Now I’d like to turn the call over to Mike Celebrezze. Mike?Mike Celebrezze Thank you, Jody. Good morning, everyone, and thank you for joining us. I’d like to welcome Bharat Kakar to this quarter’s call. In a few minutes he will be providing an overview of our marketing activities. We’re encouraged by the positive results from our actions to improve our business in the current economic environment while building a platform for future success and profitability. As previously discussed we are focused on three business priorities namely cash conservations, patient acquisition and retentions and organizational effectiveness, and our actions under these priorities are tied to performance measures. Our procedure volume and operating results continue to be adversely affected by the general economic slowdown and the associated decline in consumer confidence levels and high-end discretionary expenditures for many consumers. Despite these difficulties as a direct result of previously instituted cash conservation measures, we are reporting a positive operating cash flow for the quarter. The cash flow statement shows a $6.3 million negative change in cash but this includes our transfer of more than $8 million from cash to investment accounts. So our total cash and investment balance actually increased by $1.7 million during the quarter. We ended the quarter with more than $56 million of cash and investments. We also reduced our adjusted operating loss by $4.7 million from the 2009 first quarter despite performing 32% fewer procedures. Later in the call Dave will discuss improvements in key operational metrics that we attribute to patient acquisitions and organizational effectiveness measures. We recently received some good news. The class-action lawsuit filed against the company in 2007 has been dismissed. You may recall that in March 2009 the US district court for the Southern District of Ohio in a summary judgment dismissed all claims in the suit with prejudice. The lead plaintiff in this action (inaudible) subsequently filed a motion with the court for reconsideration. The court denied this motion last November and the plaintiff filed an appeal the following month with the U.S. Court of Appeals for the sixth circuit. This appeal was voluntarily dismissed in January 2010.
Many of you are probably wondering about the impact of the new healthcare legislation on our business, some of which is yet to be determined. Under the current legislation framework, LASIK remains a reimbursable expense under flexible healthcare spending accounts. However, the major impact item from the new law is that the annual maximum limits for flexible spending account will be reduced from $5000 to $2500 in 2013. As such patients will not be able to cover the entire procedure cost with pretext FSA money, which may negatively affect our business. Additionally, like other employers we are likely to see an increase in our health insurance costs as well.Now I’d like to review our 2010 first quarter financial results. As in the past we are providing both GAAP and adjusted revenues and operating loss as a means of measuring performance. The adjusted results account for the non-cash impact of the accounting for separately priced extended warranties. A reconciliation of revenues and operating loss as reported in accordance with GAAP is provided at the end of the news release we issued this morning. For the first quarter of 2010, revenues were $34 million compared with $47.9 million for the 2009 first quarter and adjusted revenues were $32.3 million compared with $44.9 million for the 2009 first quarter. We performed 1956 procedures at 52 vision centers during the 2010 first quarter compared with 27,859 procedures at 75 Vision centers during the 2009 first quarter. We attribute the lower procedure volumes to a 37% year-over-year decline in preoperative appointment bookings which we believe is primarily due to reduced consumer confidence, a 40% year-over-year decline in spending on marketing activities and a decrease in the number of vision centers from 75 to 52. Read the rest of this transcript for free on seekingalpha.com