UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(Amendment No. 2)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 2, 2010
STAAR Surgical Company
(Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation) | 0-11634 (Commission File Number) | 95-3797439 (I.R.S. Employer Identification No.) |
1911 Walker Ave, Monrovia, California (Address of principal executive offices) | 91016 (Zip Code) |
Registrant’s telephone number, including area code: 626-303-7902
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Explanatory Note
The Company is filing this Amendment No. 2 to its Current Report on Form 8-K, originally filed on March 8, 2010, in response to comments received from the SEC. This Amendment re-presents Item 9.01 in its entirety to provide expanded pro forma financial information for the last three completed fiscal years.
Item 9.01 – Financial Statements and Exhibits
(b) Pro Forma Financial Information.
| (i) | Unaudited Pro Forma Condensed Consolidated Balance Sheet as of January 1, 2010; | |
| (ii) | Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended January 1, 2010; | |
| (iii) | Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended January 2, 2009; | |
| (iv) | Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 28, 2007. |
The unaudited pro forma statements of operations for the years ended January 1, 2010, January 2, 2009 and December 28, 2007 give effect to the divestiture of Domilens as if STAAR had disposed of Domilens on December 30, 2006, the first day of our 2007 fiscal year. The pro forma balance sheet as of January 1, 2010 gives effect to the divestiture of Domilens as if STAAR had disposed of it on January 1, 2010.
The pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable under the circumstances. The pro forma adjustments were applied to the respective historical financial statements to reflect and account for the disposition of Domilens.
The unaudited pro forma consolidated statements of operations and consolidated balance sheet have been prepared for illustrative purposes only and do not exclude cost savings from operational efficiencies, revenue synergies or operating strategies employed prior to the disposition. Therefore, the pro forma financial information is not necessarily indicative of the operating results that we would have achieved had the disposition actually occurred on December 30, 2006 or our financial position had the disposition actually occurred on January 1, 2010, and should not be construed as a representation of our future operating results or financial position.
The unaudited pro forma consolidated financial information should be read in conjunction with our audited Consolidated Financial Statements and the notes thereto included in our Annual Reports on Form 10-K for the fiscal years ended January 2, 2009 and December 28, 2007, and the unaudited interim Consolidated Financial Statements and the notes thereto included in our quarterly report on Form 10-Q for the quarter ended October 2, 2009.
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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 hereunto duly authorized.
| STAAR Surgical Company | |||
March 23, 2010 | By: | /s/ Deborah Andrews | |
| Deborah Andrews | |||
| Vice President and Chief Financial Officer | |||
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STAAR SURGICAL COMPANY AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
JANUARY 1, 2010
(IN THOUSANDS)
| Pro Forma Adjustments to | |||||||||||||||||
| Dispose Domilens | |||||||||||||||||
| Deconsolidate | Estimated | ||||||||||||||||
Unaudited | Domilens | Proceeds | Footnotes | Pro Forma | |||||||||||||
| ASSETS | |||||||||||||||||
| Current assets: | |||||||||||||||||
| Cash | $ | 6,330 | $ | (1,597 | ) | $ | 12,998 | (A) | $ | 17,731 | |||||||
| Restricted cash | 7,396 | - | $ | 136 | (B) | 7,532 | |||||||||||
| Accounts receivable, net | 9,269 | (1,685 | ) | - | 7,584 | ||||||||||||
| Inventories | 14,820 | (3,559 | ) | - | 11,261 | ||||||||||||
| Prepaids and other current assets | 2,591 | (596 | ) | - | 1,995 | ||||||||||||
| Other current assets | - | - | $ | 98 | (C) | 98 | |||||||||||
| Total current assets | $ | 40,406 | $ | (7,437 | ) | $ | 13,232 | $ | 46,201 | ||||||||
| Property, plant and equipment, net | 5,005 | (1,171 | ) | - | 3,834 | ||||||||||||
| Intangibles, net | 4,148 | - | - | 4,148 | |||||||||||||
| Goodwill | 7,879 | (6,302 | ) | - | 1,577 | ||||||||||||
| Other assets | 1,243 | - | - | 1,243 | |||||||||||||
| Total assets | $ | 58,681 | $ | (14,910 | ) | $ | 13,232 | $ | 57,003 | ||||||||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | |||||||||||||||||
| Current liabilities: | |||||||||||||||||
| Accounts payable | 7,825 | (2,725 | ) | - | 5,100 | ||||||||||||
| Accrued legal judgments | 11,919 | - | - | 11,919 | |||||||||||||
| Other current liabilities | 8,861 | (1,092 | ) | - | 7,769 | ||||||||||||
| - | - | 485 | (D) | 485 | |||||||||||||
| - | - | 136 | (E) | 136 | |||||||||||||
| - | - | 64 | (F) | 64 | |||||||||||||
| - | - | 45 | (G) | 45 | |||||||||||||
| Line of credit | 2,160 | - | - | 2,160 | |||||||||||||
| Note payable, net of discount | 4,503 | - | - | 4,503 | |||||||||||||
| Total current liabilities | $ | 35,268 | $ | (3,817 | ) | $ | 730 | $ | 32,181 | ||||||||
| Obligations under capital leases | 1,098 | (267 | ) | - | 831 | ||||||||||||
| Other long term liabilities | 2,789 | - | - | 2,789 | |||||||||||||
| Total liabilities | $ | 39,155 | $ | (4,084 | ) | $ | 730 | $ | 35,801 | ||||||||
| Series A redeemable, convertible preferred stock | 6,784 | - | - | 6,784 | |||||||||||||
| Common stock | 348 | - | - | 348 | |||||||||||||
| Additional paid-in capital | 149,559 | - | - | 149,559 | |||||||||||||
| Accumulated other comprehensive income | 3,254 | (2,255 | ) | - | 999 | ||||||||||||
| Accumulated deficit | (140,419 | ) | (8,571 | ) | $ | 12,502 | (H) | (136,488 | ) | ||||||||
| Total stockholders' equity | $ | 12,742 | $ | (10,826 | ) | $ | 12,502 | $ | 14,418 | ||||||||
| Total liabilities, redeemable convertible preferred stock and stockholders' equity | $ | 58,681 | $ | (14,910 | ) | $ | 13,232 | $ | 57,003 | ||||||||
(A) - Represents the net cash proceeds from the sale of Domilens, net of $136k escrow funds withheld for future contingent tax liabiliy pending tax audits. Detailed as follows:
| 000s | EUR | USD | |||||||
| Sales price | 9,686 | $ | 13,134 | ||||||
| Less: Escrow funds | (100 | ) | $ | (136 | ) | (B) | |||
| Net sales price per share purchase agreement | 9,586 | $ | 12,998 |
| (B) - Represents the restricted cash escrow established for contingent tax liability pending tax audit by both parties. | |||||
| (C) - Represents receivable from Domilens for Q42009 management fees not yet paid as of close of transaction. | |||||
| (D) - Represents the incentive ($146) and success ($339) fees payable to the investment bank upon closing of transaction. | |||||
| (E) - Represents the restricted cash escrow established for contingent tax liability pending tax audit by both parties. | |||||
| (F) - Represents the total marketing allowance payable by STAAR to the new company in four equal installments. | |||||
| (G) - Represents the estimated tax on sale owed by STAAR. | |||||
| (H) - Pro Forma Gain calculation: | |||||
| $000s | ||||
| - Net proceeds | $ | 12,502 | ||
| - Net assets (Domilens) | (8,571 | ) | ||
| - Pro forma gain on sale | $ | 3,931 | ||
| - Actual gain may be different than pro forma gain. |
STAAR SURGICAL COMPANY AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED JANUARY 1, 2010
(In thousands, except per share data)
% of Sales | Unaudited | % of Sales | Deconsolidate Domilens | Pro Forma Adjustments | Footnotes | % of Sales | Pro Forma | ||||||||||||||||||||||
| Net sales | 100.0 | % | $ | 75,345 | 100.0 | % | (24,286 | ) | $ | 750 | (a) | 100.0 | % | 51,809 | |||||||||||||||
| Cost of goods sold | 44.4 | % | 33,452 | 56.8 | % | (13,783 | ) | 307 | (a) | 38.6 | % | 19,976 | |||||||||||||||||
| Gross profit | 55.6 | % | $ | 41,893 | 43.2 | % | $ | (10,503 | ) | $ | 443 | 61.4 | % | $ | 31,833 | ||||||||||||||
| General and administrative | 21.4 | % | 16,119 | 0.0 | % | - | (463 | ) | (b) | 30.2 | % | 15,656 | |||||||||||||||||
| Sales and marketing | 32.2 | % | 24,257 | 36.9 | % | (8,958 | ) | - | 29.5 | % | 15,299 | ||||||||||||||||||
| Research and development | 7.8 | % | 5,893 | 0.0 | % | - | - | 11.4 | % | 5,893 | |||||||||||||||||||
| Other expenses | 9.6 | % | 7,209 | 0.0 | % | - | - | 13.9 | % | 7,209 | |||||||||||||||||||
| Total selling, general and administrative | 71.0 | % | $ | 53,478 | 36.9 | % | $ | (8,958 | ) | $ | (463 | ) | 85.0 | % | $ | 44,057 | |||||||||||||
| Operating loss | -15.4 | % | (11,585 | ) | 6.3 | % | (1,545 | ) | 906 | -23.6 | % | (12,224 | ) | ||||||||||||||||
| Other Income/(expense) | |||||||||||||||||||||||||||||
| Interest income | 0.1 | % | 60 | 0.2 | % | (41 | ) | - | 0.0 | % | 19 | ||||||||||||||||||
| Interest expense | -2.4 | % | (1,801 | ) | 0.0 | % | 12 | - | -3.5 | % | (1,789 | ) | |||||||||||||||||
| Foreign currency gain/(loss) | 0.0 | % | - | -0.5 | % | 124 | - | 0.2 | % | 124 | |||||||||||||||||||
| Other income/(expense) | 0.4 | % | 290 | 0.1 | % | (33 | ) | - | 0.5 | % | 257 | ||||||||||||||||||
| Other income/(expense), net | -1.9 | % | (1,451 | ) | -0.2 | % | 62 | - | -2.7 | % | (1,389 | ) | |||||||||||||||||
| Loss before provision for income taxes | -17.3 | % | (13,036 | ) | 6.1 | % | (1,483 | ) | 906 | -26.3 | % | (13,613 | ) | ||||||||||||||||
| Provision for income taxes | -2.0 | % | (1,492 | ) | -1.4 | % | 338 | (227 | ) | (c) | -2.7 | % | (1,381 | ) | |||||||||||||||
| Net loss | -19.3 | % | $ | (14,528 | ) | 4.7 | % | $ | (1,145 | ) | $ | 679 | -28.9 | % | $ | (14,994 | ) | ||||||||||||
| Loss per share - basic and diluted | $ | (0.45 | ) | $ | (0.04 | ) | $ | 0.02 | $ | (0.46 | ) | ||||||||||||||||||
| Weighted average shares outstanding - basic and diluted | 32,498 | 32,498 | 32,498 | 32,498 | |||||||||||||||||||||||||
(a) - Represents the intercompany sales and cost of sales made to Domilens which was eliminated in consolidation when Domilens was wholly owned by STAAR Surgical AG, which would have been earned assuming Domilens was not part of the Company and therefore not eliminated in consolidation.
(b) - Represents the direct and incremental transaction costs related to the sale of Domilens incurred through the period presented.
(c) - Based on average effective tax rate of 25%.
Pro Forma Excludes Management Fees as those are not considered to be earned or available if STAAR Surgical AG did not own Domilens.
STAAR SURGICAL COMPANY AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED JANUARY 2, 2009
(In thousands, except per share data)| % of | % of | Deconsolidate | Pro Forma | % of | |||||||||||||||||||||||||
| Sales | As Reported | Sales | Domilens | Adjustments | Footnotes | Sales | Pro Forma | ||||||||||||||||||||||
| Net sales | 100.0 | % | $ | 74,894 | 100.0 | % | (25,124 | ) | $ | 1,070 | (a) | 100.0 | % | 50,840 | |||||||||||||||
| Cost of goods gold | 46.4 | % | 34,787 | 56.1 | % | (14,090 | ) | 511 | (a) | 41.7 | % | 21,208 | |||||||||||||||||
| Gross profit | 53.6 | % | $ | 40,107 | 43.9 | % | $ | (11,034 | ) | $ | 559 | 58.3 | % | $ | 29,632 | ||||||||||||||
| General and administrative | 21.0 | % | 15,730 | 0.0 | % | - | - | (b) | 30.9 | % | 15,730 | ||||||||||||||||||
| Sales and marketing | 36.1 | % | 27,053 | 34.2 | % | (8,580 | ) | - | 36.3 | % | 18,473 | ||||||||||||||||||
| Research and development | 10.6 | % | 7,938 | 0.0 | % | - | - | 15.6 | % | 7,938 | |||||||||||||||||||
| Other expenses | 13.0 | % | 9,773 | 0.0 | % | - | - | 19.2 | % | 9,773 | |||||||||||||||||||
| Total selling, general and administrative | 80.7 | % | $ | 60,494 | 34.2 | % | $ | (8,580 | ) | $ | - | 102.0 | % | $ | 51,914 | ||||||||||||||
| Operating loss | -27.1 | % | (20,387 | ) | 9.7 | % | (2,454 | ) | 559 | -43.7 | % | (22,282 | ) | ||||||||||||||||
| Other Income/(expense) | |||||||||||||||||||||||||||||
| Interest income | 0.2 | % | 160 | 0.2 | % | (47 | ) | - | 0.2 | % | 113 | ||||||||||||||||||
| Interest expense | -1.2 | % | (901 | ) | 0.0 | % | 4 | (116 | ) | (c) | -2.0 | % | (1,013 | ) | |||||||||||||||
| Foreign Currency gain/(loss) | -0.9 | % | (696 | ) | -1.1 | % | 287 | - | -0.8 | % | (409 | ) | |||||||||||||||||
| Other income/(expense) | 0.2 | % | 152 | 0.1 | % | (27 | ) | - | 0.2 | % | 125 | ||||||||||||||||||
| Other income/(expense), net | -1.7 | % | (1,285 | ) | -0.8 | % | 217 | (116 | ) | -2.4 | % | (1,184 | ) | ||||||||||||||||
| Loss before provision for income taxes | -28.8 | % | (21,672 | ) | 8.9 | % | (2,237 | ) | 443 | -46.1 | % | (23,466 | ) | ||||||||||||||||
| Provision for income taxes | -2.0 | % | (1,523 | ) | -2.2 | % | 548 | (111 | ) | (d) | -1.9 | % | (1,086 | ) | |||||||||||||||
| Net loss | -30.8 | % | $ | (23,195 | ) | 6.7 | % | $ | (1,689 | ) | $ | 332 | -48.0 | % | $ | (24,552 | ) | ||||||||||||
| Loss per share - basic and diluted | $ | (0.79 | ) | $ | (0.06 | ) | $ | 0.01 | $ | (0.83 | ) | ||||||||||||||||||
| Weighted average shares outstanding - basic and diluted | 29,474 | 29,474 | 29,474 | 29,474 | |||||||||||||||||||||||||
(a) - Represents the intercompany sales and cost of sales made to Domilens which was eliminated in consolidation when Domilens was wholly owned by STAAR Surgical AG, which would have been earned assuming Domilens was not part of the Company and therefore not eliminated in consolidation. | |||||
| (b) - N/A - None incurred as of this period presented. | |||||
| Pro Forma Excludes Management Fees as those are not considered to be earned or available if STAAR Surgical AG did not own Domilens, | |||||
(c) - Represents the interest expense recorded in connection with the Domilens intercompany loans payable by STAAR that would have not been eliminated had Domilens not been a subsidiary of the Company. | |||||
(d) - Based on average effective tax rate of 25%.
STAAR SURGICAL COMPANY AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 28, 2007
(In thousands, except per share data)
| % of | % of | Deconsolidate | Pro Forma | % of | |||||||||||||||||||||||||
| Sales | As Reported | Sales | Domilens | Adjustments | Footnotes | Sales | Pro Forma | ||||||||||||||||||||||
| Net sales | 100.0 | % | $ | 59,363 | 100.0 | % | (23,731 | ) | 934 | (a) | 100.0 | % | 36,566 | ||||||||||||||||
| Cost of goods sold | 50.7 | % | 30,097 | 58.4 | % | (13,849 | ) | 482 | (a) | 45.8 | % | 16,730 | |||||||||||||||||
| Gross profit | 49.3 | % | $ | 29,266 | 41.6 | % | $ | (9,882 | ) | $ | 452 | 54.2 | % | $ | 19,836 | ||||||||||||||
| General and administrative | 21.8 | % | 12,951 | 0.0 | % | - | (b) | 35.4 | % | 12,951 | |||||||||||||||||||
| Sales and marketing | 40.0 | % | 23,723 | 35.8 | % | (8,496 | ) | - | 41.6 | % | 15,227 | ||||||||||||||||||
| Research and development | 11.3 | % | 6,711 | 0.0 | % | - | 18.4 | % | 6,711 | ||||||||||||||||||||
| Other expenses | 0.0 | % | - | 0.0 | % | - | 0.0 | % | - | ||||||||||||||||||||
| Total selling, general and administrative | 73.1 | % | $ | 43,385 | 35.8 | % | $ | (8,496 | ) | $ | - | 95.4 | % | $ | 34,889 | ||||||||||||||
| Operating loss | -23.8 | % | (14,119 | ) | 5.8 | % | (1,386 | ) | 452 | -41.2 | % | (15,053 | ) | ||||||||||||||||
| Other Income/(Expense) | |||||||||||||||||||||||||||||
| Equity in operations of joint venture | -0.5 | % | (280 | ) | 0.0 | % | - | - | -0.8 | % | (280 | ) | |||||||||||||||||
| Interest income | 0.6 | % | 336 | 0.3 | % | (67 | ) | - | 0.7 | % | 269 | ||||||||||||||||||
| Interest expense | -0.8 | % | (486 | ) | 0.0 | % | 1 | - | -1.3 | % | (485 | ) | |||||||||||||||||
| Foreign Currency gain/(loss) | -0.5 | % | (295 | ) | -0.6 | % | 139 | - | -0.4 | % | (156 | ) | |||||||||||||||||
| Other income/(expense) | -0.5 | % | (312 | ) | 0.0 | % | - | - | -0.9 | % | (312 | ) | |||||||||||||||||
| Other income/(expense), net | -1.7 | % | (1,037 | ) | -0.3 | % | 73 | - | -2.6 | % | (964 | ) | |||||||||||||||||
| Loss before provision for income taxes | -25.5 | % | (15,156 | ) | 5.5 | % | (1,313 | ) | 452 | -43.8 | % | (16,017 | ) | ||||||||||||||||
| Provision for income taxes | -1.4 | % | (843 | ) | 0.2 | % | (40 | ) | (113 | ) | (c) | -2.7 | % | (996 | ) | ||||||||||||||
| Net loss | -26.9 | % | $ | (15,999 | ) | 5.7 | % | $ | (1,353 | ) | $ | 339 | -46.5 | % | $ | (17,013 | ) | ||||||||||||
| Loss per share - basic and diluted | $ | (0.57 | ) | $ | (0.05 | ) | $ | 0.01 | $ | (0.60 | ) | ||||||||||||||||||
| Weighted average shares outstanding - basic and diluted | 28,121 | 28,121 | 28,121 | 28,121 | |||||||||||||||||||||||||
(a) - Represents the intercompany sales and cost of sales made to Domilens which was eliminated in consolidation when Domilens was wholly owned by STAAR Surgical AG, which would have been earned assuming Domilens was not part of the Company and therefore not eliminated in consolidation. | ||||||
| (b) - N/A - None incurred as of this period presented. | ||||||
| (c) - Based on average effective tax rate of 25%. | ||||||
| Pro Forma Excludes Management Fees as those are not considered to be earned or available if STAAR Surgical AG did not own Domilens, | ||||||