STAAR Surgical(US:STAA)2019-10-31 09:34Financial Data and Key Metrics Changes - STAAR Surgical reported net sales of $39.1 million in Q3 2019, a 23% increase from $31.8 million in the same period last year [12] - The company achieved a gross profit margin of 74.4%, slightly down from 75.1% in the prior year due to expenses related to new manufacturing facilities [13] - Operating income for the quarter was approximately $3.3 million, compared to $1.6 million in the year-ago quarter, resulting in an operating margin of 8.5% [14] - Net income was $2.4 million or approximately $0.05 per diluted share, up from $1.5 million or $0.03 per diluted share a year ago [15] Business Line Data and Key Metrics Changes - Global ICL unit growth was 35% in Q3 2019, marking the ninth consecutive quarter of double-digit growth [4] - ICL revenue growth was 28%, representing 87% of total company net sales for the quarter [12] - Significant regional growth included Japan (57%), China (48%), South Korea (38%), France (20%), Spain (14%), UK (13%), and Germany (11%) compared to the prior year [7] Market Data and Key Metrics Changes - The global refractive surgery market is growing at approximately 2.6%, while STAAR is growing at rates above 35% [24] - The company anticipates strong demand for its EVO EDOF lens for presbyopia, expected to launch in Q2 2020 in CE Mark countries [9] Company Strategy and Development Direction - STAAR is focusing on expanding its market share in lower diopter ranges, particularly in Asia and Europe, while maintaining a strong growth trajectory [23] - The company plans to implement a hybrid business model in several major markets, combining direct sales and distributor coverage [45] - The strategic vision for 2020 to 2022 will be outlined at the upcoming Investor Day [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting financial targets for 2019, including 30% ICL unit growth and 20% company revenue growth [6] - The company is optimistic about the enrollment of patients for clinical trials in the U.S., with a strong interest from surgeons [20] - Management expects to continue expanding gross margins year-over-year and anticipates a strong finish to the year in key markets [37] Other Important Information - STAAR generated a record $11.8 million in cash from operating activities in Q3 2019 [16] - The company is preparing for significant marketing campaigns in Europe and the U.S. to support ICL growth [8] Q&A Session Summary Question: FDA recommendations and patient enrollment timelines - Management received FDA approval to begin clinical trials and is reviewing recommendations to finalize the study protocol, expecting to enroll patients quickly [20] Question: Trends in lower diopter patients and market opportunities - Management noted substantial market share growth in lower diopter ranges in Asia and Europe, with expectations for continued expansion [23] Question: Gross margin impacts and operating expenses - Management explained that startup expenses and lower-margin product sales impacted gross margins, but they expect margins to improve moving forward [31] Question: Timeline for Nidau facility and CapEx requirements - Management aims to resume shipping from the Nidau facility by Q3 2020, with ongoing investments in advanced manufacturing capabilities [33] Question: U.S. market potential for EVO lenses - Management believes the EVO family of lenses could address 70% to 75% of refractive surgery requirements in the U.S. [50]