LVCI full text of the Dow Jones article:
By Desiree J. Hanford
ST. LOUIS (Dow Jones)--Shares of Laser Vision Centers Inc. (LVCI) fell nearly
15% Monday, a tumble the company's Chairman and Chief Executive John J. Klobnak
attributed to misguided fears over pricing pressures.
Laser Vision's stock closed Monday at 15 1/2, down 2 5/8, on heavy trading of
more than 3 million shares. Average daily trading is 648,200 shares.
The company's stock dropped 11% on Friday to close at 18 1/8.
Laser Vision provides excimer lasers and other related equipment and services
to doctors to correct eyesight problems.
Klobnak told Dow Jones Newswires that some investors seem to be concerned
about pricing pressures that, at least at Laser Vision Centers, don't exist.
Klobnak said that although a competitor reportedly cut its prices on laser
procedures last month in two markets, that price cut has no effect on Laser
Vision Centers.
An analyst said last month that LCA-Vision Inc. (LCAV) lowered prices at key
laser vision correction centers in Baltimore and Annapolis, Md. The analyst's
report warned that the moves could send prices lower in other markets.
LCA-Vision's stock closed at 5 on Monday, down 7%, or 3/8, on
heavier-than-normal trading. The stock also closed down on Friday.
Klobnak said Laser Vision doesn't set the price that a doctor charges for the
laser procedure. He said the company has contracts with doctors for a set price
and term, neither of which is influenced by how much a doctor charges patients
for the procedure.
"Pricing is really up to the doctors," he said. "If they decide to be
competitive by lowering the price or if they decide to charge a premium, it's
their decision. But we charge them the same either way."
Analysts who follow Laser Vision Centers said they remain bullish on the
company's outlook. A.G. Edwards & Sons analyst Greg Simpson said the company's
business remains "extremely strong." He said doctors are committing to longer
deals with Laser Vision, with many of them making three- to five-year
commitments instead of two years.
"There's nothing specific to the company going on here," Simpson said of the
drop in Laser Vision's stock.
Simpson said that because of the contracts doctors have with Laser Vision
Centers, doctors and not the company will bear the brunt of any price declines
for eye procedures.
"This is a company that has a business model that protects it from that," he
said.
Advest Inc. analyst Theodore Huber agrees. He said a lot of the concerns about
price declines in the industry are overblown. Huber also noted that Laser Vision
gets much of its revenues from smaller cities where the company has a large
market share.
-Desiree J. Hanford; 314-588-8443; Desiree.Hanford@cor.dowjones.com
(END) DOW JONES NEWS 09-20-99
05:34 PM
Source: messages.yahoo.com
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