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STAAR Surgical Reports Second Quarter 2023 Results

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STAAR Surgical Company (NASDAQ: STAA) reported financial results for Q2 2023. Net sales were $92.3 million, up 14% YoY. Record ICL sales reached $93.1 million, up 19% YoY. Gross margin was 76.6%, down from 78.8% in the prior year quarter. Net income was $0.12 per share, compared to $0.26 per share in the prior year quarter. Cash, cash equivalents, and investments totaled $209.5 million.
Positive
  • Net sales increased by 14% YoY, reaching $92.3 million.
  • Record ICL sales of $93.1 million, up 19% YoY.
  • Gross margin decreased to 76.6% from 78.8% in the prior year quarter.
  • Net income per share was $0.12, compared to $0.26 in the prior year quarter.
  • Cash, cash equivalents, and investments totaled $209.5 million.
Negative
  • Gross margin decreased by 2.2 percentage points.
  • Net income per share decreased by 54%.
  • ICL sales growth in EMEA markets was down 23%.

Record ICL Sales of $93.1 Million Up 19% Y/Y

LAKE FOREST, Calif.--(BUSINESS WIRE)-- STAAR Surgical Company (NASDAQ: STAA), a leading developer, manufacturer and marketer of implantable lenses for the eye, today reported financial results for the second quarter ended June 30, 2023.

Second Quarter 2023 Overview

  • Net Sales of $92.3 Million Up 14% includes a $0.7 Million sales reduction related to Other Products
  • Record ICL Sales of $93.1 Million Up 19% Y/Y and Up 20% Y/Y in Constant Currency
  • ICL Units Up 21% Y/Y
  • Gross Margin at 76.6% vs. 78.8% in the Prior Year Quarter
  • Net Income of $0.12 per Share vs. $0.26 per Share in the Prior Year Quarter
  • Cash, Cash Equivalents and Investments Available for Sale Ended the Quarter at $209.5 Million
  • Accounting adjustments related to Other Products resulted in Adjusted Net Sales of $93.0 Million; Adjusted Gross Profit Margin of 79.8% and Adjusted Net Income for ICL of $0.19 per Share.

“Record second quarter global ICL sales of $93.1 million up 19%, were driven by strength in our APAC region which generated 26% ICL sales growth,” said Tom Frinzi, President and CEO of STAAR Surgical. “The peak implant season for our proprietary family of EVO ICL lenses in China, the largest market for refractive procedures in the world, had a strong start in June, during which I had the pleasure of working with our team on the ground for several days. In APAC geographies, EVO has a strong market position and a long runway for growth. In the nascent U.S. market, ICL growth exceeded industry trends and although below our expectations we remain confident this market will achieve the growth levels we have seen in our other target markets. In the U.S. ICL sales were up 10% in the second quarter as compared to refractive industry procedures which were down 15%.1 We have taken a number of steps and implemented initiatives that we expect will accelerate EVO adoption in the U.S. as we exit 2023 and beyond.”

Mr. Frinzi continued, “Given increased conservatism related to the global environment, and a revised near-term outlook for U.S. growth, we are updating our fiscal 2023 ICL sales outlook to a range of approximately $320 million to $325 million. At the mid-point of the range, our outlook represents approximately 20% growth over fiscal 2022 ICL sales of approximately $270 million. The actions we are taking, and the feedback from our customers and their happy EVO patients, make us confident that we will continue to build upon our position as the fastest growing company within the refractive industry in our target markets.”

Financial Overview – Q2 2023

During the quarter, the Company recorded various accounting adjustments related to its Other Products, specifically its non-core Cataract IOL business which the Company had previously announced it will no longer support after fiscal 2023. These adjustments included a $0.7 million reduction in net sales related to sales return reserve of certain IOL products; $2.8 million in inventory reserves related to IOL products; $0.2 million impairment of intangible assets; and a $0.4 million tax benefit; in each case related to Other Products. Please refer to the reconciliation of GAAP to Non-GAAP in the Financial Metrics Excluding Other Product Cataract IOL Adjustments table for the impact on various financial measures.

Net sales were $92.3 million for the second quarter of 2023, up 14% compared to $81.1 million reported in the prior year quarter. The sales increase in the second quarter was driven by ICL sales growth of 19% and ICL unit growth of 21%, both as compared to the prior year period. In addition to the markets noted above, ICL units in EMEA markets were down 23% (with European markets up 6%, Latin America markets up 19%, and Middle East markets down 67%), primarily due to an inability to ship ICLs into one country as a result of changes in product labeling requirements. Other Product sales for the second quarter of 2023 were ($0.8) million compared to $3.2 million in the prior year quarter, reflecting a $2.5 million reduction in Cataract IOL sales and a $1.5 million decrease in other product sales due to decreased sales of cataract injector parts and sales return reserves related to Cataract IOLs. Adjusted Net Sales which reflects an adjustment for the $0.7 million reduction related to sales return reserve for Other Products was $93.0 million for the second quarter.

Gross profit margin for the second quarter of 2023 was 76.6% compared to the prior year quarter of 78.8%. Factors impacting gross margin in the second quarter of 2023, as compared to the prior year quarter include inventory reserves related to the Other Products Cataract IOL business. Adjusted Gross Profit Margin which reflects an adjustment for the $2.8 million in inventory reserves related to Other Products was 79.8% for the second quarter.

Operating expenses for the second quarter of 2023 were $62.1 million compared to the prior year quarter of $46.9 million. General and administrative expenses were $18.1 million compared to the prior year quarter of $14.0 million. The increase in general and administrative expenses was due to increased compensation related expenses, outside services and facilities costs. Selling and marketing expenses were $32.3 million compared to the prior year quarter of $24.2 million. The increase in selling and marketing expenses is due to increased advertising and promotional activities, compensation related expenses, trade shows and sales meetings. Research and development expenses were $11.8 million compared to the prior year quarter of $8.6 million. The increase in research and development expenses is due to increased compensation related expenses and clinical trial expenses related to U.S. post-approval studies. Adjusted Operating expenses which reflects an adjustment for the $0.2 million impairment of intangible assets related to Other Products was $62.0 million.

Net income for the second quarter of 2023 was $6.1 million or $0.12 per diluted share compared with net income of $13.0 million or $0.26 per diluted share for the prior year quarter. The year over year decrease in net income is attributable to higher operating expenses partially offset by higher gross profit and interest income. Adjusted Net Income for the second quarter of 2023 was $19.7 million or $0.40 per diluted share compared to $20.7 million or $0.42 per diluted share for the prior year quarter. This includes $3.3 million reduction in net income or $(0.07) per diluted share resulting in Adjusted Net Income for ICL of $9.4 million or $0.19 per diluted share for the second quarter.

Cash, cash equivalents, and investments available for sale at June 30, 2023, totaled $209.5 million, compared to $225.5 million at end of the fourth quarter of 2022.

1 Refractive Surgery Council, RSC Quarterly Statistical Program, Q2 2023 Report, U.S. refractive procedure volumes down 14.9% Y/Y in Q2 2023 and down 9.1% sequentially from Q1 2023.

Conference Call

The Company will host a conference call and webcast today, Wednesday, August 2 at 4:30 p.m. Eastern / 1:30 p.m. Pacific to discuss its financial results and operational progress. To access the conference call (Conference ID 99981426), please dial 888-259-6580 for domestic participants and 206-962-3782 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 981426) will be available beginning approximately one hour after the call’s conclusion for seven days. This replay can be accessed by dialing 877-674-7070 for domestic callers and 416-764-8692 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. Non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

“Adjusted Net Income” and “Adjusted Net Income for ICL” exclude the following items that are included in “Net Income” as calculated in accordance with U.S. generally accepted accounting principles (“GAAP”): Cataract IOL sales return reserve, Cataract IOL inventory reserve, Cataract IOL intangible impairment, income tax benefit on Cataract IOL Adjusted Net Income also excludes gain or loss on foreign currency transactions, stock-based compensation expenses, and valuation allowance adjustments (if any). Management believes that “Adjusted Net Income” and “Adjusted Net Income for ICL” are 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 excluded accounting adjustments related to exiting the Company’s non-core Cataract IOL business. These accounting adjustments include sales returns reserve, excess inventory reserves, an impairment charge related to cataract IOLs and the associated tax benefit of these adjustments. The Company has excluded these items in order to focus on its core ICL business as the Company will continue tapering the manufacturing of cataract IOLs, though it will continue to support these products through the end of 2023, as supplies permit. Management believes that disclosing Adjusted Net Income and Adjusted Net Income for ICL excluding these accounting adjustments is useful to investors in gauging the performance of its core ICL business.

For the reasons referenced above in connection with calculating Adjusted Net Income and Adjusted Net Income for ICL, management also supplements the Company’s GAAP consolidated financial statements and GAAP financial measures with other Non-GAAP financial measures, comprising of Adjusted Net Sales, Adjusted Cost of Sales, Adjusted Gross Profit Margin, Adjusted Operating Expenses, Adjusted Income Tax Provision, which in each case exclude the impact of any accounting adjustments related to the exiting of the Company’s non-core Cataract IOL business. The Company believes that these Non-GAAP financial measures provide additional insight into the ongoing financial results of its business which investors find useful to gauge the performance of its core ICL business.

Management has also excluded from the calculation of Adjusted Net Income 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 stock-based compensation expenses and valuation allowance adjustments (if any) 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 provided in this press release shows sales results calculated in accordance with GAAP, the effect of currency, and the resulting Non-GAAP measure expressed in constant currency.

About STAAR Surgical

STAAR, which has been dedicated solely to ophthalmic surgery for over 40 years, designs, develops, manufactures and markets implantable lenses for the eye. These lenses are intended to provide visual freedom for patients, lessening or eliminating the reliance on glasses or contact lenses. All of these lenses are foldable, which permits the surgeon to insert them through a small incision. STAAR’s lens used in refractive surgery is called an Implantable Collamer® Lens or “ICL,” which includes the EVO ICL™ product line. More than 2,000,000 ICLs have been sold to date and STAAR markets these lenses in over 75 countries. To learn more about the ICL go to: EVOICL.com. Headquartered in Lake Forest, CA, the company operates manufacturing and packaging facilities in Aliso Viejo, CA, Monrovia, CA and Nidau, Switzerland. For more information, please visit the Company’s website at www.staar.com.

Safe Harbor

All statements that are not statements of historical fact are forward-looking statements, including statements about any of the following: any financial projections (including sales), plans, strategies, and objectives of management for 2023 or prospects for achieving such plans, expectations for sales, revenue, margin, expenses or earnings, and any statements of assumptions underlying any of the foregoing, including those relating to financial performance in the quarter and fiscal year 2023. 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 30, 2022 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.

We intend to use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included on our website in the ‘Investor Relations’ sections. Accordingly, investors should monitor such portions of our website, in addition to following our press releases, SEC filings and public conference calls and webcasts.

Consolidated Balance Sheets
(in 000's)
Unaudited

 

 

June 30, 2023 December 30, 2022

ASSETS

Current assets:

Cash and cash equivalents

$

94,695

 

$

86,480

 

Investments available for sale

 

97,312

 

 

125,159

 

Accounts receivable trade, net

 

94,442

 

 

62,447

 

Inventories, net

 

25,482

 

 

24,161

 

Prepayments, deposits, and other current assets

 

16,072

 

 

13,476

 

Total current assets

 

328,003

 

 

311,723

 

Investments available for sale

 

17,525

 

 

13,902

 

Property, plant, and equipment, net

 

55,924

 

 

50,921

 

Finance lease right-of-use assets, net

 

257

 

 

342

 

Operating lease right-of-use assets, net

 

31,530

 

 

30,270

 

Intangible assets, net

 

-

 

 

173

 

Goodwill

 

1,786

 

 

1,786

 

Deferred income taxes

 

4,672

 

 

4,824

 

Other assets

 

954

 

 

957

 

Total assets

$

440,651

 

$

414,898

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

11,441

 

$

11,576

 

Obligations under finance leases

 

162

 

 

169

 

Obligations under operating leases

 

4,013

 

 

3,524

 

Allowance for sales returns

 

6,653

 

 

5,706

 

Other current liabilities

 

31,925

 

 

30,741

 

Total current liabilities

 

54,194

 

 

51,716

 

Obligations under finance leases

 

125

 

 

210

 

Obligations under operating leases

 

28,189

 

 

27,136

 

Deferred income taxes

 

1,295

 

 

1,489

 

Asset retirement obligations

 

101

 

 

220

 

Pension liability

 

3,050

 

 

1,935

 

Total liabilities

 

86,954

 

 

82,706

 

 

Stockholders' equity:

Common stock

 

485

 

 

482

 

Additional paid-in capital

 

419,594

 

 

404,189

 

Accumulated other comprehensive income (loss)

 

(2,521

)

 

156

 

Accumulated deficit

 

(63,861

)

 

(72,635

)

Total stockholders' equity

 

353,697

 

 

332,192

 

Total liabilities and stockholders' equity

$

440,651

 

$

414,898

 

Consolidated Statements of Income
(In 000's except for per share data)
Unaudited
 
 
Three Months Ended Six Months Ended
% of June 30, 2023 % of July 1, 2022 Fav (Unfav) % of June 30, 2023 % of July 1, 2022 Fav (Unfav)
Sales Sales Amount % Sales Sales Amount %
Net sales

100.0

%

$

92,306

 

100.0

%

$

81,101

 

$

11,205

 

13.8

%

100.0

%

$

165,834

 

100.0

%

$

144,301

 

$

21,533

 

14.9

%

 
Cost of sales

23.4

%

 

21,580

 

21.2

%

 

17,229

 

 

(4,351

)

-25.3

%

22.6

%

 

37,546

 

21.6

%

 

31,165

 

 

(6,381

)

-20.5

%

 
Gross profit

76.6

%

 

70,726

 

78.8

%

 

63,872

 

 

6,854

 

10.7

%

77.4

%

 

128,288

 

78.4

%

 

113,136

 

 

15,152

 

13.4

%

 
Selling, general and administrative expenses:
General and administrative

19.6

%

 

18,097

 

17.2

%

 

13,983

 

 

(4,114

)

-29.4

%

21.8

%

 

36,195

 

18.0

%

 

25,923

 

 

(10,272

)

-39.6

%

Selling and marketing

35.0

%

 

32,277

 

29.9

%

 

24,233

 

 

(8,044

)

-33.2

%

35.4

%

 

58,631

 

28.8

%

 

41,503

 

 

(17,128

)

-41.3

%

Research and development

12.7

%

 

11,755

 

10.7

%

 

8,636

 

 

(3,119

)

-36.1

%

13.3

%

 

22,065

 

11.4

%

 

16,577

 

 

(5,488

)

-33.1

%

Total selling, general, and administrative expenses

67.3

%

 

62,129

 

57.8

%

 

46,852

 

 

(15,277

)

-32.6

%

70.5

%

 

116,891

 

58.2

%

 

84,003

 

 

(32,888

)

-39.2

%

 
Operating income

9.3

%

 

8,597

 

21.0

%

 

17,020

 

 

(8,423

)

-49.5

%

6.9

%

 

11,397

 

20.2

%

 

29,133

 

 

(17,736

)

-60.9

%

 
Other income (expense), net:
Interest income, net

1.9

%

 

1,775

 

0.1

%

 

43

 

 

1,732

 

4027.9

%

2.2

%

 

3,597

 

0.0

%

 

37

 

 

3,560

 

9621.6

%

Loss on foreign currency transactions

-2.0

%

 

(1,890

)

-2.3

%

 

(1,860

)

 

(30

)

-1.6

%

-1.1

%

 

(1,856

)

-1.9

%

 

(2,775

)

 

919

 

33.1

%

Royalty income

0.0

%

 

0

 

0.2

%

 

177

 

 

(177

)

-100.0

%

0.0

%

 

0

 

0.3

%

 

450

 

 

(450

)

-100.0

%

Other income, net

0.0

%

 

10

 

0.1

%

 

89

 

 

(79

)

-88.8

%

0.0

%

 

73

 

0.1

%

 

151

 

 

(78

)

-51.7

%

Total other income (expense), net

-0.1

%

 

(105

)

-1.9

%

 

(1,551

)

 

1,446

 

93.2

%

1.1

%

 

1,814

 

-1.5

%

 

(2,137

)

 

3,951

 

184.9

%

 
Income before provision for income taxes

9.2

%

 

8,492

 

19.1

%

 

15,469

 

 

(6,977

)

-45.1

%

8.0

%

 

13,211

 

18.7

%

 

26,996

 

 

(13,785

)

-51.1

%

 
Provision for income taxes

2.6

%

 

2,428

 

3.0

%

 

2,431

 

 

3

 

0.1

%

2.7

%

 

4,437

 

3.0

%

 

4,356

 

 

(81

)

-1.9

%

 
Net income

6.6

%

$

6,064

 

16.1

%

$

13,038

 

$

(6,974

)

-53.5

%

5.3

%

$

8,774

 

15.7

%

$

22,640

 

$

(13,866

)

-61.2

%

 
 
Net income per share - basic

$

0.13

 

$

0.27

 

$

0.18

 

$

0.47

 

Net income per share - diluted

$

0.12

 

$

0.26

 

$

0.18

 

$

0.46

 

 
Weighted average shares outstanding - basic

 

48,418

 

 

47,889

 

 

48,333

 

 

47,822

 

Weighted average shares outstanding - diluted

 

49,516

 

 

49,223

 

 

49,524

 

 

49,264

 

Consolidated Statements of Cash Flows
(in 000's)
Unaudited
Three Months Ended Six Months Ended
June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022
 
Cash flows from operating activities:
Net income

$

6,064

 

$

13,038

 

$

8,774

 

$

22,640

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation of property and equipment

 

1,285

 

 

1,030

 

 

2,398

 

 

2,024

 

Amortization of long-lived intangibles

 

164

 

 

7

 

 

171

 

 

15

 

Accretion/Amortization of investments available for sale

 

(841

)

 

-

 

 

(1,824

)

 

-

 

Deferred income taxes

 

18

 

 

-

 

 

75

 

 

-

 

Change in net pension liability

 

(614

)

 

11

 

 

(627

)

 

52

 

Stock-based compensation expense

 

8,423

 

 

5,754

 

 

14,488

 

 

9,648

 

Change in asset retirement obligation

 

(107

)

 

-

 

 

(107

)

 

-

 

Loss on disposal of property and equipment

 

24

 

 

-

 

 

24

 

 

-

 

Provision for sales returns and bad debts

 

1,381

 

 

994

 

 

1,004

 

 

800

 

Inventory provision

 

3,016

 

 

994

 

 

3,630

 

 

1,428

 

Changes in working capital:
Accounts receivable

 

(31,234

)

 

(16,210

)

 

(32,344

)

 

(20,137

)

Inventories

 

(462

)

 

(342

)

 

(4,382

)

 

(1,825

)

Prepayments, deposits and other current assets

 

1,584

 

 

2,245

 

 

(2,665

)

 

(2,260

)

Accounts payable

 

1,721

 

 

575

 

 

(1,447

)

 

3,243

 

Other current liabilities

 

3,272

 

 

5,150

 

 

1,432

 

 

(6,992

)

Net cash provided by (used in) operating activities

 

(6,306

)

 

13,246

 

 

(11,400

)

 

8,636

 

 
Cash flows from investing activities:
Acquisition of property and equipment

 

(3,014

)

 

(5,271

)

 

(5,915

)

 

(7,810

)

Purchase of investments available for sale

 

(15,157

)

 

-

 

 

(42,602

)

 

-

 

Proceeds from sale or maturity of investments available for sale

 

28,343

 

 

-

 

 

68,622

 

 

-

 

Net cash provided by (used in) investing activities

 

10,172

 

 

(5,271

)

 

20,105

 

 

(7,810

)

 
Cash flows from financing activities:
Repayment of finance lease obligations

 

(40

)

 

(27

)

 

(82

)

 

(45

)

Repurchase of employee common stock for taxes withheld

 

(135

)

 

-

 

 

(1,984

)

 

-

 

Proceeds from vested restricted stock and exercise of stock options

 

1,477

 

 

2,234

 

 

2,007

 

 

3,146

 

Net cash provided by (used in) financing activities

 

1,302

 

 

2,207

 

 

(59

)

 

3,101

 

 
Effect of exchange rate changes on cash and cash equivalents

 

(441

)

 

(759

)

 

(431

)

 

(1,143

)

 
Increase in cash and cash equivalents

 

4,727

 

 

9,423

 

 

8,215

 

 

2,784

 

Cash and cash equivalents, at beginning of the period

 

89,968

 

 

193,067

 

 

86,480

 

 

199,706

 

Cash and cash equivalents, at end of the period

$

94,695

 

$

202,490

 

$

94,695

 

$

202,490

 

Reconciliation of Non-GAAP Financial Measure
Financial Metrics Excluding Other Product Cataract IOL Adjustments
(in 000's)
Unaudited
 
Three Months Ended Six Months Ended
% of Sales June 30, 2023 % of Sales July 1, 2022 Fav (Unfav) % of Sales June 30, 2023 % of Sales July 1, 2022 Fav (Unfav)
Amount % Amount %
Net sales:
Net sales, GAAP

100.0

%

$

92,306

 

100.0

%

$

81,101

$

11,205

 

13.8

%

100.0

%

$

165,834

 

100.0

%

$

144,301

$

21,533

 

14.9

%

Add: Cataract IOL sales return reserve

 

742

 

 

-

 

742

 

 

742

 

 

-

 

742

 

Adjusted Net sales, Non-GAAP

100.0

%

$

93,048

 

100.0

%

$

81,101

$

11,947

 

14.7

%

100.0

%

$

166,576

 

100.0

%

$

144,301

$

22,275

 

15.4

%

 
Cost of sales:
Cost of sales, GAAP

23.4

%

$

21,580

 

21.2

%

$

17,229

$

(4,351

)

-25.3

%

22.6

%

$

37,546

 

21.6

%

$

31,165

$

(6,381

)

-20.5

%

Less: Cataract IOL inventory reserve

 

(2,800

)

 

-

 

2,800

 

 

(2,800

)

 

-

 

2,800

 

Adjusted Cost of sales, Non-GAAP

20.2

%

$

18,780

 

21.2

%

$

17,229

$

(1,551

)

-9.0

%

20.9

%

$

34,746

 

21.6

%

$

31,165

$

(3,581

)

-11.5

%

 
Gross profit and gross profit margin:
Gross profit and gross profit margin, GAAP

76.6

%

$

70,726

 

78.8

%

$

63,872

$

6,854

 

10.7

%

77.4

%

$

128,288

 

78.4

%

$

113,136

$

15,152

 

13.4

%

Add: Cataract IOL sales return reserve

 

742

 

 

-

 

742

 

 

742

 

 

-

 

742

 

Add: Cataract IOL inventory reserve

 

2,800

 

 

-

 

2,800

 

 

2,800

 

 

-

 

2,800

 

Adjusted Gross profit and gross profit margin, Non-GAAP

79.8

%

$

74,268

 

78.8

%

$

63,872

$

10,396

 

16.3

%

79.1

%

$

131,830

 

78.4

%

$

113,136

$

18,694

 

16.5

%

 
Operating expenses:
Operating expenses, GAAP

67.3

%

$

62,129

 

57.8

%

$

46,852

$

(15,277

)

-32.6

%

70.5

%

$

116,891

 

58.2

%

$

84,003

$

(32,888

)

-39.2

%

Less: Cataract IOL intangible impairment

 

(154

)

 

-

 

154

 

 

(154

)

 

-

 

154

 

Adjusted Operating expenses, Non-GAAP

66.6

%

$

61,975

 

57.8

%

$

46,852

$

(15,123

)

-32.3

%

70.1

%

$

116,737

 

58.2

%

$

84,003

$

(32,734

)

-39.0

%

 
Provision for income taxes:
Provision for income taxes, GAAP

2.6

%

$

2,428

 

3.0

%

$

2,431

$

3

 

0.1

%

2.7

%

$

4,437

 

3.0

%

$

4,356

$

(81

)

-1.9

%

Add: Income tax benefit on Cataract IOL

 

405

 

 

-

 

(405

)

 

405

 

 

-

 

(405

)

Adjusted Provision for income taxes, Non-GAAP

3.0

%

$

2,833

 

3.0

%

$

2,431

$

(402

)

-16.5

%

2.9

%

$

4,842

 

3.0

%

$

4,356

$

(486

)

-11.2

%

Reconciliation of Non-GAAP Financial Measure
Adjusted Net Income and Net Income Per Share
(in 000's)
Unaudited Three Months Ended Six Months Ended
June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022
 
Net income (as reported)

$

6,064

 

$

13,038

$

8,774

 

$

22,640

Less
Cataract IOL sales return reserve

 

742

 

 

-

 

742

 

 

-

Cataract IOL inventory reserve

 

2,800

 

 

-

 

2,800

 

 

-

Cataract IOL intangible impairment

 

154

 

 

-

 

154

 

 

-

Income tax benefit on Cataract IOL

 

(405

)

 

-

 

(405

)

 

-

Adjusted net income for ICL

 

9,355

 

 

13,038

 

12,065

 

 

22,640

Less:
Foreign currency impact

 

1,890

 

 

1,860

 

1,856

 

 

2,775

Stock-based compensation expense

 

8,423

 

 

5,754

 

14,488

 

 

9,648

Net income (adjusted)

$

19,668

 

$

20,652

$

28,409

 

$

35,063

 
Net income per share, basic (as reported)

$

0.13

 

$

0.27

$

0.18

 

$

0.47

Cataract IOL sales return reserve

 

0.02

 

 

-

 

0.02

 

 

-

Cataract IOL inventory reserve

 

0.06

 

 

-

 

0.06

 

 

-

Cataract IOL intangible impairment

 

-

 

 

-

 

-

 

 

-

Income tax benefit on Cataract IOL

 

(0.01

)

 

-

 

(0.01

)

 

-

Adjusted net income for ICL per share, basic

 

0.19

 

 

0.27

 

0.25

 

 

0.47

Foreign currency impact

 

0.04

 

 

0.04

 

0.04

 

 

0.06

Stock-based compensation expense

 

0.17

 

 

0.12

 

0.30

 

 

0.20

Net income per share, basic (adjusted)

$

0.41

 

$

0.43

$

0.59

 

$

0.73

 
Net income per share, diluted (as reported)

$

0.12

 

$

0.26

$

0.18

 

$

0.46

Cataract IOL sales return reserve

 

0.01

 

 

-

 

0.01

 

 

-

Cataract IOL inventory reserve

 

0.06

 

 

-

 

0.06

 

 

-

Cataract IOL intangible impairment

 

-

 

 

-

 

-

 

 

-

Income tax benefit on Cataract IOL

 

(0.01

)

 

-

 

(0.01

)

 

-

Adjusted net income for ICL per share, diluted

 

0.19

 

 

0.26

 

0.24

 

 

0.46

Foreign currency impact

 

0.04

 

 

0.04

 

0.04

 

 

0.06

Stock-based compensation expense

 

0.17

 

 

0.12

 

0.29

 

 

0.19

Net income per share, diluted (adjusted)

$

0.40

 

$

0.42

$

0.57

 

$

0.71

 
Weighted average shares outstanding - Basic

 

48,418

 

 

47,889

 

48,333

 

 

47,822

Weighted average shares outstanding - Diluted

 

49,516

 

 

49,223

 

49,524

 

 

49,264

 
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
June 30, 2023 Effect of Constant July 1, 2022 As Reported Constant Currency
Sales Currency Currency $ Change % Change $ Change % Change
ICL

$

93,112

 

$

390

 

$

93,502

 

$

77,922

$

15,190

 

19.5

%

$

15,580

 

20.0

%

 
Cataract IOL

 

40

 

 

2

 

 

42

 

 

2,547

 

(2,507

)

-98.4

%

 

(2,505

)

-98.4

%

Other

 

(846

)

 

(15

)

 

(861

)

 

632

 

(1,478

)

-233.9

%

 

(1,493

)

-236.2

%

Other Products

 

(806

)

 

(13

)

 

(819

)

 

3,179

 

(3,985

)

-125.4

%

 

(3,998

)

-125.8

%

 
Total Sales

$

92,306

 

$

377

 

$

92,683

 

$

81,101

$

11,205

 

13.8

%

$

11,582

 

14.3

%

 
Six Months Ended
June 30, 2023 Effect of Constant July 1, 2022 As Reported Constant Currency
Sales Currency Currency $ Change % Change $ Change % Change
ICL

$

163,737

 

$

2,116

 

$

165,853

 

$

136,597

$

27,140

 

19.9

%

$

29,256

 

21.4

%

 
Cataract IOL

 

1,516

 

 

159

 

 

1,675

 

 

5,449

 

(3,933

)

-72.2

%

 

(3,774

)

-69.3

%

Other

 

581

 

 

112

 

 

693

 

 

2,255

 

(1,674

)

-74.2

%

 

(1,562

)

-69.3

%

Other Products

 

2,097

 

 

271

 

 

2,368

 

 

7,704

 

(5,607

)

-72.8

%

 

(5,336

)

-69.3

%

 
Total Sales

$

165,834

 

$

2,387

 

$

168,221

 

$

144,301

$

21,533

 

14.9

%

$

23,920

 

16.6

%

 

Investors and Media

Brian Moore

Vice President, Investor, Media Relations and Corporate Development

(626) 303-7902, Ext. 3023

bmoore@staar.com

Source: STAAR Surgical Company

FAQ

What were STAAR Surgical's net sales for Q2 2023?

STAAR Surgical reported net sales of $92.3 million for Q2 2023.

How much were the ICL sales for Q2 2023?

ICL sales reached a record high of $93.1 million for Q2 2023.

What was the gross margin for Q2 2023?

The gross margin for Q2 2023 was 76.6%.

What was the net income per share for Q2 2023?

The net income per share for Q2 2023 was $0.12.

How much cash, cash equivalents, and investments did STAAR Surgical have at the end of Q2 2023?

STAAR Surgical had $209.5 million in cash, cash equivalents, and investments at the end of Q2 2023.

Staar Surgical Co

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