GLAUKOS Corp 8-K/A, filed Aug 2, 2024
GLAUKOS Corp (GKOS)
About this 8-K/A
GLAUKOS Corp filed this 8-K/A on August 2, 2024, reporting on events of July 31, 2024.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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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. ☐
EXPLANATORY NOTE
On July 31, 2024, Glaukos Corporation (the “Company”) filed a Current Report on Form 8-K (the “Initial Report”) with the Securities and Exchange Commission (the “SEC”) to furnish its earnings press release (the “Earnings Release”), and quarterly summary (the “Quarterly Summary”), each disclosing financial results for its second quarter ended June 30, 2024. This Current Report on Form 8-K/A amends the Initial Report to correct certain financial information included in the Earnings Release and the Quarterly Summary as further described below. This Current Report on Form 8-K/A. should be read in conjunction with the Initial Report.
Item 2.02. Results of Operations and Financial Condition.
On July 31, 2024, the Company issued the Earnings Release, a copy of which was furnished as Exhibit 99.1 to the Initial Report. On August 2, 2024, the Company filed with the SEC its Quarterly Report on Form 10-Q for its second quarter ended June 30, 2024 (its “Quarterly Report”). In preparing the final Quarterly Report, the Company, in consultation with its independent registered public accounting firm, concluded that, in connection with the exchange agreements entered into with certain holders of eighty percent of its 2.75% Convertible Senior Notes due 2027 (Exchange Transaction) that occurred in June 2024, the acceleration of approximately $3.3 million of unamortized non-cash debt issuance costs should have been accounted for as a decrease in additional paid-in capital, rather than as an interest expense, as was reflected in the Earnings Release and Quarterly Summary. In the financial statements contained in the Earnings Release and the Quarterly Summary, interest expense, total non-operating expense, loss before taxes, and net loss for the three and six months ended June 30, 2024 each were overstated by $3.3 million, basic and diluted net loss per share was overstated by $0.06 and $0.07 for the three and six months ended June 30, 2024, respectively, and additional paid-in capital and accumulated deficit were overstated by an offsetting, corresponding $3.3 million. Each of these items is correctly reported in the Company’s Quarterly Report. The revised accounting treatment did not impact the non-GAAP financial results as reported in the Earnings Release and the Quarterly Summary.
Financial statements reflecting the foregoing revisions to the financial information included in the Earnings Release and Quarterly Summary are attached to this Current Report on Form 8-K/A as Exhibit 99.1. The Earnings Release and Quarterly Summary have also been updated to reflect the foregoing revisions and are available on the Company’s website at investors.glaukos.com.
The information contained in this Item 2.02 and in the accompanying Exhibit 99.1shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. |
| Description |
99.1 |
| Updated Financial Statements of Glaukos Corporation for the second quarter ended June 30, 2024 |
| | |
104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| GLAUKOS CORPORATION | ||
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| By: | /s/ Alex R. Thurman | |
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| Name: | Alex R. Thurman |
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| Title: | Senior Vice President & Chief Financial Officer |
Date: August 2, 2024
Exhibit 99.1
GLAUKOS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
| | Three Months Ended | | Six Months Ended |
| ||||||||
| | June 30, | | June 30, | | ||||||||
|
| 2024 |
| 2023 |
| 2024 |
| 2023 | | ||||
Net sales | | $ | 95,690 | | $ | 80,399 | | $ | 181,312 | | $ | 154,298 | |
Cost of sales | | | 22,550 | | | 20,103 | | | 42,808 | | | 38,174 | |
Gross profit | | | 73,140 | | | 60,296 | | | 138,504 | | | 116,124 | |
Operating expenses: | | | | | | | | | | | | | |
Selling, general and administrative | | | 66,188 | | | 53,137 | | | 128,163 | | | 106,787 | |
Research and development | | | 34,426 | | | 33,234 | | | 65,152 | | | 68,405 | |
Acquired in-process research and development | | | 2,500 | | | 3,000 | | | 14,229 | | | 3,000 | |
Total operating expenses | | | 103,114 | | | 89,371 | | | 207,544 | | | 178,192 | |
Loss from operations | | | (29,974) | | | (29,075) | | | (69,040) | | | (62,068) | |
Non-operating expense: | | | | | | | | | | | | | |
Interest income | | | 2,828 | | | 1,894 | | | 5,911 | | | 3,542 | |
Interest expense | | | (3,354) | | | (3,399) | | | (6,804) | | | (6,807) | |
Charges associated with convertible senior notes | | | (18,012) | | | — | | | (18,012) | | | — | |
Other expense, net | | | (1,701) | | | (1,797) | | | (2,729) | | | (1,269) | |
Total non-operating expense | | | (20,239) | | | (3,302) | | | (21,634) | | | (4,534) | |
Loss before taxes | | | (50,213) | | | (32,377) | | | (90,674) | | | (66,602) | |
Income tax provision | | | 331 | | | 435 | | | 708 | | | 836 | |
Net loss | | $ | (50,544) | | $ | (32,812) | | $ | (91,382) | | $ | (67,438) | |
| | | | | | | | | | | | | |
Basic and diluted net loss per share | | $ | (1.00) | | $ | (0.68) | | $ | (1.82) | | $ | (1.40) | |
| | | | | | | | | | | | | |
Weighted average shares used to compute basic and diluted net loss per share | | | 50,715 | | | 48,281 | | | 50,169 | | | 48,082 | |
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GLAUKOS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par values)
|
| June 30, |
| December 31, |
| ||
| | 2024 | | 2023 | | ||
| | (unaudited) | | | | ||
Assets | | | | | | | |
Current assets: | | | | | | | |
Cash and cash equivalents | | $ | 68,075 | | $ | 93,467 | |
Short-term investments | | | 193,589 | | | 201,964 | |
Accounts receivable, net | | | 51,217 | | | 39,850 | |
Inventory | | | 56,480 | | | 41,986 | |
Prepaid expenses and other current assets | | | 14,420 | | | 18,194 | |
Total current assets | | | 383,781 | | | 395,461 | |
Restricted cash | | | 4,733 | | | 5,856 | |
Property and equipment, net | | | 100,230 | | | 103,212 | |
Operating lease right-of-use assets | | | 26,430 | | | 27,146 | |
Finance lease right-of-use asset | | | 42,970 | | | 44,180 | |
Intangible assets, net | | | 275,673 | | | 282,956 | |
Goodwill | | | 66,134 | | | 66,134 | |
Deposits and other assets | | | 19,725 | | | 15,469 | |
Total assets | | $ | 919,676 | | $ | 940,414 | |
| | | | | | | |
Liabilities and stockholders' equity | | | | | | | |
Current liabilities: | | | | | | | |
Accounts payable | | $ | 11,560 | | $ | 13,440 | |
Accrued liabilities | | | 58,523 | | | 60,574 | |
Total current liabilities | | | 70,083 | | | 74,014 | |
Convertible senior notes | | | 56,692 | | | 282,773 | |
Operating lease liability | | | 29,912 | | | 30,427 | |
Finance lease liability | | | 70,009 | | | 70,538 | |
Deferred tax liability, net | | | 7,142 | | | 7,144 | |
Other liabilities | | | 20,678 | | | 13,752 | |
Total liabilities | | | 254,516 | | | 478,648 | |
| | | | | | | |
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; 54,852 and 49,148 shares issued and 54,824 and 49,120 shares outstanding as of June 30, 2024 and December 31, 2023, respectively | | | 55 | | | 49 | |
Additional paid-in capital | | | 1,353,495 | | | 1,059,751 | |
Accumulated other comprehensive income | | | 2,191 | | | 1,165 | |
Accumulated deficit | | | (690,449) | | | (599,067) | |
Less treasury stock (28 shares as of June 30, 2024 and December 31, 2023) | | | (132) | | | (132) | |
Total stockholders’ equity | | | 665,160 | | | 461,766 | |
Total liabilities and stockholders' equity | | $ | 919,676 | | $ | 940,414 | |
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GLAUKOS CORPORATION
GAAP to Non-GAAP Reconciliations
(in thousands, except per share amounts and percentage data)
(unaudited)
| | Q2 2024 | | Q2 2023 | | ||||||||||||||
|
| GAAP |
| Adjustments |
| Non-GAAP |
| GAAP |
| Adjustments |
| Non-GAAP |
| ||||||
| | | | | | | | | | | | | | ||||||
Cost of sales | | $ | 22,550 | | $ | (5,523) | (a) | $ | 17,027 | | $ | 20,103 | | $ | (5,523) | (a) | $ | 14,580 | |
| | | | | | | | | | | | | | | | | | | |
Gross Margin | | | 76.4 | % | | 5.8 | % | | 82.2 | % | | 75.0 | % | | 6.9 | % | | 81.9 | % |
| | | | | | | | | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative | | $ | 66,188 | | $ | (705) | (b) | $ | 65,483 | | $ | 53,137 | | $ | (705) | (b) | $ | 52,432 | |
| | | | | | | | | | | | | | | | | | | |
Loss from operations | | $ | (29,974) | | $ | 6,228 | | $ | (23,746) | | $ | (29,075) | | $ | 6,228 | | $ | (22,847) | |
| | | | | | | | | | | | | | | | | | | |
Non-operating expense: | | | | | | | | | | | | | | | | | | | |
Charges associated with convertible senior notes | | $ | (18,012) | | $ | 18,012 | (c) | $ | — | | $ | — | | $ | — | | $ | — | |
| | | | | | | | | | | | | | | | | | | |
Net loss | | $ | (50,544) | | $ | 24,240 | (d) | $ | (26,304) | | $ | (32,812) | | $ | 6,228 | (d) | $ | (26,584) | |
| | | | | | | | | | | | | | | | | | | |
Basic and diluted net loss per share | | $ | (1.00) | | $ | 0.48 | | $ | (0.52) | | $ | (0.68) | | $ | 0.13 | | $ | (0.55) | |
(a) | Cost of sales adjustment related to amortization of developed technology intangible assets associated with the acquisition of Avedro, Inc. (Avedro) of $5.5 million. |
(b) | Avedro acquisition-related amortization expense of customer relationship intangible assets of $0.7 million. |
(c) | Expenses associated with the exchange of convertible senior notes, consisting of a non-cash inducement charge of $17.4 million and direct transaction costs of $0.6 million. |
(d) | Includes total tax effect for non-GAAP pre-tax adjustments. For non-GAAP adjustments associated with the U.S., the tax effect is $0 given the Company's U.S. taxable loss positions in both 2024 and 2023. |
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GLAUKOS CORPORATION
GAAP to Non-GAAP Reconciliations
(in thousands, except per share amounts and percentage data)
(unaudited)
| | Year-to-Date Q2 2024 | | Year-to-Date Q2 2023 | | ||||||||||||||
|
| GAAP |
| Adjustments |
| Non-GAAP |
| GAAP |
| Adjustments |
| Non-GAAP |
| ||||||
Cost of sales | | $ | 42,808 | | $ | (11,046) | (a) | $ | 31,762 | | $ | 38,174 | | $ | (11,046) | (a) | $ | 27,128 | |
| | | | | | | | | | | | | | | | | | | |
Gross Margin | | | 76.4 | % | | 6.1 | % | | 82.5 | % | | 75.3 | % | | 7.1 | % | | 82.4 | % |
| | | | | | | | | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative | | $ | 128,163 | | $ | (1,410) | (b) | $ | 126,753 | | $ | 106,787 | | $ | (1,410) | (b) | $ | 105,377 | |
| | | | | | | | | | | | | | | | | | | |
Loss from operations | | $ | (69,040) | | $ | 12,456 | | $ | (56,584) | | $ | (62,068) | | $ | 12,456 | | $ | (49,612) | |
| | | | | | | | | | | | | | | | | | | |
Non-operating expense: | | | | | | | | | | | | | | | | | | | |
Charges associated with convertible senior notes | | $ | (18,012) | | $ | 18,012 | (c) | $ | — | | $ | — | | $ | — | | $ | — | |
| | | | | | | | | | | | | | | | | | | |
Net loss | | $ | (91,382) | | $ | 30,468 | (d) | $ | (60,914) | | $ | (67,438) | | $ | 12,456 | (d) | $ | (54,982) | |
| | | | | | | | | | | | | | | | | | | |
Basic and diluted net loss per share | | $ | (1.82) | | $ | 0.61 | | $ | (1.21) | | $ | (1.40) | | $ | 0.26 | | $ | (1.14) | |
(a) | Cost of sales adjustment related to amortization of developed technology intangible assets associated with the acquisition of Avedro, Inc. (Avedro) of $11.0 million. |
(b) | Avedro acquisition-related amortization expense of customer relationship intangible assets of $1.4 million. |
(c) | Expenses associated with the exchange of convertible senior notes, consisting of a non-cash inducement charge of $17.4 million and direct transaction costs of $0.6 million. |
(d) | Includes total tax effect for non-GAAP pre-tax adjustments. For non-GAAP adjustments associated with the U.S., the tax effect is $0 given the Company's U.S. taxable loss positions in both 2024 and 2023. |
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Reported Sales vs. Prior Periods (in thousands) | | |||||||||||||||||||||
| | | | | | | | Year-over-Year Percent Change | | Quarter-over-Quarter Percent Change | | |||||||||||
|
| 2Q 2024 |
| 2Q 2023 |
| 1Q 2024 |
| Reported |
| Operations (1) |
| Currency (2) |
| Reported |
| Operations (1) |
| Currency (2) | | |||
| | | | | | | | | | | | | | | | | | | | |||
International Glaucoma | | $ | 26,131 | | $ | 22,305 | | $ | 25,238 | | 17.1 | % | 21.0 | % | (3.9%) | | 3.5 | % | 5.1 | % | (1.6%) | |
| | | | | | | | | | | | | | | | | | | | | | |
Total Net Sales | | $ | 95,690 | | $ | 80,399 | | $ | 85,622 | | 19.0 | % | 20.1 | % | (1.1%) | | 11.8 | % | 12.2 | % | (0.4%) | |
(1) | Operational growth excludes the effect of translational currency |
(2) | Calculated by converting the current period numbers using the prior period’s average foreign exchange rates |
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