10-Q

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:    July 1, 2022

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.)
25651 Atlantic Ocean 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 48,038,340 shares of common stock, par value $0.01 per share, issued and outstanding as of August 5, 2022.

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	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	22
ITEM 4.	MINE SAFETY DISCLOSURES	22
ITEM 5.	OTHER INFORMATION	22
ITEM 6.	EXHIBITS	22

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

STAAR SURGICAL COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value amounts)

(Unaudited)

	July 1, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	202,490		$	199,706
Accounts receivable trade, net of allowance for credit losses of    $55 and $43, respectively		62,811			43,531
Inventories, net		18,089			17,274
Prepayments, deposits and other current assets		13,066			10,900
Total current assets		296,456			271,411
Property, plant and equipment, net		42,813			35,912
Finance lease right-of-use assets, net		420			506
Operating lease right-of-use assets, net		30,363			31,310
Intangible assets, net		184			218
Goodwill		1,786			1,786
Deferred income taxes		3,217			3,813
Other assets		786			822
Total assets	$	376,025		$	345,778
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	12,716		$	8,699
Obligations under finance leases		166			127
Obligations under operating leases		3,708			3,283
Allowance for sales returns		5,550			4,816
Other current liabilities		24,374			31,877
Total current liabilities		46,514			48,802
Obligations under finance leases		295			382
Obligations under operating leases		26,880			28,269
Deferred income taxes		1,037			811
Asset retirement obligations		169			198
Pension liability		1,823			8,758
Total liabilities		76,718			87,220
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value; 60,000 shares authorized: 48,024 and    47,716 shares issued and outstanding at July 1, 2022 and    December 31, 2021, respectively		480			477
Additional paid-in capital		387,328			373,519
Accumulated other comprehensive loss		249			(4,048	)
Accumulated deficit		(88,750	)		(111,390	)
Total stockholders’ equity		299,307			258,558
Total liabilities and stockholders’ equity	$	376,025		$	345,778

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
	July 1, 2022			July 2, 2021			July 1, 2022			July 2, 2021
Net sales	$	81,101		$	62,367		$	144,301		$	113,119
Cost of sales		17,229			13,164			31,165			24,774
Gross profit		63,872			49,203			113,136			88,345
Selling, general and administrative expenses:
General and administrative		13,983			11,441			25,923			21,653
Selling and marketing		24,233			18,853			41,503			32,054
Research and development		8,636			8,260			16,577			16,519
Total selling, general and administrative expenses		46,852			38,554			84,003			70,226
Operating income		17,020			10,649			29,133			18,119
Other expense, net:
Interest income (expense), net		43			(5	)		37			(12	)
Loss on foreign currency transactions		(1,860	)		(131	)		(2,775	)		(1,430	)
Royalty income		177			151			450			311
Other income (expense), net		89			51			151			(34	)
Total other income (expense), net		(1,551	)		66			(2,137	)		(1,165	)
Income before income taxes		15,469			10,715			26,996			16,954
Provision for income taxes		2,431			2,148			4,356			3,395
Net income	$	13,038		$	8,567		$	22,640		$	13,559
Net income per share:
Basic	$	0.27		$	0.18		$	0.47		$	0.29
Diluted	$	0.26		$	0.17		$	0.46		$	0.27
Weighted average shares outstanding:
Basic		47,889			47,099			47,822			46,858
Diluted		49,223			49,491			49,264			49,373

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
	July 1, 2022			July 2, 2021			July 1, 2022			July 2, 2021
Net income	$	13,038		$	8,567		$	22,640		$	13,559
Other comprehensive income:
Defined benefit plans:
Net change in plan assets		2,593			(457	)		6,661			2,627
Reclassification into other income (expense), net		33			120			85			240
Foreign currency translation loss		(1,502	)		(111	)		(2,516	)		(1,227	)
Tax effect		188			69			67			69
Other comprehensive income (loss), net of tax		1,312			(379	)		4,297			1,709
Comprehensive income	$	14,350		$	8,188		$	26,937		$	15,268

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 April 1, 2022		47,810	$	478	$	378,690	$	(1,063	)	$	(101,788	)	$	276,317
Net income		—		—		—		—			13,038			13,038
Other comprehensive income		—		—		—		1,312			—			1,312
Common stock issued upon exercise of options		202		2		2,232		—			—			2,234
Stock-based compensation		—		—		6,406		—			—			6,406
Unvested restricted stock		7		—		—		—			—			—
Vested restricted and performance stock		5		—		—		—			—			—
Balance, at July 1, 2022		48,024	$	480	$	387,328	$	249		$	(88,750	)	$	299,307
Balance, at April 2, 2021		46,857	$	469	$	348,063	$	(3,457	)	$	(130,899	)	$	214,176
Net income		—		—		—		—			8,567			8,567
Other comprehensive loss		—		—		—		(379	)		—			(379	)
Common stock issued upon exercise of options		530		5		7,871		—			—			7,876
Stock-based compensation		—		—		4,382		—			—			4,382
Unvested restricted stock		3		—		—		—			—			—
Vested restricted stock		1		—		—		—			—			—
Balance, at July 2, 2021		47,391	$	474	$	360,316	$	(3,836	)	$	(122,332	)	$	234,622

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 31, 2021		47,716	$	477	$	373,519	$	(4,048	)	$	(111,390	)	$	258,558
Net income		—		—		—		—			22,640			22,640
Other comprehensive income		—		—		—		4,297			—			4,297
Common stock issued upon exercise of options		251		3		3,143		—			—			3,146
Stock-based compensation		—		—		10,666		—			—			10,666
Unvested restricted stock		7		—		—		—			—			—
Vested restricted and performance stock		50		—		—		—			—			—
Balance, at July 1, 2022		48,024	$	480	$	387,328	$	249		$	(88,750	)	$	299,307
Balance, at January 1, 2021		46,448	$	464	$	338,194	$	(5,545	)	$	(135,891	)	$	197,222
Net income		—		—		—		—			13,559			13,559
Other comprehensive income		—		—		—		1,709			—			1,709
Common stock issued upon exercise of options		906		9		14,101		—			—			14,110
Stock-based compensation		—		—		8,021		—			—			8,021
Unvested restricted stock		3		—		—		—			—			—
Vested restricted stock		34		1		—		—			—			1
Balance, at July 2, 2021		47,391	$	474	$	360,316	$	(3,836	)	$	(122,332	)	$	234,622

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
	July 1, 2022			July 2, 2021
Cash flows from operating activities:
Net income	$	22,640		$	13,559
Adjustments to reconcile net income to net cash provided by    operating activities:
Depreciation of property, plant, and equipment		2,024			1,754
Amortization of intangibles		15			17
Deferred income taxes		—			845
Change in net pension liability		52			(27	)
Loss on disposal of property and equipment		—			2
Stock-based compensation expense		9,648			7,322
Provision for sales returns and bad debts		800			932
Inventory provision		1,428			697
Changes in working capital:
Accounts receivable		(20,137	)		(13,797	)
Inventories		(1,825	)		2,238
Prepayments, deposits, and other current assets		(2,260	)		(307	)
Accounts payable		3,243			(268	)
Other current liabilities		(6,992	)		181
Net cash provided by operating activities		8,636			13,148
Cash flows from investing activities:
Acquisition of property and equipment		(7,810	)		(5,683	)
Net cash used in investing activities		(7,810	)		(5,683	)
Cash flows from financing activities:
Repayment of finance lease obligations		(45	)		(278	)
Proceeds from the exercise of stock options		3,146			14,110
Proceeds from vested restricted stock		—			1
Net cash provided by financing activities		3,101			13,833
Effect of exchange rate changes on cash and cash equivalents		(1,143	)		(668	)
Increase in cash and cash equivalents		2,784			20,630
Cash and cash equivalents, at beginning of the period		199,706			152,453
Cash and cash equivalents, at end of the period	$	202,490		$	173,083

See accompanying notes to the condensed consolidated financial statements.

6

STAAR SURGICAL COMPANY

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

Note 1 — Basis of Presentation and Significant Accounting Policies

The Condensed Consolidated Financial Statements of the Company present the financial position, results of operations, and cash flows of STAAR Surgical Company and its wholly owned subsidiaries. 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 31, 2021 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 31, 2021.

The Condensed Consolidated Financial Statements for the three and six months ended July 1, 2022 and July 2 2021, 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 July 1, 2022 and July 2, 2021, 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.

Vendor Concentration

There were no vendors that accounted for over 10% of the Company’s consolidated accounts payable as of July 1, 2022 and December 31, 2021.  There were no vendors that accounted for over 10% of the Company’s consolidated purchases for the three and six months ended July 1, 2022 and July 2, 2021, respectively.

Note 2 — Inventories

Inventories, net are stated at the lower of cost and net realizable value, determined on a first-in, first-out basis and consisted of the following (in thousands):

	July 1, 2022			December 31, 2021
Raw materials and purchased parts	$	5,119		$	3,971
Work in process		3,446			4,031
Finished goods		11,222			10,429
Total inventories, gross		19,787			18,431
Less inventory reserves		(1,698	)		(1,157	)
Total inventories, net	$	18,089		$	17,274

7

STAAR SURGICAL COMPANY

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

Note 3 — Prepayments, Deposits, and Other Current Assets

Prepayments, deposits, and other current assets consisted of the following (in thousands):

	July 1, 2022		December 31, 2021
Prepayments and deposits	$	4,397	$	4,047
Prepaid insurance		1,351		2,647
Prepaid marketing		2,244		543
Consumption tax receivable		519		830
Value added tax (VAT) receivable		2,208		2,197
BVG (Swiss Pension) prepayment		1,021		15
Swiss social insurance prepayment		945		—
Other(1)		381		621
Total prepayments, deposits and other current assets	$	13,066	$	10,900

⁽¹⁾ No individual item in “other current assets” exceeds 5% of the total prepayments, deposits and other current assets.

Note 4 — Property, Plant and Equipment

Property, plant and equipment, net consisted of the following (in thousands):

	July 1, 2022			December 31, 2021
Machinery and equipment	$	26,611		$	24,127
Computer equipment and software		8,977			8,807
Furniture and fixtures		4,478			3,658
Leasehold improvements		12,081			11,821
Construction in process		26,828			21,827
Total property, plant and equipment, gross		78,975			70,240
Less accumulated depreciation		(36,162	)		(34,328	)
Total property, plant and equipment, net	$	42,813		$	35,912

Note 5 –Intangible Assets

Intangible assets, net consisted of the following (in thousands):

	July 1, 2022							December 31, 2021
Long-lived amortized intangible assets	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Patents and licenses	$	9,227	$	(9,043	)	$	184	$	9,315	$	(9,097	)	$	218

Note 6 – Other Current Liabilities

Other current liabilities consisted of the following (in thousands):

	July 1, 2022		December 31, 2021
Accrued salaries and wages	$	9,305	$	12,030
Accrued bonuses		2,754		8,091
Income taxes payable		4,074		2,248
Marketing obligations		2,481		2,243
Other(1)		5,760		7,265
Total other current liabilities	$	24,374	$	31,877

⁽¹⁾ No individual item in “Other” exceeds 5% of the other current liabilities.

8

STAAR SURGICAL COMPANY

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

Note 7 – Leases

Finance Leases

The Company entered into finance leases primarily related to purchases of equipment used for manufacturing, computer-related equipment or furniture and fixtures.  These finance leases are two to five years in length and have fixed payment amounts for the term of the contract and have options to purchase the assets at the end of the lease term.  Supplemental balance sheet information related to finance leases consisted of the following (dollars in thousands):

	July 1, 2022			December 31, 2021
Machinery and equipment	$	30		$	35
Computer equipment and software		17			506
Furniture and fixtures		475			475
Finance lease right-of-use assets, gross		522			1,016
Less accumulated depreciation		(102	)		(510	)
Finance lease right-of-use assets, net	$	420		$	506
Total finance lease liability	$	461		$	509
Weighted-average remaining lease term (in years)		2.7			3.2
Weighted-average discount rate		4.09	%		4.02	%

Supplemental cash flow information related to finance leases consisted of the following (dollars in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Amortization of finance lease right-of-use asset	$	39	$	20	$	82	$	56
Interest on finance lease liabilities		5		1		8		5
Cash paid for amounts included in the measurement of finance lease liabilities:
Operating cash flows		5		1		8		5
Financing cash flows		27		43		45		278

Operating Leases

The Company entered into operating leases primarily related to real property (office, manufacturing and warehouse facilities), automobiles and copiers.  These operating leases are two to ten years in length with options to extend.  The Company does not include any lease extensions in the initial valuation unless the Company was reasonably certain to extend the lease.  Depending on the lease, there are those with fixed payment amounts for the entire length of the contract or payments which increase periodically as noted in the contract or increased at an inflation rate indicator.  For operating leases that increase using an inflation rate indicator, the Company used the inflation rate at the time the lease was entered into for the length of the lease term.  Supplemental balance sheet information related to operating leases consisted of the following (dollars in thousands):

	July 1, 2022			December 31, 2021
Machinery and equipment	$	782		$	760
Computer equipment and software		446			472
Real property		34,108			34,426
Operating lease right-of-use assets, gross		35,336			35,658
Less accumulated depreciation		(4,973	)		(4,348	)
Operating lease right-of-use assets, net	$	30,363		$	31,310
Total operating lease liability	$	30,588		$	31,552
Weighted-average remaining lease term (in years)		7.4			7.8
Weighted-average discount rate		3.66	%		3.56	%

9

STAAR SURGICAL COMPANY

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

Note 7 – Leases (Continued)

Operating Leases (Continued)

Supplemental cash flow information related to operating leases was as follows (dollars in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Operating lease cost	$	1,166	$	857	$	2,304	$	1,640
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows		1,034		801		1,966		1,586
Right-of-use assets obtained in exchange for new operating lease liabilities		2,081		3,356		2,756		4,007

Maturities of Lease Liabilities

Maturities of lease liabilities under operating and finance leases having initial or remaining non-cancelable lease terms more than one year as of July 1, 2022 is as follows (in thousands):

As of July 1, 2022 12 Months Ended	Operating Leases			Finance Leases
June 2023	$	5,340		$	181
June 2024		5,392			179
June 2025		4,624			128
June 2026		3,700			—
June 2027		3,655			—
Thereafter		12,613			—
Total future minimum lease payments	$	35,324		$	488
Less amounts representing interest		(4,736	)		(27	)
Present value of future minimum lease payments	$	30,588		$	461
Current lease obligations		(3,708	)		(166	)
Long-term lease obligations	$	26,880		$	295

 Note 8 — Income Taxes

The Company recorded an income tax provision as follows (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Provision for income taxes	$	2,431	$	2,148	$	4,356	$	3,395

The effective tax rates for the three months ended July 1, 2022 and July 2, 2021 was 15.7% and 20.0%, respectively, and was 16.1% and 20.0%, for the six months ended July 1, 2022 and July 2, 2021, respectively. The Company’s effective tax rates differ from the U.S. federal statutory rate of 21% for the three and six months ended July 1, 2022 and July 2, 2021, respectively, primarily due to the income taxes generated in foreign jurisdictions. The effective tax rate for the three and six months ended July 1, 2022 was lower than the same period in 2021 primarily due to jurisdictions in which the income is earned.

10

STAAR SURGICAL COMPANY

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

Note 9 – Defined Benefit Pension Plans

The Company has defined benefit plans covering employees of its Switzerland and Japan operations.  The following table summarizes the components of net periodic pension cost recorded for the Company’s defined benefit pension plans (in thousands):

	Three Months Ended						Six Months Ended
	July 1, 2022			July 2, 2021			July 1, 2022			July 2, 2021
Service cost(1)	$	309		$	329		$	635		$	677
Interest cost(2)		21			14			41			28
Expected return on plan assets(2)		(123	)		(101	)		(241	)		(200	)
Prior service credit(2),(3)		(46	)		(11	)		(91	)		(22	)
Actuarial loss recognized in current period(2),(3)		79			131			176			262
Net periodic pension cost	$	240		$	362		$	520		$	745

⁽¹⁾ Recognized in selling general and administrative expenses on the Condensed Consolidated Statements of Income.

⁽²⁾ Recognized in other expense, net on the Condensed Consolidated Statements of Income.

⁽³⁾ Amounts reclassified from accumulated other comprehensive income (loss).

The Company currently is not required to and does not make contributions to its Japan pension plan.  The Company’s contributions to its Swiss pension plan are as follows (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Employer contribution	$	220	$	204	$	436	$	397

Note 10 — Stockholders’ Equity

Stock-Based Compensation

The cost that has been charged against income for stock-based compensation is set forth below (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Employee stock options	$	2,457	$	2,784	$	4,784	$	5,256
Restricted stock		442		232		551		398
Restricted stock units		1,231		811		1,993		1,348
Performance stock units		1,310		108		1,692		201
Nonemployee stock options		314		57		628		119
Total stock-based compensation expense	$	5,754	$	3,992	$	9,648	$	7,322

The Company recorded stock-based compensation costs in the following categories (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Cost of sales	$	106	$	54	$	176	$	89
General and administrative		2,806		1,815		4,587		3,254
Selling and marketing		1,324		953		2,213		1,786
Research and development		1,518		1,170		2,672		2,193
Total stock-based compensation expense, net		5,754		3,992		9,648		7,322
Amounts capitalized as part of inventory		652		390		1,018		699
Total stock-based compensation expense, gross	$	6,406	$	4,382	$	10,666	$	8,021

11

STAAR SURGICAL COMPANY

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

Note 10 — Stockholders’ Equity (Continued)

Incentive Plan

The Amended and Restated Omnibus Equity Incentive Plan (“the Plan”) provides for various forms of stock-based incentives. To date, of the available forms of awards under the Plan, the Company has granted only stock options, restricted stock, unrestricted share grants, restricted stock units (“RSUs”) and performance stock units (“PSUs”). Options under the Plan are granted at fair market value on the date of grant, become exercisable generally over a three-year period, or as determined by the Board of Directors, and expire over periods not exceeding 10 years from the date of grant. Certain option and share awards provide for accelerated vesting if there is a change in control and pre-established financial metrics are met (as defined in the Plan). Grants of restricted stock outstanding under the Plan generally vest over periods of one to three years. Grants of RSUs and PSUs outstanding under the Plan generally vest based on service, performance, or a combination of both.  As of July 1, 2022, there were 2,156,185 shares available for grant under the Plan.

Assumptions

The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model applying the weighted-average assumptions noted in the following table.  Expected volatilities are based on historical volatility of the Company’s stock. The expected term of options granted is derived from the historical exercises and post-vesting cancellations and represents the period of time that options granted are expected to be outstanding.  The Company has calculated a 5% estimated forfeiture rate based on historical forfeiture experience.  The risk-free rate is based on the U.S. Treasury yield curve corresponding to the expected term at the time of the grant.  

	Three Months Ended						Six Months Ended
	July 1, 2022			July 2, 2021			July 1, 2022			July 2, 2021
Expected dividend yield		0	%		0	%		0	%		0	%
Expected volatility		54	%		53	%		54	%		53	%
Risk-free interest rate		3.27	%		0.83	%		1.83	%		0.84	%
Expected term (in years)		5.10			5.38			5.10			5.38

Stock Options

A summary of stock option activity under the Plan for six months ended July 1, 2022 is presented below:

	Stock Options (in 000’s)			Minimum Exercise Price		Maximum Exercise Price
Outstanding at December 31, 2021		2,435
Granted		421
Exercised		(251	)
Forfeited or expired		(16	)
Outstanding at July 1, 2022		2,589		$	5.34	$	154.96
Exercisable at July 1, 2022		1,873

Restricted Stock, Restricted Stock Units and Performance Stock Units

A summary of restricted stock, RSUs and PSUs activity under the Plan for the six months ended July 1, 2022 is presented below (shares in thousands):

	Restricted Stock			RSUs			PSUs
Unvested at December 31, 2021		3			131			10
Granted		6			113			113
Vested		(5	)		(45	)		(5	)
Unvested at July 1, 2022		4			199			118

12

STAAR SURGICAL COMPANY

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

Note 11 - Commitments and Contingencies

Litigation and Claims

From time to time, the Company is involved in various legal proceedings and other matters arising in the normal course of business.  These legal proceedings and other matters may relate to, among other things, contractual rights and obligations, employment matters, or claims of product liability.  STAAR maintains insurance coverage for various matters, including product liability and certain securities claims.  While the Company does not believe that any of the claims known is likely to have a material adverse effect on the Company’s financial condition or results of operations, new claims or unexpected results of existing claims could lead to significant financial harm.

Employment Agreements

The Company’s Chief Executive Officer entered into an employment agreement with the Company, effective March 1, 2015. She and certain officers have as provisions of their agreements certain rights, including continuance of cash compensation and benefits, upon a “change in control,” which may include an acquisition of substantially all its assets, or termination “without cause or for good reason” as defined in the employment agreements.

Note 12 — Basic and Diluted Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share (in thousands except per share amounts):

	Three Months Ended						Six Months Ended
	July 1, 2022			July 2, 2021			July 1, 2022			July 2, 2021
Numerator:
Net income	$	13,038		$	8,567		$	22,640		$	13,559
Denominator:
Weighted average common shares:
Common shares outstanding		47,893			47,102			47,826			46,861
Less:  Unvested restricted stock		(4	)		(3	)		(4	)		(3	)
Denominator for basic calculation		47,889			47,099			47,822			46,858
Weighted average effects of potentially diluted common stock:
Stock options		1,299			2,283			1,386			2,405
Unvested restricted stock		3			9			2			9
RSUs		24			88			45			90
PSUs		8			12			9			11
Denominator for diluted calculation		49,223			49,491			49,264			49,373
Net income per share:
Basic	$	0.27		$	0.18		$	0.47		$	0.29
Diluted	$	0.26		$	0.17		$	0.46		$	0.27

The following table sets forth (in thousands) the weighted average number of options to purchase shares of common stock, restricted stock, RSUs and PSUs with either exercise prices or unrecognized compensation cost per share greater than the average market price per share of the Company’s common stock, which were not included in the calculation of diluted per share amounts because the effects would be anti-dilutive.

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Stock options		1,153		14		862		173
Restricted stock, RSUs and PSUs		267		—		122		—
Total		1,420		14		984		173

13

STAAR SURGICAL COMPANY

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

Note 13 — Disaggregation of Sales, Geographic Sales and Product Sales

In the following tables, sales are disaggregated by category, sales by geographic market and sales by product data.  The following breaks down sales into the following categories (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Non-consignment sales	$	76,444	$	57,368	$	134,013	$	102,785
Consignment sales		4,657		4,999		10,288		10,334
Total net sales	$	81,101	$	62,367	$	144,301	$	113,119

The Company markets and sells its products in over 75 countries and conducts its manufacturing in the United States.  Other than China and Japan, the Company does not conduct business in any country in which its sales exceed 10% of worldwide consolidated net sales. Sales are attributed to countries based on location of customers. The composition of the Company’s net sales to unaffiliated customers was as follows (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Domestic	$	3,872	$	2,704	$	6,502	$	5,044
Foreign:
China		46,150		32,930		74,389		52,573
Japan		10,302		9,283		21,935		18,886
Other(1)		20,777		17,450		41,475		36,616
Total foreign sales		77,229		59,663		137,799		108,075
Total net sales	$	81,101	$	62,367	$	144,301	$	113,119

⁽¹⁾ No other location individually exceeds 10% of the total sales.

100% of the Company’s sales are generated from the ophthalmic surgical product segment and the chief operating decision maker makes operating decisions and allocates resources based upon the consolidated operating results, and therefore the Company operates as one operating segment for financial reporting purposes. The Company’s principal products are implantable Collamer lenses (“ICLs”) used in refractive surgery and intraocular lenses (“IOLs”) used in cataract surgery.  The composition of the Company’s net sales by product line was as follows (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
ICLs	$	77,922	$	59,235	$	136,597	$	105,736
Other product sales:
Cataract IOLs		2,547		3,074		5,449		6,799
Other surgical products		632		58		2,255		584
Total other product sales		3,179		3,132		7,704		7,383
Total net sales	$	81,101	$	62,367	$	144,301	$	113,119

One customer, the Company’s distributor in China, accounted for 57% and 53% of net sales for the three months ended July 1, 2022 and July 2, 2021, respectively, and the same customer accounted for 52% and 46% for the six months ended July 1, 2022 and July 2, 2021, respectively.  As of July 1, 2022 and December 31, 2021, respectively, one customer, the Company’s distributor in China, accounted for 60% and 47% of consolidated trade receivables.

14

STAAR SURGICAL COMPANY

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

Note 14 — COVID-19 Developments

In December 2019, COVID-19 surfaced and in March 2020, the World Health Organization declared a pandemic related to the rapid spread of COVID-19 around the world.  The impact of the COVID-19 outbreak on the businesses and the economy in the U.S. and the rest of the world is, and is expected to continue to be, uncertain and may continue to be significant as COVID-19 variant strains emerge. The Company’s revenues have been adversely impacted, and the Company experienced a substantial slowdown in sales beginning March 20, 2020 in global geographies characterized as “hot spots” for the COVID-19 virus, including parts of Europe, North America, Asia, the Middle East and India.  In certain of these markets, sales have paused as elective surgeries are discouraged to support COVID-19 related needs.  The Company continues to monitor the commercial and operational impact of new variants of COVID-19.  

15

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The matters addressed in this Item 2 that are not historical information constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Readers can recognize forward-looking statements by the use of words like “anticipate,” “estimate,” “expect,” “intend,” “plan,” “believe,” “will,” “should,” “forecast” and similar expressions in connection with any discussion of future operating or financial performance. In particular, these include statements about any of the following: any projections of or guidance as to earnings, revenue, sales, profit margins, expense rate, cash, effective tax rate, product mix, capital expense or any other financial items; the expected impact of the COVID-19 pandemic and related public health measures (including but not limited to their impact on sales, operations or clinical trials globally), the plans, strategies, and objectives of management for future operations or prospects for achieving such plans; statements regarding new, existing, or improved products, including but not limited to, expectations for success of new, existing, and improved products in the U.S. or international markets or government approval of a new or improved products; commercialization of new or improved products; future economic conditions or size of market opportunities; expected costs of operations; statements of belief, including as to achieving 2022 business plans; expected regulatory activities and approvals, product launches, and any statements of assumptions underlying any of the foregoing.

Although we believe that the expectations reflected in these forward-looking statements are reasonable, such statements are inherently subject to risks and we can give no assurance that our expectations will prove to be correct. Actual results could differ from those described in this report because of numerous factors, many of which are beyond our control. These factors include, without limitation, those described in in our Annual Report on Form 10-K in “Item 1A. Risk Factors” filed on February 23, 2022.  We undertake no obligation to update these forward-looking statements after the date of this report to reflect future events or circumstances or to reflect actual outcomes.

The following discussion should be read in conjunction with the audited consolidated financial statements of STAAR, including the related notes, provided in this report.

Overview

STAAR Surgical Company designs, develops, manufactures, and sells implantable lenses for the eye and companion delivery systems used to deliver the lenses into the eye. We are the world’s leading manufacturer of intraocular lenses for patients seeking refractive vision correction, and we also make lenses for use in surgery to treat cataracts. All the lenses we make are foldable, which allows the surgeon to insert them into the eye through a small incision during minimally invasive surgery. Refractive surgery is performed to treat the type of visual disorders that have traditionally been corrected using eyeglasses or contact lenses. We refer to our lenses used in refractive surgery as “implantable Collamer® lenses” or “ICLs.” The field of refractive surgery includes both lens-based procedures, using products like our ICL family of products, and laser-based procedures like LASIK. Successful refractive surgery can correct common vision disorders such as myopia, hyperopia, and astigmatism. Cataract surgery is a common outpatient procedure where the eye’s natural lens that has become cloudy with age is removed and replaced with an artificial lens called an intraocular lens (“IOL”) to restore the patient’s vision. STAAR employs a commercialization strategy that strives for sustainable profitable growth. Our goal is to position our refractive lenses throughout the world as primary and premium solutions for patients seeking visual freedom from wearing eyeglasses or contact lenses while achieving excellent visual acuity through refractive vision correction. We position our cataract IOL lenses used in surgery that treats cataracts based on quality and value.

Recent Developments

During the second quarter, net sales grew 30% and ICL units grew 42% compared to the prior year quarter. Highlights included unit growth in China up 45%, the U.S. up 36%, Japan up 41%, India up 181%, and Other Asia Pacific markets up 66%, all as compared to the prior year quarter. The U.S. commercial launch of the EVO Visian ICL family of myopia lenses (EVO) continued with the announced partnership with Joe Jonas, who earlier in the month received EVO lenses to correct his distance vision. In the next several weeks, Joe Jonas and other paid EVO ambassador influencers will share their journey to Visual Freedom via a global advertising, marketing and social media campaigns funded by STAAR regarding the EVO Visian ICL lens. We reaffirm our previously provided outlook for fiscal 2022 net sales of approximately $295 million, which takes into account currency headwinds, and a continuation of the current level of COVID-19 related challenges in China and elsewhere, offset by stronger than expected global demand for our EVO lenses. We continue to monitor the commercial and operational impact of new variants of COVID-19 in our markets, which remains uncertain at this time and may adversely affect our financial results. We are also monitoring inflation globally, which may adversely affect our financial results in the future if it persists.

16

Critical Accounting Estimates

This Management’s Discussion and Analysis of Financial Condition and Results of Income discusses and analyzes data in our unaudited Condensed Consolidated Financial Statements provided in this report, which we have prepared in accordance with U.S. generally accepted accounting principles. Preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Senior management has discussed the development, selection and disclosure of these estimates with the Audit Committee of our Board of Directors. Actual conditions may differ from our assumptions and actual results may differ from our estimates.

Management believes that there have been no significant changes during the six months ended July 1, 2022 to the items that we disclosed as our critical accounting estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Results of Operations

The following table shows the percentage of our total sales represented by certain items reflected in our Condensed Consolidated Statements of Income for the periods indicated.

	Percentage of Net Sales for Three Months						Percentage of Net Sales for Three Months
	July 1, 2022			July 2, 2021			July 1, 2022			July 2, 2021
Net sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of sales		21.2	%		21.1	%		21.6	%		21.9	%
Gross profit		78.8	%		78.9	%		78.4	%		78.1	%
General and administrative		17.2	%		18.4	%		18.0	%		19.1	%
Selling and marketing		29.9	%		30.2	%		28.8	%		28.4	%
Research and development		10.7	%		13.2	%		11.4	%		14.6	%
Total selling, general and administrative		57.8	%		61.8	%		58.2	%		62.1	%
Operating income		21.0	%		17.1	%		20.2	%		16.0	%
Total other income (expense), net		(1.9	)%		0.1	%		(1.5	)%		(1.0	)%
Income before income taxes		19.1	%		17.2	%		18.7	%		15.0	%
Provision for income taxes		3.0	%		3.5	%		3.0	%		3.0	%
Net income		16.1	%		13.7	%		15.7	%		12.0	%

Net Sales

	Three Months Ended				Percentage Change			Six Months Ended				Percentage Change
	July 1, 2022		July 2, 2021		2022 vs. 2021			July 1, 2022		July 2, 2021		2022 vs. 2021
ICLs	$	77,922	$	59,235		31.5	%	$	136,597	$	105,736		29.2	%
Other product sales:
Cataract IOLs		2,547		3,074		(17.1	)%		5,449		6,799		(19.9	)%
Other surgical products		632		58		—*			2,255		584		—*
Total other product sales		3,179		3,132		1.5	%		7,704		7,383		4.3	%
Net sales	$	81,101	$	62,367		30.0	%	$	144,301	$	113,119		27.6	%

* Denotes change is greater than +100%.

Net sales for the three months ended July 1, 2022 increased 30% from the same period of 2021.  The increase in net sales was due to increased ICL sales of $18.7 million.  Changes in foreign currency unfavorably impacted net sales by $3.1 million.

Net sales for the six months ended July 1, 2022 increased 28% from same period of 2021.  The increase in net sales was due to increased ICL sales of $30.9 million.  Changes in foreign currency unfavorably impacted net sales by $5.0 million.

17

Total ICL sales for the three months ended July 1, 2022 increased 32% from the same period of 2021, with unit increase of 42%. The APAC region sales increased by 37%, with unit growth up 45%, due to sales growth in India up 192%, other APAC regions up 65%, China up 39%, Japan up 16% and Korea up 16%. The Europe, Middle East, Africa and Latin America region sales increased 6% with unit increase of 30%, due to sales growth in in distributor markets up 24%, partially offset by sales decreases in our direct markets down 7%.  The North America region sales increased 42%, with unit increase of 32%, primarily to sales growth in the U.S. up 47%.  In late March 2022, the U.S. started to sell EVO ICLs. Changes in foreign currency unfavorably impacted ICL sales by $2.6 million for the three months ended July 1, 2022, which impacted our Europe, Middle East, Africa and Japan markets.  ICL sales represented 96.1% and 95.0% of our total sales for the three months ended July 1, 2022 and July 2, 2021, respectively.

Total ICL sales for the six months ended July 1, 2022 increased 29% from the same period of 2021, with unit increase of 36%. The APAC region sales increased by 36%, with unit growth up 40%, due to sales growth in India up 92%, other APAC regions up 58%, China up 41%, Japan up 19% and Korea up 15%.  The Europe, Middle East, Africa and Latin America region sales increased 2% with unit increase of 19%, due to sales due to sales growth in distributor markets up 15%, offset by sales decreases in our direct markets down 6%.  The North America region sales increased 32%, with unit increase of 25%, primarily to sales growth in the U.S. up 35%.  In late March 2022, the U.S. started to sell EVO ICLs.  Changes in foreign currency unfavorably impacted ICL sales by $4.0 million for the six months ended July 1, 2022, which impacted our Europe, Middle East, Africa and Japan markets.  ICL sales represented 94.7% and 93.5% of our total sales for the three months ended July 1, 2022 and July 2, 2021, respectively.

Other product sales, including cataract IOLs for the three and six months ended July 1, 2022, increased 1% and 4%, respectively from the same period of 2021, due to increased preloaded injector part sales, offset by decreased sales of cataract IOLs.  In the first half of 2021, we experienced product yield issues requiring rework related to preloaded injector parts manufactured on our behalf by a third-party vendor then sold by us to a third-party manufacturer for product they sell to their customers.  Changes in foreign currency unfavorably impacted other product sales by $0.6 million and $1.1 million for the three and six months July 1, 2022, respectively.  Other product sales represented 3.9% and 5.0% of our total sales for the three months ended July 1, 2022 and July 2, 2021, respectively and represented 5.3% and 6.5% of our total sales for the six months ended July 1, 2022 and July 2, 2021, respectively.

Gross Profit

	Three Months Ended						Percentage Change			Six Months Ended						Percentage Change
	July 1, 2022			July 2, 2021			2022 vs. 2021			July 1, 2022			July 2, 2021			2022 vs. 2021
Gross profit	$	63,872		$	49,203			29.8	%	$	113,136		$	88,345			28.1	%
Gross margin		78.8	%		78.9	%					78.4	%		78.1	%

* Denotes change is greater than +100%.

Gross profit for the three months ended July 1, 2022 increased 29.8% from the same period of 2021.  Gross profit margin decreased slightly to 78.8% of revenue for the three months ended July 1, 2022 compared to 78.9% of revenue for the three months ended July 2, 2021, due to inventory reserves recognized as a result of discontinuance of our older generation Visian ICL in the U.S. and increased period costs associated with manufacturing projects, offset by increased product and geographic sales mix.

Gross profit for the six months ended July 1, 2022 increased 28.1% from the same period of 2021.  Gross profit margin increased to 78.4% of revenue for the six months ended July 1, 2022 compared to 78.1% of revenue for the six months ended July 2, 2021, due mainly to product and geographic sales mix, partially offset by inventory reserves recognized as a result of discontinuance of our older generation Visian ICL in the U.S. and increased period costs associated with manufacturing projects.

18

General and Administrative Expense

	Three Months Ended						Percentage Change			Six Months Ended						Percentage Change
	July 1, 2022			July 2, 2021			2022 vs. 2021			July 1, 2022			July 2, 2021			2022 vs. 2021
General and administrative expense	$	13,983		$	11,441			22.2	%	$	25,923		$	21,653			19.7	%
Percentage of sales		17.2	%		18.4	%					18.0	%		19.1	%

General and administrative expenses for the three months ended July 1, 2022 increased 22.2% from the same period of 2021 due to increased stock-based compensation expenses and facility costs. General and administrative expenses for the six months ended July 1, 2022 increased 19.7% from the same period of 2021 due to increased facility costs, stock-based compensation expenses and outside services.

Selling and Marketing Expense

	Three Months Ended						Percentage Change			Six Months Ended						Percentage Change
	July 1, 2022			July 2, 2021			2022 vs. 2021			July 1, 2022			July 2, 2021			2022 vs. 2021
Selling and marketing expense	$	24,233		$	18,853			28.5	%	$	41,503		$	32,054			29.5	%
Percentage of sales		29.9	%		30.2	%					28.8	%		28.4	%

Selling and marketing expenses for the three months ended July 1, 2022 increased 28.5% from the same period of 2021 due to increased advertising and promotional activities and trade shows, partially offset by decreased salary-related and payroll tax expenses.  Selling and marketing expenses for the six months ended July 1, 2022 increased 29.5% from the same period of 2021 due to increased advertising and promotional activities and trade shows.  

Research and Development Expense

	Three Months Ended						Percentage Change			Six Months Ended						Percentage Change
	July 1, 2022			July 2, 2021			2022 vs. 2021			July 1, 2022			July 2, 2021			2022 vs. 2021
Research and development expense	$	8,636		$	8,260			4.6	%	$	16,577		$	16,519			0.4	%
Percentage of sales		10.7	%		13.2	%					11.4	%		14.6	%

Research and development expenses for the three and six months ended July 1, 2022 increased 4.6% and 0.4%, respectively, from the same period of 2021 due mainly to increased in salary-related and payroll tax expenses and stock-based compensation, offset by decreased clinical expenses associated with our clinical trials.  

Other Expense, Net

	Three Months Ended						Percentage Change		Six Months Ended						Percentage Change
	July 1, 2022			July 2, 2021			2022 vs. 2021		July 1, 2022			July 2, 2021			2022 vs. 2021
Other income (expense), net	$	(1,551	)	$	66			—*	$	(2,137	)	$	(1,165	)		(83.4	)%
Percentage of sales		(1.9	)%		0.1	%				(1.5	)%		(1.0	)%

The change in other expense, net for the three and six months ended July 1, 2022 and July 2, 2021, respectively, was due primarily to foreign exchange losses (primarily euro).  

19

Income Taxes

	Three Months Ended				Percentage Change			Six Months Ended				Percentage Change
	July 1, 2022		July 2, 2021		2022 vs. 2021			July 1, 2022		July 2, 2021		2022 vs. 2021
Income tax provision	$	2,431	$	2,148		13.2	%	$	4,356	$	3,395		28.3	%

The effective tax rates for the three months ended July 1, 2022 and July 2, 2021 was 15.7% and 20.0%, respectively, and was 16.1% and 20.0%, for the six months ended July 1, 2022 and July 2, 2021, respectively. Our effective tax rates differ from the U.S. federal statutory rate of 21% for the three and six months ended July 1, 2022 and July 2, 2021, respectively, primarily due to the income taxes generated in foreign jurisdictions. The effective tax rate for the three and six months ended July 1, 2022 was lower than the same period in 2021 primarily due to jurisdictions in which the income is earned.

Our future effective income tax rate depends on various factors, such as changes in tax laws, regulations, accounting principles, or interpretations thereof, and the geographic composition of our pre-tax income. We carefully monitor these factors and adjust our effective income tax rate accordingly.  

Liquidity and Capital Resources

We believe that current cash, cash equivalents and future cash flow from operating activities will be sufficient to meet our anticipated cash needs, including working capital needs, capital expenditures and contractual obligations for at least 12 months from the issuance date of the financial statements included in this quarterly report. Our financial condition at July 1, 2022 and December 31, 2021 included the following (in millions):

	July 1, 2022		December 31, 2021		2022 vs. 2021
Cash and cash equivalents	$	202.5	$	199.7	$	2.8
Current assets	$	296.5	$	271.4	$	25.1
Current liabilities		46.5		48.8		(2.3	)
Working capital	$	250.0	$	222.6	$	27.4

We invest the net proceeds in short-term interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government. We do not have any off-balance sheet arrangements.

A summary of cash flows for the six months ended July 1, 2022 and July 2, 2021 was as follows (dollars in thousands):

	Six Months Ended
	July 1, 2022			July 2, 2021
Cash flows from:
Operating activities	$	8,636		$	13,148
Investing activities		(7,810	)		(5,683	)
Financing activities		3,101			13,833
Effect of exchange rate changes		(1,143	)		(668	)
Net increase in cash and cash equivalents		2,784			20,630
Cash and cash equivalents, at beginning of year		199,706			152,453
Cash and cash equivalents, at end of year	$	202,490		$	173,083

For the six months ended July 1, 2022 net cash used by operating activities consisted of $22.6 million in net income, $14.0 million in non-cash items, offset by $28.0 million in working-capital changes.  

The increase in investments of property, plant and equipment for the six months ended July 1, 2022 relative to the same period of 2021, was due to increased investments in manufacturing facilities.  

Net cash provided by financing activities for the six months ended July 1, 2022 consisted of $3.1 million of proceeds from the exercise of stock options.  For the six months ended July 2, 2021, net cash provided by financing activities consisted of $14.1 million of proceeds from the exercise of stock options, partially offset by $0.2 million repayment of finance lease obligations.

20

Commitments

Employment Agreements

The Company’s Chief Executive Officer entered into an employment agreement with the Company, effective March 1, 2015.  She and certain officers have as provisions of their agreements certain rights, including continuance of cash compensation and benefits, upon a “change in control,” which may include an acquisition of substantially all of its assets, or termination “without cause or for good reason” as defined in the employment agreements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

During the six months ended July 1, 2022, there have been no material changes in the Company’s qualitative and quantitative market risk since the disclosure in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of the disclosure controls and procedures of the Company.  Based on that evaluation, our CEO and CFO concluded, as of the end of the period covered by this quarterly report on Form 10-Q, that our disclosure controls and procedures were effective.  For purposes of this statement, the term “disclosure controls and procedures” means controls and other procedures of the Company that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our management, including the CEO and the CFO, do not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud or material errors. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations on all internal control systems, our internal control system can provide only reasonable assurance of achieving its objectives and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of internal control is also based in part upon certain assumptions about the likelihood of future events, and can provide only reasonable, not absolute, assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in circumstances, or the degree of compliance with the policies and procedures may deteriorate.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended July 1, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Company is involved in various legal proceedings and other matters arising in the normal course of business.  These legal proceedings and other matters may relate to, among other things, contractual rights and obligations, employment matters, or claims of product liability.  STAAR maintains insurance coverage for various matters, including product liability and certain securities claims.  While the Company does not believe that any of the claims known is likely to have a material adverse effect on the Company’s financial condition or results of operations, new claims or unexpected results of existing claims could lead to significant financial harm.

21

ITEM 1A. RISK FACTORS

Our short and long-term success is subject to many factors that are beyond our control. Investors and prospective investors should consider carefully information contained in this report and the risks and uncertainties described in “Part I—Item 1A—Risk Factors” of the Company’s Form 10-K for the fiscal year ended December 31, 2021. Such risks and uncertainties could materially adversely affect our business, financial condition or operating results.  

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

3.1	Amended and Restated Certificate of Incorporation.(1)
3.2	Amended and Restated Bylaws.(2)
4.1	Form of Certificate for Common Stock, par value $0.01 per share.(3)
†4.2	Amended and Restated Omnibus Equity Incentive Plan.(4)
31.1	Certifications Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certifications Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification Pursuant to 18 U.S.C. Section 1350, Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. **
101	Financial statements from the quarterly report on Form 10-Q of STAAR Surgical Company for the quarter ended July 1, 2022 formatted in Inline Extensible Business Reporting Language (iXBRL), are filed herewith and include: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Stockholders’ Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) the Notes to Condensed Consolidated Financial Statements tagged as blocks of text.*
104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended July 1, 2022, has been formatted in Inline XBRL with applicable taxonomy extension information contained in Exhibit 101.

(1) Incorporated by reference to Appendix 2 of the Company’s Proxy Statement on Form DEF 14A as filed with the Commission on April 13, 2018.

(2) Incorporated by reference to Appendix 3 of the Company’s Proxy Statement on Form DEF 14A as filed with the Commission on April 13, 2018.

(3) Incorporated by reference to Exhibit 4.1 to Amendment No. 1 to the Company’s Registration Statement on Form 8‑A/A as filed with the Commission on April 18, 2003.

(4) Incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q, for the period ended July 3, 2020, as filed with the Commission on August 5, 2020.

* Filed herewith.

** Furnished herewith.

† Management contract or compensatory plan.

22

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 thereunto duly authorized.

		STAAR SURGICAL COMPANY
Dated:	August 10, 2022	By:	/s/ PATRICK F. WILLIAMS
			Patrick F. Williams
			Chief Financial Officer
			(on behalf of the Registrant and as its principal financial officer)

23

EX-31.1

Exhibit 31.1

Certifications

I, Caren Mason, certify that:

1.I have reviewed this quarterly report on Form 10-Q of STAAR Surgical Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	August 10, 2022	/s/ CAREN MASON
		Caren Mason
		President, Chief Executive Officer, and Director
		(principal executive officer)

EX-31.2

Exhibit 31.2

Certifications

I, Patrick F. Williams, certify that:

1.I have reviewed this quarterly report on Form 10-Q of STAAR Surgical Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	August 10, 2022	/s/ PATRICK F. WILLIAMS
		Patrick F. Williams
		Chief Financial Officer
		(principal financial officer)

EX-32.1

Exhibit 32.1

Certification pursuant to 18 U.S.C. Section 1350,

As adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the filing of the Quarterly Report on Form 10-Q for the period ended July 1, 2022 (the “Report”) by STAAR Surgical Company (“Registrant”), each of the undersigned hereby certifies that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Registrant as of and for the periods presented in the Report.

Dated:	August 10, 2022	/s/ CAREN MASON
		Caren Mason
		President, Chief Executive Officer,
		and Director (principal executive officer)

Dated:	August 10, 2022	/s/ PATRICK F. WILLIAMS
		Patrick F. Williams
		Chief Financial Officer
		(principal financial officer)

A signed original of this written statement required by 18U.S.C. Section 1350has been provided to STAAR Surgical Company and will be furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - shares	6 Months Ended
	Jul. 01, 2022	Aug. 05, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jul. 01, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Entity Registrant Name	STAAR SURGICAL CO
Entity Central Index Key	0000718937
Current Fiscal Year End Date	--12-30
Entity Filer Category	Large Accelerated Filer
Trading Symbol	STAA
Entity Common Stock, Shares Outstanding		48,038,340
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Interactive Data Current	Yes
Entity File Number	0-11634
Title of 12(b) Security	Common
Security Exchange Name	NASDAQ
Entity Tax Identification Number	95-3797439
Entity Address, Address Line One	25651 Atlantic Ocean Drive
Entity Address, City or Town	Lake Forest
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92630
City Area Code	626
Local Phone Number	303-7902
Entity Incorporation, State or Country Code	DE
Document Quarterly Report	true
Document Transition Report	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jul. 01, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 202,490	$ 199,706
Accounts receivable trade, net of allowance for credit losses of $55 and $43, respectively	62,811	43,531
Inventories, net	18,089	17,274
Prepayments, deposits and other current assets	13,066	10,900
Total current assets	296,456	271,411
Property, plant and equipment, net	42,813	35,912
Finance lease right-of-use assets, net	420	506
Operating lease right-of-use assets, net	30,363	31,310
Intangible assets, net	184	218
Goodwill	1,786	1,786
Deferred income taxes	3,217	3,813
Other assets	786	822
Total assets	376,025	345,778
Current liabilities:
Accounts payable	12,716	8,699
Obligations under finance leases	166	127
Obligations under operating leases	3,708	3,283
Allowance for sales returns	5,550	4,816
Other current liabilities	24,374	31,877
Total current liabilities	46,514	48,802
Obligations under finance leases	295	382
Obligations under operating leases	26,880	28,269
Deferred income taxes	1,037	811
Asset retirement obligations	169	198
Pension liability	1,823	8,758
Total liabilities	76,718	87,220
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value; 60,000 shares authorized: 48,024 and 47,716 shares issued and outstanding at July 1, 2022 and December 31, 2021, respectively	480	477
Additional paid-in capital	387,328	373,519
Accumulated other comprehensive loss	249	(4,048)
Accumulated deficit	(88,750)	(111,390)
Total stockholders’ equity	299,307	258,558
Total liabilities and stockholders’ equity	$ 376,025	$ 345,778

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jul. 01, 2022	Dec. 31, 2021
Statement Of Financial Position [Abstract]
Allowance for credit losses, current	$ 55	$ 43
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	60,000,000	60,000,000
Common stock, shares issued	48,024,000	47,716,000
Common stock, shares outstanding	48,024,000	47,716,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2022	Jul. 02, 2021	Jul. 01, 2022	Jul. 02, 2021
Income Statement [Abstract]
Net sales	$ 81,101	$ 62,367	$ 144,301	$ 113,119
Cost of sales	17,229	13,164	31,165	24,774
Gross profit	63,872	49,203	113,136	88,345
Selling, general and administrative expenses:
General and administrative	13,983	11,441	25,923	21,653
Selling and marketing	24,233	18,853	41,503	32,054
Research and development	8,636	8,260	16,577	16,519
Total selling, general and administrative expenses	46,852	38,554	84,003	70,226
Operating income	17,020	10,649	29,133	18,119
Other expense, net:
Interest income (expense), net	43	(5)	37	(12)
Loss on foreign currency transactions	(1,860)	(131)	(2,775)	(1,430)
Royalty income	177	151	450	311
Other income (expense), net	89	51	151	(34)
Total other income (expense), net	(1,551)	66	(2,137)	(1,165)
Income before income taxes	15,469	10,715	26,996	16,954
Provision for income taxes	2,431	2,148	4,356	3,395
Net income	$ 13,038	$ 8,567	$ 22,640	$ 13,559
Net income per share:
Basic	$ 0.27	$ 0.18	$ 0.47	$ 0.29
Diluted	$ 0.26	$ 0.17	$ 0.46	$ 0.27
Weighted average shares outstanding:
Basic	47,889	47,099	47,822	46,858
Diluted	49,223	49,491	49,264	49,373

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2022	Jul. 02, 2021	Jul. 01, 2022	Jul. 02, 2021
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 13,038	$ 8,567	$ 22,640	$ 13,559
Defined benefit plans:
Net change in plan assets	2,593	(457)	6,661	2,627
Reclassification into other income (expense), net	33	120	85	240
Foreign currency translation loss	(1,502)	(111)	(2,516)	(1,227)
Tax effect	188	69	67	69
Other comprehensive income (loss), net of tax	1,312	(379)	4,297	1,709
Comprehensive income	$ 14,350	$ 8,188	$ 26,937	$ 15,268

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Balance at Jan. 01, 2021	$ 197,222	$ 464	$ 338,194	$ (5,545)	$ (135,891)
Balance (in shares) at Jan. 01, 2021		46,448
Net income	13,559				13,559
Other comprehensive income (loss)	1,709			1,709
Common stock issued upon exercise of options	14,110	$ 9	14,101
Common stock issued upon exercise of options (in shares)		906
Stock-based compensation	$ 8,021		8,021
Unvested restricted stock (in shares)	3	3
Vested restricted stock	$ 1	$ 1
Vested restricted stock (in shares)		34
Balance at Jul. 02, 2021	234,622	$ 474	360,316	(3,836)	(122,332)
Balance (in shares) at Jul. 02, 2021		47,391
Balance at Apr. 02, 2021	214,176	$ 469	348,063	(3,457)	(130,899)
Balance (in shares) at Apr. 02, 2021		46,857
Net income	8,567				8,567
Other comprehensive income (loss)	(379)			(379)
Common stock issued upon exercise of options	7,876	$ 5	7,871
Common stock issued upon exercise of options (in shares)		530
Stock-based compensation	$ 4,382		4,382
Unvested restricted stock (in shares)	3	3
Vested restricted stock (in shares)		1
Balance at Jul. 02, 2021	$ 234,622	$ 474	360,316	(3,836)	(122,332)
Balance (in shares) at Jul. 02, 2021		47,391
Balance at Dec. 31, 2021	258,558	$ 477	373,519	(4,048)	(111,390)
Balance (in shares) at Dec. 31, 2021		47,716
Net income	22,640				22,640
Other comprehensive income (loss)	4,297			4,297
Common stock issued upon exercise of options	$ 3,146	$ 3	3,143
Common stock issued upon exercise of options (in shares)	251	251
Stock-based compensation	$ 10,666		10,666
Unvested restricted stock (in shares)	4	7
Vested restricted and performance stock (in shares)		50
Balance at Jul. 01, 2022	$ 299,307	$ 480	387,328	249	(88,750)
Balance (in shares) at Jul. 01, 2022		48,024
Balance at Apr. 01, 2022	276,317	$ 478	378,690	(1,063)	(101,788)
Balance (in shares) at Apr. 01, 2022		47,810
Net income	13,038				13,038
Other comprehensive income (loss)	1,312			1,312
Common stock issued upon exercise of options	2,234	$ 2	2,232
Common stock issued upon exercise of options (in shares)		202
Stock-based compensation	$ 6,406		6,406
Unvested restricted stock (in shares)	4	7
Vested restricted and performance stock (in shares)		5
Balance at Jul. 01, 2022	$ 299,307	$ 480	$ 387,328	$ 249	$ (88,750)
Balance (in shares) at Jul. 01, 2022		48,024

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jul. 01, 2022	Jul. 02, 2021
Cash flows from operating activities:
Net income	$ 22,640	$ 13,559
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant, and equipment	2,024	1,754
Amortization of intangibles	15	17
Deferred income taxes		845
Change in net pension liability	52	(27)
Loss on disposal of property and equipment		2
Stock-based compensation expense	9,648	7,322
Provision for sales returns and bad debts	800	932
Inventory provision	1,428	697
Changes in working capital:
Accounts receivable	(20,137)	(13,797)
Inventories	(1,825)	2,238
Prepayments, deposits, and other current assets	(2,260)	(307)
Accounts payable	3,243	(268)
Other current liabilities	(6,992)	181
Net cash provided by operating activities	8,636	13,148
Cash flows from investing activities:
Acquisition of property and equipment	(7,810)	(5,683)
Net cash used in investing activities	(7,810)	(5,683)
Cash flows from financing activities:
Repayment of finance lease obligations	(45)	(278)
Proceeds from the exercise of stock options	3,146	14,110
Proceeds from vested restricted stock		1
Net cash provided by financing activities	3,101	13,833
Effect of exchange rate changes on cash and cash equivalents	(1,143)	(668)
Increase in cash and cash equivalents	2,784	20,630
Cash and cash equivalents, at beginning of the period	199,706	152,453
Cash and cash equivalents, at end of the period	$ 202,490	$ 173,083

XML

Basis of Presentation and Significant Accounting Policies

6 Months Ended

Jul. 01, 2022

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

Note 1 — Basis of Presentation and Significant Accounting Policies

The Condensed Consolidated Financial Statements of the Company present the financial position, results of operations, and cash flows of STAAR Surgical Company and its wholly owned subsidiaries. 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 31, 2021 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 31, 2021.

The Condensed Consolidated Financial Statements for the three and six months ended July 1, 2022 and July 2 2021, 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 July 1, 2022 and July 2, 2021, 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.

Vendor Concentration

There were no vendors that accounted for over 10% of the Company’s consolidated accounts payable as of July 1, 2022 and December 31, 2021.  There were no vendors that accounted for over 10% of the Company’s consolidated purchases for the three and six months ended July 1, 2022 and July 2, 2021, respectively.

XML

Inventories

6 Months Ended

Jul. 01, 2022

Inventory Disclosure [Abstract]

Inventories

Note 2 — Inventories

Inventories, net are stated at the lower of cost and net realizable value, determined on a first-in, first-out basis and consisted of the following (in thousands):

	July 1, 2022			December 31, 2021
Raw materials and purchased parts	$	5,119		$	3,971
Work in process		3,446			4,031
Finished goods		11,222			10,429
Total inventories, gross		19,787			18,431
Less inventory reserves		(1,698	)		(1,157	)
Total inventories, net	$	18,089		$	17,274

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Prepayments, Deposits, and Other Current Assets

6 Months Ended

Jul. 01, 2022

Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]

Prepayments, Deposits, and Other Current Assets

Note 3 — Prepayments, Deposits, and Other Current Assets

Prepayments, deposits, and other current assets consisted of the following (in thousands):

	July 1, 2022		December 31, 2021
Prepayments and deposits	$	4,397	$	4,047
Prepaid insurance		1,351		2,647
Prepaid marketing		2,244		543
Consumption tax receivable		519		830
Value added tax (VAT) receivable		2,208		2,197
BVG (Swiss Pension) prepayment		1,021		15
Swiss social insurance prepayment		945		—
Other(1)		381		621
Total prepayments, deposits and other current assets	$	13,066	$	10,900

^{(1) No individual item in “other current assets” exceeds 5% of the total prepayments, deposits and other current assets.}

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Property, Plant and Equipment

6 Months Ended

Jul. 01, 2022

Property Plant And Equipment [Abstract]

Property, Plant and Equipment

Note 4 — Property, Plant and Equipment

Property, plant and equipment, net consisted of the following (in thousands):

	July 1, 2022			December 31, 2021
Machinery and equipment	$	26,611		$	24,127
Computer equipment and software		8,977			8,807
Furniture and fixtures		4,478			3,658
Leasehold improvements		12,081			11,821
Construction in process		26,828			21,827
Total property, plant and equipment, gross		78,975			70,240
Less accumulated depreciation		(36,162	)		(34,328	)
Total property, plant and equipment, net	$	42,813		$	35,912

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Intangible Assets

6 Months Ended

Jul. 01, 2022

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets

Note 5 –Intangible Assets

Intangible assets, net consisted of the following (in thousands):

	July 1, 2022							December 31, 2021
Long-lived amortized intangible assets	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Patents and licenses	$	9,227	$	(9,043	)	$	184	$	9,315	$	(9,097	)	$	218

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Other Current Liabilities

6 Months Ended

Jul. 01, 2022

Other Liabilities Disclosure [Abstract]

Other Current Liabilities

Note 6 – Other Current Liabilities

Other current liabilities consisted of the following (in thousands):

	July 1, 2022		December 31, 2021
Accrued salaries and wages	$	9,305	$	12,030
Accrued bonuses		2,754		8,091
Income taxes payable		4,074		2,248
Marketing obligations		2,481		2,243
Other(1)		5,760		7,265
Total other current liabilities	$	24,374	$	31,877

⁽¹⁾ No individual item in “Other” exceeds 5% of the other current liabilities.

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Leases

6 Months Ended

Jul. 01, 2022

Leases [Abstract]

Leases

Note 7 – Leases

Finance Leases

The Company entered into finance leases primarily related to purchases of equipment used for manufacturing, computer-related equipment or furniture and fixtures.  These finance leases are two to five years in length and have fixed payment amounts for the term of the contract and have options to purchase the assets at the end of the lease term.  Supplemental balance sheet information related to finance leases consisted of the following (dollars in thousands):

	July 1, 2022			December 31, 2021
Machinery and equipment	$	30		$	35
Computer equipment and software		17			506
Furniture and fixtures		475			475
Finance lease right-of-use assets, gross		522			1,016
Less accumulated depreciation		(102	)		(510	)
Finance lease right-of-use assets, net	$	420		$	506
Total finance lease liability	$	461		$	509
Weighted-average remaining lease term (in years)		2.7			3.2
Weighted-average discount rate		4.09	%		4.02	%

Supplemental cash flow information related to finance leases consisted of the following (dollars in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Amortization of finance lease right-of-use asset	$	39	$	20	$	82	$	56
Interest on finance lease liabilities		5		1		8		5
Cash paid for amounts included in the measurement of finance lease liabilities:
Operating cash flows		5		1		8		5
Financing cash flows		27		43		45		278

Operating Leases

The Company entered into operating leases primarily related to real property (office, manufacturing and warehouse facilities), automobiles and copiers.  These operating leases are two to ten years in length with options to extend.  The Company does not include any lease extensions in the initial valuation unless the Company was reasonably certain to extend the lease.  Depending on the lease, there are those with fixed payment amounts for the entire length of the contract or payments which increase periodically as noted in the contract or increased at an inflation rate indicator.  For operating leases that increase using an inflation rate indicator, the Company used the inflation rate at the time the lease was entered into for the length of the lease term.  Supplemental balance sheet information related to operating leases consisted of the following (dollars in thousands):

	July 1, 2022			December 31, 2021
Machinery and equipment	$	782		$	760
Computer equipment and software		446			472
Real property		34,108			34,426
Operating lease right-of-use assets, gross		35,336			35,658
Less accumulated depreciation		(4,973	)		(4,348	)
Operating lease right-of-use assets, net	$	30,363		$	31,310
Total operating lease liability	$	30,588		$	31,552
Weighted-average remaining lease term (in years)		7.4			7.8
Weighted-average discount rate		3.66	%		3.56	%

Note 7 – Leases (Continued)

Operating Leases (Continued)

Supplemental cash flow information related to operating leases was as follows (dollars in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Operating lease cost	$	1,166	$	857	$	2,304	$	1,640
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows		1,034		801		1,966		1,586
Right-of-use assets obtained in exchange for new operating lease liabilities		2,081		3,356		2,756		4,007

Maturities of Lease Liabilities

Maturities of lease liabilities under operating and finance leases having initial or remaining non-cancelable lease terms more than one year as of July 1, 2022 is as follows (in thousands):

As of July 1, 2022 12 Months Ended	Operating Leases			Finance Leases
June 2023	$	5,340		$	181
June 2024		5,392			179
June 2025		4,624			128
June 2026		3,700			—
June 2027		3,655			—
Thereafter		12,613			—
Total future minimum lease payments	$	35,324		$	488
Less amounts representing interest		(4,736	)		(27	)
Present value of future minimum lease payments	$	30,588		$	461
Current lease obligations		(3,708	)		(166	)
Long-term lease obligations	$	26,880		$	295

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Income Taxes

6 Months Ended

Jul. 01, 2022

Income Tax Disclosure [Abstract]

Income Taxes

 Note 8 — Income Taxes

The Company recorded an income tax provision as follows (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Provision for income taxes	$	2,431	$	2,148	$	4,356	$	3,395

The effective tax rates for the three months ended July 1, 2022 and July 2, 2021 was 15.7% and 20.0%, respectively, and was 16.1% and 20.0%, for the six months ended July 1, 2022 and July 2, 2021, respectively. The Company’s effective tax rates differ from the U.S. federal statutory rate of 21% for the three and six months ended July 1, 2022 and July 2, 2021, respectively, primarily due to the income taxes generated in foreign jurisdictions. The effective tax rate for the three and six months ended July 1, 2022 was lower than the same period in 2021 primarily due to jurisdictions in which the income is earned.

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Defined Benefit Pension Plans

6 Months Ended

Jul. 01, 2022

Compensation And Retirement Disclosure [Abstract]

Defined Benefit Pension Plans

Note 9 – Defined Benefit Pension Plans

The Company has defined benefit plans covering employees of its Switzerland and Japan operations.  The following table summarizes the components of net periodic pension cost recorded for the Company’s defined benefit pension plans (in thousands):

	Three Months Ended						Six Months Ended
	July 1, 2022			July 2, 2021			July 1, 2022			July 2, 2021
Service cost(1)	$	309		$	329		$	635		$	677
Interest cost(2)		21			14			41			28
Expected return on plan assets(2)		(123	)		(101	)		(241	)		(200	)
Prior service credit(2),(3)		(46	)		(11	)		(91	)		(22	)
Actuarial loss recognized in current period(2),(3)		79			131			176			262
Net periodic pension cost	$	240		$	362		$	520		$	745

⁽¹⁾ Recognized in selling general and administrative expenses on the Condensed Consolidated Statements of Income.

⁽²⁾ Recognized in other expense, net on the Condensed Consolidated Statements of Income.

⁽³⁾ Amounts reclassified from accumulated other comprehensive income (loss).

The Company currently is not required to and does not make contributions to its Japan pension plan.  The Company’s contributions to its Swiss pension plan are as follows (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Employer contribution	$	220	$	204	$	436	$	397

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Stockholders' Equity

6 Months Ended

Jul. 01, 2022

Stockholders Equity Note [Abstract]

Stockholders' Equity

Note 10 — Stockholders’ Equity

Stock-Based Compensation

The cost that has been charged against income for stock-based compensation is set forth below (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Employee stock options	$	2,457	$	2,784	$	4,784	$	5,256
Restricted stock		442		232		551		398
Restricted stock units		1,231		811		1,993		1,348
Performance stock units		1,310		108		1,692		201
Nonemployee stock options		314		57		628		119
Total stock-based compensation expense	$	5,754	$	3,992	$	9,648	$	7,322

The Company recorded stock-based compensation costs in the following categories (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Cost of sales	$	106	$	54	$	176	$	89
General and administrative		2,806		1,815		4,587		3,254
Selling and marketing		1,324		953		2,213		1,786
Research and development		1,518		1,170		2,672		2,193
Total stock-based compensation expense, net		5,754		3,992		9,648		7,322
Amounts capitalized as part of inventory		652		390		1,018		699
Total stock-based compensation expense, gross	$	6,406	$	4,382	$	10,666	$	8,021

Note 10 — Stockholders’ Equity (Continued)

Incentive Plan

The Amended and Restated Omnibus Equity Incentive Plan (“the Plan”) provides for various forms of stock-based incentives. To date, of the available forms of awards under the Plan, the Company has granted only stock options, restricted stock, unrestricted share grants, restricted stock units (“RSUs”) and performance stock units (“PSUs”). Options under the Plan are granted at fair market value on the date of grant, become exercisable generally over a three-year period, or as determined by the Board of Directors, and expire over periods not exceeding 10 years from the date of grant. Certain option and share awards provide for accelerated vesting if there is a change in control and pre-established financial metrics are met (as defined in the Plan). Grants of restricted stock outstanding under the Plan generally vest over periods of one to three years. Grants of RSUs and PSUs outstanding under the Plan generally vest based on service, performance, or a combination of both.  As of July 1, 2022, there were 2,156,185 shares available for grant under the Plan.

Assumptions

The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model applying the weighted-average assumptions noted in the following table.  Expected volatilities are based on historical volatility of the Company’s stock. The expected term of options granted is derived from the historical exercises and post-vesting cancellations and represents the period of time that options granted are expected to be outstanding.  The Company has calculated a 5% estimated forfeiture rate based on historical forfeiture experience.  The risk-free rate is based on the U.S. Treasury yield curve corresponding to the expected term at the time of the grant.  

	Three Months Ended						Six Months Ended
	July 1, 2022			July 2, 2021			July 1, 2022			July 2, 2021
Expected dividend yield		0	%		0	%		0	%		0	%
Expected volatility		54	%		53	%		54	%		53	%
Risk-free interest rate		3.27	%		0.83	%		1.83	%		0.84	%
Expected term (in years)		5.10			5.38			5.10			5.38

Stock Options

A summary of stock option activity under the Plan for six months ended July 1, 2022 is presented below:

	Stock Options (in 000’s)			Minimum Exercise Price		Maximum Exercise Price
Outstanding at December 31, 2021		2,435
Granted		421
Exercised		(251	)
Forfeited or expired		(16	)
Outstanding at July 1, 2022		2,589		$	5.34	$	154.96
Exercisable at July 1, 2022		1,873

Restricted Stock, Restricted Stock Units and Performance Stock Units

A summary of restricted stock, RSUs and PSUs activity under the Plan for the six months ended July 1, 2022 is presented below (shares in thousands):

	Restricted Stock			RSUs			PSUs
Unvested at December 31, 2021		3			131			10
Granted		6			113			113
Vested		(5	)		(45	)		(5	)
Unvested at July 1, 2022		4			199			118

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Commitments and Contingencies

6 Months Ended

Jul. 01, 2022

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 11 - Commitments and Contingencies

Litigation and Claims

From time to time, the Company is involved in various legal proceedings and other matters arising in the normal course of business.  These legal proceedings and other matters may relate to, among other things, contractual rights and obligations, employment matters, or claims of product liability.  STAAR maintains insurance coverage for various matters, including product liability and certain securities claims.  While the Company does not believe that any of the claims known is likely to have a material adverse effect on the Company’s financial condition or results of operations, new claims or unexpected results of existing claims could lead to significant financial harm.

Employment Agreements

The Company’s Chief Executive Officer entered into an employment agreement with the Company, effective March 1, 2015. She and certain officers have as provisions of their agreements certain rights, including continuance of cash compensation and benefits, upon a “change in control,” which may include an acquisition of substantially all its assets, or termination “without cause or for good reason” as defined in the employment agreements.

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Basic and Diluted Net Income Per Share

6 Months Ended

Jul. 01, 2022

Earnings Per Share [Abstract]

Basic and Diluted Net Income Per Share

Note 12 — Basic and Diluted Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share (in thousands except per share amounts):

	Three Months Ended						Six Months Ended
	July 1, 2022			July 2, 2021			July 1, 2022			July 2, 2021
Numerator:
Net income	$	13,038		$	8,567		$	22,640		$	13,559
Denominator:
Weighted average common shares:
Common shares outstanding		47,893			47,102			47,826			46,861
Less:  Unvested restricted stock		(4	)		(3	)		(4	)		(3	)
Denominator for basic calculation		47,889			47,099			47,822			46,858
Weighted average effects of potentially diluted common stock:
Stock options		1,299			2,283			1,386			2,405
Unvested restricted stock		3			9			2			9
RSUs		24			88			45			90
PSUs		8			12			9			11
Denominator for diluted calculation		49,223			49,491			49,264			49,373
Net income per share:
Basic	$	0.27		$	0.18		$	0.47		$	0.29
Diluted	$	0.26		$	0.17		$	0.46		$	0.27

The following table sets forth (in thousands) the weighted average number of options to purchase shares of common stock, restricted stock, RSUs and PSUs with either exercise prices or unrecognized compensation cost per share greater than the average market price per share of the Company’s common stock, which were not included in the calculation of diluted per share amounts because the effects would be anti-dilutive.

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Stock options		1,153		14		862		173
Restricted stock, RSUs and PSUs		267		—		122		—
Total		1,420		14		984		173

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Disaggregation of Sales, Geographic Sales and Product Sales

6 Months Ended

Jul. 01, 2022

Segment Reporting [Abstract]

Disaggregation of Sales, Geographic Sales and Product Sales

Note 13 — Disaggregation of Sales, Geographic Sales and Product Sales

In the following tables, sales are disaggregated by category, sales by geographic market and sales by product data.  The following breaks down sales into the following categories (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Non-consignment sales	$	76,444	$	57,368	$	134,013	$	102,785
Consignment sales		4,657		4,999		10,288		10,334
Total net sales	$	81,101	$	62,367	$	144,301	$	113,119

The Company markets and sells its products in over 75 countries and conducts its manufacturing in the United States.  Other than China and Japan, the Company does not conduct business in any country in which its sales exceed 10% of worldwide consolidated net sales. Sales are attributed to countries based on location of customers. The composition of the Company’s net sales to unaffiliated customers was as follows (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Domestic	$	3,872	$	2,704	$	6,502	$	5,044
Foreign:
China		46,150		32,930		74,389		52,573
Japan		10,302		9,283		21,935		18,886
Other(1)		20,777		17,450		41,475		36,616
Total foreign sales		77,229		59,663		137,799		108,075
Total net sales	$	81,101	$	62,367	$	144,301	$	113,119

⁽¹⁾ No other location individually exceeds 10% of the total sales.

100% of the Company’s sales are generated from the ophthalmic surgical product segment and the chief operating decision maker makes operating decisions and allocates resources based upon the consolidated operating results, and therefore the Company operates as one operating segment for financial reporting purposes. The Company’s principal products are implantable Collamer lenses (“ICLs”) used in refractive surgery and intraocular lenses (“IOLs”) used in cataract surgery.  The composition of the Company’s net sales by product line was as follows (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
ICLs	$	77,922	$	59,235	$	136,597	$	105,736
Other product sales:
Cataract IOLs		2,547		3,074		5,449		6,799
Other surgical products		632		58		2,255		584
Total other product sales		3,179		3,132		7,704		7,383
Total net sales	$	81,101	$	62,367	$	144,301	$	113,119

One customer, the Company’s distributor in China, accounted for 57% and 53% of net sales for the three months ended July 1, 2022 and July 2, 2021, respectively, and the same customer accounted for 52% and 46% for the six months ended July 1, 2022 and July 2, 2021, respectively.  As of July 1, 2022 and December 31, 2021, respectively, one customer, the Company’s distributor in China, accounted for 60% and 47% of consolidated trade receivables.

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COVID-19 Developments

6 Months Ended

Jul. 01, 2022

C O V I D19 Developments [Abstract]

COVID-19 Developments

Note 14 — COVID-19 Developments

In December 2019, COVID-19 surfaced and in March 2020, the World Health Organization declared a pandemic related to the rapid spread of COVID-19 around the world.  The impact of the COVID-19 outbreak on the businesses and the economy in the U.S. and the rest of the world is, and is expected to continue to be, uncertain and may continue to be significant as COVID-19 variant strains emerge. The Company’s revenues have been adversely impacted, and the Company experienced a substantial slowdown in sales beginning March 20, 2020 in global geographies characterized as “hot spots” for the COVID-19 virus, including parts of Europe, North America, Asia, the Middle East and India.  In certain of these markets, sales have paused as elective surgeries are discouraged to support COVID-19 related needs.  The Company continues to monitor the commercial and operational impact of new variants of COVID-19.  

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Basis of Presentation and Significant Accounting Policies (Policies)

6 Months Ended

Jul. 01, 2022

Accounting Policies [Abstract]

Basis of Presentation

The Condensed Consolidated Financial Statements of the Company present the financial position, results of operations, and cash flows of STAAR Surgical Company and its wholly owned subsidiaries. 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 31, 2021 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 31, 2021.

The Condensed Consolidated Financial Statements for the three and six months ended July 1, 2022 and July 2 2021, 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 July 1, 2022 and July 2, 2021, 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.

Vendor Concentration

Vendor Concentration

There were no vendors that accounted for over 10% of the Company’s consolidated accounts payable as of July 1, 2022 and December 31, 2021.  There were no vendors that accounted for over 10% of the Company’s consolidated purchases for the three and six months ended July 1, 2022 and July 2, 2021, respectively.

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Inventories (Tables)

6 Months Ended

Jul. 01, 2022

Inventory Disclosure [Abstract]

Schedule of Inventory, Current

Inventories, net are stated at the lower of cost and net realizable value, determined on a first-in, first-out basis and consisted of the following (in thousands):

	July 1, 2022			December 31, 2021
Raw materials and purchased parts	$	5,119		$	3,971
Work in process		3,446			4,031
Finished goods		11,222			10,429
Total inventories, gross		19,787			18,431
Less inventory reserves		(1,698	)		(1,157	)
Total inventories, net	$	18,089		$	17,274

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Prepayments, Deposits, and Other Current Assets (Tables)

6 Months Ended

Jul. 01, 2022

Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]

Schedule Of Prepayments, Deposits, and Other Current Assets

Prepayments, deposits, and other current assets consisted of the following (in thousands):

	July 1, 2022		December 31, 2021
Prepayments and deposits	$	4,397	$	4,047
Prepaid insurance		1,351		2,647
Prepaid marketing		2,244		543
Consumption tax receivable		519		830
Value added tax (VAT) receivable		2,208		2,197
BVG (Swiss Pension) prepayment		1,021		15
Swiss social insurance prepayment		945		—
Other(1)		381		621
Total prepayments, deposits and other current assets	$	13,066	$	10,900

^{(1) No individual item in “other current assets” exceeds 5% of the total prepayments, deposits and other current assets.}

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Property, Plant and Equipment (Tables)

6 Months Ended

Jul. 01, 2022

Property Plant And Equipment [Abstract]

Property, Plant and Equipment, Net

Property, plant and equipment, net consisted of the following (in thousands):

	July 1, 2022			December 31, 2021
Machinery and equipment	$	26,611		$	24,127
Computer equipment and software		8,977			8,807
Furniture and fixtures		4,478			3,658
Leasehold improvements		12,081			11,821
Construction in process		26,828			21,827
Total property, plant and equipment, gross		78,975			70,240
Less accumulated depreciation		(36,162	)		(34,328	)
Total property, plant and equipment, net	$	42,813		$	35,912

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Intangible Assets (Tables)

6 Months Ended

Jul. 01, 2022

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

Intangible assets, net consisted of the following (in thousands):

	July 1, 2022							December 31, 2021
Long-lived amortized intangible assets	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Patents and licenses	$	9,227	$	(9,043	)	$	184	$	9,315	$	(9,097	)	$	218

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Other Current Liabilities (Tables)

6 Months Ended

Jul. 01, 2022

Other Liabilities Disclosure [Abstract]

Schedule of Other Current Liabilities

Other current liabilities consisted of the following (in thousands):

	July 1, 2022		December 31, 2021
Accrued salaries and wages	$	9,305	$	12,030
Accrued bonuses		2,754		8,091
Income taxes payable		4,074		2,248
Marketing obligations		2,481		2,243
Other(1)		5,760		7,265
Total other current liabilities	$	24,374	$	31,877

⁽¹⁾ No individual item in “Other” exceeds 5% of the other current liabilities.

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Leases (Tables)

6 Months Ended

Jul. 01, 2022

Leases [Abstract]

Supplemental Balance Sheet Information Related to Finance Leases

Supplemental balance sheet information related to finance leases consisted of the following (dollars in thousands):

	July 1, 2022			December 31, 2021
Machinery and equipment	$	30		$	35
Computer equipment and software		17			506
Furniture and fixtures		475			475
Finance lease right-of-use assets, gross		522			1,016
Less accumulated depreciation		(102	)		(510	)
Finance lease right-of-use assets, net	$	420		$	506
Total finance lease liability	$	461		$	509
Weighted-average remaining lease term (in years)		2.7			3.2
Weighted-average discount rate		4.09	%		4.02	%

Supplemental Cash Flow Information Related to Finance Leases

Supplemental cash flow information related to finance leases consisted of the following (dollars in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Amortization of finance lease right-of-use asset	$	39	$	20	$	82	$	56
Interest on finance lease liabilities		5		1		8		5
Cash paid for amounts included in the measurement of finance lease liabilities:
Operating cash flows		5		1		8		5
Financing cash flows		27		43		45		278

Supplemental Balance Sheet Information Related to Operating Leases

Supplemental balance sheet information related to operating leases consisted of the following (dollars in thousands):

	July 1, 2022			December 31, 2021
Machinery and equipment	$	782		$	760
Computer equipment and software		446			472
Real property		34,108			34,426
Operating lease right-of-use assets, gross		35,336			35,658
Less accumulated depreciation		(4,973	)		(4,348	)
Operating lease right-of-use assets, net	$	30,363		$	31,310
Total operating lease liability	$	30,588		$	31,552
Weighted-average remaining lease term (in years)		7.4			7.8
Weighted-average discount rate		3.66	%		3.56	%

Supplemental Cash Flow Information Related to Operating Leases

Supplemental cash flow information related to operating leases was as follows (dollars in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Operating lease cost	$	1,166	$	857	$	2,304	$	1,640
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows		1,034		801		1,966		1,586
Right-of-use assets obtained in exchange for new operating lease liabilities		2,081		3,356		2,756		4,007

Schedule of Maturities of Lease Liabilities under Operating and Finance Leases Having Initial or Remaining Non-Cancelable Lease Terms More Than One Year

Maturities of lease liabilities under operating and finance leases having initial or remaining non-cancelable lease terms more than one year as of July 1, 2022 is as follows (in thousands):

As of July 1, 2022 12 Months Ended	Operating Leases			Finance Leases
June 2023	$	5,340		$	181
June 2024		5,392			179
June 2025		4,624			128
June 2026		3,700			—
June 2027		3,655			—
Thereafter		12,613			—
Total future minimum lease payments	$	35,324		$	488
Less amounts representing interest		(4,736	)		(27	)
Present value of future minimum lease payments	$	30,588		$	461
Current lease obligations		(3,708	)		(166	)
Long-term lease obligations	$	26,880		$	295

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Income Taxes (Tables)

6 Months Ended

Jul. 01, 2022

Income Tax Disclosure [Abstract]

Schedule of Income Tax Provision

The Company recorded an income tax provision as follows (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Provision for income taxes	$	2,431	$	2,148	$	4,356	$	3,395

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Defined Benefit Pension Plans (Tables)

6 Months Ended

Jul. 01, 2022

Compensation And Retirement Disclosure [Abstract]

Schedule of Net Benefit Costs

The Company has defined benefit plans covering employees of its Switzerland and Japan operations.  The following table summarizes the components of net periodic pension cost recorded for the Company’s defined benefit pension plans (in thousands):

	Three Months Ended						Six Months Ended
	July 1, 2022			July 2, 2021			July 1, 2022			July 2, 2021
Service cost(1)	$	309		$	329		$	635		$	677
Interest cost(2)		21			14			41			28
Expected return on plan assets(2)		(123	)		(101	)		(241	)		(200	)
Prior service credit(2),(3)		(46	)		(11	)		(91	)		(22	)
Actuarial loss recognized in current period(2),(3)		79			131			176			262
Net periodic pension cost	$	240		$	362		$	520		$	745

⁽¹⁾ Recognized in selling general and administrative expenses on the Condensed Consolidated Statements of Income.

⁽²⁾ Recognized in other expense, net on the Condensed Consolidated Statements of Income.

⁽³⁾ Amounts reclassified from accumulated other comprehensive income (loss).

Schedule of Defined Benefit Plans Disclosures

The Company currently is not required to and does not make contributions to its Japan pension plan.  The Company’s contributions to its Swiss pension plan are as follows (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Employer contribution	$	220	$	204	$	436	$	397

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Stockholders' Equity (Tables)

6 Months Ended

Jul. 01, 2022

Stockholders Equity Note [Abstract]

Schedule of Compensation Cost

The cost that has been charged against income for stock-based compensation is set forth below (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Employee stock options	$	2,457	$	2,784	$	4,784	$	5,256
Restricted stock		442		232		551		398
Restricted stock units		1,231		811		1,993		1,348
Performance stock units		1,310		108		1,692		201
Nonemployee stock options		314		57		628		119
Total stock-based compensation expense	$	5,754	$	3,992	$	9,648	$	7,322

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

The Company recorded stock-based compensation costs in the following categories (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Cost of sales	$	106	$	54	$	176	$	89
General and administrative		2,806		1,815		4,587		3,254
Selling and marketing		1,324		953		2,213		1,786
Research and development		1,518		1,170		2,672		2,193
Total stock-based compensation expense, net		5,754		3,992		9,648		7,322
Amounts capitalized as part of inventory		652		390		1,018		699
Total stock-based compensation expense, gross	$	6,406	$	4,382	$	10,666	$	8,021

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The risk-free rate is based on the U.S. Treasury yield curve corresponding to the expected term at the time of the grant.

	Three Months Ended						Six Months Ended
	July 1, 2022			July 2, 2021			July 1, 2022			July 2, 2021
Expected dividend yield		0	%		0	%		0	%		0	%
Expected volatility		54	%		53	%		54	%		53	%
Risk-free interest rate		3.27	%		0.83	%		1.83	%		0.84	%
Expected term (in years)		5.10			5.38			5.10			5.38

Schedule of Share-based Compensation, Stock Options, Activity

A summary of stock option activity under the Plan for six months ended July 1, 2022 is presented below:

	Stock Options (in 000’s)			Minimum Exercise Price		Maximum Exercise Price
Outstanding at December 31, 2021		2,435
Granted		421
Exercised		(251	)
Forfeited or expired		(16	)
Outstanding at July 1, 2022		2,589		$	5.34	$	154.96
Exercisable at July 1, 2022		1,873

Schedule of Share-based Compensation, Restricted Stock, RSUs and PSUs Activity

A summary of restricted stock, RSUs and PSUs activity under the Plan for the six months ended July 1, 2022 is presented below (shares in thousands):

	Restricted Stock			RSUs			PSUs
Unvested at December 31, 2021		3			131			10
Granted		6			113			113
Vested		(5	)		(45	)		(5	)
Unvested at July 1, 2022		4			199			118

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Basic and Diluted Net Income Per Share (Tables)

6 Months Ended

Jul. 01, 2022

Earnings Per Share [Abstract]

Summary of Computation of Basic and Diluted Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share (in thousands except per share amounts):

	Three Months Ended						Six Months Ended
	July 1, 2022			July 2, 2021			July 1, 2022			July 2, 2021
Numerator:
Net income	$	13,038		$	8,567		$	22,640		$	13,559
Denominator:
Weighted average common shares:
Common shares outstanding		47,893			47,102			47,826			46,861
Less:  Unvested restricted stock		(4	)		(3	)		(4	)		(3	)
Denominator for basic calculation		47,889			47,099			47,822			46,858
Weighted average effects of potentially diluted common stock:
Stock options		1,299			2,283			1,386			2,405
Unvested restricted stock		3			9			2			9
RSUs		24			88			45			90
PSUs		8			12			9			11
Denominator for diluted calculation		49,223			49,491			49,264			49,373
Net income per share:
Basic	$	0.27		$	0.18		$	0.47		$	0.29
Diluted	$	0.26		$	0.17		$	0.46		$	0.27

Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Stock options		1,153		14		862		173
Restricted stock, RSUs and PSUs		267		—		122		—
Total		1,420		14		984		173

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Disaggregation of Sales, Geographic Sales and Product Sales (Tables)

6 Months Ended

Jul. 01, 2022

Segment Reporting [Abstract]

Disaggregation of Sales

In the following tables, sales are disaggregated by category, sales by geographic market and sales by product data.  The following breaks down sales into the following categories (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Non-consignment sales	$	76,444	$	57,368	$	134,013	$	102,785
Consignment sales		4,657		4,999		10,288		10,334
Total net sales	$	81,101	$	62,367	$	144,301	$	113,119

Net Sales by Geographic Areas

The composition of the Company’s net sales to unaffiliated customers was as follows (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Domestic	$	3,872	$	2,704	$	6,502	$	5,044
Foreign:
China		46,150		32,930		74,389		52,573
Japan		10,302		9,283		21,935		18,886
Other(1)		20,777		17,450		41,475		36,616
Total foreign sales		77,229		59,663		137,799		108,075
Total net sales	$	81,101	$	62,367	$	144,301	$	113,119

⁽¹⁾ No other location individually exceeds 10% of the total sales.

Net Sales by Products and Services

The composition of the Company’s net sales by product line was as follows (in thousands):

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
ICLs	$	77,922	$	59,235	$	136,597	$	105,736
Other product sales:
Cataract IOLs		2,547		3,074		5,449		6,799
Other surgical products		632		58		2,255		584
Total other product sales		3,179		3,132		7,704		7,383
Total net sales	$	81,101	$	62,367	$	144,301	$	113,119

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Basis of Presentation and Significant Accounting Policies - Additional Information (Details) - Vendor Concentration Risk - Maximum	3 Months Ended			6 Months Ended
	Jul. 01, 2022	Dec. 31, 2021	Jul. 02, 2021	Jul. 01, 2022	Jul. 02, 2021
Consolidated Accounts Payable
Organization And Description Of Business And Accounting Policies [Line Items]
Concentration risk, percentage		10.00%		10.00%
Consolidated Purchases
Organization And Description Of Business And Accounting Policies [Line Items]
Concentration risk, percentage	10.00%		10.00%	10.00%	10.00%

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Inventories - Schedule of Inventory, Current (Details) - USD ($) $ in Thousands	Jul. 01, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials and purchased parts	$ 5,119	$ 3,971
Work in process	3,446	4,031
Finished goods	11,222	10,429
Total inventories, gross	19,787	18,431
Less inventory reserves	(1,698)	(1,157)
Total inventories, net	$ 18,089	$ 17,274

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Prepayments, Deposits, and Other Current Assets - Schedule Of Prepayments, Deposits, and Other Current Assets (Details) - USD ($) $ in Thousands		Jul. 01, 2022	Dec. 31, 2021
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]
Prepayments and deposits		$ 4,397	$ 4,047
Prepaid insurance		1,351	2,647
Prepaid marketing		2,244	543
Consumption tax receivable		519	830
Value added tax (VAT) receivable		2,208	2,197
BVG (Swiss Pension) prepayment		1,021	15
Swiss social insurance prepayment		945
Other	[1]	381	621
Total prepayments, deposits and other current assets		$ 13,066	$ 10,900

[1] No individual item in “other current assets” exceeds 5% of the total prepayments, deposits and other current assets.

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Prepayments, Deposits, and Other Current Assets - Schedule Of Prepayments, Deposits, and Other Current Assets (Parenthetical) (Details)	Jul. 01, 2022	Dec. 31, 2021
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]
Percent of prepayments deposits and other current assets included in other current assets	5.00%	5.00%

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Property, Plant and Equipment - Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands	Jul. 01, 2022	Dec. 31, 2021
Property Plant And Equipment [Abstract]
Machinery and equipment	$ 26,611	$ 24,127
Computer equipment and software	8,977	8,807
Furniture and fixtures	4,478	3,658
Leasehold improvements	12,081	11,821
Construction in process	26,828	21,827
Total property, plant and equipment, gross	78,975	70,240
Less accumulated depreciation	(36,162)	(34,328)
Total property, plant and equipment, net	$ 42,813	$ 35,912

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Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	Jul. 01, 2022	Dec. 31, 2021
Long-lived intangible assets
Long-lived intangible assets, Net	$ 184	$ 218
Patents and licenses
Long-lived intangible assets
Long-lived intangible assets, Gross Carrying Amount	9,227	9,315
Long-lived intangible assets, Accumulated Amortization	(9,043)	(9,097)
Long-lived intangible assets, Net	$ 184	$ 218

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Other Current Liabilities - Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands		Jul. 01, 2022	Dec. 31, 2021
Other Liabilities Disclosure [Abstract]
Accrued salaries and wages		$ 9,305	$ 12,030
Accrued bonuses		2,754	8,091
Income taxes payable		4,074	2,248
Marketing obligations		2,481	2,243
Other	[1]	5,760	7,265
Total other current liabilities		$ 24,374	$ 31,877

[1] No individual item in “Other” exceeds 5% of the other current liabilities

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Other Current Liabilities - Schedule of Other Current Liabilities (Parenthetical) (Details)	Jul. 01, 2022	Dec. 31, 2021
Other Liabilities Disclosure [Abstract]
Percent of Other Current Liabilities Included in Other	5.00%	5.00%

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Leases - Additional Information (Details)	Jul. 01, 2022
Minimum
Lessee Lease Description [Line Items]
Finance lease, term of contract	2 years
Operating lease, term of contract	2 years
Maximum
Lessee Lease Description [Line Items]
Finance lease, term of contract	5 years
Operating lease, term of contract	10 years

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Leases - Supplemental Balance Sheet Information Related to Finance Leases (Details) - USD ($) $ in Thousands	Jul. 01, 2022	Dec. 31, 2021
Lessee Lease Description [Line Items]
Finance lease right-of-use assets, gross	$ 522	$ 1,016
Less accumulated depreciation	(102)	(510)
Finance lease right-of-use assets, net	420	506
Total finance lease liability	$ 461	$ 509
Weighted-average remaining lease term (in years)	2 years 8 months 12 days	3 years 2 months 12 days
Weighted-average discount rate	4.09%	4.02%
Machinery and Equipment
Lessee Lease Description [Line Items]
Finance lease right-of-use assets, gross	$ 30	$ 35
Computer Equipment and Software
Lessee Lease Description [Line Items]
Finance lease right-of-use assets, gross	17	506
Furniture and Fixtures
Lessee Lease Description [Line Items]
Finance lease right-of-use assets, gross	$ 475	$ 475

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Leases - Supplemental Cash Flow Information Related to Finance Leases (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2022	Jul. 02, 2021	Jul. 01, 2022	Jul. 02, 2021
Leases [Abstract]
Amortization of finance lease right-of-use asset	$ 39	$ 20	$ 82	$ 56
Interest on finance lease liabilities	5	1	8	5
Cash paid for amounts included in the measurement of finance lease liabilities:
Operating cash flows	5	1	8	5
Financing cash flows	$ 27	$ 43	$ 45	$ 278

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Leases - Supplemental Balance Sheet Information Related to Operating Leases (Details) - USD ($) $ in Thousands	Jul. 01, 2022	Dec. 31, 2021
Lessee Lease Description [Line Items]
Operating lease right-of-use assets, gross	$ 35,336	$ 35,658
Less accumulated depreciation	(4,973)	(4,348)
Operating lease right-of-use assets, net	30,363	31,310
Total operating lease liability	$ 30,588	$ 31,552
Weighted-average remaining lease term (in years)	7 years 4 months 24 days	7 years 9 months 18 days
Weighted-average discount rate	3.66%	3.56%
Machinery and Equipment
Lessee Lease Description [Line Items]
Operating lease right-of-use assets, gross	$ 782	$ 760
Computer Equipment and Software
Lessee Lease Description [Line Items]
Operating lease right-of-use assets, gross	446	472
Real Property
Lessee Lease Description [Line Items]
Operating lease right-of-use assets, gross	$ 34,108	$ 34,426

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Leases - Supplemental Cash Flow Information Related to Operating Leases (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2022	Jul. 02, 2021	Jul. 01, 2022	Jul. 02, 2021
Leases [Abstract]
Operating lease cost	$ 1,166	$ 857	$ 2,304	$ 1,640
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows	1,034	801	1,966	1,586
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 2,081	$ 3,356	$ 2,756	$ 4,007

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Leases - Schedule of Maturities of Lease Liabilities under Operating and Finance Leases Having Initial or Remaining Non-Cancelable Lease Terms More Than One Year (Details) - USD ($) $ in Thousands	Jul. 01, 2022	Dec. 31, 2021
Operating Lease Liabilities, Payments, Due, Rolling Maturity [Abstract]
June 2023	$ 5,340
June 2024	5,392
June 2025	4,624
June 2026	3,700
June 2027	3,655
Thereafter	12,613
Total future minimum lease payments	35,324
Less amounts representing interest	(4,736)
Present value of future minimum lease payments	30,588	$ 31,552
Current lease obligations	(3,708)	(3,283)
Long-term lease obligations	26,880	28,269
Finance Lease Liabilities, Payments, Rolling Maturity [Abstract]
June 2023	181
June 2024	179
June 2025	128
Total future minimum lease payments	488
Less amounts representing interest	(27)
Present value of future minimum lease payments	461	509
Current lease obligations	(166)	(127)
Long-term lease obligations	$ 295	$ 382

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Income Taxes - Schedule of Income Tax Provision (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2022	Jul. 02, 2021	Jul. 01, 2022	Jul. 02, 2021
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 2,431	$ 2,148	$ 4,356	$ 3,395

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Income Taxes - Additional Information (Details)	3 Months Ended		6 Months Ended
	Jul. 01, 2022	Jul. 02, 2021	Jul. 01, 2022	Jul. 02, 2021
Income Tax Disclosure [Abstract]
Effective tax rate	15.70%	20.00%	16.10%	20.00%
Effective tax rates differ from U.S. federal statutory rate	21.00%	21.00%	21.00%	21.00%

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Defined Benefit Pension Plans - Schedule of Net Benefit Costs (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jul. 01, 2022	Jul. 02, 2021	Jul. 01, 2022	Jul. 02, 2021
Compensation And Retirement Disclosure [Abstract]
Service cost	[1]	$ 309	$ 329	$ 635	$ 677
Interest cost	[2]	21	14	41	28
Expected return on plan assets	[2]	(123)	(101)	(241)	(200)
Prior service credit	[2],[3]	(46)	(11)	(91)	(22)
Actuarial loss recognized in current period	[2],[3]	79	131	176	262
Net periodic pension cost		$ 240	$ 362	$ 520	$ 745

[1] Recognized in selling general and administrative expenses on the Condensed Consolidated Statements of Income.

[2] Recognized in other expense, net on the Condensed Consolidated Statements of Income.

[3] Amounts reclassified from accumulated other comprehensive income (loss).

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Defined Benefit Pension Plans - Schedule of Defined Benefit Plans Disclosures (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2022	Jul. 02, 2021	Jul. 01, 2022	Jul. 02, 2021
Swiss pension plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Benefit Plan, Plan Assets, Contributions by Employer	$ 220	$ 204	$ 436	$ 397

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Stockholders' Equity - Schedule of Compensation Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2022	Jul. 02, 2021	Jul. 01, 2022	Jul. 02, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 5,754	$ 3,992	$ 9,648	$ 7,322
Employee Stock Options
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	2,457	2,784	4,784	5,256
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	442	232	551	398
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	1,231	811	1,993	1,348
Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	1,310	108	1,692	201
Non Employee Stock Options
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 314	$ 57	$ 628	$ 119

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Stockholders' Equity - Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2022	Jul. 02, 2021	Jul. 01, 2022	Jul. 02, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense, net	$ 5,754	$ 3,992	$ 9,648	$ 7,322
Amounts capitalized as part of inventory	652	390	1,018	699
Total stock-based compensation expense, gross	6,406	4,382	10,666	8,021
Cost of Sales
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense, net	106	54	176	89
General and Administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense, net	2,806	1,815	4,587	3,254
Selling and Marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense, net	1,324	953	2,213	1,786
Research and Development Expense
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense, net	$ 1,518	$ 1,170	$ 2,672	$ 2,193

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Stockholders' Equity - Additional Information (Details)	6 Months Ended
	Jul. 01, 2022 shares
Stockholders Equity Note [Line Items]
Estimated forfeiture rate	5.00%
Omnibus Plan
Stockholders Equity Note [Line Items]
Share-based compensation arrangement by share-based payment award, expiration period	10 years
Omnibus Plan | Employee Stock Option
Stockholders Equity Note [Line Items]
Share-based compensation arrangement by share-based payment award, vesting period	3 years
Omnibus Plan | Restricted Stock
Stockholders Equity Note [Line Items]
Share-based compensation arrangement by share-based payment award, number of shares available for grant	2,156,185
Omnibus Plan | Restricted Stock | Minimum
Stockholders Equity Note [Line Items]
Share-based compensation arrangement by share-based payment award, vesting period	1 year
Omnibus Plan | Restricted Stock | Maximum
Stockholders Equity Note [Line Items]
Share-based compensation arrangement by share-based payment award, vesting period	3 years

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Stockholders' Equity - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details)	3 Months Ended		6 Months Ended
	Jul. 01, 2022	Jul. 02, 2021	Jul. 01, 2022	Jul. 02, 2021
Stockholders Equity Note [Abstract]
Expected dividend yield	0.00%	0.00%	0.00%	0.00%
Expected volatility	54.00%	53.00%	54.00%	53.00%
Risk-free interest rate	3.27%	0.83%	1.83%	0.84%
Expected term (in years)	5 years 1 month 6 days	5 years 4 months 17 days	5 years 1 month 6 days	5 years 4 months 17 days

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Stockholders' Equity - Schedule of Share-based Compensation, Stock Options, Activity (Details) - $ / shares shares in Thousands	6 Months Ended
	Jul. 01, 2022
Stockholders Equity Note [Abstract]
Options, Outstanding at December 31, 2021	2,435
Options, Granted, Shares	421
Options, Exercised, Shares	(251)
Options, Forfeited or expired, Shares	(16)
Options, Outstanding at April 1, 2022	2,589
Options, Exercisable at April 1, 2022	1,873
Minimum Exercise Price	$ 5.34
Maximum Exercise Price	$ 154.96

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Stockholders' Equity - Schedule of Share-based Compensation, Restricted Stock, RSUs and PSUs Activity (Details) shares in Thousands	6 Months Ended
	Jul. 01, 2022 shares
Restricted Stock
Schedule of Restricted Stock Restricted Stock Units and Performance Stock Units [Line Items]
Unvested at December 31, 2021	3
Granted	6
Vested	(5)
Unvested at July 1, 2022	4
RSUs
Schedule of Restricted Stock Restricted Stock Units and Performance Stock Units [Line Items]
Unvested at December 31, 2021	131
Granted	113
Vested	(45)
Unvested at July 1, 2022	199
PSUs
Schedule of Restricted Stock Restricted Stock Units and Performance Stock Units [Line Items]
Unvested at December 31, 2021	10
Granted	113
Vested	(5)
Unvested at July 1, 2022	118

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Basic and Diluted Net Income Per Share - Summary of Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2022	Jul. 02, 2021	Jul. 01, 2022	Jul. 02, 2021
Numerator:
Net income	$ 13,038	$ 8,567	$ 22,640	$ 13,559
Weighted average common shares:
Common shares outstanding	47,893	47,102	47,826	46,861
Less: Unvested restricted stock	(4)	(3)	(4)	(3)
Denominator for basic calculation	47,889	47,099	47,822	46,858
Weighted average effects of potentially diluted common stock:
Diluted	49,223	49,491	49,264	49,373
Net income per share:
Basic	$ 0.27	$ 0.18	$ 0.47	$ 0.29
Diluted	$ 0.26	$ 0.17	$ 0.46	$ 0.27
Employee Stock Options
Weighted average effects of potentially diluted common stock:
Diluted	1,299	2,283	1,386	2,405
Unvested Restricted Stock
Weighted average effects of potentially diluted common stock:
Diluted	3	9	2	9
RSUs
Weighted average effects of potentially diluted common stock:
Diluted	24	88	45	90
Performance Stock Units
Weighted average effects of potentially diluted common stock:
Diluted	8	12	9	11

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Basic and Diluted Net Income Per Share - Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2022	Jul. 02, 2021	Jul. 01, 2022	Jul. 02, 2021
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per share, Amount	1,420	14	984	173
Employee Stock Option
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per share, Amount	1,153	14	862	173
Restricted stock, RSUs and PSUs
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per share, Amount	267		122

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Disaggregation of Sales, Geographic Sales and Product Sales - Disaggregation of Sales (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2022	Jul. 02, 2021	Jul. 01, 2022	Jul. 02, 2021
Total net sales	$ 81,101	$ 62,367	$ 144,301	$ 113,119
Non Consignment Sales [Member]
Total net sales	76,444	57,368	134,013	102,785
Consignment Sales [Member]
Total net sales	$ 4,657	$ 4,999	$ 10,288	$ 10,334

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Disaggregation of Sales, Geographic Sales and Product Sales - Additional Information (Details)	3 Months Ended			6 Months Ended
	Jul. 01, 2022 Country	Dec. 31, 2021	Jul. 02, 2021	Jul. 01, 2022 Country Segment	Jul. 02, 2021
Geographic and Product Data [Line Items]
Number of countries in which Company operates | Country	75			75
Number of operating segments | Segment				1
Sales Revenue, Net | Geographic Concentration Risk [Member] | Other than China and Japan [Member] | Maximum
Geographic and Product Data [Line Items]
Concentration risk, percentage				10.00%
Sales Revenue, Net | Geographic Concentration Risk [Member] | China [Member] | Customer One [Member]
Geographic and Product Data [Line Items]
Concentration risk, percentage	57.00%		53.00%	52.00%	46.00%
Sales Revenue, Net | Product Concentration Risk [Member] | Ophthalmic Surgical Product [Member]
Geographic and Product Data [Line Items]
Concentration risk, percentage				100.00%
Accounts Receivable [Member] | Geographic Concentration Risk [Member] | China [Member] | Customer One [Member]
Geographic and Product Data [Line Items]
Concentration risk, percentage		47.00%		60.00%

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Disaggregation of Sales, Geographic Sales and Product Sales - Net Sales by Geographic Areas (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jul. 01, 2022	Jul. 02, 2021	Jul. 01, 2022	Jul. 02, 2021
Geographic And Sales [Line Items]
Total net sales		$ 81,101	$ 62,367	$ 144,301	$ 113,119
Geographic Distribution, Domestic [Member]
Geographic And Sales [Line Items]
Total net sales		3,872	2,704	6,502	5,044
Geographic Distribution, Foreign [Member]
Geographic And Sales [Line Items]
Total net sales		77,229	59,663	137,799	108,075
Geographic Distribution, Foreign [Member] | China [Member]
Geographic And Sales [Line Items]
Total net sales		46,150	32,930	74,389	52,573
Geographic Distribution, Foreign [Member] | JAPAN
Geographic And Sales [Line Items]
Total net sales		10,302	9,283	21,935	18,886
Geographic Distribution, Foreign [Member] | Other [Member]
Geographic And Sales [Line Items]
Total net sales	[1]	$ 20,777	$ 17,450	$ 41,475	$ 36,616

[1] No other location individually exceeds 10% of the total sales.

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Disaggregation of Sales, Geographic Sales and Product Sales - Net Sales by Products and Services (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2022	Jul. 02, 2021	Jul. 01, 2022	Jul. 02, 2021
Product Information [Line Items]
Total other product sales	$ 3,179	$ 3,132	$ 7,704	$ 7,383
Total net sales	81,101	62,367	144,301	113,119
ICLs [Member]
Product Information [Line Items]
Revenue from contract with customer, excluding assessed tax	77,922	59,235	136,597	105,736
Cataract IOLs [Member]
Product Information [Line Items]
Total other product sales	2,547	3,074	5,449	6,799
Other surgical products [Member]
Product Information [Line Items]
Total other product sales	$ 632	$ 58	$ 2,255	$ 584