EX-99.1 3 c83734exv99w1.txt EARNINGS PRESS RELEASE EXHIBIT 99.1 (TLC VISION LOGO) NEWS RELEASE CONTACT: FOR IMMEDIATE RELEASE STEPHEN KILMER VP, INVESTOR RELATIONS (905) 238-3904 EMAIL: INVESTOR.RELATIONS@TLCVISION.COM TLCVISION REPORTS FINANCIAL RESULTS FOR THE THREE & TWELVE MONTHS ENDED DECEMBER 31, 2003 Toronto, ON, March 4, 2003: TLC Vision Corporation (NASDAQ:TLCV; TSX:TLC), North America's premier eye care services company, today announced its financial results for the three and twelve month periods ended December 31, 2003. All dollar amounts are expressed in U.S. currency and results are reported in accordance with U.S. generally accepted accounting principles (U.S. GAAP) unless otherwise stated. THREE MONTHS ENDED DECEMBER 31, 2003 Q4-03 total net revenues were $48.5 million, up 19% from $40.8 million in Q4-02 and up 6% from $46.0 million in the previous quarter. Revenues from other healthcare services continued to demonstrate steady growth and represented 29% of total revenues in Q4-03 compared to 26% in the same three month period a year ago and 27% last quarter. Q4-03 paid laser procedure volumes were over 38,600 compared to 37,700 in the same period a year ago and 39,300 in the previous quarter. This result was due to 5% year-over-year and 1% quarter-over-quarter growth in the owned and managed centers offset by a 1% year-over-year and a 6% quarter-over-quarter volume decline in the access business, which has a lower variable margin. The procedure volume mix in Q4-03 was 59% owned and managed centers versus 41% access. CustomLASIK procedures represented approximately 43% of Q4-03 owned and managed center volumes. Higher pricing and gross margins associated with CustomLASIK procedures, combined with a more favorable volume mix led to significantly improved operating performance. On a GAAP basis, TLCVision reported a net loss of ($2.9 million) or ($0.04) per share in the fourth quarter of 2003 which included $623,000 in research and development expense related to the Company's ongoing investment in Vascular Sciences Corporation and $320,000 in restructuring and other costs. TLCVision reported a net loss of ($39.7 million) or ($0.63) per share for the same period a year ago and ($4.1 million) or ($0.06) per share in Q3-04. Q4-03 adjusted EBITDA was $3.9 million. This compares to an adjusted EBITDA loss of ($6.4 million) in the same quarter a year ago and $3.3 million in adjusted EBITDA that the Company reported last quarter. [Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization ("EBITDA") excluding certain non-recurring items and research and development costs and is used to assist in understanding and comparing operating results. EBITDA and Adjusted EBITDA, which are not calculated identically by all companies, are not substitutes for operating income, net income and cash flow as determined in accordance with generally accepted accounting principles. Management uses EBITDA and Adjusted EBITDA as key measures of operating performance. Reference should be made to the "Adjusted EBITDA" table that provides reconciliation between operating results as prescribed by U.S. GAAP and "Adjusted EBITDA".] TWELVE MONTHS ENDED DECEMBER 31, 2003 Total fiscal year 2003 net revenues were $195.7 million, up 19% from $164.6 million in the same twelve-month period in 2002. Revenues from other healthcare services generated 25% of total net revenues compared to 20% in the 2002 twelve-month period. 2003 adjusted EBITDA was $17.8 million compared to $680,000 reported last year. The 2003 net loss was ($9.4 million) or ($0.15) per share. For the same twelve-month period in 2002 the Company recorded a net loss of ($144.7 million) or ($2.68 per share). The Company ended the twelve-month period in a strong financial position with cash and short-term investments totaling $30.3 million. Q1-04 FINANCIAL OUTLOOK Refractive surgery is traditionally a seasonal business, with the first quarter being the strongest of the year. In a highly leveraged fixed-cost business model like TLCV's, profitability levels are also particularly sensitive to total procedure volumes, average variable contribution margin per procedure and procedure mix. Greater than expected improvements in all three of those profit drivers have been realized thus far in the first quarter of 2004. For Q1-04, based on preliminary financial analysis, the Company expects to report adjusted EBITDA in an approximate range of $12 million - $14 million and net income in an approximate range of $6.5 million - $8.5 million. Actual Q1-04 results could vary and will be announced in early May. RHEO UPDATE The patented Rheopheresis(R) blood filtration process ("RHEO") is performed using the Rheofilter(R) MDF System which is designed to deplete certain high molecular weight plasma proteins and lipoproteins from the blood which are believed to contribute to the development, or promote the progression, of dry AMD. Dry AMD is the leading cause of vision loss in people over the age of 50 in the western world. The majority of dry AMD patients will gradually lose their central vision, potentially to a point of legal blindness. While success in treating AMD is often only measured by the ability to slow down or halt the disease's progression, in many instances RHEO has actually improved patients' vision. RHEO is currently the subject of a pivotal (phase III) study in the U.S. known as the MIRA-1 Protocol. Given the increased attention that its RHEO business has recently received, TLCVision has commenced a process to explore structural alternatives to maximize the value of the business for TLCVision and its shareholders. ABOUT TLC VISION TLC Vision Corporation is North America's premier eye care services company. Through its subsidiaries, the Company focuses on three large eye care markets - refractive surgery (surface of the eye), cataract surgery (anterior of the eye) and dry AMD therapy (posterior of the eye). TLCVision enjoys a number of valuable assets including an affiliated network of thousands of eye doctors, access to some of the newest clinical technologies, proven patient education and marketing programs, state-of-the art information systems, a strong operations management culture and a number of well established corporate brands. The Company's common shares trade on the NASDAQ National Market under the symbol 'TLCV' and on the Toronto Stock Exchange under the symbol 'TLC'. Visit TLCVision's web site at www.tlcv.com. FORWARD LOOKING STATEMENTS This press release contains certain forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934, which statements can be identified by the use of forward looking terminology, such as "may", "will", "expect", "intend", "anticipate", "estimate", "predict", "plans" or "continue" or the negative thereof or other variations thereon or comparable terminology referring to future events or results. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous factors, including the timing of expenditures, effects of competition, changes to pricing, acquisitions and expansion opportunities, any of which could cause actual results to vary materially from current results or TLCVision's anticipated future results. See the Company's reports filed with the Canadian Securities Regulators and the U.S. Securities and Exchange Commission from time to time for cautionary statements identifying important factors with respect to such forward looking statements, including certain risks and uncertainties, that could cause actual results to differ materially from results referred to in forward looking statements. TLCVision assumes no obligation to update the information contained in this press release. TLC VISION CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED TWELVE MONTHS ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- 2003 2002 2003 2002 --------- --------- --------- --------- Revenues Refractive Owned ..................................... $ 15,014 $ 11,861 $ 55,663 $ 52,540 Managed ................................... 12,946 10,285 54,389 52,980 Access .................................... 6,703 8,022 36,140 25,371 Other healthcare services ...................... 13,881 10,586 49,488 33,714 --------- --------- --------- --------- Total revenues ................................... 48,544 40,754 195,680 164,605 --------- --------- --------- --------- Cost of revenues Refractive Owned ..................................... 12,388 11,317 45,516 42,744 Managed ................................... 10,239 9,383 40,529 39,861 Access .................................... 5,223 6,237 25,424 18,103 Reduction in fair value of capital assets ................................... -- -- -- 1,487 Other healthcare services ...................... 8,654 8,018 31,836 22,968 --------- --------- --------- --------- Total cost of revenues ........................... 36,504 34,955 143,305 125,163 --------- --------- --------- --------- Gross margin ................................... 12,040 5,799 52,375 39,442 --------- --------- --------- --------- General and administrative ....................... 7,333 11,619 31,688 38,158 Marketing ........................................ 3,819 3,670 14,094 14,402 Amortization of intangibles ...................... 1,670 2,008 6,685 8,351 Research and development ......................... 623 -- 1,598 4,000 Impairment of goodwill and other intangible ...... assets ......................................... -- 22,138 -- 103,858 Adjustment to the fair value of investments and long-term receivables ...................... 11 2,095 (206) 7,098 Restructuring and other charges .................. 320 3,163 2,040 11,218 --------- --------- --------- --------- 13,776 44,693 55,899 187,085 --------- --------- --------- --------- Operating loss ................................... (1,736) (38,894) (3,524) (147,643) Other income and (expense): Other income, net .............................. 29 369 669 6,996 Interest expense, net .......................... (278) 150 (1,364) (752) Minority interests ............................. (1,060) (888) (4,672) (1,710) --------- --------- --------- --------- Loss before income taxes ......................... (3,045) (39,263) (8,891) (143,109) Income tax expense ............................... 119 (464) (508) (1,622) --------- --------- --------- --------- Net loss ......................................... $ (2,926) $ (39,727) $ (9,399) $(144,731) ========= ========= ========= ========= Net loss per share - basic and diluted ........... $ (0.04) $ (0.63) $ (0.15) $ (2.68) ========= ========= ========= ========= Weighted average number of common shares outstanding - basic and diluted ................ 66,046 63,334 64,413 54,077
TLC VISION CORPORATION RECONCILIATION OF OPERATING RESULTS TO ADJUSTED EBITDA (IN THOUSANDS EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
3 MONTHS ENDED 12 MONTHS ENDED DECEMBER 31, DECEMBER 31, --------------------------- --------------------------- 2003 2002 2003 2002 ----------- ----------- ----------- ----------- Loss for the period $ (2,926) $ (39,727) $ (9,399) $ (144,731) Interest 278 (150) 1,364 752 Taxes (119) 464 508 1,622 Depreciation and amortization 5,786 6,034 22,593 22,375 ----------- ----------- ----------- ----------- EBITDA 3,019 (33,379) 15,066 (119,982) Research and development (1) 623 -- 1,598 4,000 Restructuring and other charges 320 3,163 2,040 11,218 Reduction in the fair value of capital assets -- -- -- 1,487 Adjustment to the fair value of (206) investments and long-term receivables allowance, net 11 2,095 7,098 Impairment of goodwill and intangibles -- 22,138 -- 103,858 Other income, net (29) (369) (669) (6,996) ----------- ----------- ----------- ----------- Adjusted EBITDA $ 3,944 $ (6,352) $ 17,829 $ 683 =========== =========== =========== ===========
(1) Research and development expense relates to TLCVision's agreement to advance up to $6 million in convertible and non-convertible debt to Vascular Sciences Corporation from time to time in addition to the $3 million of Vascular Sciences equity acquired and expensed in 2002. Vascular Science's technology is in the development stage and, accordingly, the Company accounts for its investment as a research and development arrangement whereby costs are expensed as amounts are provided to Vascular Sciences. TLC VISION CORPORATION CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
(UNAUDITED) DECEMBER 31, December 31, 2003 2002 ------------ ------------ ASSETS Current assets Cash and cash equivalents .......................... $ 29,580 $ 36,081 Short-term investments ............................. 748 1,557 Accounts receivable ................................ 15,617 14,155 Prepaids and other current assets .................. 11,646 9,820 ------------ ------------ Total current assets .............................. 57,591 61,613 Restricted cash - non-current ........................ 1,376 3,975 Investments and other assets ......................... 3,102 2,442 Intangibles, net ..................................... 22,994 29,326 Goodwill, net ........................................ 48,794 40,697 Fixed assets ......................................... 56,891 58,003 ------------ ------------ Total assets ......................................... $ 190,748 $ 196,056 ============ ============ LIABILITIES Current liabilities Accounts payable ................................... $ 10,627 $ 13,857 Accrued liabilities ................................ 25,811 28,911 Current portion of long-term debt .................. 10,285 6,322 ------------ ------------ Total current liabilities ........................ 46,723 49,090 Other long-term liabilities .......................... 2,607 9,630 Long term-debt, less current maturities .............. 19,242 15,760 Minority interests ................................... 10,907 9,748 SHAREHOLDERS' EQUITY Capital stock ........................................ 397,878 388,769 Treasury stock ....................................... -- (2,623) Option and warrant equity ............................ 8,143 11,035 Accumulated deficit .................................. (294,752) (285,353) ------------ ------------ Total shareholders' equity ........................... 111,269 111,828 ------------ ------------ Total liabilities and shareholders' equity ........... $ 190,748 $ 196,056 ============ ============