Tuesday March 23, 10:48 AM (EST)
STAAR Surgical Reports Year-End Results
MONROVIA, CALIF. (March 23) BW HEALTHWIRE -March 23, 1999--STAAR Surgical Company (Nasdaq: STAA), a leading worldwide manufacturer and marketer of a broad line of products for the refractive, cataracts and glaucoma markets, today reported revenue of $55.1 million for its fiscal year ended January 1, 1999, a 21% increase over revenue of $45.5 million for the prior year.
The revenue increase for the full year was primarily attributable to the acquisition or start-up of five international distributors in 1997 and 1998, offset somewhat by decreases in U.S. sales as a result of competitive product offerings, decreased sales to Asia as a result of the economic crisis in that region, and lower royalty revenue.
Gross margin as a percent of sales was 65.8% for the year, compared with 75.8% for fiscal 1997. The decrease in gross margin was primarily attributable to increased sales mix contributions from acquired distributors, which continued to sell significant quantities of non-STAAR ophthalmic products. In fiscal 1998, products manufactured by STAAR accounted for only two-thirds of product sales, as compared to more than 90% of sales in fiscal 1997.
For the full year, general and administrative expenses improved to 12.2% of revenue, compared with 13.9% in fiscal 1997, primarily as a result of increased operating leverage. Marketing and selling expenses increased to 33.9% of revenue, compared with 27.9% in the prior year, reflecting the launch of the STAAR Toric(TM) IOL as well as the acquisition of the direct distributors.
Net income for the full year reflects the third quarter recognition of the cumulative effect of an AICPA-required accounting change related to start-up costs. Excluding this effect, net income for the year was $4, 137,000, or $0.29 per diluted share, compared with $7,419,000, or $0.53 per share in 1997. Including this effect, reported net income for 1998 was $2,457,000, or $0.17 per diluted share.
For the quarter ended Jan. 1, 1999, revenue was $14.2 million, a 23% increase over revenue of $11.6 million for the fourth quarter of 1997. Product sales for the quarter increased 45% to $13.4 million, compared with $9.3 million a year ago.
Gross margin as a percentage of product sales was 56.5% for the quarter, compared with 74.6% in the same quarter in 1997, primarily as a result of aforementioned changes in product mix. Net income for the quarter was $541,000, or $0.04 per diluted share, compared with $1,653, 000, or $0.12 per share, in the fourth quarter of 1997.
John R. Wolf, chairman and president of STAAR Surgical Company, said, "We saw the beginning of a turnaround in STAAR's domestic IOL business during the fourth quarter, spurred both by initial excitement over our Toric IOL and waning enthusiasm for competitive products. Gross margin on sales for the quarter and the full year was below our objectives, primarily reflecting a higher mix of non-STAAR products.
"During the fourth quarter we achieved two very significant clinical milestones. The FDA approved Phase III clinical trials of the Implantable Contact Lens(TM) (ICL(TM)) for treatment of myopia and significantly expanded our hyperopia trial, based on the very positive results of the Phase I and Phase II clinical trials. More significantly in the near-term, we received FDA marketing clearance of the STAAR Toric IOL, the only intraocular lens designed to reduce pre-existing astigmatism in cataract patients. Because roughly one of every five cataract patients has pre-existing astigmatism, this is a sizable market that STAAR is now uniquely positioned to address. We are generating interest for the Toric among physicians and patients through an aggressive marketing campaign, and are working with a rapidly expanding group of physicians to familiarize them with the Toric procedure."
Wolf continued, "Our long-term outlook is very positive. We have a worldwide distribution base, including several strong European distributors acquired over the past couple of years. We believe we have the best IOL products in the industry, including the unique Toric IOL, which positions us to begin to regain the sales momentum that was disrupted by competition over the past year. Finally, and most importantly, we continue to move forward with new products. In clinical trials the ICL has delivered the most dramatic and predictable vision improvements of any ophthalmic surgery product, including lasers and other implantable devices. In addition, the AquaFlow(TM) collagen glaucoma drainage device, which is potentially significantly more efficacious and cost-effective than current glaucoma treatments, continues to move through the FDA process."
Founded in 1982, STAAR Surgical Company develops, manufactures and globally distributes minimally invasive medical devices for use in refractive, cataracts and glaucoma surgery. The Company's principal product line includes the foldable intraocular lenses, which are used as replacements for the natural lens in cataract procedures. STAAR also markets two new products: an Implantable Contact Lens(TM), which is a refractive lens for the treatment of nearsightedness and farsightedness and the AquaFlow(TM) collagen glaucoma drainage device. All of the Company's products have received CE Marking for distribution in the European Union. For additional information, visit the company's web site at staar.com .
Certain statements in this press release constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements involve risks and uncertainties that may cause the Company's actual results to be materially different. Factors that could impact the Company's future results are set forth in the cautionary statements included in Exhibit 99 to the Company's Form 10-Q dated Oct. 2, 1998, filed with the Securities and Exchange Commission.
STAAR Surgical Company
Condensed Consolidated Statements of Operations
(in 000's except per share data)
Unaudited
Three Months Ended Year Ended
Jan. 1, Jan. 2, Jan. 1, Jan. 2,
1999 1998 1999 1998
Sales $13,433 $9,253 $54,244 $42,480
Royalty Income 725 2,304 899 3,040
Total Revenue 14,158 11,557 55,143 45,520
Cost of sales 5,843 2,347 18,533 10,262
Gross profit 8,315 9,210 36,610 35,258
General and administrative 1,666 1,671 6,770 6,334
Marketing and selling 5,166 3,318 18,709 12,719
Research and development 757 911 3,570 3,936
Total Expenses 7,589 5,900 29,049 22,989
Operating income 726 3,310 7,561 12,269
Other income/(expense) (169) (130) (762) (580)
Income before taxes 557 3,180 6,799 11,689
Income tax provision (186) 1,527 1,999 4,270
Minority interest 202 663
Income before cumulative
effect of change
in accounting method 541 1,653 4,137 7,419
Cumulative effect of change in
accounting method,
write-off of start-up costs (1,680)
Net income (loss) $541 $1,653 $2,457 $7,419
Diluted earnings per share(a) $0.04 $0.12 $0.29 $0.53
Shares for diluted EPS 14,268 14,113 14,268 14,113
Note (a): does not include effect of change in accounting method
Condensed Consolidated Balance Sheets
(in 000's)
Unaudited
Jan. 1, Jan 2,
1999 1998
Current assets $38,621 $35,413
Total assets 70,794 62,391
Current liabilities 11,696 10,477
Total liabilities 23,087 17,608
Stockholders' equity -- net 47,706 44,783
Total liabilities & equity $70,794 $62,391
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CONTACT: STAAR Surgical Company |
