8-K
Staar Surgical Co (STAA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): February 26, 2024
STAAR Surgical Company
(Exact Name of Registrant as Specified in Charter)
| Delaware | 0-11634 | 95-3797439 |
|---|---|---|
| (State or Other Jurisdiction<br><br>of Incorporation) | (Commission File Number) | (IRS Employer<br><br>Identification No.) |
| 25651 Atlantic Ocean Drive<br><br>Lake Forest, California | 92630 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s Telephone Number, Including Area Code: 626-303-7902
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 (see General Instruction A.2. below):
| ☐ | Written communication 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 communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common | STAA | NASDAQ |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1 933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
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 February 26, 2024, STAAR Surgical Company (the “Company”) published a press release reporting its financial results for the quarter and year ended December 29, 2023, a copy of which is furnished as Exhibit 99.1 to this report and is incorporated herein by this reference.
This information and the information contained in the press release shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in Item 2.02 of this Current Report and Exhibit 99.1 shall not be incorporated by reference into any filings of the Company made under the Securities Act of 1933, as amended, whether made before or after the date of this Current Report, regardless of any general incorporation language in the filing unless specifically stated so therein.
Item 9.01 Financial Statements and Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release of the Company dated February 26, 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.
| STAAR Surgical Company | ||
|---|---|---|
| February 26, 2024 | By: | /s/ Tom Frinzi |
| Thomas G. Frinzi | ||
| President and Chief Executive Officer |
EX-99.1
Exhibit 99.1
STAAR Surgical Reports Fourth Quarter and Fiscal Year 2023 Results
Generates Double-Digit Sales Growth and Continuing Profitability
ICL Sales Up 22% in Fourth Quarter and 18% in Fiscal 2023
Affirms Sales Outlook for Fiscal 2024
LAKE FOREST, CA, February 26, 2024 --- STAAR Surgical Company (NASDAQ: STAA), a leading developer, manufacturer and marketer of the EVO family of Implantable Collamer® Lenses (EVO ICL™) for myopia, astigmatism and presbyopia, today reported financial results for the fourth quarter and fiscal year ended December 29, 2023.
Fourth Quarter 2023 Overview
• Net sales up 19% to $76.3 million in the fourth quarter
• ICL sales up 22% to $74.6 million and ICL units up 19%
• Gross margin at 79.6% vs. 77.7% year ago
• Net income of $7.8 million vs. $6.8 million year ago
• Earnings per share of $0.16 vs. $0.14 per share year ago
• Cash, cash equivalents and investments available for sale ended the quarter at $232.4 million
Fiscal Year 2023 Overview
• Net sales up 13% to $322.4 million for fiscal year 2023
• ICL sales up 18% to $319.4 million and ICL units up 19%
• Gross margin at 78.4% vs. 78.5% year ago
• Net income of $21.3 million vs. $39.7 million year ago
• Earnings per share of $0.43 vs. $0.80 per share year ago
“We generated strong sales growth in the fourth quarter, consistent with our preliminary sales announcement, and profitability, driven by strength in APAC and sequential growth in EMEA,” said Tom Frinzi, President and CEO of STAAR Surgical. “For fiscal 2023, every large market delivered positive sales growth. Our ICL unit growth exceeded refractive industry growth by over 25 points for the third year in a row.1 Our 22% global ICL sales growth in the quarter included 30% growth in China and 18% in EMEA. As we enter 2024, we see encouraging end-market ICL sales trends and are affirming our fiscal 2024 net sales outlook of $335 million to $340 million.”
Mr. Frinzi continued, “With healthy margins, no debt and a record $232 million of cash, cash equivalents and investments on the balance sheet we will continue to strategically invest in our growth opportunities. We are also enhancing the surgeon experience, both in the clinical environment and in driving practice efficiency. EVO ICL is the next logical step in refractive innovation with clear differentiators in patient outcomes and patient satisfaction. We are pleased with the increasing interest our lens based technology is garnering and look forward to sharing more about our progress, partnerships and innovation investments in the coming weeks and at the ASCRS meeting in Boston.”
Fourth Quarter 2023 Financial Results
Net sales were $76.3 million for the fourth quarter of 2023, up 19% compared to $64.0 million reported in the prior year quarter. The sales increase in the fourth quarter was driven by ICL sales and unit growth of 22% and 19%, respectively, as compared to the prior year period. Other Products sales decreased 43% compared to the prior year quarter.
Gross profit margin for the fourth quarter of 2023 was 79.6% of total net sales compared to the prior year quarter of 77.7% of total net sales. Product mix favorably impacted gross margin in the fourth quarter of 2023 as compared to the prior year quarter.
Operating expenses for the fourth quarter of 2023 were $50.3 million compared to the prior year quarter of $48.8 million. General and administrative expenses were $16.9 million compared to the prior year quarter of $14.8 million. The increase in general and administrative expenses was due to increased outside services and facilities costs. Selling and marketing expenses were $22.6 million compared to the prior year quarter of $24.2 million. The decrease in selling and marketing expenses was due to decreased compensation-related expenses and marketing, promotional and advertising activities. Research and development expenses were $10.9 million compared to the prior year quarter of $9.8 million. The increase in research and development expenses was due to increased compensation-related expenses.
Operating income for the fourth quarter of 2023 was $10.4 million or 13.7% of net sales as compared to $1.0 million or 1.5% of net sales for the fourth quarter of 2022.
Net income for the fourth quarter of 2023 was $7.8 million or $0.16 per diluted share compared with net income of $6.8 million or $0.14 per diluted share for the prior year quarter. The year over year increase in net income was attributable to higher gross profit, partially offset by a higher provision for income taxes, lower other income and increased SG&A expenses.
Fiscal Year 2023 Financial Results
Net sales were $322.4 million for fiscal year 2023, up 13% compared to $284.4 million reported in the prior year. The increase in net sales was driven by ICL sales and unit growth of 18% and 19%, respectively. Other Products Sales decreased 80% compared to the prior year.
Gross profit margin for fiscal year 2023 decreased to 78.4% of total net sales compared to 78.5% of total net sales for fiscal year 2022.
Operating expenses for fiscal year 2023 were $224.6 million compared to $179.6 million in the prior year. The 25% increase in operating expense was primarily due to higher compensation-related expenses, marketing, promotional and advertising activities, outside services and facilities costs.
Operating income for fiscal year 2023 was $28.1 million or 8.8% of net sales as compared to $43.8 million or 15.4% of net sales for fiscal year 2022.
Net income for fiscal year 2023 was $21.3 million or $0.43 per diluted share compared with net income of $39.7 million or $0.80 per diluted share for the prior year. The year over year decrease in net income was due to increased SG&A expenses and provision for income taxes, partially offset by higher gross margin and other income.
Cash, cash equivalents and investments available for sale at December 29, 2023, totaled $232.4 million, compared to $225.5 million at end of the fourth quarter of 2022.
Outlook
The Company expects the following for fiscal year 2024:
• Net sales of $335 million to $340 million.
• Adjusted EBITDA of approximately $36 million and Adjusted EBITDA per diluted share of approximately $0.70.2
The outlook above contemplates EVO ICL sales growth of approximately 7% in APAC, including 10% in China; 10% growth in the Americas, including 10% in the U.S.; and EMEA sales consistent with fiscal year 2023.
Conference Call
The Company will host a conference call and webcast today, Monday, February 26 at 4:15 p.m. Eastern / 1:15 p.m. Pacific to discuss its financial results and operational progress. To access the conference call please dial 877-270-2148 for domestic participants and 412-902-6510 for international participants. No access code is required. Please ask to be
joined into the STAAR Surgical Company call. The live webcast can be accessed from the ‘Investor Relations’ section of the STAAR website at www.staar.com.
A taped replay of the conference call (Access Code 6879745) will be available beginning approximately one hour after the call’s conclusion for seven days. This replay can be accessed by dialing 877-344-7529 for domestic callers and 412-317-0088 for international callers. An archived webcast will also be available at www.staar.com.
1. Global STAAR ICL unit growth exceeded refractive industry growth by an estimated 38 points (2021); 28 points (2022) and 26 points (2023). The Company estimates global refractive industry procedures increased 10% (2021); increased 5% (2022); and decreased 7% (2023) Y/Y based on Market Scope and Company data available as of January 2, 2024.
2. Adjusted EBITDA and Adjusted EBITDA per diluted share are non-GAAP financial measures. For further information on non-GAAP financial measures, please refer to the “Use of Non-GAAP Financial Measures” section of this press release. Please also refer to the tables at the end of this press release for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure.
Use of Non-GAAP Financial Measures
To supplement the Company’s financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables include certain non-GAAP financial measures, including Adjusted EBITDA. Management uses these non-GAAP financial measures in its evaluation of Company operating performance and believes investors will find them useful in evaluating the Company’s operating performance, including cash flow generation, and in analyzing period-to-period financial performance of core business operations and underlying business trends. Non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
EBITDA is a non-GAAP financial measure, which is calculated by adding interest income and expense, net; provision for income taxes; and depreciation and amortization to net income. In calculating Adjusted EBITDA and Adjusted EBITDA per diluted share, the Company further adjusts for stock-based compensation expense. As stock-based compensation is a non-cash expense that can vary significantly based on the timing, size and nature of awards granted, the Company believes that the exclusion of stock-based compensation expense can assist investors in comparisons of Company operating results with other peer companies because (i) the amount of such expense in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expense can vary significantly between periods as a result of the timing of grants of new stock-based awards, including inducement grants in connection with hiring. Additionally, the Company believes that excluding stock-based compensation from Adjusted EBITDA and Adjusted EBITDA per diluted share assists management and investors in making meaningful comparisons between the Company’s operating performance and the operating performance of other companies that may use different forms of employee compensation or different valuation methodologies for their stock-based compensation. Investors should note that stock-based compensation is a key incentive offered to employees whose efforts contributed to the operating results in the periods presented and are expected to contribute to operating results in future periods. Investors should also note that such expenses will recur in the future.
The Company also presents certain financial information on a constant currency basis, which is intended to exclude the effects of foreign currency fluctuations. The Company conducts a significant part of its activities outside the U.S. It receives sales revenue and pays expenses principally in U.S. dollars, Swiss francs, Japanese yen and euros. The exchange rates between dollars and non-U.S. currencies can fluctuate greatly and can have a significant effect on the Company’s results when reported in U.S. dollars. In order to compare the Company's performance from period to period without the effect of currency, the Company will apply the same average exchange rate applicable in the prior period, or the “constant currency” rate to sales or expenses in the current period as well.
In the tables provided below, the Company has included a reconciliation of Adjusted EBITDA and Adjusted EBITDA per diluted share to net income and net income per diluted share, the most directly comparable GAAP financial measure, as well as supplemental financial information with net sales expressed in constant currency. The Company has also provided a reconciliation of forward-looking Adjusted EBITDA and Adjusted EBITDA per diluted share to net income and net income per diluted share. This represents forward-looking information, and actual results may vary. Please see the risks and assumptions referred to in the Safe Harbor section of this press release.
About STAAR Surgical
STAAR, which has been dedicated solely to ophthalmic surgery for over 40 years, designs, develops, manufactures and markets implantable lenses for the eye. These lenses are intended to provide visual freedom for patients, lessening or eliminating the reliance on glasses or contact lenses. All of these lenses are foldable, which permits the surgeon to insert them through a small incision. STAAR’s lens used in refractive surgery is called an Implantable Collamer® Lens or “ICL,” which includes the EVO ICL™ product line. More than 2,500,000 ICLs have been sold to date and STAAR markets these lenses in over 75 countries. To learn more about the ICL go to: EVOICL.com. Headquartered in Lake Forest, CA, the company operates manufacturing and packaging facilities in Aliso Viejo, CA, Monrovia, CA and Nidau, Switzerland. For more information, please visit the Company’s website at www.staar.com.
Safe Harbor
All statements that are not statements of historical fact are forward-looking statements, including statements about any of the following: any financial projections, anticipated financial results, estimates and outlook (including as to net sales, Adjusted EBITDA, and Adjusted EBITDA per diluted share), plans, strategies, and objectives of management for 2024 and beyond or prospects for achieving such plans, expectations for sales, revenue, margin, expenses or earnings, and any statements of assumptions underlying any of the foregoing, including those relating to financial performance in the upcoming quarter, fiscal year 2024 and beyond. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include risks and uncertainties related to global economic conditions, as well as the factors set forth in the Company’s Annual Report on Form 10-K for the year ended December 29, 2023 under the caption “Risk Factors,” which is on file with the Securities and Exchange Commission and available in the “Investor Information” section of the company’s website under the heading “SEC Filings.” We disclaim any intention or obligation to update or revise any financial projections or forward-looking statement due to new information or events. These statements are based on expectations and assumptions as of the date of this press release and are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. The risks and uncertainties include the following: global economic conditions; the impact of COVID-19; the discretion of regulatory agencies to approve or reject existing, new or improved products, or to require additional actions before or after approval, or to take enforcement action; international conflicts, trade disputes and substantial dependence on demand from Asia; and the willingness of surgeons and patients to adopt a new or improved product and procedure.
We intend to use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included on our website in the ‘Investor Relations’ sections. Accordingly, investors should monitor such portions of our website, in addition to following our press releases, SEC filings and public conference calls and webcasts.
| CONTACT: | Investors & Media |
|---|---|
| Brian Moore | |
| Vice President, Investor Relations and Corporate Development | |
| (626) 303-7902, Ext. 3023 | |
| bmoore@staar.com |
Consolidated Balance Sheets
(in 000's)
Unaudited
| ASSETS | December 29, 2023 | December 30, 2022 | ||||
|---|---|---|---|---|---|---|
| Current assets: | ||||||
| Cash and cash equivalents | $ | 183,038 | $ | 86,480 | ||
| Investments available for sale | 37,688 | 125,159 | ||||
| Accounts receivable trade, net | 94,704 | 62,447 | ||||
| Inventories, net | 35,130 | 24,161 | ||||
| Prepayments, deposits, and other current assets | 14,709 | 13,476 | ||||
| Total current assets | 365,269 | 311,723 | ||||
| Investments available for sale | 11,703 | 13,902 | ||||
| Property, plant, and equipment, net | 66,835 | 50,921 | ||||
| Finance lease right-of-use assets, net | 183 | 342 | ||||
| Operating lease right-of-use assets, net | 34,387 | 30,270 | ||||
| Intangible assets, net | - | 173 | ||||
| Goodwill | 1,786 | 1,786 | ||||
| Deferred income taxes | 5,190 | 8,744 | ||||
| Other assets | 3,339 | 957 | ||||
| Total assets | $ | 488,692 | $ | 418,818 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 13,557 | $ | 11,576 | ||
| Obligations under finance leases | 165 | 169 | ||||
| Obligations under operating leases | 4,202 | 3,524 | ||||
| Allowance for sales returns | 6,174 | 5,706 | ||||
| Other current liabilities | 40,938 | 30,741 | ||||
| Total current liabilities | 65,036 | 51,716 | ||||
| Obligations under finance leases | 42 | 210 | ||||
| Obligations under operating leases | 31,425 | 27,136 | ||||
| Deferred income taxes | 1,077 | 1,489 | ||||
| Asset retirement obligations | 103 | 220 | ||||
| Pension liability | 5,055 | 1,935 | ||||
| Total liabilities | 102,738 | 82,706 | ||||
| Stockholders' equity: | ||||||
| Common stock | 488 | 482 | ||||
| Additional paid-in capital | 436,947 | 404,189 | ||||
| Accumulated other comprehensive income (loss) | (4,113 | ) | 156 | |||
| Accumulated deficit | (47,368 | ) | (68,715 | ) | ||
| Total stockholders' equity | 385,954 | 336,112 | ||||
| Total liabilities and stockholders' equity | $ | 488,692 | $ | 418,818 |
Consolidated Statements of Income
(in 000's except for per share data)
Unaudited
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fav (Unfav) | Fav (Unfav) | ||||||||||||||||||||||||||||||||||
| % of Sales | December 29, 2023 | % of Sales | December 30, 2022 | Amount | % | % of Sales | December 29, 2023 | % of Sales | December 30, 2022 | Amount | % | ||||||||||||||||||||||||
| Net sales | 100.0 | % | $ | 76,273 | 100.0 | % | $ | 64,044 | $ | 12,229 | 19.1 | % | 100.0 | % | $ | 322,415 | 100.0 | % | $ | 284,391 | $ | 38,024 | 13.4 | % | |||||||||||
| Cost of sales | 20.4 | % | 15,548 | 22.3 | % | 14,259 | (1,289 | ) | -9.0 | % | 21.6 | % | 69,764 | 21.5 | % | 61,008 | (8,756 | ) | -14.4 | % | |||||||||||||||
| Gross profit | 79.6 | % | 60,725 | 77.7 | % | 49,785 | 10,940 | 22.0 | % | 78.4 | % | 252,651 | 78.5 | % | 223,383 | 29,268 | 13.1 | % | |||||||||||||||||
| Selling, general and administrative expenses: | |||||||||||||||||||||||||||||||||||
| General and administrative | 22.1 | % | 16,858 | 23.1 | % | 14,808 | (2,050 | ) | -13.8 | % | 22.4 | % | 72,319 | 19.2 | % | 54,742 | (17,577 | ) | -32.1 | % | |||||||||||||||
| Selling and marketing | 29.6 | % | 22,596 | 37.8 | % | 24,223 | 1,627 | 6.7 | % | 33.4 | % | 107,834 | 31.2 | % | 88,856 | (18,978 | ) | -21.4 | % | ||||||||||||||||
| Research and development | 14.2 | % | 10,866 | 15.3 | % | 9,790 | (1,076 | ) | -11.0 | % | 13.8 | % | 44,401 | 12.7 | % | 35,983 | (8,418 | ) | -23.4 | % | |||||||||||||||
| Total selling, general, and administrative expenses | 65.9 | % | 50,320 | 76.2 | % | 48,821 | (1,499 | ) | -3.1 | % | 69.6 | % | 224,554 | 63.1 | % | 179,581 | (44,973 | ) | -25.0 | % | |||||||||||||||
| Operating income | 13.7 | % | 10,405 | 1.5 | % | 964 | 9,441 | 979.4 | % | 8.8 | % | 28,097 | 15.4 | % | 43,802 | (15,705 | ) | -35.9 | % | ||||||||||||||||
| Other income (expense), net: | |||||||||||||||||||||||||||||||||||
| Interest income, net | 2.2 | % | 1,699 | 2.4 | % | 1,514 | 185 | 12.2 | % | 2.2 | % | 6,986 | 0.8 | % | 2,448 | 4,538 | 185.4 | % | |||||||||||||||||
| Gain (loss) on foreign currency transactions | 1.7 | % | 1,331 | 5.0 | % | 3,197 | (1,866 | ) | -58.4 | % | -0.6 | % | (1,909 | ) | -0.6 | % | (1,707 | ) | (202 | ) | -11.8 | % | |||||||||||||
| Royalty income | 0.0 | % | 0 | 0.4 | % | 277 | (277 | ) | -100.0 | % | 0.0 | % | 74 | 0.3 | % | 804 | (730 | ) | -90.8 | % | |||||||||||||||
| Other income, net | 0.4 | % | 304 | 0.0 | % | 27 | 277 | 1025.9 | % | 0.1 | % | 448 | 0.1 | % | 205 | 243 | 118.5 | % | |||||||||||||||||
| Total other income, net | 4.3 | % | 3,334 | 7.8 | % | 5,015 | (1,681 | ) | -33.5 | % | 1.7 | % | 5,599 | 0.6 | % | 1,750 | 3,849 | 219.9 | % | ||||||||||||||||
| Income before provision for income taxes | 18.0 | % | 13,739 | 9.3 | % | 5,979 | 7,760 | 129.8 | % | 10.5 | % | 33,696 | 16.0 | % | 45,552 | (11,856 | ) | -26.0 | % | ||||||||||||||||
| Provision (benefit) for income taxes | 7.8 | % | 5,983 | -1.2 | % | (784 | ) | (6,767 | ) | -863.1 | % | 3.8 | % | 12,349 | 2.1 | % | 5,887 | (6,462 | ) | -109.8 | % | ||||||||||||||
| Net income | 10.2 | % | $ | 7,756 | 10.5 | % | $ | 6,763 | $ | 993 | 14.7 | % | 6.7 | % | $ | 21,347 | 13.9 | % | $ | 39,665 | $ | (18,318 | ) | -46.2 | % | ||||||||||
| Net income per share - basic | $ | 0.16 | $ | 0.14 | $ | 0.44 | $ | 0.83 | |||||||||||||||||||||||||||
| Net income per share - diluted | $ | 0.16 | $ | 0.14 | $ | 0.43 | $ | 0.80 | |||||||||||||||||||||||||||
| Weighted average shares outstanding - basic | 48,815 | 48,203 | 48,523 | 47,987 | |||||||||||||||||||||||||||||||
| Weighted average shares outstanding - diluted | 49,242 | 49,389 | 49,427 | 49,380 |
Consolidated Statements of Cash Flows
(in 000's)
Unaudited
| Three Months Ended | Twelve Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 29, 2023 | December 30, 2022 | December 29, 2023 | December 30, 2022 | |||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income | $ | 7,756 | $ | 6,763 | $ | 21,347 | $ | 39,665 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||
| Depreciation of property and equipment | 1,368 | 1,380 | 5,111 | 4,481 | ||||||||
| Amortization of long-lived intangibles | (2 | ) | 6 | 13 | 28 | |||||||
| Impairment of long-lived intangibles | - | - | 154 | - | ||||||||
| Accretion/Amortization of investments available for sale | (329 | ) | (891 | ) | (2,501 | ) | (1,198 | ) | ||||
| Deferred income taxes | 3,199 | (2,277 | ) | 3,264 | (2,254 | ) | ||||||
| Change in net pension liability | (190 | ) | 13 | (956 | ) | 53 | ||||||
| Stock-based compensation expense | 182 | 4,996 | 23,516 | 20,371 | ||||||||
| Change in asset retirement obligation | 2 | 47 | (102 | ) | 47 | |||||||
| Loss on disposal of property and equipment | 32 | 65 | 73 | 65 | ||||||||
| Provision for sales returns and credit losses | (1,262 | ) | 552 | 663 | 913 | |||||||
| Inventory provision | 761 | 403 | 4,851 | 2,423 | ||||||||
| Changes in working capital: | ||||||||||||
| Accounts receivable | 17,676 | (6,493 | ) | (32,760 | ) | (19,601 | ) | |||||
| Inventories | (4,386 | ) | (3,820 | ) | (14,361 | ) | (7,943 | ) | ||||
| Prepayments, deposits and other assets | 171 | (3,075 | ) | (3,413 | ) | (2,549 | ) | |||||
| Accounts payable | 2,565 | 3,639 | (701 | ) | 1,805 | |||||||
| Other current liabilities | 4,426 | 1,662 | 10,396 | (591 | ) | |||||||
| Net cash provided by operating activities | 31,969 | 2,970 | 14,594 | 35,715 | ||||||||
| Cash flows from investing activities: | ||||||||||||
| Acquisition of property and equipment | (3,088 | ) | (4,025 | ) | (18,188 | ) | (18,108 | ) | ||||
| Purchase of investments available for sale | 1 | (60,172 | ) | (52,313 | ) | (155,748 | ) | |||||
| Proceeds from sale or maturity of investments available for sale | 25,489 | 17,480 | 144,848 | 17,480 | ||||||||
| Net cash provided by (used in) investing activities | 22,402 | (46,717 | ) | 74,347 | (156,376 | ) | ||||||
| Cash flows from financing activities: | ||||||||||||
| Repayment of finance lease obligations | (40 | ) | (41 | ) | (161 | ) | (126 | ) | ||||
| Repurchase of employee common stock for taxes withheld | (1 | ) | - | (2,097 | ) | - | ||||||
| Proceeds from vested restricted stock and exercise of stock options | 408 | 243 | 9,673 | 8,423 | ||||||||
| Net cash provided by financing activities | 367 | 202 | 7,415 | 8,297 | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | 868 | 783 | 202 | (862 | ) | |||||||
| Increase (decrease) in cash and cash equivalents | 55,606 | (42,762 | ) | 96,558 | (113,226 | ) | ||||||
| Cash and cash equivalents, at beginning of the period | 127,432 | 129,242 | 86,480 | 199,706 | ||||||||
| Cash and cash equivalents, at end of the period | $ | 183,038 | $ | 86,480 | $ | 183,038 | $ | 86,480 |
Reconciliation of Non-GAAP Financial Measure
Net Income to Adjusted EBITDA
(in 000's except for per share data)
Unaudited
| 2021 | Q1-22 | Q2-22 | Q3-22 | Q4-22 | 2022 | Q1-23 | Q2-23 | Q3-23 | Q4-23 | 2023 | 2024 Outlook(2) | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income - (as reported) | $ | 27,511 | $ | 9,602 | $ | 13,038 | $ | 10,262 | $ | 6,763 | $ | 39,665 | $ | 2,710 | $ | 6,064 | $ | 4,817 | $ | 7,756 | $ | 21,347 | $ | 0 | |||||||||||
| Provision (benefit) for income taxes | 3,793 | 1,925 | 2,431 | 2,315 | (784 | ) | 5,887 | 2,009 | 2,428 | 1,929 | 5,983 | 12,349 | 0 | ||||||||||||||||||||||
| Other (income) expense, net | 2,035 | 586 | 1,551 | 1,128 | (5,015 | ) | (1,750 | ) | (1,919 | ) | 105 | (451 | ) | (3,334 | ) | (5,599 | ) | 2,000 | |||||||||||||||||
| Depreciation | 3,608 | 994 | 1,030 | 1,077 | 1,380 | 4,481 | 1,113 | 1,285 | 1,345 | 1,368 | 5,111 | 4,000 | |||||||||||||||||||||||
| Amortization of Intangible assets | 34 | 8 | 7 | 7 | 6 | 28 | 7 | 10 | (2 | ) | (2 | ) | 13 | 0 | |||||||||||||||||||||
| Stock-based compensation | 14,605 | 3,894 | 5,754 | 5,727 | 4,996 | 20,371 | 6,065 | 8,423 | 8,846 | 182 | 23,516 | 30,000 | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 51,586 | $ | 17,009 | $ | 23,811 | $ | 20,516 | $ | 7,346 | $ | 68,682 | $ | 9,985 | $ | 18,315 | $ | 16,484 | $ | 11,953 | $ | 56,737 | $ | 36,000 | |||||||||||
| Adjusted EBITDA as a % of Revenue | 22.4 | % | 26.9 | % | 29.4 | % | 27.0 | % | 11.5 | % | 24.2 | % | 13.6 | % | 19.8 | % | 20.5 | % | 15.7 | % | 17.6 | % | 10.5% | ||||||||||||
| Net income per share, diluted- (as reported) | $ | 0.56 | $ | 0.19 | $ | 0.26 | $ | 0.21 | $ | 0.14 | $ | 0.80 | $ | 0.05 | $ | 0.12 | $ | 0.10 | $ | 0.16 | $ | 0.43 | $ | 0.00 | |||||||||||
| Provision (benefit) for income taxes | 0.08 | 0.04 | 0.05 | 0.05 | (0.02 | ) | 0.12 | 0.04 | 0.05 | 0.04 | 0.12 | 0.25 | 0.00 | ||||||||||||||||||||||
| Other (income) expense, net | 0.04 | 0.01 | 0.03 | 0.02 | (0.10 | ) | (0.04 | ) | (0.04 | ) | - | (0.01 | ) | (0.07 | ) | (0.11 | ) | 0.04 | |||||||||||||||||
| Depreciation | 0.07 | 0.02 | 0.02 | 0.02 | 0.03 | 0.09 | 0.02 | 0.03 | 0.03 | 0.03 | 0.10 | 0.08 | |||||||||||||||||||||||
| Amortization of Intangible assets | - | - | - | - | - | - | - | - | - | - | - | 0.00 | |||||||||||||||||||||||
| Stock-based compensation | 0.30 | 0.08 | 0.12 | 0.12 | 0.10 | 0.41 | 0.12 | 0.17 | 0.18 | - | 0.48 | 0.58 | |||||||||||||||||||||||
| Adjusted EBITDA per share, diluted(1) | $ | 1.04 | $ | 0.35 | $ | 0.48 | $ | 0.41 | $ | 0.15 | $ | 1.39 | $ | 0.20 | $ | 0.37 | $ | 0.33 | $ | 0.24 | $ | 1.15 | $ | 0.70 | |||||||||||
| Weighted average shares outstanding - Diluted | 49,456 | 49,288 | 49,223 | 49,549 | 49,389 | 49,380 | 49,500 | 49,516 | 49,370 | 49,242 | 49,427 | 52,000 |
(1) Adjusted EBITDA per diluted share may not add due to rounding
(2) 2024 Outlook lines items are all approximations and assumes breakeven Net Income
ICL Sales by Geography
(in 000's)
Unaudited
| Fiscal Year | Three Months Ended | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ICL Sales by Region(5) | 2021 | 2022 | 2023 | December 30, 2022 | March 31, 2023 | June 30, 2023 | September 29, 2023 | December 29, 2023 | ||||||||||||||||
| Americas(1) | $ | 14,054 | $ | 20,114 | $ | 22,233 | $ | 5,703 | $ | 5,566 | $ | 5,954 | $ | 5,449 | $ | 5,264 | ||||||||
| EMEA(2) | 37,343 | 36,715 | 39,318 | 8,569 | 10,180 | 9,782 | 9,253 | 10,103 | ||||||||||||||||
| APAC(3) | 161,508 | 212,883 | 257,876 | 46,890 | 54,879 | 77,376 | 66,367 | 59,254 | ||||||||||||||||
| Global ICL Sales | $ | 212,905 | $ | 269,712 | $ | 319,427 | $ | 61,162 | $ | 70,625 | $ | 93,112 | $ | 81,069 | $ | 74,621 | ||||||||
| Global ICL Sales Growth | 51 | % | 27 | % | 18 | % | 15 | % | 20 | % | 19 | % | 13 | % | 22 | % | ||||||||
| Global ICL Unit Growth | 48 | % | 33 | % | 19 | % | 20 | % | 20 | % | 21 | % | 14 | % | 19 | % | ||||||||
| Fiscal Year | Three Months Ended | |||||||||||||||||||||||
| ICL Sales by Country(4)(5) | 2021 | 2022 | 2023 | December 30, 2022 | March 31, 2023 | June 30, 2023 | September 29, 2023 | December 29, 2023 | ||||||||||||||||
| China | $ | 107,130 | $ | 147,967 | $ | 185,404 | $ | 31,506 | $ | 35,042 | $ | 61,288 | $ | 48,262 | $ | 40,813 | ||||||||
| Growth | 50 | % | 38 | % | 25 | % | 20 | % | 25 | % | 33 | % | 14 | % | 30 | % | ||||||||
| Japan | $ | 28,688 | $ | 32,623 | $ | 36,352 | $ | 8,179 | $ | 9,203 | $ | 8,563 | $ | 9,091 | $ | 9,495 | ||||||||
| Growth | 56 | % | 14 | % | 11 | % | 6 | % | 6 | % | 13 | % | 12 | % | 16 | % | ||||||||
| South Korea | $ | 15,173 | $ | 17,940 | $ | 19,853 | $ | 3,589 | $ | 6,656 | $ | 3,316 | $ | 4,886 | $ | 4,996 | ||||||||
| Growth | 36 | % | 18 | % | 11 | % | -2 | % | 19 | % | -15 | % | 1 | % | 39 | % | ||||||||
| United States | $ | 9,478 | $ | 15,070 | $ | 17,168 | $ | 4,536 | $ | 4,396 | $ | 4,446 | $ | 4,162 | $ | 4,164 | ||||||||
| Growth | 58 | % | 59 | % | 14 | % | 94 | % | 71 | % | 10 | % | 6 | % | -8 | % |
(1) Americas includes the United States, Canada and Latin American countries
(2) EMEA includes Spain, Germany, United Kingdom, European, Middle East and Africa Distributors
(3) APAC includes China, Japan, South Korea, India and the rest of Asia Pacific distributors
(4) ICL Sales by country includes countries representing more than 5% of total ICL sales in the most recently completed fiscal year
(5) ICL sales do not include IOL, injector or other sales.
Reconciliation of Non-GAAP Financial Measure
Constant Currency Sales
(in 000's)
Unaudited
| Three Months Ended | As Reported | Constant Currency | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | December 29, 2023 | Effect of Currency | Constant Currency | December 30, 2022 | Change | % Change | Change | % Change | |||||||||||||
| ICL | $ | 74,621 | $ | (205 | ) | $ | 74,416 | $ | 61,162 | 22.0 | % | 21.7 | % | ||||||||
| Cataract IOL | (156 | ) | 26 | (130 | ) | 1,998 | ) | -107.8 | % | ) | -106.5 | % | |||||||||
| Other | 1,808 | 21 | 1,829 | 884 | 104.5 | % | 106.9 | % | |||||||||||||
| Other Products | 1,652 | 47 | 1,699 | 2,882 | ) | -42.7 | % | ) | -41.0 | % | |||||||||||
| Total Sales | $ | 76,273 | $ | (158 | ) | $ | 76,115 | $ | 64,044 | 19.1 | % | 18.8 | % | ||||||||
| Twelve Months Ended | As Reported | Constant Currency | |||||||||||||||||||
| Sales | December 29, 2023 | Effect of Currency | Constant Currency | December 30, 2022 | Change | % Change | Change | % Change | |||||||||||||
| ICL | $ | 319,427 | $ | 1,799 | $ | 321,226 | $ | 269,712 | 18.4 | % | 19.1 | % | |||||||||
| Cataract IOL | 1,139 | 198 | 1,337 | 9,638 | ) | -88.2 | % | ) | -86.1 | % | |||||||||||
| Other | 1,849 | 125 | 1,974 | 5,041 | ) | -63.3 | % | ) | -60.8 | % | |||||||||||
| Other Products | 2,988 | 323 | 3,311 | 14,679 | ) | -79.6 | % | ) | -77.4 | % | |||||||||||
| Total Sales | $ | 322,415 | $ | 2,122 | $ | 324,537 | $ | 284,391 | 13.4 | % | 14.1 | % |
All values are in US Dollars.