STAAR Surgical(US:STAA)2022-11-03 04:22Financial Data and Key Metrics Changes - Total net sales for Q3 2022 were $76 million, up 30% compared to $58.4 million in Q3 2021, with a 33% increase in ICL sales, representing 95% of total net sales [20][28] - Gross profit was $60.5 million or 79.5% of net sales, compared to 77.6% in Q3 2021, reflecting a 190 basis point year-over-year increase [23] - Operating income was $13.7 million or 18% of net sales, compared to $7.8 million or 13.4% in Q3 2021 [27] Business Line Data and Key Metrics Changes - Global ICL unit growth was up 40% year-over-year, with significant growth in the U.S. (63%), China (52%), Japan (40%), and South Korea (49%) [9][13] - ICL sales are anticipated to be approximately $272 million for fiscal 2022, representing 28% year-over-year growth [10] Market Data and Key Metrics Changes - In China, the company expects to exceed a 25% share of the refractive surgery market units by year-end, despite COVID-related delays [10] - The U.S. market is projected to see unit growth accelerate to approximately 100% year-over-year in Q4 2022 [18] Company Strategy and Development Direction - The company is focusing on the growth opportunities with its premium EVO products while phasing out its low-margin other products business [11][19] - STAAR aims to achieve approximately 30% ICL sales growth year-over-year to approximately $355 million in total company net sales for fiscal 2023 [12][32] Management's Comments on Operating Environment and Future Outlook - Management highlighted challenges such as tighter COVID restrictions in China and macroeconomic headwinds in Europe but remains optimistic about growth in the U.S. and Asia [10][12] - The company anticipates a strong trajectory of growth for EVO ICL and continued market share gains in 2023 [19][32] Other Important Information - The company has trained over 550 U.S. surgeons on EVO lenses and expects to exceed its goal of training 600 by the end of 2022 [16][18] - STAAR has implemented an investment policy to maximize returns on cash, resulting in a cash balance of $224.7 million as of September 30, 2022 [29][30] Q&A Session Summary Question: What are the headwinds affecting the Q4 implied outlook? - Management identified approximately $5 million in delayed revenue due to COVID lockdowns in China, $2 million from European macroeconomic factors, and $1.5 million from foreign exchange impacts [38] Question: What is the expected growth in China for 2023? - Management expects unit growth in China to exceed 30% in 2023, despite lingering COVID headwinds [41] Question: How is the U.S. market performing? - The U.S. market is expected to see strong growth, with management projecting significant market share gains within 18 months [42] Question: What is the impact of the phase-out of other products on ICL use? - Management does not anticipate a negative impact on ICL use due to the phase-out of other products, as they will continue to support customers during the transition [57] Question: How does the company expect to achieve the $355 million target for 2023? - The target includes a mix of unit growth and pricing, with expectations for a healthy average selling price in the U.S. [72]