U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

Form  10-Q

(Mark One)

[ X ]    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2001.

[    ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT.

For the transition period from __________ to __________

Commission file number 0-27610

LCA-Vision Inc.

(Exact name of registrant as specified in its charter)

| | Delaware

(State or other jurisdiction of

incorporation or organization) |  |  | 11-2882328

(IRS Employer

Identification No.)
| | ------------------------------------------------------------------------- |  |  | ----------------------------------------------
| |                                                                           | 

7840 Montgomery Road, Cincinnati, Ohio  45236

(Address of principal executive offices)

(513) 792-9292

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

|Yes | X |  | No |  |  |  |  |  |  | 
|--- | - |  | -- |  |  |  |  |  |  | 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest
practicable date: 46,644,558 shares as of  July 31, 2001.

1

LCA-VISION INC.

INDEX

|Facing Sheet |                                                                                               |                                                                                                       |  |   |  |    |  |    | 1
|------------ | --------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------- |  | - |  | -- |  | -- | -
|Index        |                                                                                               |                                                                                                       |  |   |  |    |  |    |  
|Part I.      | Financial Information                                                                        
|             | Item 1.  Financial Statements                                                                
|             |                                                                                               | Condensed Consolidated Balance Sheets at June 30, 2001
and December 31, 2000                          |  | 3
|            
|             |                                                                                               | Condensed Consolidated Statements of Income for the Three
and Six Months Ended June 30, 2001 and 2000 |  | 4
|            
|             |                                                                                               | Condensed Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 2001 and 2000       |  | 5
|            
|             |                                                                                               | Notes to Condensed Consolidated Financial Statements                                                  |  | 6
|             | Item 2.	Management's Discussion and Analysis of Financial Condition and Results of
Operations | 9                                                                                                    
|            
|             | Item 3.  Quantitative and Qualitative Disclosures About Market Risk                           | 11                                                                                                   
|Part II.     | Other Information                                                                             |                                                                                                       |  |   |  |    |  | 12
|             | Item 1.  Legal Proceedings                                                                   
|             | Item 2.  Changes in Securities and Use of Proceeds                                           
|             | Item 3.  Defaults Upon Senior Securities                                                     
|             | Item 4.  Submission of Matters to a Vote of Security Holders                                 
|             | Item 5.  Other Information                                                                   
|             | Item 6.  Exhibits and Reports on Form 8-K                                                     |                                                                                                       |  |   |  | 13
|Signatures   |                                                                                               |                                                                                                       |  |   |  |    |  |    |  

2

|LCA-Vision Inc.                                                                                     
|----------------------------------------------------------------------------------------------------
|Condensed Consolidated Balance Sheets                                                               
|(Dollars in thousands except per share data)                                                        
|                                                                                                    
|Assets                                                                                              
|Current Assets                                                                                      
|Cash and cash equivalents                                                                           
|Short-term investments                                                                              
|Accounts receivable, net                                                                            
|Receivable from vendor                                                                              
|Deferred tax asset                                                                                  
|Prepaid expenses, inventory and other                                                               
|                                                                                                    
|Total current assets                                                                                
|                                                                                                    
|Property and Equipment                                                                              
|Accumulated depreciation and amortization                                                           
|Property and equipment, net                                                                         
|Goodwill, net                                                                                       
|Deferred tax asset                                                                                  
|Obligations due from shareholders                                                                   
|Investment in unconsolidated businesses                                                             
|Other assets                                                                                        
|                                                                                                    
|Total assets                                                                                        
|Liabilities and Shareholders' Investment                                                            
|Current liabilities                                                                                 
|Accounts payable                                                                                    
|Accrued liabilities and other                                                                       
|Debt maturing in one year                                                                           
|                                                                                                    
|Total current liabilities                                                                           
|                                                                                                    
|Long-term debt                                                                                      
|Commitments and contingencies                                                                       
|Minority equity interest                                                                            
|                                                                                                    
|Shareholders' investment                                                                            
|Preferred stock                                                                                     
|Common stock ($0.01 par value; 52,176,554 and 52,112,404 shares and                                 
|46,627,258 and 47,393,508 shares issued and outstanding, respectively)                              
|Contributed capital                                                                                 
|Warrants                                                                                            
|Notes receivable from shareholders                                                                  
|Common stock in treasury, at cost (5,549,296 shares and 4,718,896 shares)                           
|Accumulated deficit                                                                                 
|Foreign currency translation adjustment                                                             
|                                                                                                    
|Total shareholders' investment                                                                      
|                                                                                                    
|Total liabilities and shareholders' investment                                                      
|(1)Unaudited                                                                                        
|                                                                                                    
|The notes to the Condensed Consolidated Financial Statements are an integral part of this statement.

3

|LCA-Vision Inc.                                                                                     
|----------------------------------------------------------------------------------------------------
|Condensed Consolidated Statements of Income                                                         
|(Dollars in thousands except per share data)                                                        
|                                                                                                    
|                                                                                                    
|                                                                                                    
|Revenues                                                                                            
|Laser refractive surgery                                                                            
|Other                                                                                               
|                                                                                                    
|Total revenues                                                                                      
|                                                                                                    
|Operating costs and expenses                                                                        
|Medical professional and license fees                                                               
|Direct costs of services                                                                            
|General and administrative expenses                                                                 
|Marketing and advertising                                                                           
|Depreciation                                                                                        
|                                                                                                    
|Operating income (loss)                                                                             
|                                                                                                    
|Equity in earnings from unconsolidated businesses                                                   
|Interest (expense)                                                                                  
|Interest income                                                                                     
|Other income (expense)                                                                              
|                                                                                                    
|Income before taxes on income                                                                       
|                                                                                                    
|Income tax expense (benefit)                                                                        
|                                                                                                    
|Net income (loss)                                                                                   
|Income per common share                                                                             
|Basic                                                                                               
|Diluted                                                                                             
|                                                                                                    
|Weighted average shares outstanding                                                                 
|Basic                                                                                               
|Diluted                                                                                             
|                                                                                                    
|(1)  Unaudited                                                                                      
|                                                                                                    
|The notes to the Condensed Consolidated Financial Statements are an integral part of this statement.

4

|LCA-Vision Inc.                                                                                     
|----------------------------------------------------------------------------------------------------
|Condensed Consolidated Statements of Cash Flow                                                      
|(Dollars in thousands except per share data)                                                        
|                                                                                                    
|                                                                                                    
|                                                                                                    
|Cash flow from operating activities:                                                                
|Net income (loss)                                                                                   
|Adjustments to reconcile net income to net cash provided by operating activities                    
|Depreciation and amortization                                                                       
|Warrant amortization                                                                                
|Deferred income taxes                                                                               
|Equity in earnings of unconsolidated affiliates                                                     
|Changes in working capital:                                                                         
|Accounts receivable                                                                                 
|Receivable from vendor                                                                              
|Prepaid expenses, inventory and other                                                               
|Accounts payable                                                                                    
|Accrued liabilities and other                                                                       
|                                                                                                    
|Net cash provided by operations                                                                     
|                                                                                                    
|Cash flow from investing activities:                                                                
|Purchase of property and equipment                                                                  
|Purchase of short-term investments                                                                  
|Maturity of short-term investments                                                                  
|Loans to shareholders                                                                               
|Other, net                                                                                          
|                                                                                                    
|Net cash provided (used) in investing activities                                                    
|                                                                                                    
|Cash flows from financing activities:                                                               
|Principal payments of long-term notes, debt and capital lease obligations                           
|Shares repurchased for treasury stock                                                               
|Exercise of stock options                                                                           
|Distribution from (to) minority equity investees                                                    
|                                                                                                    
|Net cash used by financing activities                                                               
|                                                                                                    
|Increase (decrease) in cash and cash equivalents                                                    
|                                                                                                    
|Cash and cash equivalents at beginning of period                                                    
|                                                                                                    
|Cash and cash equivalents at end of period                                                          
|                                                                                                    
|(1)  Unaudited                                                                                      
|                                                                                                    
|The notes to the Consolidated Condensed Financial Statements are an integral part of this statement.

5

LCA-VISION INC.

Notes to Condensed Consolidated Financial Statements

for the Three and Six Months Ended June 30, 2001 and 2000

1.  Summary of Significant Accounting Policies

The June 30, 2001 and 2000 financial data are unaudited; however, in the opinion of the Company, such data
includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the
interim periods. The December 31, 2000 Condensed Consolidated Balance Sheet has been derived from audited
financial statements but does not include all disclosures required by generally accepted accounting principles. We
suggest that these financial statements be read together with the financial statements and notes included in our
annual report on Form 10-K.

Business

We are a leading developer and operator of free-standing laser refractive surgery centers. Our laser refractive
surgery centers provide the staff, facilities, equipment and support services for performing corrective eye surgeries
that employ state-of-the-art laser technologies to correct nearsightedness, farsightedness and astigmatism.  The
Company currently utilizes two primary excimer lasers:  the Bausch & Lomb Technolas 217 and the VISX Star S2
laser.  Substantially all of the revenues from our laser vision correction procedures are derived from our U.S.
Centers.

Operating costs and expenses consist of:

-     Medical professional and license fees, including per procedure fees for the ophthalmologist performing laser
vision correction and the license fee of $110 per procedure paid to VISX and Bausch & Lomb,

-     Direct costs of services, including center rent and utilities, equipment lease and maintenance costs, surgical
supplies, center staff expense, costs related to other revenue, and all other costs associated with providing services
in our centers,

-     General and administrative associated with corporate overhead costs,

-     Marketing and advertising costs, and

-     Depreciation and amortization of equipment and intangible assets recorded in the balance sheet.

Consolidation Policy

We use two different methods to report our investments in our subsidiaries and other companies - consolidation and
the equity method.

Consolidation

We use consolidation when we own a majority of the voting stock of the subsidiary. This means the accounts of our
subsidiaries are combined with our accounts. We eliminate intercompany balances and transactions when we
consolidate these accounts. Our condensed consolidated financial statements include the accounts of:

-     LCA-Vision Inc.,

-     LCA-Vision (Ohio), Inc.,

-     Refractive Centers International, Inc. and Subsidiaries

-     LCA-Vision (Canada) Inc. and Subsidiaries, and

-     The Baltimore Laser Sight Center, Ltd.

Equity Method

We use the equity method to report investments in businesses where we hold a 20% to 50% voting interest, giving
us the ability to exercise significant influence, but not control, over operating and financial policies. Under the
equity method we report:

-    our interest in the entity as an investment in our Condensed Consolidated Balance Sheets, and

-    our percentage share of the earnings (losses) in our Condensed Consolidated Statements of Operations.

We own 43% of Silmalaseri Oy and 50% of both Cole LCA Vision LLC and Eyemed LCA Vision LLC and report
our investments under the equity method.

6

Use of Estimates

Management makes estimates and assumptions when preparing financial statements under generally accepted
accounting principles. These estimates and assumptions affect various matters including:

-     our reported amounts of assets and liabilities in our Condensed Consolidated Balance Sheets at the dates of the
financial statements,

-     our disclosure of contingent liabilities at the dates of the financial statements, and

-     our reported amounts of revenues and expenses in our Condensed Consolidated Statements of Income during
the reporting periods.

Actual amounts could differ from those estimates.

Per Share Data

Basic per share data is income applicable to common shareholders divided by the weighted average common shares
outstanding. Diluted per share data is income applicable to common shareholders divided by the weighted average
common shares outstanding plus the potential issuance of common shares if stock options or warrants were
exercised or convertible preferred stock were converted into common stock.

Following is a reconciliation of basic and diluted earnings per share for the three and six months ended June 30,
2001 and 2000 (in thousands, except per share amounts):

|                                                             |                    |         |                 
|------------------------------------------------------------ | ------------------ | ------- | ----------------
|                                                             | Three Months Ended |         | Six Months Ended
|                                                             | June 30,           |         | June 30,        
|                                                             | 2001               | 2000    |                 
|Basic earnings per share                                     |                    |         |                 
|Net income                                                   | $755               | (668)   |                 
|Weighted average shares outstanding                          | 46,703             | 51,881  |                 
|Basic earnings (loss) per share                              | $0.02              | $(0.01) |                 
|                                                             |                    |         |                 
|Diluted earnings per share                                   |                    |         |                 
|Net income                                                   | $755               | (668)   |                 
|Weighted average shares outstanding                          | 46,703             | 51,881  |                 
|Effect of dilutive securities                                |                    |         |                 
|Stock options                                                | 585                | -       |                 
|Warrants                                                     | 31                 | -       |                 
|Weighted average common shares and potential dilutive shares | 47,319             | 51,881  |                 
|Diluted earnings per share                                   | $0.02              | $(0.01) |                 

2.  Shareholders' Investment

Common Stock

During the three months ended June 30, 2001, 19,550 shares of common stock were issued to individuals who
exercised stock options. The average exercise price was $1.19 per share.

Warrants

Warrants to purchase 800,000 shares were issued during the third quarter of 1999 of which 400,000 are currently
exercisable at a price of $12.00 per share.

Generally accepted accounting principles requires us to assign a value to the warrants for the services to be
rendered. We used the Black-Scholes method to determine the amount, or expected amount, of compensation for
each block of warrants as it becomes exercisable. The amount calculated is recorded as part of other assets and
amortized over the three-year term of the agreement with Cole National Corporation to market laser vision
correction as a managed care benefit. Amortization expense of $175,000 was recorded for the second quarter of
2001, bringing the year-to-date amortization expense to $351,000.

7

3.  Segment Information

We operate in one segment - laser refractive surgery.

4.  Commitments and Contingencies

None

8

Item 2.  Management's Discussion and Analysis of Financial Condition Results of Operations.

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results could differ
materially from those projected in the forward-looking statements as a result of a number of important factors. For a
discussion of important factors that could affect our results, refer to the Overview and financial statement line item
discussions set forth in Management's Discussion and Analysis of Financial Condition and Results of Operations
("MD&A").

"MD&A" is an analysis of our operating results for the three and six months ended June 30, 2001 and 2000 and our
financial condition as of June 30, 2001. It explains why our revenues and costs changed, our overall financial
condition, and other matters.

Results of Operations - Revenues

Laser refractive surgery

Laser refractive surgery revenue includes three components: a facility fee, a license fee, and medical professional
fees. Certain states prohibit us from practicing medicine, employing physicians to practice medicine on our behalf or
employing optometrists to render optometry services on our behalf. Revenues and direct costs from centers in such
states do not include the medical professionals fee component. The contribution from laser refractive surgery
procedures for each of the three and six months ended June 30, 2001 and 2000 were (dollars in thousands):

|                                      | Three Months Ended |  | Six Months Ended
|------------------------------------- | ------------------ |  | ----------------
|                                      | June 30,           |  | June 30,        
|                                      | 2001               |  | 2000            
|Revenue                               | $21,420            |  | $15,004         
|Less:                                 |                    |  |                 
|Medical professional and license fees | 4,470              |  | 3,224           
|                                      | $16,950            |  | $11,780         
|Contribution Margin                   | 79.1%              |  | 78.5%           
|                                      |                    |  |                 

The following table illustrates the growth of laser vision correction procedures performed at our centers.

Consolidated

2001                   2000

Q1                           25,061                12,504

Q2                           22,940                13,888

Q3                                                      16,341

Q4                                                      16,411

Year                                                   59,144

Medical professional expenses and license fees

Medical professional expenses and license fees increased by $1,246,000 from the second quarter of 2000 as a result
higher procedure volumes.

Direct costs of services

Direct costs of services include the salary component of physician compensation, staffing, equipment, medical
supplies, and facility costs to operate laser vision correction centers.  These direct costs increased in the second
quarter of 2001 by $2,442,000 over the second quarter of 2000, because of the growth in procedure volumes and an
increase in the number of centers in operation.  Medical supplies increased by $412,000 in the second quarter of
2001 from the second quarter of 2000 as a result of higher procedure volumes.  Exclusive of medical supplies, the
average direct cost per center per month increased from $80,600 in the first quarter of 2001 to $82,900 in the
second quarter of 2001 because of greater employment costs and higher utility costs.

9

General and administrative

General and administrative expenses decreased by $138,000 in the second quarter of 2001 from the second quarter
of 2000.  Warrant amortization decreased by $72,000 as a result of fewer warrants outstanding.  The remainder of
the decrease in general and administrative expenses was the result of lower expenditures on legal and consulting
services.

Marketing and advertising expenses

Marketing and advertising expenses decreased by $892,000 in the second quarter of 2001 from the second quarter in
2000.  Compared to the first quarter of 2001, marketing and advertising expenditures  decreased by $162,000.
Management's current plan for the remainder of 2001 is to maintain marketing and advertising expenditures at a rate
consistent with the first six months of the year.

Depreciation and amortization

Depreciation and amortization expense increased by $593,000 in the second quarter of 2001 from the second
quarter of 2000 because of the depreciation of capitalized costs of new center openings and an increase in the
number of lasers in operation.

Non-operating income and expenses

Equity earnings in unconsolidated businesses increased by $183,000 in the second quarter of 2001 from the second
quarter of 2000.  A growth in managed care business combined with improving operating results  of our Helsinki
affiliate generated the increase in equity earnings.   Interest income for the second quarter of 2001 did not change
significantly from the first quarter of 2001 as cash on hand remained at a level consistent with the first quarter.

Liquidity and Capital Resources

Net cash provided by operating activities in the first six months of 2001 was $4,554,000.  Operating cash flow was
more than sufficient to finance our capital expenditures of $2,449,000 and debt repayment of $120,000.

As of June 30, 2001 we have cash and cash equivalents of $28,262,000.

During the second quarter of 2000, the directors initiated a program to encourage additional direct stock ownership
by senior management of the company.  The Company offered loans to nine key managers and directors for the
purpose of purchasing shares in the open market.  Each loan is a personal obligation of the borrower, and is
evidenced by a promissory note.  The interest rate on the notes is prime less one and one-half percent.  The notes
have a maximum term of three years, and contain provisions for early repayment.  A total of $1,456,000 has been
loaned under this program since inception.

As of June 30, 2001 we maintained a $10,000,000 revolving credit facility with The Provident Bank ("Provident").
In addition to the revolving credit facility, the company has a $10,000,000 credit commitment for funding
acquisitions.  Both of these credit arrangements expire June 30, 2002.

Factors That May Affect Future Results and Market Price of Stock

For a detailed discussion that may affect future results, please refer to the Company's last 10-K and 10-Q.  No
material new risks have developed since the filing of these reports.

10

Item 3. Quantitative and Qualitative Disclosure About Market Risk

The carrying values of financial instruments including cash and cash equivalents, accounts receivable and accounts
payable approximate fair value because of the short maturity of these instruments.

We have historically had very low exposure to changes in foreign currency exchange rates, and as such, have not
used derivative financial instruments to manage foreign currency fluctuation risk.

11

|Part II.  Other Information                                 
|------------------------------------------------------------
|                                                            
|Item 1.  Legal Proceedings                                  
|                                                            
|Item 2.  Changes in Securities and Use of Proceeds          
|                                                            
|Item 3.  Defaults upon Senior Securities                    
|                                                            
|Item 4.  Submission of Matters to a Vote of Security Holders

| | The Company held its Annual Meeting of Stockholders on May 7, 2001.  Two matters were
submitted to the vote of the stockholders:  election of directors and the adoption of the 2001 long-term stock incentive program.  All incumbent directors were re-elected, with the following vote
totals:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                    | Shares Voted For |  | Authority

Withheld
| | ------------------ | ---------------- |  | -------------------
| | Stephen N. Joffe   | 39,902,154       |  | 1,529,941          
| | William O. Coleman | 40,285,839       |  | 1,146,256          
| | John H. Gutfreund  | 40,285,213       |  | 1,146,882          
| | John C. Hassan     | 40,298,173       |  | 1,133,922          

| | The 2001 Long-Term Stock Incentive Program was adopted with the following vote totals:
| | --------------------------------------------------------------------------------------

For:                  38,170,345

Against:             3,026,825

Abstain:                234,925

|Item 5.  Other Information
|--------------------------
|                          

12

Part II.  Other Information (continued)

|Item 6.  Exhibits and Reports on Form 8-K.
|------------------------------------------
|                                          
|                                          
|                                          
|                                          
|                                          

13

Signatures

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf
by the undersigned, thereto duly authorized.

LCA-VISION INC.

|Date: | 8/8/01 |  |  | /s/ Stephen N. Joffe

Stephen N. Joffe

Chairman     
|----- | ------ |  |  | -----------------------------------------------------
|      |        |  |  |                                                      
|      |        |  |  |                                                      
|     
|     
|Date: | 8/8/01 |  |  | /s/ Alan Buckey

Alan Buckey

Chief Financial Officer
|      |        |  |  |                                                      
|      |        |  |  |                                                      

14