Health News
STAAR SURGICAL REPORTS 38% SECOND QUARTER REVENUE GROWTH
Second Quarter Highlights
Corporate Highlights
-- Record quarterly revenue for the third consecutive quarter
-- Total sales grew 38% year-over-year to a quarterly record of $20.7
million
-- Total international sales grew 58% year-over-year
-- US sales recorded first year-over-year increase since Q4 2006
-- Gross margins improved to 56% from 49%, highest level since Q4 2004
-- US operating expenses declined by $1 million
-- Operating expenses declined to 65% of sales from 73%
-- Net loss at its lowest level since Q2 2005
-- Cash used for operations during the quarter declined 35% year-over-year
-- Management to present at upcoming BMO Focus on Healthcare Conference
and Noble Financial Mad Max Equity Conference in August
Visian ICL Highlights
-- International ICL sales grew 41% and Domestic Visian ICL sales grew by
39%, despite ailing economy
-- ICL sales in China and Japan more than doubled year-over-year
-- U.S. consumer media coverage continues to expand awareness
-- Media focus on complications of LASIK refractive surgery driving
consumer interest in alternatives to LASIK
-- Introduced updated and consumer friendly Visian website,
http://www.visianinfo.com
IOL Highlights
-- Global cataract sales increased by 38%
-- Obtained New Technology Intraocular Lens (NTIOL) approval from the
Centers for Medicare and Medical Services (CMS) for two additional IOL
products which will now allow STAAR to compete more effectively in the
US market
STAAR Japan Highlights
-- Sales for the quarter were $3.3 million and $6.1 million for the first
six months of the year, excluding ICLs, which is on track to meet or
exceed $12 million for the year
-- Gross margin, profitability and cash usage on track for first half of
2008
-- Plan calls for continued operating performance improvements in second
half of 2008
"During the quarter, we began to show the growth potential of STAAR
Surgical, while maintaining our recent fiscal discipline," said
"Last week, we achieved two significant milestones which are critical to our seven step strategy to return our domestic IOL business to profitability. The CMS designation of two additional new aspheric cataract lenses as New Technology Intraocular Lenses allows us to more effectively compete in the U.S. market while improving our average selling prices and gross margins. Having completed to date four steps of our domestic IOL strategy, we now have three steps remaining. Our goal is to successfully complete all by the first half of 2009.
"While sales were strong, we also continued our efforts to lower costs,
reduce cash burn and improve profitability," added Mr. Caldwell. "We reduced
operating cash burn by approximately 35% compared to the second quarter of
last year, and we continued to decrease operating expenses in the US. Our
efforts to lower expenses in the US have good momentum. For the second half
we have already identified areas for reduced spending and margin improvement
within our international operations. The integration of STAAR Japan has gone
very smoothly, and we are confident about our ability to achieve our operating
expense goals in
Financial Highlights for the Second Quarter Ended
Total product sales were
Total product sales for the first six months of 2008 were
Gross profit margin was 55.8% compared with 48.5% in the second quarter of
2007. Gross profit margin for the first six months of 2008 was 49.9%,
compared with 48.7% in the first six months of 2007. First quarter gross
margin was reduced by non-cash purchasing accounting revaluations of inventory
acquired in the STAAR Japan acquisition and sold in that quarter. The
significant improvement in gross profit margin during the second quarter is
due to increased sales of ICLs globally and
General and administrative expenses were
Marketing and selling expenses were
Research and development expenses were
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 11113294#. To access the live webcast of the call, go to STAAR Surgical's website at http://www.staar.com. An archived webcast will also be available at http://www.staar.com.
About STAAR Surgical
STAAR Surgical is a leader in the development, manufacture and marketing
of minimally invasive ophthalmic products employing proprietary technologies.
STAAR's products are used by ophthalmic surgeons and include the Visian ICL, a
tiny, flexible lens implanted to correct refractive errors, as well as
innovative products designed to improve patient outcomes for cataracts and
glaucoma. Manufactured in
Safe Harbor
All statements in this press release that are not statements of historical fact are forward-looking statements, including any projections of earnings, revenue, sales, cash or other financial items, any statements of the plans, strategies, and objectives of management for future operations or prospects for achieving such plans, strategies or objectives, any statements regarding expectations for success of the ICL, TICL or other products in the U.S. or international markets, prospects for returning U.S. cataract product line to profitability, any statements regarding 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 our limited capital resources and limited access to financing, the challenge of fully integrating STAAR Japan into our business and managing our other foreign subsidiaries, the need to realize product development goals to improve profitability of our U.S. IOL product line, our ability to address 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, the effect of a possible U.S. recession on elective procedures such as refractive surgery, and the potential effect of recent negative publicity about LASIK on the demand for refractive surgery in general in the U.S. STAAR assumes no obligation to update these forward-looking statements to reflect future events or actual outcomes and does not intend to do so.
CONTACT: Investors Media
EVC Group EVC Group
Douglas Sherk, 415-896-6820 Steve DiMattia 646-201-5445
Dahlia Bailey, 415-896-5860
STAAR Surgical Company
Condensed Consolidated Statements of Income
(In 000's except for per share data)
Unaudited
Three Months Ended Six Months Ended
June 27, June 29, June 27, June 29,
2008 2007 2008 2007
Sales $20,665 $14,932 $38,625 $29,849
Cost of sales 9,131 7,695 19,336 15,317
Gross profit 11,534 7,237 19,289 14,532
General and administrative 3,520 3,005 7,961 5,789
Marketing and selling 7,646 6,270 14,113 12,372
Research and development 2,357 1,634 4,075 3,244
Loss on settlement of pre-existing
distribution arrangement - - 3,850 -
Total selling, general and
administrative expenses: 13,523 10,909 29,999 21,405
Operating loss (1,989) (3,672) (10,710) (6,873)
Other income (expense), net (160) (419) (121) (471)
Loss before income taxes (2,149) (4,091) (10,831) (7,344)
Income tax provision 396 266 654 534
Net loss $(2,545) $(4,357) $(11,485) $(7,878)
Basic and diluted loss per share $(0.09) $(0.16) $(0.39) $(0.29)
Weighted average shares outstanding 29,488 28,041 29,488 26,845
STAAR Surgical Company
Global Sales
(in 000's)
Unaudited
Three Months Ended Six Months Ended
Geographic June 27, June 29, June 27, June 29,
Sales 2008 2007 % Change 2008 2007 % Change
United States $5,198 $5,158 0.8% $9,722 $10,252 -5.2%
Germany 6,976 5,683 22.8% 13,416 11,729 14.4%
Japan 3,529 104 3293.3% 6,481 179 3520.7%
Korea 890 750 18.7% 1,640 1,529 7.3%
Other 4,072 3,237 25.8% 7,366 6,160 19.6%
Total Sales $20,665 $14,932 38.4% $38,625 $29,849 29.4%
Product Sales
Cataract
IOLs $8,787 $6,112 43.8% $16,735 $12,185 37.3%
Other Cataract 6,158 4,721 30.4% 11,622 9,671 20.2%
Total
Cataract 14,945 10,833 38.0% 28,357 21,856 29.7%
Refractive
ICL/TICL 5,405 3,845 40.6% 9,684 7,439 30.2%
Other Refractive 129 98 31.6% 225 224 0.4%
Total Refractive 5,534 3,943 40.3% 9,909 7,663 29.3%
Glaucoma 186 156 19.2% 359 330 8.8%
Total Sales $20,665 $14,932 38.4% $38,625 $29,849 29.4%
STAAR Surgical Company
Condensed Consolidated Balance Sheet
(in 000's)
Unaudited
June 27, December 28,
2008 2007
Cash, cash equivalents, and short-
term investments - restricted $8,922 $11,045
Accounts receivable trade, net 10,417 6,898
Inventories 15,572 12,741
Prepaids, deposits, and other current
assets 2,468 1,610
Total current assets 37,379 32,294
Property, plant, and equipment, net 6,385 5,772
Intangible assets, net 6,561 3,959
Goodwill, net 7,534 7,534
Advance payment for acquisition of
Canon Staar - 4,000
Other assets 1,041 620
Total assets $58,900 $54,179
Accounts payable $7,937 $4,823
Deferred income taxes - current 105 102
Obligations under capital leases -
current 929 822
Line of Credit 1,860 -
Other current liabilities 6,442 5,541
Total current liabilities 17,273 11,288
Notes payable - long-term, net of
discount 4,284 4,166
Obligations under capital leases -
long-term 1,306 1,311
Deferred income taxes - long-term 753 570
Other long-term liabilities 1,489 619
Total liabilities 25,105 17,954
Series A convertible preferred stock 6,760 -
Stockholders' equity - net 27,035 36,225
Total liabilities, convertible
preferred stock and equity $58,900 $54,179
STAAR Surgical Company
Condensed Consolidated Statements of Cash Flows
(in 000's)
Unaudited
Six Months Ended
June 27, June 29,
2008 2007
Cash flows from operating activities:
Net loss $(11,485) $(7,878)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation of property, plant
and equipment 1,340 957
Amortization of intangibles 418 240
Amortization of notes payable
discount 118 17
Loss on extinguishment of notes
payable - 233
Fair value adjustment of warrant 2 (100)
Loss on disposal of property and
equipment 84 80
Equity in operations of joint
venture - (85)
Stock-based compensation expense 825 740
Loss on settlement of pre-
existing distribution
arrangement 3,850 -
Other (74) 107
Changes in working capital:
Accounts receivable (2,716) (520)
Inventories 2,034 74
Prepaids, deposits and other
current assets (487) (18)
Accounts payable (753) (542)
Other current liabilities 714 (269)
Net cash used in operating
activities (6,130) (6,964)
Cash flows from investing activities:
Cash acquired in acquisition of
Canon Staar, net of acquisition
costs 2,511 -
Acquisition of property, plant
and equipment (415) (242)
Proceeds from sale of property,
plant and equipment 89 -
Proceeds from sale of short-term
investments - restricted 79 -
Dividend received from joint
venture - 117
Net change in other assets (63) (16)
Net cash provided by (used
in) investing activities 2,201 (141)
Cash flows from financing activities:
Proceeds from notes payable - 4,000
Repayments of notes payable - (4,000)
Borrowings under lines of credit 3,800 1,812
Repayments of lines of credit (1,900) (3,610)
Repayment of capital lease lines
of credit (419) (310)
Proceeds from private placement - 16,810
Proceeds from the exercise of
stock options - 584
Net cash (used in) provided
by financing activities 1,481 15,286
Effect of exchange rate changes on
cash and cash equivalents 404 143
(Decrease) increase in cash and cash
equivalents (2,044) 8,324
Cash and cash equivalents, at
beginning of the period 10,895 7,758
Cash and cash equivalents, at end of
the period $8,851 $16,082
SOURCE STAAR Surgical Company
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