STAAR SURGICAL CO Q1 FY2024 earnings call

• Enhanced commercial focus is yielding positive results with EVO ICL technology showing above-market growth in key geographies.
• Achieved multiple business and execution milestones in Q1 2024, including the largest commitment ever to EVO ICL in the U.S. and launching STAAR University and Stella ordering system.
• Made strategic investments in 2023, adding key leadership positions and investing in global field organizations, which are positively impacting business.
• In the Asia Pacific, APAC region outperformed fiscal 2024 outlook with 9% ICL sales growth, including 10% in China. EMEA region had 11% growth exceeding flat outlook. Americas region had 12% growth, with 15% in the U.S. outperforming flat growth outlook.
• Celebrated reaching 3 million total implantable collamer lenses sold, with half sold in the last 3 years.

For the first quarter of 2024, STAAR Surgical's segment performance was as follows: In the Asia Pacific region, ICL sales grew 9%, including 10% growth in China. The EMEA region saw 11% sales growth, exceeding the flat growth outlook for fiscal 2024, driven by the Middle East and European distributor markets. The Americas region had 12% sales growth, with 15% growth in the U.S. including 21% sequential growth. Net sales for the first quarter were $77.4 million, exceeding the outlook. EVO ICL technology delivered above-market growth across key geographies. The company reached 3 million total implantable collamer lenses sold, with half sold in the last 3 years.

• Reiterated fiscal 2024 net sales outlook range of $335 million to $340 million, expecting to be at the higher end based on Q1 results.
• Anticipates Q2 2024 net sales of approximately $95 million.
• Now expects full year adjusted EBITDA to be approximately $39 million, up $3 million from prior expectations, with adjusted EBITDA per share approximately $0.75 up from $0.70.
• Cash, cash equivalents, and investments available for sale reached a record $252.1 million at the end of Q1 2024.

• Risks associated with forward-looking statements, including numerous important risks and uncertainties that could cause actual results to differ materially from forward-looking statements.
• Macroeconomic and geopolitical uncertainties that could impact results.
• Competition in markets like China, including potential impact from local lens competition and VBP (volume-based purchasing) initiatives.

Q: About the U.S. cadence and Highway 93 partners, what's the implication for the remainder of the year?

A: Tom Frinzi said it's prudent to see how Q2 plays out, confident in a new baseline of U.S. quarterly sales but cautious due to macroeconomic headwinds.

Q: On China performance intra-quarter and second quarter outlook?

A: Thomas Frinzi said saw strong Jan-Feb, softer Mar-Apr, but encouraged by uptick in late Apr/early May. Patrick Williams mentioned Q2 guidance of ~$95M based on current trends.

Q: Thoughts on U.S. ICL penetration rates long term?

A: Tom Frinzi said to keep doing things moving the needle, increasing surgeon confidence, and surrounding customers clinically and commercially, confident lens-based refractive surgery is becoming more meaningful.

Q: On China growth and new distributor?

A: Patrick Williams said 10% growth in China assumes focus on Tier 1 and 2, added second distributor to be more efficient in delivering products, especially in Tier 3/4 cities.