false Q3 0000718937 --01-01 P3Y P1Y P1Y1M6D P5Y6M P2Y3M18D P5Y8M19D P5Y8M1D P5Y8M19D P5Y8M1D 0000718937 2020-01-04 2020-10-02 xbrli:shares 0000718937 2020-10-30 iso4217:USD 0000718937 2020-10-02 0000718937 2020-01-03 iso4217:USD xbrli:shares 0000718937 2020-10-03 0000718937 2020-07-04 2020-10-02 0000718937 2019-06-29 2019-09-27 0000718937 2018-12-29 2019-09-27 0000718937 us-gaap:CommonStockMember 2020-07-03 0000718937 us-gaap:AdditionalPaidInCapitalMember 2020-07-03 0000718937 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-07-03 0000718937 us-gaap:RetainedEarningsMember 2020-07-03 0000718937 2020-07-03 0000718937 us-gaap:RetainedEarningsMember 2020-07-04 2020-10-02 0000718937 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-07-04 2020-10-02 0000718937 us-gaap:CommonStockMember 2020-07-04 2020-10-02 0000718937 us-gaap:AdditionalPaidInCapitalMember 2020-07-04 2020-10-02 0000718937 us-gaap:CommonStockMember 2020-10-02 0000718937 us-gaap:AdditionalPaidInCapitalMember 2020-10-02 0000718937 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-10-02 0000718937 us-gaap:RetainedEarningsMember 2020-10-02 0000718937 us-gaap:CommonStockMember 2019-06-28 0000718937 us-gaap:AdditionalPaidInCapitalMember 2019-06-28 0000718937 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-28 0000718937 us-gaap:RetainedEarningsMember 2019-06-28 0000718937 2019-06-28 0000718937 us-gaap:RetainedEarningsMember 2019-06-29 2019-09-27 0000718937 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-29 2019-09-27 0000718937 us-gaap:CommonStockMember 2019-06-29 2019-09-27 0000718937 us-gaap:AdditionalPaidInCapitalMember 2019-06-29 2019-09-27 0000718937 us-gaap:CommonStockMember 2019-09-27 0000718937 us-gaap:AdditionalPaidInCapitalMember 2019-09-27 0000718937 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-09-27 0000718937 us-gaap:RetainedEarningsMember 2019-09-27 0000718937 2019-09-27 0000718937 us-gaap:CommonStockMember 2020-01-03 0000718937 us-gaap:AdditionalPaidInCapitalMember 2020-01-03 0000718937 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-03 0000718937 us-gaap:RetainedEarningsMember 2020-01-03 0000718937 us-gaap:RetainedEarningsMember 2020-01-04 2020-10-02 0000718937 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-04 2020-10-02 0000718937 us-gaap:CommonStockMember 2020-01-04 2020-10-02 0000718937 us-gaap:AdditionalPaidInCapitalMember 2020-01-04 2020-10-02 0000718937 us-gaap:CommonStockMember 2018-12-28 0000718937 us-gaap:AdditionalPaidInCapitalMember 2018-12-28 0000718937 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-28 0000718937 us-gaap:RetainedEarningsMember 2018-12-28 0000718937 2018-12-28 0000718937 us-gaap:RetainedEarningsMember 2018-12-29 2019-09-27 0000718937 us-gaap:AccountingStandardsUpdate201602Member us-gaap:RetainedEarningsMember srt:RevisionOfPriorPeriodAccountingStandardsUpdateAdjustmentMember 2018-12-28 0000718937 us-gaap:AccountingStandardsUpdate201602Member srt:RevisionOfPriorPeriodAccountingStandardsUpdateAdjustmentMember 2018-12-28 0000718937 us-gaap:AccountingStandardsUpdate201807Member us-gaap:AdditionalPaidInCapitalMember srt:RevisionOfPriorPeriodAccountingStandardsUpdateAdjustmentMember 2018-12-28 0000718937 us-gaap:AccountingStandardsUpdate201807Member us-gaap:RetainedEarningsMember srt:RevisionOfPriorPeriodAccountingStandardsUpdateAdjustmentMember 2018-12-28 0000718937 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-29 2019-09-27 0000718937 us-gaap:CommonStockMember 2018-12-29 2019-09-27 0000718937 us-gaap:AdditionalPaidInCapitalMember 2018-12-29 2019-09-27 xbrli:pure 0000718937 us-gaap:SupplierConcentrationRiskMember staa:ConsolidatedAccountsPayableMember srt:MaximumMember 2020-01-04 2020-10-02 0000718937 us-gaap:SupplierConcentrationRiskMember staa:ConsolidatedAccountsPayableMember srt:MaximumMember 2018-12-29 2020-01-03 0000718937 us-gaap:SupplierConcentrationRiskMember staa:ConsolidatedPurchasesMember srt:MaximumMember 2020-07-04 2020-10-02 0000718937 us-gaap:SupplierConcentrationRiskMember staa:ConsolidatedPurchasesMember srt:MaximumMember 2020-01-04 2020-10-02 0000718937 staa:PatentsAndLicensesMember 2020-10-02 0000718937 staa:PatentsAndLicensesMember 2020-01-03 iso4217:JPY 0000718937 staa:MizuhoBankMember 2020-10-02 0000718937 staa:MizuhoBankMember 2020-01-04 2020-10-02 0000718937 staa:MizuhoBankMember 2020-01-03 iso4217:CHF 0000718937 staa:CreditSuisseBankMember 2013-09-30 0000718937 staa:CreditSuisseBankMember 2020-10-02 0000718937 staa:CreditSuisseBankMember 2020-01-03 0000718937 staa:CreditSuisseBankMember 2020-01-04 2020-10-02 0000718937 srt:MinimumMember 2020-10-02 0000718937 srt:MaximumMember 2020-10-02 0000718937 us-gaap:MachineryAndEquipmentMember 2020-10-02 0000718937 us-gaap:MachineryAndEquipmentMember 2020-01-03 0000718937 us-gaap:ComputerEquipmentMember 2020-10-02 0000718937 us-gaap:ComputerEquipmentMember 2020-01-03 0000718937 us-gaap:FurnitureAndFixturesMember 2020-01-03 0000718937 us-gaap:LeaseholdImprovementsMember 2020-01-03 0000718937 us-gaap:RealEstateMember 2020-10-02 0000718937 us-gaap:RealEstateMember 2020-01-03 0000718937 us-gaap:DomesticCountryMember 2020-01-04 2020-10-02 0000718937 us-gaap:StateAndLocalJurisdictionMember 2020-01-04 2020-10-02 0000718937 country:US 2020-10-02 0000718937 us-gaap:DomesticCountryMember 2020-10-02 0000718937 us-gaap:StateAndLocalJurisdictionMember 2020-10-02 0000718937 staa:SwissPensionPlanMember 2020-07-04 2020-10-02 0000718937 staa:SwissPensionPlanMember 2019-06-29 2019-09-27 0000718937 staa:SwissPensionPlanMember 2020-01-04 2020-10-02 0000718937 staa:SwissPensionPlanMember 2018-12-29 2019-09-27 0000718937 us-gaap:EmployeeStockOptionMember 2020-07-04 2020-10-02 0000718937 us-gaap:EmployeeStockOptionMember 2019-06-29 2019-09-27 0000718937 us-gaap:EmployeeStockOptionMember 2020-01-04 2020-10-02 0000718937 us-gaap:EmployeeStockOptionMember 2018-12-29 2019-09-27 0000718937 us-gaap:RestrictedStockMember 2020-07-04 2020-10-02 0000718937 us-gaap:RestrictedStockMember 2019-06-29 2019-09-27 0000718937 us-gaap:RestrictedStockMember 2020-01-04 2020-10-02 0000718937 us-gaap:RestrictedStockMember 2018-12-29 2019-09-27 0000718937 us-gaap:RestrictedStockUnitsRSUMember 2020-07-04 2020-10-02 0000718937 us-gaap:RestrictedStockUnitsRSUMember 2019-06-29 2019-09-27 0000718937 us-gaap:RestrictedStockUnitsRSUMember 2020-01-04 2020-10-02 0000718937 us-gaap:RestrictedStockUnitsRSUMember 2018-12-29 2019-09-27 0000718937 us-gaap:PerformanceSharesMember 2020-07-04 2020-10-02 0000718937 us-gaap:PerformanceSharesMember 2020-01-04 2020-10-02 0000718937 staa:NonEmployeeStockOptionsMember 2020-07-04 2020-10-02 0000718937 staa:NonEmployeeStockOptionsMember 2019-06-29 2019-09-27 0000718937 staa:NonEmployeeStockOptionsMember 2020-01-04 2020-10-02 0000718937 staa:NonEmployeeStockOptionsMember 2018-12-29 2019-09-27 0000718937 us-gaap:CostOfSalesMember 2020-07-04 2020-10-02 0000718937 us-gaap:CostOfSalesMember 2019-06-29 2019-09-27 0000718937 us-gaap:CostOfSalesMember 2020-01-04 2020-10-02 0000718937 us-gaap:CostOfSalesMember 2018-12-29 2019-09-27 0000718937 us-gaap:GeneralAndAdministrativeExpenseMember 2020-07-04 2020-10-02 0000718937 us-gaap:GeneralAndAdministrativeExpenseMember 2019-06-29 2019-09-27 0000718937 us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-04 2020-10-02 0000718937 us-gaap:GeneralAndAdministrativeExpenseMember 2018-12-29 2019-09-27 0000718937 us-gaap:SellingAndMarketingExpenseMember 2020-07-04 2020-10-02 0000718937 us-gaap:SellingAndMarketingExpenseMember 2019-06-29 2019-09-27 0000718937 us-gaap:SellingAndMarketingExpenseMember 2020-01-04 2020-10-02 0000718937 us-gaap:SellingAndMarketingExpenseMember 2018-12-29 2019-09-27 0000718937 us-gaap:ResearchAndDevelopmentExpenseMember 2020-07-04 2020-10-02 0000718937 us-gaap:ResearchAndDevelopmentExpenseMember 2019-06-29 2019-09-27 0000718937 us-gaap:ResearchAndDevelopmentExpenseMember 2020-01-04 2020-10-02 0000718937 us-gaap:ResearchAndDevelopmentExpenseMember 2018-12-29 2019-09-27 0000718937 staa:OmnibusPlanMember 2020-01-04 2020-10-02 0000718937 staa:OmnibusPlanMember us-gaap:EmployeeStockOptionMember 2020-01-04 2020-10-02 0000718937 staa:OmnibusPlanMember us-gaap:RestrictedStockMember srt:MinimumMember 2020-01-04 2020-10-02 0000718937 staa:OmnibusPlanMember us-gaap:RestrictedStockMember srt:MaximumMember 2020-01-04 2020-10-02 0000718937 staa:OmnibusPlanMember us-gaap:RestrictedStockMember 2020-10-02 0000718937 staa:OmnibusPlanMember 2020-07-30 2020-07-30 0000718937 staa:OmnibusPlanMember 2020-07-30 0000718937 us-gaap:RestrictedStockMember 2020-01-03 0000718937 us-gaap:RestrictedStockUnitsRSUMember 2020-01-03 0000718937 us-gaap:RestrictedStockMember 2020-10-02 0000718937 us-gaap:RestrictedStockUnitsRSUMember 2020-10-02 0000718937 us-gaap:PerformanceSharesMember 2020-10-02 0000718937 staa:UnvestedRestrictedStockMember 2019-06-29 2019-09-27 0000718937 staa:UnvestedRestrictedStockMember 2020-01-04 2020-10-02 0000718937 staa:UnvestedRestrictedStockMember 2018-12-29 2019-09-27 0000718937 staa:RestrictedStockAwardsAndRestrictedStockUnitsMember 2020-07-04 2020-10-02 0000718937 staa:RestrictedStockAwardsAndRestrictedStockUnitsMember 2019-06-29 2019-09-27 0000718937 staa:RestrictedStockAwardsAndRestrictedStockUnitsMember 2020-01-04 2020-10-02 0000718937 staa:RestrictedStockAwardsAndRestrictedStockUnitsMember 2018-12-29 2019-09-27 0000718937 us-gaap:EmployeeStockOptionMember 2020-07-04 2020-10-02 0000718937 us-gaap:EmployeeStockOptionMember 2019-06-29 2019-09-27 0000718937 us-gaap:EmployeeStockOptionMember 2020-01-04 2020-10-02 0000718937 us-gaap:EmployeeStockOptionMember 2018-12-29 2019-09-27 0000718937 staa:RestrictedStockRestrictedStockUnitsAndPerformanceStockUnitsMember 2020-07-04 2020-10-02 0000718937 staa:RestrictedStockRestrictedStockUnitsAndPerformanceStockUnitsMember 2020-01-04 2020-10-02 0000718937 staa:NonConsignmentSalesMember 2020-07-04 2020-10-02 0000718937 staa:NonConsignmentSalesMember 2019-06-29 2019-09-27 0000718937 staa:NonConsignmentSalesMember 2020-01-04 2020-10-02 0000718937 staa:NonConsignmentSalesMember 2018-12-29 2019-09-27 0000718937 staa:ConsignmentSalesMember 2020-07-04 2020-10-02 0000718937 staa:ConsignmentSalesMember 2019-06-29 2019-09-27 0000718937 staa:ConsignmentSalesMember 2020-01-04 2020-10-02 0000718937 staa:ConsignmentSalesMember 2018-12-29 2019-09-27 staa:Country 0000718937 us-gaap:SalesRevenueNetMember us-gaap:GeographicConcentrationRiskMember staa:OtherCountriesMember srt:MaximumMember 2020-01-04 2020-10-02 0000718937 us-gaap:GeographicDistributionDomesticMember 2020-07-04 2020-10-02 0000718937 us-gaap:GeographicDistributionDomesticMember 2019-06-29 2019-09-27 0000718937 us-gaap:GeographicDistributionDomesticMember 2020-01-04 2020-10-02 0000718937 us-gaap:GeographicDistributionDomesticMember 2018-12-29 2019-09-27 0000718937 country:CN us-gaap:GeographicDistributionForeignMember 2020-07-04 2020-10-02 0000718937 country:CN us-gaap:GeographicDistributionForeignMember 2019-06-29 2019-09-27 0000718937 country:CN us-gaap:GeographicDistributionForeignMember 2020-01-04 2020-10-02 0000718937 country:CN us-gaap:GeographicDistributionForeignMember 2018-12-29 2019-09-27 0000718937 country:JP us-gaap:GeographicDistributionForeignMember 2020-07-04 2020-10-02 0000718937 country:JP us-gaap:GeographicDistributionForeignMember 2019-06-29 2019-09-27 0000718937 country:JP us-gaap:GeographicDistributionForeignMember 2020-01-04 2020-10-02 0000718937 country:JP us-gaap:GeographicDistributionForeignMember 2018-12-29 2019-09-27 0000718937 staa:OtherCountriesMember us-gaap:GeographicDistributionForeignMember 2020-07-04 2020-10-02 0000718937 staa:OtherCountriesMember us-gaap:GeographicDistributionForeignMember 2019-06-29 2019-09-27 0000718937 staa:OtherCountriesMember us-gaap:GeographicDistributionForeignMember 2020-01-04 2020-10-02 0000718937 staa:OtherCountriesMember us-gaap:GeographicDistributionForeignMember 2018-12-29 2019-09-27 0000718937 us-gaap:GeographicDistributionForeignMember 2020-07-04 2020-10-02 0000718937 us-gaap:GeographicDistributionForeignMember 2019-06-29 2019-09-27 0000718937 us-gaap:GeographicDistributionForeignMember 2020-01-04 2020-10-02 0000718937 us-gaap:GeographicDistributionForeignMember 2018-12-29 2019-09-27 0000718937 us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember staa:OphthalmicSurgicalProductMember 2020-01-04 2020-10-02 staa:Segment 0000718937 staa:ImplantableCollamerLensesMember 2020-07-04 2020-10-02 0000718937 staa:ImplantableCollamerLensesMember 2019-06-29 2019-09-27 0000718937 staa:ImplantableCollamerLensesMember 2020-01-04 2020-10-02 0000718937 staa:ImplantableCollamerLensesMember 2018-12-29 2019-09-27 0000718937 staa:IntraocularLensesMember 2020-07-04 2020-10-02 0000718937 staa:IntraocularLensesMember 2019-06-29 2019-09-27 0000718937 staa:IntraocularLensesMember 2020-01-04 2020-10-02 0000718937 staa:IntraocularLensesMember 2018-12-29 2019-09-27 0000718937 staa:OtherSurgicalProductsMember 2020-07-04 2020-10-02 0000718937 staa:OtherSurgicalProductsMember 2019-06-29 2019-09-27 0000718937 staa:OtherSurgicalProductsMember 2020-01-04 2020-10-02 0000718937 staa:OtherSurgicalProductsMember 2018-12-29 2019-09-27 0000718937 staa:CustomerOneMember us-gaap:SalesRevenueNetMember 2020-07-04 2020-10-02 0000718937 staa:CustomerOneMember us-gaap:SalesRevenueNetMember 2020-01-04 2020-10-02 0000718937 staa:CustomerOneMember us-gaap:SalesRevenueNetMember 2019-06-29 2019-09-27 0000718937 staa:CustomerOneMember us-gaap:SalesRevenueNetMember 2018-12-29 2019-09-27 0000718937 staa:CustomerOneMember us-gaap:AccountsReceivableMember 2020-01-04 2020-10-02 0000718937 staa:CustomerOneMember us-gaap:AccountsReceivableMember 2018-12-29 2020-01-03

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:    October 2, 2020

Or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number: 0-11634

 

STAAR SURGICAL COMPANY

(Exact Name of Registrant as Specified in its Charter)

 

Delaware

95-3797439

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

25651 Atlantic Ocean Drive
Lake Forest, California

 

92630

(Address of Principal Executive Offices)

(Zip Code)

 

(626) 303-7902

(Registrant’s Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common

STAA

NASDAQ

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes      No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging growth company

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes      No 

The registrant has 46,109,765 shares of common stock, par value $0.01 per share, issued and outstanding as of October 30, 2020.

 


STAAR SURGICAL COMPANY

 

INDEX

 

 

 

 

PAGE

NUMBER

 

 

 

 

PART I – FINANCIAL INFORMATION

 

1

 

 

 

 

ITEM 1

FINANCIAL STATEMENTS

 

1

 

 

 

 

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

19

 

 

 

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

24

 

 

 

 

ITEM 4.

CONTROLS AND PROCEDURES

 

25

 

 

 

 

PART II – OTHER INFORMATION

 

25

 

 

 

 

ITEM 1.

LEGAL PROCEEDINGS

 

25

 

 

 

 

ITEM 1A.

RISK FACTORS

 

26

 

 

 

 

ITEM 4.

MINE SAFETY DISCLOSURES

 

26

 

 

 

 

ITEM 5.

OTHER INFORMATION

 

26

 

 

 

 

ITEM 6.

EXHIBITS

 

26

 

 

 


PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value amounts)

(Unaudited)

 

 

 

October 2, 2020

 

 

January 3, 2020

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

128,338

 

 

$

119,968

 

Accounts receivable trade, net of allowance of doubtful accounts of

   $131 and $88, respectively

 

 

42,063

 

 

 

30,996

 

Inventories, net

 

 

18,234

 

 

 

17,142

 

Prepayments, deposits and other current assets

 

 

7,368

 

 

 

6,560

 

Total current assets

 

 

196,003

 

 

 

174,666

 

Property, plant and equipment, net

 

 

22,662

 

 

 

17,065

 

Finance lease right-of-use assets, net

 

 

640

 

 

 

1,867

 

Operating lease right-of-use assets, net

 

 

7,725

 

 

 

6,684

 

Intangible assets, net

 

 

275

 

 

 

296

 

Goodwill

 

 

1,786

 

 

 

1,786

 

Deferred income taxes

 

 

5,007

 

 

 

3,750

 

Other assets

 

 

600

 

 

 

751

 

Total assets

 

$

234,698

 

 

$

206,865

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Line of credit

 

$

1,353

 

 

$

1,827

 

Accounts payable

 

 

7,830

 

 

 

8,050

 

Obligations under finance leases

 

 

422

 

 

 

560

 

Obligations under operating leases

 

 

2,215

 

 

 

2,700

 

Allowance for sales returns

 

 

4,427

 

 

 

3,644

 

Other current liabilities

 

 

17,612

 

 

 

17,697

 

Total current liabilities

 

 

33,859

 

 

 

34,478

 

Obligations under finance leases

 

 

73

 

 

 

366

 

Obligations under operating leases

 

 

5,571

 

 

 

4,086

 

Asset retirement obligations

 

 

216

 

 

 

211

 

Pension liability

 

 

8,587

 

 

 

7,840

 

Total liabilities

 

 

48,306

 

 

 

46,981

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock, $0.01 par value; 60,000 shares authorized: 46,072 and

   44,822 shares issued and outstanding at October 3, 2020 and

   January 3, 2020, respectively

 

 

461

 

 

 

448

 

Additional paid-in capital

 

 

328,074

 

 

 

304,288

 

Accumulated other comprehensive loss

 

 

(2,925

)

 

 

(3,048

)

Accumulated deficit

 

 

(139,218

)

 

 

(141,804

)

Total stockholders’ equity

 

 

186,392

 

 

 

159,884

 

Total liabilities and stockholders’ equity

 

$

234,698

 

 

$

206,865

 

 

See accompanying notes to the condensed consolidated financial statements.

 

1


STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

October 2, 2020

 

 

September 27, 2019

 

 

October 2, 2020

 

 

September 27, 2019

 

Net sales

 

$

47,081

 

 

$

39,055

 

 

$

117,462

 

 

$

111,302

 

Cost of sales

 

 

12,210

 

 

 

10,004

 

 

 

33,401

 

 

 

28,172

 

Gross profit

 

 

34,871

 

 

 

29,051

 

 

 

84,061

 

 

 

83,130

 

Selling, general and administrative expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

8,589

 

 

 

7,098

 

 

 

24,406

 

 

 

21,443

 

Selling and marketing

 

 

12,649

 

 

 

12,463

 

 

 

34,003

 

 

 

34,288

 

Research and development

 

 

8,751

 

 

 

6,156

 

 

 

22,960

 

 

 

17,889

 

Total selling, general and administrative expenses

 

 

29,989

 

 

 

25,717

 

 

 

81,369

 

 

 

73,620

 

Operating income

 

 

4,882

 

 

 

3,334

 

 

 

2,692

 

 

 

9,510

 

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

1

 

 

 

266

 

 

 

237

 

 

 

796

 

Gain (loss) on foreign currency transactions

 

 

468

 

 

 

(584

)

 

 

388

 

 

 

(821

)

Royalty income

 

 

93

 

 

 

106

 

 

 

239

 

 

 

440

 

Other income (expense), net

 

 

(63

)

 

 

26

 

 

 

(83

)

 

 

124

 

Total other income (expense), net

 

 

499

 

 

 

(186

)

 

 

781

 

 

 

539

 

Income before income taxes

 

 

5,381

 

 

 

3,148

 

 

 

3,473

 

 

 

10,049

 

Provision for income taxes

 

 

1,489

 

 

 

760

 

 

 

887

 

 

 

2,380

 

Net income

 

$

3,892

 

 

$

2,388

 

 

$

2,586

 

 

$

7,669

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.08

 

 

$

0.05

 

 

$

0.06

 

 

$

0.17

 

Diluted

 

$

0.08

 

 

$

0.05

 

 

$

0.05

 

 

$

0.16

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

45,903

 

 

 

44,563

 

 

 

45,394

 

 

 

44,426

 

Diluted

 

 

48,180

 

 

 

46,857

 

 

 

47,589

 

 

 

46,848

 

 

See accompanying notes to the condensed consolidated financial statements.

2


STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

October 2, 2020

 

 

September 27, 2019

 

 

October 2, 2020

 

 

September 27, 2019

 

Net income

 

$

3,892

 

 

$

2,388

 

 

$

2,586

 

 

$

7,669

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Defined benefit plans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in plan assets

 

 

(334

)

 

 

(1,037

)

 

 

(387

)

 

 

(1,677

)

Reclassification into other income, net

 

 

70

 

 

 

26

 

 

 

212

 

 

 

80

 

Foreign currency translation loss

 

 

316

 

 

 

(22

)

 

 

402

 

 

 

317

 

Tax effect

 

 

(68

)

 

 

115

 

 

 

(104

)

 

 

80

 

Other comprehensive income (loss), net of tax

 

 

(16

)

 

 

(918

)

 

 

123

 

 

 

(1,200

)

Comprehensive income

 

$

3,876

 

 

$

1,470

 

 

$

2,709

 

 

$

6,469

 

 

See accompanying notes to the condensed consolidated financial statements.

 

3


STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

Common

Stock Shares

 

 

Common

Stock Par

Value

 

 

Additional

Paid-In

Capital

 

 

Accumulated

Other

Compre-

hensive

Income

(Loss)

 

 

Accumulated

Deficit

 

 

Total

 

Balance, at July 3, 2020

 

 

45,788

 

 

$

458

 

 

$

320,235

 

 

$

(2,909

)

 

$

(143,110

)

 

$

174,674

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,892

 

 

 

3,892

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(16

)

 

 

 

 

 

(16

)

Common stock issued upon exercise of options

 

 

269

 

 

 

3

 

 

 

4,426

 

 

 

 

 

 

 

 

 

4,429

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,413

 

 

 

 

 

 

 

 

 

3,413

 

Unvested restricted stock

 

 

11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested restricted stock

 

 

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, at October 2, 2020

 

 

46,072

 

 

$

461

 

 

$

328,074

 

 

$

(2,925

)

 

$

(139,218

)

 

$

186,392

 

Balance, at June 28, 2019

 

 

44,534

 

 

$

445

 

 

$

296,063

 

 

$

(1,602

)

 

$

(150,571

)

 

$

144,335

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,388

 

 

 

2,388

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(918

)

 

 

 

 

 

(918

)

Common stock issued upon exercise of options

 

 

64

 

 

 

1

 

 

 

718

 

 

 

 

 

 

 

 

 

719

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,816

 

 

 

 

 

 

 

 

 

2,816

 

Vested restricted stock

 

 

8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, at September 27, 2019

 

 

44,606

 

 

$

446

 

 

$

299,597

 

 

$

(2,520

)

 

$

(148,183

)

 

$

149,340

 

 

See accompanying notes to the condensed consolidated financial statements.


4


STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended

 

 

 

Common

Stock Shares

 

 

Common

Stock Par

Value

 

 

Additional

Paid-In

Capital

 

 

Accumulated

Other

Compre-

hensive

Income

(Loss)

 

 

Accumulated

Deficit

 

 

Total

 

Balance, at January 3, 2020

 

 

44,822

 

 

$

448

 

 

$

304,288

 

 

$

(3,048

)

 

$

(141,804

)

 

$

159,884

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,586

 

 

 

2,586

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

123

 

 

 

 

 

 

123

 

Common stock issued upon exercise of options

 

 

1,146

 

 

 

12

 

 

 

13,974

 

 

 

 

 

 

 

 

 

13,986

 

Stock-based compensation

 

 

 

 

 

 

 

 

9,812

 

 

 

 

 

 

 

 

 

9,812

 

Unvested restricted stock

 

 

11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested restricted stock

 

 

93

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Balance, at October 2, 2020

 

 

46,072

 

 

$

461

 

 

$

328,074

 

 

$

(2,925

)

 

$

(139,218

)

 

$

186,392

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, at December 28, 2018

 

 

44,195

 

 

$

442

 

 

$

289,584

 

 

$

(1,320

)

 

$

(156,280

)

 

$

132,426

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,669

 

 

 

7,669

 

Impact of the adoption of lease accounting standard

 

 

 

 

 

 

 

 

 

 

 

 

 

 

113

 

 

 

113

 

Impact of adoption of nonemployee share-based payment standard

 

 

 

 

 

 

 

 

(315

)

 

 

 

 

 

315

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(1,200

)

 

 

 

 

 

(1,200

)

Common stock issued upon exercise of options

 

 

190

 

 

 

2

 

 

 

1,827

 

 

 

 

 

 

 

 

 

1,829

 

Stock-based compensation

 

 

 

 

 

 

 

 

8,501

 

 

 

 

 

 

 

 

 

8,501

 

Unvested restricted stock

 

 

11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested restricted stock

 

 

210

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

2

 

Balance, at September 27, 2019

 

 

44,606

 

 

$

446

 

 

$

299,597

 

 

$

(2,520

)

 

$

(148,183

)

 

$

149,340

 

 

See accompanying notes to the condensed consolidated financial statements.

 

5


STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended

 

 

 

October 2, 2020

 

 

September 27, 2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

2,586

 

 

$

7,669

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation of property, plant, and equipment

 

 

2,276

 

 

 

2,853

 

Amortization of intangibles

 

 

26

 

 

 

26

 

Deferred income taxes

 

 

(1,215

)

 

 

526

 

Change in net pension liability

 

 

522

 

 

 

264

 

Loss on disposal of property and equipment

 

 

3

 

 

 

14

 

Stock-based compensation expense

 

 

8,965

 

 

 

7,778

 

Provision for sales returns and bad debts

 

 

815

 

 

 

309

 

Inventory provision

 

 

1,195

 

 

 

1,222

 

Changes in working capital:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(10,975

)

 

 

(4,260

)

Inventories

 

 

(1,353

)

 

 

(179

)

Prepayments, deposits, and other current assets

 

 

(636

)

 

 

(230

)

Accounts payable

 

 

(657

)

 

 

546

 

Other current liabilities

 

 

(151

)

 

 

(536

)

Net cash provided by operating activities

 

 

1,401

 

 

 

16,002

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Acquisition of property and equipment

 

 

(6,259

)

 

 

(7,169

)

Acquisition of patents and licenses

 

 

 

 

 

(30

)

Net cash used in investing activities

 

 

(6,259

)

 

 

(7,199

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Repayment of finance lease obligations

 

 

(455

)

 

 

(998

)

Repayment on line of credit

 

 

(511

)

 

 

(1,512

)

Proceeds from the exercise of stock options

 

 

13,986

 

 

 

1,829

 

Proceeds from vested restricted stock

 

 

1

 

 

 

2

 

Net cash provided by (used in) financing activities

 

 

13,021

 

 

 

(679

)

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

 

 

207

 

 

 

204

 

Increase in cash, cash equivalents and restricted cash

 

 

8,370

 

 

 

8,328

 

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

 

 

119,968

 

 

 

103,999

 

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

 

$

128,338

 

 

$

112,327

 

 

See accompanying notes to the condensed consolidated financial statements.

 

6


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

 

Note 1 — Basis of Presentation and Significant Accounting Policies

The Condensed Consolidated Financial Statements of the Company present the financial position, results of operations, and cash flows of STAAR Surgical Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Commission. In accordance with those rules and regulations certain information and footnote disclosures normally included in the Comprehensive Financial Statements have been condensed or omitted pursuant to such rules and regulations. The Consolidated Balance Sheet as of January 3, 2020 was derived from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 3, 2020.

The Condensed Consolidated Financial Statements for the three and nine months ended October 2, 2020 and September 27, 2019, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s financial condition and results of operations. The results of operations for the three and nine months ended October 2, 2020 and September 27, 2019, are not necessarily indicative of the results to be expected for any other interim period or for the entire year.  

Each of the Company’s fiscal reporting periods ends on the Friday nearest to the quarter ending date and generally consists of 13 weeks.  Unless the context indicates otherwise “we,” “us,” the “Company,” and “STAAR” refer to STAAR Surgical Company and its consolidated subsidiaries.

Vendor Concentration

There were two vendors which accounted for over 29% of the Company’s consolidated accounts payable as of October 2, 2020.  There was one vendor which accounted for over 11% of the Company’s consolidated accounts payable as of January 3, 2020.  There was one vendor who accounted for over 10% of the Company’s consolidated purchases for the three months ended October 2, 2020.  There were no vendors who accounted for over 10% of the Company’s consolidated purchases for the nine months ended October 2, 2020.  

Use of Estimates

During the COVID-19 pandemic, the Company believes it has used reasonable estimates and assumptions in determining valuation allowances for uncollectible trade receivables, sales returns reserves, obsolete and excess inventory reserves, deferred income taxes, and tax reserves, including valuation allowances for deferred tax assets, pension liabilities, evaluation of asset impairment, in determining the useful life of depreciable and definite-lived intangible assets, and in the variables and assumptions used to calculate and record stock-based compensation.  Throughout the COVID-19 pandemic the Company offered extended payment terms to assist its surgeon customers and their clinics as they resumed business. During the quarter ended October 2, 2020, the Company has experienced improvements in customer payments and is unaware of any material impairment of customer receivables.  The Company’s sales representatives throughout the world remain engaged with customers conducting online training and other educational courses which have been very well attended.  This activity has given the Company insight into COVID-19’s impact on customers and potential impairment of receivables.

Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Not Yet Adopted

On January 4, 2020 (beginning of fiscal year 2020), the Company adopted Accounting Standards Update (“ASU”) 2016‑13, “Financial Instruments – Credit Losses (Topic 326):  Measurement of Credit Losses on Financial Instruments,” which (i) significantly changes the impairment model for most financial assets that are measured at amortized cost and certain other instruments from an incurred loss model to an expected loss model; and (ii) provides for recording credit losses on available-for-sale debt securities through an allowance account.  ASU 2016-13 also requires certain incremental disclosures.  Subsequently, the FASB issued ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2020-02 and ASU 2020-03 to clarify and improve ASU 2016-13.  The adoption of ASU 2016-13 did not have a material impact on the Condensed Consolidated Financial Statements.

7


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

 

Note 1 — Basis of Presentation and Significant Accounting Policies (Continued)

Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Not Yet Adopted (Continued)

On January 4, 2020 (beginning of fiscal year 2020), the Company adopted ASU 2018-13, “Fair Value Measurement (Topic 820):  Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement,” which modifies certain disclosures requirements for reporting fair value measurements.  The adoption of ASU 2018-13 did not have a material impact on the Condensed Consolidated Financial Statements.

On January 4, 2020 (beginning of fiscal year 2020), the Company adopted ASU 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20); Disclosure Framework – Changes in the Disclosure Requirement for Defined Benefit Plans,” which modifies disclosure requirements for employers that sponsor defined benefit pension or other post retirement plans.  The adoption of ASU 2018-14 did not have a material impact on the Condensed Consolidated Financial Statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740):  Simplifying the Accounting for Income Taxes.” ASU 2019-12 removes the following exceptions:  exception to the incremental approach for intra period tax allocation; exception to accounting for basis differences when there are ownership changes in foreign investments; and exception to interim period tax accounting for year to date losses that exceed anticipated losses.  ASU 2019-12 also improves financial reporting for franchise taxes that are partially based on income; transactions with a government that result in a step up in the tax basis of goodwill; separate financial statements of legal entities that are not subject to tax; and enacted changes in tax laws in interim periods.  ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years.  Early adoption is permitted.  The Company will adopt this standard as of January 2, 2021 (beginning of fiscal year 2021) and is currently evaluating the disclosure requirements and its effect on the Condensed Consolidated Financial Statements.

Note 2 — Inventories

Inventories, net are stated at the lower of cost and net realizable value, determined on a first-in, first-out basis and consisted of the following (in thousands):

 

 

 

October 2, 2020

 

 

January 3, 2020

 

Raw materials and purchased parts

 

$

1,818

 

 

$

3,334

 

Work in process

 

 

4,693

 

 

 

1,870

 

Finished goods

 

 

13,018

 

 

 

12,976

 

Total inventories, gross

 

 

19,529

 

 

 

18,180

 

Less inventory reserves

 

 

1,295

 

 

 

1,038

 

Total inventories, net

 

$

18,234

 

 

$

17,142

 

 

Note 3 — Prepayments, Deposits, and Other Current Assets

Prepayments, deposits, and other current assets consisted of the following (in thousands):

 

 

October 2, 2020

 

 

January 3, 2020

 

Prepayments and deposits

 

$

3,534

 

 

$

3,031

 

Prepaid insurance

 

 

242

 

 

 

1,488

 

Consumption tax receivable

 

 

1,059

 

 

 

875

 

Value added tax (VAT) receivable

 

 

1,492

 

 

 

713

 

Other(1)

 

 

1,041

 

 

 

453

 

Total prepayments, deposits and other current assets

 

$

7,368

 

 

$

6,560

 

 

(1)

No individual item in “other current assets” exceeds 5% of the total prepayments, deposits and other current assets.

8


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

 

Note 4 — Property, Plant and Equipment

Property, plant and equipment, net consisted of the following (in thousands):

 

 

October 2, 2020

 

 

January 3, 2020

 

Machinery and equipment

 

$

21,275

 

 

$

17,173

 

Computer equipment and software