UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
For the quarterly period ended:
Or
Commission file number:
(Exact Name of Registrant as Specified in its Charter)
(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) |
(
(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 |
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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ITEM 6. |
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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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June 28, 2024 |
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December 29, 2023 |
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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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Investments available for sale |
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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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Investments available for sale |
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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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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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— |
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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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Stockholders’ equity: |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive income (loss) |
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( |
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( |
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Accumulated deficit |
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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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Six Months Ended |
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June 28, 2024 |
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June 30, 2023 |
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June 28, 2024 |
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June 30, 2023 |
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Net sales |
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$ |
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$ |
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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 income (expense), net: |
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Interest income, net |
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Loss on foreign currency transactions |
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( |
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( |
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( |
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( |
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Royalty income |
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— |
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— |
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— |
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Other income, net |
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Total other income (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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$ |
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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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$ |
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$ |
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Diluted |
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$ |
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$ |
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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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Six Months Ended |
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June 28, 2024 |
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June 30, 2023 |
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June 28, 2024 |
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June 30, 2023 |
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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 (loss): |
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Defined benefit plans: |
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Net change in plan assets |
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( |
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( |
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( |
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Reclassification into other income (expense), net |
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( |
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( |
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( |
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Investments available for sale: |
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Change in unrealized gain (loss) |
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( |
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( |
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( |
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Reclassification into other income (expense), net |
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( |
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— |
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( |
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Foreign currency translation loss |
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( |
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( |
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( |
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Tax effect |
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Other comprehensive loss, net of tax |
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( |
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( |
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( |
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( |
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Comprehensive income |
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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.
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 |
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Common |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Balance, at March 29, 2024 |
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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 loss |
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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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Common stock issued upon exercise of options |
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— |
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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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Repurchase of employee common stock for taxes withheld |
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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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Unvested restricted 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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Forfeited restricted 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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— |
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Vested restricted and performance stock units |
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— |
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— |
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— |
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Balance, at June 28, 2024 |
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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 March 31, 2023 |
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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 loss |
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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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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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Repurchase of employee common stock for taxes withheld |
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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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Unvested restricted 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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Vested restricted and performance stock units |
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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 June 30, 2023 |
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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 STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
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Six Months Ended |
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Common |
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Common |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Balance, at December 29, 2023 |
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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 loss |
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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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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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Repurchase of employee common stock for taxes withheld |
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( |
) |
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— |
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( |
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— |
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— |
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( |
) |
Unvested restricted 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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Forfeited restricted 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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— |
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Vested restricted and performance stock units |
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— |
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— |
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— |
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Balance, at June 28, 2024 |
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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 December 30, 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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Net income |
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— |
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— |
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— |
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— |
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Other comprehensive loss |
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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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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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Repurchase of employee common stock for taxes withheld |
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( |
) |
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— |
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( |
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— |
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— |
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( |
) |
Unvested restricted 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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Vested restricted and performance stock units |
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— |
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— |
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— |
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Balance at June 30, 2023 |
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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.
5
STAAR SURGICAL COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
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Six Months Ended |
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June 28, 2024 |
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June 30, 2023 |
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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 |
|
|
— |
|
|
|
|
|
Accretion/Amortization of investments available for sale |
|
|
( |
) |
|
|
( |
) |
Deferred income taxes |
|
|
|
|
|
|
||
Change in net pension liability |
|
|
( |
) |
|
|
( |
) |
Loss on disposal of property and equipment |
|
|
|
|
|
|
||
Stock-based compensation expense |
|
|
|
|
|
|
||
Change in asset retirement obligation |
|
|
|
|
|
( |
) |
|
Provision for sales returns and bad debts |
|
|
|
|
|
|
||
Inventory provision |
|
|
|
|
|
|
||
Changes in working capital: |
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|
|
|
|
|
||
Accounts receivable |
|
|
|
|
|
( |
) |
|
Inventories |
|
|
( |
) |
|
|
( |
) |
Prepayments, deposits, and other assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable |
|
|
|
|
|
( |
) |
|
Other current liabilities |
|
|
( |
) |
|
|
|
|
Net cash provided by (used in) operating activities |
|
|
|
|
|
( |
) |
|
Cash flows from investing activities: |
|
|
|
|
|
|
||
Acquisition of property and equipment |
|
|
( |
) |
|
|
( |
) |
Purchase of investments available for sale |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale or maturity of investments available for sale |
|
|
|
|
|
|
||
Net cash provided by (used in) investing activities |
|
|
( |
) |
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
||
Repayment of finance lease obligations |
|
|
( |
) |
|
|
( |
) |
Repurchase of employee common stock for taxes withheld |
|
|
( |
) |
|
|
( |
) |
Proceeds from the exercise of stock options |
|
|
|
|
|
|
||
Proceeds from vested restricted and performance stock units |
|
|
|
|
|
|
||
Net cash provided by (used in) financing activities |
|
|
|
|
|
( |
) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
( |
) |
|
|
( |
) |
Increase in cash and cash equivalents |
|
|
|
|
|
|
||
Cash and cash equivalents, at beginning of the period |
|
|
|
|
|
|
||
Cash and cash equivalents, at end of the period |
|
$ |
|
|
$ |
|
||
See accompanying notes to the condensed consolidated financial statements.
6
STAAR SURGICAL COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1 — Basis of Presentation and Significant Accounting Policies
STAAR Surgical Company, a Delaware corporation, was first incorporated in 1982, and together with its subsidiaries designs, develops, manufactures, and sells implantable lenses for the eye and accessory delivery systems used to deliver the lenses into the eye.
The Condensed Consolidated Financial Statements for the three and six months ended June 28, 2024 and June 30, 2023, 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 six months ended June 28, 2024 and June 30, 2023, 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.
Cloud-Based Software
As of June 28, 2024 and December 29, 2023, the Company recognized $
Vendor Concentration
There was one vendor that accounted for approximately
Recent Accounting Pronouncements Not Yet Adopted
In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, “Segment Reporting (Topic 280).” ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments (a) disclose significant segment expenses regularly provided to the chief operating decision maker (“CODM”), (b) disclose an amount for other segment items by reportable segment and description of its composition, (c) extend certain annual disclosures to interim periods, (d) clarify single reportable segment entities must apply Topic 280 in its entirety, (e) permit more than one measure of segment profit or loss to be reported under certain conditions and (f) require disclosure of the title and position of the CODM. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company will adopt the annual disclosure requirements of ASU 2023-07 as of beginning of fiscal year 2024 and will adopt the interim disclosure requirements beginning fiscal year 2025. The Company is currently evaluating the disclosure requirements and its effect on the Condensed Consolidated Financial Statements.
STAAR SURGICAL COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Note 1 — Basis of Presentation and Significant Accounting Policies (Continued)
Recent Accounting Pronouncements Not Yet Adopted (Continued)
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740).” ASU 2023-09 improves the transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. It also includes certain other amendments to improve the effectiveness of income tax disclosures regarding (a) income or loss from continuing operations disaggregated between domestic and foreign and (b) income tax expense or benefit from continuing operations disaggregated by federal, state and foreign. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company will adopt ASU 2023-09 at the beginning of fiscal year 2025. The Company is currently evaluating the disclosure requirements and its effect on the Condensed Consolidated Financial Statements.
Note 2 — Investments Available for Sale
Investments available for sale (“AFS”) and the related fair value measurement consisted of the following (dollars in thousands):
|
|
June 28, 2024 |
|
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Fair Value Measurements |
|
|||||||||
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|
Amortized Cost |
|
|
Unrealized Gains |
|
|
Unrealized Losses |
|
|
Estimated Fair Value |
|
|
Level 1 |
|
|
Level 2 |
|
||||||
Commercial paper |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||
Certificates of deposit |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
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|
||||
U.S. Treasury securities |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
— |
|
|||
U.S. agency securities |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
|
|||
Corporate debt securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
|
||||
Total investments AFS |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
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|
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|
|
December 29, 2023 |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements |
|
|||||||||
|
|
Amortized Cost |
|
|
Unrealized Gains |
|
|
Unrealized Losses |
|
|
Estimated Fair Value |
|
|
Level 1 |
|
|
Level 2 |
|
||||||
Commercial paper |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||
Certificates of deposit |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
U.S. Treasury securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
— |
|
||||
U.S. agency securities |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
|
|||
Corporate debt securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
|
||||
Total investments AFS |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||
The Company obtains the fair value from third-party pricing services. The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value. These observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers and other industry and economic events.
The Company assessed each debt security with gross unrealized losses for impairment. As part of that assessment, the Company concluded that it does not intend to sell and it is more-likely-than-not that the Company will not be required to sell, prior to the recovery of the amortized cost basis. The Company did
8
STAAR SURGICAL COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Note 2 — Investments Available for Sale (Continued)
The following table shows the fair value of investments AFS by contractual maturity (dollars in thousands):
|
|
As of June 28, 2024 |
|
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