Advertisement

Topics

STAAR Surgical Reports Second Quarter 2017 Results

12:23 EDT 2 Aug 2017 | PR Newswire

MONROVIA, Calif., Aug. 2, 2017 /PRNewswire/ -- 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 second quarter ended June 30, 2017.

Second Quarter 2017 Overview

  • Quarterly Net Sales of $21.9 Million Up 5% from the Prior Year Quarter
  • ICL Sales Up 6% and Units Up 11% from the Prior Year Quarter
  • IOL Sales Down 14% and Units Down 7% from the Prior Year Quarter
  • Gross Margin Improved to 70.5% of Sales from 69.7% of Sales in the Prior Year Quarter
  • Quarterly Net Loss of $0.02 per Share; Adjusted Net Loss of $0.01 per Share
  • Cash, Cash Equivalents and Restricted Cash Ended the Quarter at $13.6 Million
  • Awarded CE Mark Approval for the EVO+ Visian ICL with Aspheric (EDOF) Optic
  • Currently CE Marked and Commercially Available Products Re-Certified for 5 Years

"Our work to advance the ICL to its rightful position as a premium and primary refractive vision correction solution continues to spur strong growth in many countries globally. Unit growth in Q1 of 20% followed by unit growth of 11% in Q2 in spite of anticipated challenges in the India and Korea markets for the quarter are an indicator of continued strong progress. During Q2, the Toric ICL achieved another new quarterly record for shipments. ICL unit highlights for Q2 include growth in Canada of 119%, China of 57%, and Japan of 24%.  Region growth was strong in ICL units as well with North America and Asia Pacific Regions recording 15% unit growth respectively.  With the positioning of the sale of the ICL for the more competitive lower diopter range lenses and the addition of strategic accounts with incentivized volume commitments; our average selling prices have been appropriately adjusted to gain share in targeted markets. Our position as market leader and superior refractive surgical solution for high Myopes, however, continues to earn premium pricing," said Caren Mason, President and CEO.  

"Our first-in-man clinical trial for the next generation ICL with EDOF continued during the quarter and the results continue to be positive.  In July, DEKRA, our European Union notified regulatory body, re-certified our facilities as compliant with ISO 13485 and re-certified the CE marking for all of our currently certified and commercially available medical devices. With regard to FDA remediation, we completed our internal work in the first quarter of 2017 and have notified the FDA that we are ready for inspection," added Ms. Mason.

Financial Overview

Net sales were $21.9 million for the second quarter of 2017, up 5% compared to $21.0 million reported in the prior year quarter. The sales increase was driven by ICL revenue and unit growth of 6% and 11%, respectively, and strong injector part sales.  Sales of IOLs decreased 14% compared to the prior year quarter.

For the second quarter of 2017, gross profit margin was 70.5% compared to the prior year period of 69.7%.  The increase in gross margin for the quarter is due to a 12% increase in Toric ICL sales (our highest margin product), a reduction in inventory reserves and improved unit costs, partially offset by lower average selling prices and unfavorable product mix due to increased sales of low margin injector parts.  Inventory provisions in 2016 were unfavorably impacted by the discontinuance of silicone IOL sales in the U.S. and V4b ICL sales internationally.

Operating expenses for the quarter were flat at $16.8 million compared to the prior year quarter.  General and administrative expense was $4.8 million, 3.4% lower than the prior year quarter.  Marketing and selling expense was $7.3 million, up 1.9% compared to the prior year quarter. Research and development expense was $4.7 million, up 1.1% compared to the prior year quarter. 

The net loss for the second quarter of 2017 was $1.0 million or approximately $0.02 per share compared with a net loss of $2.1 million or $0.05 per share for the prior year quarter.

The Adjusted Net Loss for the second quarter of 2017 was $0.4 million or $0.01 Adjusted Net Loss Per Share, compared with an Adjusted Net Loss of $1.0 million or $0.02 Adjusted Net Loss Per 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, cash equivalents and restricted cash at June 30, 2017 totaled $13.6 million, compared to $14.1 million at the end of the fourth quarter of 2016 and $12.8 million at the end of the second quarter of 2016.  Continued focus on optimizing the Company's cash position through revenue growth, expense mitigation, and working capital management enabled the Company to maintain a cash balance consistent with the $13.6 million reported for the end of the first quarter of 2017.

Conference Call

The Company will host a conference call and webcast on Wednesday, August 2, 2017 at 4:30 p.m. Eastern / 1:30 p.m. Pacific to discuss its financial results and operational progress.  To access the conference call (Conference ID 54127075), please dial 855-765-5684 for domestic participants and 262-912-6252 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 (Conference ID 54127075) will be available beginning approximately one hour after the call's conclusion for seven days. This replay can be accessed by dialing 855-859-2056 for domestic callers and 404-537-3406 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 Loss" and "Adjusted Net Loss Per Share" exclude the following items that are included in "Net Loss" as calculated in accordance with U.S. generally accepted accounting principles ("GAAP"): gain or loss on foreign currency transactions, stock-based compensation expenses, and quality remediation expenses.  Management believes that "Adjusted Net Loss" and "Adjusted Net Loss Per Share" are 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 excluded quality remediation expenses because their inclusion may mask underlying trends in our business performance.

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.  In calculating Adjusted Net Loss and Adjusted Net Loss Per Share, STAAR excludes these expenses because they are non-cash expenses and because of the complexity and 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.

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".  More than 700,000 Visian ICLs have been implanted to date.  To learn more about the ICL go to: www.discovericl.com.  STAAR has approximately 340 full-time equivalent employees and markets lenses in over 60 countries.  Headquartered in Monrovia, CA, the company operates manufacturing facilities in Aliso Viejo, CA and Monrovia, CA.  For more information, please visit the Company's website at www.staar.com.

Safe Harbor

All statements in this press release that are not statements of historical fact are forward-looking statements, including statements about any of the following: any financial projections, including those relating to the plans, strategies, and objectives of management for future operations or prospects for achieving such plans, expectations for sales, marketing and clinical initiatives, completion of remediation or other expense, success and timing of new or improved products, clinical trials, research and development activities, investment imperatives, and any statements of assumptions underlying any of the foregoing.  Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth in the Company's Annual Report on Form 10-K for the year ended December 30, 2016 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: our limited capital resources and limited access to financing; global economic conditions; changes in currency exchange rates; the discretion of regulatory agencies to approve or reject existing, new or improved products, or to require additional actions before approval (including but not limited to FDA requirements regarding the Visian Toric ICL and/or actions related to the FDA Warning Letter and Form FDA-483s), or to take enforcement action; research and development efforts; the purchasing patterns of our distributors carrying inventory in the market; and the willingness of surgeons and patients to adopt a new or improved product and procedure.  The Visian Toric ICL and the Visian ICL with CentraFLOW, now known as EVO Visian ICL, are not yet approved for sale in the United States.

CONTACT:

Investors & Media

EVC Group

Brian Moore, 310-579-6199

Doug Sherk, 415-652-9100

STAAR Surgical Company

Consolidated Balance Sheets

(in 000's)

Unaudited

June 30,

December 30,

ASSETS

2017

2016

Current assets:

Cash and cash equivalents

$ 13,438

$        13,999

Accounts receivable trade, net

16,426

16,344

Inventories, net

13,458

14,825

Prepayments, deposits, and other current assets

4,474

4,349

   Total current assets

47,796

49,517

Property, plant, and equipment, net

11,619

11,790

Intangible assets, net

383

473

Goodwill

1,786

1,786

Deferred income taxes

1,104

1,105

Other assets

948

772

   Total assets

$ 63,636

$        65,443

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Line of credit

$   4,460

$          4,283

Accounts payable

6,917

8,311

Obligations under capital leases 

1,252

1,198

Other current liabilities

6,353

7,275

   Total current liabilities

18,982

21,067

Obligations under capital leases 

1,128

1,339

Deferred income taxes

889

881

Asset retirement obligations

203

195

Deferred rent

61

59

Pension liability

4,080

3,997

   Total liabilities

25,343

27,538

Stockholders' equity:

Common stock

411

407

Additional paid-in capital

200,921

197,657

Accumulated other comprehensive loss

(756)

(1,050)

Accumulated deficit

(162,283)

(159,109)

   Total stockholders' equity

38,293

37,905

   Total liabilities and stockholders' equity

$ 63,636

$        65,443

STAAR Surgical Company

Consolidated Statements of Operations

(In 000's except for per share data)

Unaudited

Three Months Ended

Six Months Ended

% of

June 30,

% of

July 1,

Fav (Unfav)

% of

June 30,

% of

July 1,

Fav (Unfav)

Sales

2017

Sales

2016

Amount

%

Sales

2017

Sales

2016

Amount

%

Net sales

100.0%

$21,936

100.0%

$20,974

$   962

4.6%

100.0%

$42,286

100.0%

$ 40,243

$ 2,043

5.1%

Cost of sales

29.5%

6,462

30.3%

6,348

(114)

-1.8%

28.9%

12,235

31.4%

12,624

389

3.1%

Gross profit

70.5%

15,474

69.7%

14,626

848

5.8%

71.1%

30,051

68.6%

27,619

2,432

8.8%

Selling, general and administrative expenses:

  General and administrative

21.7%

4,761

23.5%

4,928

167

3.4%

23.9%

10,120

33.3%

13,393

3,273

24.4%

  Marketing and selling

33.4%

7,321

34.2%

7,181

(140)

-1.9%

32.8%

13,851

36.9%

14,856

1,005

6.8%

  Research and development

21.5%

4,712

22.2%

4,659

(53)

-1.1%

22.5%

9,495

28.7%

11,565

2,070

17.9%

    Total selling, general, and administrative expenses

76.6%

16,794

79.9%

16,768

(26)

-0.2%

79.2%

33,466

98.9%

39,814

6,348

15.9%

Operating loss 

-6.1%

(1,320)

-10.2%

(2,142)

822

38.4%

-8.1%

(3,415)

-30.3%

(12,195)

8,780

72.0%

Other income (expense):

  Interest expense, net

-0.1%

(32)

-0.1%

(29)

(3)

-10.3%

-0.1%

(61)

-0.1%

(57)

(4)

-7.0%

  Gain (loss) on foreign currency transactions

1.7%

380

-2.0%

(416)

796

0.7%

294

0.1%

42

252

  Royalty income

0.6%

128

1.7%

351

(223)

-63.5%

0.6%

259

0.9%

373

(114)

-30.6%

  Other income (expense), net

0.1%

19

-0.2%

(38)

57

0.1%

36

-0.2%

(82)

118

    Total other income (expense), net

2.3%

495

-0.6%

(132)

627

1.3%

528

0.7%

276

252

91.3%

Loss before provision (benefit) for income taxes

-3.8%

(825)

-10.8%

(2,274)

1,449

63.7%

-6.8%

(2,887)

-29.6%

(11,919)

9,032

75.8%

Provision (benefit) for income taxes

0.7%

146

-0.6%

(131)

(277)

0.7%

287

-4.3%

(1,735)

2,022

Net loss

-4.5%

$    (971)

-10.2%

$ (2,143)

$ 1,172

54.7%

-7.5%

$ (3,174)

-25.3%

$(10,184)

$ 7,010

68.8%

Net loss per share - basic and diluted

$   (0.02)

$   (0.05)

$   (0.08)

$    (0.25)

Weighted average shares outstanding - basic and diluted

40,933

40,210

40,841

40,097

STAAR Surgical Company

Consolidated Statements of Cash Flows

(in 000's)

Unaudited

Three Months Ended

Six Months Ended

June 30,

July 1,

June 30,

July 1,

2017

2016

2017

2016

Cash flows from operating activities:

   Net loss 

$    (971)

$ (2,143)

$ (3,174)

$ (10,184)

   Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation of property and equipment

792

646

1,548

1,237

Amortization of long-lived intangibles

56

57

110

111

Deferred income taxes

16

(163)

9

(1,802)

Change in net pension liability

(36)

102

30

220

Stock-based compensation expense

868

300

1,378

7,758

Loss on disposal of property and equipment

5

17

72

17

Provision for sales returns and bad debts

(166)

111

66

89

Inventory provision

488

900

789

1,182

   Changes in working capital:

Accounts receivable 

(645)

252

(21)

(65)

Inventories

807

149

908

431

Prepayments, deposits and other current assets

805

494

(278)

(418)

Accounts payable

(610)

1,715

(1,767)

1,280

Other current liabilities

(2,075)

74

(961)

(324)

      Net cash provided by (used in) operating activities

(666)

2,511

(1,291)

(468)

Cash flows from investing activities:

Acquisition of property and equipment

(383)

(985)

(696)

(1,991)

      Net cash used in investing activities

(383)

(985)

(696)

(1,991)

Cash flows from financing activities:

Repayment of capital lease obligations

(360)

(92)

(661)

(184)

Proceeds from sale-leaseback transactions

-

1,154

-

1,154

Repurchase of employee common stock for taxes withheld

(17)

-

(234)

(611)

Proceeds from vested restricted stock and exercise of stock options

1,366

730

1,963

737

      Net cash provided by financing activities

989

1,792

1,068

1,096

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(1)

402

359

649

Increase (decrease)  in cash, cash equivalents and restricted cash

(61)

3,720

(560)

(714)

Cash, cash equivalents and restricted cash, at beginning of the period

13,619

9,087

14,118

13,521

Cash, cash equivalents and restricted cash, at end of the period

$ 13,558

$ 12,807

$ 13,558

$  12,807

STAAR Surgical Company

Global Sales

(in 000's)

Unaudited

Three Months Ended

Six Months Ended

June 30,

July 1,

% Change

June 30,

July 1,

% Change

Sales by Region

2017

2016

Fav (Unfav)

2017

2016

Fav (Unfav)

North America

10.6%

$   2,336

12.0%

$   2,523

-7.4%

10.9%

$   4,594

13.0%

$   5,224

-12.1%

Europe, Middle East, Africa, Latin America

31.2%

6,839

32.2%

6,751

1.3%

32.1%

13,592

31.8%

12,779

6.4%

Asia Pacific

58.2%

12,761

55.8%

11,700

9.1%

57.0%

24,100

55.3%

22,240

8.4%

    Total Sales

100.0%

$  21,936

100.0%

$  20,974

4.6%

100.0%

$  42,286

100.1%

$  40,243

5.1%

Product Sales

    ICLs

74.4%

$  16,317

73.5%

$  15,408

5.9%

74.7%

$  31,588

71.0%

$  28,588

10.5%

    IOLs

20.0%

4,377

24.2%

5,068

-13.6%

21.2%

8,983

25.2%

10,134

-11.4%

    Other

5.7%

1,242

2.4%

498

149.4%

4.1%

1,715

3.8%

1,521

12.8%

    Total Sales

100.1%

$  21,936

100.1%

$  20,974

4.6%

100.0%

$  42,286

100.0%

$  40,243

5.1%

STAAR Surgical Company

Reconciliation of Non-GAAP Financial Measure

(in 000's)

Unaudited

Three Months Ended

Six Months Ended

June 30,

July 1,

June 30,

July 1,

2017

2016

2017

2016

Net loss - (as reported)

$   (971)

$(2,143)

$ (3,174)

$(10,184)

Less:

  Foreign currency impact

(380)

416

(294)

(42)

  Stock-based compensation expense

868

300

1,378

7,758

  Quality remediation expense

43

491

210

1,000

Net income (loss) - (adjusted)

$   (440)

$   (936)

$ (1,880)

$  (1,468)

Net income (loss) per share, basic - (as reported)

$  (0.02)

$  (0.05)

$  (0.08)

$    (0.25)

  Foreign currency impact

(0.01)

0.01

(0.01)

(0.00)

  Stock-based compensation expense

$   0.02

0.01

0.03

0.19

  Quality remediation expense

0.00

0.01

0.01

0.02

Net income (loss) per share, basic - (adjusted)

$  (0.01)

$  (0.02)

$  (0.05)

$    (0.04)

Net income (loss) per share, diluted - (as reported)

$  (0.02)

$  (0.05)

$  (0.08)

$    (0.25)

  Foreign currency impact

(0.01)

0.01

(0.01)

(0.00)

  Stock-based compensation expense

0.02

0.01

0.03

0.19

  Quality remediation expense

0.00

0.01

0.01

0.02

Net income (loss) per share, diluted - (adjusted)

$  (0.01)

$  (0.02)

$  (0.05)

$    (0.04)

Weighted average shares outstanding - Basic 

40,933

40,210

40,841

40,097

Weighted average shares outstanding - Diluted

40,933

40,210

40,841

40,097

Note:  Net income (loss) per share (adjusted), basic and diluted, may not add due to rounding

View original content:http://www.prnewswire.com/news-releases/staar-surgical-reports-second-quarter-2017-results-300498686.html

SOURCE STAAR Surgical Company

NEXT ARTICLE

More From BioPortfolio on "STAAR Surgical Reports Second Quarter 2017 Results"

Quick Search
Advertisement
 

Relevant Topic

The Top 100 Pharmaceutical Companies
Top 10 biotech and pharmaceutical companies worldwide based on market value in 2015 2015 ranking of the global top 10 biotech and pharmaceutical companies based on revenue (in billion U.S. dollars) Johnson & Johnson, U.S. 74...