GLAUKOS Corp 10-Q for FY2022 Q1

GLAUKOS Corp (GKOS)

10-Q 2022-05-05 For: 2022-03-31

Added on April 12, 2026

About this 10-Q

GLAUKOS Corp filed this 10-Q on May 5, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $67.68M; down 0.4% from $67.97M a year earlier
Net income: $5.38M; compared with a net loss of $16.47M a year earlier
Diluted EPS: $0.11; compared with -$0.36 a year earlier

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

229 Avenida Fabricante San Clemente, California	92672
(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 Income (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	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30

PART II: OTHER INFORMATION		30
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 6.	Exhibits	45

SIGNATURES		46


	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 assets		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

Commitments and contingencies (Note 12)

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 as of 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


	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


						Accumulated
				Additional		other
	Common stock			paid-in		comprehensive		Accumulated		Treasury stock			Total
	Shares	Amount		capital		income (loss)		deficit		Shares	Amount		equity
Balance at December 31, 2021	46,993	$	47	$	952,432	$	15	$	(365,211)	(28)	$	(132)	$	587,151
Common stock issued under stock plans	124		—		1,515		—		—	—		—		1,515
Stock-based compensation	—		—		6,923		—		—	—		—		6,923
Other comprehensive loss	—		—		—		(3,402)		—	—		—		(3,402)
Net income	—		—		—		—		5,377	—		—		5,377
Balance at March 31, 2022	47,117	$	47	$	960,870	$	(3,387)	$	(359,834)	(28)	$	(132)	$	597,564


	Three Months Ended March 31,
	2022		2021
Operating Activities
Net income (loss)	$	5,377	$	(16,469)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		1,382		1,150
Amortization of intangible assets		6,228		6,228
Amortization of lease right-of-use assets		1,271		1,170
Amortization of debt issuance costs		343		343
Deferred income tax benefit		(6)		(24)
Gain on disposal of fixed assets		(45)		-
Stock-based compensation		6,923		8,748
Unrealized foreign currency (gains) losses		(135)		1,101
Amortization of premium on short-term investments		236		256
Other liabilities		(163)		570
Changes in operating assets and liabilities:
Accounts receivable, net		(1,423)		(547)
Inventory		(1,750)		403
Prepaid expenses and other current assets		(669)		(1,803)
Accounts payable and accrued liabilities		(7,578)		3,023
Other assets		(217)		29
Net cash provided by operating activities		9,774		4,178
Investing activities
Purchases of short-term investments		(16,747)		(54,007)
Proceeds from sales and maturities of short-term investments		17,184		50,349
Purchases of property and equipment		(6,604)		(17,182)
Proceeds from disposal of property and equipment		55		-
Investment in company-owned life insurance		215		(423)
Net cash used in investing activities		(5,897)		(21,263)
Financing activities
Proceeds from exercise of stock options		548		16,552
Proceeds from share purchases under Employee Stock Purchase Plan		1,785		1,549
Payment of employee taxes related to vested restricted stock units		(818)		(1,065)
Principal paid on finance lease		(105)		(251)
Proceeds from tenant improvement allowance		-		629
Net cash provided by financing activities		1,410		17,414
Effect of exchange rate changes on cash and cash equivalents		207		(450)
Net increase (decrease) in cash, cash equivalents and restricted cash		5,494		(121)
Cash, cash equivalents and restricted cash at beginning of period		110,124		106,162
Cash, cash equivalents and restricted cash at end of period	$	115,618	$	106,041
Supplemental disclosures of cash flow information
Taxes paid (refunded)	$	91	$	(35)
Other interest paid	$	1,091	$	3,848
Supplemental schedule of noncash investing and financing activities
Purchases of property and equipment included in accounts payable and accrued liabilities	$	2,705	$	3,848


	At March 31, 2022
	Maturity	Amortized cost		Unrealized		Unrealized		Estimated
	(in years)	or cost		gains		losses		fair value
U.S. government bonds	less than 2	$	76,772	$	-	$	(923)	$	75,849
U.S. government agency bonds	less than 3		123,693		13		(2,099)		121,607
Bank certificates of deposit	less than 2		15,499		4		(29)		15,474
Commercial paper	less than 1		2,999		—		(2)		2,997
Corporate notes	less than 3		52,349		5		(817)		51,537
Asset-backed securities	less than 2		23,900		8		(216)		23,692
Municipal bonds	less than 3		18,471		—		(416)		18,055
Total		$	313,683	$	30	$	(4,502)	$	309,211

	At December 31, 2021
	Maturity	Amortized cost		Unrealized		Unrealized		Estimated
	(in years)	or cost		gains		losses		fair value
U.S. government agency bonds	less than 3		123,803		8		(540)		123,271
U.S. government bonds	less than 1	$	76,765	$	—	$	(240)	$	76,525
Bank certificates of deposit	less than 1		12,500		1		(9)		12,492
Commercial paper	less than 1		2,998		-		(1)		2,997
Corporate notes	less than 3		55,178		37		(183)		55,032
Asset-backed securities	less than 2		23,761		44		(31)		23,774
Municipal bonds	less than 3		19,350		-		(98)		19,252
Total		$	314,355	$	90	$	(1,102)	$	313,343


			At March 31, 2022
			Quoted prices		Significant
			in active		other		Significant
			markets for		observable		unobservable
	March 31,		identical assets		inputs		inputs
	2022		(Level 1)		(Level 2)		(Level 3)
Assets
Cash equivalents:
Money market funds ⁽ⁱ⁾	$	1,060	$	1,060	$	-	$	-
Available for sale securities:
U.S. government agency bonds ⁽ⁱⁱ⁾	$	121,607	$	-	$	121,607	$	-
U.S. government bonds ⁽ⁱⁱ⁾		75,849		-		75,849		-
Bank certificates of deposit ⁽ⁱⁱ⁾		15,474		-		15,474		-
Commercial paper ^(ii)(iii)		6,997		-		6,997		-
Corporate notes ⁽ⁱⁱ⁾		51,537		-		51,537		-
Asset-backed securities ⁽ⁱⁱ⁾		23,692		-		23,692		-
Municipal bonds ⁽ⁱⁱ⁾		18,055		-		18,055		-
Investments held for deferred compensation plans		7,197		-		7,197		-
Total Assets	$	321,468	$	1,060	$	320,408	$	-
Liabilities
Deferred compensation plans	$	7,083	$	-	$	7,083	$	-
Total Liabilities	$	7,083	$	-	$	7,083	$	-


Maturity of Lease Liabilities	Operating		Finance
(in thousands)	Leases ^(a)		Leases ^(b)
Remainder of 2022	$	1,368	$	—
2023		3,340		8,725
2024		3,290		5,184
2025		3,274		5,340
2026		3,359		5,500
2027		3,418		5,665
Thereafter		33,440		101,868
Total lease payments	$	51,489	$	132,282
Less: imputed interest		22,272		59,688
Total lease liabilities	$	29,217	$	72,594


	Estimated	As of March 31, 2022						As of December 31, 2021
	Useful	Gross						Gross
	Life	Carrying		Accumulated		Net		Carrying		Accumulated		Net
	(in years)	Amount		Amortization		Amount		Amount		Amortization		Amount
Developed technology	11.4	$	252,200		(52,008)		200,192		252,200		(46,485)		205,715
Customer relationships	5.0		14,100		(6,639)		7,461		14,100		(5,934)		8,166
Intangible assets subject to amortization			266,300		(58,647)		207,653		266,300		(52,419)		213,881

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

Goodwill	Indefinite	$	66,134		—		66,134		66,134		—		66,134

Total		$	451,334	$	(58,647)	$	392,687	$	451,334	$	(52,419)	$	398,915


	Amortization Expense
Remainder of 2022	$	18,684
2023		24,912
2024		24,619
2025		22,092
2026		22,092
Thereafter		95,254
Total amortization	$	207,653


	Three Months Ended
	March 31,
	United States				International				Total
	2022		2021		2022		2021		2022		2021

Glaucoma	$	33,899	$	39,889	$	17,648	$	13,810	$	51,547	$	53,699
Corneal Health		13,617		12,055		2,517		2,214		16,134		14,269
Total	$	47,516	$	51,944	$	20,165	$	16,024	$	67,681	$	67,968



	As of		As of
	March 31,		December 31,
	2022		2021
Convertible Notes	$	287,500	$	287,500
Less: Unamortized debt issuance costs		(7,130)		(8,503)
Carrying amount of Convertible Notes	$	280,370	$	278,997


	Three Months Ended
	March 31,				% Increase
(dollars in thousands)	2022		2021		(decrease)
Statements of operations data:
Net sales	$	67,681	$	67,968	-	%
Cost of sales		17,063		16,633	3	%
Gross profit		50,618		51,335	(1)	%
Operating expenses:
Selling, general and administrative		43,949		41,921	5	%
Research and development		26,877		21,219	27	%
Litigation-related settlement		(30,000)		-	NM
Total operating expenses		40,826		63,140	(35)	%
Income (loss) from operations		9,792		(11,805)	NM
Total non-operating expense, net		(4,089)		(4,385)	(7)	%
Income tax provision		326		279	17	%
Net income (loss)	$	5,377	$	(16,469)	NM


	March 31,		December 31,
	2022		2021
Finished goods	$	8,683	$	6,495
Work in process		6,870		7,010
Raw material		9,155		9,506
	$	24,708	$	23,011


		Incorporated by Reference
Exhibit No.	Description	Form	File No.	Exhibit	Filing Date
2.1	Agreement and Plan of Merger, dated as of August 7, 2019, by and between Glaukos Corporation and Avedro, Inc.	8-K	1-37463	2.1	8/7/2019
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	11/20/2020
10.1*	Alex R. Thurman Executive Severance and Change in Control Agreement dated April 1, 2022
10.2*	Tomas Navratil Executive Severance and Change in Control Agreement dated April 1, 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
101.INS*	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*	XBRL Taxonomy Schema Linkbase Document
101.CAL*	XBRL Taxonomy Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Definition Linkbase Document
101.LAB*	XBRL Taxonomy Labels Linkbase Document
101.PRE*	XBRL Taxonomy Presentation Linkbase Document
104	Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

GLAUKOS CORPORATION

By:	/s/ THOMAS W. BURNS
Thomas W. Burns
Chief Executive Officer and President (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)

		GLAUKOS CORPORATION

		By:	/s/ Thomas W. Burns
		Name:	Thomas W. Burns
		Title:	Chairman & Chief Executive Officer


		EXECUTIVE

			/s/ Alex Thurman
		Name:	Alex Thurman
		Title:	Chief Financial Officer