U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1997.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT.
For the transition period from __________ to __________
Commission file number 0-27610
LCA-Vision Inc.
(Exact name of small business issuer 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
(Issuer's telephone number)
(Former name, former address and formal fiscal year, if changes
since last report.)
Check whether then issuer (1) filed all reports required to be
filed by Section 3 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
filing requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the registrant filed all documents and reports to
be filed by sections 12, 13 or 15(d) of the Exchange Act after
the distribution of securities under a plan confirmed by a court.
Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
19,599,231 shares as of May 9, 1997.
Transitional Small Business Disclosure Format (check one):
Yes No X
LCA-VISION INC.
INDEX
Signatures
Page No.
Facing Sheet 1
Index 2
Part I. Financial Information
Item 1. Financial Statements
Unaudited Condensed Consolidated
Balance Sheet, March 31, 1997 3
Unaudited Condensed Consolidated
Statements of Operations for
the Three Months ended March 31,
1997 and 1996 4
Unaudited Condensed
Consolidated Statements of
Cash Flows for the Three
Months ended March 31,
1997 and 1996 5
Notes to Unaudited
Condensed Consolidated
Financial Statements 6
Item 2. Management's Discussion Analysis
of Financial Condition and Results of
Operations 10
Part II. Other Information 14
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of
Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures 15
<PAGE>
<TABLE>
LCA-VISION INC.
Condensed Consolidated Balance Sheet March 31, 1997
(unaudited)
<CAPTION>
ASSETS
<S> <C>
Current assets $ 840,705
Cash and cash equivalents
Accounts receivable, net of
allowance for doubtful accounts
of $100,236 1,065,565
Supplies inventory, prepaid
expenses and other 1,115,905
Total current assets 3,022,175
Property and equipment, net 9,312,263
Investment in unconsolidated affiliates 208,832
Other assets 1,138,901
Total assets $ 13,682,171
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities
Accounts payable $ 559,171
Bank line of credit 5,492,000
Accrued liabilities and other 953,530
Current portion of long-term debt 821,992
Deferred revenue 241,700
Total current liabilities 8,068,393
Long-term debt, net of current portion 4,737,612
Note payable to shareholder 1,500,000
Total liabilities 14,306,005
Shareholders' equity
Preferred stock (Note 5) 2,521,679
Common stock - authorized 110,000,000
shares, $.001 par value;
19,599,231 shares issued and outstanding 78,931
Paid-in capital 3,227,682
Retained deficit (6,426,486)
Treasury stock - 10,909 shares (30,000)
Translation adjustment 4,360
Total shareholders' equity (623,834)
Total liabilities and shareholders' equity $ 13,682,171
</TABLE>
The Notes to Condensed Consolidated Financial Statements are an
integral part of this statement.
<TABLE>
LCA-VISION INC.
Condensed Consolidated Statements of Operations
for the Three Months Ended March 31, 1997 and 1996
(unaudited)
<CAPTION>
1997 1996
<S> <C> <C>
Net revenue $ 2,762,415 $ 3,685,704
Direct operating expenses 1,871,295 1,733,918
General and administrative expenses 1,879,124 2,081,439
Pre-opening expenses 162,605 87,444
Depreciation and amortization 413,380 361,996
Operating loss (1,563,989) (579,093)
Equity in loss of unconsolidated
affiliates (9,745) (325,922)
Interest expense (235,780) (163,577)
Interest income 19,150 26,904
Other 6,061 2,201
Gain on sale of investment of
unconsolidated affiliate 0 545,903
Loss before income taxes (1,784,303) (493,584)
Income taxes 30,528
Net loss (1,784,303) (524,112)
Accrued dividend - Class B
preferred stock (49,969) 0
Account applicable to loss
per common share $(1,834,272) $ ( 524,112)
Net loss per common share $ (0.09) $ (0.03)
Average common shares outstanding 19,596,398 19,685,321
</TABLE>
The Notes to Condensed Consolidated Financial Statements are an
integral part of this statement.
<PAGE>
<TABLE>
LCA-VISION INC.
Condensed Consolidated Statements of Cash Flows
for the Three Months Ended March 31, 1997 and 1996
(unaudited)
<CAPTION>
1997 1996
<S> <C> <C>
Cash flows (used) by operating activities:
Net loss $( 1,784,303) $ (524,112)
Adjustments to reconcile net
loss to net cash used by operation
activities:
Depreciation and amortization 413,380 361,996
Equity in earnings of affiliate 9,745 325,992
Gain on sale of investment in unconsolidated
affiliate (545,903)
Write down of intangible assets 106,772
Changes in operating assets and liabilities
(Increase) decrease in:
Accounts receivable (115,174) (370,521)
Other current assets 83,578 22,089
Increase (decrease) in:
Accounts payable (219,288) (166,515)
Other current liabilities 84,506 433,903
Deferred revenue 11,693 170,625
Net cash used by operating activities (1,515,863) (185,744)
Cash flows from investing activities:
Purchase of property and equipment (247,695) (945,750)
Investment in unconsolidated affiliates (806,939)
Net cash used in investing activities (247,695) (1,750,689)
Cash flows from financing activities:
Proceeds from sales of common stock 50,500
Repayment of long-term debt and capital
lease obligations (202,170) (30,578)
Repayment of notes payable shareholders (187,705)
Borrowings from bank line of credit 2,054,000 602,000
Other (22,093) 10,377
Net cash from financing activities 1,880,237 394,094
Increase (decrease) in cash 116,679 (1,542,339)
Cash and cash equivalents, beginning of period 724,026 2,587,151
Cash and cash equivalents, end of period 840,705 1,044,812
</TABLE>
The Notes to Condensed Consolidated Financial Statements are an integral
part of this statement.
<PAGE>
LCA-VISION INC.
Notes to Condensed Consolidated Financial Statements
for the Three Months Ended March 31, 1997 and 1996
(unaudited)
1. Description of Business Organization
On September 29, 1995, LCA-Vision Inc. (LCA-Vision or the
Company) merged with Laser Centers of America, Inc. (LCA). At the
time of the merger, two shareholders together owned 92% of the
outstanding voting stock of LCA-Vision and 100% of LCA's.
Shareholders' equity was restated to reflect the capital structure
of LCA-Vision at the time of the merger.
Immediately prior to the merger, LCA distributed $6,390,772 to
its shareholders which represented a portion of the subchapter S
corporation earnings previously included in the taxable income of
its shareholders. The proceeds of the distribution were used by
the shareholders to acquire shares of LCA-Vision common stock for $2
million and to loan the remainder to LCA-Vision, receiving two
promissory notes.
Business
LCA-Vision is a leading developer and operator of free-standing
laser refractive surgery centers. The Company also manages laser and
minimally invasive surgery programs for hospitals and medical
centers.
The laser refractive surgery centers operated by the Company
provide the facilities, equipment and support services for
performing various corrective eye surgeries that employ state-of
the-art laser technologies. The surgeries performed in the
Company's centers primarily include photorefractive keratectomy
(PRK) for treatment of myopia (nearsightedness). As of March 31,
1997, the Company had fifteen laser refractive surgery
facilities in the United States, two in Ontario, Canada, and one in
Helsinki, Finland. The Company opened two centers in January 1997
Albany, New York and Mountain View, California and one center in
March 1997 - Warren, Ohio.
The Company manages 26 multi-specialty laser surgery programs at
various medical facilities on a contract basis. The Company
structures its contractual arrangements to match compensation
with the value of the specific services it provides. The Company is
generally paid on a fixed amount for the initial work
performed to render a center operational and then receives
compensation to service a center on an ongoing basis.
Compensation is generally fixed based on procedures performed;
based on increased surgical volume or reduced surgical costs; or a
combination of such. Contracts may also compensate the Company for
conducting the education and marketing programs of the
surgical center and its staff including doctors.
2. Significant Accounting Policies
The March 31, 1997 and 1996 financial data are unaudited;
however, in the opinion of the Company, such data include all
adjustments, consisting only of normal recurring adjustments,
necessary for a fair statement of the interim periods.
Principles of Presentation
The consolidated financial statements include the accounts of
LCA-Vision Inc., a Delaware corporation, and its wholly-owned
subsidiaries after elimination of intercompany balances and
transactions. Certain reclassifications of prior year numbers
have been made to conform with the current presentation.
Stock Split
In June 1996, the shareholders approved a one-for-four reverse stock
split of the Company's common and preferred stock. The number of
shares and per share data in these consolidated financial
statements have been adjusted retroactively to give effect to
these splits as if they had occurred at the beginning of the
earliest period presented.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the dates of the financial statements and the
reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimated.
Pre-opening Costs
Cost associated with the opening of a new laser refractive
surgery center are expensed during the first month of the
center's operation.
Investments in Unconsolidated Affiliates
The equity method is used for investments in laser refractive
surgery centers in which the Company has 50% or less ownership.
These investments are recorded at the Company's initial
investment, increased or decreased by the Company's share of the
center's income or loss, less distributions received.
Impact of Recently Issued Accounting Standards
In February 1997, the FASB issued statement No. 128, Earnings per
Share, which establishes standards for computing and
presenting earnings per share. Statement 128 simplifies the
standards for computing earnings per share previously found in
APB Opinion No. 15, Earnings per Share, and makes them
comparable to international earnings per share calculations.
Statement 128 is effective for financial statements issued for
periods ending after December 15, 1997, and requires restatement of
all prior-period earnings per share data presented. The Company
expects that adoption of Statement 128 will not have a material
effect on earnings per share or prior period earnings per share
data.
3. Acquisitions
On October 28, 1996, the Company purchased the outstanding shares of
938051 Ontario Inc. (The Eye Laser Centre). The terms of the
acquisition provided, among other things, for the Company to pay
$160,000 in cash and provide a letter of credit in the amount of
$64,000 to be held in escrow pending the earlier of the
following: (1) dismissal of a patent infringement lawsuit filed
against one of the sellers, or (2) settlement or final court
determination of the lawsuit. In addition, the Company may be
required to issue unregistered common stock with a total market
value of $280,000 or cash totaling $224,000 based on whether The
Eye Laser Centre achieves certain performance objectives. The
acquisition of The Eye Laser Centre has been accounted for using
the purchase method of accounting. The purchase price in excess of
the net assets acquired ($124,175) has been recorded as
goodwill which is being amortized over 5 years.
4. Notes Payable - Shareholders
The notes payable - shareholders mature on September 25, 2005, and
bear interest at 6.91%. The promissory notes can be repaid, in whole
or in part, prior to maturity without penalty. In 1996, the
Company repaid $354,097 of the notes. In two separate
transactions in December 1996, the principal shareholders converted
$2,521,672 of their notes into Class B preferred stock (note 5).
At March 31, 1997, the principal and interest totaling $1,883,776 is
owed.
5. Preferred Stock
Preferred Stock consists of:
Class A, $.001 par value
1,688 shares authorized, 1,688 shares issued ($67,510
aggregate liquidation preference) $ 7
Class B, $.001 par value, 7% dividend
First Interim Series, 6 shares issued ($1,200,000
aggregate liquidation preference) 1,200,000
Second Interim Series, 6.6 shares issued ($1,321,672
aggregate liquidation preference) 1,321,672
$2,521,679
The holders of the Class B interim series preferred have the
right to convert the preferred stock into common stock beginning
July 1, 1997. The conversion price is the average of the closing
bid prices of the Company's common stock for the 30-day period
ending three (3) days prior to the date of conversion.
The shares are automatically converted into any class or series of
equity securities effected on or before June 30, 1997 and with gross
proceeds of at least $10,000,000. In the event of a private
placement that does not meet the above criteria, the holders of
the securities have the right to convert on a pro rata basis. The
conversion price is the price per share of the shares issued in
connection with the private placement. At March 31, 1997, dividends
totaling $49,969 have been accrued.
6. Investments in Unconsolidated Affiliates
The Company sold its investment in Continuum Biomedical, Inc.
which had been accounted for using the equity method for
$1,000,000 resulting in a gain of $545,903. The gain was recorded in
the first quarter of 1996, the proceeds were received in April 1996.
7. Related Party Transactions
The Company's principal shareholder is the majority owner
of the LCA Center for Surgery, Ltd. (Surgery, Ltd.). Surgery,
Ltd. occupies a portion of the Company's office building for which
the Company recorded income of $40,267 for the three months ended
March 31, 1996. The Company also provided certain administrative
and marketing services for which it recorded income of $15,000
for the three months ended March 31, 1996. Included in accounts
receivable at March 31, 1997 is $15,564 due from Surgery, Ltd.
In May, 1995, LCA and its principal shareholder acquired 45% and
35% ownership interests, respectively, in the Surgery Center of
Georgia, LLC (SCG) in return for guarantees of certain debt of SCG.
As part of the merger and restructuring (see Note 1), LCA
distributed its interest in SCG in return for removal from the
guarantees of SCG's debt. LCA-Vision recorded income of $9,000
and $24,594 for the three months ended March 31, 1997 and 1996,
respectively, for administrative and marketing services provided
to SCG. Included in accounts receivable at March 31, 1997, is
$97,850 due from SCG. The Company provided a $60,000 advance to
a former officer in 1995. The advance is supported by a promissory
note due November 29, 1996, with interest payable at 8.75%. The
note was extended and in January, 1997, the officer repaid
$30,000 of the balance due by selling to the Company 10,909 shares
of its common stock at the then market value. At March 31,
1997, principal and interest approximating $35,000 is included in
prepaid expenses and other.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Overview
LCA-Vision Inc. (LCA-Vision or the Company) is a leading
developer and operator of free-standing laser refractive surgery
centers and manages laser and minimally invasive surgery programs
for hospitals and medical centers. The laser refractive surgery
centers operated by the Company provide the facilities, equipment
and support services for performing various corrective eye
surgeries that employ state-of-the-art laser technologies. The
surgeries performed in the Company's centers primarily include
photorefractive keratectomy ("PRK") for treatment of myopia
(nearsightedness). The Company also manages 26 multi-specialty
laser surgery programs at various medical facilities on a contract
basis.
The Company structures its contractual arrangements to match
compensation with the value of the specific services it provides.
The Company is generally paid a fixed amount for the initial work
performed to render a center operational and then receives
compensation to service a center on an ongoing basis.
Compensation is generally fixed based on procedures performed;
based on increased surgical volume or reduced surgical costs; or a
combination of such. Contracts may also compensate the Company for
conducting the education and marketing programs of the surgical
center and its staff including doctors.
The Company derives its revenue from three primary sources: (i)
fees for surgeries performed at its laser refractive surgery
centers, (ii) contractual fees for managing multi-specialty laser
surgery programs, and (iii) fees for marketing and education
programs; management fees for operating laser refractive surgery
centers of investees; and miscellaneous sources. Miscellaneous
sources include product sales - lasers and laser surgery
instruments - which the Company began phasing out effective December
31, 1996.
The Company classifies its operating expenses into the
following categories:
(a) direct operating expenses which include: (i) laser refractive
surgery centers -- labor, physician fees, Pillar Point
royalty fees (a royalty fee paid to the manufacturers of the
FDA-approved lasers of $250 per procedure), facility rent and
utilities, and surgical supplies; (ii) multi-specialty laser
surgery programs - - labor; and (iii) other services and products
- -- labor and cost of products sold; (b) general and
administrative expenses which primarily include marketing
program costs, headquarters staff expenses and other overhead
costs; (c) center pre-opening expenses which include direct costs
incurred prior to opening a laser refractive surgery center; and (d)
depreciation and amortization.
Results of Operations
The Company's results of operations in any period are significantly
affected by the number of laser refractive surgery centers opened
and operating, the number of hospitals under management contract,
and the level of services contracted by hospitals and others
during such period. Given the limited period of time that
the laser refractive surgery centers have been opened, the
Company's results of operations may not be indicative of future
results. The following table reflects the Company's expansion into
laser refractive surgery centers:
1997 1996
Q1 Q4 Q3 Q2 Q1
Operating at
beginning of
period
Wholly-owned 10 6 5 4 2
Investees 5 3 3 3 1
Opened/acquired
during period 3 4 1 1 2
Wholly-owned 2 2
Investees
Operating at
end of period
Wholly-owned 13 10 6 5 4
Investees 5 5 3 3 3
The Company records the activity of its investee laser refractive
surgery centers using the equity method of accounting.
The following table reflects the number of hospitals under
management contract for the three months ended March 31:
1997 1996
Beginning of period 26 38
End of period 26 31
The following table reflects the sources of consolidated net
revenue:
Three Months Ended March 31,
1997 1996
Net revenue
Laser refractive surgery centers 57.4% 17.4%
Multi-specialty laser surgery programs 25.3 35.9
Other 17.3 46.7
100.0% 100.0%
The following table reflects the direct cost associated with the
principal sources of the company's revenue:
Three Months Ended March 31,
1997 1996
Direct costs
Laser refractive surgery centers 87.9% 89.8%
Multi-specialty laser surgery programs 39.9% 30.4%
Net revenue for the three months ended March 31, 1997, decreased
$923,289 compared to the three months ended March 31, 1996. 1997
net revenue was positively impacted by the opening of laser
refractive surgery centers. This source of revenue offset the
decline in marketing and education services provided to hospitals
and surgery centers. Revenue from multi-specialty laser surgery
programs declined as a result of the decreasing number of
facilities under contract. In addition, the cost reduction
programs instituted by health care providers negatively impacted
their marketing and education expenditures. Revenue for the three
months ended March 31, 1996 includes one-time income of $256,375
from the implementation of programs in hospitals and laser
refractive surgery centers of investees and a contract
cancellation fee.
Procedures performed at laser refractive surgery centers that
opened in the first three months of 1996 and have therefore, been
open a full year increased 189.6%. Procedures performed at all
centers in the first quarter 1997 increased 34.3% compared to
total procedures performed in the fourth quarter of 1996. Centers
opened in the first quarter 1997 contributed 6.9 percentage
points of this overall increase.
Management anticipates that the composition of future revenue
will change as more laser eye surgery centers are developed and as
the photorefractive keratectomy ("PRK"), a procedure in which lasers
are used to permanently correct nearsightedness, becomes more
widely known and accepted by ophthalmic physicians and their
patients. Revenues from hospital-based multi-specialty centers will
be less significant to the Company while revenues from laser eye
surgery centers are expected to increase. The extent and degree
of the shift in the Company's future revenues are subject to
significant uncertainty. Direct operating expenses were
$1,871,295 in 1997 which represents an increase of $137,377
compared to 1996. The increase in direct operating expenses is
primarily a result of the Company's expansion into the laser
refractive surgery business. Direct operating expenses comprise the
significant fixed costs of performing the procedure as well as the
costs of maintaining a facility. These costs will become a lesser
percentage of revenue as procedure volume increases. Direct
operating expenses related to the other sources of revenue are
more variable and fluctuate generally with the level of revenue.
General and administrative expenses were $1,879,124 in 1997 which
represents a decrease of $202,315 compared to 1996. The decrease
was due to cost controls instituted at the end of 1996. In 1997,
the Company has spent approximately $470,000 for marketing and
advertising programs to educate and inform individuals about PRK.
Other expenses such as telephone, legal, insurance, and repairs
and maintenance increase as the Company opens new refractive
laser surgery centers. Depreciation and amortization increased in
1997 compared to 1996 due to the increase in property and
equipment, primarily equipment for the refractive laser surgery
centers. Interest expense was $235,780 in 1997 which is an
increase of $72,203 compared to 1996. The increase is primarily a
result of the increased borrowings related to the capitalized
leases for the lasers and borrowings under the line of credit
offset by the reduction in loans from the principal shareholders.
The $545,903 gain on the sale of investment in unconsolidated
affiliate is the difference between the net selling price and the
carrying value using the equity method of accounting for the
investment in Continuum Biomedical, Inc. This investment was
sold in the first quarter 1996 and the Company received proceeds of
$1,000,000 in April, 1996 from the sale.
Liquidity and Capital Resources
The Company's principal capital requirements include working
capital for the financing of accounts receivable from its
multi-specialty laser surgery program contracts, the equipping
and furnishing of its laser refractive surgery centers, the
continuing development of marketing programs, and the funding of
operating losses of its laser refractive surgery centers. To
date, the Company has funded its capital requirements largely
from internally-generated funds, lease financing, and bank
borrowings.
The Company has an $8 million line of credit, expiring July 1,
1997, which it has used to maintain its existing businesses and to
expand its laser refractive surgery center business.
Borrowings under this line of credit were $5,492,000 at March 31,
1997. The Company anticipates renewing the bank line of credit
prior to its expiration. There is, however, no assurance that
the bank will renew the line of credit or, if the line is
renewed, on the same terms and conditions. At March 31, 1997,
the Company had cash equivalents totaling $840,705 and negative
working capital of $5,046,218. The negative working capital is
primarily due to the use of the bank line of credit to fund the
expansion of the laser refractive surgery centers and to fund
their anticipated losses. Net cash used to purchase property and
equipment was $247,695 and $943,750 for the three months ended March
31, 1997 and 1996, respectively. Cash used by operating
activities for the three months ended March 31, 1997 and
1996 was $1,515,863 and $185,744, respectively. Cash used in
operating activities was principally the funding of the
anticipated operating losses of the laser refractive surgery
centers. Capital of $50,500 was raised in the first quarter
of 1996 through the sale of common stock in private
placement transactions. With the first year cost of a laser
refractive surgery center of approximately $1 million, the
Company has concluded that additional capital is necessary to
continue the rollout of new centers and to accelerate the
operational changes underway. On March 3, 1997, the Company
announced that it had engaged an investment banking firm to
arrange a $12 million private placement of equity securities
for the Company. The proceeds of this financing, when completed,
will be used for future rollouts of new laser refractive
surgery centers and for general corporate purposes. There is
no assurance that the financing will be completed.
Part II. Other Information
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 11 Computation of Per Share Earnings
(Loss) Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K.
None
Signatures
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
LCA-VISION INC.
Date May 14, 1997 /s/ Stephen N. Joffe
Stephen N. Joffe
President and Chief
Executive Officer
Date May 14, 1997 /s/ Larry P. Rapp
Larry P. Rapp
Chief Financial Officer
LCA-VISION INC.
Computation of Per Share Loss
For the Three Months Ended
March 31, 1997 and 1996
1997 1996
Primary Per Share Loss
Net loss available for common
shareholders $(1,834,272) $ (524,112)
Shares:
Weighted average number of common
shares outstanding 19,596,398 19,685,321
Additional shares assuming exercise
of stock options (a) (a)
Average common shares and equivalents
as adjusted 19,596,398 19,685,321
Loss per common share $ (0.09) $ (0.03)
(a) Net loss per share is based on outstanding common shares.
Assuming exercise of options would be anti-dilutive as an
increase in the number of shares assumed to be outstanding would
further reduce the amount of the loss per share.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE LCA-VISION INC.
CONDENSED CONSOLIDATED BALANCE SHEET AT MARCH 31, 1997 ADN THE RELATED
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH
31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 840705
<SECURITIES> 0
<RECEIVABLES> 1165801
<ALLOWANCES> 100236
<INVENTORY> 268056
<CURRENT-ASSETS> 3022175
<PP&E> 12754220
<DEPRECIATION> 3441957
<TOTAL-ASSETS> 13682171
<CURRENT-LIABILITIES> 8068393
<BONDS> 4737612
0
2521679
<COMMON> 78931
<OTHER-SE> (3224444)
<TOTAL-LIABILITY-AND-EQUITY> 13682171
<SALES> 16510
<TOTAL-REVENUES> 2762415
<CGS> 10013
<TOTAL-COSTS> 1871295
<OTHER-EXPENSES> 2455109
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 235780
<INCOME-PRETAX> (1784303)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1784303)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1784303)
<EPS-PRIMARY> (.09)
<EPS-DILUTED> (.09)
</TABLE>
