STAAR Surgical(STAA) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Financial Overview STAAR Surgical's Q2 2025 saw a significant net sales decline, net loss, and adjusted EBITDA loss, alongside a share repurchase program and news of a pending acquisition Second Quarter 2025 Key Financial Results STAAR Surgical's Q2 2025 net sales fell 55% to $44.3 million, driven by China inventory adjustments, leading to a $16.8 million net loss and a $14.9 million adjusted EBITDA loss Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Q1 2025 | | :-------------------------------- | :-------- | :-------- | :-------- | | Net Sales | $44.3M | $99.0M | $42.6M | | Net Sales (Excluding China) | $39.0M | - | - | | Gross Margin | 74.0% | 79.2% | 65.8% | | Net Income (Loss) | $(16.8)M | $7.4M | $(54.2)M | | Net Income (Loss) Per Share | $(0.34) | $0.15 | $(1.10) | | Adjusted EBITDA (Loss) | $(14.9)M | $22.5M | $(26.4)M | | Adjusted EBITDA (Loss) Per Share | $(0.30) | $0.45 | $(0.53) | - Net sales decreased by 55% year-over-year, primarily because distributors in the China market opted to utilize existing inventory to meet demand, resulting in minimal purchases this quarter[4] - Gross margin decreased year-over-year due to lower sales volume, but it increased compared to Q1 2025[5][7] - Total operating expenses decreased year-over-year, benefiting from ongoing cost optimization initiatives, with reductions in general and administrative, selling and marketing, and research and development expenses[6] - Restructuring, impairment, and related charges of $5.2 million were incurred this quarter, primarily for severance related to leadership structure adjustments and cost control plans, as well as impairment of fixed assets and operating leases[8] Cash and Investments As of June 27, 2025, the company's total cash, cash equivalents, and available-for-sale investments amounted to $189.9 million, a decrease from the end of Q1 2025, with no outstanding debt Cash, Cash Equivalents, and Investments | Metric | June 27, 2025 | End of Q1 2025 | | :----------------------- | :-------------- | :--------------- | | Cash, Cash Equivalents, and Investments | $189.9M | $222.8M | | Outstanding Debt | None | None | Share Repurchase Program In Q2 2025, the company repurchased approximately 261,000 common shares for a total cost of $4.5 million at an average price of $17.17 per share, with $25.5 million remaining under the $30 million repurchase program as of June 27 Share Repurchase Details | Metric | Details | | :------------------- | :---------------- | | Shares Repurchased (Q2 2025) | Approx. 261,000 shares | | Total Cost (Q2 2025) | Approx. $4.5M | | Average Purchase Price | $17.17/share | | Remaining Authorized Amount | Approx. $25.5M | | Cumulative Repurchases as of August 1 | 376,000 shares | | Cumulative Cost as of August 1 | $6.5M | Pending Acquisition and Conference Call STAAR Surgical will not host a Q2 2025 earnings conference call due to its pending acquisition by Alcon Inc - The company canceled its Q2 earnings conference call due to its pending acquisition by Alcon Inc[10] Use of Non-GAAP Financial Measures The company utilizes non-GAAP financial measures, including Adjusted EBITDA and constant currency reporting, to provide a clearer view of core operational performance Adjusted EBITDA Definition and Rationale The company uses Adjusted EBITDA as a non-GAAP financial measure to assess operational performance and core business trends, further excluding stock-based compensation and restructuring, impairment, and related charges from EBITDA, as these expenses do not directly reflect underlying business performance and can be highly variable - EBITDA is calculated by adding back net interest income/expense, income tax provision, depreciation, and amortization to net income[13] - Adjusted EBITDA further excludes stock-based compensation expense and restructuring, impairment, and related charges to provide a more consistent analysis of core business operating performance[13][14] - Stock-based compensation expense is excluded as it is a non-cash expense, and its amount may not directly relate to the underlying performance of the business and can fluctuate significantly based on timing, size, and nature of awards[13][14] - Restructuring, impairment, and related charges are excluded because they do not represent the company's underlying operating expense profile and are expected to be completed within a finite period, with amounts that can fluctuate significantly[14] Constant Currency Reporting The company uses constant currency reporting for certain financial information to exclude the impact of foreign exchange fluctuations, enabling more accurate period-over-period performance comparisons, given its significant international operations and the potential for exchange rate volatility to materially affect USD-reported results - Constant currency reporting aims to exclude the impact of foreign exchange fluctuations for more accurate period-over-period performance comparisons[15] - The company conducts significant business outside the U.S., with sales revenue and expenses primarily denominated in U.S. Dollars, Swiss Francs, Japanese Yen, and Euros, where exchange rate fluctuations can materially impact results[15] About STAAR Surgical STAAR Surgical is a global leader in phakic intraocular lenses, specializing in ophthalmic surgery for 30 years, designing, developing, manufacturing, and marketing the advanced EVO ICL™ product line, with over 3 million ICLs sold in more than 75 countries worldwide - STAAR Surgical is a global leader in phakic intraocular lenses, providing vision correction solutions[17] - The company has focused on ophthalmic surgery since 1982, designing, developing, manufacturing, and marketing advanced implantable Collamer® lenses (ICLs) for 30 years[17] - The EVO ICL™ product line offers safe, long-term vision correction without removing corneal tissue or the natural crystalline lens, with over 3 million ICLs sold in more than 75 countries worldwide[17] Investor Information and Forward-Looking Statements This section outlines investor communication channels and provides a disclaimer regarding forward-looking statements, highlighting inherent risks and uncertainties Investor Relations The company discloses important non-public information and fulfills Regulation FD disclosure obligations via its investor relations website (investors.staar.com), encouraging investors to monitor the site for the latest updates - The company uses its investor relations website (investors.staar.com) as a means of disclosing material non-public information and complying with its Regulation FD obligations[18] Forward-Looking Statements Disclaimer This press release contains forward-looking statements involving known and unknown risks, uncertainties, and other important factors that could cause actual results to differ materially, including but not limited to growth capabilities, reliance on international distributors, China's economic slowdown, global economic conditions, supply chain disruptions, exchange rate fluctuations, and risks related to the pending acquisition by Alcon Inc - Forward-looking statements involve known and unknown risks, uncertainties, and other important factors that could cause actual results to differ materially from expectations[19] - Key risks include: growth and profitability, reliance on international distributors, China's economic slowdown, global economic conditions, supply chain disruptions, foreign exchange fluctuations, international trade disputes, tax rate changes, use of key manufacturing facilities, competition, product liability claims, environmental liability, data security, acquisition of new technologies, climate change, product adoption, R&D investments, government regulatory compliance, regulatory discretion, product recalls or failures, and risks related to the pending acquisition by Alcon Inc[19] - The company undertakes no obligation to update or revise any forward-looking statements, except as required by applicable law[20] Consolidated Financial Statements This section presents the company's consolidated balance sheets, statements of operations, and cash flows, reflecting its financial position and performance Consolidated Balance Sheets As of June 27, 2025, the company's total assets were $437.8 million, a decrease from $509.5 million on December 27, 2024, with corresponding reductions in total liabilities and total stockholders' equity Consolidated Balance Sheets Summary (in Thousands of USD) | Metric | June 27, 2025 | December 27, 2024 | | :-------------------------- | :-------------- | :--------------- | | Assets: | | | | Cash and Cash Equivalents | $167,131 | $144,159 | | Available-for-Sale Investments | $22,752 | $86,335 | | Accounts Receivable, Net | $34,440 | $77,897 | | Inventories, Net | $53,107 | $43,305 | | Total Current Assets | $292,792 | $367,940 | | Property, Plant and Equipment, Net | $74,417 | $84,889 | | Total Assets | $437,781 | $509,524 | | Liabilities and Stockholders' Equity: | | | | Total Current Liabilities | $59,228 | $70,306 | | Total Liabilities | $101,208 | $112,189 | | Total Stockholders' Equity | $336,573 | $397,335 | | Total Liabilities and Stockholders' Equity | $437,781 | $509,524 | Consolidated Statements of Operations In Q2 2025, the company reported $44.3 million in net sales, $32.8 million in gross profit, an operating loss of $30.0 million, a net loss of $16.8 million, and a diluted loss per share of $0.34, reflecting significant year-over-year declines in both sales and profitability Consolidated Statements of Operations Summary (in Thousands of USD, except per share data) | Metric | Q2 2025 | Q2 2024 | Y-o-Y Change (%) | | :-------------------------- | :-------------- | :-------------- | :------------ | | Net Sales | $44,320 | $99,005 | (55.2)% | | Cost of Sales | $11,521 | $20,593 | 44.1% | | Gross Profit | $32,799 | $78,412 | (58.2)% | | Selling, General and Administrative Expenses | $57,515 | $66,514 | 13.5% | | Restructuring, Impairment and Related Charges | $5,248 | $0 | 0.0% | | Total Operating Expenses | $62,763 | $66,514 | 5.6% | | Operating Income (Loss) | $(29,964) | $11,898 | (351.8)% | | Other Income (Expense), Net | $4,049 | $(1,564) | 358.9% | | Income (Loss) Before Income Taxes | $(25,915) | $10,334 | (350.8)% | | Income Tax Provision (Benefit) | $(9,103) | $2,955 | 408.1% | | Net Income (Loss) | $(16,812) | $7,379 | (327.8)% | | Diluted Net Income (Loss) Per Share | $(0.34) | $0.15 | - | Consolidated Statements of Cash Flows In Q2 2025, cash outflow from operating activities was $27.2 million, cash inflow from investing activities was $25.1 million, and cash outflow from financing activities was $4.5 million, with cash and cash equivalents totaling $167.1 million at period-end Consolidated Statements of Cash Flows Summary (in Thousands of USD) | Cash Flow Type | Q2 2025 | Q2 2024 | | :----------------------- | :-------------- | :-------------- | | Net Cash from Operating Activities | $(27,249) | $(10,413) | | Net Cash from Investing Activities | $25,120 | $(20,668) | | Net Cash from Financing Activities | $(4,540) | $163 | | Effect of Exchange Rate Changes | $686 | $(330) | | Net Increase (Decrease) in Cash and Cash Equivalents | $(5,983) | $(31,248) | | Cash and Cash Equivalents at End of Period | $167,131 | $192,776 | Supplementary Financial Data This section provides additional financial details, including a reconciliation of GAAP net income to non-GAAP Adjusted EBITDA and a breakdown of sales by geographic region Reconciliation of Net Income to Adjusted EBITDA The company provides a reconciliation of GAAP net income to non-GAAP Adjusted EBITDA, detailing adjustments for income taxes, other income/expense, depreciation, restructuring/impairment charges, and stock-based compensation expense Reconciliation of Net Income to Adjusted EBITDA (in Thousands of USD) | Metric | Q2 2025 | Q2 2024 | | :-------------------------- | :-------------- | :-------------- | | Net Income (Loss) | $(16,812) | $7,379 | | Income Tax Provision (Benefit) | $(9,103) | $2,955 | | Other Income (Expense), Net | $(4,049) | $1,564 | | Depreciation | $1,975 | $1,522 | | Restructuring, Impairment and Related Charges | $5,248 | $0 | | Stock-Based Compensation Expense | $7,802 | $9,042 | | Adjusted EBITDA | $(14,939) | $22,480 | | Adjusted EBITDA as % of Sales | (33.7)% | 22.7% | | Diluted Adjusted EBITDA Per Share | $(0.30) | $0.45 | Sales by Geography and Country In Q2 2025, global sales decreased by 55% year-over-year, primarily due to a significant decline in Asia Pacific sales, especially China; while Americas and EMEA regions both achieved double-digit growth, China sales fell 92% year-over-year, and global sales excluding China grew 10% Sales and Growth by Region (in Thousands of USD) | Region | Q2 2025 Sales | Q2 2024 Sales | Y-o-Y Growth Rate | | :----- | :------------------- | :------------------- | :--------- | | Americas | $7,307 | $6,656 | 10% | | EMEA | $11,436 | $10,316 | 11% | | Asia Pacific | $25,577 | $82,033 | (69)% | | Global Sales | $44,320 | $99,005 | (55)% | | Global ICL Unit Growth | - | - | (63)% | Sales and Growth by Key Country (in Thousands of USD) | Country | Q2 2025 Sales | Q2 2024 Sales | Y-o-Y Growth Rate | | :------- | :------------------- | :------------------- | :--------- | | China | $5,299 | $63,519 | (92)% | | Japan | $10,915 | $9,887 | 10% | | South Korea | $4,293 | $3,924 | 9% | | United States | $5,635 | $5,399 | 4% | - Global sales (excluding China) reached $39.021 million in Q2 2025, representing a 10% year-over-year increase[31] Reconciliation of Constant Currency Sales The company provides a reconciliation of total sales at reported and constant currency rates, illustrating the negative impact of foreign exchange fluctuations, which reduced Q2 2025 sales by $1.2 million Constant Currency Sales Reconciliation (in Thousands of USD) | Metric | Q2 2025 (Reported) | FX Impact | Q2 2025 (Constant Currency) | Q2 2024 | | :---------- | :-------------------- | :--------- | :-------------------------- | :-------------- | | Total Sales | $44,320 | $(1,199) | $43,121 | $99,005 | | Y-o-Y Change (%) | (55.2)% | - | (56.4)% | - | - Foreign exchange rate changes had a negative impact of $1.199 million on total sales in Q2 2025[32]