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STAAR Surgical Company STAA reported breakeven (including stock-based compensation) in the fourth quarter of 2015, which was narrower than the Zacks Consensus Estimate of a loss of 2 cents.

The company reported adjusted earnings (excluding stock based compensation) of a penny in the fourth quarter of 2015. STAAR surgical had reported a loss of 3 cents in the year-ago quarter.

Total sales in fourth-quarter 2015 rose 25.9% (27% on the basis of constant currency) year over year to $20.9 million primarily on the back of improved sales across different segments.

Full-year sales of STAAR Surgical increased 3% (up 6% on a constant currency basis) from the prior year to $77.1 million.

Segment Details  

STAAR Surgical is operates through two primary segments – Core and Non-Core. The Core segment is further divided into Implantable Collamer Lens (ICL) and Intraocular Lens (IOL).

ICL sales soared 57.3% year over year to $14.1 million primarily on the success of CentraFLOW ICL in approved markets along with double-digit growth of Spheric and Toric versions of the lens in different regions. ICL sales in Asia Pacific registered a whopping 118% rise on a year-over-year basis to $8 million.

EMEA ICL sales increased 19% from the year-ago quarter to $4.9 million whereas North American ICL sales climbed 5% year over year to $1.3 million. ICL sales also increased in Germany, China, Korea and other markets.

Although sales of ICL segment increased, Intraocular Lens (IOL) sales declined 11.3% to $4.9 million. The decrease was largely because of the hold on sales in Germany owing to distributor to direct conversion, a planned phase out of sales in China and declining sales in the U.S. The weakness of euro and yen against the U.S. dollar was another reason behind the decline.

However, the decline in IOL sales was somewhat offset by a 7% and 21% growth in Japan and France, respectively.

Sales in the non-core market also declined 11.8% year over year to $1.8 million.

Margin Details

Gross margin in the fourth quarter of 2015 was 70.3% of total sales compared to 56.7% in fourth-quarter 2014. This was primarily due to favorable product mix, raised prices and improved manufacturing performance.

In fourth-quarter 2015, operating expenses increased 12% year over year to $14.7 million primarily due to increased expenses for quality system improvement, increased selling cost in Germany and higher headcount cost.

General and Administrative expenses increased 15.3% year over year to $4.9 million primarily because of bonuses. This was partially offset by lower recruiting and consulting costs.

Research and Development expenses increased 22.1% year over year to $3.9 million owing to increased validation and project related spending. Selling and Marketing expenses also advanced 3.9% year over year to $5.9 million.

Meanwhile, STAAR Surgical faced an operating loss of $6.4 million in the quarter under review primarily owing to increased operating expenses.

Zacks Rank & Other Key Picks

STAAR Surgical carries a Zacks Rank #2 (Buy).

Other favorably ranked stocks in the same space include Derma Sciences DSCI, The Cooper Companies COO and Henry Schein HSIC. While Derma Sciences sports a Zacks Rank #1 (Strong Buy), the other two stocks carry a Zacks Rank #2.