Markets January 2007: 60 LasikPlus vision centers located in 45 markets in 28 states Plans to open 12 to 15 vision centers in 2007 Expansion plans Continue to build market share in new and existing markets Maintain industry leadership position Grow approximately 20% to 25% annually assuming favorable market/industry conditions Expand into the 80 to 100 largest U.S. markets; with multiple centers in larger markets December 2010: 120 to 150 LasikPlus vision centers located in 100 markets in 41 states page 38

39 Achieving a TRIPLE WIN! Physicians WIN Patients Shareholders page 39

40 Summary & Outlook Business model remains sound Performance continues to outpace the industry Committed to further growing leadership position in the laser vision correction industry Diligently pursuing a number of new marketing initiatives Investing in areas that will result in the biggest return on investment Opened 10 vision centers in 2006; 7 in new markets Focused on expanding the LasikPlus footprint throughout the United States while continuing to deliver high-quality results at an affordable price Plans to open 12 to 15 vision centers in 2007 page 40

41 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 60 LasikPlus fixed-site laser vision correction centers in the United States and a joint venture in Canada. LCA-Vision is one of the only publicly traded companies within the United States that focuses exclusively on laser vision correction services. We have performed over 700,000 laser vision correction procedures in our vision centers in the United States and Canada since LasikPlus laser vision correction centers are staffed with skilled ophthalmologists and optometrists and other healthcare professionals. Advanced diagnostic equipment and multiple laser brands are used to help correct nearsightedness, farsightedness and astigmatism. LasikPlus laser vision correction centers are generally located in major cities throughout the United States. Additional information is available at our corporate websites: and It's Not Just LASIK. It's LasikPlus! INVESTOR PRESENTATION January 2007