Glaukos Corporation (NYSE: GKOS), an ophthalmic medical
technology and pharmaceutical company focused on novel therapies
for the treatment of glaucoma, corneal disorders and retinal
diseases, today announced financial results for the second quarter
ended June 30, 2023. Key highlights include:
- Net sales of $80.4 million in Q2 2023 increased 11%
year-over-year.
- Glaucoma net sales of $61.9 million in Q2 2023 increased 10%
year-over-year.
- Corneal Health net sales of $18.5 million in Q2 2023 increased
11% year-over-year.
- Gross margin of approximately 75% and non-GAAP gross margin of
approximately 82% in Q2 2023.
- Raised 2023 net sales guidance to $304 million to $308 million,
compared to $295 million to $300 million previously.
“Our record second quarter results highlighted by double-digit
topline growth reflect the successful execution of our commercial
strategies thus far in 2023,” said Thomas Burns, Glaukos chairman
and chief executive officer. “We continue to prudently invest in
and advance our robust pipeline of novel, dropless platform
technologies designed to meaningfully advance the standard of care
and improve outcomes for patients suffering from chronic eye
diseases.”
Second Quarter 2023 Financial Results
Net sales in the second quarter of 2023 of $80.4 million
increased 11%, compared to $72.7 million in the same period in
2022.
Gross margin for the second quarter of 2023 was approximately
75%, compared to approximately 75% in the same period in 2022.
Non-GAAP gross margin for the second quarter of 2023 was
approximately 82%, compared to approximately 83% in the same period
in 2022.
Selling, general and administrative (SG&A) expenses for the
second quarter of 2023 increased 6% to $53.1 million, compared to
$49.9 million in the same period in 2022. Non-GAAP SG&A
expenses for the second quarter of 2023 increased 7% to $52.4
million, compared to $49.0 million in the same period in 2022.
GAAP and non-GAAP research and development (R&D) expenses
for the second quarter of 2023 increased 5% to $33.2 million,
compared to $31.7 million in the same period in 2022.
Loss from operations in the second quarter of 2023 was $29.1
million, compared to operating loss of $36.8 million in the second
quarter of 2022. Non-GAAP loss from operations in the second
quarter of 2023 was $22.8 million, compared to non-GAAP operating
loss of $30.4 million in the second quarter of 2022.
Net loss in the second quarter of 2023 was $32.8 million, or
($0.68) per diluted share, compared to net loss of $45.5 million,
or ($0.96) per diluted share, in the second quarter of 2022.
Non-GAAP net loss in the second quarter of 2023 was $26.6 million,
or ($0.55) per diluted share, compared to non-GAAP net loss of
$39.1 million, or ($0.83) per diluted share, in the second quarter
of 2022.
Included in non-GAAP loss from operations, non-GAAP net loss and
non-GAAP EPS for the second quarter of 2023 and 2022 are acquired
in-process R&D (IPR&D) charges of $3.0 million and $10.0
million, respectively, which in total caused the non-GAAP loss per
diluted share to have an additional loss of ($0.06) and ($0.21) in
each of these respective periods.
The company ended the second quarter of 2023 with approximately
$310 million in cash and cash equivalents, short-term investments
and restricted cash.
2023 Revenue Guidance
The company expects 2023 net sales to be in the range of $304
million to $308 million based on the latest foreign currency
exchange rates.
Webcast & Conference Call
The company will host a conference call and simultaneous webcast
today at 1:30 p.m. PT (4:30 p.m. ET) to discuss the results and
provide additional information about the company’s financial
outlook. A link to the webcast is available on the company’s
website at http://investors.glaukos.com. To participate in the
conference call, please dial 888-210-2212 (U.S.) or 646-960-0390
(international) and enter Conference ID 7935742. A replay of the
webcast will be archived on the company’s website following
completion of the call.
Quarterly Summary Document
The company has posted a document on its Investor Relations
website under the “Financials & Filings – Quarterly Results”
section titled “Quarterly Summary.” This Quarterly Summary document
is designed to provide the investment community with a summarized
and easily accessible reference document that details the key facts
associated with the quarter, the state of the company’s business
objectives and strategies and any forward statements or guidance
the company may make. This document is provided alongside the
company’s earnings press release and is designed to be read by
investors before the regularly scheduled quarterly conference call.
As such, today’s conference call will be in a format primarily
consisting of a questions and answers session, during which Glaukos
will address any queries investors have regarding the company’s
results. It is the company’s goal that this format will make its
quarterly earnings process more efficient and impactful for the
investment community going forward.
About Glaukos
Glaukos (www.glaukos.com) is an ophthalmic medical technology
and pharmaceutical company focused on developing and
commercializing novel therapies for the treatment of glaucoma,
corneal disorders and retinal diseases. Glaukos first developed
Micro-Invasive Glaucoma Surgery (MIGS) as an alternative to the
traditional glaucoma treatment paradigm, launching its first MIGS
device commercially in 2012, and continues to develop a portfolio
of technologically distinct and leverageable platforms to support
ongoing pharmaceutical and medical device innovations. Products or
product candidates for each of these platforms are designed to
advance the standard of care through better treatment options
across the areas of glaucoma, corneal disorders and retinal
diseases.
Forward-Looking Statements
This communication contains “forward-looking statements” within
the meaning of federal securities laws. All statements other than
statements of historical facts included in this press release that
address activities, events or developments that we expect, believe
or anticipate will or may occur in the future are forward-looking
statements. These statements are based on management’s current
expectations, assumptions, estimates and beliefs. Although we
believe that we have a reasonable basis for forward-looking
statements contained herein, we caution you that they are based on
current expectations about future events affecting us and are
subject to risks, uncertainties and factors relating to our
operations and business environment, all of which are difficult to
predict and many of which are beyond our control, that may cause
our actual results to differ materially from those expressed or
implied by forward-looking statements in this press release. These
potential risks and uncertainties that could cause actual results
to differ materially from those described in forward-looking
statements include, without limitation, uncertainties regarding the
impact of the COVID-19 pandemic or other future public health
crises on our business; the impact of general macroeconomic
conditions including foreign currency fluctuations; the reduced
physician fee and ASC facility fee reimbursement rate finalized by
CMS for 2022 and 2023 for procedures utilizing the Company’s iStent
family of products and its impact on our U.S. combo-cataract
glaucoma revenue; our ability to continue to generate sales of our
commercialized products and develop and commercialize additional
products; our dependence on a limited number of third-party
suppliers, some of which are single-source, for components of our
products; the occurrence of a crippling accident, natural disaster,
or other disruption at our primary facility, which may materially
affect our manufacturing capacity and operations; securing or
maintaining adequate coverage or reimbursement by third-party
payors for procedures using the iStent, the iStent inject, the
iStent inject W, iAccess, iPRIME, iStent infinite, our corneal
cross-linking products or other products in development; our
ability to properly train, and gain acceptance and trust from
ophthalmic surgeons in the use of our products; our ability to
compete effectively in the medical device industry and against
current and future technologies (including MIGS technologies); our
compliance with federal, state and foreign laws and regulations for
the approval and sale and marketing of our products and of our
manufacturing processes; the lengthy and expensive clinical trial
process and the uncertainty of timing and outcomes from any
particular clinical trial or regulatory approval processes; the
risk of recalls or serious safety issues with our products and the
uncertainty of patient outcomes; our ability to protect, and the
expense and time-consuming nature of protecting our intellectual
property against third parties and competitors and the impact of
any claims against us for infringement or misappropriation of third
party intellectual property rights and any related litigation; and
our ability to service our indebtedness. These and other known
risks, uncertainties and factors are described in detail under the
caption “Risk Factors” and elsewhere in our filings with the
Securities and Exchange Commission (SEC), including in our
Quarterly Report on Form 10-Q for the quarter ended June 30, 2023,
which is expected to be filed with the SEC by August 9, 2023. Our
filings with the SEC are available in the Investor Section of our
website at www.glaukos.com or at www.sec.gov. In addition,
information about the risks and benefits of our products is
available on our website at www.glaukos.com. All forward-looking
statements included in this press release are expressly qualified
in their entirety by the foregoing cautionary statements. You are
cautioned not to place undue reliance on the forward-looking
statements in this press release, which speak only as of the date
hereof. We do not undertake any obligation to update, amend or
clarify these forward-looking statements whether as a result of new
information, future events or otherwise, except as may be required
under applicable securities law.
Statement Regarding Use of Non-GAAP Financial
Measures
To supplement the consolidated financial results prepared in
accordance with Generally Accepted Accounting Principles ("GAAP"),
the Company uses certain non-GAAP historical financial measures.
Management makes adjustments to the GAAP measures for items (both
charges and gains) that (a) do not reflect the core operational
activities of the Company, (b) are commonly adjusted within the
Company's industry to enhance comparability of the Company's
financial results with those of its peer group, or (c) are
inconsistent in amount or frequency between periods (albeit such
items are monitored and controlled with equal diligence relative to
core operations). The Company uses the term "Non-GAAP" to exclude
external acquisition-related costs incurred to effect a business
combination; amortization of intangible assets acquired in a
business combination, asset purchase transaction or other
contractual relationship; impairment of goodwill and intangible
assets; certain in-process R&D charges; fair value adjustments
to contingent consideration liabilities and pre-acquisition
contingencies arising from a business combination; integration and
transition costs related to business combinations; fair market
value adjustments to inventories acquired in a business combination
or asset purchase transaction; restructuring charges, duplicative
operating expenses, or asset write-offs (or reversals) associated
with exiting or significantly downsizing a business; gain or loss
from the sale of a business; gain or loss on the mark-to-market
adjustment, impairment, or sale of long-term investments;
mark-to-market adjustments on derivative instruments that hedge
income or expense exposures in a future period; significant legal
litigation costs and/or settlement expenses or proceeds legal and
other associated expenses that are both unusual and significant
related to governmental or internal inquiries; and significant
discrete income and other tax adjustments related to transactions
as well as changes in estimated acquisition-date tax effects
associated with business combinations, and the impact from
implementation of tax law changes and settlements. See “GAAP to
Non-GAAP Reconciliations” for a reconciliation of each non-GAAP
measure presented to the comparable GAAP financial measure.
In addition, in order to remove the impact of fluctuations in
foreign currency exchange rates, the Company also presents certain
net sales information on a constant currency basis, which
represents the outcome that would have resulted had exchange rates
in the current period been the same as the average exchange rates
in effect in the comparable prior period. See “Reported Sales vs.
Prior Periods” for a presentation of certain net sales information
on a reported, GAAP and a constant currency basis.
GLAUKOS CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per
share amounts)
Three Months Ended Six Months Ended June
30, June 30,
2023
2022
2023
2022
Net sales
$
80,399
$
72,685
$
154,298
$
140,366
Cost of sales
20,103
17,833
38,174
34,896
Gross profit
60,296
54,852
116,124
105,470
Operating expenses: Selling, general and administrative
53,137
49,900
106,787
93,849
Research and development
33,234
31,712
68,405
58,589
Acquired in-process research and development
3,000
10,000
3,000
10,000
Litigation-related settlement
-
-
-
(30,000
)
Total operating expenses
89,371
91,612
178,192
132,438
Loss from operations
(29,075
)
(36,760
)
(62,068
)
(26,968
)
Non-operating expense: Interest income
1,894
384
3,542
671
Interest expense
(3,399
)
(3,414
)
(6,807
)
(6,830
)
Other expense, net
(1,797
)
(5,851
)
(1,269
)
(6,811
)
Total non-operating expense
(3,302
)
(8,881
)
(4,534
)
(12,970
)
Loss before taxes
(32,377
)
(45,641
)
(66,602
)
(39,938
)
Income tax provision (benefit)
435
(105
)
836
221
Net loss
$
(32,812
)
$
(45,536
)
$
(67,438
)
$
(40,159
)
Basic and diluted net loss per share
$
(0.68
)
$
(0.96
)
$
(1.40
)
$
(0.85
)
Weighted average shares used to compute basic and diluted
net loss per share
48,281
47,356
48,082
47,205
GLAUKOS CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except par
values)
June 30, December 31,
2023
2022
(unaudited) Assets Current assets: Cash and cash
equivalents
$
94,812
$
119,525
Short-term investments
208,995
233,170
Accounts receivable, net
39,252
36,073
Inventory
39,447
37,841
Prepaid expenses and other current assets
18,754
17,250
Total current assets
401,260
443,859
Restricted cash
5,856
7,078
Property and equipment, net
102,674
94,403
Operating lease right-of-use assets
27,726
25,826
Finance lease right-of-use asset
45,391
46,601
Intangible assets, net
295,412
307,869
Goodwill
66,134
66,134
Deposits and other assets
12,287
10,613
Total assets
$
956,740
$
1,002,383
Liabilities and stockholders' equity Current
liabilities: Accounts payable
$
8,564
$
14,403
Accrued liabilities
55,322
57,956
Total current liabilities
63,886
72,359
Convertible senior notes
282,087
281,400
Operating lease liability
30,770
28,905
Finance lease liability
71,023
72,172
Deferred tax liability, net
7,258
7,264
Other liabilities
12,905
10,278
Total liabilities
467,929
472,378
Stockholders' equity: Preferred stock, $0.001 par value;
5,000 shares authorized; no shares issued or outstanding
-
-
Common stock, $0.001 par value; 150,000 shares authorized; 48,413
and 47,782 shares issued and 48,385 and 47,754 shares outstanding
at June 30, 2023 and December 31, 2022, respectively
48
48
Additional paid-in capital
1,021,126
997,470
Accumulated other comprehensive loss
(387
)
(2,975
)
Accumulated deficit
(531,844
)
(464,406
)
Less treasury stock (28 shares as of June 30, 2023 and December 31,
2022)
(132
)
(132
)
Total stockholders' equity
488,811
530,005
Total liabilities and stockholders' equity
$
956,740
$
1,002,383
GLAUKOS CORPORATION
GAAP to Non-GAAP
Reconciliations
(in thousands, except per
share amounts and percentage data)
(unaudited) Q2 2023 Q2 2022
GAAP Adjustments Non-GAAP
GAAP Adjustments Non-GAAP
Cost of sales
$
20,103
$
(5,523
)
(a)
$
14,580
$
17,833
$
(5,546
)
(a)
$
12,287
Gross Margin
75.0
%
6.9
%
81.9
%
75.5
%
7.6
%
83.1
%
Operating expenses: Selling,
general and administrative
$
53,137
$
(705
)
(b)
$
52,432
$
49,900
$
(854
)
(b)
$
49,046
Loss from operations
$
(29,075
)
$
6,228
$
(22,847
)
$
(36,760
)
$
6,400
$
(30,360
)
Net loss
$
(32,812
)
$
6,228
(c)
$
(26,584
)
$
(45,536
)
$
6,400
(c)
$
(39,136
)
Basic and diluted net loss per share
$
(0.68
)
$
0.13
$
(0.55
)
$
(0.96
)
$
0.13
$
(0.83
)
(a)
Cost of sales adjustments related to the acquisition of Avedro,
Inc. (Avedro), including amortization of developed technology
intangible assets of $5.5 million in Q2 2023 and amortization of
developed technology intangible assets and stock-based compensation
expense related to replacement awards, totaling $5.5 million in Q2
2022.
(b)
Avedro acquisition-related expenses, including amortization expense
of customer relationship intangible assets of $0.7 million in Q2
2023 and customer relationship intangible assets and stock-based
compensation expense related to replacement awards of $0.9 million
in Q2 2022.
(c)
Includes total tax effect for non-GAAP pre-tax adjustments. For
non-GAAP adjustments associated with the U.S., the tax effect is $0
given the Company's U.S. taxable loss positions in both 2023 and
2022.
GLAUKOS CORPORATION
GAAP to Non-GAAP
Reconciliations
(in thousands, except per
share amounts and percentage data)
(unaudited) Year-to-Date Q2 2023
Year-to-Date Q2 2022 GAAP Adjustments Non-GAAP
GAAP Adjustments Non-GAAP Cost of sales
$
38,174
$
(11,046
)
(a)
$
27,128
$
34,896
$
(11,097
)
(a)
$
23,799
Gross Margin
75.3
%
7.1
%
82.4
%
75.1
%
7.9
%
83.0
%
Operating expenses: Selling,
general and administrative
$
106,787
$
(1,410
)
(b)
$
105,377
$
93,849
$
(1,745
)
(b)
$
92,104
Research and development
$
68,405
$
-
$
68,405
$
58,589
$
(127
)
(c)
$
58,462
Litigation-related settlement
$
-
$
-
$
-
$
(30,000
)
$
30,000
(d)
$
-
Loss from operations
$
(62,068
)
$
12,456
$
(49,612
)
$
(26,968
)
$
(17,031
)
$
(43,999
)
Net loss
$
(67,438
)
$
12,456
(e)
$
(54,982
)
$
(40,159
)
$
(17,031
)
(e)
$
(57,190
)
Basic and diluted net loss per share
$
(1.40
)
$
0.26
$
(1.14
)
$
(0.85
)
$
(0.36
)
$
(1.21
)
(a)
Cost of sales adjustments related to the
acquisition of Avedro, Inc. (Avedro), including amortization of
developed technology intangible assets of $11.0 million
year-to-date Q2 2023 and amortization of developed technology
intangible assets and stock-based compensation expense related to
replacement awards, totaling $11.1 million year-to-date Q2
2022.
(b)
Avedro acquisition-related expenses, including amortization expense
of customer relationship intangible assets of $1.4 million
year-to-date Q2 2023 and customer relationship intangible assets
and stock-based compensation expense related to replacement awards
of $1.7 million year-to-date Q2 2022.
(c)
Stock-based compensation expense related to replacement awards from
the acquisition of Avedro.
(d)
Settlement proceeds received related to the Company’s patent
infringement litigation.
(e)
Includes total tax effect for non-GAAP pre-tax adjustments. For
non-GAAP adjustments associated with the U.S., the tax effect is $0
given the Company's U.S. taxable loss positions in both 2023 and
2022.
Reported Sales vs. Prior Periods (in thousands)
Year-over-Year Percent Change Quarter-over-Quarter
Percent Change
2Q 2023
2Q 2022
1Q 2023
Reported
Operations (1)
Currency (2)
Reported
Operations (1)
Currency (2)
International Glaucoma
$
22,305
$
17,867
$
21,118
24.8
%
27.0
%
(2.2
%)
5.6
%
5.6
%
0.0
%
Total Net Sales
$
80,399
$
72,685
$
73,899
10.6
%
11.1
%
(0.5
%)
8.8
%
8.8
%
0.0
%
(1)
Operational growth excludes the effect of
translational currency
(2)
Calculated by converting the current period numbers using the prior
period’s average foreign exchange rates
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230802939704/en/
Chris Lewis Vice President, Investor Relations & Corporate
Affairs (949) 481-0510 clewis@glaukos.com
Glaukos (NYSE:GKOS)
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