STAAR Surgical Reports 14% Fourth Quarter Revenue Growth
Cash Used for Operating Activities Declines to Less Than$1 Million Gross Margin Increases to 57.1% Programs Implemented to Yield Additional Cost Savings During 2009 & 2010 First Quarter Sales Off to Strong Start
Fourth Quarter Highlights
Financial Highlights
-- Total sales grew 14% year-over-year to $18.2 million due to strong
sales of STAAR Japan of $3.7 million ; 19% growth excluding impact of
currency; total sales excluding Japan declined 9%
-- International sales grew 23% year-over-year, 30% excluding impact of
currency
-- U.S. sales declined by 6% while operating expenses, excluding other
charges, declined by 21%
-- Gross margin improved 700 basis points from the year ago period to
57.1%
-- Operating loss increased by 127% due to patent impairment charge and
litigation verdict, reduced by 41%, excluding these other operating
expenses
-- Cash used for operating activities during the quarter, including
Japan , decreased to $991,000 and $514,000 excluding Japan ; legal costs
paid during the quarter total $600,000
"Our fourth quarter performance, though below our original expectations,
capped a year of significant achievements for
"At year's end we implemented a new U.S. sales force structure designed to
maximize our Collamer material positioning for both ICLs and IOLs, as well as
improve efficiencies. We expect that the implementation of this structure
should yield us approximately
"Gross margin increased 700 basis points from the fourth quarter of 2007,
and outside of
"We also continued to make progress with our IOL product line sales during
the fourth quarter," Mr. Caldwell continued. "While total IOL sales increased
47% due to the strong contribution from
"In addition, we have begun a Centers of Excellence project which is
designed to take advantage of our key competencies in
"Our strong operational progress during the fourth quarter and first two
months of 2009 has been overshadowed by the
Total product sales for the quarter were
Total product sales for 2008 were
Gross profit margin for the fourth quarter was 57.1%, compared to 50.1% in
the fourth quarter of 2007. Gross profit margin for 2008 was 53.6%, compared
with 49.3% for 2007. Excluding purchase accounting charges recorded in the
first quarter of 2008, gross profit margin was 55.6% for the year. The
significant improvement in gross profit margin for the quarter is due to sales
of preloaded IOLs in
General and administrative expenses for the quarter were
Marketing and selling expenses for the fourth quarter were
Research and development expenses for the quarter were
Included in other operating expenses for the quarter is a
For the quarter ended
At
Conference Call
The Company will host a conference call and webcast on
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 800-405-2236 for domestic
callers and 303-590-3000 for international callers, both using passcode
11125535#. To access the live webcast of the call, go to
About
Safe Harbor
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 other financial items; the plans, strategies, and objectives of management for future operations or prospects for achieving such plans; strategies or objectives; prospects for appeal of the adverse verdict in the Parallax litigation; continued growth of the ICL, TICL or other products in the U.S. or international markets; expected cost savings; our future performance; 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 need to satisfy the forthcoming judgment in the Parallax case or post an appeal bond and the resulting effect on our liquidity, our limited capital resources and limited access to financing, the need to defend other litigation similar to the Parallax case and to satisfy judgment in the event of an adverse ruling in that case, for which we have taken no reserve, the effect the global recession may have 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 that we will not succeed in introducing improved products that restore the profitability of our U.S. IOL product line, our ability to resolve FDA concerns over the clinical study for the Toric ICL and to overcome negative publicity resulting from warning letters and other correspondence from the FDA Office of Compliance, the willingness of surgeons and patients to adopt a new product and procedure, and the potential effect of recent negative publicity about LASIK on the demand for refractive surgery in general in the U.S.
STAAR currently lacks the cash to satisfy the judgment expected to result
from the
Use of Non-GAAP Information
This news release presents selected items from the Company's Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows as reported in accordance with U.S. generally accepted accounting principles ("GAAP"), and also on a non-GAAP basis after excluding data reported by STAAR Japan, excluding certain non-recurring expenses, and excluding changes in currency
The Company completed the acquisition of the remaining interests in STAAR
Japan on
When assessing the effectiveness of its initiatives to enhance long-term
performance by reducing expenses, management may eliminate the effect of
significant non-recurring expenses in order to discern underlying trends. In
the 2008 fiscal year, the Company's results were significantly affected by the
following non-recurring expenses classified as "other expense": a
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 our results when reported in U.S. dollars. When preparing its financial statements in conformance with GAAP, the Company translates foreign currency sales and expenses to dollars at the weighted average of exchange rates in effect during the period. As a result, the Company's reported performance may be significantly affected by currency fluctuations. 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.
CONTACT:
Investors Media
EVC Group EVC Group
Douglas Sherk, 415-896-6820 Christopher Gale 646-201-5431
Michael Pollock , 415-896-5860
(Tables to Follow)
STAAR Surgical Company
Condensed Consolidated Statements of Operations
(In 000's except for per share data)
Unaudited
Three Months Ended Year Ended
------------------ ----------
January 2, December 28, January 2, December 28,
2009 2007 2009 2007
---- ---- ---- ----
Net sales $18,157 $15,885 $74,894 $59,363
Cost of sales 7,797 7,921 34,787 30,097
----- ----- ------ ------
Gross profit 10,360 7,964 40,107 29,266
------ ----- ------ ------
General and
administrative: 4,289 3,370 15,730 12,951
Marketing and selling 6,425 6,500 27,053 23,723
Research and
development 1,974 1,724 7,938 6,711
Other operating
expenses 5,923 - 9,773 -
----- --- ----- ---
Total selling, general
and administrative
expenses: 18,611 11,594 60,494 43,385
------ ------ ------ ------
Operating loss (8,251) (3,630) (20,387) (14,119)
------ ------ ------- -------
Other expense, net (579) (157) (1,285) (1,037)
---- ---- ------ ------
Loss before provision
(benefit) for
income taxes (8,830) (3,787) (21,672) (15,156)
Income tax provision
(benefit) 630 504 1,523 843
--- --- ----- ---
Net loss $(9,460) $(4,291) $(23,195) $(15,999)
======= ======= ======== ========
Basic and diluted loss
per share $(0.32) $(0.15) $(0.79) $(0.57)
====== ====== ====== ======
Weighted average shares
outstanding 29,496 29,388 29,474 28,121
====== ====== ====== ======
STAAR Surgical Company
Global Sales
(in 000's)
Unaudited
Three Months Ended Year Ended
------------------ ----------
Geographic January December January December
Sales 2, 2009 28, 2007 % Change 2, 2009 28, 2007 % Change
---- ---- -------- ------- -------- --------
United States $4,460 $4,730 -5.7% $18,927 $19,721 -4.0%
Germany 5,864 6,260 -6.3% 25,124 23,731 5.9%
Japan 3,878 141 2650.4% 13,485 423 3087.9%
Other 3,955 4,754 -16.8% 17,358 15,488 12.1%
----- ----- ------ ------
Total
International
Sales 13,697 11,155 22.8% 55,967 39,642 41.2%
------- ------- ------- -------
Total
Sales $18,157 $15,885 14.3% $74,894 $59,363 26.2%
======= ======= ======= =======
Product Sales
IOLs $8,550 $5,816 47.0% $32,926 $23,379 40.8%
ICLs $4,389 $4,639 -5.4% $19,069 $15,368 24.1%
Other 5,218 5,430 -3.9% 22,899 20,616 11.1%
----- ----- ------ ------
Total $18,157 $15,885 14.3% $74,894 $59,363 26.2%
======= ======= ======= =======
STAAR Surgical Company
Condensed Consolidated Balance Sheets
(in 000's)
Unaudited
January 2, December 28,
2009 2007
---- ----
Cash and cash equivalents $4,992 $10,895
Short-term investments - restricted 179 150
Accounts receivable trade, net 8,422 6,898
Inventories 16,668 12,741
Prepaids, deposits, and other current assets 2,009 1,610
----- -----
Total current assets 32,270 32,294
------ ------
Property, plant, and equipment, net 5,974 5,772
Intangible assets, net 5,611 3,959
Goodwill 7,538 7,534
Advance payment for acquisition of Canon Staar - 4,000
Other assets 1,189 620
----- ---
Total assets $52,582 $54,179
======= =======
Accounts payable $6,626 $4,823
Deferred income taxes - current 282 102
Obligations under capital leases - current 989 822
Line of credit 2,200 -
Other current liabilities 11,366 5,541
------ -----
Total current liabilities 21,463 11,288
------ ------
Notes payable - long-term, net of discount 4,414 4,166
Obligations under capital leases - long-term 897 1,311
Deferred income taxes - long-term 1,335 570
Other long-term liabilities 1,678 619
----- ---
Total liabilities 29,787 17,954
------ ------
Series A redeemable convertible preferred
stock 6,768 -
Stockholders' equity - net 16,027 36,225
------ ------
Total liabilities, redeemable convertible
preferred stock and equity $52,582 $54,179
======= =======
STAAR Surgical Company
Condensed Consolidated Statements of Cash Flows
(in 000's)
Unaudited
Year Ended
----------
January 2, December 28,
2009 2007
---- ----
Cash flows from operating activities:
Net loss $(23,195) $(15,999)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation of property, plant and equipment 2,797 2,001
Amortization of intangibles 1,866 481
Amortization of discount 248 26
Loss on extinguishment of debt - 215
Fair value adjustment of warrant (7) (182)
Loss on disposal of property and equipment 48 307
Equity in operations of joint venture - 280
Deferred income tax 238 493
Stock-based compensation expense 1,513 1,456
Common stock issued for services - 125
Loss on settlement of pre-existing
distribution arrangement 3,850 -
Change in pension accounting 72 179
Other 151 32
Changes in working capital:
Accounts receivable (891) (210)
Inventories 1,125 861
Prepaids, deposits and other current assets 708 330
Accounts payable (1,870) (637)
Other current liabilities 5,119 (942)
----- ----
Net cash used in operating activities (8,228) (11,184)
------ -------
Cash flows from investing activities:
Cash acquired in acquisition of Canon Staar,
net of acquisition costs 2,215 -
Advance payment on acquisition of Canon Staar
Joint Venture - (4,000)
Deferred acquisition costs of Canon Staar - (197)
Acquisition of property, plant and equipment (1,092) (691)
Proceeds from sale of property, plant and
equipment 167 72
Purchase of short-term investments (212) -
Dividend received from joint venture - 117
Net change in other assets 43 24
-- --
Net cash provided by (used in) investing
activities 1,121 (4,675)
----- ------
Cash flows from financing activities:
Proceeds from notes payable - 9,000
Repayments of notes payable - (4,000)
Repayment of note issued in connection with
purchase of minority interest in subsidiary - (972)
Borrowings under lines of credit 3,880 1,812
Repayments of lines of credit (1,940) (3,610)
Repayment of capital lease lines of credit (983) (692)
Net proceeds from the public sale of equity
securities - 16,613
Proceeds from the exercise of stock options 40 584
-- ---
Net cash provided by financing activities 997 18,735
--- ------
Effect of exchange rate changes on cash and cash
equivalents 207 261
--- ---
(Decrease) increase in cash and cash equivalents (5,903) 3,137
Cash and cash equivalents, at beginning of the
period 10,895 7,758
------ -----
Cash and cash equivalents, at end of the period $4,992 $10,895
====== =======
STAAR Surgical Company
GAAP Reconciliation Table
2-Jan-09
Q4 2008
-------
Ex-
Japan
Statement of Other and
Operations As Reported Japan Expenses Other Q4 2007
----------- ----- --------- ------ -------
Sales $18,157 $3,678 $- $14,479 $15,885
Cost of Sales 7,797 968 - 6,829 7,922
Gross Profit 10,360 2,710 - 7,650 7,963
Gross Profit Margin 57.1% 73.7% 0.0% 52.8% 50.1%
General and
Administrative 4,289 1,091 - 3,198 3,370
Marketing and
Selling 6,425 1,165 - 5,260 6,500
Research and
Development 1,974 637 - 1,337 1,724
Other Operating
Expenses 5,923 - 5,923 - -
Total Selling,
General,
and Administrative 18,611 2,893 5,923 9,795 11,594
Operating Loss (8,251) (183) (5,923) (2,145) (3,631)
Other Expense, Net (579) (79) - (500) (157)
Loss Before Income
Taxes (8,830) (262) (5,923) (2,645) (3,788)
Income Tax Provision
(Benefit) 630 (268) - 898 504
Net Loss $(9,460) $6 $(5,923) $(3,543) $(4,292)
Loss Per Share $(0.32) $- $(0.20) $(0.12) $(0.15)
2008 vs. 2007
-------------
As Reported Ex-Japan
----------- --------
Statement of
Operations $ Change % Change $ Change % Change
-------- -------- -------- --------
Sales $2,272 14% $(1,406) -9%
Cost of Sales (125) -2% (1,093) -14%
Gross Profit 2,397 30% (313) -4%
Gross Profit Margin 6.9% 14% 2.7% 5%
General and
Administrative 919 27% (172) -5%
Marketing and
Selling (75) -1% (1,240) -19%
Research and
Development 250 15% (387) -22%
Other Operating
Expenses 5,923 0% - 0%
Total Selling,
General,
and Administrative 7,017 61% (1,799) -16%
Operating Loss (4,620) 127% 1,486 -41%
Other Expense, Net (422) 269% (343) 218%
Loss Before Income
Taxes (5,042) 133% 1,143 -30%
Income Tax Provision
(Benefit) 126 25% 394 78%
Net Loss $(5,168) 120% $749 -17%
Loss Per Share $(0.17) 120% $0.03 -18%
2008
----
Statement of Other Ex-Japan
Operations As Reported Japan Expenses and Other 2007
----------- ----- --------- --------- ----
Sales $74,894 $12,731 $- $62,163 $59,363
Cost of Sales 34,787 3,711 1,524 29,552 30,097
Gross Profit 40,107 9,020 (1,524) 32,611 29,266
Gross Profit Margin 53.6% 70.9% 0.0% 52.5% 49.3%
General and
Administrative 15,730 3,690 - 12,040 12,951
Marketing and
Selling 27,053 4,098 - 22,955 23,723
Research and
Development 7,938 2,164 - 5,774 6,711
Other Operating
Expenses 9,773 - 9,773 - -
Total Selling,
General, and
Administrative 60,494 9,952 9,773 40,769 43,385
Operating Loss (20,387) (932) (11,297) (8,158) (14,119)
Other Expense, Net (1,285) (103) - (1,182) (1,037)
Loss Before Income
Taxes (21,672) (1,035) (11,297) (9,340) (15,156)
Income Taxes 1,523 (268) - 1,791 843
Net Loss $(23,195) $(767) $(11,297) $(11,131) $(15,999)
Loss Per Share $(0.79) $(0.03) $(0.38) $(0.38) $(0.57)
2008 vs. 2007
-------------
As Reported Ex-Japan
----------- --------
$ Change % Change $ Change % Change
-------- -------- -------- --------
Sales $15,531 26% $2,800 5%
Cost of Sales 4,690 16% (545) -2%
Gross Profit 10,841 37% 3,345 11%
Gross Profit Margin 4.3% 9% 3.2% 6%
General and
Administrative 2,779 21% (911) -7%
Marketing and
Selling 3,330 14% (768) -3%
Research and
Development 1,227 18% (937) -14%
Other Operating
Expenses 9,773 0% - 0%
Total Selling,
General, and
Administrative 17,109 39% (2,616) -6%
Operating Loss (6,268) 44% 5,961 -42%
Other Expense, Net (248) 24% (145) 14%
Loss Before Income
Taxes (6,516) 43% 5,816 -38%
Income Taxes 680 81% 948 112%
Net Loss $(7,196) 45% $4,868 -30%
Loss Per Share $(0.22) 38% $0.19 -34%
Summary of Other
Expenses Included
in Statement of Period
Operations Amount Recorded
------ ---------
Purchase accounting
charge related to
inventory $1,524 Q1
Settlement of
preexisting
distribution
arrangement 3,850 Q1
Patent impairment
charges 1,023 Q4
Lawsuit verdict 4,900 Q4
-----
$11,297
=======
2008
----
Cash Flow Q4 Japan Ex-Japan
-- ----- --------
Cash Used in
Operating
Activities (991) (477) (514)
Cash Provided
by (Used in)
Investing
Activities (541) (178) (363)
Cash Provided
by (Used in)
Financing
Activities (161) 32 (193)
Effect of
Exchange on
Cash (12) 307 (319)
--- --- ----
Increase
(Decrease) in
Cash (1,705) (316) (1,389)
====== ==== ======
Q4 2008 vs. Q4 2007
-------------------
As Reported Ex-Japan
----------- --------
Cash Flow 2007 $ Change % Change $ Change % Change
---- -------- -------- -------- --------
Cash Used in
Operating
Activities (2,671) 1,680 -63% 2,157 -81%
Cash Provided
by (Used in)
Investing
Activities (4,442) 3,901 -88% 4,079 -92%
Cash Provided
by (Used in)
Financing
Activities 3,780 (3,941) -104% (3,973) -105%
Effect of
Exchange on
Cash 32 (44) -138% (351) -1097%
-- --- ----
Increase
(Decrease) in
Cash (3,301) 1,596 -48% 1,912 -58%
====== ===== =====
2008
----
Cash Flow As Reported Japan Ex-Japan
----------- ----- --------
Cash Used in
Operating
Activities (8,228) (3,418) (4,810)
Cash Provided by
(Used in) Investing
Activities 1,121 2,624 (1,503)
Cash Provided by
(Used in) Financing
Activities 997 1,849 (852)
Effect of Exchange
on Cash 207 499 (292)
--- --- ----
Increase (Decrease)
in Cash (5,903) 1,554 (7,457)
====== ===== ======
2008 vs. 2007
-------------
As Reported Ex-Japan
----------- --------
Cash Flow 2007 $ Change % Change $ Change % Change
---- -------- -------- -------- --------
Cash Used in
Operating
Activities (11,184) 2,956 -26% 6,374 -57%
Cash Provided by
(Used in) Investing
Activities (4,675) 5,796 -124% 3,172 -68%
Cash Provided by
(Used in) Financing
Activities 18,735 (17,738) -95% (19,587) -105%
Effect of Exchange
on Cash 261 (54) -21% (553) -212%
--- --- ----
Increase (Decrease)
in Cash 3,137 (9,040) -288% (10,594) -338%
===== ====== =======
Q4 2008
-------
Effect
Sales in Constant of
Currency As Reported Currency Ex-Currency
----------- --------- -----------
US 4,460 - 4,460
International 13,697 (804) 14,501
------ ---- ------
Total 18,157 (804) 18,961
====== ==== ======
Q4 2008 vs. Q4 2007
-------------------
As Reported Ex-Currency
----------- -----------
Sales in Constant
Currency 2007 $ Change % Change $ Change % Change
---- -------- -------- -------- --------
US 4,730 (270) -6% (270) -6%
International 11,155 2,542 23% 3,346 30%
------
Total 15,885 2,272 14% 3,076 19%
======
2008
----
Effect
Sales in Constant of
Currency As Reported Currency Ex-Currency
----------- --------- -----------
US 18,927 - 18,927
International 55,967 1,640 54,327
------ ----- ------
Total 74,894 1,640 73,254
====== ===== ======
2008 vs. 2007
-------------
As Reported Ex-Currency
----------- -----------
Sales in Constant
Currency 2007 $ Change % Change $ Change % Change
---- -------- -------- -------- --------
US 19,721 (794) -4% (794) -4%
International 39,642 16,325 41% 14,685 37%
------
Total 59,363 15,531 26% 13,891 23%
======
SOURCESTAAR Surgical Company -0-03/16/2009 /CONTACT: Investors,Douglas Sherk , +1-415-896-6820, orMichael Pollock , +1-415-896-5860, or Media Christopher Gale +1-646-201-5431, all ofEVC Group , forSTAAR Surgical Company / /Web Site: http://www.staar.com / (STAA) CO:STAAR Surgical Company ST:California IN: HEA MTC SU: ERN ERP CCA PR -- SF84359 -- 595903/16/2009 16:41 EDT http://www.prnewswire.com