A Medical Device Daily
The law firm of Schiffrin Barroway Topaz & Kessler reported that it has filed a class action lawsuit on behalf of all purchasers of securities of LCA-Vision (Cincinnati, Ohio).
LCA provides fixed-site laser vision correction services at its LasikPlus vision centers. The complaint charges that LCA and certain of its officers and directors failed to disclose and misrepresented various material adverse facts which were known to defendants or recklessly disregarded by them:
• that procedure volume at existing stores had significantly declined;
• that overall growth was solely coming from new store openings;
• that the company was operating under defective assumptions about its marketing budget and deferred revenue;
• that the company lacked adequate internal and financial controls;
• and that, as a result, the company’s statements about its financial well-being and future prospects were lacking in a reasonable basis.
On July 31, the company “shocked investors when it reported abysmal second quarter 2007 financial and operational results, which included a decline in same-store procedure volume and a substantial rise in patient acquisition costs,” according to the lawsuit charges.
Additionally, the company reported lowering operating income, net income, and earnings per share (“EPS”) than in the comparable 2006 quarter. As a result, the company significantly lowered its EPS guidance from between $2.05 to $2.15 for full-year 2007 down to between $1.90 to $2.00 for full-year 2007.
On this news, the company’s shares declined $7.48 a share, or 17.4%, to close on July 31, 2007, at $35.51 a share, on unusually heavy trading. The following day, the company’s shares declined an additional $2.11 a share, or almost 6 % to close on August 1, 2007, at $33.40 a share, again on heavy trading.