Full Press Release Details
Director, Investor Relations, Corporate Strategy & Development (949) 481-0510
Glaukos Corporation Announces Fourth Quarter and Full Year 2020
San Clemente, CA - February 25, 2021 - Glaukos Corporation (NYSE: GKOS), an ophthalmic medical technology and pharmaceutical company focused on novel therapies for the treatment of glaucoma, corneal disorders and retinal diseases, today announced financial results for the fourth quarter and full year ended December 31, 2020. Key highlights include:
"Our solid fourth quarter performance marks the end of an unprecedented year in which our teams displayed an unwavering commitment to advance our key strategic priorities and execute our plans despite the unique challenges associated with the ongoing COVID-19 pandemic," said Thomas Burns, Glaukos president and chief executive officer. "While we maintain near-term caution as uncertainties associated with COVID-19 persist, I am confident in our execution and the longer-term fundamental prospects of our business remain strong as we advance our mission to transform the treatment of chronic eye diseases for the benefit of patients worldwide."
Fourth Quarter 2020 Financial Results
Net sales increased 11% in the fourth quarter of 2020 to $73.2 million, compared to $65.8 million in the same period in 2019.
Gross margin for the fourth quarter of 2020 was approximately 73%, compared to approximately 76% in the same period in 2019. Non-GAAP gross margin for the fourth quarter of 2020 was approximately 83%, compared to approximately 85% in the same period in 2019.
Selling, general and administrative (SG&A) expenses for the fourth quarter of 2020 decreased 27% to $43.8 million, compared to $59.6 million in the same period in 2019. Non-GAAP SG&A expenses for the fourth quarter of 2020 rose 6% to $40.2 million, compared to $38.0 million in the same period in 2019.
Research and development (R&D) expenses for the fourth quarter of 2020 rose 6% to $21.2 million, compared to $20.0 million in the same period in 2019. Non-GAAP R&D expenses for the fourth quarter of 2020 rose 6% to $21.3 million, compared to $20.0 million in the same period in 2019.
Loss from operations in the fourth quarter of 2020 was $11.4 million, compared to operating loss of $29.7 million in the fourth quarter of 2019. Non-GAAP loss from operations in the fourth quarter of 2020 was $0.4 million, compared to non-GAAP operating loss of $2.3 million in the fourth quarter of 2019.
Net loss in the fourth quarter of 2020 was $10.6 million, or ($0.24) per diluted share, compared to net income of $36.6 million, or $0.84 per diluted share, in the fourth quarter of 2019. Non-GAAP net loss in the fourth quarter of 2020 was $0.8 million, or ($0.02) per diluted share, compared to non-GAAP net loss of $2.4 million, or ($0.06) per diluted share, in the fourth quarter of 2019.
Full Year 2020 Financial Results
Net sales decreased 5% in 2020 to $225.0 million, compared to $237.0 million in 2019.
Gross margin for 2020 was approximately 59%, compared to approximately 84% in 2019. Non-GAAP gross margin for 2020 was approximately 83%, compared to approximately 86% in 2019.
Selling, general and administrative (SG&A) expenses in 2020 decreased 3% to $171.4 million, compared to $176.6 million in 2019. Non-GAAP SG&A expenses in 2020 rose 10% to $152.3 million, compared to $139.1 million in 2019.
Research and development (R&D) expenses in 2020 rose 25% to $85.4 million, compared to $68.3 million in 2019. Non-GAAP R&D expenses in 2020 rose 21% to $82.9 million, compared to $68.3 million in 2019.
Loss from operations in 2020 was $123.6 million, compared to operating loss of $50.3 million in 2019. Non-GAAP loss from operations in 2020 was $48.2 million, compared to non-GAAP operating loss of $3.1 million in 2019.
Net loss in 2020 was $120.3 million, or ($2.70) per diluted share, compared to net income of $15.4 million, or $0.37 per diluted share, in 2019. Non-GAAP net loss in 2020 was $51.1 million, or ($1.15) per diluted share, compared to non-GAAP net loss of $3.8 million, or ($0.10) per diluted share, in 2019.
The company ended the fourth quarter of 2020 with $413.9 million in cash and cash equivalents, short-term investments and restricted cash.
First Quarter 2021 Revenue Guidance
The company expects the first quarter of 2021 net sales to increase approximately 15% to 20% compared to the first quarter of 2020.
Webcast & Conference Call
The company will host a conference call and simultaneous webcast today at 1:30 p.m. PST (4:30 p.m. EST) to discuss the results and provide additional information about the company's financial outlook. A link to the webcast is available on the company's website at http://investors.glaukos.com. To participate in the conference call, please dial 833-231-8262 (U.S.) or 647-689-4107 (international) and enter Conference ID 4167849. A replay of the webcast will be archived on the company's website following completion of the call.
Glaukos (www.glaukos.com) is an ophthalmic medical technology and pharmaceutical company focused on novel therapies for the treatment of glaucoma, corneal disorders and retinal diseases. The company pioneered Micro-Invasive Glaucoma Surgery, or MIGS, to revolutionize the traditional glaucoma treatment
and management paradigm. Glaukos launched the iStent , its first MIGS device, in the United States in 2012, its next-generation iStent inject device in the United States in 2018 and most recently, its iStent inject W device in the United States in 2020. In corneal health, Glaukos' proprietary suite of single-use, bio-activated pharmaceuticals are designed to strengthen, stabilize and reshape the cornea through a process called corneal collagen cross-linking to treat corneal ectatic disorders and correct refractive conditions. Glaukos is leveraging its platform technology to build a comprehensive and proprietary portfolio of micro- scale surgical and pharmaceutical therapies in glaucoma, corneal health and retinal disease.
Forward-Looking Statements
This communication contains "forward-looking statements" within the meaning of federal securities laws. All statements other than statements of historical facts included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward- looking statements. These statements are based on management's current expectations, assumptions, estimates and beliefs. Although we believe that we have a reasonable basis for forward-looking statements contained herein, we caution you that they are based on current expectations about future events affecting us and are subject to risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that may cause our actual results to differ materially from those expressed or implied by forward-looking statements in this press release. These potential risks and uncertainties that could cause actual results to differ materially from those described in forward-looking statements include, without limitation, uncertainties regarding the duration and severity of the COVID-19 pandemic and its impact on our business or the economy generally; our ability to continue to generate sales of our commercialized products and develop and commercialize additional products; our dependence on a limited number of third-party suppliers, some of which are single- source, for components of our products; the occurrence of a crippling accident, natural disaster, or other disruption at our primary facility, which may materially affect our manufacturing capacity and operations; securing or maintaining adequate coverage or reimbursement by third-party payors for procedures using the iStent, the iStent inject, the iStent inject W, our corneal cross-linking products or other products in development of our products; our ability to properly train, and gain acceptance and trust from ophthalmic surgeons in the use of our products; our ability to compete effectively in the medical device industry and against current and future competitors (including MIGS competitors); our compliance with federal, state and foreign laws and regulations for the approval and sale and marketing of our products and of our manufacturing processes; the lengthy and expensive clinical trial process and the uncertainty of timing and outcomes from any particular clinical trial; the risk of recalls or serious safety issues with our products and the uncertainty of patient outcomes; our ability to protect, and the expense and time-consuming nature of protecting our intellectual property against third parties and competitors and the impact of any claims against us for infringement or misappropriation of third party intellectual property rights and any related litigation; and our ability to service our indebtedness. These and other known risks, uncertainties and factors are described in detail under the caption "Risk Factors" and elsewhere in our filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, which was filed with the Securities and Exchange Commission on November 5, 2020, and will also be included in our Annual Report on Form 10-K for 2020, which we expect to file on or before March 1, 2021. Our filings with the Securities and Exchange Commission are available in the Investor Section of our website at www.glaukos.com or at www.sec.gov. In addition, information about the risks and benefits of our products is available on our website at www.glaukos.com. All forward-looking statements included in this press release are expressly qualified in their entirety by the foregoing cautionary statements. You are cautioned not to place undue reliance on the forward-looking statements in this press release, which speak only as of the date hereof. We do not undertake any obligation to update, amend or clarify these forward- looking statements whether as a result of new information, future events or otherwise, except as may be required under applicable securities law.
Statement Regarding Use of Non-GAAP Financial Measures
To supplement the consolidated financial results prepared in accordance with Generally Accepted Accounting Principles ("GAAP"), the Company uses certain non-GAAP historical financial measures. Management makes adjustments to the GAAP measures for items (both charges and gains) that (a) do not reflect the core operational activities of the Company, (b) are commonly adjusted within the Company's industry to enhance comparability of the Company's financial results with those of its peer group, or (c) are inconsistent in amount or frequency between periods (albeit such items are monitored and controlled with equal diligence relative to core operations). The Company uses the term "Non-GAAP" to exclude intellectual property litigation income and expenses, amortization of intangible assets, fair value adjustments to contingent consideration liabilities arising from acquisitions, costs and expenses associated with acquisitions and integration, costs associated with enterprise system upgrades, certain inventory write- off charges, in-process R&D charges, amortization of debt discount and associated issuance costs related to the company's convertible senior debt offering, significant discrete income and other tax adjustments related to transactions as well as changes in estimated acquisition-date tax effects associated with business combinations, and the impact from implementation of tax law changes and settlements. See "GAAP to Non-GAAP Reconciliations" for a reconciliation of each non-GAAP measure presented to the comparable GAAP financial measure.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
| Three Months Ended | Year Ended | |||||||||||
| December 31, | December 31, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Net sales | $ | 73,234 | $ | 65,849 | $ | 224,959 | $ | 236,984 | ||||
| Cost of sales | 19,590 | 15,904 | 91,719 | 38,588 | ||||||||
| Gross profit | 53,644 | 49,945 | 133,240 | 198,396 | ||||||||
| Operating expenses: | ||||||||||||
| Selling, general and administrative | 43,792 | 59,611 | 171,401 | 176,635 | ||||||||
| Research and development | 21,244 | 20,031 | 85,392 | 68,308 | ||||||||
| In-process research and development | - | - | - | 3,745 | ||||||||
| Total operating expenses | 65,036 | 79,642 | 256,793 | 248,688 | ||||||||
| Loss from operations | (11,392) | (29,697) | (123,553) | (50,292) | ||||||||
| Non-operating (expense) income: | ||||||||||||
| Interest income | 498 | 801 | 2,379 | 3,169 | ||||||||
| Interest expense | (5,631) | (524) | (14,115) | (2,565) | ||||||||
| Other income (expense), net | 2,634 | 160 | 2,975 | (348) | ||||||||
| Total non-operating (expense) income | (2,499) | 437 | (8,761) | 256 | ||||||||
| Loss before taxes | (13,891) | (29,260) | (132,314) | (50,036) | ||||||||
| Income tax benefit | (3,243) | (65,841) | (11,966) | (65,460) | ||||||||
| Net (loss) income | $ | (10,648) | $ | 36,581 | $ | (120,348) | $ | 15,424 | ||||
| Basic net (loss) income per share | $ | (0.24) | $ | 0.92 | $ | (2.70) | $ | 0.41 | ||||
| Diluted net (loss) income per share | $ | (0.24) | $ | 0.84 | $ | (2.70) | $ | 0.37 | ||||
| Weighted average shares used to compute basic net (loss) income per share | 45,054 | 39,840 | 44,497 | 37,355 | ||||||||
| Weighted average shares used to compute diluted net (loss) income per share | 45,054 | 43,365 | 44,497 | 41,145 |
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par values)
| December 31, | December 31, | |||||
| 2020 | 2019 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 96,596 | $ | 62,430 | ||
| Short-term investments | 307,772 | 111,553 | ||||
| Accounts receivable, net | 36,059 | 38,417 | ||||
| Inventory, net | 15,809 | 42,578 | ||||
| Prepaid expenses and other current assets | 13,206 | 7,900 | ||||
| Total current assets | 469,442 | 262,878 | ||||
| Restricted cash | 9,566 | 9,326 | ||||
| Property and equipment, net | 24,008 | 22,056 | ||||
| Operating lease right-of-use asset | 20,009 | 15,704 | ||||
| Finance lease right-of-use asset | 51,443 | 54,048 | ||||
| Intangible assets, net | 357,693 | 382,605 | ||||
| Goodwill | 66,134 | 66,134 | ||||
| Deposits and other assets | 7,207 | 5,649 | ||||
| Total assets | $ | 1,005,502 | $ | 818,400 | ||
| Liabilities and stockholders' equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 4,371 | $ | 5,781 | ||
| Accrued liabilities | 45,331 | 51,919 | ||||
| Total current liabilities | 49,702 | 57,700 | ||||
| Convertible senior notes | 189,416 | - | ||||
| Operating lease liability | 20,704 | 14,195 | ||||
| Finance lease liability | 60,690 | 58,435 | ||||
| Deferred tax liability, net | 10,512 | 9,632 | ||||
| Other liabilities | 7,029 | 5,166 | ||||
| Total liabilities | 338,053 | 145,128 | ||||
| Stockholders' equity: | ||||||
| Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued and outstanding | - | - | ||||
| Common stock, $0.001 par value; 150,000 shares authorized; 45,275 and 43,530 shares issued and 45,247 and 43,502 shares outstanding at December 31, 2020 and December 31, 2019, respectively | 45 | 44 | ||||
| Additional paid-in capital | 976,590 | 861,740 | ||||
| Accumulated other comprehensive income | 1,004 | 1,330 | ||||
| Accumulated deficit | (310,058) | (189,710) | ||||
| Less treasury stock (28 shares as of December 31, 2020 and December 31, 2019) | (132) | (132) | ||||
| Total stockholders' equity | 667,449 | 673,272 | ||||
| Total liabilities and stockholders' equity | $ | 1,005,502 | $ | 818,400 |
GLAUKOS CORPO RATION
GAAP to Non-GAAP Reconciliations
(in thousands, except per share amounts)
| Q4 2020 | Q4 2019 | ||||||||||||||||||
| GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | ||||||||||||||
| Cost of sales | $ | 19,590 | $ | (7,417) | (a)(c)(d)(g) | $ | 12,173 | $ | 15,904 | (5,823) | (a)(b)(k) | $ | 10,081 | ||||||
| Gross profit | $ | 53,644 | $ | 7,417 | $ | 61,061 | $ | 49,945 | 5,823 | $ | 55,768 | ||||||||
| Operating expenses: | |||||||||||||||||||
| Selling, general and administrative | $ | 43,792 | $ | (3,622) | (d)(e)(f)(g)(h) | $ | 40,170 | $ | 59,611 | $ | (21,623) | (e)(f)(g) | $ | 37,988 | |||||
| Research and development | $ | 21,244 | $ | 71 | (d)(g) | $ | 21,315 | $ | 20,031 | - | $ | 20,031 | |||||||
| Total operating expenses | $ | 65,036 | $ | (3,551) | $ | 61,485 | $ | 79,642 | $ | (21,623) | $ | 58,019 | |||||||
| Loss from operations | $ | (11,392) | $ | 10,968 | $ | (424) | $ | (29,697) | $ | 27,446 | $ | (2,251) | |||||||
| Non-operating (expense) income: | |||||||||||||||||||
| Interest expense | (5,631) | 2,740 | (i) | (2,891) | (524) | - | (524) | ||||||||||||
| Total non-operating (expense) income | (2,499) | 2,740 | 241 | 437 | - | 437 | |||||||||||||
| (Loss) income before taxes | (13,891) | 13,708 | (183) | (29,260) | 27,446 | (1,814) | |||||||||||||
| Income tax (benefit) provision | (3,243) | 3,830 | (j) | 587 | (65,841) | 66,398 | (j) | 557 | |||||||||||
| Net (loss) income | $ | (10,648) | $ | 9,878 | (l) | $ | (770) | $ | 36,581 | $ | (38,952) | (l) | $ | (2,371) | |||||
| Diluted net (loss) income per share | $ | (0.24) | $ | (0.02) | $ | 0.84 | $ | (0.06) |
GAAP to Non-GAAP Reconciliations
(in thousands, except per share amounts) (Unaudited)
| Full Year 2020 | Full Year 2019 | ||||||||||||||||||
| GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | ||||||||||||||
| Cost of sales | $ | 91,719 | $ | (53,784) | (a)(b)(c)(d)(e)(i) | $ | 37,935 | $ | 38,588 | (5,823) | (a)(b)(m) | $ | 32,765 | ||||||
| Gross profit | $ | 133,240 | $ | 53,784 | $ | 187,024 | $ | 198,396 | 5,823 | $ | 204,219 | ||||||||
| Operating expenses: | |||||||||||||||||||
| Selling, general and administrative | $ | 171,401 | $ | (19,107) | (e)(f)(g)(h)(i)(j) | $ | 152,294 | $ | 176,635 | $ | (37,580) | (g)(h)(i) | $ | 139,055 | |||||
| Research and development | $ | 85,392 | $ | (2,451) | (e)(f)(i) | $ | 82,941 | $ | 68,308 | - | $ | 68,308 | |||||||
| In-process research and development | - | - | - | 3,745 | (3,745) | (l) | - | ||||||||||||
| Total operating expenses | $ | 256,793 | $ | (21,558) | $ | 235,235 | $ | 248,688 | $ | (41,325) | $ | 207,363 | |||||||
| Loss from operations | $ | (123,553) | $ | 75,342 | $ | (48,211) | $ | (50,292) | $ | 47,148 | $ | (3,144) | |||||||
| Non-operating (expense) income: | |||||||||||||||||||
| Interest expense | (14,115) | 5,974 | (k) | (8,141) | (2,565) | - | (2,565) | ||||||||||||
| Total non-operating (expense) income | (8,761) | 5,974 | (2,787) | 256 | - | 256 | |||||||||||||
| Loss before taxes | (132,314) | 81,316 | (50,998) | (50,036) | 47,148 | (2,888) | |||||||||||||
| Income tax (benefit) provision | (11,966) | 12,050 | (n) | 84 | (65,460) | 66,398 | (n) | 938 | |||||||||||
| Net (loss) income | $ | (120,348) | $ | 69,266 | (o) | $ | (51,082) | $ | 15,424 | $ | (19,250) | (o) | $ | (3,826) | |||||
| Diluted net (loss) income per share | $ | (2.70) | $ | (1.15) | $ | 0.37 | $ | (0.10) |