10-Q

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

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

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.

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 48,333,250 shares of common stock, par value $0.01 per share, issued and outstanding as of April 28, 2023.

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):


	March 31, 2023
										Fair Value Measurements
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value		Level 1		Level 2
Commercial paper	$	34,464	$	4	$	(28	)	$	34,440	$	—	$	34,440
Certificates of deposit		18,414		3		(42	)		18,375		—		18,375
U.S. Treasury securities		24,430		26		(9	)		24,447		24,447		—
U.S. agency securities		10,965		15		(2	)		10,978		—		10,978
Corporate debt securities		39,342		3		(261	)		39,084		—		39,084
Total investments AFS	$	127,615	$	51	$	(342	)	$	127,324	$	24,447	$	102,877

	December 30, 2022
										Fair Value Measurements
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value		Level 1		Level 2
Commercial paper	$	44,054	$	11	$	(62	)	$	44,003	$	—	$	44,003
Certificates of deposit		17,355		4		(75	)		17,284		—		17,284
U.S. Treasury securities		21,847		3		(15	)		21,835		21,835		—
U.S. agency securities		10,688		16		(3	)		10,701		—		10,701
Corporate debt securities		45,522		4		(288	)


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)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common	STAA	NASDAQ


		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	16

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	21

ITEM 4.	CONTROLS AND PROCEDURES	21

PART II – OTHER INFORMATION		21

ITEM 1.	LEGAL PROCEEDINGS	21

ITEM 1A.	RISK FACTORS	21

ITEM 4.	MINE SAFETY DISCLOSURES	22

ITEM 5.	OTHER INFORMATION	22

ITEM 6.	EXHIBITS	22


	March 31, 2023			December 30, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	89,968		$	86,480
Investments available for sale		113,879			125,159
Accounts receivable trade, net of allowance for credit losses of $43 and $20, respectively		63,494			62,447
Inventories, net		27,808			24,161
Prepayments, deposits and other current assets		17,722			13,476
Total current assets		312,871			311,723
Investments available for sale		13,445			13,902
Property, plant and equipment, net		53,453			50,921
Finance lease right-of-use assets, net		303			342
Operating lease right-of-use assets, net		31,182			30,270
Intangible assets, net		165			173
Goodwill		1,786			1,786
Deferred income taxes		4,744			4,824
Other assets		956			957
Total assets	$	418,905		$	414,898
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	9,102		$	11,576
Obligations under finance leases		171			169
Obligations under operating leases		3,538			3,524
Allowance for sales returns		5,303			5,706
Other current liabilities		28,949			30,741
Total current liabilities		47,063			51,716
Obligations under finance leases		167			210
Obligations under operating leases		28,030			27,136
Deferred income taxes		1,369			1,489
Asset retirement obligations		218			220
Pension liability		3,134			1,935
Total liabilities		79,981			82,706
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value; 60,000 shares authorized: 48,331 and 48,212 shares issued and outstanding at March 31, 2023 and December 30, 2022, respectively		483			482
Additional paid-in capital		409,303			404,189
Accumulated other comprehensive gain (loss)		(937	)		156
Accumulated deficit		(69,925	)		(72,635	)
Total stockholders’ equity		338,924			332,192
Total liabilities and stockholders’ equity	$	418,905		$	414,898


	Three Months Ended
	March 31, 2023		April 1, 2022
Net sales	$	73,528	$	63,200
Cost of sales		15,966		13,936
Gross profit		57,562		49,264
Selling, general and administrative expenses:
General and administrative		18,098		11,940
Selling and marketing		26,354		17,270
Research and development		10,310		7,941
Total selling, general and administrative expenses		54,762		37,151
Operating income		2,800		12,113
Other income (expense), net:
Interest income (expense), net		1,822		(6	)
Gain (loss) on foreign currency transactions		34		(915	)
Royalty income		—		273
Other income, net		63		62
Total other income (expense), net		1,919		(586	)
Income before income taxes		4,719		11,527
Provision for income taxes		2,009		1,925
Net income	$	2,710	$	9,602
Net income per share:
Basic	$	0.06	$	0.20
Diluted	$	0.05	$	0.19
Weighted average shares outstanding:
Basic		48,247		47,755
Diluted		49,500		49,288


Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐


	Three 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		$	(72,635	)	$	332,192
Net income		—			—		—			—			2,710			2,710
Other comprehensive loss		—			—		—			(1,093	)		—			(1,093	)
Common stock issued upon exercise of options		40			—		529			—			—			529
Stock-based compensation		—			—		6,434			—			—			6,434
Repurchase of employee common stock for taxes withheld		(31	)		—		(1,849	)		—			—			(1,849	)
Vested restricted and performance stock		110			1		—			—			—			1
Balance, at March 31, 2023		48,331		$	483	$	409,303		$	(937	)	$	(69,925	)	$	338,924

Balance, at December 31, 2021		47,716		$	477	$	373,519		$	(4,048	)	$	(111,390	)	$	258,558
Net income		—			—		—			—			9,602			9,602
Other comprehensive income		—			—		—			2,985			—			2,985
Common stock issued upon exercise of options		49			1		911			—			—			912
Stock-based compensation		—			—		4,260			—			—			4,260
Vested restricted and performance stock		45			—		—			—			—			—
Balance, at April 1, 2022		47,810		$	478	$	378,690		$	(1,063	)	$	(101,788	)	$	276,317