First Quarter ICL Sales Up 58% Y/Y and Units Up
54% Y/Y
Announces Submission of Clinical Trial Data to
U.S. FDA for EVO Family of Myopia Lenses
Introduces Net Sales Outlook of Approximately
$215 Million to $217 Million for Full Year 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 first quarter ended April 2, 2021.
First Quarter 2021
Overview
- Record Quarterly Net Sales of $50.8 Million Up 44% from the
Prior Year Quarter
- Record Quarterly ICL Sales of $46.5 Million Up 58% from the
Prior Year Quarter
- Record Quarterly ICL Units, Up 54% from the Prior Year
Quarter
- Gross Margin at 77.1% vs. 70.4% in the Prior Year Quarter
- Net Income of $0.10 per Share vs. Prior Year Quarter Net Loss
of Approximately Breakeven
- Cash and Cash Equivalents Ended the Quarter at $162.3 Million
Up from $152.5 Million in Q4 2020
“Every major market delivered outstanding performance during the
first quarter of 2021 providing a record breaking quarterly
achievement of net sales of $50.8 million. First quarter ICL sales
of $46.5 Million and unit growth of 54% continued the increasing
momentum from second half 2020 results and represents a return to
the strong demand for ICL lenses we experienced in January 2020
prior to the pandemic taking hold,” said Caren Mason, President and
CEO of STAAR Surgical. “ICL unit growth in the first quarter, year
over year, included China up 63%, Japan up 72%, Korea up 29%, Rest
of Asia Pacific up 63%, Spain up 42%, Germany up 48%, Distributor
Markets in Europe up 54%, and the U.S. up 46%.”
“The record results for the first quarter of 2021 demonstrate
that the promise for a lens-based future of refractive vision
correction is accelerating, led by STAAR’s EVO Visian family of
implantable Collamer lenses. STAAR’s imperatives around surgeon
training and partnership, clinical support and extraordinary
consumer outreach such as our newest campaign in Japan, continue to
be the underpinnings of our excellent results. In China, the
largest market for refractive surgery in the world, we now turn our
attention to preparing for and delivering excellence during the
upcoming busy implant season which typically begins in June. In
late April, the FDA received our clinical data for our EVO family
of myopia lenses with the goal of bringing EVO to the U.S. market
later this year. We also recently launched the third phase of our
newest commercial initiative in the U.S., Refractive ReLook,
a program focused on driving adoption of lower diopter lenses in
the U.S. We have increasing visibility into market dynamics and
expect the momentum in our ICL business to continue. Therefore,
today, we are introducing a sales outlook for fiscal 2021 full year
net sales of approximately $215 million to $217 million which
represents an exciting level of growth, exceeding 30% year over
year even taking into account the strong performance in the second
half of 2020,” concluded Ms. Mason.
Financial Overview – Q1
2021
Net sales were $50.8 million for the first quarter of 2021, up
44% compared to $35.2 million reported in the prior year quarter.
The sales increase was driven by ICL net sales and unit growth up
58% and 54%, respectively, as compared to the prior year period.
Other Product Sales decreased 27% compared to the prior year
quarter due primarily to lower sales of injector parts related to a
third party manufacturer’s product yield issue requiring rework.
ICL net sales were 92% of total Net sales for the first quarter of
2021.
Gross profit margin for the first quarter of 2021 was 77.1%
compared to the prior year period of 70.4%. Factors positively
impacting gross margin in the first 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, and for the
three months ended April 3, 2020 there were period costs recorded
as a result of COVID-19 and the resulting manufacturing pause which
began on March 17, 2020.
Operating expenses for the first quarter of 2021 were $31.7
million compared to the prior year quarter of $25.9 million.
General and administrative expenses were $10.2 million compared to
the prior year quarter of $8.0 million. The increase in general and
administrative expenses was due to increased variable compensation,
salary-related expenses, facility costs and corporate insurance,
partially offset by decreased tax consulting costs. Selling and
marketing expenses were $13.2 million compared to the prior year
quarter of $11.0 million. The increase in selling and marketing
expenses is due to increased salary-related expenses, variable
compensation, advertising and promotional activities, slightly
offset by travel expenses. Research and development expenses were
$8.3 million compared to the prior year quarter of $6.9 million.
The increase in research and development expenses is primarily due
to increased variable compensation, clinical expenses associated
with our EVO clinical trial in the U.S. and salary-related
expenses.
Net income for the first quarter of 2021 was $5.0 million or
$0.10 per diluted share compared with net loss of ($0.1) million or
approximately ($0.00) per diluted share for the prior year quarter.
Adjusted Net Income for the first quarter of 2021 was $9.6 million
or $0.20 per diluted share compared to $1.9 million or $0.04 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 April 2, 2021 totaled $162.3
million compared to $152.5 million at January 1, 2021.
Conference Call
The Company will host a conference call and webcast today,
Wednesday, May 5 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 4495547), please dial
833-350-1429 for domestic participants and 647-689-6661 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 4495547)
will be available beginning approximately one hour after the call’s
conclusion for seven days. This replay can be accessed by dialing
800-585-8367 for domestic callers and 416-621-4642 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 April 2, 2021 January 1, 2021
ASSETS Current assets: Cash and cash equivalents
$
162,344
$
152,453
Accounts receivable trade, net
33,733
35,229
Inventories, net
16,789
18,111
Prepayments, deposits, and other current assets
10,649
10,625
Total current assets
223,515
216,418
Property, plant, and equipment, net
26,314
24,030
Finance lease right-of-use assets, net
80
596
Operating lease right-of-use assets, net
8,666
8,764
Intangible assets, net
249
270
Goodwill
1,786
1,786
Deferred income taxes
4,536
4,944
Other assets
660
608
Total assets
$
265,806
$
257,416
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Line of credit
$
1,288
$
1,379
Accounts payable
7,834
7,874
Obligations under finance leases
124
360
Obligations under operating leases
2,373
2,485
Allowance for sales returns
4,595
4,532
Other current liabilities
19,915
24,606
Total current liabilities
36,129
41,236
Obligations under finance leases
28
38
Obligations under operating leases
6,316
6,537
Deferred income taxes
222
222
Asset retirement obligations
206
221
Pension liability
8,729
11,940
Total liabilities
51,630
60,194
Stockholders' equity: Common stock
469
464
Additional paid-in capital
348,063
338,194
Accumulated other comprehensive loss
(3,457
)
(5,545
)
Accumulated deficit
(130,899
)
(135,891
)
Total stockholders' equity
214,176
197,222
Total liabilities and stockholders' equity
$
265,806
$
257,416
Consolidated Statements of Operations (In 000's except
for per share data) Unaudited Three Months
Ended % of April 2, 2021 % of April 3,
2020 Fav (Unfav) Sales Sales Amount
% Net sales
100.0
%
$
50,752
100.0
%
$
35,187
$
15,565
44.2
%
Cost of sales
22.9
%
11,610
29.6
%
10,427
(1,183
)
-11.3
%
Gross profit
77.1
%
39,142
70.4
%
24,760
14,382
58.1
%
Selling, general and administrative expenses: General and
administrative
20.1
%
10,212
22.6
%
7,969
(2,243
)
-28.1
%
Selling and marketing
26.0
%
13,201
31.4
%
11,028
(2,173
)
-19.7
%
Research and development
16.3
%
8,259
19.6
%
6,898
(1,361
)
-19.7
%
Total selling, general, and administrative expenses
62.4
%
31,672
73.6
%
25,895
(5,777
)
-22.3
%
Operating income (loss)
14.7
%
7,470
-3.2
%
(1,135
)
8,605
758.1
%
Other expense: Interest income (expense), net
0.0
%
(7
)
0.6
%
216
(223
)
-103.2
%
Loss on foreign currency transactions
-2.5
%
(1,299
)
-1.3
%
(468
)
(831
)
-177.6
%
Royalty income
0.3
%
160
0.2
%
94
66
70.2
%
Other income (expense), net
-0.2
%
(85
)
0.0
%
1
(86
)
-8600.0
%
Total other expense, net
-2.4
%
(1,231
)
-0.5
%
(157
)
(1,074
)
-684.1
%
Income (loss) before provision (benefit) for income taxes
12.3
%
6,239
-3.7
%
(1,292
)
7,531
582.9
%
Provision (benefit) for income taxes
2.5
%
1,247
-3.3
%
(1,158
)
(2,405
)
-207.7
%
Net income (loss)
9.8
%
$
4,992
-0.4
%
$
(134
)
$
5,126
3825.4
%
Net income (loss) per share - basic
$
0.11
$
-
Net income (loss) per share - diluted
$
0.10
$
-
Weighted average shares outstanding - basic
46,617
44,953
Weighted average shares outstanding - diluted
49,213
44,953
Consolidated Statements of Cash Flows (in 000's)
Unaudited Three Months Ended April 2, 2021
April 3, 2020 Cash flows from operating activities:
Net income (loss)
$
4,992
$
(134
)
Adjustments to reconcile net income (loss) to net cash provided by
(used in)operating activities: Depreciation of property and
equipment
865
766
Amortization of long-lived intangibles
9
9
Deferred income taxes
-
(1,369
)
Change in net pension liability
127
173
Stock-based compensation expense
3,330
2,921
Loss on disposal of property and equipment
2
3
Provision for sales returns and bad debts
103
80
Inventory provision
384
336
Changes in working capital: Accounts receivable
1,138
(3,462
)
Inventories
984
(491
)
Prepayments, deposits and other current assets
(143
)
(2,446
)
Accounts payable
(399
)
907
Other current liabilities
(4,626
)
(5,464
)
Net cash provided by (used in) operating activities
6,766
(8,171
)
Cash flows from investing activities: Acquisition of
property and equipment
(2,159
)
(2,185
)
Net cash used in investing activities
(2,159
)
(2,185
)
Cash flows from financing activities: Repayment on line of
credit
-
(505
)
Repayment of finance lease obligations
(235
)
(236
)
Proceeds from vested restricted stock and exercise of stock options
6,235
2,005
Net cash provided by financing activities
6,000
1,264
Effect of exchange rate changes on cash and cash equivalents
(716
)
(25
)
Increase (decrease) in cash and cash equivalents
9,891
(9,117
)
Cash, cash equivalents and restricted cash, at beginning of the
period
152,453
119,968
Cash, cash equivalents and restricted cash, at end of the period
$
162,344
$
110,851
Reconciliation of Non-GAAP Financial Measure Adjusted Net
Income (Loss) and Net Income (Loss) Per Share (in 000's)
Unaudited Three Months Ended April 2, 2021
April 3, 2020 Net income (loss) (as reported)
$
4,992
$
(134
)
Less: Foreign currency impact
1,299
468
Stock-based compensation expense
3,330
2,921
Valuation allowance adjustment
-
(1,369
)
Net income (adjusted)
$
9,621
$
1,886
Net income (loss) per share, basic (as reported)
$
0.11
$
-
Foreign currency impact
0.03
0.01
Stock-based compensation expense
0.07
0.06
Valuation allowance adjustment
-
(0.03
)
Net income per share, basic (adjusted)
$
0.21
$
0.04
Net income (loss) per share, diluted (as reported)
$
0.10
$
-
Foreign currency impact
0.03
0.01
Stock-based compensation expense
0.07
0.06
Valuation allowance adjustment
-
(0.03
)
Net income per share, diluted (adjusted)
$
0.20
$
0.04
Weighted average shares outstanding - Basic
46,617
44,953
Weighted average shares outstanding - Diluted
49,213
47,131
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 April 2, 2021 Effect of
Constant April 3, 2020 As Reported Constant
Currency Sales Currency Currency $
Change % Change $ Change % Change ICL
$
46,501
$
(984
)
$
45,517
$
29,340
$
17,161
58.5
%
$
16,177
55.1
%
IOL
3,725
(174
)
3,551
3,994
(269
)
-6.7
%
(443
)
-11.1
%
Other
526
(9
)
517
1,853
(1,327
)
-71.6
%
(1,336
)
-72.1
%
Other Products
4,251
(183
)
4,068
5,847
(1,596
)
-27.3
%
(1,779
)
-30.4
%
Total Sales
$
50,752
$
(1,167
)
$
49,585
$
35,187
$
15,565
44.2
%
$
14,398
40.9
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210505006020/en/
Investors & Media Brian Moore Vice President,
Investor, Media Relations and Corporate Development (626) 303-7902,
Ext. 3023 bmoore@staar.com
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