SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
Amendment No. 1
To
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED FEBRUARY 29, 2000
COMMISSION FILE NUMBER: 0-29302
TLC LASER EYE CENTERS INC.
--------------------------
(Exact name of registrant as specified in its charter)
Ontario, Canada 980151150
(State or jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5600 Explorer Drive, Suite 301 L4W 4Y2
Mississauga, Ontario (Zip Code)
(Address of principal executive 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 February 29, 2000, there were 36,867,636 of the registrant's Common
Shares outstanding.
1
<PAGE>
EXPLANATORY NOTE
TLC Laser Eye Centers Inc. hereby amends the cover page of its Quarterly Report
on Form 10-Q for the quarterly period ended February 29, 2000 as originally
filed on April 14, 2000. This amendment 10-Q/A is being filed to correct a
typographical error on the cover page.
2
<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, 1999. Unless the context indicates or requires otherwise, references in
this Form 10-Q to the "Company" or "TLC" shall mean TLC Laser Eye Centers Inc.
and its subsidiaries. The Company's fiscal year ends on May 31. Therefore,
references in this Form 10-Q to "fiscal 1999" shall mean the 12 months ended on
May 31, 1999 and "fiscal 2000" shall mean to 12 months ending on May 31, 2000.
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 February 29, 2000 and
May 31, 1999
Consolidated Statement of Income for the Three Months Ended
February 29, 2000 and February 28, 1999 and the Nine Months
Ended February 29, 2000 and February 28, 1999
Consolidated Statement of Cashflows the Nine Months Ended
February 29, 2000 and February 28, 1999
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. Change in Securities
Item 4. Submission of Matter to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
2
<PAGE>
PART I. FINANCIAL INFORMATION
TLC LASER EYE CENTERS INC.
CONSOLIDATED BALANCE SHEET
February 29 May 31
(U.S. dollars, in thousands) 2000 1999
================================================================================
ASSETS
Current assets
Cash and cash equivalents $ 95,790 $ 125,598
Marketable securities -- 26,212
Accounts receivable 16,964 15,359
Income taxes recoverable 3,550 --
Prepaids and sundry assets 11,776 6,602
- --------------------------------------------------------------------------------
Total current assets 128,080 173,771
Restricted cash 1,628 1,730
Investments and other assets 34,789 14,359
Intangibles 64,480 47,441
Capital assets 47,659 38,993
Assets under capital lease 11,013 10,556
- --------------------------------------------------------------------------------
Total assets $ 287,649 $ 286,850
================================================================================
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 21,487 $ 19,512
Current portion of long term debt 2,120 2,181
Current portion of obligations under capital lease 5,294 4,717
Income taxes payable -- 477
- --------------------------------------------------------------------------------
Total current liabilities 28,901 26,887
Long term debt 2,872 4,620
Obligations under capital lease 4,546 6,410
Deferred rent and compensation 859 959
- --------------------------------------------------------------------------------
Total liabilities 37,178 38,876
- --------------------------------------------------------------------------------
Non-controlling interest 12,008 8,151
- --------------------------------------------------------------------------------
Commitments
SHAREHOLDERS' EQUITY
Capital stock 267,758 269,454
Deficit (29,295) (29,631)
- --------------------------------------------------------------------------------
Total shareholders' equity 238,463 239,823
- --------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 287,649 $ 286,850
================================================================================
3
<PAGE>
TLC LASER EYE CENTERS INC.
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
3 months ended February 29th 9 months ended Februry 28th
-----------------------------------------------------------------
(U.S. dollars, in thousands except per share amounts) 2000 1999 2000 1999
=============================================================================================================================
<S> <C> <C> <C> <C>
Net revenues
Refractive $ 46,709 $ 37,564 $ 142,180 $ 90,784
Other 2,639 3,741 7,280 9,554
- -----------------------------------------------------------------------------------------------------------------------------
Net revenues 49,348 41,305 149,460 100,338
- -----------------------------------------------------------------------------------------------------------------------------
Expenses
Doctor Compensation
Refractive 4,326 3,636 12,725 8,876
Operating 43,250 28,636 114,723 70,421
Interest and other (1,305) 788 (3,848) 1,628
Depreciation and amortization 5,571 3,775 14,843 10,935
Start-up and development expenses -- 868 -- 3,000
- -----------------------------------------------------------------------------------------------------------------------------
51,842 37,703 138,443 94,860
- -----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES AND
NON-CONTROLLING INTEREST (2,494) 3,602 11,017 5,478
- -----------------------------------------------------------------------------------------------------------------------------
Income taxes
Current (1,674) -- 2,244 619
- -----------------------------------------------------------------------------------------------------------------------------
(1,674) -- 2,244 619
- -----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE NON-CONTROLLING
INTEREST (820) 3,602 8,773 4,859
Non-controlling interest (1,159) (10) (3,310) (205)
- -----------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) FOR THE PERIOD $ (1,979) $ 3,592 $ 5,463 $ 4,654
=============================================================================================================================
BASIC INCOME (LOSS) PER SHARE $ (0.05) $ 0.11 $ 0.15 $ 0.14
Weighted average number of
Common Shares Outstanding 36,864,614 34,014,142 37,243,352 33,886,448
Fully Diluted Income (Loss) per share $ (0.05) $ 0.10 $ 0.15 $ 0.13
</TABLE>
4
<PAGE>
TLC LASER EYE CENTERS INC.
CONSOLIDATED STATEMENT OF CASHFLOWS
NINE MONTHS ENDED FEBRUARY
<TABLE>
<CAPTION>
February 29 February 28,
(U.S. dollars, in thousands) 2000 1999
=============================================================================================================
<S> <C> <C>
Operating activities
Net income for the period $ 5,463 $ 4,654
Adjustments to reconcile net income to net cash provided by (used in) operating
activities:
Depreciation and amortization 14,843 10,935
Non-controlling interest 3,310 205
Other (477) (579)
Changes in non-cash operating items
Accounts receivable (1,600) (6,047)
Prepaids and sundry assets (5,174) (1,398)
Accounts payable and accrued liabilities 1,295 4,542
Income taxes payable (net) (3,395) (656)
Deferred rent and compensation (100) 39
- -------------------------------------------------------------------------------------------------------------
Cash provided by (used for) operating activities 14,165 11,695
- -------------------------------------------------------------------------------------------------------------
Financing activities
Restricted cash 102 373
Long term debt (1,523) (1,866)
Obligations under capital lease (3,794) (2,691)
Non-controlling interest (366) (57)
Capital stock issued (purchased for cancellation) (8,177) 406
- -------------------------------------------------------------------------------------------------------------
Cash provided by (used for) financing activities (13,758) (3,835)
- -------------------------------------------------------------------------------------------------------------
Investing activities
Capital assets (15,769) (10,762)
Assets under capital lease (772) (94)
Acquisitions and investments (39,883) (20,620)
Marketable securities 26,212 --
Other (3) 19
- -------------------------------------------------------------------------------------------------------------
Cash provided by (used for) investing activities (30,215) (31,457)
- -------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents (29,808) (23,597)
Cash and cash equivalents, beginning of period 125,598 55,198
- -------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 95,790 $ 31,601
=============================================================================================================
</TABLE>
5
<PAGE>
TLC LASER EYE CENTERS INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
February 29, 2000
(Unaudited)
1. The information contained 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, 1999 Annual Report on Form 10-K filed by TLC Laser Eye Centers Inc.
(formerly TLC The Laser Center Inc.) (the "Company") with the Commission. The
unaudited interim consolidated financial statements as of February 29, 2000 and
February 28, 1999, 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
February 28, 1999 three month consolidation includes certain reclassifications
to conform with classifications for the three month period ended February 29,
2000.
The net income (loss) per share was computed using the weighted average
number of common shares outstanding during each period.
2. On April 7, 1999, the Company entered into an agreement with a subsidiary of
Kaiser Permanente, providing for a strategic alliance, with the intention to
initially own and operate three refractive centers in California and to
eventually develop additional centers in markets in the United States where
Kaiser Permanente has a significant presence. The agreement also grants the
Kaiser Permanente subsidiary the opportunity to negotiate an ownership interest
in existing and future TLC refractive centers. On June 30, 1999 the Company made
a capital contribution of US$1,002,000 representing a 50.1% interest in TLC USA,
LLC, the operating company, for activities of this strategic alliance.
On July 8,1999, the Company acquired 50.1% of the operating assets and
liabilities of Laser Eye Care of California, LLC for cash consideration, certain
operating assets and liabilities of the Company's two California refractive
centers and additional amounts contingent upon achieving certain levels of
profits. The required levels of profit were achieved which allows a value to be
assigned to these contingent amounts.
On January 11, 2000, the Company formed a 83% owned subsidiary,
eyeVantage.com Inc., to pursue opportunities in e-commerce within the eye care
community. EyeVantage.com Inc. entered into agreements with two companies to
acquire the assets for $1,000,000 in cash and shares of the subsidiary at its
initial public offering (IPO) or contingent cash amounts if the IPO is
significantly delayed or cancelled.
During the nine months ended February 29, 2000, the Company made a number
of portfolio investments in the amount of $14,870,000 in various companies
related to the laser vision correction industry to support the development of
laser vision correction technology. Included in these investments was the
purchase of common shares valued at $10,000,000 of Lasersight Incorporated.
Lasersight Incorporated is a publicly traded United States manufacturer of
excimer lasers, microkeratomes and microkeratome blades with an approval for its
excimer laser pending from the United States Food and Drug Administration. The
Company's fully-diluted ownership interest in Lasersight Incorporated is 16.1%.
During the nine months ended February 29, 2000, the Company completed
transactions to purchase certain assets of the practices of eye care
professionals for cash plus amounts contingent upon certain events. No value
will be assigned to these contingent amounts until completion of the earn-out
period and the outcome of the contingency is known.
6
<PAGE>
3. Difference Between Canadian and United States Generally Accepted Accounting
Principles
These consolidated financial statements are prepared in accordance with
accounting principles generally accepted ("GAAP") in Canada. The most
significant differences between Canadian and U.S. 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 for the period ended
February 29, 2000:
<TABLE>
<CAPTION>
Three months ended Nine months ended
February 29, 2000 February 29, 2000
-----------------------------------------------
<S> <C> <C>
Net income (loss) for the period - Canadian GAAP ($1,979) $ 5,463
Deferred foreign exchange gains (losses)(1) 46 10
Income tax expense adjustment under the liability method (2) (1,140) (1,736)
-----------------------------------------------
Net income (loss)for the year -- U.S. GAAP ($3,073) $ 3,737
-----------------------------------------------
Income (loss) per share -- U.S. GAAP (3) ($ 0.08) $ 0.09
-----------------------------------------------
Net income (loss) based on US GAAP (3,073) 3,737
Unrealized gains (losses) on securities available for sale (1,469) (3,412)
-----------------------------------------------
Comprehensive income (loss) (4,542) 325
===============================================
</TABLE>
(1) 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.
(2) Under U.S GAAP, deferred taxes are recorded based on the difference between
the values assigned for accounting purposes and the tax values of individual
assets acquired in business combinations, except for nondeductible goodwill. The
only such significant differences with respect to the Company are the practice
management agreement assets acquired in prior periods. Under U.S. GAAP, this
deferred tax liability is matched by an equal increase in the value assigned to
the practice management agreement assets. In the statement of income, the
resulting increased annual asset amortization is offset by an equal deferred tax
recovery with no effect on the net income (loss). In addition, the recognition
of operating loss carry-forwards which existed at the acquisition date is
recorded as a reduction of goodwill related to the acquisition and an increase
in the tax provision under U.S. GAAP.
(3) SFAS No. 128, "Earnings Per Share", is effective for fiscal periods ending
after December 15, 1997.
As a result of the above differences, as at February 29, 2000 under U.S.
GAAP, long-term assets would increase by $2,493,000 , deferred income tax
liabilities would increase by $3,510,000 and total shareholders' equity would
increase by $1,017,000. In addition, other comprehensive income would increase
to $2,345,000.
Additional disclosures required related to the reconciliation of the
consolidated financial statements from Canadian to U.S. GAAP are as follows:
7
<PAGE>
Income Taxes
Deferred income taxes under U.S. GAAP consist of the following temporary
differences:
February 29, 2000
------------------
Tax benefit of loss carry forwards
Pre-acquisition $10,585
Post-acquisition 4,840
Start-up costs 955
Other 1,477
Valuation allowance (17,857)
------------------
$ --
------------------
Liabilities:
Practice management agreements 1,666
Capital assets 1,990
Other --
------------------
$ 3,656
==================
8
<PAGE>
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Quarter Ended February 29, 2000 Compared to Quarter Ended February 28, 1999
SUPPLEMENTARY SEGMENTED FINANCIAL INFORMATION
Three months ended February 29, 2000
(U.S. dollars, in thousands) Refractive Other Total
================================================================================
Net revenues $ 46,709 $ 2,639 $ 49,348
Doctor compensation 4,326 -- 4,326
- --------------------------------------------------------------------------------
Net revenue after doctor compensation 42,383 2,639 45,022
- --------------------------------------------------------------------------------
Operating Expenses 40,158 3,092 43,250
Interest and other (1,321) 16 (1,305)
Depreciation and amortization 5,128 443 5,571
Start-up and development expenses -- -- --
-------------------------------------
$ 43,965 $ 3,551 $ 47,516
-------------------------------------
Income (loss) from operations $ (1,582) $ (912) $ (2,494)
=====================================
Nine months ended February 29, 2000
(U.S. dollars, in thousands) Refractive Other Total
================================================================================
Net revenues $ 142,180 $ 7,280 $ 149,460
Doctor compensation 12,725 -- 12,725
- --------------------------------------------------------------------------------
Net revenue after doctor compensation 129,455 7,280 136,735
- --------------------------------------------------------------------------------
Operating Expenses 107,328 7,395 114,723
Interest and other (3,811) (37) (3,848)
Depreciation and amortization 13,543 1,300 14,843
Start-up and development expenses -- -- --
-------------------------------------
$ 117,060 $ 8,658 $ 125,718
-------------------------------------
Income (loss) from operations $ 12,395 $ (1,378) $ 11,017
=====================================
9
<PAGE>
Three months ended February 28, 1999
(U.S. dollars, in thousands) Refractive Other Total
================================================================================
Net revenues $37,564 $ 3,741 $ 41,305
Doctor compensation 3,635 1 3,636
- --------------------------------------------------------------------------------
Net revenue after doctor compensation 33,929 3,740 37,669
- --------------------------------------------------------------------------------
Operating Expenses 25,525 3,111 28,636
Interest and other 773 15 788
Depreciation and amortization 3,092 683 3,775
Start-up and development expenses -- 868 868
---------------------------------
$29,390 $ 4,677 $ 34,067
---------------------------------
Income (loss) from operations $ 4,539 $ (937) $ 3,602
=================================
Nine months ended February 28, 1999
(U.S. dollars, in thousands) Refractive Other Total
================================================================================
Net revenues $90,784 $ 9,554 $100,338
Doctor compensation 8,875 1 8,876
- --------------------------------------------------------------------------------
Net revenue after doctor compensation 81,909 9,553 91,462
- --------------------------------------------------------------------------------
Operating Expenses 62,305 8,116 70,421
Interest and other 1,685 (57) 1,628
Depreciation and amortization 9,014 1,921 10,935
Start-up and development expenses -- 3,000 3,000
---------------------------------
$73,004 $ 12,980 $ 85,984
---------------------------------
Income (loss) from operations $ 8,905 $ (3,427) $ 5,478
=================================
10
<PAGE>
Total net revenues in the third quarter of fiscal 2000 increased 19%, from
$41.3 million in the third quarter of fiscal 1999 to $49.3 million in the third
quarter of fiscal 2000. Total net revenues for the nine month period increased
49.1% from $100.3 million in fiscal 1999 to $149.5 million in fiscal 2000. Net
revenues from refractive centers made up 95% of the total net revenue during the
third quarter of fiscal 2000 as compared to 91% during the same period last
year. For the nine month period net revenues from refractive centers also made
up 95% of the total net revenues compared to 90% during the first nine months of
fiscal 1999. This trend continues to emphasize the significance of the Company's
core business and the impact of the divestiture of a significant portion of its
secondary care operations in the final quarter of fiscal 1999.
Net revenues from refractive centers for the third quarter of fiscal 2000
were $46.7 million, which is 24% higher than the $37.6 million total in the
previous year's third quarter. For the nine month period in fiscal 2000 net
revenues from refractive centers were $142.2 million which is 57% higher than
the $90.8 million total in the first nine months of fiscal 1999. More than
33,300 procedures were performed in the third quarter of fiscal 2000 an
increase of 30%, as compared to 25,612 procedures performed during the same
period last year. During the first nine months of fiscal 2000, procedures
increased to 98,000 this year, from 61,400 in the previous year, an increase of
60%. The increasing revenues reflect strong growth in the number of procedures
at existing sites due to the increasing acceptance of the procedure in the
marketplace, as well as the development of new centers and the acquisition of
centers. The Company maintains its vision to be a premium provider of laser
vision correction services in an industry which faces significant pricing
pressures. Despite the pricing pressures in the industry and strong success of
the Company's Corporate Advantage Program, the Company's net revenue after
doctor compensation, per procedure, for the third quarter of fiscal 2000
declined less than 5% from levels one year ago.
Net revenues from other activities decreased from $3.7 million in the
third quarter of fiscal 1999 to $2.6 million in the same period this year. Net
revenues decreased from $9.5 million in the first nine months of fiscal 1999 to
$7.3 million for the same period this year. Net revenues from this business
segment will continue to decline as a percentage of total revenues reflecting
the divestiture of certain secondary care practices in the fourth quarter of
fiscal 1999.
Operating expenses and doctor compensation increased to $47.6 million in
the third quarter of fiscal 2000, a 47.4% increase from $32.3 million in fiscal
1999. For the nine month period in fiscal 2000 operating expenses and doctor
compensation increased to $127.4 million, a 61% from $79.3 million in fiscal
1999. This increase is a result of: (i) increased variable expenses associated
with the increase in the number of laser vision correction procedures performed
at existing refractive centers, (ii) increased fixed and variable costs from the
addition of new refractive centers, and (iii) higher corporate costs which are
necessary to support the higher level of business activity. Operating expenses
and doctor compensation as a percentage of net revenues were 96.4% of net
revenues in the third quarter of fiscal 2000 (85.3% in the nine month period) as
compared to 78.1% of net revenues during the same period in fiscal 1999 (79% in
the nine month period). This increase reflects the impact of marketing programs
aimed at raising consumer awareness of the Company and developing corporate
programs which have not been fully offset by the higher average number of
procedures being performed at TLC centers, as well as increased infrastructure
costs (ie. people, information systems and marketing) to maintain the continued
growth of the company.
Interest (revenue)/expense and other expenses reflect interest revenue
from a strong cash position resulting from ongoing positive cashflow from
operations and the result of a public offering in the fourth quarter of fiscal
1999. Interest expense on long term debt and capital leases on equipment have
decreased from that of prior quarters and reflect improved financing terms.
The increase in depreciation and amortization expense is largely a result
of new centers and the additional depreciation and amortization associated with
the Company's acquisitions during fiscal 1999 and 2000. Goodwill is amortized on
a straight-line basis over the term of the agreement to a maximum of fifteen
years.
Start up and development expenses in the nine months of fiscal 1999 were
incurred by Partner Provider Health for the development of a managed care
business specializing in eye care. The Company sold PPH in May of 1999. The
Company did not incur these expenses in fiscal 2000 and does not expect to incur
these expenses in the future.
11
<PAGE>
Income tax expense increased from $0.6 million for the first nine months
of fiscal 1999 to $2.2 million for the same period in 2000. This increase is a
result of the Company having utilized most of its tax losses from prior periods.
The Company expects to incur tax liabilities for its earnings in fiscal 2000.
The loss for the third quarter of fiscal 2000 was $2.0 million or $0.05
per share, compared to net income of $3.6 million or $0.11 cents a share for the
same quarter last year. This loss reflects the company's continued investment in
staff, information systems and marketing which was not fully offset by increased
procedure volumes. The reduction of losses in secondary care operations and the
disposal of the managed health care business was offset by losses in the eye
care e-commerce subsidiary. For the nine months ended February 29, 2000 net
income increased $0.8 million, or 17% from $4.7 million or $0.14 per share in
fiscal 1999 to $5.5 million or $0.15 per share.
Liquidity and Capital Resources
Cash from operating activities was $14.2 million for the first nine months
of fiscal 2000 as compared to $11.7 million for the first nine months of fiscal
1999. This is primarily a result of the Company's increase in net income for the
first nine months.
Working capital decreased from $146.9 million at May 31, 1999 to $99.2
million at February 29, 2000. Cash, cash equivalents and marketable securities
were $95.8 million at February 29, 2000 as compared to $151.8 million at May 31,
1999. The Company continues to develop or acquire new refractive centers which
has resulted in the increase of $16.5 million in its investment in capital
assets. In addition, the Company made strategic investments of $19.1 million in
the California market, repurchased outstanding shares with $10.2 million and
invested $20.8 million in laser technology, e-commerce and in partnering with
successful U.S. surgeons, .
The Company estimates that the net proceeds of its public offering in the
fourth quarter in fiscal 1999, together with existing cash balances, funds
expected to be generated from operations and available credit facilities, will
be sufficient to fund the Company's anticipated level of operations and its
current acquisition and expansion plans for the next 18 months.
The Company continues to invest in assets to develop and expand its
refractive procedure capacity in anticipation of continued growth, through the
development of new centers and acquisition of refractive practices. TLC has more
than 15 centers under various stages of development. In addition, the Company is
actively pursuing other strategic acquisition opportunities that will enhance
its position as North America's leading provider of laser vision correction.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES
Effective January 1, 2000, the Company granted warrants to purchase
100,000 of the Company's shares, at an exercise price of $13.18 per share,
representing the average market price for the common shares during the twenty
trading days prior to the effective date of the grant of the warrants. The
warrants were granted to a company that provides health care benefits for laser
vision correction in consideration of establishing a relationship with the
Company. The warrants are non-transferable, have a five year term and vest over
a period of three years. This transaction was exempt from registration under the
Securities Act pursuant to section 4(2) as a transaction not involving a public
offering.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
Not applicable.
12
<PAGE>
ITEM 5. OTHER INFORMATION
On November 4, 1999 the Company announced that it intended to purchase
up to 1.87 million of its common shares, representing approximately 5% of the
37,453,188 common shares outstanding at that time. The purchases are to take
place from time to time, depending on market conditions, through the facilities
of the Nasdaq National Market and The Toronto Stock Exchange. The Company
commenced purchasing shares on November 8, 1999 and will terminate its
purchasing by November 4, 2000, or by such earlier date as the Company may
determine. The prices which the Company will pay for any common shares will be
the market price of the shares at the time of acquisition. Any common shares
acquired by the Company will be cancelled.
ITEM 6. EXHIBITS AND REPORTS ON 8-K
a. Exhibit 27
Financial Data Schedules
b. Reports on 8-K
None.
13
<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 LASER EYE CENTERS INC.
By: /s/ Elias Vamvakas
-------------------------------
Elias Vamvakas
Chief Executive Officer
April 20, 2000
By: /s/ Peter Kastelic
-------------------------------
Peter Kastelic
Chief Financial Officer
April 20, 2000
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-2000
<PERIOD-START> JUN-01-1999
<PERIOD-END> FEB-29-2000
<CASH> 95,790,000
<SECURITIES> 0
<RECEIVABLES> 16,964,000
<ALLOWANCES> 4,243,000
<INVENTORY> 0
<CURRENT-ASSETS> 128,080,000
<PP&E> 96,564,000
<DEPRECIATION> (37,892,000)
<TOTAL-ASSETS> 287,649,000
<CURRENT-LIABILITIES> 28,901,000
<BONDS> 0
0
0
<COMMON> 267,758,000
<OTHER-SE> (29,295,000)
<TOTAL-LIABILITY-AND-EQUITY> 287,649,000
<SALES> 0
<TOTAL-REVENUES> 149,460,000
<CGS> 0
<TOTAL-COSTS> (127,448,000)
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