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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

Form  10-Q


(Mark One)

[ X ]

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934.


For the quarterly period ended June 30, 2002.


[    ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT.


For the transition period from __________ to __________


Commission file number 0-27610


                                  LCA-Vision Inc.                                       

(Exact name of registrant as specified in its charter)


              Delaware                   

(State or other jurisdiction of


incorporation or organization)

       11-2882328       

(IRS Employer

Identification No.)


7840 Montgomery Road, Cincinnati, Ohio  45236

(Address of principal executive offices)


(513) 792-9292


(Registrant's telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes

X

No



 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 42,964,762 outstanding shares as of  July 26, 2002.





LCA-VISION INC.

INDEX




Facing Sheet

1

 

Index

2

 

Part I.

Financial Information

 

Item 1.

Financial Statements

 

Condensed Consolidated Balance Sheets at June 30, 2002

3

and December 31, 2001

 

Condensed Consolidated Statements of Income for the Three

and Six Months Ended June 30, 2002 and 2001

4

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended

June 30, 2002 and 2001

5

 

Notes to Condensed Consolidated Financial Statements

6

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and

Results of Operations

8

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

10

 
 

Part II.

Other Information

11

 

Item 1.

Legal Proceedings

 

Item 2.

Changes in Securities and Use of Proceeds

 

Item 3.

Defaults Upon Senior Securities

 

Item 4.

Submission of Matters to a Vote of Security Holders

 

Item 5.

Other Information

 

Item 6.

Exhibits and Reports on Form 8-K

12

 
 

Signatures

13

 









LCA-Vision Inc.

Condensed Consolidated Balance Sheets

(Dollars in thousands except per share data)

    

Assets

June 30, 2002 (1)

 

December 31, 2001

Current Assets

   

   Cash and cash equivalents

$16,388

 

$16,609

   Accounts receivable, net

876

 

517

   Receivable from vendors

416

 

234

   Prepaid expenses, inventory and other

1,081

 

1,959

    

Total current assets

18,761

 

19,319

    

Property and Equipment

36,731

 

36,411

Accumulated depreciation and amortization

(16,370)

 

(13,753)

Property and equipment, net

20,361

 

22,658

Goodwill, net

275

 

275

Investment in unconsolidated businesses

362

 

290

Other assets

559

 

646

    

Total assets

$40,318

 

$43,188

    

Liabilities and Shareholders' Investment

   

Current liabilities

   

   Accounts payable

$2,073

 

$2,645

   Accrued liabilities and other

3,241

 

2,270

   Debt maturing in one year

18

 

26

    

Total current liabilities

5,332

 

4,941

    

Long-term debt

-

 

4

Minority equity interest

154

 

41

    

Shareholders' investment

   

   Preferred stock

-

 

-

   Common stock ($0.01 par value; 52,433,554 and 52,248,554 shares and

 

 

 

        42,964,762 and 46,045,525 shares issued and outstanding, respectively

52

 

52

   Contributed capital

91,314

 

91,080

   Warrants

2,105

 

2,105

   Notes receivable from shareholders

(1,510)

 

(1,488)

   Common stock in treasury, at cost (9,468,797 shares and 6,203,029 shares)

(15,473)

 

(13,013)

   Accumulated deficit

(41,639)

 

(40,512)

   Foreign currency translation adjustment

(17)

 

(22)

    

Total shareholders' investment

34,832

 

38,202

    

Total liabilities and shareholders' investment

$40,318

 

$43,188

    

(1)  Unaudited

   
    

The notes to the Condensed Consolidated Financial Statements are an integral part of this statement.

 



LCA-Vision Inc.

Condensed Consolidated Statements of Income

(Dollars in thousands except per share data)

   
 

Three months ended June 30,

Six months ended June 30,

 

2002 (1)

 

2001 (1)

 

2002 (1)

 

2001 (1)

Revenues

       

   Laser refractive surgery

 $      16,187

 

 $      21,420

 

 $      34,950

 

 $      43,866

   Other

81

 

4

 

126

 

48

        

Total revenues

16,268

 

21,424

 

35,076

 

43,914

        

Operating costs and expenses

       

   Medical professional and license fees

3,548

 

4,470

 

7,325

 

8,966

   Direct costs of services

7,271

 

9,141

 

14,786

 

18,463

   General and administrative expenses

2,298

 

2,379

 

4,460

 

4,534

   Marketing and advertising

4,106

 

3,249

 

7,211

 

6,659

   Depreciation

1,492

 

1,438

 

2,950

 

2,824

   Special charge reversal

                  -

 

                  -

 

            (174)

 

                  -

        

Operating (loss) income

(2,447)

 

747

 

         (1,482)

 

         2,468

        

Equity in earnings from unconsolidated businesses

                88

 

              186

 

              205

 

              264

Minority equity interest

              (46)

 

                  -

 

            (113)

 

                  -

Interest (expense)

                  -

 

                (3)

 

                (2)

 

                (8)

Interest income

              142

 

              305

 

              280

 

              606

Other income (expense)

                  8

 

              (13)

 

                  8

 

              (13)

        

(Loss) income before taxes on income

(2,255)

 

1,222

 

(1,104)

 

3,317

        

Income tax expense

23

 

467

 

23

 

1,263

        

Net (loss) income

 $      (2,278)

 

 $           755

 

 $      (1,127)

 

 $        2,054

        

(Loss) income per common share

  

 

    

   Basic

 $        (0.05)

 

 $          0.02

 

 $        (0.03)

 

 $          0.04

   Diluted

 $        (0.05)

 

 $          0.02

 

 $        (0.03)

 

 $          0.04

        

Weighted average shares outstanding

       

   Basic

42,944

 

46,703

 

43,725

 

46,866

   Diluted

42,944

 

47,319

 

43,725

 

47,444

        

(1)  Unaudited

       
        

The notes to the Condensed Consolidated Financial Statements are an integral part of this statement.

 



LCA-Vision Inc.

Condensed Consolidated Statements of Cash Flow

(Dollars in thousands except per share data)

  
 

Six months ended June 30,

 

2002 (1)

 

2001 (1)

Cash flow from operating activities:

   

Net income (loss)

 $      (1,127)

 

 $     2,054

Adjustments to reconcile net income to net cash provided by operating activities

  

   Depreciation and amortization

          2,950

 

        2,824

   Warrant amortization

             351

 

           351

   Deferred income taxes

                  -

 

        1,263

   Equity in earnings of unconsolidated affiliates

            (205)

 

          (264)

   Special charge reversal

            (174)

 

                -

   Other, net

                (8)

 

                -

   Changes in working capital:

   

  

     Accounts receivable