STAAR Surgical Announces Preliminary Results for Fourth Quarter and Fiscal 2023

Rhea-AI Summary

STAAR Surgical Company (NASDAQ: STAA) reported a 19% increase in net sales for the fourth quarter and a 13% increase for fiscal 2023. The company also announced a sales outlook of $335 million to $340 million for fiscal 2024. Operating margin is expected to be approximately 5% for both the fourth quarter and fiscal 2023. Global ICL sales increased 22% in the fourth quarter and 18% for fiscal 2023, with a positive market share gain and continued profitability. The company's cash, cash equivalents, and investments available for sale also increased to approximately $230 million as of December 29, 2023.

Insights

Financial Analyst

The reported increase in net sales by 19% for the fourth quarter and 13% for the full fiscal year by STAAR Surgical Company signifies a robust performance, especially in the context of the medical devices sector. The company's focus on the EVO family of Implantable Collamer® Lenses (EVO ICL) has yielded significant growth, particularly in the Asia-Pacific (APAC) region with a 22% increase in the fourth quarter and 21% growth for the fiscal year. These numbers not only reflect a solid demand for their products but also suggest effective market penetration strategies.

STAAR Surgical's projection of net sales for fiscal 2024 between $335 million to $340 million indicates a confident outlook, potentially driven by product innovation and market development strategies. However, the expected operating margin of around 5% raises questions about cost management and profitability. This margin is relatively modest for the medical device industry and stakeholders should monitor whether the company can improve efficiency and reduce costs to enhance profitability.

The increase in cash and cash equivalents to approximately $230 million provides the company with a comfortable liquidity position to support ongoing innovation and market expansion efforts. However, investors should be cautious about the impact of the challenging economic environment on consumer spending, which could affect elective medical procedures such as those involving ICLs.

Market Research Analyst

STAAR Surgical's performance in the refractive surgery market is noteworthy, particularly its ability to outpace the industry growth by at least 25 points for three consecutive years. This indicates a strong product-market fit and suggests that the company's ICL technology is gaining traction among surgeons and patients. The high levels of customer satisfaction and recommendation, exceeding 95%, are key indicators of the company's strong market position and could lead to increased adoption rates.

The anticipation of new peer-reviewed papers in clinical journals could further strengthen the company's reputation and surgeon confidence, which is critical in the medical device field. STAAR Surgical's investment in innovation, including AI-driven tools and intermediate lens sizes, aligns with the broader industry trend towards personalized medicine and could serve as a differentiator in the competitive landscape.

However, the company's growth prospects should be weighed against the broader economic pressures that could affect consumer spending on elective procedures. The forecasted growth rates of approximately 10% for ICL sales in both China and the U.S. reflect an optimistic but cautious estimate, considering the potential headwinds from a challenging economic environment for consumers.

Medical Research Analyst

The Implantable Collamer® Lenses (EVO ICL) represent a significant advancement in the treatment of myopia, astigmatism and presbyopia. STAAR Surgical's reported growth in this product line suggests increasing acceptance and preference for minimally invasive refractive correction options. The company's ability to capture a larger portion of the addressable market by moving down the diopter curve could lead to an expansion of the potential patient base, which is critical for sustained growth in the medical devices sector.

Furthermore, the expected publication of peer-reviewed papers enhancing surgeon confidence in measurement and lens size selection is an important factor for the adoption of new medical technologies. Such publications can provide validation of the company's products and potentially lead to increased market share. STAAR Surgical's commitment to innovation, as evidenced by their investments in AI and new lens sizes, could further solidify its position as a leader in the field of ophthalmic surgery.

It is important to note that the company's success is also dependent on external factors such as regulatory approvals, healthcare policies and reimbursement rates, which can significantly impact the adoption of new medical technologies. The company's proactive approach to addressing these factors through continued investment in innovation and market development is commendable.

Net Sales Up 19% for Fourth Quarter and 13% for Fiscal 2023¹

ICL Sales Up 22% for Fourth Quarter and 18% for Fiscal 2023

Provides Fiscal 2024 Sales Outlook of $335 Million to $340 Million

LAKE FOREST, Calif.--(BUSINESS WIRE)-- STAAR Surgical Company (NASDAQ: STAA), a leading developer, manufacturer and marketer of the EVO family of Implantable Collamer^® Lenses (EVO ICL) for myopia, astigmatism and presbyopia, today announced preliminary results for the fourth quarter and fiscal year ended December 29, 2023. Preliminary net sales were approximately $76.5 million for the fourth quarter and approximately $322.5 million for fiscal 2023. Operating margin is expected to be approximately 5% for the fourth quarter and fiscal 2023.

“Fiscal 2023 was a year of positive market share gains, sales growth and continued profitability for STAAR. Our teams finished the year on a strong note with global ICL sales increasing 22% in the fourth quarter including 26% growth in APAC,” said Tom Frinzi, President and CEO of STAAR Surgical. “ICL unit growth also compares particularly favorably to recent industry trends, outpacing refractive industry growth by at least 25 points for the third year in a row.² Global ICL sales increased 18% for fiscal 2023 driven by 21% growth in APAC, 7% growth in EMEA and 10% growth in the Americas.”

Mr. Frinzi continued, “2023 was also a year of transition and fast learning as we launched new market development strategies while continuing to invest in innovation. Global voice of customer surveys, the most recent completed in November, show willingness to recommend and satisfaction with product quality and clinical outcomes continue to exceed 95%. These data bolster our confidence that utilization of our ICL technology will continue to move down the diopter curve opening up a larger portion of the vast addressable market opportunity. We anticipate clinical journals will publish two new peer-reviewed papers in the first half of 2024 that should further enhance surgeon confidence in measurement and lens size selection across the wide range of diagnostic devices and tools surgeons use to measure the eye for our lenses. Additionally, we intend to continue our investment in innovation projects such as intermediate lens sizes and AI driven tools.”

“Our sales outlook for fiscal 2024 balances the recent industry trends and challenging economic environment for consumers against our conviction that ICL will continue to capture refractive market share globally. We therefore expect our net sales for fiscal 2024 will be approximately $335 million to $340 million which contemplates above-industry rates of growth of approximately 10% for ICL sales in both China and the U.S.³ We will continue to be disciplined in our investments on the path to realizing our market opportunity and anticipate our GAAP operating margin and earnings will be at least breakeven for fiscal 2024. We are confident our actions will increasingly resonate with a growing number of surgeons and patients in both large and emerging markets globally,” concluded Mr. Frinzi.

Cash, cash equivalents and investments available for sale was approximately $230 million as of December 29, 2023, an increase of approximately $28 million from $201.7 million at September 29, 2023. Accounts receivable was approximately $90 million as of December 29, 2023.

The Company expects to report complete fourth quarter and fiscal year results on or about February 21 and provided today’s information due to investor meetings taking place this week. The financial information in this release is unaudited and subject to adjustment in the final audited financial statements to be filed with the Company’s Annual Report on Form 10-K.

¹ Fiscal 2023 preliminary net sales of approximately $322.5 million includes approximately $3 million of low margin Other Products Cataract IOLs, a business the Company previously announced it would exit by the end of 2023. Fiscal 2022 reported net sales of $284.4 million included approximately $14 million of Other Products Cataract IOLs. For this reason, ICL sales may be a more insightful growth comparison on a go-forward basis.

² Global ICL unit growth exceed refractive industry growth by 38 points (2021); 28 points (2022) and 26 points (2023). The Company estimates global refractive industry procedures increased 10% (2021); increased 5% (2022); and decreased 7% (2023) Y/Y based on data available as of January 2, 2024.

³ The Company estimates China and U.S. refractive procedures will be approximately flat Y/Y in 2024 as of January 2, 2024.

About STAAR Surgical

STAAR, which has been dedicated solely to ophthalmic surgery for over 40 years, designs, develops, manufactures and markets implantable lenses for the eye. These lenses are intended to provide visual freedom for patients, lessening or eliminating the reliance on glasses or contact lenses. All of these lenses are foldable, which permits the surgeon to insert them through a small incision. STAAR’s lens used in refractive surgery is called an Implantable Collamer^® Lens or “ICL,” which includes the EVO ICL™ product line. More than 2,500,000 ICLs have been sold to date and STAAR markets these lenses in over 75 countries. To learn more about the ICL go to: EVOICL.com. Headquartered in Lake Forest, CA, the company operates manufacturing and packaging facilities in Aliso Viejo, CA, Monrovia, CA and Nidau, Switzerland. For more information, please visit the Company’s website at www.staar.com.

Safe Harbor

All statements that are not statements of historical fact are forward-looking statements, including statements about any of the following: any financial projections (including sales), plans, strategies, and objectives of management for 2024 and beyond or prospects for achieving such plans, expectations for sales, revenue, margin, expenses or earnings, and any statements of assumptions underlying any of the foregoing, including those relating to financial performance in the upcoming quarter, fiscal year 2024 and beyond. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include risks and uncertainties related to global economic conditions, as well as the factors set forth in the Company’s Annual Report on Form 10-K for the year ended December 30, 2022 under the caption “Risk Factors,” which is on file with the Securities and Exchange Commission and available in the “Investor Information” section of the company’s website under the heading “SEC Filings.” We disclaim any intention or obligation to update or revise any financial projections or forward-looking statement due to new information or events. These statements are based on expectations and assumptions as of the date of this press release and are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. The risks and uncertainties include the following: global economic conditions; the impact of COVID-19; the discretion of regulatory agencies to approve or reject existing, new or improved products, or to require additional actions before or after approval, or to take enforcement action; international trade disputes and substantial dependence on demand from Asia; and the willingness of surgeons and patients to adopt a new or improved product and procedure.

We intend to use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included on our website in the ‘Investor Relations’ sections. Accordingly, investors should monitor such portions of our website, in addition to following our press releases, SEC filings and public conference calls and webcasts.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240108591608/en/

Investors & Media

Brian Moore

Vice President, Investor Relations and Corporate Development

(626) 303-7902, Ext. 3023

bmoore@staar.com

Source: STAAR Surgical Company

FAQ

What were STAAR Surgical Company's net sales for the fourth quarter and fiscal 2023?

STAAR Surgical Company reported net sales of approximately $76.5 million for the fourth quarter and approximately $322.5 million for fiscal 2023.

What is STAAR Surgical Company's sales outlook for fiscal 2024?

STAAR Surgical Company expects net sales for fiscal 2024 to be approximately $335 million to $340 million.

What was the increase in global ICL sales for STAAR Surgical Company in the fourth quarter and fiscal 2023?

Global ICL sales increased 22% in the fourth quarter and 18% for fiscal 2023 for STAAR Surgical Company.

What was the operating margin for STAAR Surgical Company in the fourth quarter and fiscal 2023?

The operating margin is expected to be approximately 5% for both the fourth quarter and fiscal 2023 for STAAR Surgical Company.

How much cash, cash equivalents, and investments available for sale did STAAR Surgical Company have as of December 29, 2023?

STAAR Surgical Company had approximately $230 million in cash, cash equivalents, and investments available for sale as of December 29, 2023.