SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 1998
COMMISSION FILE NUMBER: 0-29302
TLC THE LASER CENTER INC.
-------------------------
(Exact name of registrant as specified in its charter)
Ontario, Canada
(State or jurisdiction of 980151150
incorporation or organization) (I.R.S. Employer Identification No.)
5600 Explorer Drive, Suite 301
Mississauga, Ontario L4W 4Y2
(Address of principal executive (Zip Code)
offices)
Registrant's telephone, including area code (905) 602-2020
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and 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. |X| Yes |_| No
As of September 21, 1998, there were 33,824,717 of the registrant's Common
Shares outstanding.
<PAGE>
This Quarterly Report on Form 10-Q (herein, together with all amendments,
exhibits and schedules hereto, referred to as the "Form 10-Q") contains certain
forward-looking statements within the meaning of Section 27A of the U.S.
Securities and Exchange Act of 1934, which statements can be identified by the
use of forward looking terminology, such as "may", "will", "expect",
"anticipate", "estimate", "plans", "intends" or "continue" or the negative
thereof or other variations thereon or comparable terminology. The Company's
actual results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including but not
limited to those set forth elsewhere in this Form 10-Q in the section entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and in the Company's Annual Report on Form 10-K for the year ended
May 31, 1998. Unless the context indicates or requires otherwise, references in
this Form 10-Q to the "Company" or "TLC" shall mean TLC The Laser Center Inc.
and its subsidiaries. The Company's fiscal year ends on May 31. Therefore,
references in this Form 10-Q to a particular fiscal year shall mean the 12
months ended on May 31 in that year. References to "$" or "dollars" shall mean
U.S. dollars unless otherwise indicated. References to "C$" shall mean Canadian
dollars. References to the "Commission" shall mean the U.S. Securities and
Exchange Commission.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of August 31, 1998 and May 31, 1998
Consolidated Statement of Income for the Three Months Ended
August 31, 1997 and August 31, 1998
Consolidated Statement of Changes in Financial Position for the
Three Months Ended August 31, 1997 and August 31, 1998
Notes to Interim Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 5. Other Information
Item 6. Exhibits
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. TLC THE LASER CENTER INC.
CONSOLIDATED BALANCE SHEET
August 31 May 31
(U.S. dollars, in thousands) 1998 1998
================================================================================
(Unaudited)
ASSETS
Current assets
Cash and short-term deposits $ 2,578 $ 1,895
Marketable securities 44,624 54,234
Accounts receivable 6,856 10,282
Prepaids and sundry assets 5,455 4,632
- --------------------------------------------------------------------------------
Total current assets 59,513 71,043
Restricted cash 1,361 2,086
Investments and other assets 10,477 1,663
Intangibles 48,761 47,189
Capital assets 33,596 31,049
Assets under capital lease 11,708 11,182
- --------------------------------------------------------------------------------
Total assets $165,416 $164,212
================================================================================
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 9,846 9,096
Current portion of long term debt 3,454 2,861
Current portion of obligations under
capital lease 4,012 3,951
Income taxes payable 493 613
Deferred compensation 320 320
Deferred income taxes 116 118
- --------------------------------------------------------------------------------
Total current liabilities 18,241 16,959
Long term debt 7,461 8,378
Obligations under capital lease 9,396 9,533
Deferred rent and compensation 925 1,110
- --------------------------------------------------------------------------------
Total liabilities 36,023 35,980
- --------------------------------------------------------------------------------
Non-controlling interest 6,830 6,357
- --------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Common stock
- authorized, unlimited number of shares
- issued 33,743,787 (May 31, 1998: 33,667,843) 143,839 143,554
Deficit (21,276) (21,679)
- --------------------------------------------------------------------------------
Total shareholders' equity 122,563 121,875
- --------------------------------------------------------------------------------
See notes to interim consolidated financial statements.
3
<PAGE>
TLC THE LASER CENTER INC.
CONSOLIDATED STATEMENT OF INCOME
THREE MONTHS ENDED AUGUST 31
(Unaudited)
(U.S. dollars, in thousands except per share amounts) 1998 1997
================================================================================
Net revenues
Refractive $ 26,384 $ 9,195
Secondary care 2,321 1,506
Other 258 332
- --------------------------------------------------------------------------------
Net revenues 28,963 11,033
- --------------------------------------------------------------------------------
Expenses
Doctor Compensation
Refractive 2,595 1,618
Operating 19,707 8,653
Interest and other 711 330
Depreciation and amortization 3,615 1,865
- --------------------------------------------------------------------------------
26,628 12,466
- --------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS BEFORE
START-UP AND DEVELOPMENT EXPENSES 2,335 (1,433)
Start-up and development expenses 995 1,099
- --------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES AND
NON-CONTROLLING INTEREST 1,340 (2,532)
- --------------------------------------------------------------------------------
Income taxes
Current 619 18
- --------------------------------------------------------------------------------
619 18
- --------------------------------------------------------------------------------
INCOME (LOSS) BEFORE NON-CONTROLLING
INTEREST 721 (2,550)
Non-controlling interest (318) --
- --------------------------------------------------------------------------------
NET INCOME (LOSS) FOR THE PERIOD $ 403 $ (2,550)
================================================================================
INCOME (LOSS) PER SHARE $ 0.01 $ (0.09)
Weighted average number of
Common Shares Outstanding 33,698,630 26,914,000
See notes to interim consolidated financial statements.
4
<PAGE>
TLC THE LASER CENTER INC.
CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION
THREE MONTHS ENDED AUGUST 31
(Unaudited)
(U.S. dollars, in thousands) 1998 1997
================================================================================
Operating activities
Net income(loss) $ 403 $ (2,550)
Items not affecting cash
Depreciation and amortization 3,615 1,865
Non-controlling interest 318 --
Deferred income taxes (net) -- 116
Other 241 78
Changes in non-cash operating items
Accounts receivable 3,426 (1,231)
Prepaids and sundry assets (789) (363)
Accounts payable and accrued liabilities (234) (509)
Income taxes payable (net) (79) (71)
Deferred rent and compensation (185) --
- --------------------------------------------------------------------------------
Cash provided by (used for) operating activities 6,716 (2,665)
- --------------------------------------------------------------------------------
Financing activities
Restricted cash 725 --
Long term debt (1,165) (316)
Term bank loan -- (7)
Obligations under capital lease (336) (220)
Non-controlling interest (44) --
Capital stock issued 285 1,310
- --------------------------------------------------------------------------------
Cash provided by (used for) financing activities (535) 767
- --------------------------------------------------------------------------------
Investing activities
Capital assets (3,953) (2,901)
Assets under capital lease (699) (36)
Acquisitions and investments (10,511) (1,434)
Marketable securities 9,610 --
Other 55 9
- --------------------------------------------------------------------------------
Cash provided by (used for) investing activities (5,498) (4,362)
- --------------------------------------------------------------------------------
Increase (decrease) in cash 683 (6,260)
Cash and short-term deposits, beginning of period 1,895 14,397
- --------------------------------------------------------------------------------
Cash and short-term deposits, end of period $ 2,578 $ 8,137
================================================================================
See notes to interim consolidated financial statements.
5
<PAGE>
TLC THE LASER CENTER INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1998
(Unaudited)
1. The information in the interim consolidated financial statements and
footnotes is condensed from that which would appear in the annual
consolidated financial statements. Accordingly, the interim
consolidated financial statements included herein should be read in
conjunction with the May 31, 1998 Annual Report on Form 10-K filed
by TLC The Laser Center Inc. (the "Company") with the Securities and
Exchange Commission. The unaudited interim consolidated financial
statements as of August 31, 1998 and August 31, 1997, and for the
quarterly period then ended, include all normal recurring
adjustments which management considers necessary for a fair
presentation. The results of operations for the interim periods are
not necessarily indicative of the results that may be expected for
the entire fiscal year. The interim consolidated financial
statements include the accounts and transactions of the Company and
its majority owned subsidiaries, partnerships and other entities in
which the company has more than a 50% ownership interest and
exercises control. The ownership interests of other parties in less
than wholly owned consolidated subsidiaries, partnerships and other
entities are presented as non-controlling interests. The August 31,
1997 three month consolidation includes certain reclassifications to
conform with classifications for the three month period ended August
31, 1998.
The net income (loss) per share was computed using the weighted
average number of common shares outstanding during each period.
Historically, the Company's consolidated financial statements have
been expressed in Canadian dollars. As a result of increased
business activity in the United States ("U.S.") resulting
principally from recent U.S. acquisitions, the opening of new
centers in the U.S. and the Company's growing U.S. shareholder base,
the U.S. dollar has become the unit of measure of the large majority
of the Company's operations. Accordingly, the U.S. dollar has been
adopted as the Company's reporting currency effective May 31, 1998.
2. On June 8, 1998 the Company made a portfolio investment of $8.0
million in cash through the purchase of 2,000,000 preference shares
in LaserSight Incorporated. These preference shares are convertible
to LaserSight Incorporated common shares at $4.00. This investment
was made to fund the start up and development of mobile open access
excimer lasers to individual doctors and networks throughout North
America. The companies will focus on providing the best technology
in a cost-effective manner to both urban and rural based ophthalmic
surgeons.
On June 16, 1998 the Company made a 51% equity investment of
$204,000 in cash in AllSight, Inc., a refractive laser center in the
Pittsburgh, PA area.
On June 16, 1998, the Company acquired the operating assets and
liabilities of Western Oklahoma Eye Center in exchange for $182,000
in cash and $835,000 in common shares. Simultaneous with the
acquisition, the Company entered into a long-term practice
management agreement with Dr. John Belardo, P.C.
On July 1, 1998 TLC NorthWest Eye, Inc., a wholly owned subsidiary
of the Company, acquired operating assets and liabilities from the
Figgs Eye Clinic in Yakema, Washington and Robert C. Bockoven, M.D.
with three locations in Washington in exchange for $737,500 in cash
and $737,500 in debt.
3. These consolidated financial statements are prepared in accordance
with accounting principles generally accepted ("GAAP") in Canada.
The most significant differences between Canadian and United States
GAAP, insofar as they affect the Company's consolidated financial
statements, are described below.
The following table reconciles results as reported under Canadian
GAAP with those that would have been reported under U.S. GAAP:
<TABLE>
<CAPTION>
Three months ended
August 31, 1998
<S> <C>
Net income for the period--Canadian GAAP $ 403
Deferred foreign exchange gains $ 249
Net income for the period--U.S. GAAP $ 652
Income per share--U.S. GAAP $ 0.02
</TABLE>
The gain or loss on translation of foreign currency
denominated long-term monetary items is deferred and amortized
over the remaining life of the item under Canadian GAAP. Under
U.S. GAAP, the gain or loss on translation is included in
income when it arises.
Shareholders' equity under U.S. GAAP would have been $122,070,000 at
August 31, 1998.
6
<PAGE>
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Quarter Ended August 31, 1998 Compared to Quarter Ended August 31, 1997
TLC THE LASER CENTER INC.
SUPPLEMENTARY SEGMENTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Three months ended August 31 Secondary 1998 1997
(U.S. dollars, in thousands) Refractive Care Other Total Total
================================================================================================ ========
<S> <C> <C> <C> <C> <C>
Net revenues $ 26,384 $ 2,321 $ 258 $ 28,963 $ 11,033
Doctor compensation 2,595 -- -- 2,595 1,618
- ------------------------------------------------------------------------------------------------ --------
Net revenue after doctor compensation 23,789 2,321 258 26,368 9,415
- ------------------------------------------------------------------------------------------------ --------
Operating Expenses 17,265 1,975 467 19,707 8,653
Interest and other 768 (62) 5 711 330
Depreciation and amortization 3,041 493 81 3,615 1,865
----------------------------------------------------- --------
Income (loss) from operations before
start up and development expenses $ 2,715 $ (85) $ (295) $ 2,335 $ (1,433)
----------------------------------------------------- --------
</TABLE>
7
<PAGE>
Total net revenues in the first quarter of the 1999 fiscal year increased from
$11.0 million the previous year to $29.0 million, an increase of 162%. More than
17,700 procedures were performed in the quarter as compared to 6,100 during the
first quarter of fiscal 1998. The increase in revenues is a result of improved
procedure volumes at all sites that have been open in the two periods, the
development of new centers and the acquisition of BeaconEye centers which
contributed 2,841 procedures in the quarter. Net Revenues from secondary care
centers increased $.8 million to $2.3 million from $1.5 million in the first
quarter of fiscal 1998. The recent acquisition of TLC Michigan accounted for the
majority of the increase.
Total operating expenses and doctor compensation increased to $22.3 million from
$10.3 million or 116%. This increase is a result of (i) increased fixed and
variable cost attributed to the addition of new refractive centers including the
acquisition of eleven BeaconEye centers, (ii) increases in the variable cost
component resulting from the higher number of procedures performed at centers
that have been open for more than a year. Operating expenses and doctor
compensation as a percentage of net revenues were 77% as compared to 94% in the
previous first quarter. This reduction reflects the impact of having reached
revenue levels which cover fixed costs at most centers.
Interest expense and other of $.7 million compares to $.3 million which is an
increase of 115% because of greater interest expense due to higher debt levels
incurred to finance equipment and debt included as part of the Beacon
acquisition. These higher costs were partially offset with interest income from
the higher level of cash and marketable securities held.
Depreciation and amortization increased to $3.6 million from $1.9 million in the
first quarter of the previous year. This increase is largely a result of new
centers and the additional depreciation and amortization charges associated with
the BeaconEye acquisition. Depreciation and amortization of BeaconEye assets
totalled $1.2 million in the quarter.
Start up and development costs decreased to $1.0 million compared to $1.1
million in 1998 and largely were incurred by Partner Provider Health for the
development of a managed care business specializing in eye care. All losses
incurred at new laser centers are expensed once construction is complete and
refractive procedures are being performed at the center.
Income tax expense increased to $.6 million in the first quarter as compared to
nil in the first quarter of 1998. This increase is a result of certain Canadian
centers profits being taxed in Canada, as prior period U.S. losses cannot be
applied to offset such Canadian taxable income.
The net income of $.4 million or one cent per share compared to a loss of $2.6
million or nine cents loss a share in the first quarter of fiscal 1998. This net
income was generated by operating profits of $2.7 million from the refractive
surgery business (compared to operating losses from refractive surgery of $1.3
million during the first quarter of fiscal 1998) which was reduced by losses in
secondary care, and other business including PPH.
This net income was the first to be generated by TLC since becoming a public
company in Canada in 1996.
Liquidity and Capital Resources
Cash from operating activities was $6.7 million for the quarter as compared to
the first quarter of fiscal 1998 use of cash of $2.7 million. This is primarily
a result of the company generating its first net income.
The company is continuing to develop or acquire new refractive centers and is
therefore increasing its investment in capital assets. In addition, the company
made a strategic investment in Lasersight Incorporated at a cost of $8 million.
Working capital decreased to $41.3 million from $54.1 million at May 31 1998.
Cash and marketable securities were $47.2 million as compared to $56.1 million
at May 31 1998 which reflects to a large extent the company's use of cash for
its investment in Lasersight.
The Company estimates that funds expected to be generated from operations and
available credit facilities, together with the net proceeds of the recent public
offering, will be sufficient to fund the Company's
8
<PAGE>
anticipated level of operations and its current acquisition and expansion plans
for the next twelve to eighteen months.
Year 2000 Compliance
The Company is currently completing a comprehensive study of the possible
affects of the Year 2000 issue on its systems and results of operations. This
study and a detailed plan of action, including projected costs and contingency
plans, are expected to be completed during the next fiscal quarter. To date, no
significant concerns have been identified as far as the Company's internal
operations. However, there can be no assurance that Year 2000-related issues
will not have a material effect on the financial condition or results of
operations of the Company.
The Company believes that it has prepared, or will prepare by mid-calendar year
1999, its computer systems and related applications to accommodate
date-sensitive information relating to the Year 2000. The Company's systems
constitute primarily desktop computers most of which are linked by a local area
network server at individual site locations. The Company has determined that its
software applications for all essential functions, such as accounting and
communications, are already Year 2000 compliant and that any hardware upgrades,
mostly replacing some older desktop computers, will not be material to the
financial condition or results of operations of the Company. Such costs will be
expensed as incurred. In addition, the Company is discussing with its vendors
the possibility of any interface difficulties or other difficulties which may
affect the Company. To date, no significant concerns have been identified. While
the Company has not identified any significant Year 2000 concerns in its
internal operations or vendor relationships, there can be no assurance that no
Year 2000-related operating problems or expenses will arise with the Company's
computer systems and software or in their interface with the computer systems
and software of the Company's vendors.
The Company's core business is operating refractive laser surgery centers that
are equipped with a computer-controlled excimer laser as the primary essential
piece of equipment. Approximately 85% of the excimer lasers owned by the Company
are manufactured by VISX Incorporated ("VISX"). Representatives from VISX have
informed the Company that it has tested its lasers for Year 2000 compliance and
that the lasers will function without any affect on safety or efficacy upon a
change of date to the Year 2000. However, without any upgrade, some VISX lasers
might print out patient reports with an incorrect date on them. VISX has
developed a software upgrade to correct this problem and has stated that it will
install the upgrade in the Company's VISX lasers by mid-1999 at no cost to the
Company. The Company's refractive centers are equipped with other
computer-controlled ophthalmic equipment, but none are essential to the laser
vision correction procedure. While the Company does not expect that the cost of
any replacements or upgrades required for ophthalmic equipment in its laser
centers in the Year 2000 will be material to the financial condition or results
of operations of the Company, there can be no assurance that no material
ophthalmic equipment upgrades will be required.
Refractive surgery is an elective procedure which is not covered by Medicare,
Medicaid or other governmental reimbursement programs (however, see discussion
of the Company's secondary care operations below). There are some private
insurance companies that provide partial or full coverage for the procedure,
which the Company estimates accounts for approximately 5% of its revenues for
the period from June 1, 1998 to August 31, 1998. In the event private insurance
companies that cover the laser vision procedure have difficulty processing and
paying claims because of Year 2000 issues, this could cause accounts receivable
for refractive procedures performed at the Company's refractive centers to
increase, or the patient volume in the refractive centers operated by the
Company to decrease, which could have a material adverse effect on the financial
condition or results of operations of the Company until such Year 2000 problems
are corrected.
For the period from June 1, 1998 to August 31, 1998 approximately 8% of the
Company's revenues are derived from the operation of its secondary care centers.
The Company has not completed its review of Year 2000 issues pertaining to
ophthalmic equipment located in its secondary care centers. Such review is
expected to be completed during the next quarter. Most secondary care procedures
are covered by governmental reimbursement programs, such as Medicare or
Medicaid, and by private insurance companies. In the event such third party
payors have difficulty processing and paying claims because of Year 2000 issues,
this could cause delays in such payments and an increase in accounts receivable
for procedures performed in secondary care centers operated by the Company,
which could have a material adverse effect on the financial condition or results
of operations of the Company until such Year 2000 problems are corrected.
9
<PAGE>
The Company's managed care subsidiary, Partner Provider Health Inc. ("PPH"), has
completed a review of its internal operating systems for Year 2000 compliance
and to date, no significant concerns have been identified as far as PPH's
internal operations. However, PPH will rely, directly and indirectly, almost
entirely on third party payors, including managed care companies, private
company health plans, and Medicare and Medicaid and other governmental health
reimbursement programs for its revenues in the future. PPH is in the process of
evaluating the Year 2000 compliance of its existing customers. Since PPH is
expanding its customer base and negotiating for new contracts with new customers
on a continual basis, it is not possible for PPH to fully assess the Year 2000
compliance of its future customers. In the event PPH's customers and other third
party payors have difficulty processing and paying claims because of Year 2000
issues, this could cause delays in such payments and an increase in accounts
receivable for PPH, which could have a material adverse effect on the financial
condition or results of operations of PPH and the Company until such Year 2000
problems are corrected. For the period from June 1, 1998 to August 31, 1998, PPH
represented a net loss of $1 million for the quarter.
Further, the Company cannot predict the impact that the Year 2000 issue will
have on its potential patients or the economy generally. If the Year 2000 issue
were to have a significant adverse impact on the economy or potential patients
perception of the economy, this could have a material adverse impact on the
number of procedures performed, particularly with respect to elective procedures
such as refractive surgery, and on the Company's financial results until the
economy and consumer confidence recovers.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Certain legal proceedings against the Company are described in Item 3 (Legal
Proceedings) of the Company's Form 10-K for the year ended May 31, 1998. In
addition, in July, 1998, Lasik Vision of Canada, Inc. filed a lawsuit against
the Company in the Supreme Court of British Columbia and certain of its officers
alleging libel and slander. In September, 1998, Lasik Vision of Canada, Inc.
also filed a lawsuit in the State of Washington alleging defamation, commercial
disparagement, unfair and deceptive trade practices, and tortious interference
with economic relations. Both of these lawsuits are in the early stages, and in
neither of these lawsuits has the plaintiff quantified an amount of damages. The
Company intends to vigorously defend these lawsuits. In addition, the Company
has filed a lawsuit in Federal Court of Canada against Lasik Vision of Canada,
Inc. and Dr. Hugo F. Sutton alleging trademark infringement and misleading
advertising. Although there can be no assurance, the Company does not expect
either of these suits to have a material adverse effect on its business,
financial condition or results of operations.
ITEM 2. CHANGES IN SECURITIES
Western Oklahoma Eye Center
On June 16, 1998, the Company acquired the operating assets and liabilities of
Western Oklahoma Eye Center from Western Oklahoma Eye Center, P.C. in exchange
for $182,000 in cash and 50,186 common shares valued at $835,000. The issuance
of the shares was exempt from registration under the Securities Act of 1933
pursuant to Section 4(2) as a transaction not involving a public offering. See
Note 2 to the Financial Statements above.
On July 7, 1998, the Company issued 11,736 common shares to a group of former
limited partners of its refractive laser center in Boca Raton, Florida, as a the
second tranche of a buyout that closed in September, 1997. The issuance of the
shares was exempt from registration under the Securities Act of 1933 pursuant to
Section 4(2) as a transaction not involving a public offering.
On August 12, 1998, the Company issued 10,919 common shares to a group of former
limited partners of a partnership that was formed to build a laser center in
North Carolina in exchange for certain contractual agreements of such former
limited partners. The issuance of the shares was exempt from registration under
the Securities Act of 1933 pursuant to Section 4(2) as a transaction not
involving a public offering.
On September 23, 1998, the Company acquired the interests of Vision Institute of
Canada in the Company's laser center in Toronto. Vision Institute of Canada, a
group of optometrists, previously owned a 10% interest in the Company's Toronto
laser center and were bought out in exchange for C$500,000 in cash and 22,873
common shares valued at C$500,000. The issuance of the shares was exempt from
registration pursuant to Canadian private placement rules.
10
<PAGE>
On September 24, 1998, the Company exercised a contractual option to purchase
116,771 common shares from Goldstein Family Trust for a purchase price of
$1,264,411 in cash.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
See Note 2 in the Financial Statements above for discussion of investments in
LaserSight Incorporated and Allsight, Inc., respectively.
ITEM 6. EXHIBITS
Exhibit 27 Financial Data Schedule
11
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
TLC THE LASER CENTER INC.
By: /s/ Elias Vamvakas
---------------------------------
Elias Vamvakas
Chief Executive Officer
October 15, 1998
By: /s/ Peter Kastelic
--------------------------------
Peter Kastelic
Chief Financial Officer
October 15, 1998
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the interim
consolidated financial statements of TLC The Laser Center Inc. for the three
month period ending August 31, 1998 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-START> JUN-01-1998
<PERIOD-END> AUG-31-1998
<CASH> 2,578,000
<SECURITIES> 44,624,000
<RECEIVABLES> 6,856,000
<ALLOWANCES> (350,000)
<INVENTORY> 0
<CURRENT-ASSETS> 59,513,000
<PP&E> 64,460,000
<DEPRECIATION> (19,156,000)
<TOTAL-ASSETS> 165,416,000
<CURRENT-LIABILITIES> 18,241,000
<BONDS> 0
0
0
<COMMON> 143,839,000
<OTHER-SE> (21,276,000)
<TOTAL-LIABILITY-AND-EQUITY> 165,416,000
<SALES> 0
<TOTAL-REVENUES> 28,963,000
<CGS> 0
<TOTAL-COSTS> (21,952,000)
<OTHER-EXPENSES> (4,610,000)
<LOSS-PROVISION> (350,000)
<INTEREST-EXPENSE> (711,000)
<INCOME-PRETAX> 1,340,000
<INCOME-TAX> (619,000)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (318,000)
<CHANGES> 0
<NET-INCOME> 403,000
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
