STAAR Surgical Reports Fourth Quarter and Full Year 2018 Results
MONROVIA, Calif.--(BUSINESS WIRE)--Feb 21, 2019--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 full year ended December 28, 2018.
Fourth Quarter 2018 Overview
Full Year 2018 Overview
“2018 was a breakout year for STAAR. The transformation of the business over the past two years has created a strong trajectory toward paradigm change in refractive vision correction delivering visual freedom. Lens based correction of Myopia is becoming a preferred surgical solution and EVO ICL only clinics are opening in Asia and Europe. We expect our momentum to continue with strong clinical evidence from refractive surgeons publishing ever more data supporting the safety and effectiveness of the ICL,” said Caren Mason, President and CEO. “Surgeons refer to the ICL patient as their ‘happiest patients’ and 99.4% of patients in a Patient Registry said they would have the procedure again. As such, we far exceeded our projection of breaking the $100.0 million revenue mark in 2018 by achieving $124.0 million in revenue. In fact, our ICL sales alone recorded $101.1 million in sales. My appreciation to the entire STAAR team and our surgeon partners around the globe for such outstanding performance.”
Financial Overview – Q4 2018
Net sales were $31.2 million for the fourth quarter of 2018, up 26% compared to $24.9 million reported in the prior year quarter. The sales increase was driven by ICL revenue and unit growth of 41% and 54%, respectively. Other Product Sales decreased 20% compared to the prior year quarter. ICL revenue was 84% of total Net sales for the fourth quarter of 2018.
Gross profit margin for the fourth quarter of 2018, was 73.7% compared to the prior year period of 69.9%. The increase in gross profit margin for the quarter is due to favorable product mix resulting from increased sales of ICLs, and lower freight and inventory provisions, partially offset by the effect of lower average selling prices (ASPs) for lower diopter ICLs and large volume commitment strategic partners.
Operating expenses for the quarter were $21.8 million compared to the prior year quarter of $18.6 million. General and administrative expenses were $6.2 million compared to the prior year quarter of $5.1 million. The increase in general and administrative expenses was due to increased headcount and salary-related expenses including stock-based compensation and increased facility costs. Marketing and selling expenses were $9.9 million compared to the prior year quarter of $7.9 million. The increase in marketing and selling expenses was due to increased headcount and salary-related expenses including stock-based compensation and investments in digital, strategic, and consumer marketing. Research and development expenses were $5.7 million compared to the prior year quarter of $5.6 million. The increase in research and development expenses was due to an increase in headcount and salary-related expenses including stock-based compensation, and increased clinical expenses associated with our clinical trial for the next generation ICL with EDOF optic.
Net income for the fourth quarter of 2018 was $1.1 million or approximately $0.02 per share compared with a net loss of ($0.1) million or ($0.00) per share for the prior year quarter. Non-GAAP Adjusted Net Income for the fourth quarter of 2018 was $3.2 million or $0.07 per share compared to $0.8 million or $0.02 per share for the prior year quarter. The reconciliation between GAAP and non-GAAP financial information is provided in the financial tables included with this release.
Financial Overview – Full Year 2018
Net sales were $124.0 million for FY 2018, up 37% compared to $90.6 million reported in the prior year. The sales increase was driven by ICL revenue and unit growth of 48% and 54%, respectively. Other Products Sales increased 3% compared to the prior year. ICL revenue was 82% of total Net sales for FY 2018.
Gross profit margin for FY 2018 increased to 73.8% of revenue compared to 70.9% of revenue for fiscal 2017. The increase in gross profit margin for the year is due to favorable product mix resulting from increased sales of ICLs, and lower unit costs, freight costs, and inventory provisions, partially offset by the effect of lower ASPs for lower diopter ICLs and large volume commitment strategic partners.
Operating expenses for FY 2018 were $84.9 million compared to prior year of $67.9 million. The increase in operating expense is due to increased headcount and salary-related expenses including stock-based compensation and increased investments in digital, consumer, and strategic marketing.
Net income for full year 2018 was $5.0 million or approximately $0.11 per share compared with a net loss of $2.1 million or $0.05 per share for the prior year. Non-GAAP Adjusted Net Income for full year 2018 was $12.6 million or $0.28 per share, compared with a Non-GAAP Adjusted Net Income of $0.4 million or $0.01 per share for FY 2017. The reconciliation between GAAP and non-GAAP financial information is provided in the financial tables included with this release.
Cash, cash equivalents and restricted cash at December 28, 2018 totaled $104.0 million, compared to $18.6 million at the end of the fourth quarter of 2017. The Company generated $12.8 million in cash from operations in fiscal 2018 and raised $72.2 million in gross proceeds from the sale of approximately 2 million shares of common stock to increase its cash balances.
Outlook – Full Year 2019
The Company reaffirms its Outlook as follows:
The Company will host a conference call and webcast on Thursday, February 21, 2019 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 2888737), please dial 855-765-5684 for domestic participants and 262-912-6252 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 (Conference ID 2888737) will be available beginning approximately one hour after the call’s conclusion for seven days. This replay can be accessed by dialing 855-859-2056 for domestic callers and 404-537-3406 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” and “Adjusted Net Income Per Share” exclude the following items that are included in “Net Income (Loss)” as calculated in accordance with U.S. generally accepted accounting principles (“GAAP”): gain or loss on foreign currency transactions, stock-based compensation expenses, and quality remediation expenses. Management believes that “Adjusted Net Income” and “Adjusted Net Income Per Share” 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 quality remediation expenses because their inclusion may mask underlying trends in our business performance.
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. In calculating Adjusted Net Income and Adjusted Net Income Per Share, STAAR excludes these expenses because they are non-cash expenses and because of the complexity and 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.
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 900,000 Visian ICLs have been implanted to date. To learn more about the ICL go to: www.discovericl.com. STAAR has approximately 400 full-time equivalent employees and markets lenses in over 75 countries. Headquartered in Monrovia, CA, the company operates manufacturing facilities in Aliso Viejo, CA and Monrovia, CA. For more information, please visit the Company’s website at www.staar.com.
All statements in this press release that are not statements of historical fact are forward-looking statements, including statements about any of the following: any financial projections, including those relating to the plans, strategies, and objectives of management for 2019 or prospects for achieving such plans, expectations for sales, revenue, or earnings, and any statements of assumptions underlying any of the foregoing. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth in the Company’s Annual Report on Form 10-K for the year ended December 29, 2017 and on the Company’s Current Report on Form 8-K on August 10, 2018, under the caption “Risk Factors,” respectively which are 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 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; potential international trade disputes; and the willingness of surgeons and patients to adopt a new or improved product and procedure. The Visian ICL with CentraFLOW, now known as EVO Visian ICL, is not yet approved for sale in the United States.
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CONTACT: Investors & Media
Brian Moore, 310-579-6199
Doug Sherk, 415-652-9100
KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA
INDUSTRY KEYWORD: SURGERY HEALTH MEDICAL DEVICES OPTICAL
SOURCE: STAAR Surgical Company
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PUB: 02/21/2019 04:01 PM/DISC: 02/21/2019 04:01 PM