STAAR Surgical(STAA) - 2019 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - STAAR Surgical reported net sales of $39.7 million in Q2 2019, an increase of 17% compared to $33.9 million in Q2 2018 [18] - Adjusted net income for Q2 2019 was $6.5 million or $0.14 per diluted share, compared to $3.9 million or $0.09 per diluted share in the prior year [20] - Gross profit margin improved to 75.4%, up 100 basis points from 74.4% in the prior year [19] Business Line Data and Key Metrics Changes - ICL revenue grew by 26%, representing 87% of total company net sales in Q2 2019 [18] - Other product segment sales declined by 21% in the quarter [18] - ICL unit growth was 34% globally, marking the eighth consecutive quarter of double-digit growth [9] Market Data and Key Metrics Changes - In China, ICL unit growth was 48%, while Korea, Japan, and India saw growth rates of 42%, 29%, and 22% respectively [9] - The largest market for refractive procedures is China, accounting for over 24% of the 4 million global procedures annually [10] Company Strategy and Development Direction - The company aims to achieve 30% ICL unit growth and 20% revenue growth for the full year [8] - STAAR is focusing on expanding its presence in the U.S. market and enhancing partnerships with refractive surgeons [40] - The company is pursuing FDA approval for its EVO lens and has submitted a clinical trial design [13][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory in China, citing strong demand and new account openings [28] - The company anticipates stronger cash generation in the second half of 2019 compared to the first half [22] - Management highlighted the importance of building relationships with surgeons and enhancing marketing efforts in the U.S. [40] Other Important Information - The company achieved the primary endpoint in its European multi-site clinical trial for the EDOF lens for presbyopia, with 98% of implanted eyes meeting the criteria [15][16] - STAAR is planning to host an Investor Day in November 2019 to outline its strategic vision for 2020-2022 [17] Q&A Session Summary Question: Insights on growth in China and new accounts - Management noted that demand in China is significantly higher than traditional sales growth, with new accounts contributing positively to future growth [28] Question: Regulatory pathway for EVO lens - Management indicated positive discussions with the FDA and a respectful relationship, aiming for a least burdensome pathway for approval [30] Question: EDOF lens expectations and clinical data - Management stated that the timeline for EDOF lens approval is based on past experiences and the submission for presbyopic indications [36] Question: U.S. market trends and growth expectations - Management emphasized the reintroduction of the company as a premium partner to refractive surgeons and the positive reception of the Toric product [40][44] Question: Size of the trial for EVO approval - Management could not disclose specific details about the trial size and follow-up period due to confidentiality [47]