Merchant Processing Services

With refractive surgery procedure volumes and revenues down sharply in 2008’s second quarter LCA-Vision revealed this week it has reduced its work force, cut back on advertising expenditures and reduced the number of new surgery centers it plans to open and/or relocate during the rest of this year.

In addition, the company said its chief marketing officer, Jim Brenner, has resigned; no replacement has been named yet. Brenner, who joined LCA-Vision in May 2007, had responsibilities for the company’s marketing, managed care and call center departments.

According to interim chief financial officer Michael Celebrezze, who took over last month after previous CFO Alan Buckey resigned, LCA-Vision reduced its work force by another 25 percent in the last few months, following a 16 percent staff reduction earlier this year. Celebrezze said the company will record a one time severance charge of approximately $700,000 during the third quarter; the year-to-date staff reduction is expected to reduce its annualized labor expenses by about $14.2 million, however, he said.

In addition to the staff reductions, LCA-Vision initiated a company-wide freeze on salaries, and eliminated a number of open positions. “In an effort to transition to a more variable cost structure, we are evolving toward a flexible work force by adding part-time personnel to replace open full-time positions where possible,” Celebrezze noted. As of June 30, the company had 109 part-time employees, up from 51 part-time employees as of a year earlier.

In the third quarter, LCA-Vision will reduce its national and local media expenditures by 40 percent to 45 percent compared to last year’s Q3, spending between $9.0 million and $10.5 million. Expenditures are also being reduced by halting 2008 new center openings after the third quarter, reducing the number of center relocations planned for this year from five to three, and limiting new laser purchases by moving under-utilized excimer lasers to centers opening in Q3.