GLAUKOS Corp 10-Q for FY2023 Q2

GLAUKOS Corp (GKOS)

10-Q 2023-08-02 For: 2023-06-30

Added on April 12, 2026

About this 10-Q

GLAUKOS Corp filed this 10-Q on August 2, 2023, covering the quarter ended June 30, 2023 (FY2023 Q2).

Headline figures

Quarter ended June 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $80.4M; up 10.6% from $72.69M a year earlier
Net loss: $32.81M; compared with a net loss of $45.54M a year earlier
Diluted EPS: -$0.68; compared with -$0.96 a year earlier

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Delaware	33-0945406
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One Glaukos Way Aliso Viejo, California	92656
(Address of registrant’s principal executive offices)	(Zip Code)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		GKOS		New York Stock Exchange


			Page
PART I: FINANCIAL INFORMATION			3
Item 1.		Financial Statements	3
		Condensed Consolidated Balance Sheets	3
		Condensed Consolidated Statements of Operations	4
		Condensed Consolidated Statements of Comprehensive Loss	5
		Condensed Consolidated Statements of Stockholders’ Equity	6
		Condensed Consolidated Statements of Cash Flows	7
		Notes to Condensed Consolidated Financial Statements	8
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.		Controls and Procedures	34

PART II: OTHER INFORMATION			35
Item 1.		Legal Proceedings	35
Item 1A.		Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		50
Item 5.	Other Information		50


Item 6.		Exhibits	51

SIGNATURES			52


	June 30,		December 31,
	2023		2022
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	94,812	$	119,525
Short-term investments		208,995		233,170
Accounts receivable, net		39,252		36,073
Inventory		39,447		37,841
Prepaid expenses and other current assets		18,754		17,250
Total current assets		401,260		443,859
Restricted cash		5,856		7,078
Property and equipment, net		102,674		94,403
Operating lease right-of-use assets		27,726		25,826
Finance lease right-of-use asset		45,391		46,601
Intangible assets, net		295,412		307,869
Goodwill		66,134		66,134
Deposits and other assets		12,287		10,613
Total assets	$	956,740	$	1,002,383

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	8,564	$	14,403
Accrued liabilities		55,322		57,956
Total current liabilities		63,886		72,359
Convertible senior notes		282,087		281,400
Operating lease liability		30,770		28,905
Finance lease liability		71,023		72,172
Deferred tax liability, net		7,258		7,264
Other liabilities		12,905		10,278
Total liabilities		467,929		472,378

Commitments and contingencies (Note 12)

Stockholders' equity:
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding		-		-
Common stock, $0.001 par value; 150,000 shares authorized; 48,413 and 47,782 shares issued and 48,385 and 47,754 shares outstanding as of June 30, 2023 and December 31, 2022, respectively		48		48
Additional paid-in capital		1,021,126		997,470
Accumulated other comprehensive loss		(387)		(2,975)
Accumulated deficit		(531,844)		(464,406)
Less treasury stock (28 shares as of June 30, 2023 and December 31, 2022)		(132)		(132)
Total stockholders' equity		488,811		530,005
Total liabilities and stockholders' equity	$	956,740	$	1,002,383


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Net sales	$	80,399	$	72,685	$	154,298	$	140,366
Cost of sales		20,103		17,833		38,174		34,896
Gross profit		60,296		54,852		116,124		105,470
Operating expenses:
Selling, general and administrative		53,137		49,900		106,787		93,849
Research and development		33,234		31,712		68,405		58,589
Acquired in-process research and development		3,000		10,000		3,000		10,000
Litigation-related settlement		-		-		-		(30,000)
Total operating expenses		89,371		91,612		178,192		132,438
Loss from operations		(29,075)		(36,760)		(62,068)		(26,968)
Non-operating expense:
Interest income		1,894		384		3,542		671
Interest expense		(3,399)		(3,414)		(6,807)		(6,830)
Other expense, net		(1,797)		(5,851)		(1,269)		(6,811)
Total non-operating expense		(3,302)		(8,881)		(4,534)		(12,970)
Loss before taxes		(32,377)		(45,641)		(66,602)		(39,938)
Income tax provision (benefit)		435		(105)		836		221
Net loss	$	(32,812)	$	(45,536)	$	(67,438)	$	(40,159)
Basic and diluted net loss per share	$	(0.68)	$	(0.96)	$	(1.40)	$	(0.85)
Weighted average shares used to compute basic and diluted net loss per share		48,281		47,356		48,082		47,205


						Accumulated
				Additional		other
	Common stock			paid-in		comprehensive		Accumulated		Treasury stock			Total
	Shares	Amount		capital		loss		deficit		Shares	Amount		equity
Balance at December 31, 2022	47,782	$	48	$	997,470	$	(2,975)	$	(464,406)	(28)	$	(132)	$	530,005
Common stock issued under stock plans, net	187		—		1,301		—		—	—		—		1,301
Stock-based compensation	—		—		10,184		—		—	—		—		10,184
Other comprehensive income	—		—		—		1,650		—	—		—		1,650
Net loss	—		—		—		—		(34,626)	—		—		(34,626)
Balance at March 31, 2023	47,969	$	48	$	1,008,955	$	(1,325)	$	(499,032)	(28)	$	(132)	$	508,514
Common stock issued under stock plans, net	444		—		(702)		—		—	—		—		(702)
Acquired in-process R&D acquired through the issuance of common stock					3,000		—		—	—		—		3,000
Stock-based compensation	—		—		9,873		—		—	—		—		9,873
Other comprehensive income	—		—		—		938		—	—		—		938
Net loss	—		—		—		—		(32,812)	—		—		(32,812)
Balance at June 30, 2023	48,413	$	48	$	1,021,126	$	(387)	$	(531,844)	(28)	$	(132)	$	488,811


	Six Months Ended June 30,
	2023		2022
Operating Activities
Net loss	$	(67,438)	$	(40,159)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		4,229		3,044
Amortization of intangible assets		12,456		12,456
Noncash lease expense		2,181		2,296
Amortization of debt issuance costs		687		687
Deferred income tax benefit		(6)		(12)
Gain on disposal of fixed assets		-		(35)
Stock-based compensation		20,057		17,462
Unrealized foreign currency losses		97		2,269
Amortization of premium on short-term investments		(342)		442
Other liabilities		2,353		(45)
Acquired in-process R&D acquired through the issuance of common stock		3,000		-
Changes in operating assets and liabilities:
Accounts receivable, net		(3,100)		(3,296)
Inventory		(2,283)		(5,151)
Prepaid expenses and other current assets		(1,468)		(602)
Accounts payable and accrued liabilities		(9,525)		8,367
Other assets		177		(155)
Net cash used in operating activities		(38,925)		(2,432)
Investing activities
Purchases of short-term investments		(170,070)		(36,938)
Proceeds from sales and maturities of short-term investments		196,913		56,748
Purchases of property and equipment		(12,674)		(16,005)
Proceeds from disposal of property and equipment		-		96
Investment in company-owned life insurance		(2,050)		(168)
Net cash provided by investing activities		12,119		3,733
Financing activities
Proceeds from exercise of stock options		2,314		1,921
Proceeds from share purchases under Employee Stock Purchase Plan		2,163		1,785
Payment of employee taxes related to vested restricted stock units		(3,878)		(1,954)
Principal paid on finance lease		(327)		(236)
Net cash provided by financing activities		272		1,516
Effect of exchange rate changes on cash and cash equivalents		599		(1,260)
Net (decrease) increase in cash, cash equivalents and restricted cash		(25,935)		1,557
Cash, cash equivalents and restricted cash at beginning of period		126,603		110,124
Cash, cash equivalents and restricted cash at end of period	$	100,668	$	111,681
Supplemental disclosures of cash flow information
Taxes paid, net of refunds	$	780	$	240
Interest paid on convertible senior notes	$	3,953	$	3,953
Other interest paid	$	2,161	$	2,191
Supplemental schedule of noncash investing and financing activities
Purchases of property and equipment included in accounts payable and accrued liabilities	$	3,080	$	3,310


	At June 30, 2023
	Maturity	Amortized cost		Unrealized		Unrealized		Estimated
	(in years)	or cost		gains		losses		fair value
U.S. government agency bonds	less than 3	$	56,996	$	-		(1,043)	$	55,953
U.S. treasury securities	less than 2		100,759		10		(263)		100,506
Bank certificates of deposit	less than 2		5,000		-		(7)		4,993
Corporate notes	less than 3		26,285		9		(563)		25,731
Asset-backed securities	less than 2		11,669		-		(255)		11,414
Municipal bonds	less than 3		10,515		-		(117)		10,398
Total		$	211,224	$	19	$	(2,248)	$	208,995

	At December 31, 2022
	Maturity	Amortized cost		Unrealized		Unrealized		Estimated
	(in years)	or cost		gains		losses		fair value
U.S. government agency bonds	less than 3	$	88,478	$	-	$	(2,413)	$	86,065
U.S. treasury securities	less than 1		52,991		-		(384)		52,607
Bank certificates of deposit	less than 1		17,500		3		(11)		17,492
Corporate notes	less than 3		41,464		-		(978)		40,486
Asset-backed securities	less than 2		21,656		-		(360)		21,296
Municipal bonds	less than 3		15,635		-		(411)		15,224
Total		$	237,724	$	3	$	(4,557)	$	233,170


			At June 30, 2023
			Quoted prices		Significant
			in active		other		Significant
			markets for		observable		unobservable
	June 30,		identical assets		inputs		inputs
	2023		(Level 1)		(Level 2)		(Level 3)
Assets
Cash equivalents:
Money market funds ⁽ⁱ⁾	$	27,098	$	27,098	$	-	$	-
Available for sale securities:
U.S. government agency bonds ⁽ⁱⁱ⁾	$	55,953	$	-	$	55,953	$	-
U.S. treasury securities ^(ii)(iii)		111,362		-		111,362		-
Bank certificates of deposit ⁽ⁱⁱ⁾		4,993		-		4,993		-
Corporate notes ⁽ⁱⁱ⁾		25,731		-		25,731		-
Asset-backed securities ⁽ⁱⁱ⁾		11,414		-		11,414		-
Municipal bonds ⁽ⁱⁱ⁾		10,398		-		10,398		-
Investments held for deferred compensation plans ^(iv)		10,487		-		10,487		-
Total Assets	$	257,436	$	27,098	$	230,338	$	-
Liabilities
Deferred compensation plans ^(v)	$	10,368	$	-	$	10,368	$	-
Total Liabilities	$	10,368	$	-	$	10,368	$	-


Maturity of Lease Liabilities	Operating		Finance
(in thousands)	Leases ^(a)		Leases ^(b)
Remainder of 2023	$	1,930	$	2,535
2024		3,547		5,184
2025		3,684		5,340
2026		3,720		5,500
2027		3,832		5,665
2028		3,928		5,835
Thereafter		32,560		96,055
Total lease payments	$	53,201	$	126,114
Less: imputed interest		21,180		54,270
Total lease liabilities	$	32,021	$	71,844


	Weighted-	As of June 30, 2023						As of December 31, 2022
	Average	Gross						Gross
	Amortization	Carrying		Accumulated		Net		Carrying		Accumulated		Net
	Period	Amount		Amortization		Amount		Amount		Amortization		Amount
Developed technology	11.4	$	252,200		(79,624)		172,576		252,200		(68,577)		183,623
Customer relationships	5.0		14,100		(10,164)		3,936		14,100		(8,754)		5,346
Intangible assets subject to amortization			266,300		(89,788)		176,512		266,300		(77,331)		188,969

In-process research and development	Indefinite	$	118,900		-		118,900		118,900		-		118,900

Total		$	385,200	$	(89,788)	$	295,412	$	385,200	$	(77,331)	$	307,869

Goodwill	Indefinite	$	66,134		-		66,134		66,134		-		66,134


	Amortization Expense
Remainder of 2023	$	12,456
2024		24,618
2025		22,092
2026		22,092
2027		22,081
Thereafter		73,173
Total amortization	$	176,512


	Three Months Ended
	June 30,
	United States				International				Total
	2023		2022		2023		2022		2023		2022

Glaucoma	$	39,599	$	38,199	$	22,305	$	17,867	$	61,904	$	56,066
Corneal Health		16,308		14,034		2,187		2,585		18,495		16,619
Total	$	55,907	$	52,233	$	24,492	$	20,452	$	80,399	$	72,685



	As of		As of
	June 30,		December 31,
	2023		2022
Convertible Notes	$	287,500	$	287,500
Less: Unamortized debt issuance costs		(5,413)		(6,100)
Carrying amount of Convertible Notes	$	282,087	$	281,400


	Three Months Ended
	June 30,				% Increase
(dollars in thousands)	2023		2022		(decrease)
Statements of operations data:
Net sales	$	80,399	$	72,685	11	%
Cost of sales		20,103		17,833	13	%
Gross profit		60,296		54,852	10	%
Operating expenses:
Selling, general and administrative		53,137		49,900	6	%
Research and development		33,234		31,712	5	%
Acquired in-process research and development		3,000		10,000	(70)	%
Total operating expenses		89,371		91,612	(2)	%
Loss from operations		(29,075)		(36,760)	(21)	%
Total non-operating expense, net		(3,302)		(8,881)	(63)	%
Income tax provision (benefit)		435		(105)	NM
Net loss	$	(32,812)	$	(45,536)	(28)	%


	June 30,		December 31,
	2023		2022
Finished goods	$	15,776	$	13,742
Work in process		10,611		10,495
Raw material		13,060		13,604
	$	39,447	$	37,841


		Incorporated by Reference
Exhibit No.	Description	Form	File No.	Exhibit	Filing Date
3.1	Restated Certificate of Incorporation of the Registrant	8-K	1-37463	3.1	06/30/2015
3.2	Amended and Restated Bylaws of the Registrant	8-K	1-37463	3.1	12/21/2022

31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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GLAUKOS CORPORATION

By:	/s/ THOMAS W. BURNS
Thomas W. Burns
Chairman and Chief Executive Officer (Principal Executive Officer; Duly Authorized Officer)

By:	/s/ ALEX R. THURMAN
Alex R. Thurman
Senior Vice President & Chief Financial Officer (Principal Accounting and Financial Officer)