Company Quick10K Filing
Staar Surgical
Price27.18 EPS0
Shares47 P/E145
MCap1,274 P/FCF80
Net Debt-112 EBIT11
TEV1,161 TEV/EBIT104
TTM 2019-09-27, in MM, except price, ratios
10-Q 2020-04-03 Filed 2020-05-06
10-K 2020-01-03 Filed 2020-02-26
10-Q 2019-09-27 Filed 2019-10-30
10-Q 2019-06-28 Filed 2019-07-31
10-Q 2019-03-29 Filed 2019-05-01
10-K 2018-12-28 Filed 2019-02-21
10-Q 2018-09-28 Filed 2018-10-31
10-Q 2018-06-29 Filed 2018-08-01
10-Q 2018-03-30 Filed 2018-05-02
10-K 2017-12-29 Filed 2018-02-28
10-Q 2017-09-29 Filed 2017-11-08
10-Q 2017-06-30 Filed 2017-08-02
10-Q 2017-03-31 Filed 2017-05-03
10-K 2016-12-30 Filed 2017-03-02
10-Q 2016-09-30 Filed 2016-11-03
10-Q 2016-07-01 Filed 2016-08-03
10-Q 2016-04-01 Filed 2016-05-11
10-K 2016-01-01 Filed 2016-03-11
10-Q 2015-10-02 Filed 2015-11-04
10-Q 2015-07-03 Filed 2015-08-07
10-Q 2015-04-03 Filed 2015-05-12
10-K 2015-01-02 Filed 2015-03-13
10-Q 2014-10-03 Filed 2014-11-07
10-Q 2014-07-04 Filed 2014-07-31
10-Q 2014-04-04 Filed 2014-05-13
10-K 2014-01-03 Filed 2014-03-12
10-Q 2013-09-27 Filed 2013-11-01
10-Q 2013-06-28 Filed 2013-08-06
10-Q 2013-03-29 Filed 2013-05-03
10-K 2012-12-28 Filed 2013-03-12
10-Q 2012-09-28 Filed 2012-11-05
10-Q 2012-06-29 Filed 2012-08-07
10-Q 2012-03-30 Filed 2012-05-03
10-K 2011-12-30 Filed 2012-03-08
10-Q 2011-09-30 Filed 2011-11-02
10-Q 2011-07-01 Filed 2011-08-04
10-Q 2011-04-01 Filed 2011-05-04
10-Q 2010-10-01 Filed 2010-11-10
10-Q 2010-07-02 Filed 2010-08-11
10-Q 2010-04-02 Filed 2010-05-12
10-K 2010-01-01 Filed 2010-04-01
8-K 2020-06-02
8-K 2020-06-01
8-K 2020-05-06
8-K 2020-05-03
8-K 2020-05-01
8-K 2020-04-13
8-K 2020-02-26
8-K 2020-02-26
8-K 2020-02-04
8-K 2020-01-30
8-K 2020-01-13
8-K 2019-12-17
8-K 2019-12-11
8-K 2019-11-08
8-K 2019-11-01
8-K 2019-10-30
8-K 2019-08-27
8-K 2019-08-07
8-K 2019-07-31
8-K 2019-07-31
8-K 2019-06-20
8-K 2019-06-05
8-K 2019-05-15
8-K 2019-05-02
8-K 2019-05-01
8-K 2019-05-01
8-K 2019-02-28
8-K 2019-02-21
8-K 2019-02-21
8-K 2019-01-17
8-K 2019-01-07
8-K 2019-01-07
8-K 2018-11-06
8-K 2018-10-31
8-K 2018-10-31
8-K 2018-09-13
8-K 2018-08-22
8-K 2018-08-08
8-K 2018-08-07
8-K 2018-08-01
8-K 2018-08-01
8-K 2018-06-20
8-K 2018-06-14
8-K 2018-05-02
8-K 2018-05-02
8-K 2018-03-13
8-K 2018-02-28
8-K 2018-02-28
8-K 2018-01-08

STAA 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Note 1 - Basis of Presentation and Significant Accounting Policies
Note 2 - Inventories
Note 3 - Prepayments, Deposits, and Other Current Assets
Note 4 - Property, Plant and Equipment
Note 5 - Intangible Assets
Note 6 - Other Current Liabilities
Note 7 - Lines of Credit
Note 8 - Leases
Note 9 - Income Taxes
Note 10 - Defined Benefit Pension Plans
Note 11 - Stockholders' Equity
Note 12 - Commitments and Contingencies
Note 13 - Basic and Diluted Net Income (Loss) per Share
Note 14 - Disaggregation of Sales, Geographic Sales and Product Sales
Note 15 - Covid - 19 and Cares Act Developments
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 staa-ex311_8.htm
EX-31.2 staa-ex312_7.htm
EX-32.1 staa-ex321_6.htm

Staar Surgical Earnings 2020-04-03

Balance SheetIncome StatementCash Flow
0.20.20.10.10.00.02012201420172020
Assets, Equity
0.10.10.0-0.0-0.1-0.12012201420172020
Rev, G Profit, Net Income
0.10.10.0-0.0-0.1-0.12012201420172020
Ops, Inv, Fin

staa-10q_20200403.htm
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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:    April 3, 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)

 

(626303-7902

(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 45,109,006 shares of common stock, par value $0.01 per share, issued and outstanding as of May 1, 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

 

18

 

 

 

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

23

 

 

 

 

ITEM 4.

CONTROLS AND PROCEDURES

 

24

 

 

 

 

PART II – OTHER INFORMATION

 

24

 

 

 

 

ITEM 1.

LEGAL PROCEEDINGS

 

24

 

 

 

 

ITEM 1A.

RISK FACTORS

 

24

 

 

 

 

ITEM 4.

MINE SAFETY DISCLOSURES

 

25

 

 

 

 

ITEM 5.

OTHER INFORMATION

 

25

 

 

 

 

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)

 

 

 

April 3, 2020

 

 

January 3, 2020

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

110,851

 

 

$

119,968

 

Accounts receivable trade, net of allowance of doubtful accounts of

   $49 and $88, respectively

 

 

34,492

 

 

 

30,996

 

Inventories, net

 

 

17,565

 

 

 

17,142

 

Prepayments, deposits and other current assets

 

 

9,168

 

 

 

6,560

 

Total current assets

 

 

172,076

 

 

 

174,666

 

Property, plant and equipment, net

 

 

20,184

 

 

 

17,065

 

Finance lease right-of-use assets, net

 

 

717

 

 

 

1,867

 

Operating lease right-of-use assets, net

 

 

6,038

 

 

 

6,684

 

Intangible assets, net

 

 

287

 

 

 

296

 

Goodwill

 

 

1,786

 

 

 

1,786

 

Deferred income taxes

 

 

5,112

 

 

 

3,750

 

Other assets

 

 

588

 

 

 

751

 

Total assets

 

$

206,788

 

 

$

206,865

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Line of credit

 

$

1,316

 

 

$

1,827

 

Accounts payable

 

 

9,507

 

 

 

8,050

 

Obligations under finance leases

 

 

557

 

 

 

560

 

Obligations under operating leases

 

 

2,531

 

 

 

2,700

 

Allowance for sales returns

 

 

3,761

 

 

 

3,644

 

Other current liabilities

 

 

12,230

 

 

 

17,697

 

Total current liabilities

 

 

29,902

 

 

 

34,478

 

Obligations under finance leases

 

 

132

 

 

 

366

 

Obligations under operating leases

 

 

3,612

 

 

 

4,086

 

Asset retirement obligations

 

 

210

 

 

 

211

 

Pension liability

 

 

7,965

 

 

 

7,840

 

Total liabilities

 

 

41,821

 

 

 

46,981

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock, $0.01 par value; 60,000 shares authorized: 45,105 and

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

   January 3, 2020, respectively

 

 

451

 

 

 

448

 

Additional paid-in capital

 

 

309,480

 

 

 

304,288

 

Accumulated other comprehensive loss

 

 

(3,026

)

 

 

(3,048

)

Accumulated deficit

 

 

(141,938

)

 

 

(141,804

)

Total stockholders’ equity

 

 

164,967

 

 

 

159,884

 

Total liabilities and stockholders’ equity

 

$

206,788

 

 

$

206,865

 

 

See accompanying notes to the condensed consolidated financial statements.

 

1


STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

April 3, 2020

 

 

March 29, 2019

 

Net sales

 

$

35,187

 

 

$

32,583

 

Cost of sales

 

 

10,427

 

 

 

8,403

 

Gross profit

 

 

24,760

 

 

 

24,180

 

Selling, general and administrative expenses:

 

 

 

 

 

 

 

 

General and administrative

 

 

7,969

 

 

 

6,837

 

Marketing and selling

 

 

11,028

 

 

 

10,143

 

Research and development

 

 

6,898

 

 

 

5,635

 

Total selling, general and administrative expenses

 

 

25,895

 

 

 

22,615

 

Operating income (loss)

 

 

(1,135

)

 

 

1,565

 

Other income (expense), net:

 

 

 

 

 

 

 

 

Interest income, net

 

 

216

 

 

 

271

 

Loss on foreign currency transactions

 

 

(468

)

 

 

(248

)

Royalty income

 

 

94

 

 

 

171

 

Other income, net

 

 

1

 

 

 

97

 

Total other income (expense), net

 

 

(157

)

 

 

291

 

Income (loss) before income taxes

 

 

(1,292

)

 

 

1,856

 

Provision (benefit) for income taxes

 

 

(1,158

)

 

 

489

 

Net income (loss)

 

$

(134

)

 

$

1,367

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

Basic

 

$

 

 

$

0.03

 

Diluted

 

$

 

 

$

0.03

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

44,953

 

 

 

44,235

 

Diluted

 

 

44,953

 

 

 

46,913

 

 

See accompanying notes to the condensed consolidated financial statements.

2


STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

April 3, 2020

 

 

March 29, 2019

 

Net income (loss)

 

$

(134

)

 

$

1,367

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

Defined benefit plans:

 

 

 

 

 

 

 

 

Net change in plan assets

 

 

(25

)

 

 

(26

)

Reclassification into other income, net

 

 

70

 

 

 

26

 

Foreign currency translation loss

 

 

(27

)

 

 

(43

)

Tax effect

 

 

4

 

 

 

20

 

Other comprehensive income (loss), net of tax

 

 

22

 

 

 

(23

)

Comprehensive income (loss)

 

$

(112

)

 

$

1,344

 

 

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 January 3, 2020

 

 

44,822

 

 

$

448

 

 

$

304,288

 

 

$

(3,048

)

 

$

(141,804

)

 

$

159,884

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(134

)

 

 

(134

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

22

 

 

 

 

 

 

22

 

Common stock issued upon exercise of options

 

 

196

 

 

 

2

 

 

 

2,002

 

 

 

 

 

 

 

 

 

2,004

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,190

 

 

 

 

 

 

 

 

 

3,190

 

Vested restricted stock

 

 

87

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Balance, at April 3, 2020

 

 

45,105

 

 

$

451

 

 

$

309,480

 

 

$

(3,026

)

 

$

(141,938

)

 

$

164,967

 

Balance, at December 28, 2018

 

 

44,195

 

 

$

442

 

 

$

289,584

 

 

$

(1,320

)

 

$

(156,280

)

 

$

132,426

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,367

 

 

 

1,367

 

Impact of the adoption of lease accounting standard

 

 

 

 

 

 

 

 

 

 

 

 

 

 

113

 

 

 

113

 

Impact of adoption of nonemployee share-based payment standard

 

 

 

 

 

 

 

 

(315

)

 

 

 

 

 

315

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(23

)

 

 

 

 

 

(23

)

Common stock issued upon exercise of options

 

 

74

 

 

 

 

 

 

623

 

 

 

 

 

 

 

 

 

623

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,830

 

 

 

 

 

 

 

 

 

2,830

 

Vested restricted stock

 

 

178

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

2

 

Balance, at March 29, 2019

 

 

44,447

 

 

$

444

 

 

$

292,722

 

 

$

(1,343

)

 

$

(154,485

)

 

$

137,338

 

 

See accompanying notes to the condensed consolidated financial statements.

 

 

4


STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

April 3, 2020

 

 

March 29, 2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(134

)

 

$

1,367

 

Adjustments to reconcile net income (loss) to net cash provided by

   operating activities:

 

 

 

 

 

 

 

 

Depreciation of property, plant, and equipment

 

 

766

 

 

 

1,222

 

Amortization of intangibles

 

 

9

 

 

 

8

 

Deferred income taxes

 

 

(1,369

)

 

 

79

 

Change in net pension liability

 

 

173

 

 

 

119

 

Loss on disposal of property and equipment

 

 

3

 

 

 

 

Stock-based compensation expense

 

 

2,921

 

 

 

2,641

 

Provision for sales returns and bad debts

 

 

80

 

 

 

(34

)

Inventory provision

 

 

336

 

 

 

455

 

Changes in working capital:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(3,462

)

 

 

(554

)

Inventories

 

 

(491

)

 

 

(7

)

Prepayments, deposits, and other current assets

 

 

(2,446

)

 

 

(2,317

)

Accounts payable

 

 

907

 

 

 

(185

)

Other current liabilities

 

 

(5,464

)

 

 

(2,063

)

Net cash provided by (used in) operating activities

 

 

(8,171

)

 

 

731

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Acquisition of property and equipment

 

 

(2,185

)

 

 

(2,203

)

Acquisition of patents and licenses

 

 

 

 

 

(30

)

Net cash used in investing activities

 

 

(2,185

)

 

 

(2,233

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Repayment of finance lease obligations

 

 

(236

)

 

 

(365

)

Repayment on line of credit

 

 

(505

)

 

 

(499

)

Proceeds from the exercise of stock options

 

 

2,004

 

 

 

622

 

Proceeds from vested restricted stock

 

 

1

 

 

 

2

 

Net cash provided by (used in) financing activities

 

 

1,264

 

 

 

(240

)

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

 

 

(25

)

 

 

(24

)

Decrease in cash, cash equivalents and restricted cash

 

 

(9,117

)

 

 

(1,766

)

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

 

$

110,851

 

 

$

102,233

 

 

See accompanying notes to the condensed consolidated financial statements.

 

5


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 months ended April 3, 2020 and March 29, 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 months ended April 3, 2020 and March 29, 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.

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows (in 000’s):

 

 

 

April 3, 2020

 

 

January 3, 2020

 

 

March 29, 2019

 

Cash and cash equivalents

 

$

110,851

 

 

$

119,968

 

 

$

102,111

 

Restricted cash(1)

 

 

 

 

 

 

 

 

122

 

Total cash, cash equivalents and restricted cash

 

$

110,851

 

 

$

119,968

 

 

$

102,233

 

 

(1)

Included in other assets on the Condensed Consolidated Balance Sheets.

The Company had restricted cash set aside as collateral for a standby letter of credit required by the California Department of Public Health for unforeseen future regulatory costs related to the decommissioning of certain manufacturing equipment.  Since the quarter ended June 28, 2019, the Company was no longer required to set aside collateral for this standby letter of credit.

Vendor Concentration

There were no vendors which accounted for over 10% of the Company’s consolidated accounts payable as of April 3, 2020.  There was one vendor which accounted for over 11% of the Company’s consolidated accounts payable as of January 3, 2020.

6


STAAR SURGICAL COMPANY

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

 

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

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.  Toward the end of the quarter ended April 3, 2020, the Company’s customers began experiencing delays in customer payments.  At this time, the Company is not aware of any 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 gives the Company insight as to the impact to customers of COVID-19 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.

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.

7


STAAR SURGICAL COMPANY

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

 

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):

 

 

 

April 3, 2020

 

 

January 3, 2020

 

Raw materials and purchased parts

 

$

4,252

 

 

$

3,334

 

Work in process

 

 

2,079

 

 

 

1,870

 

Finished goods

 

 

12,316

 

 

 

12,976

 

Total inventories, gross

 

 

18,647

 

 

 

18,180

 

Less inventory reserves

 

 

1,082

 

 

 

1,038

 

Total inventories, net

 

$

17,565

 

 

$

17,142

 

 

Note 3 — Prepayments, Deposits, and Other Current Assets

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

 

 

April 3, 2020

 

 

January 3, 2020

 

Prepayments and deposits

 

$

4,382

 

 

$

3,031

 

Prepaid insurance

 

 

1,079

 

 

 

1,488

 

Consumption tax receivable

 

 

1,192

 

 

 

875

 

Value added tax (VAT) receivable

 

 

1,355

 

 

 

713

 

Other(1)

 

 

1,160

 

 

 

453

 

Total prepayments, deposits and other current assets

 

$

9,168

 

 

$

6,560

 

 

(1)

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

Note 4 — Property, Plant and Equipment

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

 

 

April 3, 2020

 

 

January 3, 2020

 

Machinery and equipment

 

$

20,431

 

 

$

17,173

 

Computer equipment and software

 

 

6,475

 

 

 

6,244

 

Furniture and fixtures

 

 

4,523

 

 

 

4,169

 

Leasehold improvements

 

 

10,912

 

 

 

10,151

 

Construction in process

 

 

7,742

 

 

 

8,477

 

Total property, plant and equipment, gross

 

 

50,083

 

 

 

46,214

 

Less accumulated depreciation

 

 

29,899

 

 

 

29,149

 

Total property, plant and equipment, net

 

$

20,184

 

 

$

17,065

 

 

Note 5 –Intangible Assets

Intangible assets, net consisted of the following (in thousands):

 

 

 

April 3, 2020

 

 

January 3, 2020

 

Long-lived amortized intangible assets

 

Gross

Carrying

Amount

 

 

Accumulated

Amortization

 

 

Net

 

 

Gross

Carrying

Amount

 

 

Accumulated

Amortization

 

 

Net

 

Patents and licenses

 

$

9,352