Full Press Release Details
STAAR Surgical Reports Strong First Quarter
2013 Financial Results
Sales of $18 Million Increased 16% from Q1 2012 / 21% Increase on Constant Currency Basis~
~ Visian ICL Sales Grew
24% to Record $10.6 Million ~
~nanoFLEX Toric IOL Launched
~ GAAP Net Income of $0.01 per share,
Non GAAP Adjusted Net Income of $0.08~
Company Continues to Invest to Drive
Top and Bottom Line Growth
MONROVIA, CA, May 1, 2013 -- STAAR Surgical Company (NASDAQ:
STAA), a leading developer, manufacturer and marketer of minimally invasive ophthalmic products, today reported record revenue
for the first quarter ended March 29, 2013 of $18.0 million compared to $15.5 million reported for the first quarter of 2012. The
results included sales of $10.6 million of the Company's Visian ICL product portfolio and $6.3 million of its IOL products
and were in-line with preliminary revenue results announced on April 9. In addition, Other Product sales increased to $1.0 million.
The effect of foreign currency exchange versus prior year reduced total sales by $750,000 during the quarter.
Gross profit margin for the quarter was 70.3%, consistent with
the first quarter of 2012. Gross margin expansion was limited primarily by a large increase in very low margin IOL injector systems
sales to a third party supplier for the buildup of their acrylic preloaded product supply, which appears in the Other Product sales
category. This accounted for a 170 basis point difference in gross margin percentage. If not for this inventory buildup
factor, the gross margin would have been 72%.
Net income for the first quarter of 2013, calculated in accordance
with GAAP, was $471,000, or $0.01 on a per diluted share basis, compared with net income of $232,000, or $0.01 on a per diluted
share basis, in the first 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 March 29, 2013 was $3.2 million or $0.08 per diluted share versus adjusted net income for the year
ago quarter of $1.4 million, or $0.04 per diluted share.
Operating expenses for the first quarter of 2013 were $11.6
million, up 9% from the $10.6 million prior year period reflecting $901,000 (a $346,000 increase) in related charges associated
with the Company's manufacturing consolidation project and a $623,000 increase in sales and marketing expenses driven by
the additions to the Company's headcount throughout 2012 and commissions paid to the former distributor in Spain for early
transition to a direct sales model. Overall operating expenses were impacted positively by foreign currency exchange of $351,000.
Income taxes increased to $314,000 during the first quarter
of 2013 compared to $232,000 during the first quarter of 2012. The Company's effective tax rate for the first quarter was
40%, and is now expected to remain at this level for the remainder of 2013, versus the previously expected 50% tax rate for 2013.
Cash and cash equivalents on March 29, 2013 totaled $19.2 million,
compared to $21.7 million at the end of the prior quarter. Cash utilization during the quarter was impacted by: $563,000 negative
effect on exchange, $442,000 paid to the former Spanish distributor relating to the transition to a direct selling model (these
charges were completed on March 8) and $1.2 million used for manufacturing consolidation and expansion of the Monrovia, CA facility.
"We are encouraged by the continued revenue growth we
are achieving in the refractive surgery space, which resulted in an overall improvement in year-over-year sales of 16% for the
first quarter of 2013 which on a constant currency basis is actually 21% growth," said Barry Caldwell, president and CEO.
"Sales of our Visian ICL exceeded $10 million for the first time and reflected a 24% increase over the same period in the
prior year. Visian ICL sales increased in our focused markets, led by Europe, which increased by 57% during the first quarter and
the Middle East with a 94% increase. The competitive landscape we face in refractive surgery seems to have changed more in the
past six months than in previous years. LASIK surgery seems to be facing more difficult negative pressure with most market data
showing that LASIK procedures are declining in major markets. Lenses which attempt to compete for refractive procedure share which
are in the anterior segment of the eye all seem to be facing new clinical challenges. The Visian ICL sits behind the iris in the
posterior segment unlike those competitive lenses. Also, our new Visian ICL CentraFLOW technology in Europe has been a key
driver of our success in that marketplace," added Mr. Caldwell.
"Total IOL sales in the first quarter of 2013 were $6.3
million, relatively flat with the comparable period a year ago. On a constant currency basis, IOL sales increased 10%, reflecting
the strength of our recently launched KS-SP preloaded acrylic IOLs. However, the negative impact of foreign exchange, which totaled
$750,000 for the quarter, was $646,000 for IOLs alone. Japan represented 56% of all IOL sales, an increase of 25% in total unit
sales and a 32% revenue increase without the negative impact of foreign currency exchange," said Mr. Caldwell. "Backorders
of our preloaded acrylic IOLs in Europe were $900,000 and reflect both the strength of the recently launched KS-SP and the supply
constraints we continue to experience from a third party supplier. This backorder position is expected to be a limiting factor
to our IOL sales for the entire year and we are evaluating potential options to meet this demand. During the ASCRS meeting a few
weeks ago we formally launched our new nanoFLEX Toric IOL for Europe and would expect to see sales during the second quarter."
"Many things went right for us both from an operational
and commercial perspective during the first quarter. We are well positioned in two large markets - Refractive and Cataract
- and have a pipeline in place for new products throughout this year and well into 2014. In addition, we have made investments
to drive future top line and bottom line growth with our spending to add new sales and marketing positions and our resource dedication
to the manufacturing consolidation project. By maintaining our strong balance sheet, continuing to invest in focused research &
development initiatives, and keeping a close eye on operational efficiencies, I believe we can achieve our growth plans for 2013
and beyond," concluded Mr. Caldwell.
Recent Visian Implantable Collamer Lens (ICL)
Regional ICL Updates
Europe, Middle East, Africa
Recent Intraocular Lens (IOL) Highlights
Project Comet Update
Expansion of Monrovia facility
The Monrovia, California headquarters was expanded by approximately
26,000 square feet that directly adjoin the current 44,000 square feet. The additional space is expected to create a more productive
working environment as manufacturing is consolidated at this facility. The Company has incurred $899,000 in costs to date and expects
to spend an additional $264,000 through the remainder of the year to complete this expansion.
2013 Metrics-Solid Start to the Year, No Change to
The Company reiterates and will continue to report and update
on each of the 2013 metrics quarterly:
The Company will host a conference call and video webcast today,
May 1, 2013 at 4:30 p.m. Eastern / 1:30 p.m. Pacific to discuss the Company's first quarter 2013 financial results and recent corporate
developments. The dial-in number for the conference call is 877-703-6110 for domestic participants and 857-244-7309 for international
participants, both using a passcode 23245755.
The Company will also be using slides to illustrate its first
quarter results and operational progress. The slides and live webcast of the call can be accessed from the investor relations section
of the STAAR website at www.staar.com.
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 888-286-8010 for domestic callers and 617-801-6888 for
international callers, both using passcode 40120994. 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.
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 our results when reported
in U.S. dollars. When preparing its financial statements in conformance with GAAP, the Company translates foreign currency sales
and expenses denominated in Japanese yen to dollars at the weighted average of exchange rates in effect during the period. As a
result, the Company's reported performance may be significantly affected by currency fluctuations. 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