VISX Message Board - Msg: 3630682

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Biotech / Medical : VISX

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To: Charlie Smith who wrote (409)	3/6/1998 10:27:00 PM
From: Amy Feller	Read Replies (1) of 1754

Charlie.. Here's more from the report (I would type it all, but it was a poor fax and difficult to read) "LVC procedure royalties will drive earnings in 1998 and beyond. VISX generates its revenue largely through the worldwide sales of its LVC systems and highly profitable royalty fees from each LVC procedure that is performed in the US. While equipment sales were historically responsible for the majority of revenue and earnings, this top-line component should trend downward through the year 2000, reflecting the emergence of new competitors in a domestic market that has probably already surpassed the 50% saturation point. The LVC procedure royalties that are paid through a partnership called Piller Point should account for about 65% of 1998 revenue and will continue to be the largest and most profitable portion of the company's revenue stream over the next several years. There were approximately 195,000 LVC procedures performed in 1997 and we expect the industry to perform 350,000 procedures this year. We continue to believe that one million individuals in the US will undergo laser vision correction in the year 2000. --Strong bottom line comparisons in coming quarters and a healthy cash horde. Accompanying the continued robust growth in LVC procedures will be accelerating bottom-line gains. While we look for 1998 earnings to rise more than 50% in the first half of the year, we are estimating FULLY TAXED (ed note: my CAPS) March quarter earnings of $.27 per share (compared with $.12 a year ago) and earnings of $.30 for the three month period ending June 30 (versus $0.14 in the prior year). Operating margins will improve dramatically, reflecting gross margin expansion and leverage within other expense categories. Moreover, VISX had $101 Million in cash (more than $6.50 share) and no long term debt as of Dec 31. The company has been steadily generating cash for the past two years. ###

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