STAAR Surgical(US:STAA)2023-08-03 03:06Financial Data and Key Metrics Changes - Total net sales for Q2 2023 were $92.3 million, up 14% compared to $81.1 million in Q2 2022 and up 26% sequentially from Q1 2023 [7] - Gross profit for Q2 2023 was $70.7 million, or 76.6% of net sales, compared to $63.9 million, or 78.8% of net sales in Q2 2022 [93] - Operating income in Q2 2023 was $8.6 million, or 9.3% of net sales, down from $17 million, or 21% of net sales in Q2 2022 [95] Business Line Data and Key Metrics Changes - ICL sales increased by $50 million, or 19%, year-over-year, while other product sales decreased by $4 million [7] - ICL sales for Q2 2023 were $93.1 million, with global ICL sales growth of 19% and unit growth of 21% [117] - Research and development expense was $11.8 million in Q2 2023, up from $8.6 million in Q2 2022 [9] Market Data and Key Metrics Changes - Sales in the EMEA region declined by 9% due to macroeconomic and geopolitical factors, but ICL units in European markets increased by 6% [4] - APAC region saw a 29% increase in ICL units and a 26% increase in sales for Q2 2023 [117] - The U.S. refractive market experienced a 15% year-over-year decline, while STAAR's ICL sales grew by 10% [91][67] Company Strategy and Development Direction - The company aims to remain a high-growth organization, targeting 20% annual growth, particularly in APAC and the U.S. [6][16] - New analytic tools are being implemented to better target high-volume customers and improve marketing effectiveness [5] - A patient call center education and surgeon referral program is being piloted to enhance patient engagement and conversion [5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the U.S. market despite current challenges, emphasizing the need for time to transition EVO from a niche to a mainstream procedure [13] - The company anticipates a strong performance in China, with a positive start to the peak season for ICLs [16][61] - Management acknowledged the need for adjustments in digital marketing strategies due to lower-than-expected returns [122] Other Important Information - The company expects to invest approximately $26 million in property and equipment for the year, primarily for manufacturing capacity expansion [10] - The effective tax rate is expected to be approximately 35% in Q3 and Q4 due to reduced profitability in the U.S. [123] Q&A Session Summary Question: What is the outlook for the U.S. market? - Management indicated that the U.S. market is expected to remain flat in the second half of the year, with plans to enhance training and education efforts to drive growth in 2024 [104][132] Question: How is the company addressing the challenges in digital marketing? - The company is reducing digital marketing investments until they can ensure better patient conversion rates and cost-effectiveness [122] Question: What is the confidence level regarding growth in China? - Management expressed high confidence in the Chinese market, noting strong surgeon support and positive sales activity [61][68]