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8-K - STAAR SURGICAL CO | v201396_8k.htm |
EX-99.2 - STAAR SURGICAL CO | v201396_ex99-2.htm |
STAAR
Surgical Reports Continued Double Digit Core Revenue Growth
Core
Product Revenue Grows 10% for the Third Quarter and Year to Date
Record
Quarter for Visian ICL® Revenues and Units
IOL
Revenues in the U.S. Grow for the First Time in Four Years
nanoFLEX™
Revenue Increases 26%
Visian
ICL Direct to Consumer Marketing Campaign Initiated
MONROVIA,
CA, November 2, 2010 -- STAAR Surgical Company (NASDAQ: STAA), a leading
developer, manufacturer and marketer of minimally invasive ophthalmic products,
today reported results for the third quarter ended October 1,
2010. Revenue for the period grew 6% to $13.2 million reflecting core
product (IOLs and ICLs) revenue growth of 10% and a 44% decrease in defocused
product revenue as compared to the third quarter of 2009. Foreign
currency exchange favorably impacted sales by $404,000. The Company
generated cash from operations in the third quarter of $470,000 and ended the
quarter with cash, cash equivalents, and restricted cash of $8.6 million
compared to $8.0 million as of July 2, 2010.
“Revenue
from our core IOL and ICL products continued to grow in the third quarter,
driven by record Visian ICL revenues with a 21% growth rate and increased market
penetration of the nanoFLEX IOL,” said Barry G. Caldwell, President and
CEO. “We began the launch of our expanded range of Visian ICLs in
late September to countries that accept CE Mark Certification. With
this expansion the Visian ICL has the broadest approval of any other refractive
surgical option as virtually all myopic, hyperopic and astigmatic patients can
now be treated. Visian ICL units also established a new record with
34% growth reflecting accelerated market share gains. A higher percentage mix of
ICLs compared to Toric ICLs resulted in an overall decline in average selling
price. Sales of the nanoFLEX IOL remain strong with a 26% increase
over the prior year’s quarter.
“We are
positioned to take advantage of the growth opportunities in our core product
offerings,” continued Mr. Caldwell. “We have increased the U.S. sales
and marketing organization to more aggressively promote our ICL and IOL
products. Yesterday we launched the first phase of a
direct-to-consumer marketing campaign that will focus on the benefits of Visian
ICL over competing technologies for vision correction. It is designed to drive
more potential refractive patients to schedule an appointment with an
ophthalmologist to ask about the Visian ICL technology. The campaign
consists of a series of seven humorous one-minute videos that compare the Visian
ICL to contacts, glasses and LASIK - the first video is now available on: www.visianinfo.com
or click
here for a sneak preview of the first three episodes. The
remaining six videos will be released individually in the coming weeks. The
availability of each new video will be announced through our social media sites;
www.facebook.com/VisianICL
and www.twitter.com/VisianICL as part of our initial viral
campaign. We will also be testing more traditional direct to consumer
methods in select markets, which will include television and
radio.”
1
Additional highlights in the third quarter of 2010 include:
·
|
There
were several highlights at the 2010 Congress of European Society of
Cataract and Refractive Surgeons (ESCRS) held in Paris during September,
including:
|
o
|
The
Visian ICL was featured in over 40 presentations by leading
ophthalmologists, based on studies conducted all over the world during the
Expert’s Symposium sponsored by the Company. These studies
confirm that Visian ICL offers superior visual results over a wide range
of myopic and hyperopic refractive errors and confirmed its safety and
efficacy over a period of 17 years.
|
o
|
In
addition, Dr. Kenneth Lipstock, a member of STAAR’s CAST (Collamer
Accommodating Study Team), presented data on his experience with the
nanoFLEX™ IOL demonstrating that results at near and intermediate vision
with the nanoFLEX IOL were superior to standard IOLs on the
market.
|
·
|
The
Asia-Pacific Academy of Ophthalmology Congress (APAO) held in Beijing
during September included the following
highlights:
|
o
|
During
the General Conference Presentation Sessions there were 7 ICL
presentations and 15 ICL Posters. In the STAAR booth there were
22 ICL presentations and 8 IOL presentations from local
physicians.
|
o
|
Dr.
Kimiya Shimizu, one of the foremost ophthalmic surgeons in Asia, presented
a paper showing refractive instability and decreased visual performance
after six years with LASIK. He has abandoned LASIK in his practice and
implants the Visian ICL to correct greater than five diopters of
myopia.
|
·
|
The
American Academy of Ophthalmology (AAO) Conference in Chicago during
October, included the following
highlights:
|
o
|
The
Company sponsored a Visian ICL Symposium attended by 150 surgeons with
presentations by 30 surgeons from nine
countries.
|
o
|
The
Company sponsored training courses led by Dr. Scott Barnes and Dr. Butch
Harton on Toric ICL for over 100
surgeons.
|
o
|
Dr.
Greg Parkhurst, Major in the U.S. Army, presented his findings of a study
comparing night vision and contrast sensitivity in patients with the
Visian ICL and LASIK. His conclusion was that the improvements
in night vision were greater in ICL
patients.
|
·
|
On
August 2nd, the Company responded to the FDA’s questions concerning its
submission for approval of the Visian Toric ICL. Since that
response there have been 20 additional questions which have mainly focused
on the astigmatic results and most of those questions have come with a
deadline for response.
|
·
|
The
Company also responded on August 20th to questions from PMDA in Japan on
its submission for approval of the Visian Toric ICL. The
Company is currently working on an additional request from September
28th
and expects to respond in early
November.
|
2
Recent Visian Implantable
Collamer® Lens (ICL) Highlights
·
|
Third
quarter Visian ICL sales hit a record $6.0 million which was an increase
of 21% as compared to $5.0 million for the third quarter of
2009. The increase reflected growth of total unit volume at 34%
during the quarter which also established a new quarterly high. Mix
changes generated by a 39% growth in ICL units compared to a 21% increase
in Toric ICL units resulted in a slower rate of growth in Visian ICL
revenue increases as compared to unit
increases.
|
·
|
The
Visian Toric ICL, which is available in 45 markets, accounted for 41% of
ICL sales in those markets during the quarter as compared to 44% for the
first nine months of 2010. Visian Toric revenues in those
markets increased by 14% during the quarter while the ICL increased by
47%.
|
·
|
In
Korea, revenues for the Visian ICL products increased 59% during the third
quarter, partly reflecting the shipments that had been previously delayed
in Q2 due to the opening of a new ICL distribution
center. Units increased by 68% in the
quarter. Korean revenues have increased by 18% year to
date.
|
·
|
In
the U.S., Visian ICL sales decreased 9% primarily due to a change in
purchasing patterns of a large customer. Overall, refractive
procedures continue to be adversely affected by the economy as LCA-Vision,
reported that their same store procedures declined by 19% during the
quarter and the two leading companies providing LASIK technology have
reported what appear to be weak quarters. Year to date, sales
in the U.S. were down 3%. For both the quarter and the first
nine months, military sales have increased slightly, while civilian sales
decreased slightly.
|
·
|
Other
key markets continued to demonstrate strong growth as they have since the
beginning of the year, including:
|
o
|
Sales
in India grew 80% during the third quarter while units increased
74%. India represented the product line’s fourth largest market
during the period. Sales in India for the first nine months of
the year increased by 55%.
|
o
|
In
China, the third largest ICL market during the quarter and second largest
refractive surgery market, sales grew by 72% compared to the third quarter
of 2009 with units growing 94%. Sales for the first nine months
of the year increased by 87%.
|
o
|
ICL
sales in Singapore were up 102% in the quarter and 128% year to
date.
|
o
|
Sales
in the Mideast grew 18% during the quarter and 54% through the first nine
months of the year.
|
Recent Intraocular Lens
(IOL) Highlights
·
|
Third
quarter IOL sales increased 2% to $6.6 million from the third quarter of
2009. Sales of the nanoFLEX IOL grew 26% during the
quarter.
|
·
|
Quarterly
sales of IOLs in the U.S. increased for the first time in four years and
only the second time in seven years. The trends look promising
for continued growth.
|
o
|
Average
selling prices increased 12% in the third
quarter.
|
o
|
Collamer
and Toric lenses represented 72% of total
sales.
|
·
|
Overall
IOL sales in Europe decreased by 22% in the quarter however year to date,
IOL sales in Europe are up 39%. The decrease is primarily due
to inventory launch purchases of the Preloaded KS-X in the prior year
period.
|
3
·
|
In
Japan, IOL sales increased 8% in the third quarter compared with the third
quarter of 2009. The quarter ended with no backorders to direct
customers in Japan, though there were still backorders of about 1800 IOLs
to distributors. These represent lower margin sales and this
level is within the normal range of a quarter end
position.
|
·
|
Aaren
Scientific, formerly Ophthalmic Innovation International, received FDA
approval for their hydrophobic acrylic IOL, which uses a proprietary
material owned by STAAR under a license. Hydrophobic acrylic
IOLs represent the majority of the IOLs sold in the U.S.
market. The lens design incorporates a square edge to reduce
PCO rates and the ultra-high-purity material eliminates glistening which
has been an issue with the leading hydrophobic acrylic
IOL. STAAR has the right to market these IOLs in the U.S.
and also receives a royalty on all sales by Aaren. The Company
is currently evaluating market entrance in the U.S. with this
product.
|
·
|
The
Company continues to work with the FDA on its submission for the CAST II
clinical protocol and the Preloaded Silicone
IOL. Additionally, the Company is pursuing CE Mark approval for
the nanoFLEX IOL.
|
Third Quarter Financial
Highlights
·
|
Total
net sales in the third quarter grew 6% to $13.2 million from $12.5 million
in the third quarter of 2009. Foreign currency changes
favorably impacted sales by
$404,000.
|
·
|
Gross
margin increased to 62.8% of revenue from 60.3% of revenue in the third
quarter of 2009. The increase is primarily due to
improved manufacturing cost, increased average selling prices of IOLs and
a decrease in royalty expense resulting from the 2009 expiration of a
patent licensed to STAAR which was offset by a one-time charge of $160,000
due to raw material issues related to the Collamer
material. This is not expected to repeat as the issue with the
supplier has been resolved.
|
·
|
Total
operating expenses were $9.5 million, an increase of 9.4% over the third
quarter 2009 total of $8.6 million. The effect of unfavorable
exchange rate changes was approximately
$295,000.
|
-
|
General
and administrative (G&A) expenses increased by 9% to $3.6 million over
$3.3 million in the third quarter of 2009 increased payroll and related
expenses. The unfavorable effect of foreign exchange rate
changes was approximately $90,000.
|
-
|
Sales
and marketing expenses were up 20% to $4.5 million as compared to $3.8
million during the third quarter of 2009 due to an investment to increase
headcount in the U.S. sales and marketing team, an increase in trade show
expenses and an unfavorable effect of exchange rate changes which was
approximately $150,000.
|
-
|
R&D
expenses decreased by 15% to $1.3 million due to decreased headcount and
other expenses in Japan, partially offset by the $58,000 unfavorable
effect of exchange rate changes.
|
·
|
Other
income, net during the third quarter was $390,000 compared with other
expenses, net of $511,000 in the prior year’s third
quarter. The $901,000 difference is primarily due to exchange
gains recorded during the quarter and a decrease in interest expense as a
result of the repayment of debt.
|
·
|
For
the quarter ended October 1, 2010, loss from continuing operations and net
loss was $1.2 million or $0.03 per share. For the quarter ended
October 2, 2009, loss from continuing operations was $1.8 million, or
$0.05 per share, loss from discontinued operations was $134,000 or $0.01
per share, and the net loss was $2.0 million or $0.06 per
share.
|
4
·
|
Cash
and cash equivalents and restricted cash totaled $8,624,000 compared with
$13,726,000 as of January 1, 2010 and $8,032,000 as of July 2,
2010.
|
STAAR
generated cash from operating activities of $470,000 during the third quarter of
2010.
Nine Month
Results
·
|
Total
net sales in the first nine months of 2010 grew 7% to $40.6 million from
$37.8 million in the first nine months of 2009. Core product
revenues increased by $3.6 million or 10.3%, while defocused product
revenues declined by $780,000 or 25%. The effect of exchange on net sales
was favorable by approximately
$892,000.
|
·
|
Total
Visian ICL sales were $17.8 million, up 16% from $15.3 million reported
for the first nine months of 2009. Volume increased
18%.
|
·
|
Total
IOL sales were $20.4 million, up 6% from $19.4 million reported during the
first nine months of 2009. For the nine month period, nanoFLEX
IOL sales increased 22%. Preloaded IOL sales grew 11% year to
date, due to a 52% increase in KS-X Hydrophobic Acrylic Preloaded IOL
sales reflecting the launch to expand market presence. Low price silicone
IOLs decreased 19% as the Company focuses on more premium
IOLs.
|
·
|
Total
other product revenue of $2.4 million was 25% below $3.2 million in other
revenue for the nine months of
2009.
|
·
|
Gross
margin increased to 63.5% of revenue from 61.3% of revenue for the first
nine months of 2009. The increase was primarily due to
improved manufacturing costs, higher average selling prices and royalty
expense reduction, partially offset by higher inventory
provisions.
|
·
|
Total
operating expenses were $27.7 million, a 2% increase over the first nine
months 2009 total of $27.1 million. The unfavorable effect of
exchange rate changes was approximately
$551,000.
|
-
|
General
and administrative (G&A) expenses decreased by 10% over the first nine
months of 2009, primarily reflecting a decline in legal expenses which was
partially offset by the $150,000 unfavorable effect of exchange rate
changes.
|
-
|
Sales
and marketing expenses were up 10% over the first nine months of 2009 due
to an investment in headcount in the U.S. sales and marketing team, an
increase in trade show expenses and the unfavorable effect of exchange
rate changes of approximately
$300,000.
|
-
|
R&D
expense decreased 4% over the first nine months of 2009, reflecting lower
salaries and patent legal expenses, partially offset by the $100,000
unfavorable effect of exchange rate
changes.
|
·
|
The
results for the first nine months ended October 1, 2010, as compared to
the first nine months ended October 2, 2009
are:
|
-
|
Loss
from continuing operations was $3.4 million or $0.10 per share, as
compared to a loss of $5.4 million or $0.17 per share in the prior
year.
|
-
|
Income
from discontinued operations was $4.2 million or $0.12 per share, as
compared to income of $715,000 or $0.02 per
share.
|
5
-
|
Net
income was $744,000 or $0.02 per share, as compared to a net loss of $4.7
million or $0.15 per share.
|
All
reported results reflect STAAR’s March 2, 2010 divestiture of its German
distribution subsidiary, Domilens GmbH. Operating results reported
for both the first nine months of 2010 and for the comparative prior year
periods include only results from continuing operations and exclude any
contribution from Domilens, which the Company has presented in all reported
periods as discontinued operations in accordance with U.S. Generally Accepted
Accounting Principles (U.S. GAAP).
Except
where otherwise stated, all financial comparisons in this press release are
comparing corresponding periods of 2010 and 2009.
Conference
Call
The
Company will host a conference call and webcast on Tuesday, November 2, 2010 at
4:30 p.m. Eastern / 1:30 p.m. Pacific to discuss the Company's third quarter
results, and recent corporate developments. The dial-in number for the
conference call is 877-941-7133 for domestic participants and 480-629-9821 for
international participants.
A taped
replay of the conference call will also be available beginning approximately one
hour after the call's conclusion and will be available for seven days. This
replay can be accessed by dialing 800-406-7325 for domestic callers and
303-590-3030 for international callers, both using passcode 4375246#. To access
the live webcast of the call, go to STAAR's website at www.staar.com. An
archived webcast will also be available at www.staar.com.
About STAAR
Surgical
STAAR,
which has been dedicated solely to ophthalmic surgery for over 25 years,
designs, develops, manufactures and markets implantable lenses for the
eye. All of these lenses are foldable, which permits the surgeon to
insert them through a small incision. A lens used to replace the
natural lens after cataract surgery is called an intraocular lens or
“IOL.” A lens used in refractive surgery as an alternative to LASIK
is called an Implantable Collamer® Lens or “ICL.” Over 195,000 Visian
ICLs have been implanted to date; to learn more about the ICL go to:
www.visianinfo.com. STAAR has approximately 300 full time employees
and markets lenses in approximately 50 countries. Headquartered in
Monrovia, CA, it manufactures in the following locations: Nidau, Switzerland;
Ichikawa City, Japan; Aliso Viejo, CA; and Monrovia, CA. For more
information, please visit the Company’s website at www.staar.com or call
626-303-7902.
Collamer®
is the registered trademark for STAAR’s proprietary biocompatible collagen
copolymer lens material.
6
Safe
Harbor
The
financial information presented in this press release for the quarter ended
October 1, 2010 is preliminary and remains subject to review by STAAR’s
independent registered public accountants. Final financial
information for the quarter, which STAAR will report in its Quarterly Report on
Form 10-Q, may differ.
All
statements in this press release that are not statements of historical fact are
forward-looking statements, including statements about any of the following:
projections of earnings; revenue; sales; cash or any other financial items; the
plans, strategies, and objectives of management for future operations or
prospects for achieving such plans; prospects for increased Visian ICL sales as
a result of the expanded range of correction in certain regions, advertising
campaigns or any of our other initiatives;, prospects for any product approval,
including approval of the Visian Toric ICL in the U.S. or Japan; the outcome of
plans to develop accommodating lenses or other products; statements
of belief; and any statements of assumptions underlying any of the
foregoing.
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:
our limited capital resources and limited access to financing; the negative
effect of the global recession on sales of products, especially products such as
the ICL used in non-reimbursed elective procedures; the challenge of managing
our foreign subsidiaries; the risk of unfavorable changes in currency exchange
rate; the risk that improved sales in our U.S. IOL product line may not be
sustainable; the risk that efforts to develop new products, such as
accommodating lenses, may not be successful; the broad discretion of regulators
in approving medical devices in our major markets; the willingness of surgeons
and patients to adopt a new product and procedure; patterns of Visian ICL use
that have typically limited our penetration of the refractive surgery market,
and a general decline in the demand for refractive surgery, which STAAR believes
has resulted from both concerns about the safety and effectiveness of laser
procedures and current economic conditions.
STAAR’s
current data on the accommodating properties of the Collamer material derive
from the reports of individual independent clinicians and has not been subjected
to formal clinical studies. STAAR's current nanoFLEX IOL does not currently have
an FDA labeling claim for accommodation. STAAR cannot assure that its further
research will support a claim that either its current Collamer lenses or future
designs restore the eye’s ability to accommodate. If clinical research does not
support these claims, or supports only a narrow range of accommodation, STAAR’s
Collamer accommodation project may not result in increased sales. New lens
designs may require clinical research studies and applying for the FDA’s
premarket approval, which are expensive and could result in delay or denial of
approval.
7
STAAR
Surgical Company
|
Condensed
Consolidated Statements of Operations
|
(In
000's except for per share data)
|
Unaudited
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||||||||||||||||||||||||||||||||||
%
of
|
October
1,
|
%
of
|
October
2,
|
Change
|
%
of
|
October
1,
|
%
of
|
October
2,
|
Change
|
|||||||||||||||||||||||||||||||||||||||
Sales
|
2010
|
Sales
|
2009**
|
Amount
|
%
|
Sales
|
2010
|
Sales
|
2009
|
** |
Amount
|
%
|
||||||||||||||||||||||||||||||||||||
Net
sales
|
100.0 | % | $ | 13,152 | 100.0 | % | $ | 12,455 | $ | 697 | 5.6 | % | 100.0 | % | $ | 40,569 | 100.0 | % | $ | 37,771 | $ | 2,798 | 7.4 | % | ||||||||||||||||||||||||
Cost
of sales
|
37.2 | % | 4,892 | 39.7 | % | 4,943 | (51 | ) | -1.0 | % | 36.5 | % | 14,801 | 38.7 | % | 14,633 | 168 | 1.1 | % | |||||||||||||||||||||||||||||
Gross
profit
|
62.8 | % | 8,260 | 60.3 | % | 7,512 | 748 | 10.0 | % | 63.5 | % | 25,768 | 61.3 | % | 23,138 | 2,630 | 11.4 | % | ||||||||||||||||||||||||||||||
Selling,
general and administrative expenses:
|
||||||||||||||||||||||||||||||||||||||||||||||||
General
and administrative
|
27.3 | % | 3,591 | 26.5 | % | 3,302 | 289 | 8.8 | % | 25.2 | % | 10,247 | 30.2 | % | 11,404 | (1,157 | ) | -10.1 | % | |||||||||||||||||||||||||||||
Marketing
and selling
|
34.6 | % | 4,552 | 30.5 | % | 3,798 | 754 | 19.9 | % | 30.9 | % | 12,517 | 30.0 | % | 11,350 | 1,167 | 10.3 | % | ||||||||||||||||||||||||||||||
Research
and development
|
10.0 | % | 1,309 | 12.4 | % | 1,542 | (233 | ) | -15.1 | % | 10.4 | % | 4,218 | 11.6 | % | 4,395 | (177 | ) | -4.0 | % | ||||||||||||||||||||||||||||
Other
operating expenses
|
0.0 | % | - | 0.0 | % | - | - | 100.0 | % | 1.7 | % | 700 | 0.0 | % | - | 700 |
#DIV/0!
|
|||||||||||||||||||||||||||||||
Total
selling, general and administrative expenses
|
71.9 | % | 9,452 | 69.4 | % | 8,642 | 810 | 9.4 | % | 68.2 | % | 27,682 | 71.8 | % | 27,149 | 533 | 2.0 | % | ||||||||||||||||||||||||||||||
Operating
loss
|
-9.1 | % | (1,192 | ) | -9.1 | % | (1,130 | ) | (62 | ) | 5.5 | % | -4.7 | % | (1,914 | ) | -10.5 | % | (4,011 | ) | 2,097 | -52.3 | % | |||||||||||||||||||||||||
Other
income (expense):
|
||||||||||||||||||||||||||||||||||||||||||||||||
Interest
income
|
0.1 | % | 7 | 0.2 | % | 29 | (22 | ) | -75.9 | % | 0.1 | % | 22 | 0.1 | % | 37 | (15 | ) | -40.5 | % | ||||||||||||||||||||||||||||
Interest
expense
|
-1.2 | % | (152 | ) | -4.4 | % | (549 | ) | 397 | -72.3 | % | -1.9 | % | (783 | ) | -3.1 | % | (1,175 | ) | 392 | -33.4 | % | ||||||||||||||||||||||||||
Gain
(loss) on foreign currency
|
3.4 | % | 446 | 0.6 | % | 78 | 368 | 471.8 | % | 0.0 | % | 6 | 0.6 | % | 224 | (218 | ) | -97.3 | % | |||||||||||||||||||||||||||||
Loss
on early extinguishment of note payable
|
0.0 | % | - | 0.0 | % | - | - |
#DIV/0!
|
-0.7 | % | (267 | ) | 0.0 | % | - | (267 | ) |
#DIV/0!
|
||||||||||||||||||||||||||||||
Other
income (expense), net
|
0.7 | % | 89 | -0.6 | % | (69 | ) | 158 | -229.0 | % | 0.2 | % | 77 | 0.2 | % | 90 | (13 | ) | -14.4 | % | ||||||||||||||||||||||||||||
Other
income (expense), net
|
3.0 | % | 390 | -4.2 | % | (511 | ) | 901 | -176.3 | % | -2.3 | % | (945 | ) | -2.2 | % | (824 | ) | (121 | ) | 14.7 | % | ||||||||||||||||||||||||||
Loss
before provision for income taxes
|
-6.1 | % | (802 | ) | -13.3 | % | (1,641 | ) | 839 | -51.1 | % | -7.0 | % | (2,859 | ) | -12.7 | % | (4,835 | ) | 1,976 | -40.9 | % | ||||||||||||||||||||||||||
Provision
for income taxes
|
2.7 | % | 356 | 1.5 | % | 192 | 164 | 85.4 | % | 1.4 | % | 563 | 1.6 | % | 597 | (34 | ) | -5.7 | % | |||||||||||||||||||||||||||||
Loss
from continuing operations
|
-8.8 | % | (1,158 | ) | -14.8 | % | (1,833 | ) | 675 | -36.8 | % | -8.4 | % | (3,422 | ) | -14.3 | % | (5,432 | ) | 2,010 | -37.0 | % | ||||||||||||||||||||||||||
Income
(loss) from discontinued operations, net of income taxes
|
0.0 | % | - | -1.1 | % | (134 | ) | 134 | -100.0 | % | 10.3 | % | 4,166 | 1.9 | % | 715 | 3,451 | 482.7 | % | |||||||||||||||||||||||||||||
Net
income (loss)
|
-8.8 | % | $ | (1,158 | ) | -15.9 | % | $ | (1,967 | ) | $ | 809 | -41.1 | % | 1.9 | % | $ | 744 | -12.4 | % | $ | (4,717 | ) | $ | 5,461 | -115.8 | % | |||||||||||||||||||||
Loss
per share from continuing operations:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Basic
and diluted
|
$ | (0.03 | ) | $ | (0.05 | ) | $ | (0.10 | ) | $ | (0.17 | ) | ||||||||||||||||||||||||||||||||||||
Income
(loss) per share from discontinued operations:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Basic
and diluted
|
$ | - | $ | (0.01 | ) | $ | 0.12 | $ | 0.02 | |||||||||||||||||||||||||||||||||||||||
Income
(loss) per share:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Basic
and diluted
|
$ | (0.03 | ) | $ | (0.06 | ) | $ | 0.02 | $ | (0.15 | ) | |||||||||||||||||||||||||||||||||||||
Weighted
average shares outstanding:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Basic
and diluted
|
34,831 | 34,701 | 34,790 | 31,751 |
**Note:
Prior year results of operations have been adjusted to reflect the
discontinued operations of
|
the
Company's German subsidiary, Domilens, which was sold on March 2,
2010.
|
8
STAAR
Surgical Company
|
Global
Sales
|
(in
000's)
|
Unaudited
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||||||||||||||||||||||||||
October
1,
|
October 2, |
%
|
October
1,
|
October
2,
|
%
|
|||||||||||||||||||||||||||||||||||
Geographic
Sales
|
2010
|
2009**
|
Change
|
2010
|
2009**
|
Change
|
||||||||||||||||||||||||||||||||||
United
States
|
28.3 | % | $ | 3,727 | 32.3 | % | $ | 4,017 | -7.2 | % | 28.5 | % | $ | 11,560 | 32.6 | % | $ | 12,329 | -6.2 | % | ||||||||||||||||||||
Japan
|
28.4 | % | 3,734 | 29.2 | % | 3,643 | 2.5 | % | 28.9 | % | 11,706 | 29.7 | % | 11,199 | 4.5 | % | ||||||||||||||||||||||||
Korea
|
13.0 | % | 1,710 | 8.5 | % | 1,064 | 60.7 | % | 10.7 | % | 4,356 | 9.7 | % | 3,664 | 18.9 | % | ||||||||||||||||||||||||
Other
|
30.3 | % | 3,981 | 30.0 | % | 3,731 | 6.7 | % | 31.9 | % | 12,947 | 28.0 | % | 10,579 | 22.4 | % | ||||||||||||||||||||||||
Total
International Sales
|
71.7 | % | 9,425 | 67.7 | % | 8,438 | 11.7 | % | 71.5 | % | 29,009 | 67.4 | % | 25,442 | 14.0 | % | ||||||||||||||||||||||||
Total
Sales
|
100.0 | % | $ | 13,152 | 100.0 | % | $ | 12,455 | 5.6 | % | 100.0 | % | $ | 40,569 | 100.0 | % | $ | 37,771 | 7.4 | % | ||||||||||||||||||||
Product
Sales
|
||||||||||||||||||||||||||||||||||||||||
Core
products
|
||||||||||||||||||||||||||||||||||||||||
IOLs
|
49.9 | % | $ | 6,559 | 51.8 | % | $ | 6,454 | 1.6 | % | 50.4 | % | $ | 20,442 | 51.2 | % | $ | 19,350 | 5.6 | % | ||||||||||||||||||||
ICLs
|
45.9 | % | 6,034 | 40.2 | % | 5,002 | 20.6 | % | 43.8 | % | 17,757 | 40.4 | % | 15,271 | 16.3 | % | ||||||||||||||||||||||||
Total
core products
|
95.7 | % | 12,593 | 92.0 | % | 11,456 | 9.9 | % | 94.2 | % | 38,199 | 91.7 | % | 34,621 | 10.3 | % | ||||||||||||||||||||||||
Non-core
products
|
||||||||||||||||||||||||||||||||||||||||
Other
|
4.3 | % | 559 | 8.0 | % | 999 | -44.0 | % | 5.8 | % | 2,370 | 8.3 | % | 3,150 | -24.8 | % | ||||||||||||||||||||||||
Total
Sales
|
100.0 | % | $ | 13,152 | 100.0 | % | $ | 12,455 | 5.6 | % | 100.0 | % | $ | 40,569 | 100.0 | % | $ | 37,771 | 7.4 | % |
**Note:
Prior year results of operations have been adjusted to reflect the
discontinued operations of
|
|||||||||||||
the
Company's German subsidiary, Domilens, which was sold on March 2,
2010.
|
9
STAAR
Surgical Company
|
Condensed
Consolidated Balance Sheets
|
(in
000's)
|
Unaudited
|
October
1,
|
January
1,
|
|||||||
2010
|
2010
|
|||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 8,488 | $ | 6,330 | ||||
Restricted
cash
|
136 | 7,396 | ||||||
Accounts
receivable trade, net
|
7,118 | 9,269 | ||||||
Inventories,
net
|
10,952 | 14,820 | ||||||
Prepaids,
deposits, and other current assets
|
1,317 | 2,591 | ||||||
Total
current assets
|
28,011 | 40,406 | ||||||
Property,
plant, and equipment, net
|
3,772 | 5,005 | ||||||
Intangible
assets, net
|
3,818 | 4,148 | ||||||
Goodwill
|
1,700 | 7,879 | ||||||
Deferred
income taxes
|
104 | 104 | ||||||
Other
assets
|
1,217 | 1,139 | ||||||
Total
assets
|
$ | 38,622 | $ | 58,681 | ||||
Current
liabilities:
|
||||||||
Line
of credit
|
$ | 2,400 | $ | 2,160 | ||||
Accounts
payable
|
3,408 | 7,416 | ||||||
Deferred
income taxes
|
360 | 360 | ||||||
Obligations
under capital leases
|
494 | 795 | ||||||
Accrued
legal judgments
|
- | 4,000 | ||||||
Note
payable, net of discount
|
- | 4,503 | ||||||
Other
current liabilities
|
6,111 | 7,706 | ||||||
Total
current liabilities
|
12,773 | 26,940 | ||||||
Obligations
under capital leases
|
1,307 | 1,098 | ||||||
Deferred
income taxes
|
218 | 653 | ||||||
Pension
obligations
|
2,395 | 2,035 | ||||||
Other
long-term liabilities
|
218 | 101 | ||||||
Total
liabilities
|
16,911 | 30,827 | ||||||
Series
A redeemable convertible preferred stock
|
- | 6,784 | ||||||
Stockholders'
equity:
|
||||||||
Common
stock
|
348 | 348 | ||||||
Additional
paid-in capital
|
150,861 | 149,559 | ||||||
Accumulated
other comprehensive income
|
1,849 | 3,254 | ||||||
Accumulated
deficit
|
(131,347 | ) | (132,091 | ) | ||||
Total
stockholders' equity
|
21,711 | 21,070 | ||||||
Total
liabilities, redeemable convertible preferred stock and stockholders'
equity
|
$ | 38,622 | $ | 58,681 |
10
STAAR
Surgical Company
|
||
Condensed
Consolidated Statements of Cash Flows
|
||
(in
000's)
|
||
Unaudited
|
Nine
Months Ended
|
Three
Months Ended
|
|||||||||||||||
October
1,
|
October
2,
|
October
1,
|
October
2,
|
|||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Cash
flows from operating activities:
|
||||||||||||||||
Net
income (loss)
|
$ | 744 | $ | (4,717 | ) | $ | (1,158 | ) | $ | (1,967 | ) | |||||
(Income)
loss from discontinued operations
|
(4,166 | ) | (715 | ) | - | 134 | ||||||||||
Adjustments
to reconcile net income (loss) to net cash provided by (used in)
operating
activities:
|
||||||||||||||||
Depreciation
of property and equipment
|
1,191 | 1,526 | 370 | 523 | ||||||||||||
Amortization
of intangibles
|
607 | 585 | 208 | 195 | ||||||||||||
Amortization
of discount
|
236 | 265 | - | 113 | ||||||||||||
Loss
on early extinguishment of note payable
|
267 | - | - | - | ||||||||||||
Fair
value adjustment of warrant
|
117 | 74 | (20 | ) | 66 | |||||||||||
Loss
on disposal of property and equipment
|
4 | 91 | 2 | 54 | ||||||||||||
Stock-based
compensation expense
|
945 | 1,184 | 296 | 300 | ||||||||||||
Change
in pension liability
|
256 | 117 | 99 | 11 | ||||||||||||
Other
|
40 | 62 | (72 | ) | (50 | ) | ||||||||||
Changes
in working capital:
|
||||||||||||||||
Accounts
receivable
|
862 | (107 | ) | (178 | ) | 265 | ||||||||||
Inventories
|
1,042 | 1,111 | 264 | 346 | ||||||||||||
Prepaids,
deposits and other current assets
|
717 | 95 | 445 | (451 | ) | |||||||||||
Accounts
payable
|
(1,395 | ) | (72 | ) | 336 | 392 | ||||||||||
Other
current liabilities
|
(5,462 | ) | 396 | (122 | ) | 511 | ||||||||||
Net
cash provided by (used in) operating activities of discontinued
operations
|
(635 | ) | 407 | - | 23 | |||||||||||
Net
cash provided by (used in) operating activities
|
(4,630 | ) | 302 | 470 | 465 | |||||||||||
Cash
flows from investing activities:
|
||||||||||||||||
Proceeds
from sale of subsidiary, net of transaction costs
|
11,824 | - | - | - | ||||||||||||
Decrease
(increase) in restricted cash
|
7,396 | (7,368 | ) | 65 | (27 | ) | ||||||||||
Deposit
to restricted escrow account
|
(136 | ) | - | - | - | |||||||||||
Acquisition
of property and equipment
|
(247 | ) | (300 | ) | (45 | ) | (68 | ) | ||||||||
Purchase
of short-term investments
|
- | - | (55 | ) | - | |||||||||||
Sale
of short-term investments
|
- | - | 54 | - | ||||||||||||
Proceeds
from sale of property and equipment
|
- | 22 | - | 4 | ||||||||||||
Proceeds
from sale of short-term investments - restricted
|
- | 168 | - | - | ||||||||||||
Net
change in other assets
|
10 | 5 | - | 168 | ||||||||||||
Net
cash provided by (used in) investing activities of discontinued
operations
|
(50 | ) | 118 | - | 79 | |||||||||||
Net
cash provided by (used in) investing activities
|
18,797 | (7,355 | ) | 19 | 156 | |||||||||||
Cash
flows from financing activities:
|
||||||||||||||||
Repayment
of notes payable
|
(5,000 | ) | - | - | - | |||||||||||
Redemption
of Series A preferred stock
|
(6,800 | ) | - | - | - | |||||||||||
Net
proceeds from public sale of equity securities
|
- | 8,548 | - | - | ||||||||||||
Repayment
of capital lease lines of credit
|
(609 | ) | (744 | ) | (114 | ) | (243 | ) | ||||||||
Borrowings
under line of credit
|
- | 630 | - | - | ||||||||||||
Repayment
under line of credit
|
- | (630 | ) | - | (630 | ) | ||||||||||
Proceeds
from exercise of stock options
|
292 | - | 152 | - | ||||||||||||
Net
cash used in financing activities of discontinued
operations
|
(50 | ) | (108 | ) | - | (50 | ) | |||||||||
Net
cash provided by (used in) financing activities
|
(12,167 | ) | 7,696 | 38 | (923 | ) | ||||||||||
Effect
of exchange rate changes on cash and cash equivalents
|
158 | 9 | 65 | 192 | ||||||||||||
Increase
(decrease) in cash and cash equivalents
|
2,158 | 652 | 592 | (110 | ) | |||||||||||
Cash
and cash equivalents, at beginning of the period
|
6,330 | 4,992 | 7,896 | 5,754 | ||||||||||||
Cash
and cash equivalents, at end of the period
|
$ | 8,488 | $ | 5,644 | $ | 8,488 | $ | 5,644 |
11
CONTACT:
|
Investors
|
Media
|
EVC
Group
|
EVC
Group
|
|
Jenifer
Kirtland, 415-896-6820
|
Christopher
Gale, 646-201-5431
|
|
Douglas
Sherk, 415-896-6820
|
12