UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: SeptemberMarch 29, 20232024

Or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number: 0-11634

 

STAAR Surgical CompanyCompany

(Exact Name of Registrant as Specified in its Charter)

 

Delaware

95-3797439

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

25651 Atlantic Ocean Drive
Lake Forest, California

 

92630

(Address of Principal Executive Offices)

(Zip Code)

 

(626) 303-7902

(Registrant’s Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common

STAA

NASDAQ

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging growth company

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

The registrant has 48,817,47349,131,110 shares of common stock, par value $0.01 per share, issued and outstanding as of October 27, 2023.May 2, 2024.

 


STAAR SURGICAL COMPANY

 

INDEX

 

 

 

 

PAGE

NUMBER

 

 

 

 

PART I – FINANCIAL INFORMATION

 

1

 

 

 

 

ITEM 1

FINANCIAL STATEMENTS

 

1

 

 

 

 

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

1916

 

 

 

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

2421

 

 

 

 

ITEM 4.

CONTROLS AND PROCEDURES

 

2421

 

 

 

 

PART II – OTHER INFORMATION

 

2521

 

 

 

 

ITEM 1.

LEGAL PROCEEDINGS

 

2521

 

 

 

 

ITEM 1A.

RISK FACTORS

 

2521

 

 

 

 

ITEM 4.

MINE SAFETY DISCLOSURES

 

2522

 

 

 

 

ITEM 5.

OTHER INFORMATION

 

2522

 

 

 

 

ITEM 6.

EXHIBITS

 

2622

 

 

 


 

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value amounts)

(Unaudited)

 

 

September 29, 2023

 

 

December 30, 2022

 

 

March 29, 2024

 

 

December 29, 2023

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

127,432

 

 

$

86,480

 

 

$

224,024

 

 

$

183,038

 

Investments available for sale

 

 

60,681

 

 

 

125,159

 

 

 

21,125

 

 

 

37,688

 

Accounts receivable trade, net of allowance for credit losses of
$
38 and $20, respectively

 

 

112,367

 

 

 

62,447

 

Accounts receivable trade, net of allowance for credit losses of
$
187 and $191, respectively

 

 

64,604

 

 

 

94,704

 

Inventories, net

 

 

31,061

 

 

 

24,161

 

 

 

38,581

 

 

 

35,130

 

Prepayments, deposits and other current assets

 

 

15,527

 

 

 

13,476

 

 

 

17,381

 

 

 

14,709

 

Total current assets

 

 

347,068

 

 

 

311,723

 

 

 

365,715

 

 

 

365,269

 

Investments available for sale

 

 

13,627

 

 

 

13,902

 

 

 

6,963

 

 

 

11,703

 

Property, plant and equipment, net

 

 

62,886

 

 

 

50,921

 

 

 

72,337

 

 

 

66,835

 

Finance lease right-of-use assets, net

 

 

220

 

 

 

342

 

 

 

146

 

 

 

183

 

Operating lease right-of-use assets, net

 

 

34,992

 

 

 

30,270

 

 

 

34,600

 

 

 

34,387

 

Intangible assets, net

 

 

 

 

 

173

 

Goodwill

 

 

1,786

 

 

 

1,786

 

 

 

1,786

 

 

 

1,786

 

Deferred income taxes

 

 

8,560

 

 

 

8,744

 

 

 

5,125

 

 

 

5,190

 

Other assets

 

 

2,382

 

 

 

957

 

 

 

5,863

 

 

 

3,339

 

Total assets

 

$

471,521

 

 

$

418,818

 

 

$

492,535

 

 

$

488,692

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

8,786

 

 

$

11,576

 

 

$

16,560

 

 

$

13,557

 

Obligations under finance leases

 

 

164

 

 

 

169

 

 

 

166

 

 

 

165

 

Obligations under operating leases

 

 

4,003

 

 

 

3,524

 

 

 

4,403

 

 

 

4,202

 

Allowance for sales returns

 

 

7,557

 

 

 

5,706

 

 

 

6,284

 

 

 

6,174

 

Other current liabilities

 

 

36,265

 

 

 

30,741

 

 

 

35,261

 

 

 

40,938

 

Total current liabilities

 

 

56,775

 

 

 

51,716

 

 

 

62,674

 

 

 

65,036

 

Obligations under finance leases

 

 

84

 

 

 

210

 

 

 

 

 

 

42

 

Obligations under operating leases

 

 

31,643

 

 

 

27,136

 

 

 

31,126

 

 

 

31,425

 

Deferred income taxes

 

 

1,295

 

 

 

1,489

 

 

 

1,074

 

 

 

1,077

 

Asset retirement obligations

 

 

98

 

 

 

220

 

 

 

96

 

 

 

103

 

Pension liability

 

 

3,031

 

 

 

1,935

 

 

 

4,777

 

 

 

5,055

 

Total liabilities

 

 

92,926

 

 

 

82,706

 

 

 

99,747

 

 

 

102,738

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

Common stock, $0.01 par value; 60,000 shares authorized: 48,817 and
48,212 shares issued and outstanding at September 29, 2023 and
December 30, 2022, respectively

 

 

488

 

 

 

482

 

Common stock, $0.01 par value; 60,000 shares authorized: 49,120 and
48,839 shares issued and outstanding at March 29, 2024 and
December 29, 2023, respectively

 

 

491

 

 

 

488

 

Additional paid-in capital

 

 

436,117

 

 

 

404,189

 

 

 

447,716

 

 

 

436,947

 

Accumulated other comprehensive gain (loss)

 

 

(2,886

)

 

 

156

 

Accumulated other comprehensive income (loss)

 

 

(4,712

)

 

 

(4,113

)

Accumulated deficit

 

 

(55,124

)

 

 

(68,715

)

 

 

(50,707

)

 

 

(47,368

)

Total stockholders’ equity

 

 

378,595

 

 

 

336,112

 

 

 

392,788

 

 

 

385,954

 

Total liabilities and stockholders’ equity

 

$

471,521

 

 

$

418,818

 

 

$

492,535

 

 

$

488,692

 

 

See accompanying notes to the condensed consolidated financial statements.

1


 

STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOMEOPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

September 29, 2023

 

 

September 30, 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

Net sales

 

$

80,308

 

 

$

76,046

 

 

$

246,142

 

 

$

220,347

 

 

$

77,356

 

 

$

73,528

 

Cost of sales

 

 

16,670

 

 

 

15,584

 

 

 

54,216

 

 

 

46,749

 

 

 

16,321

 

 

 

15,966

 

Gross profit

 

 

63,638

 

 

 

60,462

 

 

 

191,926

 

 

 

173,598

 

 

 

61,035

 

 

 

57,562

 

Selling, general and administrative expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

19,266

 

 

 

14,011

 

 

 

55,461

 

 

 

39,934

 

 

 

23,228

 

 

 

18,098

 

Selling and marketing

 

 

26,607

 

 

 

23,130

 

 

 

85,238

 

 

 

64,633

 

 

 

26,708

 

 

 

26,354

 

Research and development

 

 

11,470

 

 

 

9,616

 

 

 

33,535

 

 

 

26,193

 

 

 

13,380

 

 

 

10,310

 

Total selling, general and administrative expenses

 

 

57,343

 

 

 

46,757

 

 

 

174,234

 

 

 

130,760

 

 

 

63,316

 

 

 

54,762

 

Operating income

 

 

6,295

 

 

 

13,705

 

 

 

17,692

 

 

 

42,838

 

Operating income (loss)

 

 

(2,281

)

 

 

2,800

 

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

1,690

 

 

 

897

 

 

 

5,287

 

 

 

934

 

 

 

1,529

 

 

 

1,822

 

Loss on foreign currency transactions

 

 

(1,384

)

 

 

(2,129

)

 

 

(3,240

)

 

 

(4,904

)

Gain (loss) on foreign currency transactions

 

 

(2,297

)

 

 

34

 

Royalty income

 

 

74

 

 

 

77

 

 

 

74

 

 

 

527

 

 

 

508

 

 

 

 

Other income, net

 

 

71

 

 

 

27

 

 

 

144

 

 

 

178

 

 

 

330

 

 

 

63

 

Total other income (expense), net

 

 

451

 

 

 

(1,128

)

 

 

2,265

 

 

 

(3,265

)

Income before income taxes

 

 

6,746

 

 

 

12,577

 

 

 

19,957

 

 

 

39,573

 

Total other income, net

 

 

70

 

 

 

1,919

 

Income (loss) before income taxes

 

 

(2,211

)

 

 

4,719

 

Provision for income taxes

 

 

1,929

 

 

 

2,315

 

 

 

6,366

 

 

 

6,671

 

 

 

1,128

 

 

 

2,009

 

Net income

 

$

4,817

 

 

$

10,262

 

 

$

13,591

 

 

$

32,902

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(3,339

)

 

$

2,710

 

Net income (loss) per share:

 

 

 

 

 

 

Basic

 

$

0.10

 

 

$

0.21

 

 

$

0.28

 

 

$

0.69

 

 

$

(0.07

)

 

$

0.06

 

Diluted

 

$

0.10

 

 

$

0.21

 

 

$

0.27

 

 

$

0.67

 

 

$

(0.07

)

 

$

0.05

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

48,613

 

 

 

48,102

 

 

 

48,426

 

 

 

47,915

 

 

 

48,907

 

 

 

48,247

 

Diluted

 

 

49,370

 

 

 

49,549

 

 

 

49,494

 

 

 

49,371

 

 

 

48,907

 

 

 

49,500

 

 

See accompanying notes to the condensed consolidated financial statements.

2


 

STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

September 29, 2023

 

 

September 30, 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

Net income

 

$

4,817

 

 

$

10,262

 

 

$

13,591

 

 

$

32,902

 

Net income (loss)

 

$

(3,339

)

 

$

2,710

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Defined benefit plans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in plan assets

 

 

(115

)

 

 

465

 

 

 

(1,839

)

 

 

7,126

 

 

 

232

 

 

 

(1,177

)

Reclassification into other income (expense), net

 

 

(51

)

 

 

54

 

 

 

(154

)

 

 

139

 

 

 

(17

)

 

 

(52

)

Investments available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized gain (loss)

 

 

149

 

 

 

(432

)

 

 

123

 

 

 

(432

)

 

 

(36

)

 

 

116

 

Reclassification into other income (expense), net

 

 

 

 

 

 

 

 

(2

)

 

 

 

 

 

3

 

 

 

(2

)

Foreign currency translation gain (loss)

 

 

(494

)

 

 

(958

)

 

 

(1,965

)

 

 

(3,474

)

Foreign currency translation loss

 

 

(1,100

)

 

 

(129

)

Tax effect

 

 

146

 

 

 

312

 

 

 

795

 

 

 

379

 

 

 

319

 

 

 

151

 

Other comprehensive income (loss), net of tax

 

 

(365

)

 

 

(559

)

 

 

(3,042

)

 

 

3,738

 

Comprehensive income

 

$

4,452

 

 

$

9,703

 

 

$

10,549

 

 

$

36,640

 

Other comprehensive loss, net of tax

 

 

(599

)

 

 

(1,093

)

Comprehensive income (loss)

 

$

(3,938

)

 

$

1,617

 

 

See accompanying notes to the condensed consolidated financial statements.

3


 

STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Common
Stock Shares

 

 

Common
Stock Par
Value

 

 

Additional
Paid-In
Capital

 

 

Accumulated
Other
Compre-
hensive
Income
(Loss)

 

 

Accumulated
Deficit

 

 

Total

 

 

Common
Stock Shares

 

 

Common
Stock Par
Value

 

 

Additional
Paid-In
Capital

 

 

Accumulated
Other
Compre-
hensive
Income
(Loss)

 

 

Accumulated
Deficit

 

 

Total

 

Balance, at June 30, 2023

 

 

48,499

 

 

$

485

 

 

$

419,594

 

 

$

(2,521

)

 

$

(59,941

)

 

$

357,617

 

Balance, at December 29, 2023

 

 

48,839

 

 

$

488

 

 

$

436,947

 

 

$

(4,113

)

 

$

(47,368

)

 

$

385,954

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,339

)

 

 

(3,339

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(599

)

 

 

 

 

 

(599

)

Common stock issued upon exercise of options

 

 

187

 

 

 

2

 

 

 

5,322

 

 

 

 

 

 

 

 

 

5,324

 

Stock-based compensation

 

 

 

 

 

 

 

 

6,676

 

 

 

 

 

 

 

 

 

6,676

 

Repurchase of employee common stock for taxes withheld

 

 

(36

)

 

 

 

 

 

(1,229

)

 

 

 

 

 

 

 

 

(1,229

)

Forfeited restricted stock

 

 

(4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested restricted and performance stock units

 

 

134

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Balance, at March 29, 2024

 

 

49,120

 

 

$

491

 

 

$

447,716

 

 

$

(4,712

)

 

$

(50,707

)

 

$

392,788

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, at December 30, 2022

 

 

48,212

 

 

$

482

 

 

$

404,189

 

 

$

156

 

 

$

(68,715

)

 

$

336,112

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,817

 

 

 

4,817

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,710

 

 

 

2,710

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(365

)

 

 

 

 

 

(365

)

 

 

 

 

 

 

 

 

 

 

 

(1,093

)

 

 

 

 

 

(1,093

)

Common stock issued upon exercise of options

 

 

305

 

 

 

3

 

 

 

7,255

 

 

 

 

 

 

 

 

 

7,258

 

 

 

40

 

 

 

 

 

 

529

 

 

 

 

 

 

 

 

 

529

 

Stock-based compensation

 

 

 

 

 

 

 

 

9,380

 

 

 

 

 

 

 

 

 

9,380

 

 

 

 

 

 

 

 

 

6,434

 

 

 

 

 

 

 

 

 

6,434

 

Repurchase of employee common stock for taxes withheld

 

 

(1

)

 

 

 

 

 

(112

)

 

 

 

 

 

 

 

 

(112

)

 

 

(31

)

 

 

 

 

 

(1,849

)

 

 

 

 

 

 

 

 

(1,849

)

Vested restricted and performance stock

 

 

14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, at September 29, 2023

 

 

48,817

 

 

$

488

 

 

$

436,117

 

 

$

(2,886

)

 

$

(55,124

)

 

$

378,595

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, at July 1, 2022

 

 

48,024

 

 

$

480

 

 

$

387,328

 

 

$

249

 

 

$

(85,740

)

 

$

302,317

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,262

 

 

 

10,262

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(559

)

 

 

 

 

 

(559

)

Common stock issued upon exercise of options

 

 

166

 

 

 

2

 

 

 

5,032

 

 

 

 

 

 

 

 

 

5,034

 

Stock-based compensation

 

 

 

 

 

 

 

 

6,088

 

 

 

 

 

 

 

 

 

6,088

 

Vested restricted and performance stock

 

 

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, at September 30, 2022

 

 

48,202

 

 

$

482

 

 

$

398,448

 

 

$

(310

)

 

$

(75,478

)

 

$

323,142

 

Vested restricted and performance stock units

 

 

110

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Balance at March 31, 2023

 

 

48,331

 

 

$

483

 

 

$

409,303

 

 

$

(937

)

 

$

(66,005

)

 

$

342,844

 

 

See accompanying notes to the condensed consolidated financial statements.

 

4


 

4


STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

 

 

Nine Months Ended

 

 

 

Common
Stock Shares

 

 

Common
Stock Par
Value

 

 

Additional
Paid-In
Capital

 

 

Accumulated
Other
Compre-
hensive
Income
(Loss)

 

 

Accumulated
Deficit

 

 

Total

 

Balance, at December 30, 2022

 

 

48,212

 

 

$

482

 

 

$

404,189

 

 

$

156

 

 

$

(68,715

)

 

$

336,112

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,591

 

 

 

13,591

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(3,042

)

 

 

 

 

 

(3,042

)

Common stock issued upon exercise of options

 

 

500

 

 

 

5

 

 

 

9,259

 

 

 

 

 

 

 

 

 

9,264

 

Stock-based compensation

 

 

 

 

 

 

 

 

24,765

 

 

 

 

 

 

 

 

 

24,765

 

Repurchase of employee common stock for taxes withheld

 

 

(35

)

 

 

 

 

 

(2,096

)

 

 

 

 

 

 

 

 

(2,096

)

Unvested restricted stock

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested restricted and performance stock

 

 

130

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Balance, at September 29, 2023

 

 

48,817

 

 

$

488

 

 

$

436,117

 

 

$

(2,886

)

 

$

(55,124

)

 

$

378,595

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, at December 31, 2021

 

 

47,716

 

 

$

477

 

 

$

373,519

 

 

$

(4,048

)

 

$

(108,380

)

 

$

261,568

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32,902

 

 

 

32,902

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

3,738

 

 

 

 

 

 

3,738

 

Common stock issued upon exercise of options

 

 

417

 

 

 

4

 

 

 

8,175

 

 

 

 

 

 

 

 

 

8,179

 

Stock-based compensation

 

 

 

 

 

 

 

 

16,754

 

 

 

 

 

 

 

 

 

16,754

 

Unvested restricted stock

 

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested restricted and performance stock

 

 

62

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Balance, at September 30, 2022

 

 

48,202

 

 

$

482

 

 

$

398,448

 

 

$

(310

)

 

$

(75,478

)

 

$

323,142

 

See accompanying notes to the condensed consolidated financial statements.

5


STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

September 29, 2023

 

 

September 30, 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

13,591

 

 

$

32,902

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

 

 

 

Net income (loss)

 

$

(3,339

)

 

$

2,710

 

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

Depreciation of property, plant, and equipment

 

 

3,743

 

 

 

3,101

 

 

 

1,237

 

 

 

1,113

 

Amortization/Impairment of intangibles

 

 

169

 

 

 

22

 

Amortization of intangibles

 

 

 

 

 

7

 

Accretion/Amortization of investments available for sale

 

 

(2,172

)

 

 

(307

)

 

 

(120

)

 

 

(983

)

Deferred income taxes

 

 

65

 

 

 

23

 

 

 

61

 

 

 

57

 

Change in net pension liability

 

 

(766

)

 

 

40

 

 

 

(93

)

 

 

(13

)

Loss on disposal of property and equipment

 

 

41

 

 

 

 

Stock-based compensation expense

 

 

23,334

 

 

 

15,375

 

 

 

6,339

 

 

 

6,065

 

Change in asset retirement obligation

 

 

(104

)

 

 

 

Provision for sales returns and bad debts

 

 

1,925

 

 

 

361

 

 

 

128

 

 

 

(377

)

Inventory provision

 

 

4,090

 

 

 

2,020

 

 

 

646

 

 

 

614

 

Changes in working capital:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(50,436

)

 

 

(13,108

)

 

 

29,837

 

 

 

(1,110

)

Inventories

 

 

(9,975

)

 

 

(4,123

)

 

 

(4,002

)

 

 

(3,920

)

Prepayments, deposits, and other current assets

 

 

(3,584

)

 

 

526

 

Prepayments, deposits, and other assets

 

 

(5,485

)

 

 

(4,249

)

Accounts payable

 

 

(3,266

)

 

 

(1,834

)

 

 

1,519

 

 

 

(3,168

)

Other current liabilities

 

 

5,970

 

 

 

(2,253

)

 

 

(5,048

)

 

 

(1,840

)

Net cash provided by (used in) operating activities

 

 

(17,375

)

 

 

32,745

 

 

 

21,680

 

 

 

(5,094

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition of property and equipment

 

 

(15,100

)

 

 

(14,083

)

 

 

(5,202

)

 

 

(2,901

)

Purchase of investments available for sale

 

 

(52,314

)

 

 

(95,576

)

 

 

 

 

 

(27,445

)

Proceeds from sale or maturity of investments available for sale

 

 

119,359

 

 

 

 

 

 

21,389

 

 

 

40,279

 

Net cash provided by (used in) investing activities

 

 

51,945

 

 

 

(109,659

)

Net cash provided by investing activities

 

 

16,187

 

 

 

9,933

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Repayment of finance lease obligations

 

 

(121

)

 

 

(85

)

 

 

(40

)

 

 

(42

)

Repurchase of employee common stock for taxes withheld

 

 

(2,096

)

 

 

 

 

 

(1,229

)

 

 

(1,849

)

Proceeds from the exercise of stock options

 

 

9,264

 

 

 

8,179

 

 

 

5,324

 

 

 

529

 

Proceeds from vested restricted stock

 

 

1

 

 

 

1

 

Net cash provided by financing activities

 

 

7,048

 

 

 

8,095

 

Proceeds from vested restricted and performance stock units

 

 

1

 

 

 

1

 

Net cash provided by (used in) financing activities

 

 

4,056

 

 

 

(1,361

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(666

)

 

 

(1,645

)

 

 

(937

)

 

 

10

 

Increase (decrease) in cash and cash equivalents

 

 

40,952

 

 

 

(70,464

)

Increase in cash and cash equivalents

 

 

40,986

 

 

 

3,488

 

Cash and cash equivalents, at beginning of the period

 

 

86,480

 

 

 

199,706

 

 

 

183,038

 

 

 

86,480

 

Cash and cash equivalents, at end of the period

 

$

127,432

 

 

$

129,242

 

 

$

224,024

 

 

$

89,968

 

 

See accompanying notes to the condensed consolidated financial statements.

65


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

 

Note 1 — Basis of Presentation and Significant Accounting Policies

STAAR Surgical Company, a Delaware corporation, was first incorporated in 1982, and together with its subsidiaries designs, develops, manufactures, and sells implantable lenses for the eye and accessory delivery systems used to deliver the lenses into the eye. The accompanying Condensed Consolidated Financial Statements of the Company present the financial position, results of operations, and cash flows of STAAR Surgical Company and its wholly owned subsidiaries.subsidiaries (the “Company”). All significant intercompany accounts and transactions have been eliminated. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Commission. In accordance with those rules and regulations certain information and footnote disclosures normally included in the Comprehensive Financial Statements have been condensed or omitted pursuant to such rules and regulations. The Consolidated Balance Sheet as of December 30, 202229, 2023 was derived from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 30, 2022.29, 2023.

The Condensed Consolidated Financial Statements for the three and nine months ended SeptemberMarch 29, 20232024 and September 30, 2022,March 31, 2023, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s financial condition and results of operations. The results of operations for the three and nine months ended SeptemberMarch 29, 20232024 and September 30, 2022,March 31, 2023, are not necessarily indicative of the results to be expected for any other interim period or for the entire year.

Each of the Company’s fiscal reporting periods ends on the Friday nearest to the quarter ending date and generally consists of 13 weeks. Unless the context indicates otherwise “we,” “us,” the “Company,” and “STAAR” refer to STAAR Surgical Company and its consolidated subsidiaries.

Revision of Financial Statements for Correction of Immaterial Misstatements

Subsequent to the issuance of the Company’s consolidated financial statements for the year ended December 30, 2022, the Company determined that it had not correctly deducted compensation expense in calculating its income tax provision, deferred tax asset and valuation allowance under the Incremental Cash Tax Method. This resulted in an understatement of the net deferred tax asset, an overstatement in the valuation allowance, an overstatement of the provision for income taxes and understatement of net income. In accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the error and determined that the related impact was not material to results of operations or financial position for any prior annual or interim period, but that correcting the cumulative impact of the error would be material to our results of operations for the year ended December 29, 2023. Accordingly, the Company has corrected the consolidated balance sheet as of December 30, 2022 and the consolidated statements of income and comprehensive income for the years ended December 30, 2022 and December 31, 2021. The effects of the revision on the previously issued consolidated financial statements were as follows:

Condensed Consolidated Balance Sheet

(in thousands)

(Unaudited)

 

 

December 30, 2022

 

 

 

As Previously Reported

 

 

Adjustment

 

 

As revised

 

Deferred income taxes

 

$

4,824

 

 

$

3,920

 

 

$

8,744

 

Total assets

 

 

414,898

 

 

 

3,920

 

 

 

418,818

 

Accumulated deficit

 

 

(72,635

)

 

 

3,920

 

 

 

(68,715

)

Total stockholders’ equity

 

 

332,192

 

 

 

3,920

 

 

 

336,112

 

Total liabilities and stockholders’ equity

 

 

414,898

 

 

 

3,920

 

 

 

418,818

 

7


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Note 1 — Basis of Presentation and Significant Accounting Policies (Continued)

Revision of Financial Statements for Correction of Immaterial Misstatements (Continued)

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands)

(Unaudited)

 

 

As Previously Reported

 

 

Adjustment

 

 

As revised

 

At December 31, 2021

 

 

 

 

 

 

 

 

 

Accumulated deficit

 

$

(111,390

)

 

$

3,010

 

 

$

(108,380

)

Total stockholders’ equity

 

 

258,558

 

 

 

3,010

 

 

 

261,568

 

At December 30, 2022

 

 

 

 

 

 

 

 

 

Accumulated deficit

 

 

(72,635

)

 

 

3,920

 

 

 

(68,715

)

Total stockholders’ equity

 

 

332,192

 

 

 

3,920

 

 

 

336,112

 

Condensed Consolidated Statements of Income and Comprehensive Income

(in thousands, except per share amounts)

(Unaudited)

 

 

December 30, 2022

 

 

December 31, 2021

 

 

 

As Previously Reported

 

 

Adjustment

 

 

As revised

 

 

As Previously Reported

 

 

Adjustment

 

 

As revised

 

Provision (benefit) for income taxes

 

$

6,797

 

 

$

(910

)

 

$

5,887

 

 

$

6,803

 

 

$

(3,010

)

 

$

3,793

 

Net income

 

 

38,755

 

 

 

910

 

 

 

39,665

 

 

 

24,501

 

 

 

3,010

 

 

 

27,511

 

Comprehensive income

 

 

42,959

 

 

 

910

 

 

 

43,869

 

 

 

25,998

 

 

 

3,010

 

 

 

29,008

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.81

 

 

$

0.02

 

 

$

0.83

 

 

$

0.52

 

 

$

0.06

 

 

$

0.58

 

Diluted

 

$

0.78

 

 

$

0.02

 

 

$

0.80

 

 

$

0.50

 

 

$

0.06

 

 

$

0.56

 

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

 

December 30, 2022

 

 

December 31, 2021

 

 

 

As Previously Reported

 

 

Adjustment

 

 

As revised

 

 

As Previously Reported

 

 

Adjustment

 

 

As revised

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

38,755

 

 

$

910

 

 

$

39,665

 

 

$

24,501

 

 

$

3,010

 

 

$

27,511

 

Deferred income taxes

 

 

(1,344

)

 

 

(910

)

 

 

(2,254

)

 

 

1,495

 

 

 

(3,010

)

 

 

(1,515

)

8


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Note 1 — Basis of Presentation and Significant Accounting Policies (Continued)

Cloud-Based Software Implementation Costs

The Company has entered into cloud-based software hosting arrangements for which it incurs implementation costs. Certain costs incurred during the application development stage are capitalized and included within Prepayments, deposits and other current assets or Other assets on the condensed consolidated balance sheet, depending on the short or long-term nature of such costs, in line with the Company's policy on the accounting for prepaid software hosting arrangements. Costs incurred during the preliminary project stage and post-implementation stage are expensed as incurred. Capitalized cloud-based software implementation costs are amortized, beginning on the date the related software or module is ready for its intended use, on a straight-line basis over the remaining term of the hosting arrangement. Amortization is recognized as a component of selling, general, and administrative expenses, in the same line item as the expense for the associated hosting arrangement.

As of SeptemberMarch 29, 2024 and December 29, 2023, the Company recognized $1,318,0004,947,000 and $2,406,000, respectively, of net capitalized cloud-based software implementation costs recorded within Other assets on the condensed consolidated balance sheets. There were no capitalized cloud-based software implementation costs recognized at December 30, 2022.Condensed Consolidated Balance Sheets. As of SeptemberMarch 29, 2023,2024, these assets are not currently placed into service. No amortization of capitalized cloud-based software implementation costs were recognized during the three and nine months ended SeptemberMarch 29, 2024 and March 31, 2023.

Vendor Concentration

There was one vendor that accounted for over 12% of the Company’s consolidated accounts payable as of March 29, 2024.

Recent Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, “Segment Reporting (Topic 280).” ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments (a) disclose significant segment expenses regularly provided to the chief operating decision maker (“CODM”), (b) disclose an amount for other segment items by reportable segment and description of its composition, (c) extend certain annual disclosures to interim periods, (d) clarify single reportable segment entities must apply Topic 280 in its entirety, (e) permit more than one measure of segment profit or loss to be reported under certain conditions and (f) require disclosure of the title and position of the CODM. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company will adopt the annual disclosure requirements of ASU 2023-07 as of beginning of fiscal year 2024 and will adopt the interim disclosure requirements beginning fiscal year 2025. The Company is currently evaluating the disclosure requirements and its effect on the Condensed Consolidated Financial Statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740).” ASU 2023-09 improves the transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. It also includes certain other amendments to improve the effectiveness of income tax disclosures regarding (a) income or loss from continuing operations disaggregated between domestic and foreign and (b) income tax expense or benefit from continuing operations disaggregated by federal, state and foreign. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company will adopt ASU 2023-09 at the beginning of fiscal year 2025. The Company is currently evaluating the disclosure requirements and its effect on the Condensed Consolidated Financial Statements.

6


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Note 2 — Investments Available for Sale

During the second half of 2022, the Company started to invest its cash in slightly higher yielding securities. Investments available for sale (“AFS”) and the related fair value measurement consisted of the following (dollars in thousands):

 

 

September 29, 2023

 

 

March 29, 2024

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements

 

 

Amortized Cost

 

 

Unrealized Gains

 

 

Unrealized Losses

 

 

Estimated Fair Value

 

 

Level 1

 

 

Level 2

 

 

Amortized Cost

 

 

Unrealized Gains

 

 

Unrealized Losses

 

 

Estimated Fair Value

 

 

Level 1

 

 

Level 2

 

Commercial paper

 

$

17,102

 

 

$

1

 

 

$

(5

)

 

$

17,098

 

 

$

 

 

$

17,098

 

 

$

4,522

 

 

$

3

 

 

$

(1

)

 

$

4,524

 

 

$

 

 

$

4,524

 

Certificates of deposit

 

 

4,080

 

 

 

1

 

 

 

(2

)

 

 

4,079

 

 

 

 

 

 

4,079

 

 

 

2,017

 

 

 

2

 

 

 

 

 

 

2,019

 

 

 

 

 

 

2,019

 

U.S. Treasury securities

 

 

24,828

 

 

 

 

 

 

(188

)

 

 

24,640

 

 

 

24,640

 

 

 

 

 

 

15,432

 

 

 

 

 

 

(78

)

 

 

15,354

 

 

 

15,354

 

 

 

 

U.S. agency securities

 

 

9,771

 

 

 

 

 

 

(21

)

 

 

9,750

 

 

 

 

 

 

9,750

 

 

 

1,732

 

 

 

 

 

 

(3

)

 

 

1,729

 

 

 

 

 

 

1,729

 

Corporate debt securities

 

 

18,812

 

 

 

2

 

 

 

(73

)

 

 

18,741

 

 

 

 

 

 

18,741

 

 

 

4,462

 

 

 

4

 

 

 

(4

)

 

 

4,462

 

 

 

 

 

 

4,462

 

Total investments AFS

 

$

74,593

 

 

$

4

 

 

$

(289

)

 

$

74,308

 

 

$

24,640

 

 

$

49,668

 

 

$

28,165

 

 

$

9

 

 

$

(86

)

 

$

28,088

 

 

$

15,354

 

 

$

12,734

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 30, 2022

 

 

December 29, 2023

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements

 

 

Amortized Cost

 

 

Unrealized Gains

 

 

Unrealized Losses

 

 

Estimated Fair Value

 

 

Level 1

 

 

Level 2

 

 

Amortized Cost

 

 

Unrealized Gains

 

 

Unrealized Losses

 

 

Estimated Fair Value

 

 

Level 1

 

 

Level 2

 

Commercial paper

 

$

44,054

 

 

$

11

 

 

$

(62

)

 

$

44,003

 

 

$

 

 

$

44,003

 

 

$

7,720

 

 

$

9

 

 

$

 

 

$

7,729

 

 

$

 

 

$

7,729

 

Certificates of deposit

 

 

17,355

 

 

 

4

 

 

 

(75

)

 

 

17,284

 

 

 

 

 

 

17,284

 

 

 

3,716

 

 

 

4

 

 

 

 

 

 

3,720

 

 

 

 

 

 

3,720

 

U.S. Treasury securities

 

 

21,847

 

 

 

3

 

 

 

(15

)

 

 

21,835

 

 

 

21,835

 

 

 

 

 

 

23,036

 

 

 

3

 

 

 

(56

)

 

 

22,983

 

 

 

22,983

 

 

 

 

U.S. agency securities

 

 

10,688

 

 

 

16

 

 

 

(3

)

 

 

10,701

 

 

 

 

 

 

10,701

 

 

 

3,423

 

 

 

 

 

 

(4

)

 

 

3,419

 

 

 

 

 

 

3,419

 

Corporate debt securities

 

 

45,522

 

 

 

4

 

 

 

(288

)

 

 

45,238

 

 

 

 

 

 

45,238

 

 

 

11,538

 

 

 

12

 

 

 

(10

)

 

 

11,540

 

 

 

 

 

 

11,540

 

Total investments AFS

 

$

139,466

 

 

$

38

 

 

$

(443

)

 

$

139,061

 

 

$

21,835

 

 

$

117,226

 

 

$

49,433

 

 

$

28

 

 

$

(70

)

 

$

49,391

 

 

$

22,983

 

 

$

26,408

 

 

The Company obtains the fair value from third-party pricing services. The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value. These observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers and other industry and economic events.

9


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Note 2 — Investments Available for Sale (Continued)

The Company assessed each debt security with gross unrealized losses for impairment. As part of that assessment, the Company concluded that it does not intend to sell and it is more-likely-than-not that the Company will not be required to sell, prior to the recovery of the amortized cost basis. The Company did not recognize impairment for the three and nine months ended SeptemberMarch 29, 2023.2024.

The following table shows the fair value of investments AFS by contractual maturity (dollars in thousands):

 

 

As of September 29, 2023

 

 

As of March 29, 2024

 

 

Within one year

 

 

After one year through five years

 

 

Total

 

 

Within one year

 

 

After one year through five years

 

 

Total

 

Commercial paper

 

$

17,098

 

 

$

 

 

$

17,098

 

 

$

4,524

 

 

$

 

 

$

4,524

 

Certificates of deposit

 

 

4,079

 

 

 

 

 

 

4,079

 

 

 

2,019

 

 

 

 

 

 

2,019

 

U.S. Treasury securities

 

 

14,855

 

 

 

9,785

 

 

 

24,640

 

 

 

9,816

 

 

 

5,538

 

 

 

15,354

 

U.S. agency securities

 

 

9,354

 

 

 

396

 

 

 

9,750

 

 

 

1,729

 

 

 

 

 

 

1,729

 

Corporate debt securities

 

 

15,295

 

 

 

3,446

 

 

 

18,741

 

 

 

3,037

 

 

 

1,425

 

 

 

4,462

 

Total investments AFS

 

$

60,681

 

 

$

13,627

 

 

$

74,308

 

 

$

21,125

 

 

$

6,963

 

 

$

28,088

 

 

7


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Note 2 — Investments Available for Sale (Continued)

During the ninethree months ended September 29,March 31, 2023, one of the Company’s investments AFS was the subject of a downgraded credit rating. The Company sold its investments of $600,000 in securities duringfollowing the first quarter of 2023 due to a downgraded credit rating.downgrade. The Company recognized a realized gain upon sale of $2,000 during the ninethree months ended September 29,March 31, 2023.

 

Note 3 — Inventories

Inventories, net are stated at the lower of cost and net realizable value, determined on a first-in, first-out basis and consisted of the following (in thousands):

 

 

September 29, 2023

 

 

December 30, 2022

 

 

March 29, 2024

 

 

December 29, 2023

 

Raw materials and purchased parts

 

$

9,591

 

 

$

6,703

 

 

$

9,591

 

 

$

9,766

 

Work in process

 

 

6,451

 

 

 

5,499

 

 

 

6,097

 

 

 

5,722

 

Finished goods

 

 

18,944

 

 

 

13,633

 

 

 

25,642

 

 

 

23,150

 

Total inventories, gross

 

 

34,986

 

 

 

25,835

 

 

 

41,330

 

 

 

38,638

 

Less inventory reserves

 

 

(3,925

)

 

 

(1,674

)

 

 

(2,749

)

 

 

(3,508

)

Total inventories, net

 

$

31,061

 

 

$

24,161

 

 

$

38,581

 

 

$

35,130

 

 

Note 4 — Prepayments, Deposits, and Other Current Assets

Prepayments, deposits, and other current assets consisted of the following (in thousands):

 

September 29, 2023

 

 

December 30, 2022

 

 

March 29, 2024

 

 

December 29, 2023

 

Prepayments and deposits

 

$

5,830

 

 

$

3,986

 

 

$

7,817

 

 

$

6,216

 

Prepaid insurance

 

 

455

 

 

 

2,620

 

 

 

1,968

 

 

 

2,314

 

Prepaid marketing costs

 

 

4,543

 

 

 

2,534

 

 

 

2,647

 

 

 

2,141

 

Consumption tax receivable

 

 

777

 

 

 

864

 

 

 

766

 

 

 

820

 

Value added tax (VAT) receivable

 

 

2,189

 

 

 

2,661

 

 

 

2,323

 

 

 

2,456

 

BVG (Swiss Pension) prepayment

 

 

801

 

 

 

111

 

 

 

1,416

 

 

 

23

 

Other(1)

 

 

932

 

 

 

700

 

 

 

444

 

 

 

739

 

Total prepayments, deposits and other current assets

 

$

15,527

 

 

$

13,476

 

 

$

17,381

 

 

$

14,709

 

 

(1)
No individual category in “other current assets” exceeds 5% of the total prepayments, deposits and other current assets.

10


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Note 5 — Property, Plant and Equipment

Property, plant and equipment, net consisted of the following (in thousands):

 

 

September 29, 2023

 

 

December 30, 2022

 

 

March 29, 2024

 

 

December 29, 2023

 

Machinery and equipment

 

$

29,461

 

 

$

28,026

 

 

$

32,547

 

 

$

30,874

 

Computer equipment and software

 

 

8,329

 

 

 

9,266

 

 

 

8,511

 

 

 

8,495

 

Furniture and fixtures

 

 

4,110

 

 

 

4,276

 

 

 

4,703

 

 

 

4,122

 

Leasehold improvements

 

 

10,047

 

 

 

14,965

 

 

 

11,736

 

 

 

10,780

 

Construction in process

 

 

40,174

 

 

 

32,269

 

 

 

45,149

 

 

 

40,364

 

Total property, plant and equipment, gross

 

 

92,121

 

 

 

88,802

 

 

 

102,646

 

 

 

94,635

 

Less accumulated depreciation

 

 

(29,235

)

 

 

(37,881

)

 

 

(30,309

)

 

 

(27,800

)

Total property, plant and equipment, net

 

$

62,886

 

 

$

50,921

 

 

$

72,337

 

 

$

66,835

 

8


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

 

Note 6 – Intangible Assets

Intangible assets, net consisted of the following (in thousands):

 

 

September 29, 2023

 

 

December 30, 2022

 

Long-lived amortized intangible assets

 

Gross
Carrying
Amount

 

 

Accumulated
Amortization

 

 

Net

 

 

Gross
Carrying
Amount

 

 

Accumulated
Amortization

 

 

Net

 

Patents and licenses

 

$

9,180

 

 

$

(9,180

)

 

$

 

 

$

9,240

 

 

$

(9,067

)

 

$

173

 

During the nine months ended September 29, 2023, the Company recognized full impairment of $154,000 for its Japan patents and licenses related to cataract IOLs.

Note 76 – Other Current Liabilities

Other current liabilities consisted of the following (in thousands):

 

 

September 29, 2023

 

 

December 30, 2022

 

 

March 29, 2024

 

 

December 29, 2023

 

Accrued salaries and wages

 

$

11,813

 

 

$

10,862

 

 

$

10,440

 

 

$

12,519

 

Accrued bonuses

 

 

2,517

 

 

 

6,925

 

 

 

2,325

 

 

 

3,456

 

Accrued insurance

 

 

1,460

 

 

 

2,315

 

Income taxes payable

 

 

8,540

 

 

 

3,845

 

 

 

9,708

 

 

 

10,848

 

Marketing obligations

 

 

1,571

 

 

 

1,374

 

 

 

2,097

 

 

 

1,874

 

Other(1)

 

 

11,824

 

 

 

7,735

 

 

 

9,231

 

 

 

9,926

 

Total other current liabilities

 

$

36,265

 

 

$

30,741

 

 

$

35,261

 

 

$

40,938

 

 

(1)
No individual category in “Other” exceeds 5% of the other current liabilities.

Note 87 – Leases

Finance Leases

The Company entered into finance leases primarily related to purchases of equipment used for manufacturing, computer-related equipment or furniture and fixtures. These finance leases are two to five years in length and have fixed payment amounts for the term of the contract and have options to purchase the assets at the end of the lease term. Supplemental balance sheet information related to finance leases consisted of the following (dollars in thousands):

11


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

 

Note 8 – Leases (Continued)

Finance Leases (Continued)

 

September 29, 2023

 

 

December 30, 2022

 

 

March 29, 2024

 

 

December 29, 2023

 

Machinery and equipment

 

$

 

 

$

30

 

Computer equipment and software

 

 

6

 

 

 

18

 

 

$

6

 

 

$

6

 

Furniture and fixtures

 

 

475

 

 

 

475

 

 

 

475

 

 

 

475

 

Finance lease right-of-use assets, gross

 

 

481

 

 

 

523

 

 

 

481

 

 

 

481

 

Less accumulated depreciation

 

 

(261

)

 

 

(181

)

 

 

(335

)

 

 

(298

)

Finance lease right-of-use assets, net

 

$

220

 

 

$

342

 

 

$

146

 

 

$

183

 

 

 

 

 

 

 

 

 

 

 

 

 

Current finance lease obligations

 

$

164

 

 

$

169

 

 

$

166

 

 

$

165

 

Long-term finance lease obligations

 

 

84

 

 

 

210

 

 

 

 

 

 

42

 

Total finance lease liability

 

$

248

 

 

$

379

 

 

$

166

 

 

$

207

 

Weighted-average remaining lease term (in years)

 

 

1.5

 

 

 

2.2

 

 

 

1.0

 

 

 

1.3

 

Weighted-average discount rate

 

 

4.23

%

 

 

4.10

%

 

 

4.25

%

 

 

4.24

%

 

Supplemental cash flow information related to finance leases consisted of the following (dollars in thousands):

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

September 29, 2023

 

 

September 30, 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

Amortization of finance lease right-of-use asset

 

$

37

 

 

$

39

 

 

$

114

 

 

$

121

 

 

$

37

 

 

$

39

 

Interest on finance lease liabilities

 

 

3

 

 

 

5

 

 

 

10

 

 

 

13

 

 

 

2

 

 

 

4

 

Cash paid for amounts included in the measurement of finance lease liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating cash flows

 

 

3

 

 

 

5

 

 

 

10

 

 

 

13

 

 

 

2

 

 

 

4

 

Financing cash flows

 

 

39

 

 

 

40

 

 

 

121

 

 

 

85

 

 

 

40

 

 

 

42

 

9


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Note 7 – Leases (Continued)

Operating Leases

The Company entered into operating leases primarily related to real property (office, manufacturing and warehouse facilities), automobiles and copiers. These operating leases are two to ten years in length with options to extend. The Company does not include any lease extensions in the initial valuation unless the Company was reasonably certain to extend the lease. Depending on the lease, there are those with fixed payment amounts for the entire length of the contract or payments which increase periodically as noted in the contract or increased at an inflation rate indicator. For operating leases that increase using an inflation rate indicator, the Company used the inflation rate at the time the lease was entered into for the length of the lease term. Supplemental balance sheet information related to operating leases consisted of the following (dollars in thousands):

 

September 29, 2023

 

 

December 30, 2022

 

 

March 29, 2024

 

 

December 29, 2023

 

Machinery and equipment

 

$

726

 

 

$

789

 

 

$

701

 

 

$

735

 

Computer equipment and software

 

 

446

 

 

 

446

 

 

 

445

 

 

 

446

 

Real property

 

 

41,313

 

 

 

34,465

 

 

 

42,291

 

 

 

40,869

 

Operating lease right-of-use assets, gross

 

 

42,485

 

 

 

35,700

 

 

 

43,437

 

 

 

42,050

 

Less accumulated depreciation

 

 

(7,493

)

 

 

(5,430

)

 

 

(8,837

)

 

 

(7,663

)

Operating lease right-of-use assets, net

 

$

34,992

 

 

$

30,270

 

 

$

34,600

 

 

$

34,387

 

 

 

 

 

 

 

 

 

 

 

 

 

Current operating lease obligations

 

$

4,003

 

 

$

3,524

 

 

$

4,403

 

 

$

4,202

 

Long-term operating lease obligations

 

 

31,643

 

 

 

27,136

 

 

 

31,126

 

 

 

31,425

 

Total operating lease liability

 

$

35,646

 

 

$

30,660

 

 

$

35,529

 

 

$

35,627

 

Weighted-average remaining lease term (in years)

 

 

7.5

 

 

 

7.5

 

 

 

7.2

 

 

 

7.3

 

Weighted-average discount rate

 

 

5.15

%

 

 

3.87

%

 

 

5.51

%

 

 

5.48

%

 

12


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Note 8 – Leases (Continued)

Operating Leases (Continued)

Supplemental cash flow information related to operating leases was as follows (dollars in thousands):

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

September 29, 2023

 

 

September 30, 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

Operating lease cost

 

$

1,419

 

 

$

1,167

 

 

$

3,883

 

 

$

3,471

 

 

$

2,223

 

 

$

1,107

 

Cash paid for amounts included in the measurement of operating lease liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating cash flows

 

 

1,259

 

 

 

1,103

 

 

 

3,584

 

 

 

3,069

 

 

 

1,384

 

 

 

1,173

 

Right-of-use assets obtained in exchange for new operating lease liabilities

 

 

4,580

 

 

 

126

 

 

 

8,000

 

 

 

1,166

 

 

 

1,495

 

 

 

1,909

 

Future Maturities of Lease Liabilities

Estimated future maturities of lease liabilities under operating and finance leases having initial or remaining non-cancelable lease terms more than one year as of SeptemberMarch 29, 20232024 is as follows (in thousands):

.

As of September 29, 2023
12 Months Ended

 

Operating Leases

 

 

Finance Leases

 

September 2024

 

$

5,957

 

 

$

171

 

September 2025

 

 

5,630

 

 

 

85

 

September 2026

 

 

4,987

 

 

 

 

September 2027

 

 

5,319

 

 

 

 

September 2028

 

 

5,381

 

 

 

 

Thereafter

 

 

18,105

 

 

 

 

Total future minimum lease payments

 

$

45,379

 

 

$

256

 

Less amounts representing interest

 

 

(9,733

)

 

 

(8

)

Total lease liability

 

$

35,646

 

 

$

248

 

As of March 29, 2024
12 Months Ended

 

Operating Leases

 

 

Finance Leases

 

March 2025

 

$

6,433

 

 

$

170

 

March 2026

 

 

5,379

 

 

 

 

March 2027

 

 

5,508

 

 

 

 

March 2028

 

 

5,633

 

 

 

 

March 2029

 

 

5,743

 

 

 

 

Thereafter

 

 

16,733

 

 

 

 

Total future minimum lease payments

 

$

45,429

 

 

$

170

 

Less amounts representing interest

 

 

(9,900

)

 

 

(4

)

Total lease liability

 

$

35,529

 

 

$

166

 

 

10


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Note 98 — Income Taxes

The Company recorded an income tax provision as follows (in thousands):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 29, 2023

 

 

September 30, 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

Provision for income taxes

 

$

1,929

 

 

$

2,315

 

 

$

6,366

 

 

$

6,671

 

 

 

Three Months Ended

 

 

 

March 29, 2024

 

 

March 31, 2023

 

Provision for income taxes

 

$

1,128

 

 

$

2,009

 

The effective tax rates for the three months ended SeptemberMarch 29, 2024 and March 31, 2023 and September 30, 2022 were (28.651.0)% and 18.442.6%, respectively, and were 31.9% and 16.9% for the nine months ended September 29, 2023 and September 30, 2022, respectively. The Company’s effective tax rates differ from the U.S. federal statutory rate of 21% for the three and nine months ended SeptemberMarch 29, 20232024 and September 30, 2022,March 31, 2023, respectively, primarily due to the income tax expense generated in foreign jurisdictions.

13


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Note 109 – Defined Benefit Pension Plans

The Company has defined benefit plans covering employees of its Switzerland and Japan operations. The following table summarizes the components of net periodic pension cost recorded for the Company’s defined benefit pension plans (in thousands):

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

September 29, 2023

 

 

September 30, 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

Service cost(1)

 

$

256

 

 

$

306

 

 

$

759

 

 

$

941

 

 

$

325

 

 

$

249

 

Interest cost(2)

 

 

91

 

 

 

22

 

 

 

268

 

 

 

63

 

 

 

84

 

 

 

87

 

Expected return on plan assets(2)

 

 

(92

)

 

 

(125

)

 

 

(270

)

 

 

(366

)

 

 

(132

)

 

 

(87

)

Prior service credit(2),(3)

 

 

(45

)

 

 

(44

)

 

 

(135

)

 

 

(135

)

 

 

(45

)

 

 

(45

)

Actuarial loss recognized in current period(2),(3)

 

 

(6

)

 

 

98

 

 

 

(19

)

 

 

274

 

 

 

28

 

 

 

(7

)

Net periodic pension cost

 

$

204

 

 

$

257

 

 

$

603

 

 

$

777

 

 

$

260

 

 

$

197

 

 

(1)
Recognized in selling general and administrative expenses on the Condensed Consolidated Statements of Income.
(2)
Recognized in other expense, net on the Condensed Consolidated Statements of Income.
(3)
Amounts reclassified from accumulated other comprehensive income (loss).

The Company currently is not required to and does not make contributions to its Japan pension plan. The Company’s contributions to its Swiss pension plan are as follows (in thousands):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 29, 2023

 

 

September 30, 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

Employer contribution

 

$

269

 

 

$

230

 

 

$

731

 

 

$

666

 

 

 

Three Months Ended

 

 

 

March 29, 2024

 

 

March 31, 2023

 

Employer contribution

 

$

267

 

 

$

217

 

 

Note 11 — Stockholders’ Equity

Stock-Based Compensation


The cost that has been charged against income for stock-based compensation is set forth below (in thousands):

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 29, 2023

 

 

September 30, 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

Employee stock options

 

$

3,517

 

 

$

2,865

 

 

$

9,973

 

 

$

7,649

 

Restricted stock

 

 

201

 

 

 

67

 

 

 

347

 

 

 

618

 

Restricted stock units

 

 

2,214

 

 

 

1,249

 

 

 

5,963

 

 

 

3,242

 

Performance stock units

 

 

2,449

 

 

 

1,240

 

 

 

5,958

 

 

 

2,932

 

Nonemployee stock options

 

 

465

 

 

 

306

 

 

 

1,093

 

 

 

934

 

Total stock-based compensation expense

 

$

8,846

 

 

$

5,727

 

 

$

23,334

 

 

$

15,375

 

The Company recorded stock-based compensation costs in the following categories (in thousands):

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 29, 2023

 

 

September 30, 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

Cost of sales

 

$

223

 

 

$

233

 

 

$

595

 

 

$

409

 

General and administrative

 

 

4,049

 

 

 

2,584

 

 

 

11,107

 

 

 

7,171

 

Selling and marketing

 

 

2,561

 

 

 

1,335

 

 

 

5,910

 

 

 

3,548

 

Research and development

 

 

2,013

 

 

 

1,575

 

 

 

5,722

 

 

 

4,247

 

Total stock-based compensation expense, net

 

 

8,846

 

 

 

5,727

 

 

 

23,334

 

 

 

15,375

 

Amounts capitalized as part of inventory

 

 

534

 

 

 

361

 

 

 

1,431

 

 

 

1,379

 

Total stock-based compensation expense, gross

 

$

9,380

 

 

$

6,088

 

 

$

24,765

 

 

$

16,754

 

14


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

 

Note 1110 — Stockholders’ Equity (Continued)

Stock-Based Compensation (Continued)

As of September 29, 2023, total unrecognized compensation cost related to non-vested stock-based compensation arrangements were as follows (in thousands):

 

 

September 29, 2023

 

Stock options

 

$

23,888

 

Restricted stock, RSUs and PSUs

 

 

24,690

 

Total unrecognized stock-based compensation cost

 

$

48,578

 

The cost is expected to be recognized over a weighted-average period of approximately two years.

Incentive Plan

The Company maintains an Amended and Restated Omnibus Equity Incentive Plan (“the(the “Equity Plan”) provides. The Equity Plan allows for various formsawards of stock-based incentives. To date, of the available forms of awards under the Plan, the Company has granted only stock options, stock appreciation rights, restricted stock, unrestricted share grants, restricted stock units (“RSUs”) and performance stock units (“PSUs”). Options and other stock- and cash-based awards, including awards that are subject to service-based and performance-based vesting conditions. As of March 29, 2024, the Company had outstanding grants of stock options, restricted stock awards, RSUs and PSUs.

Stock option granted under the Equity Plan are granted at fair market value on the date of grant, become exercisable generally over a three-year period, or as determined by the Board of Directors, and expire over periods not exceeding 10 years from the date of grant. Certain optionstock options and sharestock-based awards provide for accelerated vesting if there is a change in control and pre-established financial metrics are met (as defined in the Equity Plan). Grants of restricted stock outstanding under the Equity Plan generally vest over periods of one to three years. Grants of RSUs and PSUs outstanding under the Equity Plan generally vest based on service, performance, or a combination of both. On June 15, 2023, stockholders approved a proposal to increase the number of shares under the plan by 2,170,000 shares, for a total of 20,205,000 shares. As of SeptemberMarch 29, 2023,2024, there were 2,784,909962,029 shares available for grant under the Equity Plan.

Stock-Based Compensation

The cost that has been charged against income for stock-based compensation is set forth below (in thousands):

 

 

Three Months Ended

 

 

 

March 29, 2024

 

 

March 31, 2023

 

Employee stock options

 

$

3,173

 

 

$

2,977

 

Restricted stock

 

 

28

 

 

 

67

 

RSUs

 

 

2,312

 

 

 

1,601

 

PSUs

 

 

685

 

 

 

1,106

 

Nonemployee stock options

 

 

141

 

 

 

314

 

Total stock-based compensation expense

 

$

6,339

 

 

$

6,065

 

The Company recorded stock-based compensation costs in the following categories (in thousands):

 

 

Three Months Ended

 

 

 

March 29, 2024

 

 

March 31, 2023

 

Cost of sales

 

$

298

 

 

$

149

 

General and administrative

 

 

3,075

 

 

 

3,363

 

Selling and marketing

 

 

1,210

 

 

 

857

 

Research and development

 

 

1,756

 

 

 

1,696

 

Total stock-based compensation expense, net

 

 

6,339

 

 

 

6,065

 

Amounts capitalized as part of inventory

 

 

337

 

 

 

369

 

Total stock-based compensation expense, gross

 

$

6,676

 

 

$

6,434

 

As of March 29, 2024, total unrecognized compensation cost related to non-vested stock-based compensation arrangements were as follows (in thousands):

 

 

March 29, 2024

 

Stock options

 

$

28,392

 

Restricted stock, RSUs and PSUs

 

 

43,614

 

Total unrecognized stock-based compensation cost

 

$

72,006

 

The cost is expected to be recognized over a weighted-average period of approximately two years.

12


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Note 10 — Stockholders’ Equity (Continued)

Assumptions

The fair value of each stock option award is estimated on the date of grant using a Black-Scholes option valuation model applying the weighted-average assumptions noted in the following table. Expected volatilities are based on historical volatility of the Company’s stock. The expected term of stock options granted is derived from the historical exercises and post-vesting cancellations and represents the period of time that stock options granted are expected to be outstanding. The Company has calculated a 78% estimated forfeiture rate based on historical forfeiture experience. The risk-free rate is based on the U.S. Treasury yield curve corresponding to the expected term at the time of the grant.

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

September 29, 2023

 

 

September 30, 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

Expected dividend yield

 

 

0

%

 

 

0

%

 

 

0

%

 

 

0

%

 

 

0

%

 

 

0

%

Expected volatility

 

 

60

%

 

 

54

%

 

 

60

%

 

 

54

%

 

 

59

%

 

 

60

%

Risk-free interest rate

 

 

4.18

%

 

 

2.91

%

 

 

3.91

%

 

 

1.88

%

 

 

4.16

%

 

 

3.96

%

Expected term (in years)

 

 

5.05

 

 

 

5.10

 

 

 

5.05

 

 

 

5.10

 

 

 

5.29

 

 

 

5.05

 

15


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Note 11 — Stockholders’ Equity (Continued)

Stock Options

A summary of stock option activity under the Equity Plan for ninethree months ended SeptemberMarch 29, 20232024 is presented below:

 

 

Stock
Options
(in 000’s)

 

 

Weighted-
Average
Exercise
Price

 

 

Weighted-
Average
Remaining
Contractual
Term (years)

 

 

Aggregate
Intrinsic
Value
(in 000’s)

 

 

Stock
Options
(in 000’s)

 

 

Weighted-
Average
Exercise
Price

 

 

Weighted-
Average
Remaining
Contractual
Term (years)

 

 

Aggregate
Intrinsic
Value
(in 000’s)

 

Outstanding at December 30, 2022

 

 

2,469

 

 

$

39.63

 

 

 

 

 

 

 

Outstanding at December 29, 2023

 

 

2,630

 

 

$

46.38

 

 

 

 

 

 

 

Granted

 

 

622

 

 

 

55.84

 

 

 

 

 

 

 

 

 

523

 

 

 

37.21

 

 

 

 

 

 

 

Exercised

 

 

(500

)

 

 

18.54

 

 

 

 

 

 

 

 

 

(187

)

 

 

28.50

 

 

 

 

 

 

 

Forfeited or expired

 

 

(38

)

 

 

72.49

 

 

 

 

 

 

 

 

 

(83

)

 

 

76.05

 

 

 

 

 

 

 

Outstanding at September 29, 2023

 

 

2,553

 

 

$

47.22

 

 

 

6.77

 

 

$

19,641

 

Exercisable at September 29, 2023

 

 

1,663

 

 

$

39.11

 

 

 

5.52

 

 

$

19,641

 

Outstanding at March 29, 2024

 

 

2,883

 

 

$

45.01

 

 

 

6.98

 

 

$

16,386

 

Exercisable at March 29, 2024

 

 

1,668

 

 

$

42.93

 

 

 

5.41

 

 

$

15,090

 

 

Restricted Stock, Restricted Stock Units and Performance Stock Units

A summary of restricted stock, RSUsRSU and PSUsPSU activity under the Equity Plan for the ninethree months ended SeptemberMarch 29, 20232024 is presented below (shares in thousands):

 

 

Restricted
Stock

 

 

RSUs

 

 

PSUs

 

 

Restricted
Stock

 

 

RSUs

 

 

PSUs

 

Unvested at December 30, 2022

 

 

4

 

 

 

192

 

 

 

118

 

Unvested at December 29, 2023

 

 

14

 

 

 

401

 

 

 

56

 

Granted

 

 

12

 

 

 

269

 

 

 

182

 

 

 

 

 

 

415

 

 

 

390

 

Vested

 

 

(4

)

 

 

(94

)

 

 

(36

)

 

 

 

 

 

(110

)

 

 

(24

)

Forfeited or expired

 

 

 

 

 

(6

)

 

 

(13

)

 

 

(4

)

 

 

(1

)

 

 

(4

)

Unvested at September 29, 2023

 

 

12

 

 

 

361

 

 

 

251

 

Unvested at March 29, 2024

 

 

10

 

 

 

705

 

 

 

418

 

 

13


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Note 1211 - Commitments and Contingencies

Severance Payable

As of September 29, 2023 and December 30, 2022 there was severance payable of $422,000 and $410,000, respectively. recognized in other current liabilities on the Consolidated Balance Sheets, which included approximately $258,000 and $300,000, respectively, in one-time employee benefits to be paid to certain employees in STAAR Japan who work primarily in IOL sales. During the three and nine months ended September 29, 2023, the Company recognized $80,000 and $1,441,000, respectively, related to this. The Company is expected to incur through the end of 2023, one-time employee benefits of approximately $1,457,000 related to this. These one-time employee benefits are recognized in general and administrative expense on the Consolidated Statements of Income.

Litigation and Claims

From time to time, the Company is involved in various legal proceedings and other matters arising in the normal course of business. These legal proceedings and other matters may relate to, among other things, contractual rights and obligations, employment matters, or claims of product liability. STAARThe Company maintains insurance coverage for various matters, including product liability and certain securities claims. While the Company does not believe that any of the claims known is likely to have a material adverse effect on the Company’s financial condition or results of operations, new claims or unexpected results of existing claims could lead to significant financial harm.

Employment Agreements

The Company’s Chief Executive Officer entered into an employment agreement with the Company, effective January 1, 2023. He and certain officers have as provisions of their agreements certain rights, including continuance of cash compensation and benefits, upon a “change in control,” which may include an acquisition of substantially all its assets, or termination “without cause or for good reason” as defined in the employment agreements.

16


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Note 1312 — Basic and Diluted Net Income (Loss) Per Share

The following table sets forth the computation of basic and diluted net income per share (in thousands except per share amounts):

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

September 29, 2023

 

 

September 30, 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

4,817

 

 

$

10,262

 

 

$

13,591

 

 

$

32,902

 

Net income (loss)

 

$

(3,339

)

 

$

2,710

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

 

48,625

 

 

 

48,106

 

 

 

48,438

 

 

 

47,919

 

 

 

48,907

 

 

 

48,251

 

Less: Unvested restricted stock

 

 

(12

)

 

 

(4

)

 

 

(12

)

 

 

(4

)

 

 

 

 

 

(4

)

Denominator for basic calculation

 

 

48,613

 

 

 

48,102

 

 

 

48,426

 

 

 

47,915

 

 

 

48,907

 

 

 

48,247

 

Weighted average effects of potentially diluted common stock:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

 

679

 

 

 

1,336

 

 

 

933

 

 

 

1,378

 

 

 

 

 

 

1,116

 

Unvested restricted stock

 

 

 

 

 

2

 

 

 

3

 

 

 

2

 

 

 

 

 

 

3

 

RSUs

 

 

17

 

 

 

64

 

 

 

67

 

 

 

55

 

 

 

 

 

 

81

 

PSUs

 

 

61

 

 

 

45

 

 

 

65

 

 

 

21

 

 

 

 

 

 

53

 

Denominator for diluted calculation

 

 

49,370

 

 

 

49,549

 

 

 

49,494

 

 

 

49,371

 

 

 

48,907

 

 

 

49,500

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

Basic

 

$

0.10

 

 

$

0.21

 

 

$

0.28

 

 

$

0.69

 

 

$

(0.07

)

 

$

0.06

 

Diluted

 

$

0.10

 

 

$

0.21

 

 

$

0.27

 

 

$

0.67

 

 

$

(0.07

)

 

$

0.05

 

Because the Company had a net loss for the three months ended March 29, 2024, the number of diluted shares is equal to the number of basic shares. The following table sets forth (in thousands) the weighted average number of options to purchase shares of common stock, restricted stock, RSUs and PSUs with either exercise prices or unrecognized compensation cost per share greater than the average market price per share of the Company’s common stock, which were not included in the calculation of diluted per share amounts because the effects would be anti-dilutive.

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

September 29, 2023

 

 

September 30, 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

Stock options

 

 

2,453

 

 

 

864

 

 

 

1,853

 

 

 

865

 

 

 

4,316

 

 

 

1,392

 

Restricted stock, RSUs and PSUs

 

 

341

 

 

 

2

 

 

 

26

 

 

 

20

 

 

 

495

 

 

 

15

 

Total

 

 

2,794

 

 

 

866

 

 

 

1,879

 

 

 

885

 

 

 

4,811

 

 

 

1,407

 

 

14


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Note 1413 — Disaggregation of Sales, Geographic Sales and Product Sales

In the following tables, sales are disaggregated by category, sales by geographic market and sales by product data. The following breaks down sales into the following categories (in thousands):

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

September 29, 2023

 

 

September 30, 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

Non-consignment sales

 

$

75,296

 

 

$

71,223

 

 

$

230,527

 

 

$

205,236

 

 

$

71,764

 

 

$

67,163

 

Consignment sales

 

 

5,012

 

 

 

4,823

 

 

 

15,615

 

 

 

15,111

 

 

 

5,592

 

 

 

6,365

 

Total net sales

 

$

80,308

 

 

$

76,046

 

 

$

246,142

 

 

$

220,347

 

 

$

77,356

 

 

$

73,528

 

 

The Company markets and sells its products in over 75 countries and conducts its manufacturing in the United States. Other than China and Japan, the Company does not conduct business in any country in which its sales exceed 10% of worldwide consolidated net sales. Sales are attributed to countries based on location of customers. The composition of the Company’s net sales to unaffiliated customers was as follows (in thousands):

17


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Note 14 — Disaggregation of Sales, Geographic Sales and Product Sales (Continued)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

September 29, 2023

 

 

September 30, 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

Domestic

 

$

4,164

 

 

$

3,873

 

 

$

13,061

 

 

$

10,375

 

 

$

4,935

 

 

$

4,551

 

Foreign:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

China

 

 

48,287

 

 

 

42,246

 

 

 

144,716

 

 

 

116,635

 

 

 

38,549

 

 

 

35,090

 

Japan

 

 

9,175

 

 

 

10,546

 

 

 

28,526

 

 

 

32,481

 

 

 

10,456

 

 

 

10,936

 

Other(1)

 

 

18,682

 

 

 

19,381

 

 

 

59,839

 

 

 

60,856

 

 

 

23,416

 

 

 

22,951

 

Total foreign sales

 

 

76,144

 

 

 

72,173

 

 

 

233,081

 

 

 

209,972

 

 

 

72,421

 

 

 

68,977

 

Total net sales

 

$

80,308

 

 

$

76,046

 

 

$

246,142

 

 

$

220,347

 

 

$

77,356

 

 

$

73,528

 

 

(1)
No other location individually exceeds 10% of the total sales.

100% of the Company’s sales are generated from the ophthalmic surgical product segment and the chief operating decision maker makes operating decisions and allocates resources based upon the consolidated operating results, and therefore the Company operates as one operating segment for financial reporting purposes. The Company’s principal products are implantable Collamer lenses (“ICLs”) used in refractive surgerysurgery. Historically the Company marketed and sold cataract intraocular lenses (“IOLs”) usedand related injectors and injector parts. The Company phased out sales of such products in cataract surgery.fiscal 2023, and does not expect to sell any such products in fiscal 2024 or thereafter. The composition of the Company’s net sales by product line was as follows (in thousands):

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

September 29, 2023

 

 

September 30, 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

ICLs

 

$

81,069

 

 

$

71,953

 

 

$

244,806

 

 

$

208,550

 

 

$

77,151

 

 

$

70,625

 

Other product sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cataract IOLs

 

 

(221

)

 

 

2,191

 

 

 

1,295

 

 

 

7,640

 

 

 

 

 

 

1,476

 

Other surgical products(1)

 

 

(540

)

 

 

1,902

 

 

 

41

 

 

 

4,157

 

 

 

205

 

 

 

1,427

 

Total other product sales

 

 

(761

)

 

 

4,093

 

 

 

1,336

 

 

 

11,797

 

 

 

205

 

 

 

2,903

 

Total net sales

 

$

80,308

 

 

$

76,046

 

 

$

246,142

 

 

$

220,347

 

 

$

77,356

 

 

$

73,528

 

 

(1) Other surgical products include delivery systems and normal recurring sales adjustments such as sales return allowances.

 

One customer, theThe Company’s distributor in China distributors accounted for 6049% and 5648% of net sales for the three months ended SeptemberMarch 29, 2024 and March 31, 2023, respectively. As of March 29, 2024 and December 29, 2023, and September 30, 2022, respectively, and the same customerCompany’s China distributors accounted for 5954% and 5370% for the nine months ended September 29, 2023 and September 30, 2022, respectively. As of September 29, 2023 and December 30, 2022,, respectively, one customer, the Company’s distributor in China, accounted for 78% and 59% of consolidated trade receivables.

Note 15 — COVID-19 Developments

In December 2019, COVID-19 surfaced and in March 2020, the World Health Organization declared a pandemic related to the rapid spread of COVID-19 around the world. The impact of the COVID-19 outbreak on the businesses and the economy in the U.S. and the rest of the world is, and is expected to continue to be, uncertain and may continue to be significant as COVID-19 variant strains emerge. The Company’s revenues have been adversely impacted, and the Company experienced a substantial slowdown in sales beginning March 20, 2020 in global geographies characterized as “hot spots” for the COVID-19 virus, including parts of Europe, North America, Asia, the Middle East and India. In certain of these markets, sales have paused as elective surgeries are discouraged to support COVID-19 related needs. While COVID-19 restrictions have since eased globally, a resurgence of the COVID-19 pandemic in global geographies, depending upon its duration and severity, could material adversely impact the global economy and the Company's industry, operations and financial condition and performance. The Company continues to monitor the commercial and operational impact of new variants of COVID-19 in its markets.

18


 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The matters addressed in this Item 2 that are not historical information constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. Readersamended (“Exchange Act”), and the Private Securities Litigation Reform Act of 1995, and is subject to the safe harbor created therein. In some cases readers can recognize forward-looking statements by the use of words like “anticipate,” “estimate,” “expect,” “project,” “intend,” “may,” “plan,” “believe,” “will,” “should,” “forecast”“could,” “forecast,” “potential,” “continue,” “ongoing” (or the negative of those words and similar expressions in connection with any discussion of future operatingwords or financial performance.expressions), although not all forward-looking statements contain these words. In particular, these include statements aboutregarding the intent, belief or current expectations of the Company and its management regarding any of the following: any projections of or guidance as to future earnings, revenue, sales, profit margins, expense rate, cash, effective tax rate, product mix, capital expense or any other financial items; the expected impact of the COVID-19 pandemic and related public health measures (including but not limited to their impact on sales, operations or clinical trials globally),; the plans, strategies, and objectives of management for future operations or prospects for achieving such plans; statements regarding new, existing, or improved products, including but not limited to, expectations for success of new, existing, and improved products in the U.S. or international markets or government approval of a new or improved products; commercialization of new or improved products; future economic conditions or size of market opportunities; expected costs of operations; statements of belief, including as to achieving 2023 business plans;plans for 2024 and beyond; expected regulatory activities and approvals, product launches, and any statements of assumptions underlying any of the foregoing.

Although we believe that the expectations reflected in these forward-looking statements are reasonable, we caution investors and prospective investors that any such forward-looking statements are inherently subjectnot guarantees of future performance and involve risks, uncertainties, assumptions and other factors, which if they do not materialize or prove correct, could cause actual results to risks and we can give no assurance that our expectations will prove to be correct. Actual results could differ materially from those describedexpressed or implied by such forward-looking statements. We caution you not to place undue reliance on these forward-looking statements and to note they speak only as of the date hereof. Factors that could cause actual results to differ materially from those set forth in this report because of numerous factors, many of which are beyond our control. These factorsthe forward-looking statements include, without limitation, those described in our Annual Report on Form 10-K in “Item 1A. Risk Factors” filed on February 23, 2023.27, 2024. We undertake nodisclaim any intention or obligation to update or review these financial projections or forward-looking statements after the date of this reportdue to reflect futurenew information or other events or circumstances or to reflect actual outcomes.except as required by law.

The following discussion should be read in conjunction with the audited consolidated financial statements of STAAR,Company’s unaudited Condensed Consolidated Financial Statements, including the related notes, provided in this report.

We intend to use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included on our website in the ‘Investor Relations’ sections. Accordingly, investors should monitor such portions of our website, in addition to following our press releases, SEC filings and public conference calls and webcasts.

Overview

STAAR Surgical Company designs, develops, manufactures, and sells implantable lenses for the eye and companionaccessory delivery systems used to deliver the lenses into the eye. We are the world’s leading manufacturer of intraocular lenses for patients seeking refractive vision correction. All the lenses we make are foldable, which allows the surgeon to insert them into the eye through a small incision during minimally invasive surgery. Refractive surgery is performed to treat the type of visual disorders that have traditionally been corrected using eyeglasses or contact lenses. We refer to ourphakic implantable lenses used worldwide in refractivecorrective or “refractive” surgery. We have been dedicated solely to ophthalmic surgery as “implantable Collamer® lenses” or “ICLs.” The field of refractive surgery includes both lens-based procedures, using products like our ICL family of products, and laser-based procedures like LASIK. Successful refractive surgery can correct common vision disorders such as myopia, hyperopia, and astigmatism. STAAR employs a commercialization strategy that strives for sustainable profitable growth.over 40 years. Our goal is to position our refractive lenses throughout the world as primary and premium solutions for patients seeking visual freedom from wearing eyeglasses or contact lenses while achieving excellent visual acuity through refractive vision correction.

Recent Developments We generate worldwide revenue almost exclusively from sales of our implantable Collamer® lenses, or “ICLs.” Our ICLs are made from Collamer, which is a proprietary collagen copolymer material created and exclusively used by STAAR to make our lenses soft, flexible and biocompatible with the eye. Our ICLs are phakic lenses, meaning that they are implanted into the eye without removing the eye’s natural crystalline lens. This distinguishes an ICL procedure from other refractive procedures, as it does not involve the removal of corneal eye tissue. All of our ICLs are foldable, which allows the surgeon to insert them into the eye through a small incision during minimally invasive surgery. Further, while ICLs are intended to be permanent, our ICLs are reversible lens implants, meaning they can be removed by a doctor if desired.

STAAR achieved 13%employs a commercialization strategy that strives for sustainable profitable growth. Our growth strategy includes making our complete ICL product line available in our existing geographic markets and expanding into attractive markets where we do not sell our products today. In addition, we are focused on driving awareness of the ICL sales in the third quarter of 2023, compared to the third quarter of 2022, with ICL sales growth in the Asia Pacific markets up 13%, EMEA markets up 14%,procedure and the Americas up 5%. In China, ICL sales were up 14% compared to the second quarterclinical benefits of 2022. The uncertain economic environment globallyour ICLs, and world events may have an impact onproviding surgeon training, support and education, particularly in our surgeon customers and patients. As a result, while we are reaffirming our previously provided outlook for fiscal 2023 ICL sales of $320 million to $325 million, revenue may come in at the lower end of the range should macroeconomic weakness and/or other disruptions materialize.newer markets.

16

On October 25, we began a voluntary recall of approximately 300 EVO/EVO+ lenses with a measurement deviating +/- 0.5 diopters from the as labeled power. We have identified and fixed the problem. We do not expect material operational costs related to this matter.

19


 

Critical Accounting Estimates

This Management’s Discussion and Analysis of Financial Condition and Results of IncomeOperations discusses and analyzes data in our unaudited Condensed Consolidated Financial Statements provided in this report, which we have prepared in accordance with U.S. generally accepted accounting principles. Preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Senior management has discussed the development, selection and disclosure of these estimates with the Audit Committee of our Board of Directors. Actual conditions may differ from our assumptions and actual results may differ from our estimates.

Management believes that there have been no significant changes during the ninethree months ended SeptemberMarch 29, 20232024 to the items that we disclosed as our critical accounting estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 30, 2022.29, 2023.

Results of Operations

The following table shows the percentage of our total sales represented by certain items reflected in our Condensed Consolidated Statements of Income for the periods indicated.

 

 

Percentage of Net
Sales for Three Months

 

 

Percentage of Net
Sales for Nine Months

 

 

Percentage of Net
Sales for Three Months

 

 

September 29, 2023

 

 

September 30, 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

Net sales

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

Cost of sales

 

 

20.8

%

 

 

20.5

%

 

 

22.0

%

 

 

21.2

%

 

 

21.1

%

 

 

21.7

%

Gross profit

 

 

79.2

%

 

 

79.5

%

 

 

78.0

%

 

 

78.8

%

 

 

78.9

%

 

 

78.3

%

General and administrative

 

 

24.0

%

 

 

18.4

%

 

 

22.6

%

 

 

18.1

%

 

 

30.0

%

 

 

24.7

%

Selling and marketing

 

 

33.1

%

 

 

30.4

%

 

 

34.6

%

 

 

29.3

%

 

 

34.5

%

 

 

35.8

%

Research and development

 

 

14.3

%

 

 

12.7

%

 

 

13.6

%

 

 

12.0

%

 

 

17.3

%

 

 

14.0

%

Total selling, general and administrative

 

 

71.4

%

 

 

61.5

%

 

 

70.8

%

 

 

59.4

%

 

 

81.8

%

 

 

74.5

%

Operating income

 

 

7.8

%

 

 

18.0

%

 

 

7.2

%

 

 

19.4

%

Total other income (expense), net

 

 

0.6

%

 

 

(1.5

)%

 

 

0.9

%

 

 

(1.5

)%

Income before income taxes

 

 

8.4

%

 

 

16.5

%

 

 

8.1

%

 

 

17.9

%

Operating income (loss)

 

 

(2.9

)%

 

 

3.8

%

Total other income, net

 

 

0.1

%

 

 

2.6

%

Income (loss) before income taxes

 

 

(2.8

)%

 

 

6.4

%

Provision for income taxes

 

 

2.4

%

 

 

3.0

%

 

 

2.6

%

 

 

3.0

%

 

 

1.5

%

 

 

2.7

%

Net income

 

 

6.0

%

 

 

13.5

%

 

 

5.5

%

 

 

14.9

%

Net income (loss)

 

 

(4.3

)%

 

 

3.7

%

 

Net Sales

The following table presents our net sales, by product (dollars in thousands):

 

 

 

Three Months Ended

 

 

Percentage
Change

 

 

Nine Months Ended

 

 

Percentage
Change

 

 

 

September 29, 2023

 

 

September 30, 2022

 

 

2023 vs. 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

2023 vs. 2022

 

ICLs

 

$

81,069

 

 

$

71,953

 

 

 

12.7

%

 

$

244,806

 

 

$

208,550

 

 

 

17.4

%

Other product sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cataract IOLs

 

 

(221

)

 

 

2,191

 

 

 

*

 

 

1,295

 

 

 

7,640

 

 

 

(83.0

)%

Other surgical products

 

 

(540

)

 

 

1,902

 

 

 

*

 

 

41

 

 

 

4,157

 

 

 

(99.0

)%

Total other product sales

 

 

(761

)

 

 

4,093

 

 

 

*

 

 

1,336

 

 

 

11,797

 

 

 

(88.7

)%

Net sales

 

$

80,308

 

 

$

76,046

 

 

 

5.6

%

 

$

246,142

 

 

$

220,347

 

 

 

11.7

%

* Denotes change is greater than +100%.

 

 

Three Months Ended

 

 

Percentage
Change

 

 

 

March 29, 2024

 

 

March 31, 2023

 

 

2024 vs. 2023

 

ICLs

 

$

77,151

 

 

$

70,625

 

 

 

9.2

%

Other product sales:

 

 

 

 

 

 

 

 

 

Cataract IOLs

 

 

 

 

 

1,476

 

 

 

(100.0

)%

Other surgical products

 

 

205

 

 

 

1,427

 

 

 

(85.6

)%

Total other product sales

 

 

205

 

 

 

2,903

 

 

 

(92.9

)%

Net sales

 

$

77,356

 

 

$

73,528

 

 

 

5.2

%

Net sales for the three months ended SeptemberMarch 29, 20232024 increased 6%5% from the same period of 2022.2023. The increase in net sales was primarily due to increased ICL sales of $9.1$6.5 million, slightly offset by decreased other product sales of $4.9 million. Changes in foreign currency favorably impacted net sales by $0.1 million.

20


Net sales for the nine months ended September 29, 2023 increased 12% from the same period of 2022. The increase in net sales was primarily due to increased ICL sales of $36.3 million, slightly offset by decreased other product sales of $10.5$2.7 million. Changes in foreign currency unfavorably impacted net sales by $2.3$1.0 million.

Total ICL sales for the three months ended SeptemberMarch 29, 20232024 increased 13%9% from the same period of 2022,2023, with unit increase of 14%2%. The APAC region sales increased by 13%9%, with unit growth up 15%decrease of 1%, due to sales growth in India up 40%, China up 14%10%, Japan up 12%11% and other APAC regionsChina up 6%10%. The EMEA region sales increased 14%11% with unit growth up 13%22%, due to sales increases in our distributor markets up 20% and35%, partially offset by direct markets up 9%down 5%. The Americas region sales increased 5%12%, with unit growth up 3%, primarily due to sales growth in Canada up 26% and the U.S. up 6%, partially offset by sales decrease in Latin America of 12%. Changes in foreign currency favorably impacted ICL sales by $0.1 million for the three months ended September 29, 2023. ICL sales represented 100.9% and 94.6% of our total sales for the three months ended September 29, 2023 and September 30, 2022, respectively.

Total ICL sales for the nine months ended September 29, 2023 increased 17% from the same period of 2022, with unit increase of 19%. The APAC region sales increased by 20%, with unit growth up 21%, due to sales growth in China up 24%, India up 20%, other APAC regions up 10%, Japan up 10% and Korea up 4%. The EMEA region sales increased 4%, with unit decrease of 2%, due to sales increases in our distributor markets up 5% and our direct markets up 3%. The Americas region sales increased 18%, with unit growth up 16%17


11%, primarily due to sales growth in the U.S. up 23%15% and Canada up 11%. In late March 2022, the U.S. started to sell EVO ICLs. Changes in foreign currency unfavorably impacted ICL sales by $2.0$1.0 million for the ninethree months ended SeptemberMarch 29, 2023, which impacted our Japan and Europe, Middle East and Africa markets.2024. ICL sales represented 99.5%99.7% and 94.6%96.1% of our total sales for the ninethree months ended SeptemberMarch 29, 20232024 and September 30, 2022,March 31, 2023, respectively.

Other product sales, includes cataract IOLs,intraocular lenses (“IOLs”), delivery systems and normal recurring sales adjustments such as sales return allowances. As a result of third-party materials and supply chain challenges that affectaffected our cataract IOLs and associated delivery devices, we will no longer manufacturehave phased out sales of our cataract IOLs thoughas we will continuefocus on growing our ICL business. During 2023, we stopped manufacturing cataract IOLs, and we do not plan to support these products through the end of 2023, as supplies permit.sell cataract IOLs in 2024. We do not expect this decision to have a significant impact to revenue growth in future years. Other product sales for the three and nine months ended SeptemberMarch 29, 2023,2024, decreased 119% and 89%, respectively,93% from the same period of 2022,2023, due primarily to a reduction in cataract IOL sales and decreased sales of cataract IOL injector parts and increased sales return reserves. Changes in foreign currency unfavorably impacted other product sales by $0.3 million for the nine months ended September 29, 2023.parts. Other product sales represented (0.9%)0.3% and 5.4%3.9% of our total sales for the three months ended SeptemberMarch 29, 20232024 and September 30, 2022, respectively, and represented 0.5% and 5.4% of our total sales for the nine months ended September 29,March 31, 2023, and September 30, 2022, respectively.

Gross Profit

The following table presents our gross profit and gross profit margin (dollars in thousands):

 

 

Three Months Ended

 

 

Percentage
Change

 

 

Nine Months Ended

 

 

Percentage
Change

 

 

Three Months Ended

 

 

Percentage
Change

 

 

September 29, 2023

 

 

September 30, 2022

 

 

2023 vs. 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

2023 vs. 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

 

2024 vs. 2023

 

Gross profit

 

$

63,638

 

 

$

60,462

 

 

 

5.3

%

 

$

191,926

 

 

$

173,598

 

 

 

10.6

%

 

$

61,035

 

 

$

57,562

 

 

 

6.0

%

Gross margin

 

 

79.2

%

 

 

79.5

%

 

 

 

 

 

78.0

%

 

 

78.8

%

 

 

 

 

 

78.9

%

 

 

78.3

%

 

 

 

 

Gross profit for the three months ended SeptemberMarch 29, 20232024 increased 5.3%6.0%, from the same period of 2022.2023. Gross profit margin decreasedincreased to 79.2%78.9% of revenue for the three months ended SeptemberMarch 29, 20232024 compared to 79.5%78.3% of revenue for the three months ended September 30, 2022,March 31, 2023, due mainlyprimarily to increased sales return reserves and period costs associated with manufacturing projects, partially offset by product and geographic sales mix.country mix of ICL sales.

Gross profit for the nine months ended September 29, 2023 increased 10.6%, from the same period of 2022. Gross profit margin decreased to 78.0% of revenue for the nine months ended September 29, 2023 compared to 78.8% of revenue for the nine months ended September 30, 2022, due mainly to reserves related to cataract IOLs.

21


General and Administrative Expense

The following table presents our general and administrative expenses (dollars in thousands):

 

 

Three Months Ended

 

 

Percentage
Change

 

 

Nine Months Ended

 

 

Percentage
Change

 

 

Three Months Ended

 

 

Percentage
Change

 

 

September 29, 2023

 

 

September 30, 2022

 

 

2023 vs. 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

2023 vs. 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

 

2024 vs. 2023

 

General and administrative expense

 

$

19,266

 

 

$

14,011

 

 

 

37.5

%

 

$

55,461

 

 

$

39,934

 

 

 

38.9

%

 

$

23,228

 

 

$

18,098

 

 

 

28.3

%

Percentage of sales

 

 

24.0

%

 

 

18.4

%

 

 

 

 

 

22.6

%

 

 

18.1

%

 

 

 

 

 

30.0

%

 

 

24.7

%

 

 

 

General and administrative expenses for the three months ended SeptemberMarch 29, 20232024 increased 37.5%28.3% from the same period of 20222023 due to increased salary-related and payroll tax expenses, outside services, facility costs and bonus and stock-based compensation expenses.

General and administrative expenses for the nine months ended September 29, 2023 increased 38.9% from the same period of 2022 due to increased salary-related and payroll tax expenses, outside services, bonus and stock-based compensation expenses, facility costs and Japan one-time employee benefits.expenses.

Selling and Marketing Expense

The following table presents our selling and marketing expenses (dollars in thousands):

 

 

Three Months Ended

 

 

Percentage
Change

 

 

Nine Months Ended

 

 

Percentage
Change

 

 

Three Months Ended

 

 

Percentage
Change

 

 

September 29, 2023

 

 

September 30, 2022

 

 

2023 vs. 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

2023 vs. 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

 

2024 vs. 2023

 

Selling and marketing expense

 

$

26,607

 

 

$

23,130

 

 

 

15.0

%

 

$

85,238

 

 

$

64,633

 

 

 

31.9

%

 

$

26,708

 

 

$

26,354

 

 

 

1.3

%

Percentage of sales

 

 

33.1

%

 

 

30.4

%

 

 

 

 

 

34.6

%

 

 

29.3

%

 

 

 

 

 

34.5

%

 

 

35.8

%

 

 

 

Selling and marketing expenses for the three months ended SeptemberMarch 29, 20232024 increased 15.0%1.3% from the same period of 20222023 due to increased advertising and promotional activities, salary-related and payroll tax expenses, trade shows and sales meetings expenses and bonus and stock-based compensation expenses, partially offset by decreased trade shows and sales meetings expenses.

Selling and marketing expenses for the nine months ended September 29, 2023 increased 31.9% from the same period of 2022 due to increased advertising and promotional activities especially in the U.S., salary-related and payroll tax expenses, bonus and stock-based compensation expenses and sales commission expenses.

18


Research and Development Expense

The following table presents our research and development expenses (dollars in thousands):

 

 

Three Months Ended

 

 

Percentage
Change

 

 

Nine Months Ended

 

 

Percentage
Change

 

 

Three Months Ended

 

 

Percentage
Change

 

 

September 29, 2023

 

 

September 30, 2022

 

 

2023 vs. 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

2023 vs. 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

 

2024 vs. 2023

 

Research and development expense

 

$

11,470

 

 

$

9,616

 

 

 

19.3

%

 

$

33,535

 

 

$

26,193

 

 

 

28.0

%

 

$

13,380

 

 

$

10,310

 

 

 

29.8

%

Percentage of sales

 

 

14.3

%

 

 

12.7

%

 

 

 

 

 

13.6

%

 

 

12.0

%

 

 

 

 

 

17.3

%

 

 

14.0

%

 

 

 

Research and development expenses for the three and nine months ended SeptemberMarch 29, 20232024 increased 19.3% and 28.0%29.8% from the same period of 2022, respectively,2023, due mainly to increased salary-related and payroll tax expenses and clinical expenses associated with our U.S. post-approval clinical trials, and for the nine months ended September 29, 2023, increased bonus and stock-based compensation expenses as compared to the nine months ended September 30, 2022.expenses.

22


Other Expense, Net

The following table presents our other expenses, net (dollars in thousands):

 

 

 

Three Months Ended

 

 

Percentage
Change

 

 

Nine Months Ended

 

 

Percentage
Change

 

 

 

September 29, 2023

 

 

September 30, 2022

 

 

2023 vs. 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

2023 vs. 2022

 

Other income (expense), net

 

$

451

 

 

$

(1,128

)

 

 

*

 

$

2,265

 

 

$

(3,265

)

 

 

*

Percentage of sales

 

 

0.6

%

 

 

(1.5

)%

 

 

 

 

 

0.9

%

 

 

(1.5

)%

 

 

 

* Denotes change is greater than +100%.

 

 

Three Months Ended

 

 

Percentage
Change

 

 

 

March 29, 2024

 

 

March 31, 2023

 

 

2024 vs. 2023

 

Other income, net

 

$

70

 

 

$

1,919

 

 

 

(96.4

)%

Percentage of sales

 

 

0.1

%

 

 

2.6

%

 

 

 

The changedecrease in other income, (expense), net for the three and nine months ended SeptemberMarch 29, 20232024 and September 30, 2022,March 31, 2023, respectively, was due mainly to increased interest income mainly due to our investments held available for sale and lowerhigher foreign exchange losses.

Income Taxes

The following table presents our income tax provision (dollars in thousands):

 

 

 

Three Months Ended

 

 

Percentage
Change

 

 

Nine Months Ended

 

 

Percentage
Change

 

 

 

September 29, 2023

 

 

September 30, 2022

 

 

2023 vs. 2022

 

 

September 29, 2023

 

 

September 30, 2022

 

 

2023 vs. 2022

 

Income tax provision

 

$

1,929

 

 

$

2,315

 

 

 

(16.7

)%

 

$

6,366

 

 

$

6,671

 

 

 

(4.6

)%

 

 

Three Months Ended

 

 

Percentage
Change

 

 

 

March 29, 2024

 

 

March 31, 2023

 

 

2024 vs. 2023

 

Income tax provision

 

$

1,128

 

 

$

2,009

 

 

 

(43.9

)%

The effective tax rates for the three months ended SeptemberMarch 29, 2024 and March 31, 2023 were (51.0)% and September 30, 2022 were 28.6% and 18.4%42.6%, respectively, and were 31.9% and 16.9% for the nine months ended September 29, 2023 and September 30, 2022, respectively. Our effective tax rates differ from the U.S. federal statutory rate of 21%, primarily due to the income tax expense generated in foreign jurisdictions.

Our future effective income tax rate depends on various factors, such as changes in tax laws, regulations, accounting principles, or interpretations thereof, and the geographic composition of our pre-tax income. We carefully monitor these factors and adjust our effective income tax rate accordingly.

Liquidity and Capital Resources

We believe that currentOur principal sources of liquidity are cash, and cash equivalents, investments available for sale (“AFS”) and future cash flow from operating activitiesactivities. We believe these sources of liquidity will be sufficient to meet our anticipated cash needs, including working capital needs, capital expenditures and contractual obligations for at least 12 months from the issuance date of the financial statements includedstatements. We expect that cash flow from operating activities may fluctuate in this quarterly report.future periods as a result of a number of factors, including fluctuations in our operating results, working capital needs, capital expenditures, and capital deployment decisions. In addition, future capital requirements will depend on many factors including our growth rate in net sales, the timing and extent of spending to support our growth strategy, the expansion of selling and marketing activities, the timing of introductions of new products, as well as global macroeconomic factors. Our financial condition at SeptemberMarch 29, 20232024 and December 30, 202229, 2023 included the following (in thousands):

19


 

 

 

September 29, 2023

 

 

December 30,
2022

 

 

2023 vs. 2022

 

Cash and cash equivalents

 

$

127,432

 

 

$

86,480

 

 

$

40,952

 

Investments available for sale

 

 

74,308

 

 

 

139,061

 

 

 

(64,753

)

Total

 

$

201,740

 

 

$

225,541

 

 

$

(23,801

)

 

 

 

 

 

 

 

 

 

 

Current assets

 

$

347,068

 

 

$

311,723

 

 

$

35,345

 

Current liabilities

 

 

56,775

 

 

 

51,716

 

 

 

5,059

 

Working capital

 

$

290,293

 

 

$

260,007

 

 

$

30,286

 

 

 

March 29, 2024

 

 

December 29, 2023

 

 

2024 vs. 2023

 

Cash and cash equivalents

 

$

224,024

 

 

$

183,038

 

 

$

40,986

 

Investments available for sale

 

 

28,088

 

 

 

49,391

 

 

 

(21,303

)

Total

 

$

252,112

 

 

$

232,429

 

 

$

19,683

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

$

365,715

 

 

$

365,269

 

 

$

446

 

Current liabilities

 

 

62,674

 

 

 

65,036

 

 

 

(2,362

)

Working capital

 

$

303,041

 

 

$

300,233

 

 

$

2,808

 

 

Cash and cash equivalents include cash and balances in deposits and money market accounts held at banks and financial institutions. Our investment policy primary objective is capital preservation while maximizing our return on investment. Investments available for sale may include U.S. government and corporate debt securities, commercial paper, certain certificates deposit and related security types, that are rated by two nationally recognized statistical rating organizations with minimum investment grade ratings of AAA to A-/A-1+ to A-2, or the equivalent. The maturity of individual investments may not extend 24 months from the date of purchase. There are also limits to the amount of credit exposure in any given security type. We do not have any off-balance sheet arrangements.

23


A summary of cash flows for the ninethree months ended SeptemberMarch 29, 20232024 and September 30, 2022March 31, 2023 was as follows (in thousands):

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

September 29, 2023

 

 

September 30, 2022

 

 

March 29, 2024

 

 

March 31, 2023

 

Cash flows from:

 

 

 

 

 

 

 

 

 

 

 

 

Operating activities

 

$

(17,375

)

 

$

32,745

 

 

$

21,680

 

 

$

(5,094

)

Investing activities

 

 

51,945

 

 

 

(109,659

)

 

 

16,187

 

 

 

9,933

 

Financing activities

 

 

7,048

 

 

 

8,095

 

 

 

4,056

 

 

 

(1,361

)

Effect of exchange rate changes

 

 

(666

)

 

 

(1,645

)

 

 

(937

)

 

 

10

 

Net increase (decrease) in cash and cash equivalents

 

 

40,952

 

 

 

(70,464

)

Net increase in cash and cash equivalents

 

 

40,986

 

 

 

3,488

 

Cash and cash equivalents, at beginning of year

 

 

86,480

 

 

 

199,706

 

 

 

183,038

 

 

 

86,480

 

Cash and cash equivalents, at end of year

 

$

127,432

 

 

$

129,242

 

 

$

224,024

 

 

$

89,968

 

 

For the ninethree months ended SeptemberMarch 29, 20232024 net cash usedprovided by operating activities consisted of $61.3$16.8 million in working-capital changes and $8.2 million in non-cash items, partially offset by the net loss of $3.3 million. For the three months ended March 31, 2023 net cash used in operating activities consisted of $14.3 million in working-capital changes, partially offset by $30.3$6.5 million in non-cash items and net income of $13.6$2.7 million.

Starting in the second half of 2022, we decided to invest our cash in slightly higher yielding securities. For the ninethree months ended SeptemberMarch 29, 2023,2024, net cash provided by investment activities was $52.0$16.2 million which consisted of $119.4$21.4 million of proceeds from the sale or maturity of investments AFS, partially offset by $52.3 million in purchases of investments AFS and $15.1$5.2 million in purchases of property, plant and equipment. For the ninethree months ended September 30, 2022,March 31, 2023, net cash used inprovided by investment activity was $109.7$9.9 million which consisted of $95.6$40.3 million of proceeds from the sale or maturity of investments AFS, partially offset by $27.4 million in purchases of investments AFS and $14.1$2.9 million in purchases of property, plant and equipment.

Net cash provided by financing activities for the ninethree months ended SeptemberMarch 29, 20232024 was $7.0$4.1 million which consisted of $9.3$5.3 million of proceeds from the exercise of stock options, partially offset by $2.1$1.2 million to repurchase of employee common stock for taxes withheld. For the ninethree months ended September 30, 2022,March 31, 2023, net cash provided byused in financing activities was $1.4 million which consisted of $8.2$1.8 million to repurchase of proceeds from the exercise ofemployee common stock options.for taxes withheld.

Commitments

Employment Agreements

The Company’s Chief Executive Officer entered into an employment agreement with the Company, effective January 1, 2023. He and certain officers have as provisions of their agreements certain rights, including continuance of cash compensation and benefits, upon a “change in control,” which may include an acquisition of substantially all of its assets, or termination “without cause or for good reason” as defined in the employment agreements.

20


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

During the ninethree months ended SeptemberMarch 29, 2023,2024, there have been no material changes in the Company’s qualitative and quantitative market risk since the disclosure in the Company’s Annual Report on Form 10-K for the year ended December 30, 2022.29, 2023.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of the disclosure controls and procedures of the Company. Based on that evaluation, our CEO and CFO concluded, as of the end of the period covered by this quarterly report on Form 10-Q, that our disclosure controls and procedures were effective. For purposes of this statement, the term “disclosure controls and procedures” means controls and other procedures of the Company that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

24


Our management, including the CEO and the CFO, do not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud or material errors. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations on all internal control systems, our internal control system can provide only reasonable assurance of achieving its objectives and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of internal control is also based in part upon certain assumptions about the likelihood of future events, and can provide only reasonable, not absolute, assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in circumstances, or the degree of compliance with the policies and procedures may deteriorate.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended SeptemberMarch 29, 20232024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

From time to time, the Company is involved in various legal proceedings and other matters arising in the normal course of business. These legal proceedings and other matters may relate to, among other things, contractual rights and obligations, employment matters, or claims of product liability. STAARThe Company maintains insurance coverage for various matters, including product liability and certain securities claims. While the Company does not believe that any of the claims known is likely to have a material adverse effect on the Company’s financial condition or results of operations, new claims or unexpected results of existing claims could lead to significant financial harm.

ITEM 1A. RISK FACTORS

Our short and long-term success is subject to many factors that are beyond our control. Investors and prospective investors should consider carefully information contained in this report and the risks and uncertainties described in “Part I—Item 1A—Risk Factors” of the Company’s Form 10-K for the fiscal year ended December 30, 2022.29, 2023. Such risks and uncertainties could materially adversely affect our business, financial condition or operating results.

21


ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

(c)
Trading Plans

During the quarter ended SeptemberMarch 29, 2023,2024, no director or officer adopted or terminated:

(i)
Any contract, instruction or written plan for the purchase or sale of securities of the Company intended to satisfy the affirmative defense conditions of Rule 10b51-1(c)10b5-1(c); and
(ii)
Any “non-Rule 10b5-1 trading arrangement” as defined in paragraph (c) of item 408(a) of Regulation S-K.

25


ITEM 6. EXHIBITS

 

    3.1Exhibit Number

Amended and Restated Certificate of Incorporation.(1)

Description

 

 

    3.2

Amended and Restated Bylaws.(2)

 

 

3.1

Amended and Restated Certificate of Incorporation (incorporated by reference to Appendix 2 of the Company’s Proxy Statement on Form DEF 14A as filed with the Commission on April 26, 2018).

3.2

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K as filed with the Commission on February 1, 2023).

4.1

Form of Certificate for Common Stock, par value $0.01 per share.(3)share (incorporated by reference to Exhibit 4.1 to Amendment No. 1 to the Company’s Registration Statement on Form 8 A/A as filed with the Commission on April 18, 2003).

 

 

  †4.231.1

Amended and Restated Omnibus Equity Incentive Plan.(4)

*

 

  31.1

Certifications Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

 

 

31.2

*

Certifications Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

 

 

32.1

**

Certification Pursuant to 18 U.S.C. Section 1350, Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. **

 

 

101

*

Financial statements from the quarterly report on Form 10-Q of STAAR Surgical Company for the quarter ended SeptemberMarch 29, 20232024 formatted in Inline Extensible Business Reporting Language (iXBRL), are filed herewith and include: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Stockholders’ Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) the Notes to Condensed Consolidated Financial Statements tagged as blocks of text.*

 

 

104

The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended SeptemberMarch 29, 2023,2024, has been formatted in Inline XBRL with applicable taxonomy extension information contained in Exhibit 101.

*

Filed herewith.

**

Certification furnished herewith solely to accompany this annual report pursuant to 18 U.S.C. Section 1350. Certification is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. Such certification is not deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act except to the extent that the registrant specifically incorporates it by reference.

 

(1)
Incorporated by reference to Appendix 2 of the Company’s Proxy Statement on Form DEF 14A as filed with the Commission on April 13, 2018.
(2)
Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the Commission on February 1, 2023.
(3)
Incorporated by reference to Exhibit 4.1 to Amendment No. 1 to the Company’s Registration Statement on Form 8‑A/A as filed with the Commission on April 18, 2003.
(4)
Incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q, for the period ended July 3, 2020, as filed with the Commission on August 5, 2020.

* Filed herewith.22

** Furnished herewith.

† Management contract or compensatory plan.

26


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

 

STAAR SURGICAL COMPANY

 

 

 

 

 

 

Dated:

 

November 6, 2023May 7, 2024

By:

 

/s/ PATRICK F. WILLIAMS

 

 

 

 

 

Patrick F. Williams

 

 

 

 

 

Chief Financial Officer

 

 

 

 

 

(on behalf of the Registrant and as its principal financial officer)

 

2723