8-K
GLAUKOS Corp (GKOS)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 4, 2022
Glaukos Corporation
(Exact name of registrant as specified in its charter)
| Delaware | 001-37463 | 33-0945406 | ||
|---|---|---|---|---|
| (State or other jurisdiction | | (Commission | | (I.R.S. Employer |
| of incorporation) | | File Number) | | Identification No.) |
| | ||
|---|---|---|
| 229 Avenida Fabricante | **** | |
| San Clemente , | | |
| California | | 92672 |
| (Address of principal executive offices) | **** | (Zip Code) |
Registrant’s telephone number, including area code: ( 949 ) 367-9600
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||
|---|---|---|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||
| --- | --- | |||
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||
| --- | --- | |||
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||
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| Title of each class: | **** | Trading Symbol | **** | Name of each exchange on which registered: |
| --- | --- | --- | --- | --- |
| Common Stock | | GKOS | | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On May 4, 2022, Glaukos Corporation (the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
The information contained in this Item 2.02 and in the accompanying Exhibit 99.1 shall 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 7.01. Regulation FD Disclosure.
A Quarterly Summary containing supplemental business and financial information for the Company’s first quarter ended March 31, 2022 is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference herein. A copy of the Quarterly Summary is also available in the “Financials & Filings” section of the Company’s investor relations website at https://investors.glaukos.com.
The information contained in this Item 7.01 and in the accompanying Exhibit 99.2 shall not be deemed filed for purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Exchange Act or 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 | Press Release of Glaukos Corporation, dated May 4, 2022 | |
| | | |
| 99.2 | | Quarterly Summary of Glaukos Corporation for the first quarter ended March 31, 2022 |
| | | |
| 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<br>(Registrant) | |||
|---|---|---|---|
| | | ||
| By: | /s/ Alex R. Thurman | ||
| Name: | Alex R. Thurman | ||
| Title: | Senior Vice President & Chief Financial Officer |
Date: May 4, 2022
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact:
Chris Lewis
Vice President, Investor Relations & Corporate Affairs
(949) 481-0510
clewis@glaukos.com
Glaukos Corporation Announces First Quarter 2022 Financial Results
San Clemente, CA – May 4, 2022 – Glaukos Corporation (NYSE: GKOS), an ophthalmic medical technology and pharmaceutical company focused on novel therapies for the treatment of glaucoma, corneal disorders and retinal diseases, today announced financial results for the first quarter ended March 31, 2022. Key highlights include:
| ● | Net sales of $67.7 million in Q1 2022. |
|---|---|
| ● | Glaucoma net sales of $51.5 million and Corneal Health net sales of $16.1 million in Q1 2022. |
| --- | --- |
| ● | Gross margin of approximately 75% and non-GAAP gross margin of approximately 83% in Q1 2022. |
| --- | --- |
| ● | Operating expenses of $40.8 million and non-GAAP operating expenses of $69.8 million in Q1 2022. |
| --- | --- |
| ● | Updated 2022 net sales guidance of $270 million to $275 million, compared to $265 million to $275 million previously. |
| --- | --- |
“I’m pleased with our first quarter performance and execution of our strategies despite a challenging global environment,” said Thomas Burns, Glaukos chairman and chief executive officer. “We continue to successfully invest in and advance our robust pipeline of novel, dropless platform technologies designed to transform vision by disrupting the standard of care and improving outcomes for the benefit of patients worldwide suffering from chronic eye diseases.”
First Quarter 2022 Financial Results
Net sales in the first quarter of 2022 were $67.7 million, compared to $68.0 million in the same period in 2021.
Gross margin for the first quarter of 2022 was approximately 75%, compared to approximately 76% in the same period in 2021. Non-GAAP gross margin for the first quarter of 2022 was approximately 83%, compared to approximately 84% in the same period in 2021.
Selling, general and administrative (SG&A) expenses for the first quarter of 2022 increased 5% to $43.9 million, compared to $41.9 million in the same period in 2021. Non-GAAP SG&A expenses for the first quarter of 2022 increased 6% to $43.1 million, compared to $40.7 million in the same period in 2021.
Research and development (R&D) expenses for the first quarter of 2022 increased 27% to $26.9 million, compared to $21.2 million in the same period in 2021. Non-GAAP R&D expenses for the first quarter of 2022 increased 27% to $26.8 million, compared to $21.1 million in the same period in 2021.
During the first quarter of 2022, the company received a $30.0 million payment related to the company’s settlement of patent litigation with Ivantis, Inc. This receipt was recorded as an offset to GAAP operating expenses in the quarter.
Income from operations in the first quarter of 2022 was $9.8 million, compared to operating loss of $11.8 million in the first quarter of 2021. Non-GAAP loss from operations in the first quarter of 2022 was $13.6 million, compared to non-GAAP operating loss of $4.8 million in the first quarter of 2021. 1
Net income in the first quarter of 2022 was $5.4 million, or $0.11 per diluted share, compared to a net loss of $16.5 million, or ($0.36) per diluted share, in the first quarter of 2021. Non-GAAP net loss in the first quarter of 2022 was $18.1 million, or ($0.38) per diluted share, compared to non-GAAP net loss of $9.5 million, or ($0.21) per diluted share, in the first quarter of 2021.
The company ended the first quarter of 2022 with approximately $425 million in cash and cash equivalents, short-term investments and restricted cash.
2022 Revenue Guidance
The company expects 2022 net sales to be in the range of $270 million to $275 million.
Webcast & Conference Call
The company will host a conference call and simultaneous webcast today at 1:30 p.m. PT (4:30 p.m. ET) to discuss the results and provide additional information about the company’s financial outlook. A link to the webcast is available on the company’s website at http://investors.glaukos.com. To participate in the conference call, please dial 888-210-2212 (U.S.) or 646-960-0390 (international) and enter Conference ID 7935742. A replay of the webcast will be archived on the company’s website following completion of the call.
Quarterly Summary Document
The company has posted a document on its Investor Relations website under the “Financials & Filings – Quarterly Results” section titled “Quarterly Summary.” This Quarterly Summary document is designed to provide the investment community with a summarized and easily accessible reference document that details the key facts associated with the quarter, the state of the company’s business objectives and strategies and any forward statements or guidance the company may make. Going forward, this document will be provided alongside the company’s earnings press release and is designed to be read by investors before the regularly scheduled quarterly conference call. As such, beginning with the first quarter of 2022, the conference call will be in a format primarily consisting of a questions and answers session, during which Glaukos will address any queries investors have regarding the company’s results. It is the company’s goal that this change will make its quarterly earnings process more efficient and impactful for the investment community going forward.
About Glaukos
Glaukos (www.glaukos.com) is an ophthalmic medical technology and pharmaceutical company focused on developing and commercializing novel therapies for the treatment of glaucoma, corneal disorders and retinal diseases. Glaukos first developed Micro-Invasive Glaucoma Surgery (MIGS) as an alternative to the traditional glaucoma treatment paradigm, launching its first MIGS device commercially in 2012, and has since developed a portfolio of technologically distinct and leverageable platforms to support ongoing pharmaceutical and medical device innovations. Products or product candidates for each of these platforms are designed to advance the standard of care through better treatment options across the areas of glaucoma, corneal disorders and retinal diseases.
Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of federal securities laws. All statements other than statements of historical facts included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. These statements are based on management’s current expectations, assumptions, estimates and beliefs. Although we believe that we have a reasonable basis for forward-looking statements contained herein, we caution you that they are based on current expectations about future events affecting us and are subject to risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that may cause our actual 2
results to differ materially from those expressed or implied by forward-looking statements in this press release. These potential risks and uncertainties that could cause actual results to differ materially from those described in forward-looking statements include, without limitation, uncertainties regarding the duration and severity of the COVID-19 pandemic and its impact on our business or the economy generally; the reduced physician fee and ASC facility fee reimbursement rate finalized by CMS for 2022 for procedures utilizing the Company’s iStent family of products and its impact on our U.S. combo-cataract glaucoma revenue; our ability to continue to generate sales of our commercialized products and develop and commercialize additional products; our dependence on a limited number of third-party suppliers, some of which are single-source, for components of our products; the occurrence of a crippling accident, natural disaster, or other disruption at our primary facility, which may materially affect our manufacturing capacity and operations; securing or maintaining adequate coverage or reimbursement by third-party payors for procedures using the iStent, the iStent inject, the iStent inject W, iAccess, iPRIME, our corneal cross-linking products or other products in development; our ability to properly train, and gain acceptance and trust from ophthalmic surgeons in the use of our products; our ability to compete effectively in the medical device industry and against current and future technologies (including MIGS technologies); our compliance with federal, state and foreign laws and regulations for the approval and sale and marketing of our products and of our manufacturing processes; the lengthy and expensive clinical trial process and the uncertainty of timing and outcomes from any particular clinical trial or regulatory approval processes; the risk of recalls or serious safety issues with our products and the uncertainty of patient outcomes; our ability to protect, and the expense and time-consuming nature of protecting our intellectual property against third parties and competitors and the impact of any claims against us for infringement or misappropriation of third party intellectual property rights and any related litigation; and our ability to service our indebtedness. These and other known risks, uncertainties and factors are described in detail under the caption “Risk Factors” and elsewhere in our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on February 28, 2022, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, which is expected to be filed with the SEC by May 10, 2022. Our filings with the SEC are available in the Investor Section of our website at www.glaukos.com or at www.sec.gov. In addition, information about the risks and benefits of our products is available on our website at www.glaukos.com. All forward-looking statements included in this press release are expressly qualified in their entirety by the foregoing cautionary statements. You are cautioned not to place undue reliance on the forward-looking statements in this press release, which speak only as of the date hereof. We do not undertake any obligation to update, amend or clarify these forward-looking statements whether as a result of new information, future events or otherwise, except as may be required under applicable securities law.
Statement Regarding Use of Non-GAAP Financial Measures
To supplement the consolidated financial results prepared in accordance with Generally Accepted Accounting Principles (“GAAP”), the Company uses certain non-GAAP historical financial measures. Management makes adjustments to the GAAP measures for items (both charges and gains) that (a) do not reflect the core operational activities of the Company, (b) are commonly adjusted within the Company’s industry to enhance comparability of the Company’s financial results with those of its peer group, or (c) are inconsistent in amount or frequency between periods (albeit such items are monitored and controlled with equal diligence relative to core operations). The Company uses the term “Non-GAAP” to exclude external acquisition-related costs incurred to effect a business combination; amortization of intangible assets acquired in a business combination, asset purchase transaction or other contractual relationship; impairment of goodwill and intangible assets; in-process R&D charges; fair value adjustments to contingent consideration liabilities and pre-acquisition contingencies arising from a business combination; integration and transition costs related to business combinations; fair market value adjustments to inventories acquired in a business combination or asset purchase transaction; restructuring charges, duplicative operating expenses, or asset write-offs (or reversals) associated with exiting or significantly downsizing a business; gain or loss from the sale of a business; gain or loss on the mark-to-market adjustment, impairment, or sale of long-term investments; mark-to-market adjustments on derivative instruments that hedge income or expense exposures in a future period; significant legal litigation costs and/or settlement expenses or proceeds legal and other associated expenses that are both unusual and significant related to governmental or internal inquiries; significant extraordinary one-time partnering receipts or payments immediately recognized as income or expense and that are not recurring; amortization of debt discount and associated issuance costs related to the company’s convertible senior debt offering; and significant 3
discrete income and other tax adjustments related to transactions as well as changes in estimated acquisition-date tax effects associated with business combinations, and the impact from implementation of tax law changes and settlements. See “GAAP to Non-GAAP Reconciliations” for a reconciliation of each non-GAAP measure presented to the comparable GAAP financial measure.
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GLAUKOS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
| | | | | | | | |
|---|---|---|---|---|---|---|---|
| | | Three Months Ended | | ||||
| | | March 31, | | ||||
| | | 2022 | | 2021 | | ||
| Net sales | $ | 67,681 | $ | 67,968 | |||
| Cost of sales | | | 17,063 | | | 16,633 | |
| Gross profit | | | 50,618 | | | 51,335 | |
| Operating expenses: | | | | | | | |
| Selling, general and administrative | | | 43,949 | | | 41,921 | |
| Research and development | | | 26,877 | | | 21,219 | |
| Litigation-related settlement | | | (30,000) | | | - | |
| Total operating expenses | | | 40,826 | | | 63,140 | |
| Income (loss) from operations | | | 9,792 | | | (11,805) | |
| Non-operating expense: | | | | | | | |
| Interest income | | | 287 | | | 383 | |
| Interest expense | | | (3,416) | | | (3,229) | |
| Other expense, net | | | (960) | | | (1,539) | |
| Total non-operating expense | | | (4,089) | | | (4,385) | |
| Income (loss) before taxes | | | 5,703 | | | (16,190) | |
| Income tax provision | | | 326 | | | 279 | |
| Net income (loss) | | $ | 5,377 | | $ | (16,469) | |
| | | | | | | | |
| Basic net income (loss) per share | | $ | 0.11 | | $ | (0.36) | |
| | | | | | | | |
| Diluted net income (loss) per share | | $ | 0.11 | | $ | (0.36) | |
| | | | | | | | |
| | | | | | | | |
| Weighted average shares used to compute basic net income (loss) per share | | | 47,050 | | | 45,709 | |
| Weighted average shares used to compute diluted net income (loss) per share | | | 49,506 | | | 45,709 | |
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GLAUKOS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par values)
| | | | | | | | |
|---|---|---|---|---|---|---|---|
| | **** | March 31, | **** | December 31, | **** | ||
| | | 2022 | | 2021 | | ||
| | | (unaudited) | | | | ||
| Assets | | | | | | | |
| Current assets: | | | | | | | |
| Cash and cash equivalents | | $ | 106,202 | | $ | 100,708 | |
| Short-term investments | | | 309,211 | | | 313,343 | |
| Accounts receivable, net | | | 34,804 | | | 33,438 | |
| Inventory | | | 24,708 | | | 23,011 | |
| Prepaid expenses and other current assets | | | 16,278 | | | 15,626 | |
| Total current assets | | | 491,203 | | | 486,126 | |
| Restricted cash | | | 9,416 | | | 9,416 | |
| Property and equipment, net | | | 74,708 | | | 68,969 | |
| Operating lease right-of-use asset | | | 26,539 | | | 28,142 | |
| Finance lease right-of-use asset | | | 48,417 | | | 49,022 | |
| Intangible assets, net | | | 326,553 | | | 332,781 | |
| Goodwill | | | 66,134 | | | 66,134 | |
| Deposits and other assets | | | 9,100 | | | 9,108 | |
| Total assets | | $ | 1,052,070 | | $ | 1,049,698 | |
| | | | | | | | |
| Liabilities and stockholders’ equity | | | | | | | |
| Current liabilities: | | | | | | | |
| Accounts payable | | $ | 7,998 | | $ | 7,333 | |
| Accrued liabilities | | | 47,598 | | | 56,027 | |
| Total current liabilities | | | 55,596 | | | 63,360 | |
| Convertible senior notes | | | 280,370 | | | 280,026 | |
| Operating lease liability | | | 29,304 | | | 29,650 | |
| Finance lease liability | | | 72,594 | | | 72,699 | |
| Deferred tax liability, net | | | 7,312 | | | 7,318 | |
| Other liabilities | | | 9,330 | | | 9,494 | |
| Total liabilities | | | 454,506 | | | 462,547 | |
| | | | | | | | |
| Stockholders’ equity: | | | | | | | |
| Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued and outstanding | | | - | | | - | |
| Common stock, $0.001 par value; 150,000 shares authorized; 47,117 and 46,993 shares issued and 47,089 and 46,965 shares outstanding | | | | | | | |
| at March 31, 2022 and December 31, 2021, respectively | | | 47 | | | 47 | |
| Additional paid-in capital | | | 960,870 | | | 952,432 | |
| Accumulated other comprehensive (loss) income | | | (3,387) | | | 15 | |
| Accumulated deficit | | | (359,834) | | | (365,211) | |
| Less treasury stock (28 shares as of March 31, 2022 and December 31, 2021) | | | (132) | | | (132) | |
| Total stockholders’ equity | | | 597,564 | | | 587,151 | |
| Total liabilities and stockholders’ equity | | $ | 1,052,070 | | $ | 1,049,698 | |
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GLAUKOS CORPORATION
GAAP to Non-GAAP Reconciliations
(in thousands, except per share amounts and percentage data)
(unaudited )
| | | | | | | | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Q1 2022 | | | Q1 2021 | | ||||||||||||||||||
| | GAAP | Adjustments | | | Non-GAAP | | GAAP | Adjustments | | | Non-GAAP | | ||||||||||||
| Cost of sales | | $ | 17,063 | | $ | (5,551) | | (a) | | $ | 11,512 | | | $ | 16,633 | | $ | (5,600) | | (a) | | $ | 11,033 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Gross Margin | | | 74.8 | % | | 8.2 | % | | | | 83.0 | % | | | 75.5 | % | | 8.3 | % | | | | 83.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Selling, general and administrative | | $ | 43,949 | | $ | (892) | | (b) | | $ | 43,057 | | | $ | 41,921 | | $ | (1,220) | | (b)(e) | | $ | 40,701 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Research and development | | $ | 26,877 | | $ | (127) | | (c) | | $ | 26,750 | | | $ | 21,219 | | $ | (150) | | (c) | | $ | 21,069 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Litigation-related settlement | | $ | (30,000) | | $ | 30,000 | | (d) | | $ | - | | | $ | - | | $ | - | | | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) from operations | | $ | 9,792 | | $ | (23,430) | | | | $ | (13,638) | | | $ | (11,805) | | $ | 6,970 | | | | $ | (4,835) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | 5,377 | | $ | (23,430) | | (f) | | $ | (18,053) | | | $ | (16,469) | | $ | 6,970 | | (f) | | $ | (9,499) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income (loss) per share | | $ | 0.11 | | $ | (0.49) | | | | $ | (0.38) | | | $ | (0.36) | | $ | 0.15 | | | | $ | (0.21) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Diluted net income (loss) per share | | $ | 0.11 | | $ | (0.49) | | | | $ | (0.38) | | | $ | (0.36) | | $ | 0.15 | | | | $ | (0.21) | |
| (a) | Cost of sales adjustments related to the acquisition of Avedro, Inc. (Avedro), including amortization of developed technology intangible assets and stock-based compensation expense related to replacement awards, totaling $5.6 million in Q1 2022 and Q1 2021. |
|---|---|
| (b) | Avedro acquisition-related expenses, including amortization expense of customer relationship intangible assets and stock-based compensation expense related to replacement awards of $0.9 million in Q1 2022 and $1.0 million in Q1 2021. |
| --- | --- |
| (c) | Stock-based compensation expense related to replacement awards from the acquisition of Avedro of $0.1 million in Q1 2022 and $0.2 million in Q1 2021. |
| --- | --- |
| (d) | Settlement proceeds received related to the Company’s patent infringement litigation. |
| --- | --- |
| (e) | Expenses related to the Company’s patent infringement litigation and related matters of $0.2 million. |
| --- | --- |
| (f) | 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 2022 and 2021. |
| --- | --- |
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| | Exhibit 99.2 |
|---|---|
| | |
 |
MAY 4, 2022 |
GLAUKOS CORPORATION (NYSE: GKOS)
FIRST QUARTER 2022 IN REVIEW
Important Information
This document is intended to be read by investors in advance of regularly scheduled quarterly conference calls and was designed to provide a review of Glaukos Corporation’s recent financial and operational performance and general business outlook.
Please see “Forward-Looking Statements” and “Statement Regarding Use of Non-GAAP Financial Measures” in the Additional Information section of this document.
Conference Call Information
| | | |
|---|---|---|
| Date: | May 4, 2022 | |
| Time: | 4:30 p.m. ET / 1:30 p.m. PT | |
| Dial-in numbers: | 1-888-210-2212 (U.S.), 1-646-960-0390 (International) | |
| Confirmation ID: | 7935742 | |
| Live webcast: | Events page at the Glaukos Investor Relations website at http://investors.glaukos.com or at this link. | |
| Webcast replay: | A replay of the webcast will be archived on the Glaukos Investor Relations website following completion of the call. | |
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| MAY 4, 2022 |
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FIRST QUARTER 2022 FINANCIAL RESULTS SUMMARY
| | | |
|---|---|---|
| Business Description | Ophthalmic medical technology and pharmaceutical company focused on developing and commercializing novel, dropless platform therapies designed to disrupt the conventional standard of care and improve outcomes for patients suffering from chronic eye diseases | |
| Disease Categories | | Glaucoma<br><br>Corneal Health<br><br>Retinal Disease |
| Revenue (Growth) | | 1Q 2022<br><br>$67.7 million<br><br>(flat vs. 1Q 2021; +1% constant currency vs. 1Q 2021) |
| Gross Margin (Non-GAAP) | | 1Q 2022<br><br>83.0%<br><br>(versus 83.8% in 1Q 2021) |
| OPEX (Non-GAAP) | | 1Q 2022<br><br>$69.8 million<br><br>(+13% vs. 1Q 2021) |
| Earnings Per Share<br><br>(Non-GAAP) | | 1Q 2022<br><br>($0.38) per share<br><br>(versus ($0.21) 1Q 2021) |
| Number of Disclosed Pipeline Programs | | 16 |
| Cash & Cash Equivalents, Short-Term Investments, and Restricted Cash | | $424.8 million as of March 31, 2022 (versus $423.5 million as of December 31, 2021) |
| Updated Guidance | | FY 2022 global consolidated revenues of $270 - $275 million expected (versus $265 - $275 million previously) |
See “Statement Regarding Use of Non-GAAP Financial Measures” and the Non-GAAP reconciliations included within the Additional Information section of this document. Reconciliations for each of Non-GAAP Gross Margin, Non-GAAP OPEX, and Non-GAAP Earnings Per Share to the most directly comparable GAAP financial measure are provided.
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| MAY 4, 2022 |
|---|
Revenue Performance & Commercial Overview
Global Consolidated Revenue Performance
Glaukos reported first quarter net revenues of $67.7 million that were flat versus the first quarter of 2021 on a reported basis or up 1% on a constant currency basis versus 1Q 2021. Our first quarter performance reflected solid execution across our global Glaucoma and Corneal Health franchises amidst continued COVID-related volatility and headwinds globally, and U.S. combination cataract glaucoma dynamics associated in particular with the 2022 Centers for Medicare and Medicaid Services (CMS) final Physician Fee reimbursement rates that became effective on January 1, 2022.
Franchise Revenue Performance
U.S. Glaucoma
Our first quarter U.S. Glaucoma net revenues were approximately $33.9 million, down 15% year-over-year reflecting a combination of pandemic-related dynamics, and U.S. combination cataract glaucoma dynamics associated in particular with the 2022 CMS final Physician Fee reimbursement rates that became
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| MAY 4, 2022 |
|---|
effective on January 1, 2022. Despite an impact to customer ordering patterns and competitive trialing activities in the first quarter, as expected, we’ve been very pleased with the execution of our commercial strategies and the resiliency of our combo-cataract iStent® franchise in the face of the reimbursement headwinds thus far in 2022.
Our commercial team continues to successfully train and educate our current and prospective surgeon customers on the favorable long-term risk-benefit profile of our iStent family of technologies and advance Micro-Invasive Glaucoma Surgery (MIGS) towards the standard of care for glaucoma.
We remain focused on maximizing the access to our sight-saving technologies and overall care for glaucoma patients domestically. One such new technology is iAccess™, our new trabecular trephine device, for which we commenced full U.S. commercial launch activities in the latter part of the first quarter. Initial surgeon feedback on precision goniotomy with iAccess has been positive with surgeons most commonly citing the technology’s differentiated tissue-sparing, minimally-invasive approach to creating an extensive opening to Schlemm’s canal via numerous ectomies across multiple clock hours.
While we acknowledge that we may continue to face near-term headwinds in combination-cataract glaucoma domestically based on the cuts in professional reimbursement for trabecular stents that remain substantially below more invasive alternatives, we continue to feel confident in our ability to execute our strategy as we continue to bring complementary technologies to market in the quarters ahead. At the same time, we will remain prudent as it relates to forward guidance as we navigate the year ahead.
International Glaucoma
Our first quarter International Glaucoma net revenues were approximately $17.6 million, representing year-over-year growth of 28%, or 35% on a constant currency basis, versus 1Q 2021, which included a one-time unfavorable catch-up provision associated with government rebates in France.
Growth internationally during the first quarter was broad-based, but similar to the U.S., we did experience intermittent COVID disruptions during January and early February in particular across several key European and Asia-Pacific markets. Early launch activities of the PRESERFLO® MicroShunt® in Australia and Canada continue to go well and our overall performance in key markets such as Japan and France highlighted the strong quarter. We remain early in our penetration of the international opportunity and continue to make significant investments in our commercial sales and market access efforts in existing markets globally while selectively pursuing geographic expansion opportunistically.
Corneal Health
Our first quarter Corneal Health net revenues were approximately $16.1 million, representing year-over-year growth of 13% versus 1Q 2021.
The first quarter performance was driven by U.S. Photrexa® sales of $13.1 million along with a continued trend of healthy new U.S. Photrexa account starts, partially offset again by COVID-related headwinds and sporadic reimbursement volatility. Moving forward, our focus remains on executing our commercial and market development strategies and building upon the strong momentum we are experiencing within this emerging growth franchise for Glaukos.
4
| MAY 4, 2022 |
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Additional Commercial Updates & Commentary
We have had several additional positive commercial updates worth highlighting here:
| ✓ | PRESERFLO MicroShunt initial commercial launch activities commenced during the fourth quarter in Canada, and during the first quarter in Australia |
|---|---|
| ✓ | iPRIME™ Food and Drug Administration (FDA) 510(k) clearance was received in January 2022, and we are planning for a controlled commercial launch in the second quarter of 2022 |
| --- | --- |
| ✓ | Initial commercial launch activities commenced for iStent inject® in India during the fourth quarter of 2022 |
| --- | --- |
| ✓ | Commenced commercial launch activities in the U.S. for iAccess late in the first quarter of 2022 |
| --- | --- |
 |
|
|---|---|
| Developed by Glaukos in partnership with ophthalmic surgeons, iAccess is designed to deliver multiple outflow channels through the trabecular meshwork into Schlemm’s canal. When medically necessary, precision goniotomy with iAccess is designed to be unrestricted in its ability to create numerous ectomies across multiple clock hours, providing an extensive opening to Schlemm’s canal, while preserving up to 95% more anatomy vs other tissue removal procedures. |  |
 |
|
|---|---|
| We are also planning for a controlled commercial launch of iPRIME in the second quarter of 2022. iPRIME is a truly minimally-invasive viscoelastic delivery system that further supports the needs of physicians and patients by providing the delivery of viscoelastic during ophthalmic surgery. This technology further expands Glaukos’ broad portfolio of innovative ophthalmic solutions and is consistent with our longstanding position on the value of tissue-sparing therapies. We believe iPRIME will be another important tool that supports the needs of physicians and patients.<br><br> |  |
COVID-19 Update:
The impact of the Omicron variant as we entered into 2022 varied by geography and generally peaked in January and early February. The impact varied given more strict government-driven lockdowns in markets like Australia and Canada versus the U.S. where hospitals and ambulatory surgery centers (ASCs) have at times had to restrict elective procedures as sites dealt with the impact of increased numbers of staff members testing positive given how transmissible this latest wave of COVID was globally.
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| MAY 4, 2022 |
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2022 Updated Revenue Guidance
Glaukos expects full year 2022 global consolidated net sales of $270 - $275 million, up from its previous guidance of $265 - $275 million. This upwardly-revised guidance attempts to take into consideration:
| · | The estimated impact on U.S. Glaucoma volumes from the 2022 CMS Final Rule related to professional fee reimbursement for combination-cataract trabecular bypass surgery |
|---|---|
| · | Heightened competition in combo-cataract MIGS globally in 2022 |
| --- | --- |
| · | Potential modest early launch contributions from iAccess, iPRIME, and iStent infinite® as 2022 progresses |
| --- | --- |
| · | COVID-19 headwinds, including COVID-related staffing dynamics, based on the facts and circumstances as they exist today |
| --- | --- |
| · | Potential for ongoing Corneal Health sporadic reimbursement volatility |
| --- | --- |
| · | Incremental foreign exchange headwinds |
| --- | --- |
We would also remind investors to factor in our typical underlying seasonality patterns and COVID-related trends and risks that are outside of our control.
6
| MAY 4, 2022 |
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Research & Development / Pipeline Overview
Pipeline Summary
Our five key dropless technology therapy platforms designed to disrupt traditional treatment paradigms and generate cascades of future innovation are as follows:
| iStent® micro-scale surgical devices |
|---|
| iDose® sustained-release pharmaceuticals |
| iLution™ transdermal pharmaceuticals |
| iLink™ bio-activated pharmaceuticals |
| Retina XR™ bio-erodible sustained-release pharmaceuticals |
7
| MAY 4, 2022 |
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Key R&D and Pipeline Updates
We are continuing to successfully invest in and advance our fulsome pipeline of core novel platforms, supported by over $300 million of self-funded investment into our R&D programs since 2018 alone. Recent updates in our pipeline include:
| ✓ | iStent infinite FDA 510(k) submission (4Q 2021) remains under FDA review with mid-2022 approval target |
|---|---|
| ✓ | iPRIME FDA 510(k) clearance (January 2022); controlled U.S. commercial launch planned for 2Q 2022 |
| --- | --- |
| ✓ | Commencement of Phase 2 clinical trials for GLK-301 (iLution – Dry Eye Disease) and GLK-302 (iLution – Presbyopia) (January 2022) |
| --- | --- |
| ✓ | iDose TR Phase 2b 36-month data announcement (January 2022); Phase 3 clinical program ongoing with NDA submission targeted for 2022 and potential U.S. FDA approval in 2023 |
| --- | --- |
| ✓ | Epioxa™ (Epi-on) pre-submission activities ongoing; NDA submission targeted for 2022 and potential U.S. FDA approval in 2023 |
| --- | --- |
| ✓ | Commencement of Phase 2 Corneal Health clinical program for third-generation iLink therapy (March 2022) |
| --- | --- |
| ✓ | PRESERFLO MicroShunt |
| --- | --- |
| o | The U.S. FDA has completed its review for the PRESERFLO MicroShunt PMA submission and has notified InnFocus, Inc., a Santen company, of a Non-Approvable determination based on its PMA study and submission. Based on the terms of our agreement, Glaukos expects to assume control over U.S. clinical and regulatory activities moving forward. We intend to engage with the FDA over the coming months to determine the next appropriate clinical and regulatory steps, in cooperation with InnFocus/Santen, as we continue to believe patients and surgeons in the U.S. should have access to the PRESERFLO MicroShunt as a late-stage glaucoma treatment alternative. |
| --- | --- |
| o | Regulatory activities to seek approval in Latin America underway |
| --- | --- |
Clinical Update
We have been privileged as the corporate founder to pioneer, validate and advance MIGS therapy as a key component of glaucoma management. Our robust and growing body of clinical literature is unparalleled in the MIGS category and now consists of more than 200 clinical peer-reviewed studies supporting the performance of our technologies.
One recent addition to this expansive and growing library of clinical evidence is the first independent, real-world, observational, multicenter study that was peer-review published in Clinical & Experimental Ophthalmology earlier this year. The study, which analyzed data from the Fight Glaucoma Blindness international registry, established by the Save Sight Institute in Sydney, Australia, compared 24-month outcomes of 344 eyes with mild-to-moderate open-angle glaucoma, normal-tension glaucoma or ocular hypertension that underwent cataract surgery combined with either iStent inject or the Hydrus®
8
| MAY 4, 2022 |
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Microstent. Two-year outcomes demonstrated sustained IOP-reductions across both cohorts. In the matched cohort, the mean 24-month achieved IOP was 14.4 mmHg in the iStent inject group vs. 15.9 mmHg in the Hydrus group. Further, after adjusting for baseline characteristics, there was significantly greater average medication reduction in the iStent inject group (0.9 med reduction) compared to the Hydrus group (0.4 med reduction) (p=0.025). Finally, a positive safety profile was reported for the iStent inject cohort.
In addition to this publication, several studies and symposia have also been presented by ophthalmic surgeons at recent key societal meetings, including the American Glaucoma Society annual meeting in March, as well as the American Society of Cataract and Refractive Surgery annual meeting in April. The highly compelling results of these various studies highlight a favorable risk-benefit profile for our family of iStent technologies versus competitive alternatives, and further strengthen our market-leading library of clinical evidence.
9
| MAY 4, 2022 |
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Other Financial Performance Overview
As a reminder, we discuss our financial performance on a non-GAAP or pro forma basis and summarize our GAAP performance. We encourage investors to review our GAAP to non-GAAP reconciliation which can be found in our earnings press release, the Additional Information section contained herein, as well as the Investor Relations section of our website.
First quarter 2022 financial performance summary:
| | <br><br>∆: -80bps<br><br> | Geographic mix headwinds in 1Q 2022<br><br> |
|---|---|---|
 |
1Q 2022: 83%<br><br>1Q 2021: 84%<br><br>YoY ∆: -80bps | ●<br><br>Please note that our non-GAAP adjustments to cost of goods sold include substantial amounts related to Avedro acquisition accounting<br><br>●<br><br>Geographic mix headwinds in 1Q 2022 |
 |
1Q 2022: $43.1M<br><br>1Q 2021: $40.7M<br><br>YoY ∆: +6% | ●<br><br>8% sequential decrease vs $46.7M in 4Q 2021<br><br>●<br><br>YoY increase reflects commercial and G&A investments globally and new product launch activities |
 |
1Q 2022: $26.8M<br><br>1Q 2021: $21.1M<br><br>YoY ∆: +27% | ●<br><br>5% sequential increase vs $25.5M in 4Q 2021<br><br>●<br><br>YoY increase reflects continued investment in and advancement of R&D programs<br><br>●<br><br>iDose TR and Epioxa registration prep; iLution and third-gen iLink clinical trial activities |
 |
1Q 2022: $69.8M<br><br>1Q 2021: $61.8M<br><br>YoY ∆: +13% | ●<br><br>3% sequential decrease vs $72.3M in 4Q 2021<br><br>●<br><br>Continued restoration of expansionary spending as the recovery from the COVID-19 pandemic warrants, a trend that we would expect moving forward |
 |
Operating Loss<br><br>1Q 2022: ($13.6M)<br><br>1Q 2021: ($4.8M)<br><br> | ●<br><br>Net Loss of ($18.1M) in 1Q 2022 vs ($9.5M) in 1Q 2021<br><br>●<br><br>Net Loss per share was ($0.38) in 1Q 2022 vs ($0.21) in 1Q 2021<br><br><br><br> |
 |
1Q 2022: $6.6M<br><br>1Q 2021: $17.2M<br><br>YoY ∆: -$10.6M<br><br> | ●<br><br>Capital expenditures remained elevated versus historical levels, a trend expected to continue through 2022 before moderating to levels more consistent with historical norms<br><br>●<br><br>1Q YoY decline primarily due to completion of new Aliso Viejo, CA facilities |
 |
1Q 2022: ~$425M<br><br>4Q 2021: ~$423M<br><br>YoY ∆: +$1.4M<br><br> | ●<br><br>Operating expenses and capital investments offset by proceeds from litigation settlement (see bullet below) and financing cash inflows<br><br>●<br><br>Received $30 million payment related to settlement of patent litigation with Ivantis, Inc. This receipt was recorded as an offset to GAAP operating expenses in the first quarter. |
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| MAY 4, 2022 |
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Other Important Updates
| Ø | The Company announced the release of its 2021 Sustainability Report (April 2022) |
|---|---|
| o | The report highlights the company’s continued commitment and progress on environmental, social and governance (ESG) initiatives. |
| --- | --- |
| o | Over the course of 2021, Glaukos undertook several actions to further improve its ESG efforts and reporting framework. To highlight a few: |
| --- | --- |
| · | Glaukos established a diversity, equity and inclusion (DEI) forum comprised of global, cross-functional employees and executive sponsors to champion DEI initiatives. |
| --- | --- |
| · | The company also increased its board diversity through the addition of two new directors in 2021, resulting in a significant increase in gender diversity and in individuals from underrepresented communities. |
| --- | --- |
| · | In addition, the company received ISO 14001 certification for its San Clemente, California manufacturing facility. |
| --- | --- |
| · | Glaukos also reported 100% completion of a new annual cybersecurity training course for all Glaukos employees. |
| --- | --- |
| o | For additional information and highlights, please see Glaukos’ 2021 Sustainability Report, which can be found on the company’s website here. |
| --- | --- |
| o | Glaukos’ ESG initiatives are overseen by the company’s board of directors. |
| --- | --- |
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| MAY 4, 2022 |
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| MAY 4, 2022 |
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Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of federal securities laws. All statements other than statements of historical facts included in this presentation that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. These statements are based on management’s current expectations, assumptions, estimates and beliefs. Although we believe that we have a reasonable basis for forward-looking statements contained herein, we caution you that they are based on current expectations about future events affecting us and are subject to risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that may cause our actual results to differ materially from those expressed or implied by forward-looking statements in this presentation. These potential risks and uncertainties that could cause actual results to differ materially from those described in forward-looking statements include, without limitation, uncertainties regarding the duration and severity of the COVID-19 pandemic and its impact on our business or the economy generally; the reduced physician fee and ASC facility fee reimbursement rate finalized by CMS for 2022 for procedures utilizing the Company’s iStent family of products and its impact on our U.S. combo-cataract glaucoma revenue; our ability to continue to generate sales of our commercialized products and develop and commercialize additional products; our dependence on a limited number of third-party suppliers, some of which are single-source, for components of our products; the occurrence of a crippling accident, natural disaster, or other disruption at our primary facility, which may materially affect our manufacturing capacity and operations; securing or maintaining adequate coverage or reimbursement by third-party payors for procedures using the iStent, the iStent inject, the iStent inject W, iAccess, iPRIME, our corneal cross-linking products or other products in development; our ability to properly train, and gain acceptance and trust from ophthalmic surgeons in the use of our products; our ability to compete effectively in the medical device industry and against current and future technologies (including MIGS technologies); our compliance with federal, state and foreign laws and regulations for the approval and sale and marketing of our products and of our manufacturing processes; the lengthy and expensive clinical trial process and the uncertainty of timing and outcomes from any particular clinical trial or regulatory approval processes; the risk of recalls or serious safety issues with our products and the uncertainty of patient outcomes; our ability to protect, and the expense and time-consuming nature of protecting our intellectual property against third parties and competitors and the impact of any claims against us for infringement or misappropriation of third party intellectual property rights and any related litigation; and our ability to service our indebtedness. These and other known risks, uncertainties and factors are described in detail under the caption “Risk Factors” and elsewhere in our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on February 28, 2022, and will also be included in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, which we expect to file on or before May 10, 2022. Our filings with the SEC are available in the Investor Section of our website at www.glaukos.com or at www.sec.gov. In addition, information about the risks and benefits of our products is available on our website at www.glaukos.com. All forward-looking statements included in this press release are expressly qualified in their entirety by the foregoing cautionary statements. You are cautioned not to place undue reliance on the forward-looking statements in this press release, which speak only as of the date hereof. We do not undertake any obligation to update, amend or clarify these forward-looking statements whether as a result of new information, future events or otherwise, except as may be required under applicable securities law.
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| MAY 4, 2022 |
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Statement Regarding Use of Non-GAAP Financial Measures
To supplement the consolidated financial results prepared in accordance with Generally Accepted Accounting Principles ("GAAP"), the Company uses certain non-GAAP historical financial measures. Management makes adjustments to the GAAP measures for items (both charges and gains) that (a) do not reflect the core operational activities of the Company, (b) are commonly adjusted within the Company's industry to enhance comparability of the Company's financial results with those of its peer group, or (c) are inconsistent in amount or frequency between periods (albeit such items are monitored and controlled with equal diligence relative to core operations). The Company uses the term "Non-GAAP" to exclude external acquisition-related costs incurred to effect a business combination; amortization of intangible assets acquired in a business combination, asset purchase transaction or other contractual relationship; impairment of goodwill and intangible assets; in-process R&D charges; fair value adjustments to contingent consideration liabilities and pre-acquisition contingencies arising from a business combination; integration and transition costs related to business combinations; fair market value adjustments to inventories acquired in a business combination or asset purchase transaction; restructuring charges, duplicative operating expenses, or asset write-offs (or reversals) associated with exiting or significantly downsizing a business; gain or loss from the sale of a business; gain or loss on the mark-to-market adjustment, impairment, or sale of long-term investments; mark-to-market adjustments on derivative instruments that hedge income or expense exposures in a future period; significant legal litigation costs and/or settlement expenses or proceeds legal and other associated expenses that are both unusual and significant related to governmental or internal inquiries; significant extraordinary one-time partnering receipts or payments immediately recognized as income or expense and that are not recurring; amortization of debt discount and associated issuance costs related to the company’s convertible senior debt offering; and significant discrete income and other tax adjustments related to transactions as well as changes in estimated acquisition-date tax effects associated with business combinations, and the impact from implementation of tax law changes and settlements. In addition, we also present certain revenue information on a constant currency basis to exclude fluctuations in currency exchange rates that impact the comparative results and sales growth rates of the Company's business as compared to historical financial results. See “Primary GAAP to Non-GAAP Reconciliations” for a reconciliation of each non-GAAP measure presented to the comparable GAAP financial measure.
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| MAY 4, 2022 |
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GAAP Income Statement
GLAUKOS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
| | | | | | | | |
|---|---|---|---|---|---|---|---|
| | | Three Months Ended March 31, | |||||
| | **** | 2022 | 2021 | | |||
| Net sales | | $ | 67,681 | | $ | 67,968 | |
| Cost of sales | | | 17,063 | | | 16,633 | |
| Gross profit | | | 50,618 | | | 51,335 | |
| Operating expenses: | | | | | | | |
| Selling, general and administrative | | | 43,949 | | | 41,921 | |
| Research and development | | | 26,877 | | | 21,219 | |
| Litigation-related settlement | | | (30,000) | | | – | |
| Total operating expenses | | | 40,826 | | | 63,140 | |
| Income (loss) from operations | | | 9,792 | | | (11,805) | |
| Non-operating expense: | | | | | | | |
| Interest income | | | 287 | | | 383 | |
| Interest expense | | | (3,416) | | | (3,229) | |
| Other expense, net | | | (960) | | | (1,539) | |
| Total non-operating expense | | | (4,089) | | | (4,385) | |
| Income (loss) before taxes | | | 5,703 | | | (16,190) | |
| Income tax provision | | | 326 | | | 279 | |
| Net income (loss) | | $ | 5,377 | | $ | (16,469) | |
| | | | | | | | |
| Basic net income (loss) per share | | $ | 0.11 | | $ | (0.36) | |
| | | | | | | | |
| Diluted net income (loss) per share | | $ | 0.11 | | $ | (0.36) | |
| | | | | | | | |
| Weighted average shares used to compute basic net income (loss) per share | | | 47,050 | | | 45,709 | |
| Weighted average shares used to compute diluted net income (loss) per share | | | 49,506 | | | 45,709 | |
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| MAY 4, 2022 |
|---|
GAAP Balance Sheet
GLAUKOS CORPORATION
CONDENSED CONSOLIDATED BALANCESHEETS
(in thousands, except par values)
| | | | | | | | |
|---|---|---|---|---|---|---|---|
| | **** | March 31, | **** | December 31, | **** | ||
| | | 2022 | | 2021 | | ||
| | | (unaudited) | | | | ||
| Assets | | | | | | | |
| Current assets: | | | | | | | |
| Cash and cash equivalents | | $ | 106,202 | | $ | 100,708 | |
| Short-term investments | | | 309,211 | | | 313,343 | |
| Accounts receivable, net | | | 34,804 | | | 33,438 | |
| Inventory | | | 24,708 | | | 23,011 | |
| Prepaid expenses and other current assets | | | 16,278 | | | 15,626 | |
| Total current assets | | | 491,203 | | | 486,126 | |
| Restricted cash | | | 9,416 | | | 9,416 | |
| Property and equipment, net | | | 74,708 | | | 68,969 | |
| Operating lease right-of-use asset | | | 26,539 | | | 28,142 | |
| Finance lease right-of-use asset | | | 48,417 | | | 49,022 | |
| Intangible assets, net | | | 326,553 | | | 332,781 | |
| Goodwill | | | 66,134 | | | 66,134 | |
| Deposits and other assets | | | 9,100 | | | 9,108 | |
| Total assets | | $ | 1,052,070 | | $ | 1,049,698 | |
| | | | | | | | |
| Liabilities and stockholders' equity | | | | | | | |
| Current liabilities: | | | | | | | |
| Accounts payable | | $ | 7,998 | | $ | 7,333 | |
| Accrued liabilities | | | 47,598 | | | 56,027 | |
| Total current liabilities | | | 55,596 | | | 63,360 | |
| Convertible senior notes | | | 280,370 | | | 280,026 | |
| Operating lease liability | | | 29,304 | | | 29,650 | |
| Finance lease liability | | | 72,594 | | | 72,699 | |
| Deferred tax liability, net | | | 7,312 | | | 7,318 | |
| Other liabilities | | | 9,330 | | | 9,494 | |
| Total liabilities | | | 454,506 | | | 462,547 | |
| | | | | | | | |
| Stockholders' equity: | | | | | | | |
| Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued and outstanding | | | – | | | – | |
| Common stock, $0.001 par value; 150,000 shares authorized; 47,117 and 46,993 shares issued and 47,089 and 46,965 shares outstanding at March 31, 2022 and December 31, 2021, respectively | | | 47 | | | 47 | |
| Additional paid-in capital | | | 960,870 | | | 952,432 | |
| Accumulated other comprehensive (loss) income | | | (3,387) | | | 15 | |
| Accumulated deficit | | | (359,834) | | | (365,211) | |
| Less treasury stock (28 shares as of March 31, 2022 and December 31, 2021) | | | (132) | | | (132) | |
| Total stockholders' equity | | | 597,564 | | | 587,151 | |
| Total liabilities and stockholders' equity | | $ | 1,052,070 | | $ | 1,049,698 | |
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| MAY 4, 2022 |
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Primary GAAP to Non-GAAP Reconciliations
GLAUKOS CORPORATION
GAAP to Non-GAAP Reconciliations
(in thousands, except per share amounts and percentage data) (unaudited)
| | | Q 1 2022 | | Q 1 2021 | | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | **** | GAAP | Adjustments | Non-GAAP | **** | GAAP | Adjustments | Non-GAAP | | ||||||||||
| Cost of sales | | $ | 17,063 | | $ | (5,551) | (a) | $ | 11,512 | | $ | 16,633 | | $ | (5,600) | (a) | $ | 11,033 | |
| Gross Margin | | | 74.8 | % | | 8.2 | % | | 83.0 | % | | 75.5 | % | | 8.3 | % | | 83.8 | % |
| Operat ing expenses: | | | | | | | | | | | | | | | | | | | |
| Selling, general and administrative | | $ | 43,949 | | $ | (892) | (b) | $ | 43,057 | | $ | 41,921 | | $ | (1,220) | (b)(e) | $ | 40,701 | |
| Research and development | | $ | 26,877 | | $ | (127) | (c) | $ | 26,750 | | $ | 21,219 | | $ | (150) | (c) | $ | 21,069 | |
| Litigation-related settlement | | $ | (30,000) | | $ | 30,000 | (d) | $ | – | | $ | – | | $ | – | | $ | – | |
| Income (loss) from operations | | $ | 9,792 | | $ | (23,430) | | $ | (13,638) | | $ | (11,805) | | $ | 6,970 | | $ | (4,835) | |
| Net income (loss) | | $ | 5,377 | | $ | (23,430) | (f) | $ | (18,053) | | $ | (16,469) | | $ | 6,970 | (f) | $ | (9,499) | |
| Basic net income (loss) per share | | $ | 0.11 | | $ | (0.49) | | $ | (0.38) | | $ | (0.36) | | $ | 0.15 | | $ | (0.21) | |
| Diluted net income (loss) per share | | $ | 0.11 | | $ | (0.49) | | $ | (0.38) | | $ | (0.36) | | $ | 0.15 | | $ | (0.21) | |
| (a) | Cost of sales adjustments related to the acquisition of Avedro, Inc. (Avedro), including amortization of developed technology intangible assets and stock-based compensation expense related to replacement awards, totaling $5.6 million in Q1 2022 and Q1 2021. |
|---|---|
| (b) | Avedro acquisition-related expenses, including amortization expense of customer relationship intangible assets and stock-based compensation expense related to replacement awards of $0.9 million in Q1 2022 and $1.0 million in Q1 2021. |
| --- | --- |
| (c) | Stock-based compensation expense related to replacement awards from the acquisition of Avedro of $0.1 million in Q1 2022 and $0.2 million in Q1 2021. |
| --- | --- |
| (d) | Settlement proceeds received related to the Company's patent infringement litigation. |
| --- | --- |
| (e) | Expenses related to the Company's patent infringement litigation and related matters of $0.2 million. |
| --- | --- |
| (f) | 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 2022 and 2021. |
| --- | --- |
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| MAY 4, 2022 |
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Additional GAAP to Non-GAAP Reconciliations
| Reported Sales vs. Prior Period (in thousands) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | |||
| | | | | | | Percent Change | ||||||
| | | 1 Q 2022 | | 1 Q 2021 | | Reported | | Operations (1) | | Currency (2) | ||
| International Glaucoma | $ | 17,648 | $ | 13,810 | 27.8 | % | 34.6 | % | 6.8%) | |||
| (Total Net Sales | | $ | 67,681 | | $ | 67,968 | | -0.4 | % | 1.0 | % | (1.4%) |
(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
For Non-GAAP disclosures associated with the company’s quarterly results in the fourth quarter of 2021, please see reconciliation here. 18