STAAR Surgical(US:STAA)2025-02-13 06:52Financial 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]