Yahoo Finance Staar Surgical Co (STAA) Q1 2024 Earnings Call Transcript Highlights: Navigating Growth Amid ...
Net Sales: $77.4 million for Q1 2024, a $3.8 million increase from the previous year.
Gross Profit: $61 million or 78.9% of net sales for Q1 2024.
Net Loss: $3.3 million or $0.07 loss per share for Q1 2024.
Adjusted EBITDA: $5.3 million or $0.11 per share for Q1 2024.
ICL Sales Growth: 9% increase in the Asia Pacific region, including 10% growth in China.
U.S. Sales Growth: 15% increase, with sequential growth of 21%.
EMEA Sales Growth: 11% increase, driven by the Middle East and European distributor markets.
Cash Position: Reached a record $252.1 million at the end of Q1 2024.
Fiscal 2024 Sales Outlook: Reiterated at $335 million to $340 million, expected to be at the higher end.
Release Date: May 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
STAAR Surgical Co (NASDAQ:STAA) reported a net sales of $77.4 million for Q1 2024, exceeding expectations and demonstrating strong year-over-year growth.
The company achieved a 21% sequential sales growth in the U.S., reaching record quarterly U.S. ICL sales of $5 million.
STAAR Surgical Co (NASDAQ:STAA) saw significant growth in the Asia Pacific region with a 9% increase, including a 10% growth in China, surpassing the full year fiscal 2024 outlook of 7%.
The EMEA region experienced an 11% sales growth, driven by strong performance in the Middle East and European distributor markets.
STAAR Surgical Co (NASDAQ:STAA) introduced several new initiatives such as the Star University and the Stellar ordering and planning system, enhancing surgeon efficiency and expanding educational resources.
Negative Points
Despite overall growth, the company reported a net loss of $3.3 million for Q1 2024, attributed mainly to a $2.3 million loss related to foreign currency exchange.
Operating expenses for Q1 2024 increased significantly to $63.3 million compared to $54.8 million in the prior year, reflecting higher investments to build the market for EVO ICL.
Gross margin saw a slight decline sequentially from Q4 2023, primarily due to inventory adjustments.
The company faces ongoing challenges in a dynamic macroeconomic and geopolitical environment, which could impact consumer discretionary spending and overall market conditions.
STAAR Surgical Co (NASDAQ:STAA) is experiencing increased competition in key markets, particularly with the anticipated entry of local lens competitors in China.
Q & A Highlights
Q: Can you elaborate on what specifically is going well as you continue to refine your US EVO strategy? Are there any noticeable areas of improvement, whether in execution or in what doctors or patients are experiencing? A: (Patrick Williams, CFO) - The improvements are across the board, including increased surgeon confidence around measurement and lens size selection, supported by new data and studies. The US market is showing a growing acceptance of lens-based refractive surgery, evidenced by new agreements and increased momentum. The company's execution has improved, with new tools and better customer engagement at the practice level.
Q: Given the progress in the US, is there any structural reason why the US couldn't reach high ICL penetration rates similar to other markets? A: (Patrick Williams, CFO) - The focus remains on increasing surgeon confidence and providing comprehensive clinical and marketing support. The shift from brand awareness to more targeted marketing is proving effective. Continued execution of these strategies should naturally lead to increased ICL penetration, reflecting the growing acceptance of EVO ICL in practice.
Q: What are your expectations for the macroeconomic environment, particularly in markets like China? A: (Thomas Frinzi, CEO) - The economic environment in China remains uncertain, with some slowdowns observed. However, recent upticks suggest potential improvement. The company maintains a cautious but optimistic outlook, expecting stronger performance in the latter half of the year as market conditions stabilize.
Q: How are the Highway 93 accounts performing compared to non-Highway 93 accounts, and what are your plans for expanding or adjusting this program? A: (Patrick Williams, CFO) - Highway 93 accounts are performing better year-over-year compared to other accounts, indicating the effectiveness of focused support and engagement. The company plans to deepen relationships within this group rather than expanding broadly, ensuring that resources are directed where they have the greatest impact.
Q: Can you provide insights into the performance and expectations for China, especially considering the new stimulus programs and the addition of a second distributor? A: (Thomas Frinzi, CEO) - The stimulus program in China is expected to positively impact the market in the second half of the year. The addition of a second distributor is improving efficiency and reach, particularly in tier three and four cities, supporting continued growth and market penetration.
Q: What impact do you foresee from local lens competition in China, and how is STAAR Surgical positioned to respond? A: (Thomas Frinzi, CEO) - New local competition may emerge, but STAAR Surgical is well-prepared with strategies to maintain its market lead. The competition's product limitations and STAAR's established presence and ongoing investments in the market will help mitigate potential impacts.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
