STAAR Surgical(US:STAA)2020-08-06 03:04Financial Data and Key Metrics Changes - Total net sales for Q2 2020 were $35.2 million, consistent with Q1 2020 but down from $39.7 million in Q2 2019, attributed to COVID-related market closures [22] - Gross profit for Q2 2020 was $24.4 million, or 69.4% of net sales, down from 70.4% in Q1 2020 and 75.4% in Q2 2019, primarily due to manufacturing pause costs and geographic sales mix [23] - Net loss for Q2 2020 was $1.2 million, or $0.03 per share, compared to a net income of $3.9 million, or $0.08 per share, in Q2 2019 [29] Business Line Data and Key Metrics Changes - ICL sales represented 87% of total company net sales for Q2 2020, consistent with Q2 2019 results [22] - Research and development expense was $7.3 million in Q2 2020, up from $6.1 million in Q2 2019, due to increased clinical expenses associated with EVO clinical trials [27] Market Data and Key Metrics Changes - In June, year-over-year ICLM plan procedures recorded strong growth: 65% in Japan, 24% in the rest of Asia Pacific, 17% in Germany, 15% in distributor markets in Europe, and 11% in Korea [12] - China experienced a 6% increase in units in Q2 2020, with a strong demand for refractive procedures as the peak season began [48] Company Strategy and Development Direction - The company aims to achieve a 20% share of the refractive procedure market in China by year-end, supported by a digital marketing strategy targeting 100 million visitors [14] - Plans to restart manufacturing in Nidau, Switzerland, in 2021, and to prepare the Lake Forest, California facility for EVO Viva lens production [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a sequential revenue increase of at least 20% in Q3 2020, driven by recovery in various markets, particularly in Asia [21] - The impact of COVID-19 on sales appears to be lessening, with customers indicating no desire to pause procedures again unless mandated [20] Other Important Information - The company has received CE mark approval for its EVO Viva presbyopia lens, targeting a market of 1.7 billion people globally [17] - Cash and cash equivalents as of July 3, 2020, totaled $116.3 million, up from $110.9 million at the end of Q1 2020 [31] Q&A Session Summary Question: Confidence in expected sequential growth in Q3 - Management's confidence is based on recovery in multiple markets, particularly in Asia, with strong July results and peak season in China [36] Question: Margin structure for EVO Viva - Initial production of EVO Viva will be out of Monrovia, with expected gross margins in line with current EVO lenses [38] Question: Trends in China and market share - The company is seeing share gains from moderate myopes and is currently around 18% market share in China, aiming for 20% by year-end [40] Question: U.S. rollout progression for EVO - The U.S. market is more fragmented, but a "refractive restart" program is expected to facilitate a quick ramp-up in adoption [42] Question: Impact of COVID-19 on China’s busy season - There has been no disruption in business in China, with high demand for refractive procedures and effective consumer outreach strategies [68] Question: Initial interest in EVO in Europe - The EVO family of lenses is expected to expand the target demographic for surgeons, increasing overall volume and specificity in marketing [70]