Glaukos Corporation Announces Third Quarter 2021 Financial Results
11/04/2021 - 04:10 PM
SAN CLEMENTE, Calif. --(BUSINESS WIRE)--
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 third quarter ended September 30, 2021 . Key highlights include:
Net sales growth of 15% to $74.7 million $64.8 million
Glaucoma net sales of $58.5 million Corneal Health net sales of $16.2 million
Gross margin of approximately 79% and non-GAAP gross margin of approximately 87% in Q3 2021.
Operating expenses of $48.3 million $69.9 million
“We are pleased with our strong third quarter performance driven by our teams’ unwavering commitment to advance our key strategic priorities and execute our plans despite unique challenges we faced during the quarter,” said Thomas Burns , Glaukos president and chief executive officer. “We continue to successfully invest in and advance our robust pipeline of novel, promising platform technologies designed to drive long-term sustainable growth and transform the treatment of chronic eye diseases for the benefit of patients worldwide.”
Third Quarter 2021 Financial Results
Net sales increased 15% in the third quarter of 2021 to $74.7 million $64.8 million
Gross margin for the third quarter of 2021 was approximately 79% , compared to approximately 72% in the same period in 2020. Non-GAAP gross margin for the third quarter of 2021 was approximately 87% , compared to approximately 85% in the same period in 2020.
Selling, general and administrative (SG&A) expenses for the third quarter of 2021 increased 14% to $44.5 million $38.9 million 10% to $41.2 million $37.4 million
Research and development (R&D) expenses for the third quarter of 2021 increased 42% to $28.8 million $20.3 million 43% to $28.7 million $20.1 million $5.0 million Attillaps Holdings .
During the third quarter of 2021, the company received a $30 million Ivantis, Inc. This receipt was recorded as an offset to GAAP operating expenses in the quarter.
Income from operations in the third quarter of 2021 was $11.0 million $12.4 million $4.9 million $2.4 million
Net income in the third quarter of 2021 was $6.2 million $0.13 per diluted share, compared to a net loss of $15.7 million $0.35 ) per diluted share, in the third quarter of 2020. Non-GAAP net loss in the third quarter of 2021 was $9.7 million $0.21 ) per diluted share, compared to non-GAAP net loss of $4.1 million $0.09 ) per diluted share, in the third quarter of 2020.
The company ended the third quarter of 2021 with approximately $438 million
2021 Revenue Guidance
The company expects 2021 net sales to be in the range of $285 million $290 million
Webcast & Conference Call
The company will host a conference call and simultaneous webcast today at 1:30 p.m. PDT (4:30 p.m. EDT ) 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.
About Glaukos
Glaukos (www.glaukos.com ) is an ophthalmic medical technology and pharmaceutical company focused on novel therapies for the treatment of glaucoma, corneal disorders and retinal diseases. The company pioneered Micro-Invasive Glaucoma Surgery, or MIGS, to revolutionize the traditional glaucoma treatment and management paradigm. Glaukos launched the iStent® , its first MIGS device, in the United States in 2012, its next-generation iStent inject® device in the United States in 2018 and most recently, its iStent inject W device in the United States in 2020. In corneal health, Glaukos’ proprietary suite of single-use, bio-activated pharmaceuticals are designed to strengthen, stabilize and reshape the cornea through a process called corneal collagen cross-linking to treat corneal ectatic disorders and correct refractive conditions. Glaukos is leveraging its platform technology to build a comprehensive and proprietary portfolio of micro-scale surgical and pharmaceutical therapies in glaucoma, corneal health and retinal disease.
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 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; iStent, the iStent inject , the iStent inject W , 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 competitors (including MIGS competitors); 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 Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 , which was filed with the SEC on August 5, 2021 , and will also be included in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 , which we expect to file on or before November 9, 2021 . Our filings with the Securities and Exchange Commission 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 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.
GLAUKOS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30 ,September 30 ,
2021
2020
2021
2020
Net sales
$
74,710
$
64,831
$
220,771
$
151,725
Cost of sales
15,370
17,932
49,762
72,129
Gross profit
59,340
46,899
171,009
79,596
Operating expenses:
Selling, general and administrative
44,470
38,947
131,691
127,609
Research and development
28,846
20,304
74,321
64,148
In-process research and development
5,000
-
10,000
-
Litigation-related settlement
(30,000
)
-
(30,000
)
-
Total operating expenses
48,316
59,251
186,012
191,757
Income (loss) from operations
11,024
(12,352
)
(15,003
)
(112,161
)
Non-operating expense:
Interest income
291
595
1,016
1,881
Interest expense
(3,413
)
(5,732
)
(9,948
)
(8,485
)
Other (expense) income, net
(1,470
)
852
(3,097
)
342
Total non-operating expense
(4,592
)
(4,285
)
(12,029
)
(6,262
)
Income (loss) before taxes
6,432
(16,637
)
(27,032
)
(118,423
)
Income tax provision (benefit)
202
(889
)
689
(8,723
)
Net income (loss)
$
6,230
$
(15,748
)
$
(27,721
)
$
(109,700
)
Basic net income (loss) per share
$
0.13
$
(0.35
)
$
(0.60
)
$
(2.48
)
Diluted net income (loss) per share
$
0.13
$
(0.35
)
$
(0.60
)
$
(2.48
)
Weighted average shares used to compute basic net income (loss) per share
46,737
44,706
46,255
44,302
Weighted average shares used to compute diluted net income (loss) per share
49,320
44,706
46,255
44,302
GLAUKOS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par values)
September 30 ,
December 31 ,
2021
2020
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
113,131
$
96,596
Short-term investments
315,834
307,772
Accounts receivable, net
35,236
36,059
Inventory, net
19,720
15,809
Prepaid expenses and other current assets
17,887
13,206
Total current assets
501,808
469,442
Restricted cash
9,416
9,566
Property and equipment, net
60,800
24,008
Operating lease right-of-use asset
28,734
20,009
Finance lease right-of-use asset
49,627
51,443
Intangible assets, net
339,009
357,693
Goodwill
66,134
66,134
Deposits and other assets
8,601
7,207
Total assets
$
1,064,129
$
1,005,502
Liabilities and stockholders' equity
Current liabilities:
Accounts payable
$
8,459
$
4,371
Accrued liabilities
54,991
45,331
Total current liabilities
63,450
49,702
Convertible senior notes
279,683
189,416
Operating lease liability
29,889
20,704
Finance lease liability
72,803
60,690
Deferred tax liability, net
8,274
10,512
Other liabilities
8,981
7,029
Total liabilities
463,080
338,053
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; 46,892 and 45,275 shares issued and 46,864 and 45,247 shares outstanding at September 30, 2021 and December 31, 2020 , respectively
47
45
Additional paid-in capital
943,486
976,590
Accumulated other comprehensive income
987
1,004
Accumulated deficit
(343,339
)
(310,058
)
Less treasury stock (28 shares as of September 30, 2021 and December 31, 2020 )
(132
)
(132
)
Total stockholders' equity
601,049
667,449
Total liabilities and stockholders' equity
$
1,064,129
$
1,005,502
GLAUKOS CORPORATION
GAAP to Non-GAAP Reconciliations
(in thousands, except per share amounts and percentage data)
(unaudited)
Q3 2021 Q3 2020
GAAP Adjustments
Non-GAAP
GAAP Adjustments
Non-GAAP
Cost of sales
$
15,370
$
(5,703
)
(a)
$
9,667
$
17,932
$
(8,143
)
(a)(g)(h)
$
9,789
Gross Margin
79.4
%
7.7
%
87.1
%
72.3
%
12.6
%
84.9
%
Operating expenses:
Selling, general and administrative
$
44,470
$
(3,278
)
(b)(c)
$
41,192
$
38,947
$
(1,564
)
(b)(c)(i)
$
37,383
Research and development
$
28,846
$
(136
)
(d)
$
28,710
$
20,304
$
(215
)
(d)
$
20,089
In-process research and development
$
5,000
$
(5,000
)
(e)
$
-
$
-
$
-
$
-
Litigation-related settlement
$
(30,000
)
$
30,000
(f)
$
-
$
-
$
-
$
-
Income (loss) from operations
$
11,024
$
(15,883
)
$
(4,859
)
$
(12,352
)
$
9,922
$
(2,430
)
Interest expense
$
(3,413
)
$
-
$
(3,413
)
$
(5,732
)
$
2,677
(j)
$
(3,055
)
Income tax provision (benefit)
$
202
$
-
$
202
$
(889
)
$
964
(k)
$
75
Net income (loss)
$
6,230
$
(15,883
)
(l)
$
(9,653
)
$
(15,748
)
$
11,635
(l)
$
(4,113
)
Basic net income (loss) per share
$
0.13
$
(0.34
)
$
(0.21
)
$
(0.35
)
$
0.26
$
(0.09
)
Diluted net income (loss) per share
$
0.13
$
(0.34
)
$
(0.21
)
$
(0.35
)
$
0.26
$
(0.09
)
(a)
Cost of sales adjustments related to the acquisition of Avedro, Inc. (Avedro ), including amortization of developed technology intangible assets, stock-based compensation expense related to replacement awards, and reversal of restructuring expenses, totaling $5.7 million $5.8 million
(b)
Avedro acquisition-related expenses, including amortization expense of customer relationship intangible assets and stock-based compensation expense related to replacement awards of $1.2 million $1.1 million
(c)
Expenses related to the Company's patent infringement litigation and related matters of $2.1 million $0.1 million
(d)
Stock-based compensation expense related to replacement awards from the acquisition of Avedro of $0.1 million $0.2 million
(e)
Upfront payment associated with the execution of the licensing arrangement with Attillaps Holdings Inc.
(f)
Settlement proceeds received related to the Company's patent infringement litigation.
(g)
COVID-19 related excess and obsolete reserves associated with the fair-value step up of acquired Avedro inventory, totaling ($3.0) million .
(h)
$5.3 million Avedro .
(i)
$0.4 million Avedro , and integration expenses from the acquisition of Avedro .
(j)
Non-cash interest expense for the amortization of debt discount and associated issuance costs related to the convertible senior notes.
(k)
Tax benefit related to the Company's issuance of the convertible senior notes.
(l)
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 2021 and 2020.
GLAUKOS CORPORATION
GAAP to Non-GAAP Reconciliations
(in thousands, except per share amounts and percentage data)
(unaudited)
Year-to-Date Q3 2021 Year-to-Date Q3 2020
GAAP Adjustments
Non-GAAP
GAAP Adjustments
Non-GAAP
Cost of sales
$
49,762
$
(16,893
)
(a)
$
32,869
$
72,129
$
(46,367
)
(a)(g)(h)
$
25,762
Gross Margin
77.5
%
7.6
%
85.1
%
52.5
%
30.5
%
83.0
%
Operating expenses:
Selling, general and administrative
$
131,691
$
(6,163
)
(b)(c)
$
125,528
$
127,609
$
(15,484
)
(b)(c)(i)
$
112,125
Research and development
$
74,321
$
(426
)
(d)
$
73,895
$
64,148
$
(2,522
)
(d)(j)
$
61,626
In-process research and development
$
10,000
$
(10,000
)
(e)
$
-
$
-
$
-
$
-
Litigation-related settlement
$
(30,000
)
$
30,000
(f)
$
-
$
-
$
-
$
-
Income (loss) from operations
$
(15,003
)
$
3,482
$
(11,521
)
$
(112,161
)
$
64,373
$
(47,788
)
Interest expense
$
(9,948
)
$
-
$
(9,948
)
$
(8,485
)
$
3,234
(k)
$
(5,251
)
Income tax provision (benefit)
$
689
$
-
$
689
$
(8,723
)
$
8,220
(l)
$
(503
)
Net income (loss)
$
(27,721
)
$
3,482
(m)
$
(24,239
)
$
(109,700
)
$
59,387
(m)
$
(50,313
)
Basic net loss per share
$
(0.60
)
$
0.08
$
(0.52
)
$
(2.48
)
$
1.34
$
(1.14
)
Diluted net loss per share
$
(0.60
)
$
0.08
$
(0.52
)
$
(2.48
)
$
1.34
$
(1.14
)
(a)
Cost of sales adjustments related to the acquisition of Avedro, Inc. (Avedro ), including amortization of developed technology intangible assets, stock-based compensation expense related to replacement awards, and reversal of restructuring expenses, totaling $16.9 million $17.3 million
(b)
Avedro acquisition-related expenses, including amortization expense of customer relationship intangible assets and stock-based compensation expense related to replacement awards of $3.2 million $8.6 million
(c)
Expenses related to the Company's patent infringement litigation and related matters of $3.0 million $4.4 million
(d)
Stock-based compensation expense related to replacement awards from the acquisition of Avedro of $0.4 million $2.3 million
(e)
Upfront payments associated with the execution of the amended licensing arrangement with Intratus, Inc. and the licensing arrangement with Attillaps Holdings Inc.
(f)
Settlement proceeds received related to the Company's patent infringement litigation.
(g)
$4.4 million Avedro inventory.
(h)
$24.7 million Avedro .
(i)
$2.5 million Avedro , and integration expenses from the acquisition of Avedro .
(j)
Restructuring expenses associated with COVID-19 and the acquisition of Avedro , totaling $0.2 million
(k)
Non-cash interest expense for the amortization of debt discount and associated issuance costs related to the convertible senior notes.
(l)
Tax benefit related to the Company's issuance of the convertible senior notes.
(m)
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 2021 and 2020.
View source version on businesswire.com : https://www.businesswire.com/news/home/20211104006150/en/
Chris Lewis
clewis@glaukos.com
Source: Glaukos Corporation
