Core Viewpoint - STAAR Surgical Company is under investigation for potential securities fraud and unlawful business practices following disappointing financial results for Q4 and full year 2024 [1][2]. Financial Performance - For Q4 2024, STAAR reported GAAP earnings per share of -$0.69, missing consensus estimates by $0.55 [2]. - The company's revenue for the quarter was $48.95 million, which fell short of consensus estimates by $28.52 million [2]. - The company attributed its poor performance to "fluctuating demand in China" [2]. Market Reaction - Following the announcement of the financial results, STAAR's stock price dropped by $5.40 per share, or 24.68%, closing at $16.48 per share on February 12, 2025 [3].

Core Viewpoint - The Schall Law Firm is investigating STAAR Surgical Company for potential violations of securities laws following disappointing Q4 2024 earnings, which led to a significant drop in share price [1][2]. Group 1: Investigation Details - The investigation centers on whether STAAR Surgical made false or misleading statements and failed to disclose important information to investors [2]. - The company's Q4 2024 earnings report indicated weak demand in China and a decline in refractive procedures, contributing to the disappointing results [2]. Group 2: Market Reaction - Following the earnings report, STAAR Surgical's shares experienced a decline of 24.68% on February 12, 2025 [2].

Financial Data and Key Metrics Changes - For fiscal 2024, the company reported net sales of approximately $314 million, a decline of 3% compared to $322.4 million in fiscal 2023 [35][39] - The gross margin for fiscal 2024 was down 210 basis points but remained at a solid 76.3% [39] - The company experienced a net loss of $20.2 million in fiscal 2024 compared to net income of $21.3 million in fiscal 2023 [39] Business Line Data and Key Metrics Changes - ICL sales outside of China grew by 17% in the fourth quarter and 13% for fiscal 2024, totaling $152 million [11][22] - ICL sales in China for the fourth quarter were $7.5 million, and for the full year, they were $161 million, down 13% year-over-year [13][39] - In the Americas, ICL sales grew by 22% in the fourth quarter and 15% for the fiscal year [22] - EMEA ICL sales grew by 9% in the fourth quarter and 10% for fiscal 2024 [24] - APAC ICL sales, excluding China, grew by 20% in the fourth quarter and 14% for fiscal 2024 [25] Market Data and Key Metrics Changes - The overall refractive market in the Americas is expected to decline by 5% to 10%, while the company anticipates its US sales to grow around 15% year-over-year [62] - The overall refractive market in China is projected to be down 10% year-over-year at the lower end of the sales outlook and up 10% at the higher end [63][90] Company Strategy and Development Direction - The company plans to manage working capital and implement cost-cutting measures in light of the lower revenue forecast for 2025 [42] - The company aims to lower production output and decrease capital expenditures while continuing to invest in commercial activities that drive demand generation [43] - The launch of EVO Plus in China is anticipated to provide potential revenue upside, although it is not factored into the current guidance [33][105] Management's Comments on Operating Environment and Future Outlook - Management believes that the current challenges in China are transitory and expects consumer confidence to improve in the second half of 2025 [31][49] - The company is optimistic about the rebound in the refractive market, citing historical data showing rapid recovery following improvements in consumer confidence [20][102] - Management emphasized the importance of maintaining strong relationships with distributors and key opinion leaders to navigate the current market challenges [101] Other Important Information - The company ended fiscal 2024 with $230.5 million in cash and cash equivalents, a slight decrease from $232.4 million at the beginning of the year [46] - The company has no debt and expects to fully collect its accounts receivable in the first half of 2025 [46] Q&A Session Summary Question: What drove the significant decline in global units year-over-year? - The decline was primarily related to the $7.5 million in overall revenue in China, which impacted unit sales [56] Question: What assumptions are driving the 2025 guidance, particularly regarding China? - The guidance assumes a slowdown in refractive volumes across all regions, with growth in the second half of the year dependent on government stimulus [57][60] Question: How can investors be assured that inventory issues will be remediated? - Management indicated that the revenue recognition issue was a timing matter and emphasized that they are focused on managing sell-through rather than sell-in [68][81] Question: What is the impact of competition from Eyebright on guidance? - Management clarified that the distributor's actions were not influenced by Eyebright's market entry and expressed confidence in their competitive position [74][75] Question: What is the expected cash burn for the year? - The company anticipates a cash burn of approximately $70 million, which is above the expected operating loss, due to the wide range of revenue projections [125]

Financial Performance & Outlook - FY24 GAAP Net Sales were $313.9 million[16], a 13% increase excluding China ICL sales[16] - China ICL sales decreased by 13% in FY24[23], and significantly dropped by 82% in Q4'24[23], reaching $7.5 million[16] - ICL Sales Ex China grew by 13% in FY24, reaching $151.6 million[16] - The company anticipates FY25 ICL Sales Ex China to be in the range of $165 million to $175 million, representing a 9% to 15% year-over-year increase[33] - The company projects China ICL Sales for FY25 to be between $75 million and $125 million[33] - The company anticipates an Adjusted EBITDA loss of approximately $50 million to $15 million for FY25[48] Regional Performance - Americas ICL sales increased by 15% in FY24[16], with Q4'24 showing a 22% increase[27] - EMEA ICL sales grew by 10% in FY24[16], and APAC Ex China ICL sales increased by 14%[16] - US ICL sales increased by 19% in FY24[29] Challenges & Strategies - Weak consumer confidence and macroeconomic headwinds in China significantly impacted ICL sales[14, 19] - The company estimates an approximate 15% decline in overall refractive procedure volume in China for FY24[24] - The company expects performance to rebound in the second half of 2025 as government stimulus takes hold[24]

Group 1 - STAAR Surgical reported Q4 revenue of $49 million, a decrease of 36% year over year, significantly below management's guidance of $77 million [1] - Global revenue excluding China increased by 17% year over year, indicating strong performance in markets outside of China [1]

Financial Performance - Net sales for fiscal year 2024 were $313.9 million, a decrease from $322.4 million in the prior year, primarily due to weak performance in China[11]. - ICL sales for fiscal year 2024 totaled $312.5 million, down from $319.4 million in the previous year, with ICL sales excluding China increasing by 13% to $151.6 million[11]. - Fourth quarter net sales were $49.0 million, significantly lower than $76.3 million in the prior year quarter, driven by a decline in China revenue[6]. - ICL sales in the fourth quarter were $46.9 million, compared to $74.6 million in the prior year quarter, with ICL sales excluding China up 17% to $39.5 million[4]. - The company reported a net loss of $(20.2) million for fiscal year 2024, compared to net income of $21.3 million in the prior year, resulting in a net loss per share of $(0.41)[13]. - The company reported a net loss of $34,228,000 for the three months ended December 27, 2024, compared to a net income of $7,756,000 for the same period in 2023[32]. - Net income for Q4 2023 was $7,756, a decrease from $21,347 in Q4 2022, resulting in a net loss of $34,228 for Q1 2024[33]. Gross Margin and Expenses - Gross margin for fiscal year 2024 was 76.3%, down from 78.4% in the previous year, and gross profit margin for the fourth quarter was 64.7%, compared to 79.6% in the prior year quarter[12][7]. - Gross profit margin decreased to 64.7% in Q4 2024 from 79.6% in Q4 2023, reflecting a gross profit of $31,648,000 compared to $60,725,000[32]. - Research and development expenses increased by 10.8% to $12,042,000 in Q4 2024, compared to $10,866,000 in Q4 2023[32]. - Selling, general and administrative expenses increased to $59,558,000 in Q4 2024, representing 121.7% of net sales, compared to $50,320,000 in Q4 2023[32]. Cash Flow and Assets - Cash, cash equivalents, and investments available for sale at the end of fiscal year 2024 totaled $230.5 million, slightly down from $232.4 million at the end of the previous year[14]. - Cash and cash equivalents decreased to $144,159,000 as of December 27, 2024, from $183,038,000 as of December 29, 2023[31]. - The company’s total assets increased to $509,524,000 as of December 27, 2024, compared to $488,692,000 as of December 29, 2023[31]. - Cash provided by operating activities for Q4 2023 was $31,969, compared to $642 in Q1 2024, indicating a significant decline[33]. - The company’s cash flows from investing activities showed a net usage of $(19,495) in Q4 2023, contrasting with a net inflow of $22,402 in Q1 2024[33]. Future Projections - For fiscal year 2025, the company expects ICL sales excluding China to be approximately $165 million to $175 million, representing 9% to 15% growth[16]. - China ICL sales are projected to be less than $5 million in the first half of 2025, with a potential rebound to $75 million to $125 million in the second half[16]. - The company anticipates an adjusted EBITDA loss of approximately $(30) million per quarter in the first half of 2025, followed by a gain of $5 million to $22.5 million per quarter in the second half[16]. - The company’s outlook for Q1 2024 includes a projected net income loss of $(63,000) to $(78,000)[34]. Sales Growth by Region - Global ICL sales reached $319,427,000 in 2023, reflecting an 18% growth compared to 2022[35]. - Americas sales increased to $22,233,000 in 2023, with a growth rate of 11% year-over-year[35]. - EMEA sales grew to $39,318,000 in 2023, marking a 7% increase from the previous year[35]. - APAC sales surged to $257,876,000 in 2023, showing a 21% growth compared to 2022[35]. - China sales amounted to $185,404,000 in 2023, with a growth rate of 25%[35]. - ICL sales excluding China totaled $134,023,000 in 2023, reflecting a 10% increase year-over-year[35]. - The company reported a global ICL sales growth of 27% in 2022, followed by an 18% growth in 2023[35]. - The Americas region experienced a significant sales growth of 43% in 2022, which decreased to 11% in 2023[35]. - The company anticipates a continued focus on market expansion and new product development in the upcoming fiscal year[35]. Liabilities and Stock Information - Total liabilities increased to $112,189,000 as of December 27, 2024, from $102,738,000 as of December 29, 2023[31]. - The weighted average shares outstanding for basic shares increased to 49,266,000 in Q4 2024 from 48,815,000 in Q4 2023[32]. - The company reported a stock-based compensation expense of $27,210 for the year ended 2023, up from $23,516 in 2022[33]. - The company experienced a loss on disposal of property and equipment amounting to $1,694 for the year ended 2023[33]. - The provision for sales returns and bad debts was $(1,661) in Q4 2023, compared to $(1,262) in Q4 2022[33]. - The company’s depreciation expense for Q4 2023 was $1,368, with a total of $6,891 for the year[34].

Core Insights - STAAR Surgical Company (NASDAQ: STAA) experienced poor stock performance last year primarily due to weak consumer demand in its largest market, China [1] - Despite the challenges in the Chinese market, sales of STAAR's EVO lenses, which serve as an alternative to LASIK surgery, have remained strong [1] Company Analysis - The company is focused on the ophthalmic surgical market, particularly in providing innovative lens solutions [1] - The performance of the company's products indicates resilience in certain segments despite broader market challenges [1] Market Context - The overall market for surgical alternatives, such as EVO lenses, continues to show potential for growth, suggesting opportunities for STAAR in expanding its market presence [1]

Financial Data and Key Metrics Changes - Total net sales for Q3 2024 increased 10% to $88.6 million, up from $80.3 million in the prior year quarter, primarily due to a $8 million or 10% increase in ICL sales [23][29] - Gross profit was $68.5 million or 77.3% of net sales, compared to $63.6 million or 79.2% of net sales in the prior year, with the decrease in gross margin attributed to reduced unit production [24] - GAAP net income for Q3 2024 was $10 million or $0.20 earnings per diluted share, up from $4.8 million or $0.10 earnings per diluted share in the prior year quarter [29] Business Line Data and Key Metrics Changes - ICL sales increased by 10% year-over-year, contributing significantly to the overall sales growth [23] - Operating expenses for Q3 2024 increased 10% to $62.8 million, reflecting a shift in the timing of some expenditures expected to occur in Q4 2024 [25] - Research and development expense was $14.5 million for Q3 2024, up from $11.5 million in the prior year quarter, primarily due to purchases of in-process R&D related to external AI tools [28] Market Data and Key Metrics Changes - In the Americas, sales growth was 14% in Q3 2024, with U.S. sales growing 16% year-over-year despite the U.S. refractive market being down 18% [17][18] - EMEA region generated 12% sales growth, driven primarily by the Middle East and European distributor markets [19] - APAC region, the largest market for refractive procedures, saw sales growth of 9%, with China sales up 7% [20] Company Strategy and Development Direction - The company is maintaining its financial outlook for fiscal year 2024, anticipating net sales of approximately $340 million to $345 million [11] - The grand opening of the new EVO ICL Experience Center aims to enhance training and education for surgeons, thereby increasing ICL adoption [12][14] - The company is focused on building surgeon confidence in measurement and lens size selection, which is expected to expand the total addressable market [38] Management's Comments on Operating Environment and Future Outlook - Management noted that the macroeconomic environment in China has softened but remains optimistic about the potential impact of recent fiscal policy changes and stimulus [36] - The company is confident in its long-term growth prospects, emphasizing the growing healthcare issue of myopia and the unique advantages of its polymer material [37][38] - Management believes that the current market dynamics are transitory and that STAAR is well-positioned to weather these challenges [36] Other Important Information - The company incurred a $1.6 million non-cash write-off related to its former EVO Experience Center [27] - Cash, cash equivalents, and investments available for sale were $236 million at the end of Q3 2024, providing significant flexibility for capital allocation [30] Q&A Session Summary Question: 2025 growth outlook - Management stated it is premature to comment on 2025 outlook but expressed confidence in the company's ability to outpace the market [42] Question: Trends in China - Management noted that sales tapered off in the second half of the high season but remains optimistic about the impact of government stimulus [44][45] Question: U.S. market penetration - Management highlighted that despite a challenging U.S. refractive market, the company grew 16% and is well-positioned for sustainable growth [50] Question: Competitive landscape in China - Management acknowledged competition but believes their product advantages will maintain a premium position in the market [68]

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 ...

Financial Performance - Net sales for the three months ended September 27, 2024 increased by 10% to $88.6 million compared to $80.3 million for the same period in 2023, primarily due to increased ICL sales of $8.0 million[66]. - Net sales for the nine months ended September 27, 2024 increased by 8% to $265.6 million compared to $244.8 million for the same period in 2023, primarily due to increased ICL sales of $20.8 million[67]. - Gross profit for the three months ended September 27, 2024 increased by 7.6% to $68.5 million, while the gross profit margin decreased to 77.3% from 79.2% in the same period of 2023[71]. - Operating income for the three months ended September 27, 2024 was 6.4% of net sales, down from 7.8% in the same period of 2023[64]. - Other income, net for the three months ended September 27, 2024 was $7,477,000, significantly up from $451,000 in the same period of 2023, indicating a change greater than +100%[76]. Sales and Market Trends - Total ICL sales for the three months ended September 27, 2024 increased by 10% with a unit increase of 6%, driven by sales growth in the Americas region, which saw a 14% increase[68]. - Total ICL sales for the nine months ended September 27, 2024 increased by 9% with a unit increase of 4%, with the EMEA region showing an 11% increase[69]. - Other product sales decreased by 33% for the three months ended September 27, 2024, primarily due to the phase-out of cataract IOL sales[70]. Expenses and Taxation - General and administrative expenses for the three months ended September 27, 2024 increased by 12.6% to $21,685,000 compared to $19,266,000 in the same period of 2023[72]. - Selling and marketing expenses for the three months ended September 27, 2024 were $26,623,000, a slight increase of 0.1% from $26,607,000 in the same period of 2023[74]. - Research and development expenses for the three months ended September 27, 2024 rose by 26.4% to $14,497,000 from $11,470,000 in the same period of 2023[75]. - The provision for income taxes for the three months ended September 27, 2024 was 3.6% of income before taxes, compared to 2.4% in the same period of 2023[64]. - The income tax provision for the three months ended September 27, 2024 was $3,179,000, a 64.8% increase from $1,929,000 in the same period of 2023[77]. - The effective tax rate for the three months ended September 27, 2024 was 24.2%, down from 28.6% in the same period of 2023[77]. Cash Flow and Investments - Cash and cash equivalents as of September 27, 2024 were $164,003,000, down from $183,038,000 as of December 29, 2023, reflecting a decrease of $19,035,000[80]. - Net cash provided by operating activities for the nine months ended September 27, 2024 was $15,083,000, compared to a net cash used of $17,375,000 in the same period of 2023[82]. - Net cash used in investing activities for the nine months ended September 27, 2024 was $39,722,000, compared to net cash provided of $51,945,000 in the same period of 2023[83]. - Net cash provided by financing activities for the nine months ended September 27, 2024 was $5,834,000, down from $7,048,000 in the same period of 2023[84]. Strategic Focus - The company plans to focus on growing its ICL business and has ceased manufacturing cataract IOLs, with no plans to sell them in 2024[70]. - The company aims to expand its ICL product line into new geographic markets while driving awareness and providing surgeon training and support[60].