UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended:
Or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number:
(Exact Name of Registrant as Specified in its Charter)
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(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
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(Address of Principal Executive Offices) |
(Zip Code) |
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(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 |
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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.
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).
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.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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
The registrant has
STAAR SURGICAL COMPANY
INDEX
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PAGE NUMBER |
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ITEM 1 |
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1 |
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ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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ITEM 3. |
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ITEM 4. |
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ITEM 1. |
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ITEM 1A. |
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ITEM 4. |
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ITEM 5. |
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19 |
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ITEM 6. |
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20 |
PART I – FINANCIAL INFORMATION
ITEM 1. |
FINANCIAL STATEMENTS |
STAAR SURGICAL COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value amounts)
(Unaudited)
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April 1, 2022 |
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December 31, 2021 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable trade, net of allowance for credit losses of $ |
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Inventories, net |
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Prepayments, deposits and other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Finance lease right-of-use assets, net |
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Operating lease right-of-use assets, net |
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Intangible assets, net |
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Goodwill |
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Deferred income taxes |
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Other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Obligations under finance leases |
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Obligations under operating leases |
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Allowance for sales returns |
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Other current liabilities |
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Total current liabilities |
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Obligations under finance leases |
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Obligations under operating leases |
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Deferred income taxes |
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Asset retirement obligations |
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Pension liability |
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Total liabilities |
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Commitments and contingencies |
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Stockholders’ equity: |
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Common stock, $ December 31, 2021, respectively |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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( |
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Accumulated deficit |
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( |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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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)
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Three Months Ended |
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April 1, 2022 |
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April 2, 2021 |
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Net sales |
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$ |
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$ |
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Cost of sales |
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Gross profit |
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Selling, general and administrative expenses: |
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General and administrative |
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Selling and marketing |
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Research and development |
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Total selling, general and administrative expenses |
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Operating income |
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Other expense, net: |
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Interest expense, net |
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( |
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( |
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Loss on foreign currency transactions |
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( |
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Royalty income |
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Other income (expense), net |
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( |
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Total other expense, net |
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( |
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( |
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Income before income taxes |
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Provision for income taxes |
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Net income |
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$ |
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$ |
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Net income per share: |
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Basic |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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Weighted average shares outstanding: |
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Basic |
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Diluted |
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See accompanying notes to the condensed consolidated financial statements.
2
STAAR SURGICAL COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
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Three Months Ended |
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April 1, 2022 |
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April 2, 2021 |
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Net income |
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$ |
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$ |
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Other comprehensive income: |
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Defined benefit plans: |
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Net change in plan assets |
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Reclassification into other income (expense), net |
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Foreign currency translation loss |
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( |
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( |
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Tax effect |
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— |
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Other comprehensive income, net of tax |
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Comprehensive income |
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$ |
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$ |
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See accompanying notes to the condensed consolidated financial statements.
3
STAAR SURGICAL COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
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Three Months Ended |
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Common Stock Shares |
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Common Stock Par Value |
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Additional Paid-In Capital |
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Accumulated Other Compre- hensive Income (Loss) |
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Accumulated Deficit |
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Total |
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Balance, at December 31, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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Common stock issued upon exercise of options |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Vested restricted and performance stock |
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— |
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— |
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— |
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— |
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— |
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Balance, at April 1, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Balance, at January 1, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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Common stock issued upon exercise of options |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Vested restricted stock |
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— |
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— |
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— |
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Balance, at April 2, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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See accompanying notes to the condensed consolidated financial statements.
4
STAAR SURGICAL COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
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Three Months Ended |
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April 1, 2022 |
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April 2, 2021 |
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Cash flows from operating activities: |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
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Depreciation of property, plant, and equipment |
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Amortization of intangibles |
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Change in net pension liability |
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Loss on disposal of property and equipment |
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— |
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Stock-based compensation expense |
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Provision for sales returns and bad debts |
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( |
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Inventory provision |
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Changes in working capital: |
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Accounts receivable |
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( |
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Inventories |
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( |
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Prepayments, deposits, and other current assets |
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( |
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( |
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Accounts payable |
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( |
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Other current liabilities |
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( |
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( |
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Net cash provided by (used in) operating activities |
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( |
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Cash flows from investing activities: |
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Acquisition of property and equipment |
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( |
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( |
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Net cash used in investing activities |
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( |
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( |
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Cash flows from financing activities: |
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Repayment of finance lease obligations |
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( |
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( |
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Proceeds from the exercise of stock options |
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Proceeds from vested restricted stock |
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— |
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Net cash provided by financing activities |
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Effect of exchange rate changes on cash, cash equivalents and restricted cash |
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( |
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( |
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Increase (decrease) in cash, cash equivalents and restricted cash |
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( |
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Cash and cash equivalents, at beginning of the period |
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Cash and cash equivalents, at end of the period |
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$ |
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$ |
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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 December 31, 2021 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 December 31, 2021.
The Condensed Consolidated Financial Statements for the three months ended April 1, 2022 and April 2, 2021, 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 1, 2022 and April 2, 2021, 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 no vendors that accounted for over
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):
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April 1, 2022 |
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December 31, 2021 |
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Raw materials and purchased parts |
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$ |
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$ |
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Work in process |
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Finished goods |
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Total inventories, gross |
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Less inventory reserves |
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( |
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( |
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Total inventories, net |
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$ |
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$ |
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6
STAAR SURGICAL COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Note 3 — Prepayments, Deposits, and Other Current Assets
Prepayments, deposits, and other current assets consisted of the following (in thousands):
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April 1, 2022 |
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December 31, 2021 |
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Prepayments and deposits |
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$ |
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$ |
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Prepaid insurance |
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Prepaid marketing |
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Consumption tax receivable |
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Value added tax (VAT) receivable |
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BVG (Swiss Pension) prepayment |
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Other(1) |
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Total prepayments, deposits and other current assets |
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$ |
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$ |
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(1) |
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Note 4 — Property, Plant and Equipment
Property, plant and equipment, net consisted of the following (in thousands):
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April 1, 2022 |
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December 31, 2021 |
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Machinery and equipment |
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$ |
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$ |
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Computer equipment and software |
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Furniture and fixtures |
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Leasehold improvements |
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Construction in process |
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Total property, plant and equipment, gross |
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Less accumulated depreciation |
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( |
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( |
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Total property, plant and equipment, net |
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$ |
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$ |
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Note 5 –Intangible Assets
Intangible assets, net consisted of the following (in thousands):
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April 1, 2022 |
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December 31, 2021 |
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Long-lived amortized intangible assets |
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Gross Carrying Amount |
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Accumulated Amortization |
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Net |
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Gross Carrying Amount |
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Accumulated Amortization |
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Net |
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Patents and licenses |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Note 6 – Other Current Liabilities
Other current liabilities consisted of the following (in thousands):
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April 1, 2022 |
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December 31, 2021 |
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Accrued salaries and wages |
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$ |
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$ |
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Accrued bonuses |
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Income taxes payable |
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Marketing obligations |
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Other(1) |
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Total other current liabilities |
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$ |
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$ |
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(1) |
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7
STAAR SURGICAL COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Note 7 – Leases
Finance Leases
The Company entered into finance leases primarily related to purchases of equipment used for manufacturing, computer-related equipment or furniture and fixtures. These finance leases are
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April 1, 2022 |
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December 31, 2021 |
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Machinery and equipment |
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$ |
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$ |
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Computer equipment and software |
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Furniture and fixtures |
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Finance lease right-of-use assets, gross |
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Less accumulated depreciation |
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( |
) |
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( |
) |
Finance lease right-of-use assets, net |
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$ |
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$ |
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Total finance lease liability |
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$ |
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$ |
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Weighted-average remaining lease term (in years) |
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Weighted-average discount rate |
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% |
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% |
Supplemental cash flow information related to finance leases consisted of the following (dollars in thousands):
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Three Months Ended |
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April 1, 2022 |
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April 2, 2021 |
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Amortization of finance lease right-of-use asset |
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$ |
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$ |
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Interest on finance lease liabilities |
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Cash paid for amounts included in the measurement of finance lease liabilities: |
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Operating cash flows |
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Financing cash flows |
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Operating Leases
The Company entered into operating leases primarily related to real property (office, manufacturing and warehouse facilities), automobiles and copiers. These operating leases are
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April 1, 2022 |
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December 31, 2021 |
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Machinery and equipment |
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$ |
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$ |
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Computer equipment and software |
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Real property |
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Operating lease right-of-use assets, gross |
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Less accumulated depreciation |
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( |
) |
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( |
) |
Operating lease right-of-use assets, net |
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$ |
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$ |
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Total operating lease liability |
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$ |
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$ |
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Weighted-average remaining lease term (in years) |
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Weighted-average discount rate |
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% |
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% |
8
STAAR SURGICAL COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Note 7 – Leases (Continued)
Operating Leases (Continued)
Supplemental cash flow information related to operating leases was as follows (dollars in thousands):
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Three Months Ended |
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April 1, 2022 |
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April 2, 2021 |
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Operating lease cost |
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$ |
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$ |
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Cash paid for amounts included in the measurement of operating lease liabilities: |
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Operating cash flows |
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Right-of-use assets obtained in exchange for new operating lease liabilities |
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Maturities of Lease Liabilities
Maturities of lease liabilities under operating and finance leases having initial or remaining non-cancelable lease terms more than one year as of April 1, 2022 is as follows (in thousands):
As of April 1, 2022 12 Months Ended |
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Operating Leases |
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