10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

  Washington, DC 20549

Form 10-Q

(Mark One)

[ X ]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
	For the quarterly period ended September 30, 2013.
[   ]	TRANSITION REPORT PURSUANT TO 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	11-2882328
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	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 was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes   X            No         

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes   X                No         

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)

     Large accelerated filer                 Accelerated filer   X        

     Non-accelerated filer ____        Smaller reporting company _____

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes         No X  

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 19,247,765 shares as of October 24, 2013.

1

LCA-Vision Inc.

TABLE OF CONTENTS

Part I. FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets (Unaudited) September 30, 2013 and December 31, 2012	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) Three and Nine Months Ended September 30, 2013 and 2012	4
	Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended September 30, 2013 and 2012	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19
Item 4.	Controls and Procedures	19
Part II. OTHER INFORMATION
Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Mine Safety Disclosures	20
Item 5.	Other Information	20
Item 6.	Exhibits	20
	Signatures	21

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

LCA-Vision Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(Dollars in thousands)

	September 30, 2013			December 31, 2012
Assets
Current assets
Cash and cash equivalents	$	27,129		$	31,653
Short-term investments		1,984			2,804
Patient receivables, net of allowances of $855 and $1,019, respectively		3,061			2,810
Other accounts receivable, net		666			443
Prepaid expenses and other		2,473			3,318
Total current assets		35,313			41,028
Property and equipment, net		7,289			6,380
Patient receivables, net of allowances of $552 and $634, respectively		1,170			1,059
Other assets		223			501
Total assets	$	43,995		$	48,968
Liabilities and Stockholders' Investment
Current liabilities
Accounts payable	$	6,461		$	8,046
Accrued liabilities and other		7,099			11,930
Debt obligations maturing within one year		751			-
Total current liabilities		14,311			19,976
Long-term insurance reserves, less current portion		5,651			5,741
Long-term debt obligations, less current portion		1,245			-
Other long-term liabilities		2,308			3,454
Stockholders' investment
Common stock ($.001 par value; 25,291,637 shares issued and 19,247,765 and 19,050,504 shares outstanding, respectively)		25			25
Contributed capital		180,500			179,543
Common stock in treasury, at cost (6,043,872 shares and 6,241,133 shares, respectively)		(110,063	)		(111,395	)
Accumulated deficit		(50,509	)		(49,053	)
Accumulated other comprehensive income		527			677
Total stockholders' investment		20,480			19,797
Total liabilities and stockholders' investment	$	43,995		$	48,968

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

3

LCA-Vision Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(Amounts in thousands except per share data)

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Revenues	$	20,656		$	20,009		$	71,569		$	81,298
Operating costs and expenses
Medical professional and license fees		4,554			4,648			15,518			19,139
Direct costs of services		9,886			10,068			29,376			33,477
General and administrative expenses		2,791			3,037			8,847			10,151
Marketing and advertising		4,981			4,803			16,918			18,283
Depreciation		516			1,223			1,555			3,743
Restructuring and impairment		(5	)		10			214			47
		22,723			23,789			72,428			84,840
Gain on sale of assets		65			33			180			221
Operating loss		(2,002	)		(3,747	)		(679	)		(3,321	)
Net investment income and other		225			220			676			498
Loss before taxes on income		(1,777	)		(3,527	)		(3	)		(2,823	)
Income tax (benefit) expense		(217	)		22			(111	)		70
Net (loss) income	$	(1,560	)	$	(3,549	)	$	108		$	(2,893	)
(Loss) earnings per common share
Basic	$	(0.08	)	$	(0.19	)	$	0.01		$	(0.15	)
Diluted	$	(0.08	)	$	(0.19	)	$	0.01		$	(0.15	)
Weighted average shares outstanding
Basic		19,241			19,017			19,182			18,968
Diluted		19,241			19,017			19,332			18,968
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	$	92		$	189		$	(150	)	$	167
Unrealized investment gain		-			-			-			30
Total other comprehensive income (loss), net of tax	$	92		$	189		$	(150	)	$	197
Comprehensive loss	$	(1,468	)	$	(3,360	)	$	(42	)	$	(2,696	)

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

4

LCA-Vision Inc. 
Condensed Conolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)

	Nine months ended September 30,
	2013			2012
Cash flow from operating activities:
Net income (loss)	$	108		$	(2,893	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		1,555			3,743
Provision for loss on doubtful accounts		388			704
Loss on sale of investments		-			8
Impairment charges		-			37
Gain on sale of assets		(180	)		(221	)
Stock-based compensation		957			1,531
Insurance reserve		(102	)		(318	)
Changes in operating assets and liabilities:
Patient accounts receivable		(773	)		(1,719	)
Other accounts receivable		(207	)		(60	)
Prepaid expenses and other		(108	)		870
Accounts payable		(1,585	)		(2,660	)
Deferred revenue, net of professional fees		(680	)		(1,838	)
Accrued liabilities and other		(3,744	)		(2,144	)
Net cash used in operations		(4,371	)		(4,960	)
Cash flow from investing activities:
Purchases of property and equipment		(505	)		(973	)
Proceeds from sale of assets		217			283
Purchases of investment securities		(1,984	)		(39,659	)
Proceeds from sale of investment securities		2,804			62,064
Net cash provided by investing activities		532			21,715
Cash flow from financing activities:
Principal payments on loans		(304	)		(4,004	)
Shares repurchased for treasury stock		(231	)		(357	)
Proceeds from exercise of stock options		-			57
Net cash used in financing activities		(535	)		(4,304	)
Net effect of exchange rate changes on cash and cash equivalents		(150	)		167
(Decrease) increase in cash and cash equivalents		(4,524	)		12,618
Cash and cash equivalents at beginning of period		31,653			18,568
Cash and cash equivalents at end of period	$	27,129		$	31,186

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

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LCA-Vision Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

1.  Description of Business and Accounting Policies

Description of Business

We are a provider of laser vision correction services at our LasikPlus® vision centers. Our vision centers provide the staff, facilities, equipment and support services for performing laser vision correction that employ advanced laser technologies to help correct nearsightedness, farsightedness and astigmatism. We currently use two suppliers for fixed-site excimer lasers: Abbott Medical Optics and Alcon, Inc. Our vision centers are supported by independent ophthalmologists and credentialed optometrists, as well as other healthcare professionals. The ophthalmologists perform the laser vision correction procedures in our vision centers, and ophthalmologists or optometrists conduct pre-procedure evaluations and post-operative follow-up care in-center. Most of our patients currently receive a procedure called LASIK, which we began performing in the United States in 1995.

As of September 30, 2013, we operated 59 LasikPlus® vision centers in the United States: 51 full-service LasikPlus® fixed-site laser vision correction centers and eight pre- and post-operative LasikPlus® satellite centers. Included in those 59 vision centers are five vision centers owned and operated by ophthalmologists who license our trademarks. Beginning in late 2011, we began offering refractive lens and cataract services in certain of our existing markets.

Basis of Presentation

Our Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all adjustments necessary for a fair presentation of our financial position, results of operations, and cash flows for each period presented. These adjustments are of a normal and recurring nature unless otherwise disclosed herein. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to SEC rules and regulations.

We derived the Condensed Consolidated Balance Sheet as of December 31, 2012 from audited financial statements, but did not include all disclosures required by U.S. GAAP. These Condensed Consolidated Financial Statements should be read in conjunction with our 2012 Annual Report on Form 10-K. Operating results for the three- and nine-month periods ended September 30, 2013 are not necessarily indicative of the results expected in subsequent quarters or for the year ending December 31, 2013.

Use of Estimates

The preparation of our Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Significant items that are subject to such estimates and assumptions include allowance for doubtful accounts against patient receivables, insurance reserves, income taxes and enhancement accruals. Although our management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ significantly from the estimates under different assumptions or conditions.

Reclassifications

We have reclassified certain prior-period amounts in the Condensed Consolidated Balance Sheets to conform to current period presentation. The reclassifications were not material to the Condensed Consolidated Financial Statements.

Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (“FASB”) issued new guidance to improve the reporting of reclassifications out of Accumulated Other Comprehensive Income (“AOCI”) and requires the disclosure (either on the face of the financial statements or within the Notes) for significant items reclassified out of AOCI and into net income, for each component of other comprehensive income. The new guidance was effective with the filing of our Quarterly Report on Form 10-Q for the three months ended March 31, 2013, with prospective application required and did not have a material impact on our Condensed Consolidated Financial Statements.

6

LCA-Vision Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Patient Receivables and Allowance for Doubtful Accounts

We provide financing to some of our patients, including to those who could not otherwise obtain third-party financing. The terms of the financing usually require the patient to pay an up-front fee which is intended to cover some or all of our variable costs and then, we deduct the remainder of the amount due automatically from the patient’s bank account over a period of 12 to 36 months. We have recorded an allowance for doubtful accounts as a best estimate of the amount of probable credit losses from our patient financing program. Each month, we review the allowance and adjust it based upon our experience with patient financing. We charge-off receivables against the allowance when it is probable that a receivable will not be recovered. Our policy is to reserve for all patient receivables that remain open past their financial maturity date and to provide reserves for patient receivables prior to the maturity date so as to bring patient receivables, net of reserves, down to the estimated net realizable value based on historical collectability rates, recent default activity and the current credit environment. Receivable balances that remain open past their financial maturity amounted to $29,000 and $42,000 at September 30, 2013 and December 31, 2012, respectively.

We maintained an allowance for doubtful accounts on our patient receivables of $1.4 million and $1.7 million at September 30, 2013 and December 31, 2012, respectively. During the three and nine months ended September 30, 2013, we wrote-off $287,000 and $751,000, respectively, of receivables against the allowance for doubtful accounts and recovered $36,000 and $91,000, respectively, in receivables previously written off. During the three and nine months ended September 30, 2012, we wrote-off $296,000 and $712,000, respectively, of receivables against the allowance for doubtful accounts and recovered $40,000 and $102,000, respectively, in receivables previously written off.

2.  Investments

Management determines the appropriate classification of securities at the time of purchase and reevaluates such designation as of each balance sheet date. We carry available-for-sale securities at fair value, with temporary unrealized gains and losses, net of tax, reported in accumulated other comprehensive income, a component of stockholders’ investment. The amortized cost of debt securities reflects amortization of premiums and accretion of discounts to maturity computed under the effective interest method. We included this amortization in the caption “Net investment income and other” within the Condensed Consolidated Statement of Operations and Comprehensive Loss. We also included in “Net investment income and other” realized gains and losses on sales of securities and declines in value of securities determined to be other-than-temporary. We base the cost of securities sold upon the specific identification method. We include interest and dividends on securities classified as available-for-sale in net investment income.

At September 30, 2013 we held certificates of deposit with an adjusted cost basis and fair value of $2.0 million. We did not recognize any realized or unrealized gains or losses on the sale of investment securities during the three and nine months ended September 30, 2013. At December 31, 2012 we held certificates of deposit with an adjusted cost basis and fair value of $2.8 million. We realized no gains or losses on the sale of investment securities for the three months ended September 30, 2012, and we realized gains of $3,000 and other-than–temporary impairments of $11,000 for the nine months ended September 30, 2012. We recognized unrealized gains of $41,000 and no unrealized losses in accumulated other comprehensive income as of September 30, 2012. No investments were held in an unrealized loss position for greater than 12 months at September 30, 2013 or 2012.

3.  Fair Value Measurements

U.S. GAAP defines a hierarchy which prioritizes the inputs in measuring fair value. The three levels of the fair value hierarchy are as follows: Level 1 inputs are quoted prices for identical assets or liabilities in active markets at the measurement date; Level 2 inputs are observable market-based inputs or unobservable inputs that are corroborated by market data at the measurement date; and Level 3 inputs are unobservable inputs reflecting management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. When applying the fair value principles in valuation of assets and liabilities, we are required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short-term maturity of these instruments.

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LCA-Vision Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

At September 30, 2013 we held $2.0 million of certificates of deposit, which were considered a Level 2 asset, and no liabilities measured at fair value on a recurring basis. At December 31, 2012 we held $2.8 million of certificates of deposit, and no liabilities measured at fair value on a recurring basis. The valuation technique used to measure fair value of certificates of deposit was based on observable market data.

There were no transfers between Level 1 and Level 2 measurements in the three and nine months ended September 30, 2013 and 2012. The following table sets forth the reconciliation of beginning and ending balances for auction rate securities at fair value using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2012 (dollars in thousands). The auction rate securities were redeemed prior to December 31, 2012.

	Three Months Ended September 30				Nine Months Ended September 30,
	2013		2012		2013		2012
Balance at beginning of period	$	-	$	923	$	-		902
Losses included in earnings		-		-		-		(11	)
Gains included in other comprehensive income		-		-		-		32
Balance as of September 30	$	-	$	923	$	-	$	923

4.  Income Taxes

The following table presents the components of our income tax expense for the following periods (dollars in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Current:
Federal	$	(241	)	$	6		$	(186	)	$	19
State and local		24			16			75			51
Total Current		(217	)		22			(111	)		70
Deferred:
Federal	$	-		$	-		$	-		$	-
State and local		-			-			-			-
Total Deferred		-			-			-			-
Income tax (benefit) expense	$	(217	)	$	22		$	(111	)	$	70
Effective income tax rate		-12.2	%		0.6	%	n/m				2.5	%

Our effective tax rate for the three and nine months ended September 30, 2013 was affected by a full valuation allowance against all of our deferred tax assets, net of deferred tax liabilities.

As of September 30, 2013 and December 31, 2012, the net deferred tax assets are offset by full valuation allowances because it is not more-likely-than-not that we will realize our deferred tax assets. We did not record the related tax benefits in the United States and state jurisdictions during the three and nine months ended September 30, 2013. Income tax expense for the three and nine months ended September 30, 2013 includes $236,000 of tax benefit due to the statute of limitations lapsing on previously unrecognized tax benefits, offset in part by state taxes in certain jurisdictions and interest in other unrecognized tax benefits. Income tax expense for the three and nine months ended September 30, 2012 includes primarily interest in unrecognized tax benefits and state taxes in certain jurisdictions.

8

LCA-Vision Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

All interest and penalties related to unrecognized tax benefits are recorded as a component of income tax expense. The total amount of unrecognized tax benefits at September 30, 2013 and December 31, 2012 was $336,000 and $508,000, respectively. It is reasonably possible that the amount of the total unrecognized tax benefits may change in the next 12 months. However, we do not believe that any anticipated change will be material to the Condensed Consolidated Financial Statements.

5.  Earnings Per Common Share

We calculate basic earnings per common share data using the weighted average number of common shares outstanding during the period. Diluted per share data reflects the potential dilution that would occur if common stock equivalents were exercised or converted to common stock but only to the extent that they are considered dilutive to our earnings. The following table is a reconciliation of basic and diluted per share data for the following periods (in thousands, except per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013		2012
Basic
Net (loss) income	$	(1,560	)	$	(3,549	)	$	108	$	(2,893	)
Weighted average shares outstanding		19,241			19,017			19,182		18,968
Basic (loss) earnings per common share	$	(0.08	)	$	(0.19	)	$	0.01	$	(0.15	)
Diluted
Net (loss) income	$	(1,560	)	$	(3,549	)	$	108	$	(2,893	)
Weighted average shares outstanding		19,241			19,017			19,182		18,968
Effect of dilutive securities
Restricted stock		-			-			150		-
Weighted average common shares and potential dilutive shares		19,241			19,017			19,332		18,968
Diluted (loss) earnings per common share	$	(0.08	)	$	(0.19	)	$	0.01	$	(0.15	)
Anti-dilutive options (excluded from diluted net (loss) earnings per share computations)		139			489			166		363
Anti-dilutive restricted stock units (excluded from diluted net (loss) earnings per share computations)		38			-			25		-

6.  Stock-Based Compensation

We have stock incentive plans through which employees and directors have been or will be granted stock-based compensation. We recognize compensation expense for the grant date fair value of stock-based awards over the applicable vesting period. The components of our pre-tax stock-based compensation expense, net of forfeitures and associated income tax effect, were as follows (dollars in thousands):

 

	Three Months Ended September 30,				Nine Months Ended Sepember 30,
	2013		2012		2013		2012
Stock options	$	-	$	15	$	6	$	46
Restricted stock		289		434		951		1,485
	$	289	$	449	$	957	$	1,531
Income tax effect		113		174		373		594
	$	176	$	275	$	584	$	937

9

LCA-Vision Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

We estimate the fair value of stock options granted using the Black-Scholes option-pricing model. This model requires several assumptions, which we have developed based on historical trends and updated based on current market observations. The accuracy of these assumptions is critical to the estimate of fair value for these equity instruments.

Our restricted stock unit awards include both time-based awards that vest ratably over three years and restricted stock units that are tied to the achievement of certain financial targets and stock performance criteria and cliff-vest at the end of three years. The financial targets include revenue and adjusted earnings per share measurements. Total stockholder return, the stock performance criteria, is considered a market condition and the fair value of those awards was calculated using a Monte Carlo simulation valuation model, which utilizes Level 3 inputs.

7.  Restructuring Charges

At September 30, 2013 and December 31, 2012, we included short-term restructuring reserves of $701,000 and $1.8 million, respectively, in “Accrued liabilities and other” in the Condensed Consolidated Balance Sheets. Long-term restructuring reserves were $100,000 and $327,000 at September 30, 2013 and December 31, 2012, respectively, and were included in “Other long-term liabilities.” The decrease in restructuring reserves relates primarily to lease payments for previously closed vision centers and severance payments during the three and nine months ended September 30, 2013.

The following table summarizes the restructuring reserves for the three and nine months ended September 30, 2013 (dollars in thousands):

	Employee Separation Costs			Contract Termination Costs			Total
Balance at December 31, 2012	$	604		$	1,525		$	2,129
Liabilities recognized		-			219			219
Payments		(222	)		(451	)		(673	)
Balance at March 31, 2013	$	382		$	1,293		$	1,675
Liabilities recognized		-			-			-
Payments		(118	)		(410	)		(528	)
Balance at June 30, 2013	$	264		$	883		$	1,147
Adjustments to liabilities previously recognized		-			(5	)		(5	)
Payments		(87	)		(254	)		(341	)
Balance as of September 30, 2013	$	177		$	624		$	801

8.  Debt

Long-term debt obligations consist of (dollars in thousands):

	September 30, 2013			December 31, 2012
Third party debt	$	1,996		$	-
Debt obligations maturing within one year		(751	)		-
Long-term obligations (less current portion)	$	1,245		$	-

In April 2013, we purchased excimer lasers for all of our full-service vision centers for $2.3 million. We had previously leased these lasers through a vendor financed transaction. In July 2013 we purchased an additional excimer laser for a licensee center. The terms of the financing provide for monthly payments over a 36-month term at a fixed interest rate of 3.5%.

10

LCA-Vision Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

The financing agreement does not contain any financial covenants and is secured by the excimer lasers. The estimated fair value of our debt obligations is $1.9 million based on the present value of the underlying cash flows discounted at our incremental borrowing rate. Within the hierarchy of fair value measurements, this is a Level 3 fair value measurement. The financing agreement represents a significant financing activity which affected recognized assets and liabilities by $2.3 million, but did not result in any cash receipts within the nine-month period ending September 30, 2013.

9.  Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income consisted of the following (dollars in thousands):

		Foreign currency translation adjustment
	Three months ended		Nine months ended
Beginning balance	$	435	$	677
Other comprehensive income (loss) before reclassifications		92		(150	)
Balance at September 30, 2013	$	527	$	527

There were no reclassifications out of accumulated other comprehensive income during the three and nine months ended September 30, 2013.

10.  Commitments and Contingencies

At September 30, 2013, we were party to certain media purchase agreements with remaining commitments that require us to spend an aggregate of $1.3 million over the next two years.

From time to time, we are subject to medical malpractice lawsuits arising out of our business. We are insured through our captive insurance company to provide coverage for current claims brought against us. We use the captive insurance company for both primary insurance and excess liability coverage. A number of claims are now pending with our captive insurance company.

Our loss reserves are based on our historical claim experience, comparable industry experience and recent trends that would impact the ultimate settlement of claims. However, due to the uncertainties inherent in the determination of these liabilities, the ultimate settlement of claims incurred through September 30, 2013 could differ from the amounts recorded. At September 30, 2013 and December 31, 2012, we maintained insurance reserves of $6.5 million and $6.6 million, respectively, of which $858,000 and $871,000 were classified as current within the caption “Accrued liabilities and other” in the Condensed Consolidated Balance Sheets. Although our insurance reserve reflects our best estimate of the amount of probable loss, we believe the range of loss that is reasonably possible to have been incurred to be approximately $5.0 million to $13.5 million at September 30, 2013. We record any adjustment to these estimates in the period determined.

In addition to the above, we are periodically subject to various other claims and lawsuits. We believe that none of these other claims or lawsuits to which we are currently subject, individually or in the aggregate, will have a material adverse effect on our business, financial condition, results of operations or cash flows.

11

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Information included in this Quarterly Report on Form 10-Q contains forward-looking statements that involve potential risks and uncertainties. Actual results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, those discussed herein and those discussed in our Annual Report on Form 10-K for the year ended December 31, 2012. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date thereof.

We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (SEC) under the Exchange Act. These reports and other information filed by us may be read and copied at the Public Reference Room of the SEC, 100 F Street N.E., Washington, D.C. 20549. Information may be obtained about the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website (www.sec.gov) that contains reports, proxy and information statements and other information about issuers that we file electronically with the SEC.

This Management’s Discussion and Analysis section provides an overview of our financial condition as of September 30, 2013, and the results of operations for the three- and nine-months ended September 30, 2013 and 2012. This discussion should be read in conjunction with our Condensed Consolidated Financial Statements and the accompanying Notes, as well as our Annual Report on Form 10-K for the year ended December 31, 2012. Results of interim periods may not be indicative of the results for subsequent periods or the full year.

Overview

Key financial highlights for the three months ended September 30, 2013 include (all comparisons are with the same period of 2012):

● Revenues increased 3.2% to $20.7 million from $20.0 million; adjusted revenues increased 5.4% to $20.5 million from $19.5 million.

● Procedure volume increased 3.7% to 11,932 from 11,510.

● Medical professional and license fees remained essentially unchanged at $4.6 million. Medical professional and license fees for the 2013 third quarter included higher fees due to an increase in procedure volume, offset by lower license fees as a result of our purchase in April 2013 of previously leased excimer lasers.

● Vision center direct costs decreased by $182,000 to $9.9 million from $10.1 million. The decrease was a result of savings in employee-related costs, lower financing fees from finance plan mix and renegotiated rates for third-party financing plans. These costs were offset partially by higher laser maintenance costs and increases in insurance expense.

● General and administrative expenses decreased by $246,000 to $2.8 million from $3.0 million, due primarily to reductions in employee-related costs as a result of restructuring initiatives implemented earlier in the year.

● Marketing expense increased by $178,000 to $5.0 million from $4.8 million. Marketing cost per eye was $417 for the third quarters of each of 2013 and 2012.

● Depreciation expense decreased by $707,000 to $516,000 from $1.2 million, due to lower capital expenditures in recent years.

● Operating loss was $2.0 million, a $1.7 million improvement from an operating loss of $3.7 million; adjusted operating loss was $2.1 million, a $2.1 million improvement from an adjusted operating loss of $4.2 million.

● Net loss was $1.6 million, or $0.08 per share, a $1.9 million improvement from a net loss of $3.5 million, or $0.19 per share.

12

Key financial highlights for the nine months ended September 30, 2013 include (all comparisons are with the same period of 2012):

● Revenues were $71.6 million compared with $81.3 million; adjusted revenues were $70.8 million compared with $79.3 million.

● Procedure volume was 41,198 compared with 46,912.

● Medical professional and license fees decreased by $3.6 million to $15.5 million from $19.1 million. The decrease resulted from lower procedure volume coupled with the impact of lower license fees and enhancement expenses related to our purchase of previously leased excimer lasers.

● Vision center direct costs decreased by $4.1 million to $29.4 million from $33.5 million. The decrease was a result of lower variable costs associated with the procedure volume combined with other cost savings. These savings primarily included lower financing fees from renegotiated rates and a shift in portfolio mix, reductions in employee-related costs and lower insurance costs from favorable claims experience.

● General and administrative expenses decreased by $1.4 million to $8.8 million from $10.2 million, due primarily to reductions in employee-related costs and rent from the consolidation of our call center as a result of restructuring initiatives implemented in early 2013, and reductions in travel and telecommunications expenses.

● Marketing expense decreased by $1.4 million to $16.9 million from $18.3 million. Marketing cost per eye was $411 compared with $390.

● Depreciation expense decreased by $2.1 million to $1.6 million from $3.7 million, primarily due to lower capital expenditures in recent years.

● Restructuring charges of $214,000 resulted primarily from the relocation of our call center.

● Operating loss was $679,000, a $2.6 million improvement from an operating loss of $3.3 million; adjusted operating loss was $1.4 million, a $3.8 million improvement from an adjusted operating loss of $5.2 million.

● Net income was $108,000, or $0.01 per diluted share, a $3.0 million improvement from a net loss of $2.9 million, or $0.15 per share.

● Cash and investments were $29.1 million as of September 30, 2013, compared with $34.5 million as of December 31, 2012. Cash used in operations included working capital changes driven primarily by $1.5 million of restructuring payments related to previously closed vision centers, reductions in accounts payable related to timing of payments, increased accounts receivable for self-financed patients and reductions in accruals. Cash used in operations also included approximately $1.1 million of start-up losses related to our refractive lens and cataract business.

We derive substantially all of our revenues from the delivery of laser vision correction procedures performed in our U.S. vision centers. Our revenues, therefore, depend on our volume of procedures, and are impacted by a number of factors, including the following:

● General economic conditions and consumer confidence and discretionary spending levels,

● Our ability to generate customers through our arrangements with managed care companies, direct-to-consumer advertising, word-of-mouth referrals, and our partner network relationships,

● The availability of patient financing,

● Government mandated limits on flexible spending accounts,

● Our ability to manage equipment and operating costs, and

● The impact of competitors and discounting practices in our industry.

Other factors that impact our revenues include:

● Deferred revenue from the sale, prior to June 15, 2007, of separately priced acuity programs, and

● Our mix of procedures among the different types of laser technology.

13

Because our revenues are a function of the number of laser vision correction procedures we performand the pricing for these services, and many of our costs are fixed, our vision centers have a relatively high degree of operating leverage. As a result, our level of procedure volume can have a significant impact on our level of profitability. The following table details the number of laser vision correction procedures performed at our vision centers. Total procedure volume includes laser vision correction, intraocular and implantable collamer lens procedures. 

 

	2013		2012
First quarter		16,272		20,987
Second quarter		12,994		14,415
Third quarter		11,932		11,510
Fourth quarter		-		11,613
Year		41,198		58,525

As of September 30, 2013, we operated 59 LasikPlus^® vision centers in the United States: 51 full-service LasikPlus^® fixed-site laser vision correction centers and eight LasikPlus^® satellite centers. Included in the 59 vision centers are five vision centers owned and operated by ophthalmologists who license our trademarks. The satellite vision centers perform pre-operative and post-operative exams, providing added convenience for patients who live considerable distances from our full-service LasikPlus^® vision centers in that market. We have also been working to establish and expand a partner network of eye care professionals that share patients who have laser vision correction and other refractive surgeries.

We have 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 which we offered prior to June 15, 2007. We believe the adjusted information better reflects operating performance and therefore is more meaningful to investors. A reconciliation of revenues and operating loss reported in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) is provided below (dollars in thousands).

 

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Revenues
Reported U.S. GAAP	$	20,656		$	20,009		$	71,569		$	81,298
Adjustments
Amortization of prior deferred revenue		(154	)		(555	)		(756	)		(2,043	)
Adjusted revenues	$	20,502		$	19,454		$	70,813		$	79,255
Operating loss
Reported U.S. GAAP	$	(2,002	)	$	(3,747	)	$	(679	)	$	(3,321	)
Adjustments
Amortization of prior deferred revenue		(154	)		(555	)		(756	)		(2,043	)
Amortization of prior professional fees		15			56			76			204
Adjusted operating loss	$	(2,141	)	$	(4,246	)	$	(1,359	)	$	(5,160	)

14

Results of Operations for the Three Months Ended September 30, 2013 Compared to the Same Period in 2012

Revenues

In the third quarter of 2013, revenues increased by $647,000, or 3.2%, to $20.7 million from $20.0 million in the third quarter of 2012. Procedure volume increased 3.7% to 11,932 in the third quarter of 2013 from 11,510 in the third quarter of 2012. The adjusted average reported revenue per procedure, which excludes the impact of deferring revenue from separately priced extended warranties, increased to $1,718 in the third quarter of 2013 from $1,690 in the third quarter of 2012, and decreased slightly from $1,722 in the second quarter of 2013. The components of the revenue change include (dollars in thousands):

Increase in revenue from higher procedure volume	$	713
Impact from increase in average procedure price, adjusted for revenue deferral		335
Change in deferred revenue		(401	)
Increase in revenues	$	647

We expect procedure volume to be negatively impacted throughout 2013 by the new federal tax regulations which reduced the maximum contribution to flexible spending accounts mandated by the federal government, which went into effect at the beginning of the year. Additionally, continued cautious consumer spending has negatively impacted the industry.

Operating costs and expenses

Our operating costs and expenses include:

● Medical professional and license fees, including per procedure fees for the ophthalmologists performing laser vision correction and other services, and per procedure license fees paid to the equipment suppliers of our excimer and femtosecond lasers,

● Direct costs of services, including the salary component of physician compensation for certain physicians employed by us, staff compensation, facility costs of operating laser vision correction centers, equipment lease and maintenance costs, medical malpractice insurance costs, surgical supplies, financing charges for third-party patient financing, and other costs related to revenues,

● General and administrative costs, including corporate headquarters and call center staff expense, and other overhead costs,

● Marketing and advertising costs, and

● Depreciation of equipment and leasehold improvements.

Medical professional and license fees

Medical professional and license fees in the third quarter of 2013, totaling $4.6 million, increased by $94,000, or 2.0%, from the third quarter of 2012. The increase is due to higher procedure volume, partially offset by favorable per-procedure fee negotiations with our vendors from earlier this year. The amortization of the deferred medical professional fees attributable to the sale of separately priced extended warranties in prior years was $15,000 in the third quarter of 2013 and $56,000 in the third quarter of 2012.

Direct costs of services

Direct costs of services decreased $182,000, or 1.8%, in the third quarter of 2013 to $9.9 million from $10.1 million in the third quarter of 2012. The decrease reflected savings resulting from our previously announced restructuring initiatives and other savings. Lower costs included reductions in employee costs of $258,000, comprised of stock compensation and other employee costs, as well as financing costs of $158,000 due to renegotiation of rates for third-party financing plans and a shift in our portfolio mix. Favorable trends continued for other costs, including reductions to contract services, travel, bad debt, equipment expense, rent and utilities, state and local sales taxes and telecommunication expenses. These costs were partially offset by increases in laser maintenance costs of $244,000 and insurance expenses of $206,000.

General and administrative

General and administrative expenses decreased in the third quarter of 2013 by $246,000, or 8.1%, from the third quarter of 2012, due primarily to reductions in employee costs, comprised of stock compensation and other employee costs. The decrease reflects savings resulting from our previously announced restructuring plans.

15

Marketing and advertising

Marketing and advertising expenses in the third quarter of 2013 increased by $178,000, or 3.7%, from the third quarter of 2012. These expenses were 24.1% of revenues in the third quarter of 2013, compared to 24.0% during the same period of 2012. Adjusted marketing cost per eye, adjusted for spending on our cataract expansion initiatives, decreased slightly to $412 in the third quarter of 2013 compared with $413 in the same period of 2012. We adjust our marketing spend levels continuously in an attempt to align spending levels with consumer demand. We are continuing to work to develop more efficient marketing techniques and expand local initiatives as a means to attract patients. Our future operating profitability will depend in large part on the success of our efforts in this regard.

Depreciation

Depreciation expense decreased in the third quarter of 2013 by approximately $707,000, or 57.8%, to $516,000, from $1.2 million in the third quarter of 2012, largely due to reduced capital expenditures beginning in 2009 and prior period impairment charges and disposals of property and equipment as a result of closed vision centers.

Restructuring and impairment charges

During the third quarter of 2013, we recorded $5,000 in favorable adjustments to prior estimates in costs from closed vision centers.

Gain on sale of assets

We sold assets held for sale for a gain of approximately $65,000 in the third quarter of 2013. Gain on sale of assets was $33,000 in the same period of 2012.

Non-operating income and expenses

Net investment income and other in the third quarter of 2013 increased $5,000 to $225,000 in the third quarter of 2013 from $220,000 in the same period of 2012.

Income taxes

Income tax expense for the third quarter of 2013 included $236,000 of tax benefit on previously unrecognized tax positions due to the expiration of the statute of limitations. Income tax expense in the third quarter of 2012 included primarily the interest on unrecognized tax benefits and state taxes in certain jurisdictions.

Results of Operations for the Nine Months Ended September 30, 2013 Compared to the Same Period in 2012

Revenues

In the nine months ended September 30, 2013, revenues decreased by $9.7 million, or 12.0%, to $71.6 million from $81.3 million in the nine months ended September 30, 2012. Procedure volume decreased 12.2% to 41,198 in the first nine months of 2013 from 46,912 in the first nine months of 2012. The adjusted average reported revenue per procedure, which excludes the impact of deferring revenue from separately priced extended warranties, increased to $1,719 in the nine months ended September 30, 2013 from $1,689 in the nine months ended September 30, 2012. The components of the revenue change include (dollars in thousands):

 

Decrease in revenue from lower procedure volume	$	(9,653	)
Impact from increase in average procedure price, adjusted for revenue deferral		1,211
Change in deferred revenue		(1,287	)
Decrease in revenues	$	(9,729	)

16

Medical professional and license fees

Due to lower procedure volume, medical professional and license fees in the nine months ended September 30, 2013, totaling $15.5 million, decreased by $3.6 million, or 18.9%, from the nine months ended September 30, 2012. The decrease is also due to favorable procedure fee negotiations with our excimer laser vendors which decreased license fees by $1.1 million, and had a favorable impact on our enhancement reserve of $295,000. Enhancement costs were also lower due to favorable trends in our enhancement rates. The amortization of the deferred medical professional fees attributable to the sale of separately priced extended warranties in prior years was $76,000 in the nine months ended September 30, 2013 and $204,000 in the nine months ended September 30, 2012.

Direct costs of services

Direct costs of services decreased $4.1 million, or 12.3%, in the nine months ended September 30, 2013 to $29.4 million from $33.5 million in the nine months ended September 30, 2012. The decrease reflected lower variable costs as a result of lower procedure volume in combination with savings resulting from our previously announced restructuring initiatives and other savings. Lower costs included a reduction in financing costs of $1.1 million due to lower procedure volume, renegotiation of rates for third-party financing plans, including a promotional rate in the first four months of 2013 and a shift in mix to lower-cost plans; employee costs of $908,000, comprised of stock compensation and other employee costs; insurance costs of $348,000 related to favorable actuarial valuation changes resulting from updated claims experience; bad debt expense of $316,000; rent costs of $252,000 due to vision center closures and lease renegotiations; state and local taxes of $226,000; travel costs of $222,000; laser maintenance of $177,000 from managing purchases; and contracted and professional services of $242,000.

General and administrative

General and administrative expenses decreased in the nine months ended September 30, 2013 by $1.3 million, or 12.9%, from the nine months ended September 30, 2012, due primarily to reductions in employee costs of $828,000 comprised of stock compensation and other employee costs, rent from the relocation of our call center of $130,000, travel expenses and telecommunication expenses.

Marketing and advertising

Marketing and advertising expenses in the nine months ended September 30, 2013 decreased by $1.4 million, or 7.5%, from the nine months ended September 30, 2012. These expenses were 23.6% of revenues in the nine months ended September 30, 2013, compared to 22.5% during the same period of 2012. Due to lower procedure volume, adjusted marketing cost per eye, excluding spending on our cataract expansion initiatives, increased to $402 in the nine months ended September 30, 2013 compared with $381 in the same period of 2012. We adjust our marketing spend levels continuously in an attempt to align spending levels with consumer demand. We are continuing to work to develop more efficient marketing techniques and expand local initiatives as a means to attract patients. Our future operating profitability will depend in large part on the success of our efforts in this regard.

Depreciation

Depreciation expense decreased in the nine months ended September 30, 2013 by approximately $2.2 million, or 58.5%, to $1.6 million, from $3.7 million in the nine months ended September 30, 2012, due largely to reduced capital expenditures beginning in 2009 and impairment charges and disposals as a result of closed vision centers.

Restructuring and impairment charges

During the nine months ended September 30, 2013, we recorded restructuring charges of $214,000 as a result primarily of the relocation of our patient communication center to our corporate headquarters as part of our restructuring plan announced in late 2012.

Gain on sale of assets

We sold assets held for sale for a gain of approximately $180,000 in the nine months ended September 30, 2013. Gain on sale of assets was $221,000 in the same period of 2012.

Non-operating income and expenses

Net investment income and other in the nine months ended September 30, 2013 increased $178,000 due primarily to lower interest expense from our decision to pay off third party debt in June, 2012, prior to its maturity.

17

Income taxes

Income tax expense for the nine months ended September 30, 2013 included $236,000 of tax benefit on previously unrecognized tax positions due to the expiration of the statute of limitations. Income tax expense in the nine months ended September 30, 2012 included primarily the interest on unrecognized tax benefits and state taxes in certain jurisdictions.

Liquidity and Capital Resources

At September 30, 2013, we held $29.1 million in cash and cash equivalents and short-term investments, a decrease of $5.4 million from $34.5 million at December 31, 2012. Our cash flows from operating, investing, and financing activities, as reflected in the Condensed Consolidated Statements of Cash Flows, are summarized as follows (dollars in thousands):

	Nine Months Ending September 30,
	2013			2012
Cash (used in) provided by:
Operating activities	$	(4,371	)	$	(4,960	)
Investing activities		532			21,715
Financing activities		(535	)		(4,304	)
Net effect of exchange rate changes on cash and cash equivalents		(150	)		167
Net (decrease) increase in cash and cash equivalents	$	(4,524	)	$	12,618

Cash used in operating activities was $4.4 million for the nine months ended September 30, 2013 compared to $5.0 million for the same period of 2012.   The reduced cash used in operating activities was a result of improved earnings, partially offset by changes in working capital. Working capital changes were driven primarily by restructuring payments related to severance and lease obligations from previously closed vision centers. We continue to manage working capital closely with particular focus on ensuring timely collection of outstanding patient receivables and the management of our trade payable obligations. We have continued our efforts to control costs and conserve cash by maintaining efficiencies in many discretionary areas.

At September 30, 2013, working capital (excluding debt due within one year) amounted to $21.8 million compared to $21.1 million at December 31, 2012. Liquid assets (cash and cash equivalents, short-term investments and accounts receivable) amounted to 229.5% of current liabilities at September 30, 2013, compared to 188.8% at December 31, 2012.

We continue to offer our own patient financing. As of September 30, 2013, we had $4.2 million in patient receivables, net of allowance for doubtful accounts, which was an increase of $362,000, or 9.4% from December 31, 2012. In 2013, the amount of revenue internally financed has remained consistent with the same period in 2012 at approximately 6% of gross revenues. We continually monitor the allowance for doubtful accounts and will adjust our lending criteria or require greater down payments if our experience indicates that is necessary. However, our ability to collect patient accounts depends, in part, on overall economic conditions. Bad debt expense was less than 1% of revenue for the nine months ended September 30, 2013 and 2012.

In April 2013, we agreed to purchase for $2.3 million our excimer lasers previously leased from one of our vendors, with payment terms of 36 months at an interest rate of 3.5%. Our outstanding debt balance was $2.0 million at September 30, 2013. Our loan agreement contains no financial covenants and is secured by the lasers purchased.

During the nine months ended September 30, 2013, we purchased $2.0 million in certificates of deposit and received proceeds from the sale of investment securities of $2.8 million. As of September 30, 2013, the majority of our cash and investment portfolio is comprised of cash and cash equivalents due to the low investment yields in the current market.

18

We have opened four satellite vision centers and two licensed vision centers since the beginning of 2013, and we did not open any new full-service vision centers in 2012. Capital expenditures for the nine months ended September 30, 2013 were $505,000, which excludes the purchase of $2.3 million in previously leased excimer lasers as the purchase was financed through the vendor and had no cash impact. Capital expenditures for the nine months ended September 30, 2012 were $973,000.

Critical Accounting Estimates

There have been no material changes in the critical accounting policies described in Management’s Discussion and Analysis in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

The carrying values of financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, approximate fair value because of the short maturity of these instruments.

We have low exposure to changes in foreign currency exchange rates and, as such, have not used derivative financial instruments to manage foreign currency fluctuation risk.

Item 4. Controls and Procedures.

(a)       Evaluation of Disclosure Controls and Procedures

Under the supervision of and with the participation of our management, including the company's Chief Executive Officer (CEO) and Chief Financial Officer (CFO), an evaluation of the effectiveness of our disclosure controls and procedures was performed as of September 30, 2013. Based on this evaluation, the CEO and CFO concluded that our disclosure controls and procedures are effective to ensure that material information is (1) accumulated and communicated to our management as appropriate to allow timely decisions regarding disclosure and (2) recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

(b)       Changes in Internal Control over Financial Reporting

Under the supervision of and with the participation of our management, including the CEO and CFO, an evaluation of our internal control over financial reporting was performed as of September 30, 2013. Based on this evaluation, management concluded that there were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

19

PART II. OTHER INFORMATION.

Item 1. Legal Proceedings

Not applicable.

Item 1A. Risk Factors

For a discussion of risk factors attributable to our business, refer to Part 1, Item 1A, “Risk Factors,” contained in our Annual Report on Form 10-K for the year ended December 31, 2012. There have been no material changes to the risk factors disclosed in the Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6.     Exhibits

Exhibits

Number	Description
31.1	CEO Certification under Section 302 of the Sarbanes-Oxley Act of 2002
31.2	CFO Certification under Section 302 of the Sarbanes-Oxley Act of 2002
32	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

20

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LCA-VISION INC.
Date: October 29, 2013	/s/ Michael J. Celebrezze
	Michael J. Celebrezze
	Chief Executive Officer
Date: October 29, 2013	/s/ Amy F. Kappen
	Amy F. Kappen
	Chief Financial Officer

 21

EX-31

 

Exhibit 31.1

Certification of Chief Executive Officer

I, Michael J. Celebrezze, certify that:

1. I have reviewed this report on Form 10-Q of LCA-Vision Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
	(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 29, 2013	/s/ Michael J. Celebrezze
	Michael J. Celebrezze
	Chief Executive Officer

EX-31

Exhibit 31.2

Certification of Chief Financial Officer

I, Amy F. Kappen, certify that:

1. I have reviewed this report on Form 10-Q of LCA-Vision Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
	(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 29, 2013	/s/ Amy F. Kappen
	Amy F. Kappen
	Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of LCA-Vision Inc. (the “Company”), does hereby certify, to such officer’s knowledge, that:

This quarterly report on Form 10-Q for the period ended September 30, 2013 of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in this Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 29, 2013	/s/ Michael J. Celebrezze
	Michael J. Celebrezze
	Chief Executive Officer
Date: October 29, 2013	/s/ Amy F. Kappen
	Amy F. Kappen
	Chief Financial Officer

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Note 3 - Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	Three Months Ended September 30				Nine Months Ended September 30,
	2013		2012		2013		2012
Balance at beginning of period	$	-	$	923	$	-		902
Losses included in earnings		-		-		-		(11	)
Gains included in other comprehensive income		-		-		-		32
Balance as of September 30	$	-	$	923	$	-	$	923

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Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Revenues	$ 20,656	$ 20,009	$ 71,569	$ 81,298
Operating costs and expenses
Medical professional and license fees	4,554	4,648	15,518	19,139
Direct costs of services	9,886	10,068	29,376	33,477
General and administrative expenses	2,791	3,037	8,847	10,151
Marketing and advertising	4,981	4,803	16,918	18,283
Depreciation	516	1,223	1,555	3,743
Restructuring and impairment	(5)	10	214	47
	22,723	23,789	72,428	84,840
Gain on sale of assets	65	33	180	221
Operating loss	(2,002)	(3,747)	(679)	(3,321)
Net investment income and other	225	220	676	498
Loss before taxes on income	(1,777)	(3,527)	(3)	(2,823)
Income tax (benefit) expense	(217)	22	(111)	70
Net (loss) income	(1,560)	(3,549)	108	(2,893)
(Loss) earnings per common share
Basic (in Dollars per share)	$ (0.08)	$ (0.19)	$ 0.01	$ (0.15)
Diluted (in Dollars per share)	$ (0.08)	$ (0.19)	$ 0.01	$ (0.15)
Weighted average shares outstanding
Basic (in Shares)	19,241	19,017	19,182	18,968
Diluted (in Shares)	19,241	19,017	19,332	18,968
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	92	189	(150)	167
Unrealized investment gain	0	0	0	30
Total other comprehensive income (loss), net of tax	92	189	(150)	197
Comprehensive loss	$ (1,468)	$ (3,360)	$ (42)	$ (2,696)

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Note 5 - Earnings Per Common Share

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

5.  Earnings Per Common Share

We calculate basic earnings per common share data using the weighted average number of common shares outstanding during the period. Diluted per share data reflects the potential dilution that would occur if common stock equivalents were exercised or converted to common stock but only to the extent that they are considered dilutive to our earnings. The following table is a reconciliation of basic and diluted per share data for the following periods (in thousands, except per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013		2012
Basic
Net (loss) income	$	(1,560	)	$	(3,549	)	$	108	$	(2,893	)
Weighted average shares outstanding		19,241			19,017			19,182		18,968
Basic (loss) earnings per common share	$	(0.08	)	$	(0.19	)	$	0.01	$	(0.15	)
Diluted
Net (loss) income	$	(1,560	)	$	(3,549	)	$	108	$	(2,893	)
Weighted average shares outstanding		19,241			19,017			19,182		18,968
Effect of dilutive securities
Restricted stock		-			-			150		-
Weighted average common shares and potential dilutive shares		19,241			19,017			19,332		18,968
Diluted (loss) earnings per common share	$	(0.08	)	$	(0.19	)	$	0.01	$	(0.15	)
Anti-dilutive options (excluded from diluted net (loss) earnings per share computations)		139			489			166		363
Anti-dilutive restricted stock units (excluded from diluted net (loss) earnings per share computations)		38			-			25		-

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Note 1 - Description of Business and Accounting Policies (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Note 1 - Description of Business and Accounting Policies (Details) [Line Items]
Number Of Vision Correction Centers Operated			59
Number Of Vision Correction Centers Licensed To Ophthalmologists Who Use Trade Mark			5
Period Over Which Patient Receivables Are Recovered			9 months
Receivable Balances That Remain Open Past Maturity Amount	$ 29,000		$ 29,000		$ 42,000
Allowance for Doubtful Accounts Receivable, Write-offs	287,000	296,000	751,000	712,000
Allowance for Doubtful Accounts Receivable, Recoveries	36,000	40,000	91,000	102,000
Patient Receivable [Member]
Note 1 - Description of Business and Accounting Policies (Details) [Line Items]
Allowance for Doubtful Accounts Receivable	$ 1,400,000		$ 1,400,000		$ 1,700,000
Full Service Centers [Member]
Note 1 - Description of Business and Accounting Policies (Details) [Line Items]
Number Of Vision Correction Centers Operated			51
Pre And Post Operative Centers [Member]
Note 1 - Description of Business and Accounting Policies (Details) [Line Items]
Number Of Vision Correction Centers Operated			8
Minimum [Member]
Note 1 - Description of Business and Accounting Policies (Details) [Line Items]
Period Over Which Patient Receivables Are Recovered			12 months
Maximum [Member]
Note 1 - Description of Business and Accounting Policies (Details) [Line Items]
Period Over Which Patient Receivables Are Recovered			36 months

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Note 4 - Income Taxes (Tables)

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Current:
Federal	$	(241	)	$	6		$	(186	)	$	19
State and local		24			16			75			51
Total Current		(217	)		22			(111	)		70
Deferred:
Federal	$	-		$	-		$	-		$	-
State and local		-			-			-			-
Total Deferred		-			-			-			-
Income tax (benefit) expense	$	(217	)	$	22		$	(111	)	$	70
Effective income tax rate		-12.2	%		0.6	%	n/m				2.5	%

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Note 9 - Accumulated Other Comprehensive Income (Details) - Accumulated Other Comprehensive Income (USD $) In Thousands, unless otherwise specified			3 Months Ended	9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Accumulated Translation Adjustment [Member]	Sep. 30, 2013 Accumulated Translation Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ 527	$ 677	$ 435	$ 677
Balance at September 30, 2013	527	677	527	527
Other comprehensive income (loss) before reclassifications			$ 92	$ (150)

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Note 3 - Fair Value Measurements (Details) - Auction Rate Securities at Fair Value Using Significant Unobservable Input (Level 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Auction Rate Securities at Fair Value Using Significant Unobservable Input (Level 3) [Abstract]
Balance at beginning of period	$ 0	$ 923	$ 0	$ 902
Losses included in earnings	0	0	0	(11)
Gains included in other comprehensive income	0	0	0	32
Balance as of September 30	$ 0	$ 923	$ 0	$ 923

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Note 3 - Fair Value Measurements (Details) (Certificates of Deposit [Member], USD $) In Millions, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Note 3 - Fair Value Measurements (Details) [Line Items]
Assets, Fair Value Disclosure	$ 2.0
Fair Value, Inputs, Level 2 [Member]
Note 3 - Fair Value Measurements (Details) [Line Items]
Assets, Fair Value Disclosure	$ 2.0	$ 2.8

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Note 7 - Restructuring Charges (Details) - Summary of Restructuring Reserves (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013
Restructuring Cost and Reserve [Line Items]
Restructuring reserve, balance	$ 1,147	$ 1,675	$ 2,129
Liabilities Recognized	(5)	0	219
Payments	(341)	(528)	(673)
Restructuring reserve, balance	801	1,147	1,675
Employee Separation Costs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring reserve, balance	264	382	604
Liabilities Recognized	0	0	0
Payments	(87)	(118)	(222)
Restructuring reserve, balance	177	264	382
Contract Termination Costs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring reserve, balance	883	1,293	1,525
Liabilities Recognized	(5)	0	219
Payments	(254)	(410)	(451)
Restructuring reserve, balance	$ 624	$ 883	$ 1,293

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Note 6 - Stock-Based Compensation (Details)	9 Months Ended
	Sep. 30, 2013
Restricted Stock Unit Time Based Awards [Member]
Note 6 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Restricted Stock Unit Performance Based Awards [Member]
Note 6 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years

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Note 2 - Investments (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 Certificates of Deposit [Member] Fair Value, Inputs, Level 2 [Member]	Dec. 31, 2012 Certificates of Deposit [Member] Fair Value, Inputs, Level 2 [Member]	Sep. 30, 2013 Certificates of Deposit [Member]
Note 2 - Investments (Details) [Line Items]
Assets, Fair Value Disclosure					$ 2,000,000	$ 2,800,000	$ 2,000,000
Available-for-sale Securities, Gross Realized Gain (Loss)	0		0
Available-for-sale Securities, Gross Unrealized Gain (Loss)	0		0
Available-for-sale Securities, Gross Realized Gains		0		3,000
Available-for-sale Securities, Gross Realized Losses		0
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities				11,000
Available-for-sale Securities, Gross Unrealized Gain				41,000
Available-for-sale Securities, Gross Unrealized Loss				0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	$ 0	$ 0	$ 0	$ 0

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Note 1 - Description of Business and Accounting Policies

9 Months Ended

Sep. 30, 2013

Disclosure Text Block [Abstract]

Business Description and Accounting Policies [Text Block]

1.  Description of Business and Accounting Policies

Description of Business

We are a provider of laser vision correction services at our LasikPlus® vision centers. Our vision centers provide the staff, facilities, equipment and support services for performing laser vision correction that employ advanced laser technologies to help correct nearsightedness, farsightedness and astigmatism. We currently use two suppliers for fixed-site excimer lasers: Abbott Medical Optics and Alcon, Inc. Our vision centers are supported by independent ophthalmologists and credentialed optometrists, as well as other healthcare professionals. The ophthalmologists perform the laser vision correction procedures in our vision centers, and ophthalmologists or optometrists conduct pre-procedure evaluations and post-operative follow-up care in-center. Most of our patients currently receive a procedure called LASIK, which we began performing in the United States in 1995.

As of September 30, 2013, we operated 59 LasikPlus® vision centers in the United States: 51 full-service LasikPlus® fixed-site laser vision correction centers and eight pre- and post-operative LasikPlus® satellite centers. Included in those 59 vision centers are five vision centers owned and operated by ophthalmologists who license our trademarks. Beginning in late 2011, we began offering refractive lens and cataract services in certain of our existing markets.

Basis of Presentation

Our Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all adjustments necessary for a fair presentation of our financial position, results of operations, and cash flows for each period presented. These adjustments are of a normal and recurring nature unless otherwise disclosed herein. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to SEC rules and regulations.

We derived the Condensed Consolidated Balance Sheet as of December 31, 2012 from audited financial statements, but did not include all disclosures required by U.S. GAAP. These Condensed Consolidated Financial Statements should be read in conjunction with our 2012 Annual Report on Form 10-K. Operating results for the three- and nine-month periods ended September 30, 2013 are not necessarily indicative of the results expected in subsequent quarters or for the year ending December 31, 2013.

Use of Estimates

The preparation of our Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Significant items that are subject to such estimates and assumptions include allowance for doubtful accounts against patient receivables, insurance reserves, income taxes and enhancement accruals. Although our management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ significantly from the estimates under different assumptions or conditions.

Reclassifications

We have reclassified certain prior-period amounts in the Condensed Consolidated Balance Sheets to conform to current period presentation. The reclassifications were not material to the Condensed Consolidated Financial Statements.

Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (“FASB”) issued new guidance to improve the reporting of reclassifications out of Accumulated Other Comprehensive Income (“AOCI”) and requires the disclosure (either on the face of the financial statements or within the Notes) for significant items reclassified out of AOCI and into net income, for each component of other comprehensive income. The new guidance was effective with the filing of our Quarterly Report on Form 10-Q for the three months ended March 31, 2013, with prospective application required and did not have a material impact on our Condensed Consolidated Financial Statements.

Patient Receivables and Allowance for Doubtful Accounts

We provide financing to some of our patients, including to those who could not otherwise obtain third-party financing. The terms of the financing usually require the patient to pay an up-front fee which is intended to cover some or all of our variable costs and then, we deduct the remainder of the amount due automatically from the patient’s bank account over a period of 12 to 36 months. We have recorded an allowance for doubtful accounts as a best estimate of the amount of probable credit losses from our patient financing program. Each month, we review the allowance and adjust it based upon our experience with patient financing. We charge-off receivables against the allowance when it is probable that a receivable will not be recovered. Our policy is to reserve for all patient receivables that remain open past their financial maturity date and to provide reserves for patient receivables prior to the maturity date so as to bring patient receivables, net of reserves, down to the estimated net realizable value based on historical collectability rates, recent default activity and the current credit environment. Receivable balances that remain open past their financial maturity amounted to $29,000 and $42,000 at September 30, 2013 and December 31, 2012, respectively.

We maintained an allowance for doubtful accounts on our patient receivables of $1.4 million and $1.7 million at September 30, 2013 and December 31, 2012, respectively. During the three and nine months ended September 30, 2013, we wrote-off $287,000 and $751,000, respectively, of receivables against the allowance for doubtful accounts and recovered $36,000 and $91,000, respectively, in receivables previously written off. During the three and nine months ended September 30, 2012, we wrote-off $296,000 and $712,000, respectively, of receivables against the allowance for doubtful accounts and recovered $40,000 and $102,000, respectively, in receivables previously written off.

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Note 3 - Fair Value Measurements

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

3.  Fair Value Measurements

U.S. GAAP defines a hierarchy which prioritizes the inputs in measuring fair value. The three levels of the fair value hierarchy are as follows: Level 1 inputs are quoted prices for identical assets or liabilities in active markets at the measurement date; Level 2 inputs are observable market-based inputs or unobservable inputs that are corroborated by market data at the measurement date; and Level 3 inputs are unobservable inputs reflecting management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. When applying the fair value principles in valuation of assets and liabilities, we are required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short-term maturity of these instruments.

At September 30, 2013 we held $2.0 million of certificates of deposit, which were considered a Level 2 asset, and no liabilities measured at fair value on a recurring basis. At December 31, 2012 we held $2.8 million of certificates of deposit, and no liabilities measured at fair value on a recurring basis. The valuation technique used to measure fair value of certificates of deposit was based on observable market data.

There were no transfers between Level 1 and Level 2 measurements in the three and nine months ended September 30, 2013 and 2012. The following table sets forth the reconciliation of beginning and ending balances for auction rate securities at fair value using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2012 (dollars in thousands). The auction rate securities were redeemed prior to December 31, 2012.

	Three Months Ended September 30				Nine Months Ended September 30,
	2013		2012		2013		2012
Balance at beginning of period	$	-	$	923	$	-		902
Losses included in earnings		-		-		-		(11	)
Gains included in other comprehensive income		-		-		-		32
Balance as of September 30	$	-	$	923	$	-	$	923

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Note 6 - Stock-Based Compensation

9 Months Ended

Sep. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

6.  Stock-Based Compensation

We have stock incentive plans through which employees and directors have been or will be granted stock-based compensation. We recognize compensation expense for the grant date fair value of stock-based awards over the applicable vesting period. The components of our pre-tax stock-based compensation expense, net of forfeitures and associated income tax effect, were as follows (dollars in thousands):

	Three Months Ended September 30,				Nine Months Ended Sepember 30,
	2013		2012		2013		2012
Stock options	$	-	$	15	$	6	$	46
Restricted stock		289		434		951		1,485
	$	289	$	449	$	957	$	1,531
Income tax effect		113		174		373		594
	$	176	$	275	$	584	$	937

We estimate the fair value of stock options granted using the Black-Scholes option-pricing model. This model requires several assumptions, which we have developed based on historical trends and updated based on current market observations. The accuracy of these assumptions is critical to the estimate of fair value for these equity instruments.

Our restricted stock unit awards include both time-based awards that vest ratably over three years and restricted stock units that are tied to the achievement of certain financial targets and stock performance criteria and cliff-vest at the end of three years. The financial targets include revenue and adjusted earnings per share measurements. Total stockholder return, the stock performance criteria, is considered a market condition and the fair value of those awards was calculated using a Monte Carlo simulation valuation model, which utilizes Level 3 inputs.

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Note 4 - Income Taxes

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

4.  Income Taxes

The following table presents the components of our income tax expense for the following periods (dollars in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Current:
Federal	$	(241	)	$	6		$	(186	)	$	19
State and local		24			16			75			51
Total Current		(217	)		22			(111	)		70
Deferred:
Federal	$	-		$	-		$	-		$	-
State and local		-			-			-			-
Total Deferred		-			-			-			-
Income tax (benefit) expense	$	(217	)	$	22		$	(111	)	$	70
Effective income tax rate		-12.2	%		0.6	%	n/m				2.5	%

Our effective tax rate for the three and nine months ended September 30, 2013 was affected by a full valuation allowance against all of our deferred tax assets, net of deferred tax liabilities.

As of September 30, 2013 and December 31, 2012, the net deferred tax assets are offset by full valuation allowances because it is not more-likely-than-not that we will realize our deferred tax assets. We did not record the related tax benefits in the United States and state jurisdictions during the three and nine months ended September 30, 2013. Income tax expense for the three and nine months ended September 30, 2013 includes $236,000 of tax benefit due to the statute of limitations lapsing on previously unrecognized tax benefits, offset in part by state taxes in certain jurisdictions and interest in other unrecognized tax benefits. Income tax expense for the three and nine months ended September 30, 2012 includes primarily interest in unrecognized tax benefits and state taxes in certain jurisdictions.

All interest and penalties related to unrecognized tax benefits are recorded as a component of income tax expense. The total amount of unrecognized tax benefits at September 30, 2013 and December 31, 2012 was $336,000 and $508,000, respectively. It is reasonably possible that the amount of the total unrecognized tax benefits may change in the next 12 months. However, we do not believe that any anticipated change will be material to the Condensed Consolidated Financial Statements.

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Note 4 - Income Taxes (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Note 4 - Income Taxes (Details) [Line Items]
Income Tax Expense (Benefit)	$ (217,000)	$ 22,000	$ (111,000)	$ 70,000
Unrecognized Tax Benefits	336,000		336,000		508,000
Tax Benefit - Limitations Lapsing [Member]
Note 4 - Income Taxes (Details) [Line Items]
Income Tax Expense (Benefit)	$ (236,000)		$ 236,000

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Note 6 - Stock-Based Compensation (Details) - Components of Pre-tax Stock-based Compensation Expense, Net of Forfeitures and Income Tax Effect (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Note 6 - Stock-Based Compensation (Details) - Components of Pre-tax Stock-based Compensation Expense, Net of Forfeitures and Income Tax Effect [Line Items]
stock-based compensation expense	$ 289	$ 449	$ 957	$ 1,531
Income tax effect	113	174	373	594
Employee Stock Option [Member]
Note 6 - Stock-Based Compensation (Details) - Components of Pre-tax Stock-based Compensation Expense, Net of Forfeitures and Income Tax Effect [Line Items]
stock-based compensation expense	0	15	6	46
Restricted Stock [Member]
Note 6 - Stock-Based Compensation (Details) - Components of Pre-tax Stock-based Compensation Expense, Net of Forfeitures and Income Tax Effect [Line Items]
stock-based compensation expense	289	434	951	1,485
Stock Based Compensation Expense [Member]
Note 6 - Stock-Based Compensation (Details) - Components of Pre-tax Stock-based Compensation Expense, Net of Forfeitures and Income Tax Effect [Line Items]
stock-based compensation expense	$ 176	$ 275	$ 584	$ 937

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Note 9 - Accumulated Other Comprehensive Income (Details) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013
Disclosure Text Block [Abstract]
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	$ 0	$ 0

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Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Patient receivables, allowances, current (in Dollars)	$ 855	$ 1,019
Patient receivables, allowances, noncurrent (in Dollars)	$ 552	$ 634
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares issued and 19,247,765 and 19,050,504 shares outstanding, respectively) (in Shares)	25,291,637	25,291,637
Common stock, shares outstanding (in Shares)	19,247,765	19,050,504
Common stock in treasury, shares (in Shares)	6,043,872	6,241,133

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Note 9 - Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2013

Disclosure Text Block [Abstract]

Comprehensive Income (Loss) Note [Text Block]

9.  Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income consisted of the following (dollars in thousands):

		Foreign currency translation adjustment
	Three months ended		Nine months ended
Beginning balance	$	435	$	677
Other comprehensive income (loss) before reclassifications		92		(150	)
Balance at September 30, 2013	$	527	$	527

There were no reclassifications out of accumulated other comprehensive income during the three and nine months ended September 30, 2013.

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Net income (loss)	$ 108	$ (2,893)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation	1,555	3,743
Provision for loss on doubtful accounts	388	704
Loss on sale of investments		8
Impairment charges		37
Gain on sale of assets	(180)	(221)
Stock-based compensation	957	1,531
Insurance reserve	(102)	(318)
Changes in operating assets and liabilities:
Patient accounts receivable	(773)	(1,719)
Other accounts receivable	(207)	(60)
Prepaid expenses and other	(108)	870
Accounts payable	(1,585)	(2,660)
Deferred revenue, net of professional fees	(680)	(1,838)
Accrued liabilities and other	(3,744)	(2,144)
Net cash used in operations	(4,371)	(4,960)
Cash flow from investing activities:
Purchases of property and equipment	(505)	(973)
Proceeds from sale of assets	217	283
Purchases of investment securities	(1,984)	(39,659)
Proceeds from sale of investment securities	2,804	62,064
Net cash provided by investing activities	532	21,715
Cash flow from financing activities:
Principal payments on loans	(304)	(4,004)
Shares repurchased for treasury stock	(231)	(357)
Proceeds from exercise of stock options		57
Net cash used in financing activities	(535)	(4,304)
Net effect of exchange rate changes on cash and cash equivalents	(150)	167
(Decrease) increase in cash and cash equivalents	(4,524)	12,618
Cash and cash equivalents at beginning of period	31,653	18,568
Cash and cash equivalents at end of period	$ 27,129	$ 31,186

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Assets
Cash and cash equivalents	$ 27,129	$ 31,653
Short-term investments	1,984	2,804
Patient receivables, net of allowances of $855 and $1,019, respectively	3,061	2,810
Other accounts receivable, net	666	443
Prepaid expenses and other	2,473	3,318
Total current assets	35,313	41,028
Property and equipment, net	7,289	6,380
Patient receivables, net of allowances of $552 and $634, respectively	1,170	1,059
Other assets	223	501
Total assets	43,995	48,968
Liabilities and Stockholders' Investment
Accounts payable	6,461	8,046
Accrued liabilities and other	7,099	11,930
Debt obligations maturing within one year	751
Total current liabilities	14,311	19,976
Long-term insurance reserves, less current portion	5,651	5,741
Long-term debt obligations, less current portion	1,245	0
Other long-term liabilities	2,308	3,454
Stockholders' investment
Common stock ($.001 par value; 25,291,637 shares issued and 19,247,765 and 19,050,504 shares outstanding, respectively)	25	25
Contributed capital	180,500	179,543
Common stock in treasury, at cost (6,043,872 shares and 6,241,133 shares, respectively)	(110,063)	(111,395)
Accumulated deficit	(50,509)	(49,053)
Accumulated other comprehensive income	527	677
Total stockholders' investment	20,480	19,797
Total liabilities and stockholders' investment	$ 43,995	$ 48,968

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Note 4 - Income Taxes (Details) - Components of Income Tax Expense (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Current:
Federal	$ (241)	$ 6	$ (186)	$ 19
State and local	24	16	75	51
Total Current	(217)	22	(111)	70
Deferred:
Federal	0	0	0	0
State and local	0	0	0	0
Total Deferred	0	0	0	0
Income tax (benefit) expense	$ (217)	$ 22	$ (111)	$ 70
Effective income tax rate	(12.20%)	0.60%		2.50%

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Note 9 - Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2013

Disclosure Text Block [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

		Foreign currency translation adjustment
	Three months ended		Nine months ended
Beginning balance	$	435	$	677
Other comprehensive income (loss) before reclassifications		92		(150	)
Balance at September 30, 2013	$	527	$	527

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Note 10 - Commitments and Contingencies (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Note 10 - Commitments and Contingencies (Details) [Line Items]
Self Insurance Reserve	$ 6,500,000	$ 6,600,000
Self Insurance Reserve, Current	858,000	871,000
Marketing Commitments [Member]
Note 10 - Commitments and Contingencies (Details) [Line Items]
Contractual Obligation	1,300,000
Minimum [Member]
Note 10 - Commitments and Contingencies (Details) [Line Items]
Loss Contingency, Estimate of Possible Loss	5,000,000
Maximum [Member]
Note 10 - Commitments and Contingencies (Details) [Line Items]
Loss Contingency, Estimate of Possible Loss	$ 13,500,000

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Note 8 - Debt (Details) (USD $) In Millions, unless otherwise specified	4 Months Ended	9 Months Ended
	Apr. 30, 2013	Sep. 30, 2013
Debt Disclosure [Abstract]
Long-term Debt, Gross (in Dollars)	$ 2.3
Debt Instrument, Term	36 months
Debt Instrument, Interest Rate, Stated Percentage	3.50%
Long-term Debt, Fair Value (in Dollars)	$ 1.9
Period Over Which Patient Receivables Are Recovered		9 months

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Note 8 - Debt (Details) - Long-term Debt Obligations (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Debt obligations maturing within one year	$ (751)	$ 0
Long-term obligations (less current portion)	1,245	0
Third Party [Member]
Debt Instrument [Line Items]
Third party debt	$ 1,996	$ 0

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Note 8 - Debt

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

8.  Debt

Long-term debt obligations consist of (dollars in thousands):

	September 30, 2013			December 31, 2012
Third party debt	$	1,996		$	-
Debt obligations maturing within one year		(751	)		-
Long-term obligations (less current portion)	$	1,245		$	-

In April 2013, we purchased excimer lasers for all of our full-service vision centers for $2.3 million. We had previously leased these lasers through a vendor financed transaction. In July 2013 we purchased an additional excimer laser for a licensee center. The terms of the financing provide for monthly payments over a 36-month term at a fixed interest rate of 3.5%.

The financing agreement does not contain any financial covenants and is secured by the excimer lasers. The estimated fair value of our debt obligations is $1.9 million based on the present value of the underlying cash flows discounted at our incremental borrowing rate. Within the hierarchy of fair value measurements, this is a Level 3 fair value measurement. The financing agreement represents a significant financing activity which affected recognized assets and liabilities by $2.3 million, but did not result in any cash receipts within the nine-month period ending September 30, 2013.

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Note 5 - Earnings Per Common Share (Details) - Reconciliation of Basic and Diluted Earnings Per Share (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Note 5 - Earnings Per Common Share (Details) - Reconciliation of Basic and Diluted Earnings Per Share [Line Items]
Net income (loss) (in Dollars)	$ (1,560)	$ (3,549)	$ 108	$ (2,893)
Weighted average shares outstanding	19,241	19,017	19,182	18,968
Effect of dilutive securities
Weighted average common shares and potential dilutive shares	19,241	19,017	19,332	18,968
Diluted (loss) earnings per common share (in Dollars per share)	$ (0.08)	$ (0.19)	$ 0.01	$ (0.15)
Basic (loss) earnings per common share (in Dollars per share)	$ (0.08)	$ (0.19)	$ 0.01	$ (0.15)
Restricted Stock [Member]
Effect of dilutive securities
Restricted stock	0	0	150	0
Employee Stock Option [Member]
Effect of dilutive securities
Effect of dilutive securities	139	489	166	363
Restricted Stock Units (RSUs) [Member]
Effect of dilutive securities
Effect of dilutive securities	38	0	25	0

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Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Business Policy [Policy Text Block]

Description of Business

We are a provider of laser vision correction services at our LasikPlus® vision centers. Our vision centers provide the staff, facilities, equipment and support services for performing laser vision correction that employ advanced laser technologies to help correct nearsightedness, farsightedness and astigmatism. We currently use two suppliers for fixed-site excimer lasers: Abbott Medical Optics and Alcon, Inc. Our vision centers are supported by independent ophthalmologists and credentialed optometrists, as well as other healthcare professionals. The ophthalmologists perform the laser vision correction procedures in our vision centers, and ophthalmologists or optometrists conduct pre-procedure evaluations and post-operative follow-up care in-center. Most of our patients currently receive a procedure called LASIK, which we began performing in the United States in 1995.

As of September 30, 2013, we operated 59 LasikPlus® vision centers in the United States: 51 full-service LasikPlus® fixed-site laser vision correction centers and eight pre- and post-operative LasikPlus® satellite centers. Included in those 59 vision centers are five vision centers owned and operated by ophthalmologists who license our trademarks. Beginning in late 2011, we began offering refractive lens and cataract services in certain of our existing markets.

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

Our Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all adjustments necessary for a fair presentation of our financial position, results of operations, and cash flows for each period presented. These adjustments are of a normal and recurring nature unless otherwise disclosed herein. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to SEC rules and regulations.

We derived the Condensed Consolidated Balance Sheet as of December 31, 2012 from audited financial statements, but did not include all disclosures required by U.S. GAAP. These Condensed Consolidated Financial Statements should be read in conjunction with our 2012 Annual Report on Form 10-K. Operating results for the three- and nine-month periods ended September 30, 2013 are not necessarily indicative of the results expected in subsequent quarters or for the year ending December 31, 2013.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of our Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Significant items that are subject to such estimates and assumptions include allowance for doubtful accounts against patient receivables, insurance reserves, income taxes and enhancement accruals. Although our management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ significantly from the estimates under different assumptions or conditions.

Reclassification, Policy [Policy Text Block]

Reclassifications

We have reclassified certain prior-period amounts in the Condensed Consolidated Balance Sheets to conform to current period presentation. The reclassifications were not material to the Condensed Consolidated Financial Statements.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (“FASB”) issued new guidance to improve the reporting of reclassifications out of Accumulated Other Comprehensive Income (“AOCI”) and requires the disclosure (either on the face of the financial statements or within the Notes) for significant items reclassified out of AOCI and into net income, for each component of other comprehensive income. The new guidance was effective with the filing of our Quarterly Report on Form 10-Q for the three months ended March 31, 2013, with prospective application required and did not have a material impact on our Condensed Consolidated Financial Statements.

Receivables Trade and Other Accounts Receivable Allowance for Doubtful Accounts Policy [Policy Text Block]

Patient Receivables and Allowance for Doubtful Accounts

We provide financing to some of our patients, including to those who could not otherwise obtain third-party financing. The terms of the financing usually require the patient to pay an up-front fee which is intended to cover some or all of our variable costs and then, we deduct the remainder of the amount due automatically from the patient’s bank account over a period of 12 to 36 months. We have recorded an allowance for doubtful accounts as a best estimate of the amount of probable credit losses from our patient financing program. Each month, we review the allowance and adjust it based upon our experience with patient financing. We charge-off receivables against the allowance when it is probable that a receivable will not be recovered. Our policy is to reserve for all patient receivables that remain open past their financial maturity date and to provide reserves for patient receivables prior to the maturity date so as to bring patient receivables, net of reserves, down to the estimated net realizable value based on historical collectability rates, recent default activity and the current credit environment. Receivable balances that remain open past their financial maturity amounted to $29,000 and $42,000 at September 30, 2013 and December 31, 2012, respectively.

We maintained an allowance for doubtful accounts on our patient receivables of $1.4 million and $1.7 million at September 30, 2013 and December 31, 2012, respectively. During the three and nine months ended September 30, 2013, we wrote-off $287,000 and $751,000, respectively, of receivables against the allowance for doubtful accounts and recovered $36,000 and $91,000, respectively, in receivables previously written off. During the three and nine months ended September 30, 2012, we wrote-off $296,000 and $712,000, respectively, of receivables against the allowance for doubtful accounts and recovered $40,000 and $102,000, respectively, in receivables previously written off.

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Note 7 - Restructuring Charges

9 Months Ended

Sep. 30, 2013

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

7.  Restructuring Charges

At September 30, 2013 and December 31, 2012, we included short-term restructuring reserves of $701,000 and $1.8 million, respectively, in “Accrued liabilities and other” in the Condensed Consolidated Balance Sheets. Long-term restructuring reserves were $100,000 and $327,000 at September 30, 2013 and December 31, 2012, respectively, and were included in “Other long-term liabilities.” The decrease in restructuring reserves relates primarily to lease payments for previously closed vision centers and severance payments during the three and nine months ended September 30, 2013.

The following table summarizes the restructuring reserves for the three and nine months ended September 30, 2013 (dollars in thousands):

	Employee Separation Costs			Contract Termination Costs			Total
Balance at December 31, 2012	$	604		$	1,525		$	2,129
Liabilities recognized		-			219			219
Payments		(222	)		(451	)		(673	)
Balance at March 31, 2013	$	382		$	1,293		$	1,675
Liabilities recognized		-			-			-
Payments		(118	)		(410	)		(528	)
Balance at June 30, 2013	$	264		$	883		$	1,147
Adjustments to liabilities previously recognized		-			(5	)		(5	)
Payments		(87	)		(254	)		(341	)
Balance as of September 30, 2013	$	177		$	624		$	801

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Note 2 - Investments

9 Months Ended

Sep. 30, 2013

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

2.  Investments

Management determines the appropriate classification of securities at the time of purchase and reevaluates such designation as of each balance sheet date. We carry available-for-sale securities at fair value, with temporary unrealized gains and losses, net of tax, reported in accumulated other comprehensive income, a component of stockholders’ investment. The amortized cost of debt securities reflects amortization of premiums and accretion of discounts to maturity computed under the effective interest method. We included this amortization in the caption “Net investment income and other” within the Condensed Consolidated Statement of Operations and Comprehensive Loss. We also included in “Net investment income and other” realized gains and losses on sales of securities and declines in value of securities determined to be other-than-temporary. We base the cost of securities sold upon the specific identification method. We include interest and dividends on securities classified as available-for-sale in net investment income.

At September 30, 2013 we held certificates of deposit with an adjusted cost basis and fair value of $2.0 million. We did not recognize any realized or unrealized gains or losses on the sale of investment securities during the three and nine months ended September 30, 2013. At December 31, 2012 we held certificates of deposit with an adjusted cost basis and fair value of $2.8 million. We realized no gains or losses on the sale of investment securities for the three months ended September 30, 2012, and we realized gains of $3,000 and other-than–temporary impairments of $11,000 for the nine months ended September 30, 2012. We recognized unrealized gains of $41,000 and no unrealized losses in accumulated other comprehensive income as of September 30, 2012. No investments were held in an unrealized loss position for greater than 12 months at September 30, 2013 or 2012.

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Note 7 - Restructuring Charges (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Restructuring and Related Activities [Abstract]
Restructuring Reserve, Current	$ 701,000	$ 1,800,000
Restructuring Reserve, Noncurrent	$ 100,000	$ 327,000

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Note 5 - Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013		2012
Basic
Net (loss) income	$	(1,560	)	$	(3,549	)	$	108	$	(2,893	)
Weighted average shares outstanding		19,241			19,017			19,182		18,968
Basic (loss) earnings per common share	$	(0.08	)	$	(0.19	)	$	0.01	$	(0.15	)
Diluted
Net (loss) income	$	(1,560	)	$	(3,549	)	$	108	$	(2,893	)
Weighted average shares outstanding		19,241			19,017			19,182		18,968
Effect of dilutive securities
Restricted stock		-			-			150		-
Weighted average common shares and potential dilutive shares		19,241			19,017			19,332		18,968
Diluted (loss) earnings per common share	$	(0.08	)	$	(0.19	)	$	0.01	$	(0.15	)
Anti-dilutive options (excluded from diluted net (loss) earnings per share computations)		139			489			166		363
Anti-dilutive restricted stock units (excluded from diluted net (loss) earnings per share computations)		38			-			25		-

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Note 10 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

10.  Commitments and Contingencies

At September 30, 2013, we were party to certain media purchase agreements with remaining commitments that require us to spend an aggregate of $1.3 million over the next two years.

From time to time, we are subject to medical malpractice lawsuits arising out of our business. We are insured through our captive insurance company to provide coverage for current claims brought against us. We use the captive insurance company for both primary insurance and excess liability coverage. A number of claims are now pending with our captive insurance company.

Our loss reserves are based on our historical claim experience, comparable industry experience and recent trends that would impact the ultimate settlement of claims. However, due to the uncertainties inherent in the determination of these liabilities, the ultimate settlement of claims incurred through September 30, 2013 could differ from the amounts recorded. At September 30, 2013 and December 31, 2012, we maintained insurance reserves of $6.5 million and $6.6 million, respectively, of which $858,000 and $871,000 were classified as current within the caption “Accrued liabilities and other” in the Condensed Consolidated Balance Sheets. Although our insurance reserve reflects our best estimate of the amount of probable loss, we believe the range of loss that is reasonably possible to have been incurred to be approximately $5.0 million to $13.5 million at September 30, 2013. We record any adjustment to these estimates in the period determined.

In addition to the above, we are periodically subject to various other claims and lawsuits. We believe that none of these other claims or lawsuits to which we are currently subject, individually or in the aggregate, will have a material adverse effect on our business, financial condition, results of operations or cash flows.

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Note 8 - Debt (Tables)

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

	September 30, 2013			December 31, 2012
Third party debt	$	1,996		$	-
Debt obligations maturing within one year		(751	)		-
Long-term obligations (less current portion)	$	1,245		$	-

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Note 6 - Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block]

	Three Months Ended September 30,				Nine Months Ended Sepember 30,
	2013		2012		2013		2012
Stock options	$	-	$	15	$	6	$	46
Restricted stock		289		434		951		1,485
	$	289	$	449	$	957	$	1,531
Income tax effect		113		174		373		594
	$	176	$	275	$	584	$	937

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Document And Entity Information	9 Months Ended
	Sep. 30, 2013	Oct. 24, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	LCA VISION INC
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		19,247,765
Amendment Flag	false
Entity Central Index Key	0001003130
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

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Note 7 - Restructuring Charges (Tables)

9 Months Ended

Sep. 30, 2013

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs [Table Text Block]

	Employee Separation Costs			Contract Termination Costs			Total
Balance at December 31, 2012	$	604		$	1,525		$	2,129
Liabilities recognized		-			219			219
Payments		(222	)		(451	)		(673	)
Balance at March 31, 2013	$	382		$	1,293		$	1,675
Liabilities recognized		-			-			-
Payments		(118	)		(410	)		(528	)
Balance at June 30, 2013	$	264		$	883		$	1,147
Adjustments to liabilities previously recognized		-			(5	)		(5	)
Payments		(87	)		(254	)		(341	)
Balance as of September 30, 2013	$	177		$	624		$	801