TLC Reports 2001 Financial Results

Business Wire,  July 12, 2001  

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Business Editors

BETHESDA, Maryland--(BUSINESS WIRE)--July 12, 2001

Results in line with Preliminary Announcement

TLC Laser Eye Centers Inc. (NASDAQ:TLCV) (TSE:TLC.), the world's largest provider of laser eye surgery services, today announced its fourth quarter and annual results for the period ending May 31, 2001. All dollar amounts are expressed in U.S. currency and results are reported in accordance with United States generally accepted accounting principles (U.S. GAAP).

As previously reported, more than 28,900 paid laser procedures (including over 500 paid procedures generated by the new "TLC Affiliate Centers" program) were performed at TLC refractive centers in Q4-01, representing a 19% decline from Q4-00.

A year ago, TLC made the strategic decision not to participate in an escalating industry price war instigated by a number of "deep-discount" providers who employed "below-cost" pricing to gain share, marketing the procedure as a commodity rather than recognizing it as a surgical procedure.

During the fiscal 2001 fourth quarter, there were a plethora of media reports highlighting the insolvency and closure of a number of these deep-discount laser eye surgery companies and centers. The Company believes that tThe reports, understandably, had a negative impact on procedure volumes by generating a great deal of short-term concern and confusion amongst prospective patients. Being an elective procedure, laser eye surgery volumes may have been further depressed during the quarter by current general economic conditions.

Despite the quarterly weakness in procedure volumes, TLC reduced its cost structure which enabled the Company to generate improved corresponding financial results and continuing positive operating cash flows.

TLC's fiscal 2001 fourth quarter net revenues of $40.1 million were in line with paid procedure volumes. Total fourth quarter operating expenses were $32.7 million, representing a 36% improvement from the same period a year ago and a 5% improvement from last quarter.

For the fiscal 2001 fourth quarter, TLC generated:

- Cash or "adjusted" EPS before restructuring and other one-time charges of positive $0.04. This is in line with the Company's previous guidance and compares to the negative ($0.19) reported in the same period a year ago. Cash or "adjusted" EPS excludes the effects of non-cash charges relating to the amortization of goodwill and intangibles from acquisitions.

- Net EPS before restructuring and other one-time charges of negative ($0.05). This is in line with the Company's previous guidance and compares to the negative ($0.26) reported in Q4-00.

- Restructuring and other one-time time charges of approximately $3.1 million, resulting in net EPS after restructuring and other one-time charges of negative ($0.13). This compares to negative ($0.26) reported in Q4-00.

For the 2001 fiscal year, net revenues totaled $174 million. Including the effects of non-cash charges relating to the amortization of goodwill and intangibles from acquisitions, along with restructuring and other one-time charges, the net EPS loss for the fiscal 2001 year was ($1.00) compared to a net EPS loss of ($0.16) in the 2000 fiscal year.

Despite the turmoil that gripped the industry throughout the period, TLC managed to generate $15 million in cash from operating activities in fiscal 2001, ending the year in a strong financial position with more than $54 million in cash and marketable securities.

Elias Vamvakas, TLC's Chairman & CEO, commented that "fiscal 2001 was another period of challenges met and milestones achieved by TLC. By refusing to compete primarily on price, and by putting patient care first, TLC has built an enduring brand and maintained our leadership position in this exciting industry. Throughout fiscal 2002, TLC's focus will remain on providing superior quality of care and clinical outcomes while maximizing revenues and controlling costs. As the industry and pricing continue to stabilize, this positioning will leave us well placed strategically for the future."

About TLC Laser Eye Centers Inc.

TLC is the world's largest provider of laser eye surgery services. TLC's core business strategy is providing excimer laser eye surgery in partnership with its network of more than 12,500 affiliated doctors. TLC's common shares trade on the NASDAQ National Market under the symbol 'TLCV' and on The Toronto Stock Exchange under the symbol 'TLC'.

Visit our web site at http://www.tlcvision.com

Forward Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which statements can be identified by the use of forward looking terminology, such as "may", "will", "expect", "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, pricing, competition, the acceptance of the procedure and the timing of acquisitions and expansion opportunities, any of which could cause actual results to vary materially from current results or TLC's anticipated future results. See the Company's reports filed with the Toronto Stock Exchange and the U.S. Securities and Exchange Commission from time to time for cauti onary 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. TLC assumes no obligation to update the information contained in this press release.