<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X-QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(b) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
OCTOBER 31, 1997
Commission file number 1-10629
LASER VISION CENTERS, INC.
(Exact name of registrant as specified in its charter)
Delaware 43-1530063
-------- ----------
(State or other jurisdiction of incorporation (I.R.S. Employer identification
or organization) number)
540 Maryville Centre Dr., Suite 200, St. Louis, Missouri 63141
---------------------------------------------------------------
(Address of principal executive offices)
(314)434-6900
-------------
(Registrant's telephone number, including area code)
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 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. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock outstanding as of November 28, 1997 - 9,283,070 shares.
<PAGE> 2
LASER VISION CENTERS, INC.
FORM 10-Q FOR QUARTERLY PERIOD ENDED OCTOBER 31, 1997
INDEX
<TABLE>
<CAPTION>
PART OR ITEM PAGE
<S> <C>
Part I. FINANCIAL STATEMENTS
Item 1. Interim Consolidated Financial Statements
Consolidated Balance Sheet - October 31, 1997 and April 30, 1997 .............3-4
Consolidated Statement of Operations - Three months and six months
ended October 31, 1997 ..........................................................5
Consolidated Statement of Cash Flow - Six months
ended October 31, 1997 and 1996 ..............................................6-7
Consolidated Statement of Changes in Stockholders' Equity - Six months
ended October 31, 1997 ..........................................................8
Notes to Interim Consolidated Financial Statements ...........................9-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Liquidity and Capital Resources .............................................10-11
Results of Operations .......................................................11-14
Part II. OTHER INFORMATION
Item 1. Legal Proceedings ..............................................................15
Item 2. Changes in Securities ..........................................................15
Item 3. Defaults upon Senior Securities ................................................15
Item 4. Submission of Matters to a
Vote of Security Holders .......................................................15
Item 5. Other Information ..............................................................15
Item 6. Reports on Form 8-K ............................................................15
</TABLE>
<PAGE> 3
LASER VISION CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
- -------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
October 31, April 30,
1997 1997
<S> <C> <C>
CURRENT ASSETS
- --------------
Cash and cash equivalents $ 7,675,000 $ 3,794,000
Restricted cash 411,000 461,000
Receivables, net of allowances of
$469,000 and $360,000, respectively 3,047,000 1,719,000
Prepaid expenses and
other current assets 1,682,000 915,000
----------- -----------
Total Current Assets 12,815,000 6,889,000
EQUIPMENT
- ---------
Laser equipment 13,926,000 12,617,000
Medical Equipment 762,000 750,000
Mobile equipment 2,691,000 1,599,000
Furniture and fixtures 1,381,000 1,316,000
-Accumulated depreciation (5,896,000) (3,799,000)
----------- -----------
Total Equipment, Net 12,864,000 12,483,000
OTHER ASSETS
- ------------
Restricted cash 1,136,000 1,239,000
Goodwill, net 757,000 836,000
Tradename and service mark costs, net 126,000 136,000
Deferred contract rights 1,655,000 1,238,000
Rent deposits and other, net 61,000 49,000
----------- -----------
Total Other Assets 3,735,000 3,498,000
----------- -----------
Total Assets $29,414,000 $22,870,000
=========== ===========
</TABLE>
See notes to interim consolidated financial statements
3
<PAGE> 4
LASER VISION CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
- -------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
October 31, April 30,
1997 1997
<S> <C> <C>
CURRENT LIABILITIES
- -------------------
Current portion of notes payable $ 1,501,000 $ 1,003,000
Current portion of capitalized
lease obligations 783,000 690,000
Accounts payable 3,110,000 2,078,000
Accrued compensation 532,000 616,000
Other accrued liabilities 979,000 848,000
----------- -----------
Total Current Liabilities 6,905,000 5,235,000
NON-CURRENT LIABILITIES
- -----------------------
Notes payable 5,423,000 4,544,000
Capitalized lease obligations 1,157,000 1,589,000
Deferred revenue 91,000 134,000
----------- -----------
Total Non-Current Liabilities 6,671,000 6,267,000
COMMITMENTS AND CONTINGENCIES
COMMON STOCK AND STOCK OPTIONS ISSUED
FOR CONTRACT RIGHTS 1,618,000 1,092,000
STOCKHOLDERS' EQUITY
- --------------------
Preferred stock - 6,000 shares
issued at $1,000 par value, Series B,
4,500 shares outstanding 3,835,000
Common stock, par value of $.01 per
share, 50,000,000 shares authorized;
9,282,070 and 8,817,057 shares issued
and outstanding, respectively 93,000 88,000
Warrants and options 435,000 36,000
Paid-in capital 41,078,000 38,663,000
Accumulated deficit (31,221,000) (28,511,000)
----------- -----------
Total Stockholders' Equity 14,220,000 10,276,000
----------- -----------
Total Liabilities and Stockholders' Equity $29,414,000 $22,870,000
=========== ===========
</TABLE>
See notes to interim consolidated financial statements
4
<PAGE> 5
LASER VISION CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
- ------------------------------------------------
<TABLE>
<CAPTION>
Three Month Period Six Month Period
Ended October 31, Ended October 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
REVENUES $ 5,224,000 $ 1,928,000 $ 9,321,000 $ 3,430,000
Cost of revenues, depreciation
and amortization 1,077,000 944,000 2,122,000 1,559,000
Cost of revenues, other 2,871,000 886,000 5,142,000 1,663,000
----------- ----------- ----------- -----------
GROSS PROFIT 1,276,000 98,000 2,057,000 208,000
----------- ----------- ----------- -----------
Operating Expenses:
General and administrative 745,000 785,000 1,533,000 1,892,000
Salaries and related expenses 1,067,000 815,000 1,941,000 1,622,000
Depreciation and amortization 134,000 109,000 250,000 208,000
Selling and marketing expenses 363,000 520,000 716,000 991,000
----------- ----------- ----------- -----------
2,309,000 2,229,000 4,440,000 4,713,000
----------- ----------- ----------- -----------
LOSS FROM OPERATIONS (1,033,000) (2,131,000) (2,383,000) (4,505,000)
Other income (expenses)
Interest and other income 89,000 57,000 144,000 163,000
Interest expense (229,000) (117,000) (471,000) (189,000)
Minority interest in net loss
of subsidiary 55,000 103,000
----------- ----------- ----------- -----------
NET LOSS ($1,173,000) ($2,136,000) ($2,710,000) ($4,428,000)
=========== =========== =========== ===========
NET LOSS PER SHARE ($0.14) ($0.25) ($0.31) ($0.57)
=========== =========== =========== ===========
Weighted average number of
common shares outstanding 9,044,000 8,537,000 8,933,000 8,035,000
=========== =========== =========== ===========
</TABLE>
See notes to interim consolidated financial statements
5
<PAGE> 6
<TABLE>
<CAPTION>
LASER VISION CENTERS, INC. AND SUBSIDIARIES Six Month Period
CONSOLIDATED STATEMENT OF CASH FLOW (UNAUDITED) Ended October 31,
- -----------------------------------------------
1997 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
- ------------------------------------
Net loss ($2,710,000) ($4,428,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 2,372,000 1,767,000
Compensation paid in common stock,
options or warrants 66,000
Provision for uncollectible accounts 109,000 108,000
Receivables increase (1,437,000) (371,000)
Prepaid expenses and other current asset increase (767,000) (163,000)
Minority interests decrease (103,000)
Accounts payable and accrued
liabilities increase 1,080,000 198,000
Deferred revenue decrease (43,000) (49,000)
----------- -----------
Net cash used in operating activities (1,330,000) (3,041,000)
CASH FLOWS FROM INVESTING ACTIVITIES
- ------------------------------------
Acquisition of equipment (2,553,000) (3,844,000)
Acquisition of goodwill (206,000)
Other, net (14,000) 22,000
----------- -----------
Net cash used in investing activities (2,567,000) (4,028,000)
CASH FLOWS FROM FINANCING ACTIVITIES
- ------------------------------------
Proceeds from private offering, preferred 6,000,000
Private placement offering costs, preferred (513,000)
Return of restricted cash 153,000
Proceeds from exercise of stock options 284,000 60,000
Proceeds from exercise of Class C and
Class E warrants 111,000
Proceeds from exercise of other warrants 706,000
Principal payments under capitalized
lease obligations and notes payable (826,000) (2,109,000)
Proceeds from loan financings 1,863,000 2,573,000
----------- -----------
Net cash provided by financing activities 7,778,000 524,000
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 3,881,000 (6,545,000)
Cash and cash equivalents at beginning of period 3,794,000 12,672,000
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 7,675,000 $ 6,127,000
=========== ===========
</TABLE>
6
<PAGE> 7
<TABLE>
<CAPTION>
LASER VISION CENTERS, INC. AND SUBSIDIARIES Six Month Period
CONSOLIDATED STATEMENT OF CASH FLOW Ended October 31,
- ------------------------------------------- 1997 1996
<S> <C> <C>
Non-cash investing and financing:
- ---------------------------------
Conversion of preferred stock to common stock,
accrual of preferred dividends, and value
assigned to warrants $1,652,000 $14,539,000
Adjustment of value of common stock and
stock options issued for contract rights 526,000
Equipment deposits and assets held for sale
exchanged for equipment 2,693,000
Restricted cash acquired through financing 1,650,000
Capital lease obligations related to laser purchases 617,000
Increase in other liabilities for laser purchase 300,000
Common stock issued to acquire goodwill and
reduce liabilities 200,000
</TABLE>
See notes to interim consolidated financial statements
7
<PAGE> 8
LASER VISION CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCK
$.01 PAR VALUE
PAID-IN WARRANTS AND ACCUMULATED TOTAL SHAREHOLDERS'
PREFERRED STOCK SHARES AMOUNT CAPITAL OPTIONS DEFICIT EQUITY
<S> <C> <C> <C> <C> <C> <C> <C>
Balance - April 30, 1997 $ - 8,817,057 $88,000 $38,663,000 $ 36,000 ($28,511,000) $10,276,000
Issuance of Preferred Stock 5,125,000 362,000 5,487,000
Exercise of incentive options 61,800 1,000 283,000 284,000
Exercise of non-qualified
warrants 140,700 2,000 704,000 706,000
Exercise of Class E and
Class C warrants 24,208 111,000 111,000
Dividends accrued on
convertible preferred stock 99,000 (99,000) -
Conversion of preferred stock (1,389,000) 234,464 2,000 1,387,000 -
Warrants and Options 37,000 37,000
Shares issued to 401(k) plan
for employees 3,841 29,000 29,000
Net loss for the six month
period ending October 31,
1997 (2,710,000) (2,710,000)
----------- ----------- ------- ----------- -------- ------------ -----------
Balance - October 31, 1997 $ 3,835,000 $ 9,282,070 $93,000 $ 41,078,00 $435,000 ($31,221,000) $14,220,000
=========== =========== ======= =========== ======== ============ ===========
</TABLE>
See notes to interim consolidated financial statements
8
<PAGE> 9
LASER VISION CENTERS, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 1997
(Unaudited)
Item 1.
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
consolidated financial statements and related notes thereto contained in the
April 30, 1997 Annual Report on Form 10-K filed by Laser Vision Centers, Inc.
(the "Company") with the Securities and Exchange Commission. The unaudited
interim consolidated financial statements as of October 31, 1997 and October
31, 1996, and for the quarterly and six month periods 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 which may be expected for the entire
fiscal year. The interim consolidated financial statements include the
accounts and transactions of the Company and its subsidiaries. All significant
intercompany transactions and accounts have been eliminated. The October 31,
1997 six month consolidated statements of operations include certain
reclassifications to conform with classifications for the three month period
ended October 31, 1997.
The net loss per share was computed using the weighted average number of common
shares outstanding during each period. Common stock equivalents were excluded
due to their anti-dilutive effect. The loss per common share for the six
months ended October 31, 1997 and for the quarter ended October 31, 1997,
reflects $99,000 and $66,000, respectively, of accrued dividends on the Series
B Convertible Preferred Stock. The loss per common share for the six months
ended October 31, 1996 and for the quarter ended October 31, 1996 reflects
$126,000 and $21,000, respectively, of accrued dividends on Convertible
Preferred Stock with Mandatory Redemption in 2005.
2. In June 1997, the Company completed a $6 million private placement, before
expenses, of 6,000 shares of Series B Convertible Preferred Stock with $1,000
stated value per share, and 100,000 vested warrants with an exercise price of
$9.39 per warrant, 130% of the average market price. An additional 100,000
warrants may be issued in June 1998 at 130% of the then current market price if
at least $2 million of Series B Preferred remains outstanding. The Series B
shares accrue a 5% non-cash dividend equivalent in preferred stock per year,
convert (within a range) to common stock at a discount to the market price of
the common stock and must be converted to common stock within five years. In
August 1997, the common shares underlying this convertible preferred stock and
warrants were registered with the Securities and Exchange Commission pursuant
to registration rights under the Series B stock purchase agreement. The $5.5
million net proceeds after fees is being used for working capital, the
acquisition of equipment and general corporate purposes. The market value of
the warrants associated
9
<PAGE> 10
with this transaction have been recorded as Warrants and Options in the equity
section of the balance sheet. In September 1997, 1,500 shares of Series B
Convertible Preferred Stock and the related accrued dividends were converted to
234,464 shares of common stock.
3. In September, 1997 the Company borrowed $1,050,000 at 11.3% with a term of
four years to finance the acquisition of lasers and mobile equipment. The debt
is collateralized by the same equipment.
4. In October, 1997 the Company borrowed $813,000 from the lender which
provided financing in March 1997. Under the March 1997 debt agreement, the
lender had the right to increase the percentage funded by the loan under
similar financial terms. This debt bears interest at 13.6% with a term of four
years.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 2.
(A) LIQUIDITY AND CAPITAL RESOURCES
Since the completion of its initial public offering in April 1991, the
Company's primary sources of liquidity have consisted of financing from the
sale of Common Stock and Convertible Preferred Stock, revenues from marketing
and laser access services provided to ophthalmologists, loans and leases. At
October 31, 1997, the Company had $7,675,000 of cash and cash equivalents
compared with $3,794,000 at April 30, 1997. At October 31, 1997, the Company
had working capital of $5,910,000 compared with working capital of $1,654,000
at April 30, 1997. The ratio of current assets to current liabilities at
October 31, 1997 was 1.86 to one, compared to 1.32 to one at April 30, 1997.
Cash Flows from Operating Activities
Net cash used for operating activities was $1,330,000 for the six months ended
October 31, 1997 compared to $3,041,000 for the six months ended October 31,
1996. The cash flows used for operating activities during the six months ended
October 31, 1997 and 1996 primarily represent the net loss incurred in this
period less depreciation and amortization plus increases in accounts receivable
and prepaid expenses and other current assets partially offset by net increases
in current liabilities. During the quarter ended October 31, 1997,
depreciation and amortization represented 103% of the net loss for the quarter.
Cash Flows from Investing Activities
Net cash used for investing activities was $2,567,000 and $4,028,000 during the
six months ended October 31, 1997 and 1996, respectively. Cash used for
investing during the six months ended October 31, 1997 and 1996 was used to
acquire equipment for the expanding U.S. market.
10
<PAGE> 11
Cash Flows from Financing Activities
Net cash provided by financing activities was $7,778,000 and $524,000 during
the six months ended October 31, 1997 and 1996, respectively. Cash provided by
financing during the six months ended October 31, 1997 was primarily provided
by a private placement of preferred stock, proceeds from exercise of stock
options and warrants, and proceeds from loan financing, partially offset by
principal payments under capitalized lease obligations and notes payable. Loan
proceeds, offset by lease payments, was the primary source of cash provided by
financing during the six months ended October 31, 1996.
The Company expects to continue to fund future operations and mobile
development costs from existing cash and cash equivalents, revenues received
from providing laser access and market services, the exercise of stock options
and warrants and future financing as required. There can be no assurance that
capital will be available when needed or, if available, that the terms for
obtaining such funds will be favorable to the Company.
(B) RESULTS OF OPERATIONS
QUARTER ENDED OCTOBER 31, 1997 COMPARED TO QUARTER ENDED OCTOBER 31, 1996
The Company has continued to provide excimer laser access to additional sites
throughout the U.S.
Revenues
Total revenues of $5,224,000 for the quarter ended October 31, 1997 increased
by $3,296,000 from $1,928,000 for the quarter ended October 31, 1996, or an
increase of 171%.
Revenues for the LaserVision Centers division increased to $5,106,000 for the
quarter ended October 31, 1997 from $1,617,000 for the quarter ended October
31, 1996. The increase is attributable to higher revenues from U.S. operations
of $3.6 million partially offset by a decrease in Canadian and European
revenues totaling $108,000. The increase in U.S. revenues for the LaserVision
Centers division is attributable to the increased number of lasers in operation
in an increased number of markets. During the quarter ended October 31, 1997
the Company served over 75 U.S. markets.
Revenues for the MarketVision division declined from $310,000 to $118,000 due
to the shift of attention to providing marketing services for the Company's
laser centers for which the Company does not record revenue.
Cost of Revenues/Gross Profit
Cost of revenues increased to $3,948,000 for the quarter ended October 31, 1997
from $1,830,000 for the quarter ended October 31, 1996. Depreciation in cost
of revenue increased to $1,077,000 from
11
<PAGE> 12
$944,000 in these respective periods due to the increased number of lasers and
mobile equipment in the U.S. partially offset by decreases in depreciation on
lasers which were written down to estimated fair market value during the fourth
quarter of fiscal 1997.
Other costs of revenues increased to $2,871,000 for the quarter ended October
31, 1997 from $886,000 for the quarter ended October 31, 1996 due to increased
costs, including Pillar Point royalties of $1,266,000, professional medical
services of $249,000 and mobile laser operator salaries, travel and set-up
related costs of $605,000. These increases were partially offset by decreases
in costs of revenue for MarketVision of $97,000. The net increase, when
combined with the revenue increase, resulted in these other costs of revenues
increasing from 46% of total revenues for the quarter ended October 31, 1996 to
55% of total revenues for the quarter ended October 31, 1997. The increase in
these other costs of revenues as a percentage of revenues is attributable to
the change in the revenue mix to greater U.S. revenues which have greater costs
of revenue, particularly Pillar Point royalties.
Total gross profit improved from $98,000 for the quarter ended October 31, 1996
to a profit of $1,276,000 for the quarter ended October 31, 1997. The
variable gross profit, excluding depreciation, increased to $2,353,000 from
$1,042,000, primarily due to increased procedures in the U.S.
Operating Expenses
General and administrative expenses decreased from $785,000 to $745,000 for the
quarters ended October 31, 1996 and 1997, respectively. The decrease is
primarily attributable to a decrease of $130,000 in legal fees associated with
tradename issues offset by increases in rent, telephone and other office
expenses of $82,000.
Salaries and related expenses increased from $815,000 to $1,067,000 for the
quarters ended October 31, 1996 and 1997, respectively. The increase was due
to an increased number of employees to support operations, salary adjustments
and the related payroll taxes and fringe benefits.
Depreciation and amortization increased from $109,000 to $134,000 for the
quarter ended October 31, 1996 and 1997, respectively. The increase was
primarily due to amortization of goodwill associated with the Harley Street
purchase and increased depreciation for the corporate office.
Selling and marketing expenses decreased from $520,000 to $363,000 for the
quarters ended October 31, 1996 and 1997, respectively. The decrease was
primarily due to decreased media advertising of $92,000 and a decrease of
$39,000 in travel costs.
Other Income (Expenses)
Higher interest expense caused the decline to a net $140,000 in other expenses
during the quarter ended October 31, 1997 from a net $5,000 in other expenses
during the quarter ended October 31, 1996.
12
<PAGE> 13
SIX MONTHS ENDED OCTOBER 31, 1997 COMPARED TO SIX MONTHS ENDED OCTOBER 31, 1996
Revenues
Total revenues of $9,321,000 for the six months ended October 31, 1997
increased by $5,891,000 from $3,430,000 for the six months ended October 31,
1996, or an increase of 172%.
Revenues for the LaserVision Centers division increased to $8,997,000 for the
six months ended October 31, 1997 from $2,759,000 for the six months ended
October 31, 1996. The increase is attributable to higher revenues from
European operations of $39,000 and from U.S. operations of $6.2 million
partially offset by a decrease in Canadian revenues of $46,000. The increase
in U.S. revenues for the LaserVision Centers division is attributable to the
increased number of lasers in operation in an increased number of markets.
Revenues for the MarketVision division declined from $671,000 to $324,000 due
to the shift of attention to providing marketing services for the Company's
laser centers for which the Company does not record revenue.
Cost of Revenues/Gross Profit
Cost of revenues increased to $7,264,000 for the six months ended October 31,
1997 from $3,222,000 for the six months ended October 31, 1996. Depreciation
in cost of revenue increased to $2,122,000 from $1,559,000 in these respective
periods due to the increased lasers and mobile equipment in the U.S. partially
offset by decreases in depreciation on lasers which were written down to
estimated fair market value during the fourth quarter of fiscal 1997.
Other costs of revenues increased to $5,142,000 for the six months ended
October 31, 1997 from $1,663,000 for the six months ended October 31, 1996 due
to increased costs, including Pillar Point royalties of $2,159,000,
professional medical services of $515,000 and mobile laser operator salaries,
travel and set-up related costs of $1,054,000. These increases were partially
offset by decreases in costs of revenue for Market Vision of $178,000. The net
increase, when combined with the revenue increase, resulted in these other
costs of revenues increasing from 48% of total revenues for the six months
ended October 31, 1996 to 55% of total revenues for the six months ended
October 31, 1997. The increase in these other costs of revenues as a
percentage of revenues is attributable to the change in the revenue mix to
greater U.S. revenues which have greater costs of revenue, particularly Pillar
Point royalties.
Total gross profit improved from $208,000 for the six months ended October 31,
1996 to $2,057,000 for the six months ended October 31, 1997. The
variable gross profit, excluding depreciation, increased to $4,179,000 from
$1,767,000, primarily due to increased laser procedures in the U.S.
13
<PAGE> 14
Operating Expenses
General and administrative expenses decreased from $1,892,000 to $1,533,000 for
the six month periods ended October 31, 1996 and 1997, respectively. The
decrease is primarily attributable to a one-time write-off of $260,000 of stock
offering costs in the quarter ended July 31, 1996, a decrease of $200,000 in
legal fees associated with tradename issues, offset by increases in rent,
telephone and other office expenses of $100,000.
Salaries and related expenses increased from $1,622,000 to $1,941,000 for the
six month periods ended October 31, 1996 and 1997, respectively. The increase
was due to an increased number of employees to support operations, salary
adjustments and the related payroll taxes and fringe benefits.
Depreciation and amortization increased from $208,000 to $250,000 for the six
month periods ended October 31, 1996 and 1997, respectively. The increase was
primarily due to an increase in amortization of goodwill associated with
acquisitions of Harley Street and increased depreciation for the home office.
Selling and marketing expenses decreased from $991,000 to $716,000 for the six
month periods ended October 31, 1996 and 1997, respectively. The decrease was
primarily due to decreased marketing programs of $132,000 and decreased travel
costs of $124,000.
Other Income (Expenses)
Higher interest expense caused the decline to a net $327,000 other expenses
during the six months ended October 31, 1997, from a net $77,000 in other
income during the six months ended October 31, 1996.
14
<PAGE> 15
PART II-OTHER INFORMATION
Item 1. Legal Proceedings
There has been no material change in the status of any litigation from
that reported in the Form 10-K for the year ended April 30, 1997, nor has any
other material litigation been initiated.
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. Reports on Form 8-K during the period covered by this report:
None.
Exhibits - None
15
<PAGE> 16
Signature
Pursuant to the requirement 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.
LASER VISION CENTERS, INC.
\s\John J. Klobnak December 4 , 1997
- ------------------------- -----------------
John J. Klobnak Date
Chairman of the Board and Chief Executive Officer
\s\B. Charles Bono, III December 4, 1997
- ------------------------- ----------------
B. Charles Bono Date Date
Chief Financial Officer
16
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-START> MAY-01-1997
<PERIOD-END> OCT-31-1997
<CASH> 7,675,000
<SECURITIES> 0
<RECEIVABLES> 3,516,000
<ALLOWANCES> 469,000
<INVENTORY> 0
<CURRENT-ASSETS> 12,815,000
<PP&E> 18,760,000
<DEPRECIATION> 5,896,000
<TOTAL-ASSETS> 29,414,000
<CURRENT-LIABILITIES> 6,905,000
<BONDS> 5,423,000
0
3,835,000
<COMMON> 93,000
<OTHER-SE> 10,292,000
<TOTAL-LIABILITY-AND-EQUITY> 29,414,000
<SALES> 9,321,000
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<INCOME-PRETAX> (2,710,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,710,000)
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<CHANGES> 0
<NET-INCOME> (2,710,000)
<EPS-PRIMARY> (0.31)
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</TABLE>
