Unassociated Document
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K/A
(Amendment No. 2)
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of Earliest Event Reported):  March 2, 2010
 
STAAR Surgical Company
(Exact name of registrant as specified in its charter)
 
Delaware
(State or other jurisdiction
of incorporation)
0-11634
(Commission File Number)
95-3797439
(I.R.S. Employer
Identification No.)
     
1911 Walker Ave, Monrovia, California
(Address of principal executive offices)
  
91016
(Zip Code)

Registrant’s telephone number, including area code: 626-303-7902
 
Not Applicable
Former name or former address, if changed since last report
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
Explanatory Note
 
The Company is filing this Amendment No. 2 to its Current Report on Form 8-K, originally filed on March 8, 2010, in response to comments received from the SEC. This Amendment re-presents Item 9.01 in its entirety to provide expanded pro forma financial information for the last three completed fiscal years.
 
Item 9.01 – Financial Statements and Exhibits
 
(b) Pro Forma Financial Information.

(i)
  
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of January 1, 2010;
(ii)
  
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended January 1, 2010;
(iii)
  
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended January 2, 2009;
(iv)
  
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 28, 2007.
 
The unaudited pro forma statements of operations for the years ended January 1, 2010, January 2, 2009 and December 28, 2007 give effect to the divestiture of Domilens as if STAAR had disposed of Domilens on December 30, 2006, the first day of our 2007 fiscal year.  The pro forma balance sheet as of January 1, 2010 gives effect to the divestiture of Domilens as if STAAR had disposed of it on January 1, 2010.
 
The pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable under the circumstances. The pro forma adjustments were applied to the respective historical financial statements to reflect and account for the disposition of Domilens.
 
The unaudited pro forma consolidated statements of operations and consolidated balance sheet have been prepared for illustrative purposes only and do not exclude cost savings from operational efficiencies, revenue synergies or operating strategies employed prior to the disposition. Therefore, the pro forma financial information is not necessarily indicative of the operating results that we would have achieved had the disposition actually occurred on December 30, 2006 or our financial position had the disposition actually occurred on January 1, 2010, and should not be construed as a representation of our future operating results or financial position.
 
The unaudited pro forma consolidated financial information should be read in conjunction with our audited Consolidated Financial Statements and the notes thereto included in our Annual Reports on Form 10-K for the fiscal years ended January 2, 2009 and December 28, 2007, and the unaudited interim Consolidated Financial Statements and the notes thereto included in our quarterly report on Form 10-Q for the quarter ended October 2, 2009.
 
-2-
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
  STAAR Surgical Company  
       
March 23, 2010
By:
/s/ Deborah Andrews  
    Deborah Andrews  
   
Vice President and Chief Financial Officer
  
 
-3-
 
STAAR SURGICAL COMPANY AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
JANUARY 1, 2010
(IN THOUSANDS)
 
          
Pro Forma Adjustments to
          
   
 
    
Dispose Domilens
      
 
  
 
  
 
    
Deconsolidate
    
Estimated
      
 
  
 
  
Unaudited
    
Domilens
    
Proceeds
  
Footnotes
  
Pro Forma
  
ASSETS
                          
Current assets:                           
Cash
   $ 6,330     $ (1,597 )   $ 12,998  
 (A)
   $ 17,731  
Restricted cash
     7,396       -     $ 136  
 (B)
     7,532  
Accounts receivable, net
     9,269       (1,685 )     -         7,584  
Inventories
     14,820       (3,559 )     -         11,261  
Prepaids and other current assets
     2,591       (596 )     -         1,995  
Other current assets
     -       -     $ 98  
 (C)
     98  
     Total current assets
   $ 40,406     $ (7,437 )   $ 13,232       $ 46,201  
                                   
Property, plant and equipment, net
     5,005       (1,171 )     -         3,834  
Intangibles, net
     4,148       -       -         4,148  
Goodwill
     7,879       (6,302 )     -         1,577  
Other assets
     1,243       -       -         1,243  
     Total assets
   $ 58,681     $ (14,910 )   $ 13,232       $ 57,003  
                                   
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY 
                                  
                                   
Current liabilities:                                  
Accounts payable
     7,825       (2,725 )     -         5,100  
Accrued legal judgments
     11,919       -       -         11,919  
Other current liabilities
     8,861       (1,092 )     -         7,769  
      -       -       485  
(D)
     485  
      -       -       136  
(E)
     136  
      -       -       64  
(F)
     64  
      -       -       45  
(G)
     45  
Line of credit
     2,160       -       -  
 
    2,160  
Note payable, net of discount
     4,503       -       -         4,503  
     Total current liabilities
   $ 35,268     $ (3,817 )   $ 730       $ 32,181  
                                   
Obligations under capital leases
     1,098       (267 )     -         831  
Other long term liabilities
     2,789       -       -         2,789  
     Total liabilities
   $ 39,155     $ (4,084 )   $ 730       $ 35,801  
                                   
Series A redeemable, convertible preferred stock
     6,784       -       -         6,784  
                                   
Common stock
     348       -       -         348  
Additional paid-in capital
     149,559       -       -         149,559  
Accumulated other comprehensive income
     3,254       (2,255 )     -         999  
Accumulated deficit
     (140,419 )     (8,571 )   $ 12,502  
 (H)
     (136,488 )
     Total stockholders' equity
   $ 12,742     $ (10,826 )   $ 12,502       $ 14,418  
                                   
Total liabilities, redeemable convertible preferred stock and stockholders' equity
   $ 58,681     $ (14,910 )   $ 13,232       $ 57,003  
 
(A) - Represents the net cash proceeds from the sale of Domilens, net of $136k escrow funds withheld for future contingent tax liabiliy pending tax audits. Detailed as follows:
 
000s
    
EUR
      
USD
    
Sales price
     9,686     $ 13,134    
Less: Escrow funds
     (100 )   $ (136 ) (B)
Net sales price per share purchase agreement
     9,586     $ 12,998    
 
(B) - Represents the restricted cash escrow established for contingent tax liability pending tax audit by both parties.
           
(C) - Represents receivable from Domilens for Q42009 management fees not yet paid as of close of transaction.
           
(D) - Represents the incentive ($146) and success ($339) fees payable to the investment bank upon closing of transaction.
           
(E) - Represents the restricted cash escrow established for contingent tax liability pending tax audit by both parties.
           
(F) - Represents the total marketing allowance payable by STAAR to the new company in four equal installments.
           
(G) - Represents the estimated tax on sale owed by STAAR.
      
           
(H) - Pro Forma Gain calculation:
          
 
     
$000s
  
   - Net proceeds
   $ 12,502  
   - Net assets (Domilens)
     (8,571 )
   - Pro forma gain on sale
   $ 3,931  
- Actual gain may be different than pro forma gain.
        
 
 
STAAR SURGICAL COMPANY AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED JANUARY 1, 2010
(In thousands, except per share data)
 
 
  
% of
Sales
    
Unaudited
    
% of
Sales
    
Deconsolidate
Domilens
    
Pro Forma
Adjustments
  
Footnotes
  
% of
Sales
    
Pro Forma
  
                                             
 Net sales
     100.0 %   $ 75,345       100.0 %     (24,286 )   $ 750  
 (a)
     100.0 %     51,809  
 Cost of goods sold
     44.4 %     33,452       56.8 %     (13,783 )     307  
 (a)
     38.6 %     19,976  
 Gross profit
     55.6 %   $ 41,893       43.2 %   $ (10,503 )   $ 443         61.4 %   $ 31,833  
                                                           
 General and administrative
     21.4 %     16,119       0.0 %     -       (463 )
 (b)
     30.2 %     15,656  
 Sales and marketing
     32.2 %     24,257       36.9 %     (8,958 )     -         29.5 %     15,299  
 Research and development
     7.8 %     5,893       0.0 %     -       -         11.4 %     5,893  
 Other expenses
     9.6 %     7,209       0.0 %     -       -         13.9 %     7,209  
    Total selling, general and administrative
     71.0 %   $ 53,478       36.9 %   $ (8,958 )   $ (463 )       85.0 %   $ 44,057  
                                                           
 Operating loss
     -15.4 %     (11,585 )     6.3 %     (1,545 )     906         -23.6 %     (12,224 )
                                                           
 Other Income/(expense)
                                                          
    Interest income
     0.1 %     60       0.2 %     (41 )     -         0.0 %     19  
    Interest expense
     -2.4 %     (1,801 )     0.0 %     12       -         -3.5 %     (1,789 )
    Foreign currency gain/(loss)
     0.0 %     -       -0.5 %     124       -         0.2 %     124  
    Other income/(expense)
     0.4 %     290       0.1 %     (33 )     -         0.5 %     257  
      Other income/(expense), net
     -1.9 %     (1,451 )     -0.2 %     62       -         -2.7 %     (1,389 )
                                                           
 Loss before provision for income taxes
     -17.3 %     (13,036 )     6.1 %     (1,483 )     906         -26.3 %     (13,613 )
 Provision for income taxes
     -2.0 %     (1,492 )     -1.4 %     338       (227 )
 (c)
     -2.7 %     (1,381 )
 Net loss
     -19.3 %   $ (14,528 )     4.7 %   $ (1,145 )   $ 679         -28.9 %   $ (14,994 )
                                                           
 Loss per share - basic and diluted
           $ (0.45 )           $ (0.04 )   $ 0.02               $ (0.46 )
                                                           
Weighted average shares outstanding - basic and diluted
       32,498               32,498       32,498                 32,498  
 
(a)  - Represents the intercompany sales and cost of sales made to Domilens which was eliminated in consolidation when Domilens was wholly owned by STAAR Surgical AG, which would have been earned assuming Domilens was not part of the Company and therefore not eliminated in consolidation.
 
(b) - Represents the direct and incremental transaction costs related to the sale of Domilens incurred through the period presented.
 
(c) - Based on average effective tax rate of 25%.
 
Pro Forma Excludes Management Fees as those are not considered to be earned or available if STAAR Surgical AG did not own Domilens.
 
 
STAAR SURGICAL COMPANY AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED JANUARY 2, 2009
(In thousands, except per share data)
 
 
  
% of
    
 
    
% of
    
Deconsolidate
    
Pro Forma
      
% of
    
 
  
 
  
Sales
    
As Reported
    
Sales
    
Domilens
    
Adjustments
  
Footnotes
  
Sales
    
Pro Forma 
  
                                             
 Net sales
     100.0 %   $ 74,894       100.0 %     (25,124 )   $ 1,070  
 (a)
     100.0 %     50,840  
 Cost of goods gold
     46.4 %     34,787       56.1 %     (14,090 )     511  
 (a)
     41.7 %     21,208  
 Gross profit
     53.6 %   $ 40,107       43.9 %   $ (11,034 )   $ 559         58.3 %   $ 29,632  
                                                           
 General and administrative
     21.0 %     15,730       0.0 %     -       -  
 (b)
     30.9 %     15,730  
 Sales and marketing
     36.1 %     27,053       34.2 %     (8,580 )     -         36.3 %     18,473  
 Research and  development
     10.6 %     7,938       0.0 %     -       -         15.6 %     7,938  
 Other expenses
     13.0 %     9,773       0.0 %     -       -         19.2 %     9,773  
    Total selling, general and administrative
     80.7 %   $ 60,494       34.2 %   $ (8,580 )   $ -         102.0 %   $ 51,914  
                                                           
 Operating loss
     -27.1 %     (20,387 )     9.7 %     (2,454 )     559         -43.7 %     (22,282 )
                                                           
 Other Income/(expense)
                                                          
    Interest income
     0.2 %     160       0.2 %     (47 )     -         0.2 %     113  
    Interest expense
     -1.2 %     (901 )     0.0 %     4       (116 )
 (c)
     -2.0 %     (1,013 )
    Foreign Currency gain/(loss)
 -0.9 %     (696 )     -1.1 %     287       -         -0.8 %     (409 )
    Other income/(expense)
     0.2 %     152       0.1 %     (27 )     -         0.2 %     125  
      Other income/(expense), net
   -1.7 %     (1,285 )     -0.8 %     217       (116 )       -2.4 %     (1,184 )
                                                           
 Loss before provision for income taxes
     -28.8 %     (21,672 )     8.9 %     (2,237 )     443         -46.1 %     (23,466 )
 Provision for income taxes
     -2.0 %     (1,523 )     -2.2 %     548       (111 )
(d)
     -1.9 %     (1,086 )
 Net loss
     -30.8 %   $ (23,195 )     6.7 %   $ (1,689 )   $ 332         -48.0 %   $ (24,552 )
                                                           
 Loss per share - basic and diluted
           $ (0.79 )           $ (0.06 )   $ 0.01               $ (0.83 )
                                                           
 Weighted average shares outstanding - basic and diluted
             29,474               29,474       29,474                 29,474  
 
(a)  - Represents the intercompany sales and cost of sales made to Domilens which was eliminated in consolidation when Domilens was wholly owned by STAAR Surgical AG, which would have been earned assuming Domilens was not part of the Company and therefore not eliminated in consolidation.
 
(b) - N/A - None incurred as of this period presented.
        
           
Pro Forma Excludes Management Fees as those are not considered to be earned or available if STAAR Surgical AG did not own Domilens,
           
(c) - Represents the interest expense recorded in connection with the Domilens intercompany loans payable by STAAR that would have not been eliminated had Domilens not been a subsidiary of the Company.
 
(d) - Based on average effective tax rate of 25%.
 
 
STAAR SURGICAL COMPANY AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 28, 2007
(In thousands, except per share data)
 
 
  
% of
    
 
    
% of
    
Deconsolidate
    
Pro Forma
      
% of
    
 
  
 
  
Sales
    
As Reported
    
Sales
    
Domilens
    
Adjustments
  
Footnotes
  
Sales
    
 Pro Forma
  
                                             
 Net sales
     100.0 %   $ 59,363       100.0 %     (23,731 )     934  
 (a)
     100.0 %     36,566  
 Cost of goods sold
     50.7 %     30,097       58.4 %     (13,849 )     482  
 (a)
     45.8 %     16,730  
 Gross profit
     49.3 %   $ 29,266       41.6 %   $ (9,882 )   $ 452         54.2 %   $ 19,836  
                                                           
 General and administrative
     21.8 %     12,951       0.0 %             -  
 (b)
     35.4 %     12,951  
 Sales and marketing
     40.0 %     23,723       35.8 %     (8,496 )     -         41.6 %     15,227  
 Research and development
     11.3 %     6,711       0.0 %             -         18.4 %     6,711  
 Other expenses
     0.0 %     -       0.0 %             -         0.0 %     -  
    Total selling, general and administrative
     73.1 %   $ 43,385       35.8 %   $ (8,496 )   $ -         95.4 %   $ 34,889  
                                                           
                                                           
 Operating loss
     -23.8 %     (14,119 )     5.8 %     (1,386 )     452         -41.2 %     (15,053 )
                                                           
 Other Income/(Expense)
                                                          
    Equity in operations of joint venture
     -0.5 %     (280 )     0.0 %     -       -         -0.8 %     (280 )
    Interest income
     0.6 %     336       0.3 %     (67 )     -         0.7 %     269  
    Interest expense
     -0.8 %     (486 )     0.0 %     1       -         -1.3 %     (485 )
    Foreign Currency gain/(loss)
     -0.5 %     (295 )     -0.6 %     139       -         -0.4 %     (156 )
    Other income/(expense)
     -0.5 %     (312 )     0.0 %     -       -         -0.9 %     (312 )
      Other income/(expense), net
     -1.7 %     (1,037 )     -0.3 %     73       -         -2.6 %     (964 )
                                                           
 Loss before provision for income taxes
     -25.5 %     (15,156 )     5.5 %     (1,313 )     452         -43.8 %     (16,017 )
 Provision for income taxes
     -1.4 %     (843 )     0.2 %     (40 )     (113 )
(c)
     -2.7 %     (996 )
 Net loss
     -26.9 %   $ (15,999 )     5.7 %   $ (1,353 )   $ 339         -46.5 %   $ (17,013 )
                                                           
 Loss per share - basic and diluted
           $ (0.57 )           $ (0.05 )   $ 0.01               $ (0.60 )
                                                           
Weighted average shares outstanding - basic and diluted
       28,121               28,121       28,121                 28,121  
 
 (a)  - Represents the intercompany sales and cost of sales made to Domilens which was eliminated in consolidation when Domilens was wholly owned by STAAR Surgical AG, which would have been earned assuming Domilens was not part of the Company and therefore not eliminated in consolidation.
             
 (b) - N/A - None incurred as of this period presented.
      
       
 (c) - Based on average effective tax rate of 25%.      
             
 Pro Forma Excludes Management Fees as those are not considered to be earned or available if STAAR Surgical AG did not own Domilens,