0000950170-24-092753.txt : 20240807 0000950170-24-092753.hdr.sgml : 20240807 20240807160604 ACCESSION NUMBER: 0000950170-24-092753 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 80 CONFORMED PERIOD OF REPORT: 20240628 FILED AS OF DATE: 20240807 DATE AS OF CHANGE: 20240807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STAAR SURGICAL CO CENTRAL INDEX KEY: 0000718937 STANDARD INDUSTRIAL CLASSIFICATION: OPHTHALMIC GOODS [3851] ORGANIZATION NAME: 08 Industrial Applications and Services IRS NUMBER: 953797439 STATE OF INCORPORATION: DE FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11634 FILM NUMBER: 241183617 BUSINESS ADDRESS: STREET 1: 1911 WALKER AVE CITY: MONROVIA STATE: CA ZIP: 91016 BUSINESS PHONE: 6263037902 MAIL ADDRESS: STREET 1: 1911 WALKER AVE CITY: MONROVIA STATE: CA ZIP: 91016 FORMER COMPANY: FORMER CONFORMED NAME: STAAR SURGICAL COMPANY DATE OF NAME CHANGE: 19920703 10-Q 1 staa-20240628.htm 10-Q 10-Q
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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: June 28, 2024

Or

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

 

Commission file number: 0-11634

 

STAAR Surgical Company

(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.)

25510 Commercentre 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 49,188,211 shares of common stock, par value $0.01 per share, issued and outstanding as of August 1, 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

 

17

 

 

 

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

22

 

 

 

 

ITEM 4.

CONTROLS AND PROCEDURES

 

22

 

 

 

 

PART II – OTHER INFORMATION

 

23

 

 

 

 

ITEM 1.

LEGAL PROCEEDINGS

 

23

 

 

 

 

ITEM 1A.

RISK FACTORS

 

23

 

 

 

 

ITEM 4.

MINE SAFETY DISCLOSURES

 

23

 

 

 

 

ITEM 5.

OTHER INFORMATION

 

23

 

 

 

 

ITEM 6.

EXHIBITS

 

24

 

 

 


 

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value amounts)

(Unaudited)

 

 

 

June 28, 2024

 

 

December 29, 2023

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

192,776

 

 

$

183,038

 

Investments available for sale

 

 

42,424

 

 

 

37,688

 

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

 

 

93,800

 

 

 

94,704

 

Inventories, net

 

 

39,282

 

 

 

35,130

 

Prepayments, deposits and other current assets

 

 

15,535

 

 

 

14,709

 

Total current assets

 

 

383,817

 

 

 

365,269

 

Investments available for sale

 

 

265

 

 

 

11,703

 

Property, plant and equipment, net

 

 

77,500

 

 

 

66,835

 

Finance lease right-of-use assets, net

 

 

109

 

 

 

183

 

Operating lease right-of-use assets, net

 

 

34,971

 

 

 

34,387

 

Goodwill

 

 

1,786

 

 

 

1,786

 

Deferred income taxes

 

 

5,078

 

 

 

5,190

 

Other assets

 

 

9,219

 

 

 

3,339

 

Total assets

 

$

512,745

 

 

$

488,692

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

19,059

 

 

$

13,557

 

Obligations under finance leases

 

 

125

 

 

 

165

 

Obligations under operating leases

 

 

4,648

 

 

 

4,202

 

Allowance for sales returns

 

 

7,225

 

 

 

6,174

 

Other current liabilities

 

 

35,113

 

 

 

40,938

 

Total current liabilities

 

 

66,170

 

 

 

65,036

 

Obligations under finance leases

 

 

 

 

 

42

 

Obligations under operating leases

 

 

31,499

 

 

 

31,425

 

Deferred income taxes

 

 

1,056

 

 

 

1,077

 

Asset retirement obligations

 

 

109

 

 

 

103

 

Pension liability

 

 

4,808

 

 

 

5,055

 

Total liabilities

 

 

103,642

 

 

 

102,738

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.01 par value; 60,000 shares authorized: 49,161 and
   
48,839 shares issued and outstanding at June 28, 2024 and
   December 29, 2023, respectively

 

 

492

 

 

 

488

 

Additional paid-in capital

 

 

457,402

 

 

 

436,947

 

Accumulated other comprehensive income (loss)

 

 

(5,463

)

 

 

(4,113

)

Accumulated deficit

 

 

(43,328

)

 

 

(47,368

)

Total stockholders’ equity

 

 

409,103

 

 

 

385,954

 

Total liabilities and stockholders’ equity

 

$

512,745

 

 

$

488,692

 

 

See accompanying notes to the condensed consolidated financial statements.

1


 

STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 28, 2024

 

 

June 30, 2023

 

 

June 28, 2024

 

 

June 30, 2023

 

Net sales

 

$

99,005

 

 

$

92,306

 

 

$

176,361

 

 

$

165,834

 

Cost of sales

 

 

20,593

 

 

 

21,580

 

 

 

36,914

 

 

 

37,546

 

Gross profit

 

 

78,412

 

 

 

70,726

 

 

 

139,447

 

 

 

128,288

 

Selling, general and administrative expenses:

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

23,641

 

 

 

18,097

 

 

 

46,869

 

 

 

36,195

 

Selling and marketing

 

 

28,819

 

 

 

32,277

 

 

 

55,527

 

 

 

58,631

 

Research and development

 

 

14,054

 

 

 

11,755

 

 

 

27,434

 

 

 

22,065

 

Total selling, general and administrative expenses

 

 

66,514

 

 

 

62,129

 

 

 

129,830

 

 

 

116,891

 

Operating income

 

 

11,898

 

 

 

8,597

 

 

 

9,617

 

 

 

11,397

 

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

1,422

 

 

 

1,775

 

 

 

2,951

 

 

 

3,597

 

Loss on foreign currency transactions

 

 

(3,049

)

 

 

(1,890

)

 

 

(5,346

)

 

 

(1,856

)

Royalty income

 

 

 

 

 

 

 

 

508

 

 

 

 

Other income, net

 

 

63

 

 

 

10

 

 

 

393

 

 

 

73

 

Total other income (expense), net

 

 

(1,564

)

 

 

(105

)

 

 

(1,494

)

 

 

1,814

 

Income before income taxes

 

 

10,334

 

 

 

8,492

 

 

 

8,123

 

 

 

13,211

 

Provision for income taxes

 

 

2,955

 

 

 

2,428

 

 

 

4,083

 

 

 

4,437

 

Net income

 

$

7,379

 

 

$

6,064

 

 

$

4,040

 

 

$

8,774

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.15

 

 

$

0.13

 

 

$

0.08

 

 

$

0.18

 

Diluted

 

$

0.15

 

 

$

0.12

 

 

$

0.08

 

 

$

0.18

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

49,127

 

 

 

48,418

 

 

 

49,018

 

 

 

48,333

 

Diluted

 

 

49,811

 

 

 

49,516

 

 

 

49,529

 

 

 

49,524

 

 

See accompanying notes to the condensed consolidated financial statements.

2


 

STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 28, 2024

 

 

June 30, 2023

 

 

June 28, 2024

 

 

June 30, 2023

 

Net income

 

$

7,379

 

 

$

6,064

 

 

$

4,040

 

 

$

8,774

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Defined benefit plans:

 

 

 

 

 

 

 

 

 

 

 

 

Net change in plan assets

 

 

(97

)

 

 

(547

)

 

 

135

 

 

 

(1,724

)

Reclassification into other income (expense), net

 

 

(17

)

 

 

(51

)

 

 

(34

)

 

 

(103

)

Investments available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized gain (loss)

 

 

3

 

 

 

(142

)

 

 

(33

)

 

 

(26

)

Reclassification into other income (expense), net

 

 

(1

)

 

 

 

 

 

2

 

 

 

(2

)

Foreign currency translation loss

 

 

(938

)

 

 

(1,342

)

 

 

(2,038

)

 

 

(1,471

)

Tax effect

 

 

299

 

 

 

498

 

 

 

618

 

 

 

649

 

Other comprehensive loss, net of tax

 

 

(751

)

 

 

(1,584

)

 

 

(1,350

)

 

 

(2,677

)

Comprehensive income

 

$

6,628

 

 

$

4,480

 

 

$

2,690

 

 

$

6,097

 

 

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

 

 

 

Common
Stock Shares

 

 

Common
Stock Par
Value

 

 

Additional
Paid-In
Capital

 

 

Accumulated
Other
Compre-
hensive
Income
(Loss)

 

 

Accumulated
Deficit

 

 

Total

 

Balance, at March 29, 2024

 

 

49,120

 

 

$

491

 

 

$

447,716

 

 

$

(4,712

)

 

$

(50,707

)

 

$

392,788

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,379

 

 

 

7,379

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(751

)

 

 

 

 

 

(751

)

Common stock issued upon exercise of options

 

 

18

 

 

 

 

 

 

371

 

 

 

 

 

 

 

 

 

371

 

Stock-based compensation

 

 

 

 

 

 

 

 

9,482

 

 

 

 

 

 

 

 

 

9,482

 

Repurchase of employee common stock for taxes withheld

 

 

(4

)

 

 

 

 

 

(167

)

 

 

 

 

 

 

 

 

(167

)

Unvested restricted stock

 

 

16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forfeited restricted stock

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested restricted and performance stock units

 

 

12

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Balance, at June 28, 2024

 

 

49,161

 

 

$

492

 

 

$

457,402

 

 

$

(5,463

)

 

$

(43,328

)

 

$

409,103

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2023

 

 

48,331

 

 

$

483

 

 

$

409,303

 

 

$

(937

)

 

$

(66,005

)

 

$

342,844

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,064

 

 

 

6,064

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(1,584

)

 

 

 

 

 

(1,584

)

Common stock issued upon exercise of options

 

 

155

 

 

 

2

 

 

 

1,475

 

 

 

 

 

 

 

 

 

1,477

 

Stock-based compensation

 

 

 

 

 

 

 

 

8,951

 

 

 

 

 

 

 

 

 

8,951

 

Repurchase of employee common stock for taxes withheld

 

 

(3

)

 

 

 

 

 

(135

)

 

 

 

 

 

 

 

 

(135

)

Unvested restricted stock

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested restricted and performance stock units

 

 

6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2023

 

 

48,499

 

 

$

485

 

 

$

419,594

 

 

$

(2,521

)

 

$

(59,941

)

 

$

357,617

 

 

See accompanying notes to the condensed consolidated financial statements.

 

4


 

STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

 

 

 

Six 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 29, 2023

 

 

48,839

 

 

$

488

 

 

$

436,947

 

 

$

(4,113

)

 

$

(47,368

)

 

$

385,954

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,040

 

 

 

4,040

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(1,350

)

 

 

 

 

 

(1,350

)

Common stock issued upon exercise of options

 

 

205

 

 

 

2

 

 

 

5,693

 

 

 

 

 

 

 

 

 

5,695

 

Stock-based compensation

 

 

 

 

 

 

 

 

16,158

 

 

 

 

 

 

 

 

 

16,158

 

Repurchase of employee common stock for taxes withheld

 

 

(40

)

 

 

 

 

 

(1,396

)

 

 

 

 

 

 

 

 

(1,396

)

Unvested restricted stock

 

 

16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forfeited restricted stock

 

 

(5

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested restricted and performance stock units

 

 

146

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

2

 

Balance, at June 28, 2024

 

 

49,161

 

 

$

492

 

 

$

457,402

 

 

$

(5,463

)

 

$

(43,328

)

 

$

409,103

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, at December 30, 2022

 

 

48,212

 

 

$

482

 

 

$

404,189

 

 

$

156

 

 

$

(68,715

)

 

$

336,112

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,774

 

 

 

8,774

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(2,677

)

 

 

 

 

 

(2,677

)

Common stock issued upon exercise of options

 

 

195

 

 

 

2

 

 

 

2,004

 

 

 

 

 

 

 

 

 

2,006

 

Stock-based compensation

 

 

 

 

 

 

 

 

15,385

 

 

 

 

 

 

 

 

 

15,385

 

Repurchase of employee common stock for taxes withheld

 

 

(34

)

 

 

 

 

 

(1,984

)

 

 

 

 

 

 

 

 

(1,984

)

Unvested restricted stock

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested restricted and performance stock units

 

 

116

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Balance at June 30, 2023

 

 

48,499

 

 

$

485

 

 

$

419,594

 

 

$

(2,521

)

 

$

(59,941

)

 

$

357,617

 

 

See accompanying notes to the condensed consolidated financial statements.

 

5


 

STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Six Months Ended

 

 

 

June 28, 2024

 

 

June 30, 2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

4,040

 

 

$

8,774

 

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

 

 

 

 

 

 

Depreciation of property, plant, and equipment

 

 

2,759

 

 

 

2,398

 

Amortization of intangibles

 

 

 

 

 

171

 

Accretion/Amortization of investments available for sale

 

 

(286

)

 

 

(1,824

)

Deferred income taxes

 

 

60

 

 

 

75

 

Change in net pension liability

 

 

(146

)

 

 

(627

)

Loss on disposal of property and equipment

 

 

26

 

 

 

24

 

Stock-based compensation expense

 

 

15,381

 

 

 

14,488

 

Change in asset retirement obligation

 

 

20

 

 

 

(107

)

Provision for sales returns and bad debts

 

 

1,079

 

 

 

1,004

 

Inventory provision

 

 

1,024

 

 

 

3,630

 

Changes in working capital:

 

 

 

 

 

 

Accounts receivable

 

 

436

 

 

 

(32,344

)

Inventories

 

 

(4,871

)

 

 

(4,382

)

Prepayments, deposits, and other assets

 

 

(7,085

)

 

 

(2,665

)

Accounts payable

 

 

3,618

 

 

 

(1,447

)

Other current liabilities

 

 

(4,788

)

 

 

1,432

 

Net cash provided by (used in) operating activities

 

 

11,267

 

 

 

(11,400

)

Cash flows from investing activities:

 

 

 

 

 

 

Acquisition of property and equipment

 

 

(11,438

)

 

 

(5,915

)

Purchase of investments available for sale

 

 

(20,249

)

 

 

(42,602

)

Proceeds from sale or maturity of investments available for sale

 

 

27,206

 

 

 

68,622

 

Net cash provided by (used in) investing activities

 

 

(4,481

)

 

 

20,105

 

Cash flows from financing activities:

 

 

 

 

 

 

Repayment of finance lease obligations

 

 

(82

)

 

 

(82

)

Repurchase of employee common stock for taxes withheld

 

 

(1,396

)

 

 

(1,984

)

Proceeds from the exercise of stock options

 

 

5,695

 

 

 

2,006

 

Proceeds from vested restricted and performance stock units

 

 

2

 

 

 

1

 

Net cash provided by (used in) financing activities

 

 

4,219

 

 

 

(59

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(1,267

)

 

 

(431

)

Increase in cash and cash equivalents

 

 

9,738

 

 

 

8,215

 

Cash and cash equivalents, at beginning of the period

 

 

183,038

 

 

 

86,480

 

Cash and cash equivalents, at end of the period

 

$

192,776

 

 

$

94,695

 

 

See accompanying notes to the condensed consolidated financial statements.

6


STAAR SURGICAL COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

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 present the financial position, results of operations, and cash flows of STAAR Surgical Company and its wholly owned 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 29, 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 29, 2023.

The Condensed Consolidated Financial Statements for the three and six months ended June 28, 2024 and June 30, 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 six months ended June 28, 2024 and June 30, 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.

Cloud-Based Software

As of June 28, 2024 and December 29, 2023, the Company recognized $8,103,000 and $2,406,000, respectively, of net capitalized cloud-based software implementation costs related to several systems, including enterprise resource planning and customer relationship management systems, recorded within Other assets on the Condensed Consolidated Balance Sheets. As of June 28, 2024, these assets are not currently placed into service. These assets are expected to be placed into service through the first quarter of 2025. No amortization of capitalized cloud-based software implementation costs were recognized during the three and six months ended June 28, 2024 and June 30, 2023.

Vendor Concentration

There was one vendor that accounted for approximately 28% of the Company’s consolidated accounts payable as of June 28, 2024. There was one vendor that accounted for approximately 11% of the Company’s consolidated purchases as of the three months ended June 28, 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.

 


STAAR SURGICAL COMPANY

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

 

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

Recent Accounting Pronouncements Not Yet Adopted (Continued)

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.

Note 2 — Investments Available for Sale

Investments available for sale (“AFS”) and the related fair value measurement consisted of the following (dollars in thousands):

 

 

 

June 28, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements

 

 

 

Amortized Cost

 

 

Unrealized Gains

 

 

Unrealized Losses

 

 

Estimated Fair Value

 

 

Level 1

 

 

Level 2

 

Commercial paper

 

$

3,565

 

 

$

1

 

 

$

 

 

$

3,566

 

 

$

 

 

$

3,566

 

Certificates of deposit

 

 

1,762

 

 

 

1

 

 

 

 

 

 

1,763

 

 

 

 

 

 

1,763

 

U.S. Treasury securities

 

 

13,943

 

 

 

 

 

 

(66

)

 

 

13,877

 

 

 

13,877

 

 

 

 

U.S. agency securities

 

 

989

 

 

 

 

 

 

(2

)

 

 

987

 

 

 

 

 

 

987

 

Corporate debt securities

 

 

22,503

 

 

 

3

 

 

 

(10

)

 

 

22,496

 

 

 

 

 

 

22,496

 

Total investments AFS

 

$

42,762

 

 

$

5

 

 

$

(78

)

 

$

42,689

 

 

$

13,877

 

 

$

28,812

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 29, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements

 

 

 

Amortized Cost

 

 

Unrealized Gains

 

 

Unrealized Losses

 

 

Estimated Fair Value

 

 

Level 1

 

 

Level 2

 

Commercial paper

 

$

7,720

 

 

$

9

 

 

$

 

 

$

7,729

 

 

$

 

 

$

7,729

 

Certificates of deposit

 

 

3,716

 

 

 

4

 

 

 

 

 

 

3,720

 

 

 

 

 

 

3,720

 

U.S. Treasury securities

 

 

23,036

 

 

 

3

 

 

 

(56

)

 

 

22,983

 

 

 

22,983

 

 

 

 

U.S. agency securities

 

 

3,423

 

 

 

 

 

 

(4

)

 

 

3,419

 

 

 

 

 

 

3,419

 

Corporate debt securities

 

 

11,538

 

 

 

12

 

 

 

(10

)

 

 

11,540

 

 

 

 

 

 

11,540

 

Total investments AFS

 

$

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.

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 six months ended June 28, 2024.

8


STAAR SURGICAL COMPANY

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

 

Note 2 — Investments Available for Sale (Continued)

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

 

 

 

As of June 28, 2024

 

 

 

Within one year

 

 

After one year through five years

 

 

 

Total

 

Commercial paper

 

$

3,566

 

 

$

 

 

 

$

3,566

 

Certificates of deposit

 

 

1,763

 

 

 

 

 

 

 

1,763

 

U.S. Treasury securities

 

 

13,877

 

 

 

 

 

 

 

13,877

 

U.S. agency securities

 

 

987

 

 

 

 

 

 

 

987

 

Corporate debt securities

 

 

22,231