Full Press Release Details
STAAR Surgical Reports 15% Fourth Quarter
Revenue Growth and 13% Full Year 2013
~Total Sales Increased 22% in Constant
Currency from Q4 2012~
~ Record Quarterly Visian ICL
Sales Increased to $11.5 Million~
~ICL Revenue Up 34% in APAC, 27% in EMEA
Regions and 36% in North America ~
~Total IOL Sales Decreased 2%; Increased
12% in Constant Currency ~
~FDA's Ophthalmic Devices Panel
on Visian TICL Rescheduled for March 14~
MONROVIA, CA, February 26, 2014---STAAR Surgical Company (NASDAQ:
STAA) a leading developer, manufacturer and marketer of minimally invasive ophthalmic products today reported revenue for the fourth
quarter ended January 3, 2014 of $18.9 million, a 15% increase over $16.5 million reported for the fourth quarter of 2012. The
effect of foreign currency exchange reduced sales by $1.1 million during the quarter. On a constant currency basis, revenues grew
22% during the fourth quarter of 2013 compared to the fourth quarter of 2012. The results included record quarterly sales of $11.5
million of the Company's Visian ICL product portfolio and $6.6 million of its IOL products. Low margin Other Product
sales were $812,000, a 12% decrease over the prior year and a 3% decrease in constant currency.
"We had a successful fourth quarter and a strong finish
to 2013. Revenues grew 15% year over year and 22% on a constant currency basis. Sales of our Visian ICL reached record levels with
31% growth in dollars and 29% growth in units. We generated revenue growth of 27% or greater in all of our three regions as we
continue to grow market share globally. Among our accomplishments in 2013 was consistent revenue growth that exceeded our original
expectations at the beginning of year. Sales for the year reached $72.2 million, reflecting 13% growth over the prior fiscal year,
despite the ongoing headwinds from the yen valuation, which reduced our revenue for the year by $3.8 million. Sales in constant
currency grew 19% to $76 million for the year. Sales of our Visian ICL reached record levels, growing 26% to $44.1 million. To
date, more than 400,000 ICLs have been implanted worldwide and that number is growing every day," said Barry Caldwell, President
"Customer adoption of CentraFLOW
technology has been a key driver to our growth in 2013 and we are expecting approval in Japan within days," added Mr. Caldwell.
"We also believe we remain on track for CentraFLOW approval in China at mid-year. ICLs with CentraFLOW technology represented
67% of all ICL's shipped in December and this should be a good signal for our 2014 ICL outlook. The Visian ICL with CentraFLOW
technology helped to drive sales during 2013 in our EMEA region which grew 41% in revenue and 29% in procedures. During 2014 we
should start to see that benefit in our APAC region with full year approvals in Korea and India, as well as potentially half the
year in China. We will also significantly enhance our global ICL platform offering with the introduction of the preloaded ICL,
which we expect will receive CE Mark approval in April. Finally, we began development of our V6a and V6b ICLs, which will differentiate
the ICL for treating presbyopic and myopic patients and could significantly expand the market for our ICL to include patients over
the age of 45 for the onset of presbyopia.
"We have been informed our meeting with the FDA's
Ophthalmic Devices Panel regarding the safety and effectiveness of the Visian Toric Implantable Collamer Lens (TICL) has now been
rescheduled for Friday, March 14. This date has yet to be published on the FDA website. We have excellent clinical outcomes to
share with the advisory committee. More than 110,000 TICLs have been successfully implanted and we are confident we are well prepared
to address the agency's questions on our submission of the TICL for the U.S. market.
"Our investment in consumer awareness and digital marketing
programs is paying off and having a positive impact on the growth of ICLs in certain key markets. U.S. ICL revenue grew 33% in
the fourth quarter while according to Market Scope, laser refractive procedures declined 1% in the quarter while non-laser procedures
grew 20%. We believe our growth is due in part to initiatives such as a new website, www.staarmd.com and the Visian ICL "Doc
Finder" that assists surgeons with ICL practice development. Key digital marketing metrics such as: website visits, video
views, Doc Finder leads, Twitter and Facebook have all more than doubled during the fourth quarter as compared to the year ago
period. Patient leads generated from our digital marketing that were followed up with contact from a surgeon's practice resulted
in 62% of those patients having an ICL implanted. This is a very high conversion rate and we are watching it closely. Finally,
new websites in China, Japan and the Middle East are expanding awareness of the ICL in these key markets," concluded Mr.
The Company sells injectors to a third party to be used in preloaded
IOLs, some of which are sold back to the Company for sale to end customers. During the fourth quarter, the Company determined that
a more appropriate accounting for these injectors would be to reduce the cost of goods sold, rather than the previous accounting
treatment as revenue. Therefore, the fourth quarter injector sales of $476,000 were recorded as cost of goods sold rather than
revenue and this accounting treatment will be followed on a go-forward basis.
Gross profit margin for the quarter was 68.5% compared to 67.8%
in the fourth quarter of 2012. Sales of low margin IOL injectors to a third party manufacturer and the manufacturing of the silicone
preloaded IOLs in the U.S. combined to limit our gross margin expansion during the quarter.
Operating expenses for the fourth quarter of 2013 were $14.2
million, up 15% from $12.4 million in the prior year. This includes an 8% increase in General and Administrative expenses, a 29%
increase in Sales and Marketing expenses, and a 9% increased investment in R&D. Operating expenses in general increased due
to an additional week of compensation in the fourth quarter of 2013 which contained 14 weeks versus 13 weeks in 2012. General and
Administrative expenses increased due to the Monrovia facility expansion and recruiting and consulting costs as we build our organizational
talent. Sales and Marketing increased due to commissions from higher sales, the impact of consumer awareness initiatives, and the
timing of the ESCRS trade show which fell in the fourth quarter this year versus the third quarter of last year. The increased
R&D spending included approximately $200,000 in costs associated with preparation for the FDA Panel meeting on the TICL.
Income taxes resulted in a benefit of $172,000 during the fourth
quarter of 2013 compared to a provision of $466,000 during the fourth quarter of 2012. This benefit was partially driven by the
buildup of production in the U.S. for products previously produced outside the U.S.
The net loss for the fourth quarter of 2013, calculated in accordance
with GAAP, was $876,000 or $0.02 on a per share basis, compared with a net loss of $1.4 million, or $0.04 on a per diluted share
basis, in the fourth quarter of 2012. Adjusted net income (excluding manufacturing consolidation expenses, distribution transition
expenses in Spain, gain (loss) on foreign currency transactions, fair value adjustment of warrants, and stock-based compensation
expense) for the quarter ended January 3, 2014 was $850,000, or $0.02 per share versus adjusted net income for the year ago quarter
of $495,000, or $0.01 per diluted share.
Cash and cash equivalents at January 3, 2014 totaled $23 million,
which includes $3.4 million generated from operations. During the year, the Company invested a total of $5.7 million of which $2.2
million was for the manufacturing consolidation efforts and an additional $3.5 million was for fixed asset additions.
Visian Implantable Collamer Lens (ICL) Highlights.
Quarterly Regional ICL Updates
Europe, Middle East, Africa (EMEA)
Quarterly Intraocular Lens (IOL) Highlights
Project Comet Update
During the quarter, the Company continued to make progress toward
completing the manufacturing consolidation project by mid-2014. At the end of the fourth quarter the Company had approximately
17,100 ICLs in finished goods inventory, compared to approximately 11,400 ICLs in inventory held in both Europe and the U.S. at
the end of the third quarter. This represents a 50% increase of ICLs in finished goods inventory during the quarter while shipping
29% more units from stock compared to the fourth quarter of 2012. This inventory build is consistent with management's plan
to assure adequate supply and quality of product throughout this consolidation project. Manufacturing yields of the ICL in the
U.S. continue to increase. The Company will officially close its manufacturing capabilities in Switzerland in June 2014, and expects
to add headcount in U.S. as it transfers manufacturing from Switzerland.
Full Year 2013 Financial Highlights
Looking ahead, the Company offered the following annual key
metrics that management will focus on achieving during 2014 and upon which it will report and update each quarter:
The Company will host a conference call and webcast today 4:30
p.m. Eastern / 1:30 p.m. Pacific to discuss these results and recent corporate developments. The dial-in number for the conference
call is 877-415-3181 for domestic participants and 857-244-7324 for international participants, both using the passcode 88698954.
The Company will also be using slides to illustrate its fourth quarter results and operational progress including comments regarding
the rescheduled FDA panel on the TICL. The slides and live webcast of the call can be accessed from the investor relations section