Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Staar Surgical Co (STAA, Financial) achieved net sales of $88.6 million, reflecting double-digit sales growth despite a challenging macroeconomic environment.
- The company celebrated the grand opening of the new EVO ICL Experience Center, which is designed to enhance training and education for surgeons and healthcare staff.
- Staar Surgical Co (STAA) reported strong regional performance, with 14% sales growth in the Americas and 12% in EMEA, driven by the Middle East and European distributor markets.
- The company continues to gain market share in key regions, including a 16% sales growth in the US and 15% in Japan.
- Staar Surgical Co (STAA) maintains a strong balance sheet with $236 million in cash, cash equivalents, and investments, providing flexibility for capital allocation decisions.
Negative Points
- The macroeconomic environment in China softened, impacting sales momentum in the second half of the quarter.
- Gross profit margin decreased to 77.3% from 79.2% due to reduced unit production and less absorption of fixed overhead.
- Operating expenses increased by 10% year-over-year, driven by higher facilities costs and compensation-related expenses.
- The US refractive market was more challenging than anticipated, with a 18% year-over-year decline.
- The company faces potential competitive pressure in China from new entrants in the implantable lens category.
Q & A Highlights
Q: Can you provide insights on the expected growth for 2025, considering the current macroeconomic dynamics?
A: Thomas Frinzi, Chairman of the Board, President, and CEO, stated that it is premature to comment on the 2025 outlook. However, he emphasized the company's history of outpacing the market and expressed confidence in their ability to continue being a growth-oriented company with a strong track record.
Q: What are the current trends in China, and how are they affecting your guidance for the fourth quarter?
A: Thomas Frinzi noted that the high season in China saw a slowdown in sales following the Q2 earnings call in August. Despite the challenges, STAAR Surgical continued to gain market share. The company believes these headwinds are transitory and is encouraged by the Chinese government's stimulus and economic packages.
Q: How is the US market performing, especially in comparison to laser vision correction trends?
A: Thomas Frinzi highlighted that despite the US laser vision correction market being down 18% in the quarter, STAAR Surgical grew 16%. The company is pleased with this performance and continues to take market share, particularly through their Highway 93 initiative.
Q: Can you elaborate on the strong performance in the EMEA region and the factors contributing to it?
A: Thomas Frinzi attributed the strong performance in the EMEA region to robust sales in the Middle East and European distributor markets. He also mentioned successful initiatives in the UK, Spain, and Germany, where the company is direct, and highlighted the AON 50 strategy as a key growth driver.
Q: What is the competitive landscape in China, and how is STAAR Surgical positioned against competitors?
A: Thomas Frinzi acknowledged the presence of competition, particularly from iBright, which is expected to enter the market in 2025. He emphasized STAAR Surgical's advantages, such as their Collamer material and toric version, and expressed confidence in maintaining a premium position due to superior outcomes.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
