STAA - Earnings call transcript Q3 2024

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Operator

Greetings, and welcome to the STAAR Surgical Third Quarter 2024 Earnings Webcast.

As a reminder, this event is being recorded today, Wednesday, October 30, 2024. [Operator Instructions] I would now like to introduce your host, Brian Moore, Vice President of Investor Relations with STAAR Surgical. Please go ahead.

Brian Moore

Thank you, operator. thank results joining ended for XXXX. and the to September everyone, financial company's the afternoon, you us for discuss XX, Good third quarter speakers X:XX release of Board, third quarter of Patrick Today's issued Chief our Frinzi, just was CEO; after Williams, press and and the Officer. The Financial results Tom are p.m. President Chair Eastern Time.

have copies of at presentation Relations Investor the STAAR's posted today's website earnings We section investors.staar.com. to earnings release of and

implied this those actual a cause during date company's will Before any forward-looking to results could These includes based a release analysis or and on safe with that described associated and statements that forward-looking harbor important historical materially are these today's let in to from well as the about the beliefs statements. The statements. as we caution include the in Except fact me you call press We assumes comments plans, begin, and forward-looking uncertainties the required risks remind forward-looking risks do to SEC. statements expressed statement this obligation are quickly and with company STAAR's that filings projections, STAAR actual these by future of law, statements This does statement public numerous to statement differ update reflect is uncertainties call conference events not subject intend the no to by are or prospects. as you and periodic outcomes and that statement. is so. judgment such forward-looking not remarks of expectations, as of

adjusted discuss adjusted certain and in call including press EBITDA non-GAAP and per measures, financial share. on we release, EBITDA addition, this In the

to included in provide and Definitions today's release. GAAP sales press also currency. constant We are in data reconciliations

a For brevity, comparisons period. be all specified, today's basis on on unless the will versus year-over-year relevant call otherwise

then re-queue questions your publishing your with prepared our unmated, remarks, ups. questions line initial analysts, when X to follow analysts. will webcast ask this Publishing is we from Following open please any

we for Accordingly, our with in to releases, addition website use website as like I disclosures under and our to would information public press of and Relations in and with filings SEC a our complying disclosure following monitor included calls Such Investor intend to the our obligations means nonpublic section. investors on be FD. conference Finally, our will disclosing material investor Frinzi. that, over Tom presentation turn website Tom? should webcasts. And now to Regulation the

Thomas G. Frinzi

that good of we against and particularly Brian, you, afternoon, growth sales third million net of a Thank macroeconomic the softened achieved environment $XX.X sales the In in in second quarter, and double-digit China. half quarter, everyone. the

the lenses, reflect the gains adoption programs, business. results on global our our customer-focused diversity share in the of ICL and EVO our Our of investments market commercial and returns positive global initiatives increased

to maintaining are net approximately we XXXX, sales outlook and year fiscal continue million. million of $XXX For anticipate financial our to $XXX

quarter, Experience California During celebrated third EVO of our grand the headquarters. opening new we Forest, Southern Center the at Lake our ICL

environment this care patient XXx practice previous technology for as a and increase employees, our facilitate surgeons, efficiencies, approximately for capacity goal the new includes center and for ICL learning center care of to help workstations STAAR our nearly state-of-the-art XX Importantly, adoption. enhance and center. Designed health the staff cutting-edge is individuals,

camp XXnd Japan, of capabilities leading in Highway optometrists attended key key for October Barcelona, from programs group dozen excellence. Earlier training programs, patient acquisition of ESCRS, at by attended the to year-end, at this trained center our practice the surgeons from offering for surgeries ICL sites. In a Surgeons, least employed live summit boot size Cataract case the Society Refractive and U.S. XX and the in be will in getting selection within meeting program a By the with U.S. as new management, lens of preoperative a of XX a number teams launch Canada, We from newly surgeons surgeons of alone, hosted a and European Congress our and customers. we Spain, education comprehensive stream around Annual a started quarter, and X we including approximately will development, world.

by we as have diopters advance education, ICL increased of confidence understanding than that surgeons XXXX number direct view to We XX of the find and the presentations X above. This papers to are relating and EVO is were encouraged that even to for the training that ICL made surgeon more minus they a choice the technology, and ICL more and of presented a reflection pleased throughout shared our customers. investments

diopter ICL are that surgeons advance market. from addressable among preferred lower total our we choice our We especially strategies positive as this to confident position feedback will patients, expand the as help

Now third now fast on strategy. part growth was lane growing XX quarter, XX STAAR much customers average U.S. more market to sales of mix XX% XX% lane X their significantly lane XX% market, region. in as the of our agreement. We have U.S. commercial generated In signed and the year turning the quarter, quarter. we customers, the Americas, additional fast Highway commit the our performance first year-over-year. we refractive The agreements outpaced in year-over-year. anticipated fast procedure down of of we these XX% by the In third the in U.S. refractive sales than challenging

one sales driven the XXXX, least delivered generated quarter XX% East markets. growth at lane third sales and sales belt EMEA, we European the ICL In by X the quarter, with growth. the of quarter of full their Middle fast distributor XX% primarily customers in For under

in we EMEA continue investments our in positive. in largest region We ICL of from region our third benefit unit our year, are to will up procedures growth relative growth APAC, were market for this outlook the important market. In X% initial particular, for to and believe in sales and refractive energized outperformance by the our was the we sales China of quarter. world generated sales, largest the X% and this

the in macroeconomic climate in earnings but China strong, declined August. QX started our season high the following However, report

through unit market but and market, sales we tapered QX. the early We growth deliver in continue certainly key this quarter momentum in to move the the we saw that as outpace and

Japan. to Turning

sales growth We gain of to share continue XX%. with

Our Japan growth a only region. In implant team, update we unit not last of third growth support I on and first the to you the Korea, sales quarters, financial growth XX quarter, discusses from Patrick? Patrick lenses is key South of the review but which South to has results. boosted the by receive testament to double-digit leaders ICL-only our we the continue X,XXX our call is track outlook. Patrick over business in we talent Korea's additional XX% year. I the in the on generated believe generated would in to opinion this initiatives to now strength After our turn like which to clinic, over will the financials, of XX

Patrick Williams

decrease products. sales year compared $X.X the Tom, QX or prior currency XX% million and attributable $XX.X for XXXX Total $X net This and year afternoon, also net quarter. million million, QX up were in you, million, to increase increase in good sales sales prior to is XXXX from for $XX.X million to other largely the Thank as increased in everyone. XX% up million period. Constant $XX.X ICL $X.X XX%

net as resulted primarily in due overhead. profit was margin fixed production $XX.X ago of The year decrease compared reduced absorption that gross sales period. year-over-year of million XXXX, to unit in or sales XX.X% was less QX to net the XX.X% in $XX.X of million For or gross

full to expect XX%, our year, estimate. point For approximately be gross down the now from we profit previous X margin

in in expenses, expense QX and down million, timing up look for Moving QX some up in expenses XXXX. Taking shift QX costs increase of operating is expenses XXXX primarily components quarter from $XX.X XXXX. XXXX year-over-year million XXXX. due $XX.X QX increased and This total decrease operating the down operating QX of prior the to down and $XX.X at G&A from we the in now compensation-related $XX.X XXXX occur million to income QX the $XX.X $XX.X million, to spend in statement, for from year expenses. facilities that in million a increased a expect in closer was million sequential reflects XX% The from

quarter year G&A expect be $XX For QX to expense $XX.X the both million. Selling prior approximately for down $XX.X QX and continue million XXXX quarter, XXXX. and of expense over marketing XXXX, marketing, to we which promotion and was QX. most to advertising the carry to The to from expect in activities, due we timing lower-than-planned and selling of million marketing in QX was

million write-off to $X.X noncash EVO our related a incurred Center. also former Experience We

million clinical approximately in lower year-over-year which costs. quarter as we be the in purchases AI QX XXXX. million For primarily for selection lens were $XX.X in-process year size expense tools XXXX, of XXXX, development in now expect million for and $XX and well measurement to related QX million. Research prior selling from external expenses, due was from compensation-related QX R&D up offset $XX.X $XX.X up increase and partially is by as expense marketing This to to R&D and trial

expect million. be R&D to For approximately QX XXXX, expense continue we $XX to

For attributable per was on income $X.XX $X.XX QX higher year up share The increase quarter. XXXX, per million was per GAAP expense. million transactions, $X.XX foreign prior gain diluted offset $X.XX currency share compared a per for million share or quarter. operating QX $XX million net the to or in or was diluted net EBITDA diluted earnings in as the $XX.X and $XX.X to earnings prior $X.X year from Adjusted XXXX share, diluted in income or partially higher primarily sales by

cash, balance $XXX cash At flexibility December were of and giving end of sheet. our Turning significant STAAR up our equivalents make now XXXX, investments available $XXX.X the allocation a range million, capital sale quarter, decisions. the from third million in for to to

receivable significant have future We balance. also receipts as accounts in shown our cash

our to this we In expect DSO is million. to And week, moving approximately $XX around already forward, days. of XX moderate fact, accounts as balance our receivable down

million is flow year, assets million expect projects, on CapEx recorded our of full for statement. ERP-related approximately $XX currently approximately we cash continue of XXXX, fiscal which For $XX the which as includes to other

in outlook. our we sales outlook measures are adjusted shown today's A financial earnings presentation. of said, Tom reconciliation and As non-GAAP and press is maintaining EBITDA fiscal release both earnings XXXX

to for this days back activities For now in and be Events. list Tom. please of Slide weeks line can additional and on presentation of And meetings ahead. upcoming investor detail to and item A under to earnings Upcoming specific the modeling updates. We meeting forward many investor of XX refer website you purposes, our look found

Thomas G. Frinzi

you, Patrick. Thank

in the market-building the of noted top advance significant growing Every customers I quarter respond proud the to of As opportunity drive solutions. we third the for to we incredibly and us. and uptake our actively reinforce progress made need call, EVO our in initiatives, myopia of the day, market, ICL am the I front at the

mentioned maintaining our are earlier, we I XXXX As fiscal outlook.

the business. our global of both sales macroeconomic and environment changed, diversity composition note has growing will dynamic outlook of which the reflects our You the

for expectations other in are forth have particularly landscape growing the set is press than and now, softened. The while believe today's macroeconomic As regions regions China right release transitory. some dynamic slides, which more growth in we presentation is anticipated, earnings

announced potential by are to in continue will we the monitor recent consumer sales. on We encouraged impact sentiment policy shift and stimulus, fiscal and our closely and the China's

implant positive a strong October early For in Week market a sheet. balance positioned example, We ICL we well following the XX. STAAR weather on our uplift dynamics. in-market remain procedures September saw profitable, the is during Golden sales, to announcement current by proxy in for stimulus backed

not we for XXXX high unique providing EVO. patient and with of be in positioned, growth remain STAAR's to are outlook confident material the very surgeon and Collamer today, and opportunity STAAR's well we levels satisfaction. While continues tremendous long-term

going issue and increasing care addressable myopia growing is is away. Additionally, as only market total is our not health certainly a

stated that, continue as deliver for confidence being of coming will build not is builds, X curve to the quantity rebuilding company the continue our STAAR is demands. but as create vision and tomorrow. And for great that a lens increases, to good process quality provide well their the laying finally, in we'll minus we're as which the operator, and diopters consistent demographic take confidence We with now choice foundation measurement pipeline of technology only And our well next-generation to today, the growth a to to for as questions. surgeon goal surgeon their to that EVO commitment down diopter our as selection. size above. And of with commitment in company

Operator

The Instructions] [Operator comes question Stephan from Stifel. with first today Tom

Thomas Stephan

I think, Maybe When modeling, growth with year. I'll teens at they're start I XXXX. look low next numbers, Street

at year's it of growth macro the of in I midpoint maybe obviously, a single-digit implies look So when quarter. dynamics. lot fourth very this fluid low guide, But the

full you you're year can high a So think you in that going and/or XQ the know mid for I said just but look I be growth not to XXXX you're growth like relative then tracking towards to Tom, either should guidance, to about have us help that 'XX? single-digit maybe providing what follow-up. the exit And

Thomas G. Frinzi

think in history our we the be XXXX on premature, the in prepared as I at to you said But outlook feel know, continue to appreciate and time. it'd so. comment of confident do as the this comments, we outpacing a And ability Sure. to Look, have question. market

company We have exceptionally our are be a been date. with record, to and a performance and strong growth-oriented will continue to pleased track with

Thomas Stephan

of XQ the you I I China, in implies, if it. here but Got That's -- the, quarter? guidance date quarter. hopefully, of transpired, fourth Can then maybe trends kind I let's just call right, intra in some And on And on seeing? it, updated the my elaborate XX% guess, growth to the guess, to then, XX% fair. is down roughly zero think trends? you're What math to maybe

Thomas G. Frinzi

heard and question. second were we're off following changed. call And packages monitoring prepared think that environment government gain speaking and in I Yes. the earnings the August August. appreciate early challenging. encouraged high even in you QX it the of and market. Again, these closely. Sure, tapered Tom. half we and our continue season stimulus that by the economic we're But what to And certainly consistent are the China with remarks, market the September and transitory, in Sales about, Again, I headwinds we is believe share outpace the

Operator

Ryan Zimmerman BTIG. from comes question next The with

Ryan Zimmerman

correction, very Appreciate penetration about your the X was in actually. quarters It's laser all I for XQ our prior. I U.S. by last the numbers to steady at disclosures. business really at ask look relative grown estimates. to on to It's X% If vision U.S. first, helpful. the want it

So the that in did U.S. just U.S.? you you how about call keep Would anything particularly And there's to to given take trajectory, Tom, guidance? to if I'm wondering that out think here. that just expect down the growing

Thomas G. Frinzi

the think we're laser with a when we're we pleased of lane Ryan, in correction pleased our new performance. XX is vision type that within those look U.S. of defined of signed initiative, XX%, in And we market. quarter, stated, the you being grew we down XX%, what we broadly As happening accounts. with fast When at and particular, In very Highway couple we're well positioned and And in continued the we largest under accounts, us belt refractive the the market. nice that said are full taking have market a had see again, quarter remarks, growth prepared world. within accounts it those second really in growth surgery their that fact, our as sustainable we encourages we have share, outpacing this in certainly we're to around

Ryan Zimmerman

were have follow to you your on you kind as that your reaffirming of in your curious from just then at you a And up plans long-term Okay. comments, Tom, either growth just in the we on that last long-range standpoint confident Day timing Are you Markets if China, And out contribution I'm outlook. read said to assuming laid you're year? from stimulus Capital or any that? thoughts what

Thomas G. Frinzi

said us to something is to that I've appreciate Ryan, trying Look, premature on probably comment. I to question me get the of comment for

Ryan Zimmerman

Yes.

Thomas G. Frinzi

from was see people I'm we Golden in in encouraged to opportunity uptick what a nice are spending. ground by China. Week consumer the our look, on hearing So some

those And in stimulus we we advantage So believe indicated as grow to transitory. take quickly. in XXXX, to beginning a back you to and we're look, continue very great it We're are position a are to XXXX, have We've turn well and it market. market. market. well is whether China that outpace that that can received positioned issues continue that in the we we the turns, impact. of market an And have go And history, think to

Operator

Petrone with The Anthony question next Mizuho. comes from

Unknown Analyst

see returning And can next around -- the I'll for Dmitry the scheduling again, follow-up, how China. on the Do I looking. -- on just outlook market volumes when stabilize? ask at the in wanted if look growth it He's planes. single-digit at refractive the for we is I'll for China ask jumping year? boarding U.S. Group. maybe conferences, touch the Aier in the mid we This is can to stocking But a Anthony. to distributor what's trends for on underlying And are

Thomas G. Frinzi

I'd the exited the down and you September. China back did of Again, We August indicated season I our to prepared in refer slow the comments. we that Yes, nature high certainly question. understand as

we we as it's inventory So because market the slightly turns, we of downturn, level. an have do more that get the that channel but in appropriate that will at And think through believe appropriate level. pulled

Patrick Williams

we've downturn clearly see the And Then in again. on assumptions, what year bit contemplated in QX we've if TAM take our doctors, was And and that doing we're spoke as our the Look, more market to of the more an about, laser overall volume. of we're and question U.S. reducing you is And there. to XX%, continued share a out EVO vision board. related expanding continue grow. guidance reflected our job that full contemplates But we down we a to the with getting correction. said, and amazing anything, underlying on

Operator

comes next Wood The Patrick Stanley. from with Morgan question

Patrick Wood

Perfect.

U.S. it? But of they've LASIK But effect think after that to gone a in or not all? a surgery treated for go and an for delayed lump? China, reason what Just patients come patients? that where happened just where effect they're waiting? And refractive one been slower, decided know having want I these delayed I let's through is you quick to have you there a to And was I ask do a of stimulus don't just Or then in comes guess say that to a happen bonus say has an an you I if the at volumes different Did bit a volumes. the of just that they've a one. been 'XX. the way effect think is bit think the is, -- historically? do about there little is back, get procedure,

Thomas G. Frinzi

it's I think still there. back quickly. -- are great think seen earlier very as Fiscal the I China look, the can past demand And And question. pretty returned quarter first a quickly. 'XX market again, yes, activity, stimulus those come I type we've said following 'XX, Patrick, patients in year

patients those think sentiment market. I our that -- again, So respected well in changes consumer I very there. as And are as we're said, --

I in market. that well think very we're positioned

And lot I to turns, as We quickly. reasonable surgeon support. pick of economy a volumes think assume have that back up rather it's

Operator

Matthew question next Sandler. comes from The with O'Brien Piper

Unknown Analyst

This is Phil for Matt. on

X%, countries sales China? from why out? guidance you a domestically Any start to commentary in refractive in up bit call different this strength to of which countries little with specific And brought wanted any be Just backdrop. XX% might given outstanding EMEA, is growth to really market we're and the where seeing what over on than these

Thomas G. Frinzi

-- recognizing performance team. you look the Yes, our strong EMEA thank for by

have U.S., encouraged. deck customers, in certainly, in As we there. with said the our us. have a we But has prepared for markets in where our And Autobahn those Middle performance in Much our growth we there very nice an pleased also in as all-hands-on U.K., direct. we're and team very what type in an the we're our distributor really very been a like initiative targeted were market seeing nice XX. And we're refers strong. seen we certainly, And we've work approach to remarks, East Spain, within nice in what Highway XX have Germany,

Unknown Analyst

in the landscape update seeing there one That's I that specifically, laser-based but talked the price both on you to helpful. due procedure other a implantable offerings. today, China. lot well in as as we've lens about And you follow-up any then over competitive just it SMILE an And pressure adjustment? the are play More know on category

Thomas G. Frinzi

Imitation thing. the embedded form flattery. healthy competition I the said questions good again, in there. of And I've -- as in certainly think I the is think It validates highest market. past, a is Yes,

have issue their to in premium China. for they by a somewhere to we'll positioned. iBright competition outcome. One from per And what that's opportunity, have eye favorably. But real your are we advantage think another an how could reality version have market, said talking in place, again, material, the and come is is think, the step acrylic premium. more about argue closest based both won't extra and upon XXXX, as that produce to our the product becomes the ears of And question will market. customer where are part sometime But and boats We aware they'll latter I been we're of publicly, in it And because a of Collamer in premium. point we a market, the us. probably is out market by what it. inclined yes, general, side. quality the product But China premium mid-XXXX. correction, by price think to stratification outcome validates introduce to they've in if of the in prepared, some an well And certainly, the in market in that we a We certainly, So welcome there compete we eyes there company seen think that advantage. premium about vision as laser be we've believe customers we're think open. very versus grow we've we help produce compression uptick quantity because on to a fact a the has But taken all price LVC we in great probably that we're vision material seen volume. The probably rise, if again, particularly the our I of we technology toric $X,XXX it up we to coming. should market we've our appropriate a seen But VX do, opportunity vision of maintain and hit We $X,XXX particularly view. our think we keeping people

Operator

[Operator Instructions] The the presentation. attending conference concluded. now you next Thank -- question today's has for

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STAAR Surgical (STAA) 30 Oct 242024 Q3 Earnings call transcript