STAAR Surgical Company (NASDAQ:STAA) Q3 2024 Earnings Conference Call October 30, 2024 4:30 PM ET Company Participants Brian Moore - VP, IR Tom Frinzi - Chair, President and CEO Patrick Williams - CFO Conference Call Participants Tom Stephan - Stifel Ryan Zimmerman - BTIG Patrick Wood - Morgan Stanley Operator Greetings and welcome to the STAAR Surgical Third Quarter 2024 Earnings Webcast. As a reminder, this event is being recorded today Wednesday, October 30th, 2024. During today's presentation, all parti ...

Staar Surgical (STAA) came out with quarterly earnings of $0.41 per share, beating the Zacks Consensus Estimate of $0.19 per share. This compares to earnings of $0.30 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 115.79%. A quarter ago, it was expected that this maker of implantable lenses would post earnings of $0.25 per share when it actually produced earnings of $0.33, delivering a surprise of 32%.Over the last four quart ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 27, 2024 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 0-11634 STAAR Surgical Company (Exact Name of Registrant as Specified in its Charter) Delaware 95-3797439 (State or Other Jurisdiction of Incorporation or Organ ...

Revenue and Sales Growth - Net sales increased by 10% to $88.6 million, driven by growth in all regions: Americas up 14%, EMEA up 12%, and APAC up 9%[1][2] - ICL sales grew by 10% to $89.1 million, with unit growth of 6% compared to the prior year quarter[2][3] - Net sales increased by 10.3% to $88,590,000 in Q3 2024 compared to $80,308,000 in Q3 2023[21] - Global ICL sales increased by 10% to $89.1 million in September 2024 compared to the same period in 2023[24] - APAC region ICL sales grew by 9% to $72.6 million in September 2024, driven by strong performance in China and Japan[24] - Americas ICL sales rose 14% to $6.2 million in September 2024, with the United States contributing $4.8 million[24] - EMEA ICL sales increased 12% to $10.3 million in September 2024, led by growth in Germany and the United Kingdom[24] - China ICL sales grew 7% to $51.7 million in September 2024, accounting for 58% of total APAC sales[24] - Japan ICL sales increased 7% to $10.5 million in September 2024, representing 14% of APAC sales[24] - South Korea ICL sales increased 15% to $5.4 million in September 2024, driven by strong demand in the region[24] - Constant currency sales for September 2024 were $89.4 million, a 10.7% increase compared to the same period in 2023[26][27] - Year-to-date constant currency sales through September 2024 were $267.6 million, up 8.7% compared to the same period in 2023[28] - Global ICL unit growth was 6% in September 2024, with APAC contributing the majority of unit sales[24] Profitability and Margins - Gross margin decreased to 77.3% from 79.2% due to reduced unit production and lower absorption of fixed overhead[4] - Net income rose to $10.0 million or $0.20 per share, up from $4.8 million or $0.10 per share in the prior year quarter, primarily due to a gain on foreign currency transactions[6] - Adjusted EBITDA was $16.2 million or $0.33 per share, compared to $16.5 million or $0.33 per share in the prior year quarter[2] - Gross profit rose by 7.6% to $68,487,000 in Q3 2024 from $63,638,000 in Q3 2023[21] - Operating income decreased by 9.7% to $5,682,000 in Q3 2024 from $6,295,000 in Q3 2023[21] - Net income surged by 107.2% to $9,980,000 in Q3 2024 compared to $4,817,000 in Q3 2023[21] - Net income for 2023 was $21.3 million, a decrease from $39.6 million in 2022[23] - Adjusted EBITDA for 2023 was $56.8 million, compared to $68.7 million in 2022[23] - Adjusted EBITDA as a percentage of revenue was 17.6% in 2023, down from 24.2% in 2022[23] - Net income per share, diluted, was $0.43 in 2023, down from $0.80 in 2022[23] - Adjusted EBITDA per share, diluted, was $1.15 in 2023, compared to $1.39 in 2022[23] Expenses and Costs - Operating expenses increased to $62.8 million, driven by higher general and administrative expenses ($21.7 million) and R&D expenses ($14.5 million)[5] - Research and development expenses increased by 26.4% to $14,497,000 in Q3 2024 from $11,470,000 in Q3 2023[21] - Stock-based compensation increased to $23.5 million in 2023 from $20.3 million in 2022[23] - Depreciation expenses were $13 million in 2023, up from $28 million in 2022[23] - Amortization of intangible assets decreased to $13 million in 2023 from $28 million in 2022[23] Cash Flow and Financial Position - Cash, cash equivalents, and investments available for sale totaled $236.0 million as of September 27, 2024, up from $232.4 million at the end of 2023[7] - Net cash provided by operating activities was $3,816,000 in Q3 2024, a significant improvement from a net cash used of $5,975,000 in Q3 2023[22] - Cash and cash equivalents decreased by $28,773,000 to $164,003,000 at the end of Q3 2024 from $192,776,000 at the beginning of the period[22] - The company repurchased $1,396,000 worth of employee common stock for taxes withheld year-to-date in 2024[22] - Proceeds from vested restricted stock and exercise of stock options totaled $7,354,000 year-to-date in 2024[22] - The effect of exchange rate changes on cash and cash equivalents was a decrease of $230,000 year-to-date in 2024[22] - The company's total assets increased to $537.6 million, up from $488.7 million at the end of 2023, with current assets rising to $397.1 million[20] Outlook and Projections - The company maintained its fiscal year 2024 outlook for net sales of $340 million to $345 million and Adjusted EBITDA of approximately $42 million[8] - EVO ICL sales growth outlook for 2024: Americas at 17% (up from 15%), EMEA at 10% (up from 6%), and APAC at 4% (down from 7%), with China expected to grow at 2% (down from 10%)[9] - The company's outlook for 2024 projects Adjusted EBITDA of $41.8 million[23] Shareholder Information - Weighted average shares outstanding - Diluted was 49,427 in 2023, slightly up from 49,380 in 2022[23]

Shares of Staar Surgical (STAA) have gained 5.4% over the past four weeks to close the last trading session at $33.87, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $48.75 indicates a potential upside of 43.9%. The average comprises eight short-term price targets ranging from a low of $37 to a high of $60, with a standard deviation of $9.32. While the lowest estimate indicates ...

Staar Surgical (STAA) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices. A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years. Individual invest ...

Investment Thesis - STAAR Surgical's EVO lens is the leading product in the corrective eye surgery market, with a growing market share due to its superiority over existing procedures [2] - The company is achieving solid growth and strong profitability despite macroeconomic challenges, with a healthy balance sheet of $23.5 million in cash and no debt [2] - Anticipated 21% growth in each of the next two years, leading to revenue and FCF of $500 million and $70 million respectively for 2026 [2] - Price target of $46 implies substantial upside potential, offering an attractive risk-reward profile for investors [2] Financial Highlights and Growth Outlook - Global ICL sales grew 7% year-over-year in Q2, with strong growth in the Americas (14%) and EMEA (10%) [4] - US market sales grew 25% year-over-year to $5.5 million, with potential annual sales of $140 million if market share increases to 20% [4] - Growth in the US is expected to accelerate to above 30% over the next two years [4] - Full-year guidance raised by $5 million due to strong Q2 performance [4] China Market Performance - China sales represent a significant portion of overall revenue, with year-over-year growth of close to 6% in H1 2024 [5] - Management expects a 10% increase in sales for the full year, with growth accelerating in the second half of 2024 [5] - Growth is driven by the addition of a second distributor and Chinese government stimulus programs [5] - Mid-teens growth exiting Q4 is expected to be sustained through 2025 and 2026 [5] Ongoing Investments and Margins - Gross margins are rising towards 80%, but operating expenses have increased, capping adjusted EBITDA margins at close to 12% [6] - Sales and Marketing expenses have decreased, while R&D and G&A expenses have significantly increased [6] - Expense growth is expected to moderate over the next two years, with adjusted EBITDA margins approaching 20% by 2026 [6] Valuation and Future Targets - Revenue growth of 21% expected in both 2025 and 2026, reaching $500 million in 2026 [7] - Adjusted EBITDA expected to be approximately $95 million, translating to FCF of close to $70 million after deducting capex [7] - Current enterprise value of $1.33 billion, with shares valued at an EV/2026 FCF multiple of 19 [7] - If valued in line with peers, a 30x multiple on FCF would imply an enterprise value of $2.1 billion and a share price of $46, representing 44% upside [7] Conclusion - STAAR's EVO lens is a leading product in the corrective eye surgery market, with strong growth prospects and an attractive valuation [10] - The company's growth trajectory and market position make it a compelling investment opportunity with significant upside potential [10]

Did you analyze how Staar Surgical (STAA) fared in its international operations for the quarter ending June 2024? Given the widespread global presence of this maker of implantable lenses, scrutinizing the trends in international revenues becomes imperative to assess its financial strength and future growth possibilities. The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and growth path. It has becom ...

Financial Data and Key Metrics - Record net sales of $99 million in Q2 2024, with constant currency net sales reaching $100.4 million, up 9% YoY [5][12] - Gross profit for Q2 2024 was $78.4 million, or 79.2% of net sales, compared to $70.7 million (76.6%) in the prior year quarter [12] - GAAP net income for Q2 2024 was $7.4 million, or $0.15 earnings per diluted share, compared to $6.1 million ($0.12) in the prior year quarter [16] - Adjusted EBITDA for Q2 2024 was $22.5 million, or $0.45 per diluted share, compared to $18.3 million ($0.37) in the prior year quarter [16] - Full-year 2024 net sales outlook raised to $340 million - $345 million, with adjusted EBITDA expected to be approximately $42 million [6][17] Business Line Performance - ICL sales increased by 7% YoY, contributing $6.3 million to the $6.7 million total net sales increase in Q2 2024 [11] - The average diopter of EVO ICL sold globally in H1 2024 was minus 8.2 diopters, 0.5 diopter lower than fiscal 2023, indicating a shift toward lower levels of vision correction [10] - The mix of lenses sold at minus eight diopters and below increased three points to 35% in H1 2024, expanding the total addressable market [11] Regional Performance - Americas region sales grew 14% YoY, with US sales up 25% YoY and 10% sequentially, driven by the Highway 93 initiative [8] - EMEA region sales grew 10% YoY, driven by the Middle East, European distributor markets, and Spain [8] - APAC region sales grew 6% YoY and 37% sequentially, with China on track to achieve 10% annual sales growth, reaching over $200 million in 2024 [9] - Japan sales grew 14% YoY despite currency headwinds, with unit sales significantly higher [10] - South Korea sales grew 20% YoY, with the first ICL-only clinic opening earlier in 2024 [10] Company Strategy and Industry Competition - The company is focusing on three main areas to accelerate EVO ICL adoption: surgeon education, broadening the EVO market opportunity, and driving innovation in technical and product areas [6][7] - EVO ICL lens technology continues to outpace the growth of laser vision correction procedures globally, including LASIK, PRK, and SMILE [10] - The company is working on harmonizing label indications globally and advancing AI-based protocols to guide measurement and size selection [24] Management Commentary on Operating Environment and Future Outlook - Management remains optimistic about growth in China, despite macroeconomic headwinds, and expects to achieve 10% annual sales growth in the region [9][29] - The US market is showing strong momentum, with the company expecting to reach 20% market share, equating to $140 million in annual sales [22] - The company is raising its fiscal 2024 outlook, reflecting confidence in its growth trajectory and market position [6][17] Other Important Information - The company plans to open a new EVO ICL Experience Center at its Lake Forest headquarters, serving as a hub for surgeon and ophthalmic practice education [23] - A new US-based head-to-head study versus laser vision correction procedures is in the final stages of development, expected to further demonstrate EVO's advantages [24] Q&A Session Summary Question: China's growth outlook and consumer health - Management feels positive about China's performance, with minimal impact from competition, anticorruption, or PPP issues, and expects continued growth despite economic headwinds [29] Question: Growth acceleration in 2025 and M&A strategy - The company is not providing specific 2025 guidance but remains confident in its Vision 2026 target of 15%-20% CAGR, with growth initiatives expected to drive adoption globally [31][32] - Management is focused on execution and growth, dismissing M&A rumors as speculative [33] Question: US market traction and guidance - The US market is showing strong sequential growth, with Highway 93 accounts growing 29% YoY, compared to 19% for non-Highway 93 accounts [36] - Management expects the US business to accelerate further in 2025, with initiatives like the Stella Ordering System and STAAR University driving adoption [36] Question: Aier's pricing strategy and M&A impact in China - Aier's pricing adjustments for SMILE have not significantly impacted EVO ICL sales, with the company maintaining a strong relationship and growth trajectory with Aier [38][39] - Aier's recent M&A activity is not expected to have a significant crossover impact on STAAR's volumes or pricing [41] Question: China's second distributor contribution and stimulus impact - The integration of the second distributor, HTDK, has been smooth, with both distributors contributing positively to the business [46] - Potential stimulus measures by the Chinese government could positively impact the business in H2 2024 and beyond [45] Question: US Highway 93 growth drivers - Growth in Highway 93 accounts is driven by increased surgeon confidence, marketing focus at the practice level, and pricing adjustments closer to laser vision correction levels [53] Question: Clinical data and marketing impact - The company is in the early stages of leveraging clinical data to drive global sales, with initiatives aimed at accelerating adoption and improving surgeon confidence [55] Question: US fast lane accounts and strategic alliances - The company has signed nine new agreements in the US in 2024, with a target list of 15, and is seeing increased interest from other accounts due to the halo effect [57][58]

Second Quarter 2024 Earnings Presentation August 7, 2024 NASDAQ: STAA Second Quarter 2024 STAAR Surgical Earnings Webcast Chair of the Board, President and CEO Chief Financial Officer TOM FRINZI PATRICK WILLIAMS Today's Speakers Investor Relations ? http://investors.staar.com Brian Moore VP, Investor Relations and Corporate Development +1 626.303.7902 x3023 > bmoore@staar.com Connie Johnson Director, Investor Relations and High-Performance Management Niko Liu, CFA Director, Investor Relations and Corporate ...