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Press release content from Business Wire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Business Wire
Press release content from Business Wire. The AP news staff was not involved in its creation.

STAAR Surgical Reports Third Quarter Net Sales of $58.4 Million Up 24% Y/Y

November 3, 2021 GMT

LAKE FOREST, Calif.--(BUSINESS WIRE)--Nov 3, 2021--

STAAR Surgical Company (NASDAQ: STAA), a leading developer, manufacturer and marketer of implantable lenses and companion delivery systems for the eye, today reported financial results for the third quarter ended October 1, 2021.

Third Quarter 2021 Overview

  • Quarterly Net Sales of $58.4 Million Up 24% from the Prior Year Quarter
  • Quarterly ICL Sales of $54.2 Million Up 31% from the Prior Year Quarter
  • Quarterly ICL Units Up 29% from the Prior Year Quarter
  • Gross Margin at 77.6% vs. 74.1% in the Prior Year Quarter
  • Net Income of $0.12 per Share vs. $0.08 in the Prior Year Quarter
  • Cash and Cash Equivalents Ended the Quarter at $196.2 Million Up from $152.5 Million in Q4 2020

“We experienced outstanding demand for our ICLs during the third quarter and achieved net sales above the high end of our previously provided outlook,” said Caren Mason, President and CEO of STAAR Surgical. “Enthusiasm for our implantable Collamer® lenses continues to grow and has never been higher. In fact, orders for ICLs outstripped our supply of lenses in the quarter. With China being our largest market, our distributor’s inventory levels in China were drawn down to historically low levels to meet surgeon and patient demand. While we were able to meet 35% growth levels to the surgeon and patient community from our distributor inventory, we were only able to ship units equaling 19% growth to our distributor. COVID-related employment, production output and modest supply chain challenges impacted the quarter and resulted in a backlog of over 20,000 lenses at the end of the third quarter representing several million dollars of orders-in-house. Despite the challenges which we are addressing, we achieved global ICL unit growth up 29%, year over year, for the third quarter of 2021. ICL unit growth was up 44% in Japan, up 21% in South Korea, up 338% in India, up 25% in Germany, up 66% in the U.S. and up 32% in our hybrid distributor markets. In the U.S. our submission of clinical data for STAAR’s EVO ICL family of myopia lenses remains under customary interactive FDA review. While our expectation of pre-COVID approval timelines by the FDA has now passed, we remain confident regarding an approval of our PMA supplement.

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Ms. Mason, concluded, “We are squarely focused on meeting the significant level of demand for our ICL lenses and achieving standard inventory level requirements in the coming quarters. Based on our analyses of demand and supply forecasts we are today raising our outlook for full year fiscal 2021 net sales to a range of $230 million to $231 million which represents growth of over 40% year-over-year. We are also reaffirming our previously communicated pre-COVID three-year outlook for 25%+ compound annual sales growth for fiscal 2020 through 2022 despite the 2020 COVID impacted growth rate of 9%.”

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Financial Overview – Q3 2021

Net sales were $58.4 million for the third quarter of 2021, up 24% compared to $47.1 million reported in the prior year quarter. The sales increase was driven by ICL net sales and unit growth up 31% and 29%, respectively, as compared to the prior year period. ICL net sales were 93% of total net sales for the third quarter of 2021. Other Product Sales were $4.2 million, representing 7% of total net sales and decreased 25% compared to the prior year quarter due to lower sales of cataract IOLs and low margin injector parts.

Gross profit margin for the third quarter of 2021 was 77.6% compared to the prior year period of 74.1%. Factors positively impacting gross margin in the third quarter of 2021, as compared to the prior year period, include geographic sales mix and a decreased mix of injector part sales which carry a lower margin, partially offset by increased period costs associated with manufacturing projects.

Operating expenses for the third quarter of 2021 were $37.5 million compared to the prior year quarter of $30.0 million. The increase in total operating expenses was due to an overall increase in various functional areas to support higher net sales. General and administrative expenses were $11.0 million compared to the prior year quarter of $8.6 million. The increase in general and administrative expenses was due to increased compensation-related expenses and outside services. Selling and marketing expenses were $18.2 million compared to the prior year quarter of $12.6 million. The increase in selling and marketing expenses was due to increased advertising and promotional activities, compensation-related expenses and trade show expenses. Research and development expenses were $8.3 million compared to the prior year quarter of $8.8 million. The decrease in research and development expenses is primarily due to lower expenses associated with the EVO clinical trial in the U.S.

Net income for the third quarter of 2021 was $6.0 million or $0.12 per diluted share compared with net income of $3.9 million or $0.08 per diluted share for the prior year quarter. Adjusted Net Income for the third quarter of 2021 was $10.3 million or $0.21 per diluted share compared to $6.7 million or $0.14 per diluted share for the prior year quarter. The reconciliation between GAAP and non-GAAP financial information is provided in the financial tables included with this release.

Cash and cash equivalents at October 1, 2021 totaled $196.2 million compared to $152.5 million at January 1, 2021.

Conference Call

The Company will host a conference call and webcast today, Wednesday, November 3 at 4:30 p.m. Eastern / 1:30 p.m. Pacific to discuss its financial results and operational progress. To access the conference call (Access Code 249252), please dial 844-200-6205 for domestic participants and 929-526-1599 for international participants. The live webcast can be accessed from the investor relations section of the STAAR website at www.staar.com.

A taped replay of the conference call (Replay Code 403818) will be available beginning approximately one hour after the call’s conclusion for seven days. This replay can be accessed by dialing 866-813-9403 for domestic callers and 929-458-6194 for international callers. An archived webcast will also be available at www.staar.com.

Use of Non-GAAP Financial Measures

This press release includes supplemental non-GAAP financial information, which STAAR believes investors will find helpful in understanding its operating performance. “Adjusted Net Income” excludes the following items that are included in “Net Income” as calculated in accordance with U.S. generally accepted accounting principles (“GAAP”): gain or loss on foreign currency transactions, stock-based compensation expenses, and valuation allowance adjustments. Management believes that “Adjusted Net Income” is useful to investors in gauging the outcome of the key drivers of the business performance: the ability to increase sales revenue and our ability to increase profit margin by improving the mix of high value products while reducing the costs over which management has control.

Management has also excluded gains and losses on foreign currency transactions because of the significant fluctuations that can result from period to period as a result of market driven factors. Stock-based compensation expenses consist of expenses for stock options and restricted stock under the Financial Accounting Standards Board’s Accounting Standards Codification (ASC) 718. Valuation allowance adjustments can occur from time to time based on forecasted changes in operating results until all net operating loss carryforwards are fully utilized. In calculating Adjusted Net Income, STAAR excludes these expenses because they are non-cash expenses and because of the considerable judgment involved in calculating their values. In addition, these expenses tend to be driven by fluctuations in the price of our stock and not by the same factors that generally affect our other business expenses.

The Company also uses Constant Currency as a Non-GAAP financial measure to exclude the effects of currency fluctuations on net sales. The Company conducts a significant part of its activities outside the U.S. It receives sales revenue and pays expenses principally in U.S. dollars, Swiss francs, Japanese yen and euros. The exchange rates between dollars and non-U.S. currencies can fluctuate greatly and can have a significant effect on the Company’s results when reported in U.S. dollars. In order to compare the Company’s performance from period to period without the effect of currency, the Company will apply the same average exchange rate applicable in the prior period, or the “constant currency” rate to sales or expenses in the current period as well. Because changes in currency are outside of the control of the Company and its managers, management finds this non-GAAP measure useful in determining the long-term progress of its initiatives and determining whether its managers are achieving their performance goals. The Company believes that the non-GAAP constant-currency sales results measures provided in this press release are similarly useful to investors to give insight on long term trends in the Company’s performance without the external effect of changes in relative currency values. The table below shows sales results calculated in accordance with GAAP, the effect of currency, and the resulting non-GAAP measure expressed in constant currency.

About STAAR Surgical

STAAR, which has been dedicated solely to ophthalmic surgery for over 30 years, designs, develops, manufactures and markets implantable lenses for the eye with companion delivery systems. These lenses are intended to provide visual freedom for patients, lessening or eliminating the reliance on glasses or contact lenses. All of these lenses are foldable, which permits the surgeon to insert them through a small incision. STAAR’s lens used in refractive surgery is called an Implantable Collamer® Lens or “ICL”, which includes the EVO Visian ICL™ product line. More than 1,000,000 Visian ® ICLs have been implanted to date and STAAR markets these lenses in over 75 countries. To learn more about the ICL go to: www.discovericl.com. Headquartered in Lake Forest, CA, the company operates manufacturing and packaging facilities in Aliso Viejo, CA, Monrovia, CA and Nidau, Switzerland. For more information, please visit the Company’s website at www.staar.com.

Safe Harbor

All statements that are not statements of historical fact are forward-looking statements, including statements about any of the following: any financial projections (including sales), plans, strategies, and objectives of management for 2021 or prospects for achieving such plans, expectations for sales, revenue, margin, expenses or earnings, the expected impact of the COVID-19 pandemic and related public health measures (including but not limited to its impact on sales, operations or clinical trials globally), product safety or effectiveness, the status of our pipeline of ICL products with regulators, including our EVO family of lenses in the U.S., and any statements of assumptions underlying any of the foregoing, including those relating to our product pipeline and market expansion activities. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include risks and uncertainties related to the COVID-19 pandemic and related public health measures, as well as the factors set forth in the Company’s Annual Report on Form 10-K for the year ended January 1, 2021 under the caption “Risk Factors,” which is on file with the Securities and Exchange Commission and available in the “Investor Information” section of the company’s website under the heading “SEC Filings.” We disclaim any intention or obligation to update or revise any financial projections or forward-looking statement due to new information or events. These statements are based on expectations and assumptions as of the date of this press release and are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. The risks and uncertainties include the following: global economic conditions; the impact of the COVID-19 pandemic on markets; the discretion of regulatory agencies to approve or reject existing, new or improved products, or to require additional actions before approval, or to take enforcement action; international trade disputes; and the willingness of surgeons and patients to adopt a new or improved product and procedure. The EVO version of our ICL lens is not yet approved for sale in the United States.

Consolidated Balance Sheets
(in 000's)
Unaudited
 
October 1, 2021January 1, 2021
ASSETS
Current assets:
Cash and cash equivalents

$

196,246

 

$

152,453

 

Accounts receivable trade, net

 

41,917

 

 

35,229

 

Inventories, net

 

16,518

 

 

18,111

 

Prepayments, deposits, and other current assets

 

9,264

 

 

10,625

 

Total current assets

 

263,945

 

 

216,418

 

Property, plant, and equipment, net

 

32,266

 

 

24,030

 

Finance lease right-of-use assets, net

 

45

 

 

596

 

Operating lease right-of-use assets, net

 

22,006

 

 

8,764

 

Intangible assets, net

 

232

 

 

270

 

Goodwill

 

1,786

 

 

1,786

 

Deferred income taxes

 

3,700

 

 

4,944

 

Other assets

 

625

 

 

608

 

Total assets

$

324,605

 

$

257,416

 

 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit

$

1,282

 

$

1,379

 

Accounts payable

 

9,092

 

 

7,874

 

Obligations under finance leases

 

50

 

 

360

 

Obligations under operating leases

 

2,646

 

 

2,485

 

Allowance for sales returns

 

5,566

 

 

4,532

 

Other current liabilities

 

28,160

 

 

24,606

 

Total current liabilities

 

46,796

 

 

41,236

 

Obligations under finance leases

 

21

 

 

38

 

Obligations under operating leases

 

19,437

 

 

6,537

 

Deferred income taxes

 

222

 

 

222

 

Asset retirement obligations

 

205

 

 

221

 

Pension liability

 

8,816

 

 

11,940

 

Total liabilities

 

75,497

 

 

60,194

 

 
 
 
Stockholders' equity:
Common stock

 

476

 

 

464

 

Additional paid-in capital

 

368,572

 

 

338,194

 

Accumulated other comprehensive loss

 

(3,628

)

 

(5,545

)

Accumulated deficit

 

(116,312

)

 

(135,891

)

Total stockholders' equity

 

249,108

 

 

197,222

 

Total liabilities and stockholders' equity

$

324,605

 

$

257,416

 

Consolidated Statements of Income
(In 000's except for per share data)
Unaudited
 
 
Three Months EndedNine Months Ended
% ofOctober 1, 2021% ofOctober 2, 2020Fav (Unfav)% ofOctober 1, 2021% ofOctober 2, 2020Fav (Unfav)
SalesSalesAmount%SalesSalesAmount%
Net sales

100.0

%

$

58,352

 

100.0

%

$

47,081

 

$

11,271

 

23.9

%

100.0

%

$

171,471

 

100.0

%

$

117,462

 

$

54,009

 

46.0

%

 
Cost of sales

22.4

%

 

13,051

 

25.9

%

 

12,210

 

 

(841

)

-6.9

%

22.1

%

 

37,825

 

28.4

%

 

33,401

 

 

(4,424

)

-13.2

%

 
Gross profit

77.6

%

 

45,301

 

74.1

%

 

34,871

 

 

10,430

 

29.9

%

77.9

%

 

133,646

 

71.6

%

 

84,061

 

 

49,585

 

59.0

%

 
Selling, general and administrative expenses:
General and administrative

18.9

%

 

11,018

 

18.2

%

 

8,589

 

 

(2,429

)

-28.3

%

19.0

%

 

32,671

 

20.8

%

 

24,406

 

 

(8,265

)

-33.9

%

Selling and marketing

31.1

%

 

18,175

 

26.9

%

 

12,649

 

 

(5,526

)

-43.7

%

29.3

%

 

50,229

 

29.0

%

 

34,003

 

 

(16,226

)

-47.7

%

Research and development

14.2

%

 

8,271

 

18.6

%

 

8,751

 

 

480

 

5.5

%

14.5

%

 

24,790

 

19.5

%

 

22,960

 

 

(1,830

)

-8.0

%

Total selling, general, and administrative expenses

64.2

%

 

37,464

 

63.7

%

 

29,989

 

 

(7,475

)

-24.9

%

62.8

%

 

107,690

 

69.3

%

 

81,369

 

 

(26,321

)

-32.3

%

 
Operating income

13.4

%

 

7,837

 

10.4

%

 

4,882

 

 

2,955

 

60.5

%

15.1

%

 

25,956

 

2.3

%

 

2,692

 

 

23,264

 

864.2

%

 
Other income (expense):
Interest income (expense), net

0.0

%

 

(23

)

0.0

%

 

1

 

 

(24

)

-2400.0

%

0.0

%

 

(35

)

0.2

%

 

237

 

 

(272

)

-114.8

%

Gain (loss) on foreign currency transactions

-1.1

%

 

(610

)

1.0

%

 

468

 

 

(1,078

)

-230.3

%

-1.2

%

 

(2,040

)

0.3

%

 

388

 

 

(2,428

)

-625.8

%

Royalty income

0.3

%

 

185

 

0.2

%

 

93

 

 

92

 

98.9

%

0.3

%

 

496

 

0.2

%

 

239

 

 

257

 

107.5

%

Other expense, net

0.0

%

 

(13

)

-0.1

%

 

(63

)

 

50

 

79.4

%

0.0

%

 

(47

)

0.0

%

 

(83

)

 

36

 

43.4

%

Total other income (expense), net

-0.8

%

 

(461

)

1.1

%

 

499

 

 

(960

)

-192.4

%

-0.9

%

 

(1,626

)

0.7

%

 

781

 

 

(2,407

)

-308.2

%

 
Income before provision for income taxes

12.6

%

 

7,376

 

11.5

%

 

5,381

 

 

1,995

 

37.1

%

14.2

%

 

24,330

 

3.0

%

 

3,473

 

 

20,857

 

600.5

%

 
Provision for income taxes

2.3

%

 

1,356

 

3.2

%

 

1,489

 

 

133

 

8.9

%

2.8

%

 

4,751

 

0.8

%

 

887

 

 

(3,864

)

-435.6

%

 
Net income

10.3

%

$

6,020

 

8.3

%

$

3,892

 

$

2,128

 

54.7

%

11.4

%

$

19,579

 

2.2

%

$

2,586

 

$

16,993

 

657.1

%

 
 
Net income per share - basic

$

0.13

 

$

0.08

 

$

0.42

 

$

0.06

 

Net income per share - diluted

$

0.12

 

$

0.08

 

$

0.40

 

$

0.05

 

 
Weighted average shares outstanding - basic

 

47,483

 

 

45,903

 

 

47,064

 

 

45,394

 

Weighted average shares outstanding - diluted

 

49,592

 

 

48,180

 

 

49,448

 

 

47,589

 

Consolidated Statements of Cash Flows
(in 000's)
Unaudited
Three Months EndedNine Months Ended
October 1, 2021October 2, 2020October 1, 2021October 2, 2020
 
Cash flows from operating activities:
Net income

$

6,020

 

$

3,892

 

$

19,579

 

$

2,586

 

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment

 

917

 

 

758

 

 

2,671

 

 

2,276

 

Amortization of long-lived intangibles

 

9

 

 

9

 

 

26

 

 

26

 

Deferred income taxes

 

-

 

 

154

 

 

845

 

 

(1,215

)

Change in net pension liability

 

118

 

 

146

 

 

91

 

 

522

 

Stock-based compensation expense

 

3,663

 

 

3,126

 

 

10,985

 

 

8,965

 

Loss on disposal of property and equipment

 

-

 

 

-

 

 

2

 

 

3

 

Provision for sales returns and bad debts

 

137

 

 

210

 

 

1,069

 

 

815

 

Inventory provision

 

400

 

 

379

 

 

1,097

 

 

1,195

 

Changes in working capital:
Accounts receivable

 

6,725

 

 

(2,566

)

 

(7,072

)

 

(10,975

)

Inventories

 

(937

)

 

(421

)

 

1,301

 

 

(1,353

)

Prepayments, deposits and other current assets

 

1,595

 

 

1,536

 

 

1,288

 

 

(636

)

Accounts payable

 

228

 

 

(954

)

 

(40

)

 

(657

)

Other current liabilities

 

3,441

 

 

3,320

 

 

3,622

 

 

(151

)

Net cash provided by operating activities

 

22,316

 

 

9,589

 

 

35,464

 

 

1,401

 

 
Cash flows from investing activities:
Acquisition of property and equipment

 

(3,273

)

 

(2,049

)

 

(8,956

)

 

(6,259

)

Net cash used in investing activities

 

(3,273

)

 

(2,049

)

 

(8,956

)

 

(6,259

)

 
Cash flows from financing activities:
Repayment on line of credit

 

-

 

 

(3

)

 

-

 

 

(511

)

Repayment of finance lease obligations

 

(36

)

 

(109

)

 

(314

)

 

(455

)

Proceeds from vested restricted stock and exercise of stock options

 

4,212

 

 

4,429

 

 

18,323

 

 

13,987

 

Net cash provided by financing activities

 

4,176

 

 

4,317

 

 

18,009

 

 

13,021

 

 
Effect of exchange rate changes on cash and cash equivalents

 

(56

)

 

166

 

 

(724

)

 

207

 

 
Increase in cash and cash equivalents

 

23,163

 

 

12,023

 

 

43,793

 

 

8,370

 

Cash and cash equivalents, at beginning of the period

 

173,083

 

 

116,315

 

 

152,453

 

 

119,968

 

Cash and cash equivalents, at end of the period

$

196,246

 

$

128,338

 

$

196,246

 

$

128,338

 

Reconciliation of Non-GAAP Financial Measure
Adjusted Net Income and Net Income Per Share
(in 000's)
UnauditedThree Months EndedNine Months Ended
October 1, 2021October 2, 2020October 1, 2021October 2, 2020
 
Net income (as reported)

$

6,020

$

3,892

 

$

19,579

$

2,586

 

Less:
Foreign currency impact

 

610

 

(468

)

 

2,040

 

(388

)

Stock-based compensation expense

 

3,663

 

3,126

 

 

10,985

 

8,965

 

Valuation allowance adjustment

 

-

 

154

 

 

845

 

(1,215

)

Net income (adjusted)

$

10,293

$

6,704

 

$

33,449

$

9,948

 

 
Net income per share, basic (as reported)

$

0.13

$

0.08

 

$

0.42

$

0.06

 

Foreign currency impact

 

0.01

 

(0.01

)

 

0.04

 

(0.01

)

Stock-based compensation expense

 

0.08

 

0.08

 

 

0.23

 

0.20

 

Valuation allowance adjustment

 

-

 

-

 

 

0.02

 

(0.03

)

Net income per share, basic (adjusted)

$

0.22

$

0.15

 

$

0.71

$

0.22

 

 
Net income per share, diluted (as reported)

$

0.12

$

0.08

 

$

0.40

$

0.05

 

Foreign currency impact

 

0.01

 

(0.01

)

 

0.04

 

(0.01

)

Stock-based compensation expense

 

0.08

 

0.07

 

 

0.22

 

0.19

 

Valuation allowance adjustment

 

-

 

-

 

 

0.02

 

(0.02

)

Net income per share, diluted (adjusted)

$

0.21

$

0.14

 

$

0.68

$

0.21

 

 
Weighted average shares outstanding - Basic

 

47,483

 

45,903

 

 

47,064

 

45,394

 

Weighted average shares outstanding - Diluted

 

49,592

 

48,180

 

 

49,448

 

47,589

 

 
Note: Net income per share (adjusted), basic and diluted, may not add due to rounding
STAAR Surgical Company
Reconciliation of Non-GAAP Financial Measure
Constant Currency Sales
(in 000's)
Unaudited
  
Three Months Ended
October 1, 2021 Effect ofConstantOctober 2, 2020As ReportedConstant Currency
Sales CurrencyCurrency$ Change% Change$ Change% Change
ICL

$

54,153

 

$

117

 

$

54,270

$

41,493

$

12,660

 

30.5

%

$

12,777

 

30.8

%

  
Cataract IOL

 

2,525

 

 

50

 

 

2,575

 

3,325

 

(800

)

-24.1

%

 

(750

)

-22.6

%

Other

 

1,674

 

 

59

 

 

1,733

 

2,263

 

(589

)

-26.0

%

 

(530

)

-23.4

%

Other Products

 

4,199

 

 

109

 

 

4,308

 

5,588

 

(1,389

)

-24.9

%

 

(1,280

)

-22.9

%

  
Total Sales

$

58,352

 

$

226

 

$

58,578

$

47,081

$

11,271

 

23.9

%

$

11,497

 

24.4

%

  
Nine Months Ended
October 1, 2021 Effect ofConstantOctober 2, 2020As ReportedConstant Currency
Sales CurrencyCurrency$ Change% Change$ Change% Change
ICL

$

159,889

 

$

(1,605

)

$

158,284

$

101,561

$

58,328

 

57.4

%

$

56,723

 

55.9

%

  
Cataract IOL

 

9,324

 

 

(182

)

 

9,142

 

9,880

 

(556

)

-5.6

%

 

(738

)

-7.5

%

Other

 

2,258

 

 

70

 

 

2,328

 

6,021

 

(3,763

)

-62.5

%

 

(3,693

)

-61.3

%

Other Products

 

11,582

 

 

(112

)

 

11,470

 

15,901

 

(4,319

)

-27.2

%

 

(4,431

)

-27.9

%

  
Total Sales

$

171,471

 

$

(1,717

)

$

169,754

$

117,462

$

54,009

 

46.0

%

$

52,292

 

44.5

%

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20211103006067/en/

CONTACT: Investors

Brian Moore

Vice President, Investor, Media Relations and Corporate Development

(626) 303-7902, Ext. 3023

bmoore@staar.comMedia

Jen Jones

Gold PR | Social Media

(310) 918-4313

jjones@goldpr.com

KEYWORD: CALIFORNIA UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: GENERAL HEALTH SURGERY MEDICAL DEVICES OTHER HEALTH HEALTH

SOURCE: STAAR Surgical Company

Copyright Business Wire 2021.

PUB: 11/03/2021 04:01 PM/DISC: 11/03/2021 04:02 PM

http://www.businesswire.com/news/home/20211103006067/en