MONROVIA, Calif., Aug. 3, 2016 /PRNewswire/ -- 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 second quarter ended July 1, 2016.
Second Quarter 2016 Overview
- Record Quarterly Net Sales of $21.0 Million Up 12% from the Prior Year Quarter
- Worldwide ICL Sales Up 26% and Units Up 18% from the Prior Year Quarter
- Worldwide IOL Sales Down 3% and Units Down 15% from the Prior Year Quarter
- Gross Margin Improved to 69.7% of Sales from 66.3% of Sales in the Prior Year Quarter
- On-Going FDA Remediation Effort Finished the Quarter On-Track and On-Budget
- Second Quarter Net Loss of $0.05 per Share; Adjusted Net Loss of $0.02 per Share
- Cash Optimization Strategy and Operating Success Increased Cash and Equivalents by $3.7 Million to $12.7 Million.
"We delivered record quarterly net sales of $21 million and achieved record quarterly ICL sales and units as well. Continuing strength and momentum is evident in most of the Asia Pacific region leading with China and in Europe leading with Germany," said Caren Mason, President and CEO. "We advanced a number of strategic priorities for 2016 in the quarter including the finalization of four additional Strategic Cooperation Agreements in the Asia Pacific region. During the quarter, we also finalized the clinical study agreements for our first-in-man implants of the Presbyopic ICL and we are on schedule to provide lenses for surgeries scheduled during the third quarter. In addition, we continued the evaluation process concerning our Cataract Care strategy and have decided to discontinue the manufacturing of silicone IOL lenses for distribution in North America. Consequently, our proprietary Collamer® material IOL lenses will be the only lens version offered in North America at this time. We are currently developing a competitive commercial strategy to encourage users of silicone IOL lenses to use our nanoFLEX® Collamer lenses," added Ms. Mason.
Financial Overview
Net sales were $21.0 million for the second quarter of 2016, up 12% compared to $18.7 million reported in the prior year quarter. On a constant currency basis, second quarter net sales increased 10% compared to the prior year quarter. The sales increase was driven by ICL revenue and unit growth of 26% and 18%, respectively, with strong double-digit unit growth in all of the Asia Pacific ("APAC") markets and in Germany. These increases were partially offset by lower IOL revenues and lower sales of injector parts. For the first half of 2016, ICL revenue and unit growth was 17% and 9%, respectively.
For the second quarter of 2016, gross profit margin was 69.7% compared to the prior year period of 66.3%. An increased mix of higher margin ICL units, higher average selling prices, and lower ICL unit costs improved gross margin by approximately 7.0 points which was partially offset by approximately 3.6 points in higher IOL unit costs and reserves for the discontinuation of the Company's silicone IOL product line.
Operating expenses for the quarter increased $2.7 million to $16.8 million primarily due to costs related to quality system improvements and investments made in the international selling and marketing organizations. General and administrative expense was $4.9 million and the change from the prior year quarter was not material. Marketing and selling expense was $7.2 million, $1.3 million higher than the prior year quarter due to higher international selling and marketing expenses, including the cost of direct selling in Germany. Research and development expense was $4.7 million, an increase of $1.1 million due to investments in quality system improvements, regulatory and clinical affairs, and project-related spending, partially offset by lower remediation expenses. Remediation expense for the quarter was on budget.
The net loss for the second quarter of 2016 was $2.1 million or $0.05 per share compared with a net loss of $1.6 million or $0.04 per share for the prior year quarter. Charges of $0.4 million or $0.01 per share associated with the discontinuation of the silicone IOL product line are included in the second quarter results.
The adjusted net loss for the second quarter of 2016 was $0.9 million or $0.02 per share, compared with adjusted net income of $0.2 million or breakeven 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.
Cash and cash equivalents at July 1, 2016 totaled $12.7 million, compared to $15.3 million at the end of the second quarter of 2015 and $9.0 million at the end of the first quarter 2016. Continued focus on optimizing the Company's cash position through revenue growth, expense mitigation, working capital management, and equipment leasing generated the increase in cash from the first quarter of 2016 to the second quarter of 2016. The Company has used $0.5 million in cash from operating activities during the first six months of the year.
Conference Call
The Company will host a conference call and webcast on Wednesday, August 3 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 48714531), 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 48714531) 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.
The Company conducts a significant part of its activities outside the U.S.
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