STAAR Surgical Reports Fourth Quarter and Full Year 2021 Results
02/23/2022 - 04:01 PM
LAKE FOREST, Calif. --(BUSINESS WIRE)--
STAAR Surgical Company (NASDAQ: STAA), a leading developer, manufacturer and marketer of implantable lenses and companion delivery systems for the eye, today reported financial results for the fourth quarter and fiscal year ended December 31, 2021 .
Fourth Quarter 2021 Overview
Net Sales of $59.0 Million 28% from the Prior Year Quarter
ICL Sales of $53.0 Million 33% from the Prior Year Quarter
ICL Units Up 36% from the Prior Year Quarter
Gross Margin at 76.3% vs. 74.6% in the Prior Year Quarter
Net Income of $0.10 $0.07
Cash and Cash Equivalents Ended the Quarter at $199.7 Million
Full Year 2021 Overview
Record Net Sales of $230.5 Million 41% from Prior Year
ICL Sales Up 51% and Units Up 48% from the Prior Year
Gross Margin at 77.5% of Sales from 72.4% of Sales in the Prior Year
Full Year Net Income of $0.50 Net Income of $0.12
“Our fiscal 2021 results reflect record levels of sales, profit and growth achievement for STAAR, driven by continued accelerating demand for our implantable Collamer® lenses,” said Caren Mason , President and CEO of STAAR Surgical . “For the full year, fiscal 2021, total company Net sales growth, up 41% year over year, accelerated from fiscal 2020 and the pre-pandemic level of 2019 driven by global ICL unit growth up 48% , which was almost three times the growth of global refractive industry procedures.1 During the fourth quarter, sales in Europe and our U.S. manufacturing operations were impacted by Covid-related staffing and throughput challenges which are now lessening. Global demand for our ICL continues unabated through the first seven weeks of the first quarter of 2022, including record orders from surgeons in China . In the U.S. , our submission of clinical data for STAAR’s EVO family of myopia lenses remains under customary interactive FDA review. For fiscal 2022, we plan to invest more heavily in consumer awareness building programs designed to drive growth. The STAAR team will also continue to engage the ophthalmic community through clinical validation, education and strategic cooperation. We reaffirm our previously provided outlook for Net sales of approximately $295 million 28% growth year over year and another record year of commercial and financial progress for STAAR.”
Financial Overview – Q4 2021
Net sales were $59.0 million 28% compared to $46.0 million 33% and 36% , respectively, as compared to the prior year period. Other Product Sales decreased 3% compared to the prior year quarter. ICL sales was 90% of total Net sales for the fourth quarter of 2021.
Gross profit margin for the fourth quarter of 2021 was 76.3% compared to the prior year period of 74.6% . Factors impacting gross margin in the fourth quarter of 2021, as compared to the prior year period, include a higher mix of ICL sales and geographic sales mix, partially offset by an increase in expenses related to manufacturing projects.
Operating expenses for the fourth quarter of 2021 were $37.6 million $30.2 million $11.5 million $9.5 million $17.1 million $11.8 million $9.1 million $9.0 million U.S. EVO clinical trial expenses offset the increase in compensation-related expenses related to additional hires.
Net income for the fourth quarter of 2021 was $4.9 million $0.10 $3.3 million $0.07 $9.5 million $0.19 $6.8 million $0.14
Financial Overview – Full Year 2021
Net sales were $230.5 million 41% compared to $163.5 million 51% and 48% , respectively. Other Products Sales decreased 20% compared to the prior year due to lower sales of injectors and injector parts and IOLs. ICL sales were 92% of total Net sales for FY 2021 as compared to 87% for FY 2020.
Gross profit margin for FY 2021 increased to 77.5% of total net sales compared to 72.4% of total net sales for FY 2020. The increase in gross margin for the year is due to a higher mix of ICL sales, geographic sales mix, a decreased mix of injector part sales which carry a lower margin offset by increased period costs associated with the manufacturing expansion projects. FY 2020 gross margin was impacted by a voluntary pause in manufacturing at the Company’s principal manufacturing facility due to the pandemic.
Operating expenses for FY 2021 were $145.3 million $111.6 million 30% increase in operating expense is primarily due to increased compensation-related expenses, marketing, promotion and advertising costs. Increases in meetings and trade show expenses, outside services and facilities costs were partially offset by a decrease in clinical expenses associated with the Company’s EVO clinical trial in the U.S.
Net income for FY 2021 was $24.5 million $0.50 $5.9 million $0.12 $42.9 million $0.87 $16.7 million $0.35
Cash and cash equivalents at December 31, 2021 totaled $199.7 million $152.5 million $44.0 million
Conference Call
The Company will host a conference call and webcast today, Wednesday, February 23 at 4:30 p.m. Eastern / 1:30 p.m. Pacific to discuss its financial results and operational progress. To access the conference call (Access Code 142350), please dial 844-200-6205 for domestic participants and 929-526-1599 for international participants. 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 (Replay Code 610748) will be available beginning approximately one hour after the call’s conclusion for seven days. This replay can be accessed by dialing 866-813-9403 for domestic callers and 929-458-6194 for international callers. An archived webcast will also be available at www.staar.com .
Use of Non-GAAP Financial Measures
This press release includes supplemental non-GAAP financial information, which STAAR believes investors will find helpful in understanding its operating performance. “Adjusted Net Income” excludes the following items that are included in “Net Income” as calculated in accordance with U.S. generally accepted accounting principles (“GAAP”): gain or loss on foreign currency transactions, stock-based compensation expenses, and valuation allowance adjustments. Management believes that “Adjusted Net Income” is useful to investors in gauging the outcome of the key drivers of the business performance: the ability to increase sales revenue and our ability to increase profit margin by improving the mix of high value products while reducing the costs over which management has control.
Management has also excluded gains and losses on foreign currency transactions because of the significant fluctuations that can result from period to period as a result of market driven factors. Stock-based compensation expenses consist of expenses for stock options and restricted stock under the Financial Accounting Standards Board’s Accounting Standards Codification (ASC) 718. Valuation allowance adjustments can occur from time to time based on forecasted changes in operating results until all net operating loss carryforwards are fully utilized. In calculating Adjusted Net Income, STAAR excludes these expenses because they are non-cash expenses and because of the considerable judgment involved in calculating their values. In addition, these expenses tend to be driven by fluctuations in the price of our stock and not by the same factors that generally affect our other business expenses.
The Company also uses Constant Currency as a Non-GAAP financial measure to exclude the effects of currency fluctuations on net sales. 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. Because changes in currency are outside of the control of the Company and its managers, management finds this non-GAAP measure useful in determining the long-term progress of its initiatives and determining whether its managers are achieving their performance goals. The Company believes that the non-GAAP constant-currency sales results measures provided in this press release are similarly useful to investors to give insight on long term trends in the Company's performance without the external effect of changes in relative currency values. The table below shows sales results calculated in accordance with GAAP, the effect of currency, and the resulting non-GAAP measure expressed in constant currency.
1 Market Scope Refractive Surgery Report, January 2022 . Industry refractive procedures up 17% .
About STAAR Surgical
STAAR, which has been dedicated solely to ophthalmic surgery for over 30 years, designs, develops, manufactures and markets implantable lenses for the eye with companion delivery systems. 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 Visian ICL™ product line. More than 1,000,000 Visian® ICLs have been implanted to date and STAAR markets these lenses in over 75 countries. To learn more about the ICL go to: www.discovericl.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 (including sales), plans, strategies, and objectives of management for 2022 or prospects for achieving such plans, expectations for sales, revenue, margin, expenses or earnings, the expected impact of the COVID-19 pandemic and related public health measures (including but not limited to its impact on sales, operations or clinical trials globally), product safety or effectiveness, the status of our pipeline of ICL products with regulators, including our EVO family of lenses in the U.S. , and any statements of assumptions underlying any of the foregoing, including those relating to our product pipeline and market expansion activities. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include risks and uncertainties related to the COVID-19 pandemic and related public health measures, as well as the factors set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 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 the COVID-19 pandemic on markets; the discretion of regulatory agencies to approve or reject existing, new or improved products, or to require additional actions before approval, or to take enforcement action; international trade disputes; and the willingness of surgeons and patients to adopt a new or improved product and procedure. The EVO version of our ICL lens is not yet approved for sale in the United States .
Consolidated Balance Sheets
(in 000's)
Unaudited
December 31, 2021 January 1, 2021
ASSETS
Current assets:
Cash and cash equivalents
$ 199,706
$ 152,453
Accounts receivable trade, net
43,531
35,229
Inventories, net
17,274
18,111
Prepayments, deposits, and other current assets
10,900
10,625
Total current assets
271,411
216,418
Property, plant, and equipment, net
35,912
24,030
Finance lease right-of-use assets, net
506
596
Operating lease right-of-use assets, net
31,310
8,764
Intangible assets, net
218
270
Goodwill
1,786
1,786
Deferred income taxes
3,813
4,944
Other assets
822
608
Total assets
$ 345,778
$ 257,416
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit
$ -
$ 1,379
Accounts payable
8,699
7,474
Obligations under finance leases
127
360
Obligations under operating leases
3,283
2,485
Allowance for sales returns
4,816
4,532
Other current liabilities
31,877
25,006
Total current liabilities
48,802
41,236
Obligations under finance leases
382
38
Obligations under operating leases
28,269
6,537
Deferred income taxes
811
222
Asset retirement obligations
198
221
Pension liability
8,758
11,940
Total liabilities
87,220
60,194
Stockholders' equity:
Common stock
477
464
Additional paid-in capital
373,519
338,194
Accumulated other comprehensive loss
(4,048
)
(5,545
)
Accumulated deficit
(111,390
)
(135,891
)
Total stockholders' equity
258,558
197,222
Total liabilities and stockholders' equity
$ 345,778
$ 257,416
Consolidated Statements of Income
(In 000's except for per share data)
Unaudited
Three Months Ended Twelve Months Ended
% of
December 31, 2021 % of
January 1, 2021 Fav (Unfav) % of
December 31, 2021 % of
January 1, 2021 Fav (Unfav)
Sales
Sales
Amount % Sales
Sales
Amount %
Net sales
100.0
%
$ 59,001
100.0
%
$ 45,998
$ 13,003
28.3
%
100.0
%
$ 230,472
100.0
%
$ 163,460
$ 67,012
41.0
%
Cost of sales
23.7
%
14,010
25.4
%
11,697
(2,313
)
-19.8
%
22.5
%
51,835
27.6
%
45,098
(6,737
)
-14.9
%
Gross profit
76.3
%
44,991
74.6
%
34,301
10,690
31.2
%
77.5
%
178,637
72.4
%
118,362
60,275
50.9
%
Selling, general and administrative expenses:
General and administrative
19.5
%
11,471
20.7
%
9,505
(1,966
)
-20.7
%
19.1
%
44,142
20.7
%
33,911
(10,231
)
-30.2
%
Selling and marketing
28.9
%
17,065
25.6
%
11,761
(5,304
)
-45.1
%
29.2
%
67,294
28.0
%
45,764
(21,530
)
-47.0
%
Research and development
15.4
%
9,072
19.5
%
8,958
(114
)
-1.3
%
14.7
%
33,862
19.6
%
31,918
(1,944
)
-6.1
%
Total selling, general, and administrative expenses
63.8
%
37,608
65.8
%
30,224
(7,384
)
-24.4
%
63.0
%
145,298
68.3
%
111,593
(33,705
)
-30.2
%
Operating income
12.5
%
7,383
8.8
%
4,077
3,306
81.1
%
14.5
%
33,339
4.1
%
6,769
26,570
392.5
%
Other income (expense):
Interest income (expense), net
0.0
%
(3
)
0.0
%
1
(4
)
-400.0
%
0.0
%
(38
)
0.1
%
238
(276
)
-116.0
%
Gain (loss) on foreign currency transactions
-1.6
%
(924
)
1.0
%
476
(1,400
)
-294.1
%
-1.3
%
(2,964
)
0.5
%
864
(3,828
)
-443.1
%
Royalty income
0.9
%
519
0.5
%
201
318
158.2
%
0.4
%
1,015
0.3
%
440
575
130.7
%
Other income (expense), net
0.0
%
(1
)
0.1
%
39
(40
)
-102.6
%
0.0
%
(48
)
0.0
%
(44
)
(4
)
-9.1
%
Total other income (expense), net
-0.7
%
(409
)
1.6
%
717
(1,126
)
-157.0
%
-0.9
%
(2,035
)
0.9
%
1,498
(3,533
)
-235.8
%
Income before provision for income taxes
11.8
%
6,974
10.4
%
4,794
2,180
45.5
%
13.6
%
31,304
5.0
%
8,267
23,037
278.7
%
Provision for income taxes
3.5
%
2,052
3.2
%
1,467
(585
)
-39.9
%
3.0
%
6,803
1.4
%
2,354
(4,449
)
-189.0
%
Net income
8.3
%
$ 4,922
7.2
%
$ 3,327
$ 1,595
47.9
%
10.6
%
$ 24,501
3.6
%
$ 5,913
$ 18,588
314.4
%
Net income per share - basic
$ 0.10
$ 0.07
$ 0.52
$ 0.13
Net income per share - diluted
$ 0.10
$ 0.07
$ 0.50
$ 0.12
Weighted average shares outstanding - basic
47,652
46,264
47,210
45,605
Weighted average shares outstanding - diluted
49,478
48,808
49,456
47,953
Consolidated Statements of Cash Flows
(in 000's)
Unaudited
Three Months Ended Twelve Months Ended
December 31, 2021 January 1, 2021 December 31, 2021 January 1, 2021
Cash flows from operating activities:
Net income
$ 4,922
$ 3,327
$ 24,501
$ 5,913
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment
937
784
3,608
3,060
Amortization of long-lived intangibles
8
9
34
35
Deferred income taxes
650
366
1,495
(849
)
Change in net pension liability
46
134
137
656
Stock-based compensation expense
3,620
3,181
14,605
12,146
Loss on disposal of property and equipment
-
210
2
213
Provision for sales returns and bad debts
(751
)
20
318
835
Inventory provision
557
511
1,654
1,706
Changes in working capital:
Accounts receivable
(1,796
)
7,001
(8,868
)
(3,974
)
Inventories
(1,235
)
(37
)
66
(1,390
)
Prepayments, deposits and other current assets
(1,999
)
(3,117
)
(711
)
(3,753
)
Accounts payable
148
(542
)
108
(1,199
)
Other current liabilities
3,391
7,703
7,013
7,552
Net cash provided by operating activities
8,498
19,550
43,962
20,951
Cash flows from investing activities:
Acquisition of property and equipment
(4,689
)
(2,145
)
(13,645
)
(8,404
)
Net cash used in investing activities
(4,689
)
(2,145
)
(13,645
)
(8,404
)
Cash flows from financing activities:
Repayment on line of credit
(1,297
)
(4
)
(1,297
)
(515
)
Repayment of finance lease obligations
(34
)
(106
)
(348
)
(561
)
Proceeds from vested restricted stock and exercise of stock options
1,115
6,660
19,438
20,647
Net cash provided by (used in) financing activities
(216
)
6,550
17,793
19,571
Effect of exchange rate changes on cash and cash equivalents
(133
)
160
(857
)
367
Increase in cash and cash equivalents
3,460
24,115
47,253
32,485
Cash and cash equivalents, at beginning of the period
196,246
128,338
152,453
119,968
Cash and cash equivalents, at end of the period
$ 199,706
$ 152,453
$ 199,706
$ 152,453
Reconciliation of Non-GAAP Financial Measure
Adjusted Net Income and Net Income Per Share
(in 000's)
Unaudited
Three Months Ended Twelve Months Ended
December 31, 2021
January 1, 2021 December 31, 2021
January 1, 2021
Net income (as reported)
$ 4,922
$ 3,327
$ 24,501
$ 5,913
Less:
Foreign currency impact
924
(476
)
2,964
(864
)
Stock-based compensation expense
3,620
3,181
14,605
12,146
Valuation allowance adjustment
-
720
845
(495
)
Net income (adjusted)
$ 9,466
$ 6,752
$ 42,915
$ 16,700
Net income per share, basic (as reported)
$ 0.10
$ 0.07
$ 0.52
$ 0.13
Foreign currency impact
0.02
(0.01
)
0.06
(0.02
)
Stock-based compensation expense
0.08
0.07
0.31
0.27
Valuation allowance adjustment
-
0.02
0.02
(0.01
)
Net income per share, basic (adjusted)
$ 0.20
$ 0.15
$ 0.91
$ 0.37
Net income per share, diluted (as reported)
$ 0.10
$ 0.07
$ 0.50
$ 0.12
Foreign currency impact
0.02
(0.01
)
0.06
(0.02
)
Stock-based compensation expense
0.07
0.07
0.29
0.25
Valuation allowance adjustment
-
0.01
0.02
-
Net income per share, diluted (adjusted)
$ 0.19
$ 0.14
$ 0.87
$ 0.35
Weighted average shares outstanding - Basic
47,652
46,264
47,210
45,605
Weighted average shares outstanding - Diluted
49,478
48,808
49,456
47,953
Note: Net income per share (adjusted), basic and diluted, may not add due to rounding
STAAR Surgical Company
Reconciliation of Non-GAAP Financial Measure
Constant Currency Sales
(in 000's)
Unaudited
Three Months Ended
December 31, 2021
Effect of
Constant January 1, 2021 As Reported Constant Currency
Sales
Currency
Currency $ Change
% Change $ Change
% Change
ICL
$ 53,016
$ 846
$ 53,862
$ 39,846
$ 13,170
33.1
%
$ 14,016
35.2
%
Cataract IOL
3,195
201
3,396
3,694
(499
)
-13.5
%
(298
)
-8.1
%
Other
2,790
173
2,963
2,458
332
13.5
%
505
20.5
%
Other Products
5,985
374
6,359
6,152
(167
)
-2.7
%
207
3.4
%
Total Sales
$ 59,001
$ 1,220
$ 60,221
$ 45,998
$ 13,003
28.3
%
$ 14,223
30.9
%
Twelve Months Ended
December 31, 2021
Effect of
Constant January 1, 2021 As Reported Constant Currency
Sales
Currency
Currency $ Change
% Change $ Change
% Change
ICL
$ 212,905
$ (759
)
$ 212,146
$ 141,407
$ 71,498
50.6
%
$ 70,739
50.0
%
Cataract IOL
12,519
19
12,538
13,574
(1,055
)
-7.8
%
(1,036
)
-7.6
%
Other
5,048
243
5,291
8,479
(3,431
)
-40.5
%
(3,188
)
-37.6
%
Other Products
17,567
262
17,829
22,053
(4,486
)
-20.3
%
(4,224
)
-19.2
%
Total Sales
$ 230,472
$ (497
)
$ 229,975
$ 163,460
$ 67,012
41.0
%
$ 66,515
40.7
%
View source version on businesswire.com : https://www.businesswire.com/news/home/20220223006083/en/
Investors
Brian Moore
bmoore@staar.com
Media
Jen Jones
jjones@goldpr.com
Source: STAAR Surgical Company
