Third Quarter Net Revenue Grows 57.0 Percent to
$27.2 Million
Wednesday, October 20, 1999 06:01 AM
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CHICAGO--(BUSINESS WIRE)--Oct. 20, 1999--NovaMed Eyecare, Inc. (Nasdaq: NOVA), a leading eye
care services company focused on laser vision correction (LVC), announced today that its net revenue
of $27.2 million for the third quarter ended September 30, 1999, represented an increase of 57.0
percent over the third quarter 1998. Net income in the third quarter of 1999 on a pro forma basis nearly
doubled from the prior year third quarter to approximately $1.4 million, equivalent to 6 cents per fully
diluted share, up from 3 cents per fully diluted share in the prior year quarter, presented on the same
pro forma basis. Pro forma net income reflects adjustments for previously disclosed, nonrecurring and
noncash items associated with NovaMed's initial public offering completed August 18, 1999, together
with the elimination of interest expense associated with debt converted to common stock at the time of
the initial public offering.
For the nine months ended September 30, 1999, NovaMed's net revenue of $72.0 million represented
an increase of 61.5 percent over the first nine months of 1998. Net income for the nine months on the
same pro forma basis described above nearly doubled to $2.8 million, equivalent to 12 cents per fully
diluted share, up from 7 cents in the prior year period.
"This was a landmark quarter for NovaMed," said Stephen J. Winjum, NovaMed Chairman, President
and Chief Executive Officer. "We completed our initial public offering in August. We also continued to
grow profitably at high rates through a focus on laser vision correction and the significant operating
leverage opportunity in our five regional markets. We are pleased to report strong laser vision correction
procedure growth, net revenue growth and earnings growth for the third quarter. We are well positioned
to continue that growth in the fourth quarter."
Earlier in October, NovaMed reported 3,615 LVC procedures for the third quarter (up 135 percent over
the third quarter 1998), representing an annual run rate of 14,400 LVC procedures. For the nine months
ended September 30, 1999, LVC procedures of 8,765 were up 160 percent over the comparable 1998
period. In the third quarter 1999, revenue from LVC (before amounts retained by affiliated professional
entities) represented approximately 22 percent of total net revenue, up from 13 percent in the year
earlier period. For the nine months, LVC revenue represented approximately 20 percent of total net
revenue, up from approximately 12 percent in the first nine months of 1998.
In the third quarter, pro forma income from operations increased 74 percent to $2.7 million,
representing an operating margin of 10.1 percent, up from 9.1 percent in the year earlier quarter. For
the nine months, pro forma income from operations increased 80 percent to $5.9 million. The
nine-month operating margin expanded to 8.3 percent in 1999 from 7.4 percent in 1998. The overall
growth in net revenue and the revenue mix change towards a greater proportion of LVC were the
primary reasons for the operating margin improvements.
As previously reported in NovaMed's prospectus for its initial public offering, NovaMed recorded three
nonrecurring, noncash items in its third quarter results, related to its initial public offering. The three
items were the discount to the initial public offering price associated with certain subordinated notes
converted to common stock; the final valuation adjustment associated with the preferred stock, all of
which was converted to common stock in connection with the initial public offering; and the
compensation expense associated with certain 1999 option grants made prior to the initial public
offering. Together, those items represented a third quarter loss of $1.9 million (net of tax benefit of $1.6
million). For the nine months, the three items represented a loss of $5.5 million (net of tax benefit of
$1.7).
NovaMed is an eye care services company focused on laser vision correction. It owns and operates 10
eye surgery and laser centers and operates four laser vision correction centers in five U.S. regional
markets, where it is affiliated with 89 eye care professionals. NovaMed's executive offices are located
in Chicago, Illinois.
This press release contains "forward looking" statements which relate to possible future events. These
statements are based on management's current expectations and are subject to risks and
uncertainties which could cause our actual results to differ materially from those expressed or implied
in this press release. These risks and uncertainties include: the acceptance of laser vision correction
and other refractive surgical procedures by eye care professionals and the general public; our ability to
establish and maintain profitable affiliations with eye care professionals; the adoption of competing new
technologies for vision correction surgery; laser vision correction equipment and supply shortages;
proposed health care reforms; and reductions in reimbursement rates. We encourage readers to review
a more complete discussion of the factors affecting our business and prospects in our filings with the
Securities and Exchange Commission, including our prospectus filed on August 18, 1999. |
