Q4 2020 STAAR Surgical Co Earnings Call
Good afternoon, ladies and gentlemen, and welcome to the STAAR surgical fourth quarter 'twenty to many financial results conference call.
At this time all participants are in a listen only mode.
Later, we will conduct a question answer session and instructions will follow at that time.
And then once you do quite assistance during the conference. Please press Star then zero on your Touchtone telephone.
I would now like to turn the conference over to your host Mr. Brian Moore, Vice President Investor Media Relations and corporate development. Please go ahead Sir.
Thank you operator, and good afternoon, everyone.
Thank you for joining us on the STAAR surgical conference call. This afternoon to discuss the company's financial results for the fourth quarter and the fiscal year ended January one 2021.
On the call today are Caren Mason, President and Chief Executive Officer.
And Patrick Williams, Chief Financial Officer.
The press release of our fourth quarter results was issued just after four PM Eastern time and is now available on staar's website at Www Dot STAAR Dot com.
Before we begin let me quickly remind you that during the course of this conference call. The company will make forward looking statements. We caution you that any statement that is not a statement of historical fact is a forward looking statement.
This includes remarks about the companys projections expectations plans beliefs and prospects.
These statements are based on the judgment and analysis as of the date of this conference call and are subject to numerous important risks and uncertainties that could cause actual results to differ materially from those described in the forward looking statements.
The risks and uncertainties associated with the forward looking statements made in this conference call and webcast are described in the Safe Harbor statement in today's press release as well as staar's public periodic filings with the SEC.
Except as required by law STAAR assumes no obligation to update these forward looking statements to reflect future events or actual outcomes and does not intend to do so.
In addition to supplement the GAAP numbers, we have provided non-GAAP adjusted net income and adjusted earnings per share and sales in constant currency.
We believe that these non-GAAP numbers provide meaningful supplemental information of are helpful in assessing our historical and future performance.
A table reconciling the GAAP information to the non-GAAP information is included in today's press release.
Following our prepared remarks, we will open the lines for questions from publishing analysts.
We ask analysts limit themselves to two initial questions then re queue with any follow ups.
We thank everyone in advance for their cooperation with this process.
And with that I would now like to turn the call over to Caren Mason, President and CEO of STAAR.
Thank you Brian.
Afternoon, everyone and thank you for joining us on today's call.
The fourth quarter and fiscal 2020 results. We reported today are consistent with our January 11th free announcements and represent yet another year of with record results increase consumer awareness and growing the surgeon commitments to our proprietary Evo <unk> family of <unk>.
<unk> column of our lenses.
The COVID-19 global pandemic challenged are generally high levels of growth, particularly in the first half of 2020.
However for the second half of 2020, we were able to meet the original sales targets, we entered the year with prior to the global pandemic, taking hold in late January.
2020 demonstrated the continuing momentum of the industry shift towards our lens based solutions for patients seeking visual freedom.
In addition in 2020, we launched the new Presbyopic lens, Viva and made progress towards introducing our evo family of lenses in the U S and.
And introduce new programs to increase customer engagement.
2020 performance confirms our position as the kind of assistance and rapidly growing innovative leader in the refractory of industry.
Turning now to the fourth quarter.
ICL unit growth in the fourth quarter continued to rebound we saw in the third quarter as more of our markets more fully reopens, we achieved strong growth in several markets, including China of 17%, Japan up 52%, Germany of.
28%.
APAC distributor markets up, 71% and Latin America of 26%, all as compared to the prior year quarter.
We also saw a significant sequential improvement in India during the fourth quarter.
<unk> units on a year over year basis, we're down just 10% in the fourth quarter of 2020 as compared to down 55% in the third quarter.
The middle East remains our most challenged market due to COVID-19 during the fourth quarter.
For fiscal year, 2020, ICL units were up 11% of compared to the prior year.
The positive ICL unit growth must be considered in the context of the global pandemic and also the total market for refractive procedures.
Industry reports estimate of decline of 21% in total refractive industry procedures in 2020 as compared to the prior year.
The chasm between Starz positive ICL unit growth rates and the decline in total refractive industry procedures demonstrates that we are continuing to capture market share.
Therefore, while our growth in certain markets remains impacted by COVID-19, our enthusiasm for even brighter days ahead.
All stirred by solid second half results in 2020, and a solid start to 2021.
Our strategic imperative remains to position, our Evo ICL family of implantable lenses as the transformational pathway to visual freedom for patients seeking of like independent of glasses and frequent replacement contact lenses our.
Our strategy support the transformation to a lens based future for refractive vision correction and should allow start of capture a disproportionate share of the five 8 million of annual refractive procedures that industry market reports project in 2025 today.
And as we look ahead, we are laying the foundation for STAAR that can grow from selling hundreds of thousands of lenses per year 10 million of sort of lenses per year through increasing consumer awareness surgeon commitments, new product introductions and appropriate investments to scale the company.
Consistent with our significant growth opportunity.
Briefly touch on each of these areas to illustrate our focus and commitment.
First we have increasing evidence that our multichannel consumer awareness and marketing activities globally are showing positive results where.
Where we promote the exceptional cyber ability of our Evo ICL family of lenses to consumers, we see greatest Suzy of some amongst consumers on social media.
More visits by consumers to our Doctor Finder, and higher ICL unit growth, including in China, Japan, Korea, and Germany to name a few.
Evil visiting ICL patient Influencers for.
Television or music personalities to everyday people are creating meaningful interactions with their followers on various social media platforms, such as Tictoc Little Red book and Instagram.
That resulted in the its followers becoming prospective patients.
Our investment in consumer marketing is supported by marketing research that shows 40 point plus upticks in ICL interest in key markets when consumers understand the advantages of our ICL lenses, including remove the ability no dry eye syndrome and excellent night.
Vision.
This joint marketing research shows the 60 point increase and interest among U S consumers.
Second we are gaining increased and the surgeon commitment with our lenses for.
Which is supported by clinical validation.
2020, and for the first year STAAR sold more lower diopter lenses between minus 0.5, and minus 10, then higher diopter lenses between minus 10 and minus 20.
Our opportunity with surgeons includes training and certifying more refractive surgeons globally.
And also increasing the number of ICL lenses implanted by currently certified surgeons, increasing lens utilization remains of significant growth opportunities for STAAR as surgeons can move from implanting tens of lenses per year, the hundreds or even thousands as we've seen in certain Asia.
When markets.
Turning to our third strategic priority, which is introducing our innovative products to large new markets globally. We are continuing the controlled rollout of our Evo veeva of presbyopia lens in Europe.
The initial commercial surgeons are implanting, the veeva lens, while gaining valuable insights for delighting patients at each of distance near intermediate and for these.
These insights will be part of the Evo beef of playbook of best practices that we will share with certified surgeons during full commercialization of the lens expected in the second half of 2021.
In the coming weeks, we will add more surgeons as part of our phased rollout of the Viva lens.
In the U S. We of implants at all patients in the study for our Evo family of Myopia lenses and follow up is being conducted per the trial protocol.
Our plan remains to submit the data to the FDA for marketing approval in late April.
We will provide an update on the status of our submission and any other details when appropriate and permitted.
The U S. As the number two market in the world for refractive procedures as the long debt market, where we look forward to introducing our family of Evo lenses. We believe we remain on track pending FDA approval to introduce our Evo lenses to the U S market in the fourth quarter of this year.
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Finally, we continue moving forward with scaling the company to meet increasing demand and physician star to sell millions of lenses in the future.
Capital investments include the following.
Establishment of our Evo manufacturing operations and need of Switzerland, and our advanced Presbyopia Veeva lens manufacturing facility in Lake Forest, California.
Also expanding capacity of our Monrovia of manufacturing facility.
Operating investments include scaling our revenue generating sales and marketing teams and programs.
We have recently added key hires to the U S sales team and we will continue to support our growth in China with additional in country STAAR account executives.
We will also invest in marketing programs and geographies that can demonstrate strong returns by driving higher levels of ICL unit growth.
Before turning the call over to Patrick Let me conclude my prepared remarks by welcoming two new members to the star of Board of Directors, Dr. Elizabeth You and Dr. Peony, Yu, who joined the board as previously announced on January 21.
I would also like to thank retiring board member John Moore for his more than a decade of service to STAAR.
Patrick.
Thank you Karen and good afternoon, everyone.
Total net sales of Q4, 2020 were $46 million up 18% as compared to the $38 9 million of net sales in Q4, 2019 and down 2% on a sequential basis from Q3 2020.
The year over year increase of net sales was attributable to the growth Caren highlighted earlier.
Sequential decrease in sales was due to the moderate seasonality in our business.
As a reminder to our investors and analysts Q1, and Q4 have historically represented our seasonally lowest quarters and thus we continue to believe Q1 2021 will be slightly down from our Q4 2020 results.
In terms of product mix ICL sales represented 87% of total company net sales for the fourth quarter of 2020 and other products represented 13%, which is consistent with recent trends.
Gross profit for Q4, 2020 was $34 $3 million for 74, 6% of net sales as compared to gross profit of $28 8 million for 74, 1% of net sales for Q4 2019.
And $34 9 million or <unk> 74, 1% of net sales for Q3 2020.
The 50 basis point increase in gross margin as compared to Q4 2019 is primarily due to geographic sales mix, partially offset by inventory reserves taken on certain lower margin <unk> products, which are being discontinued and manufacturing projects.
The sequential increase in gross margin from the third quarter is due to sales mix, partially offset by inventory reserves taken of certain lower margin <unk> products, which are being discontinued we expect Q1 and fiscal year 2021 gross margin to be similar or slightly up from our Q4 2020 results.
Moving down the income statement total operating expenses for Q4, 2020 were $30 2 million as compared to $26 $5 million in Q4, 2019 and $30 million for Q3 2020.
Taking a closer look at the components of operating expenses G&A expenses.
For Q4, 2020 was $9 5 million compared.
Compared to seven nine for Q4 2019 of eight 6 million for Q3 2020 the.
The year over year increase in G&A is due to increased salary related costs variable compensation corporate insurance and facilities cost.
The increase from Q3 2020 was due to increased variable compensation corporate insurance and salary related costs.
We expect G&A dollars for Q1 2021 to be slightly higher than Q4, 2020 and to continue at a similar level of absolute dollars each quarter for the balance of 2021.
Selling and marketing expense was $11 $8 million for Q4, 2020 compared to $11 2 million for Q4, 2019, and $12 6 million for Q3 2020.
The increase in selling and marketing expense from the prior year was due to increased salary related costs and advertising and promotional expenses, partially offset by decreased travel and sales meetings and trade shows expenses.
And the decrease from Q3 2020 was due to decreased advertising and promotional expense, partially offset by increased salary related costs and variable compensation.
We expect selling and marketing as a percentage of sales to represent approximately 33 percentage of sales for the first quarter and the full year of 2021 as the company make appropriate investments in scaling the company consistent with current comments earlier.
Research and development expense was $9 million in Q4, 2020 compared to $7 4 million for Q4, 2019, and $8 8 million for Q3 2020.
The increase in research and development expenses compared to the prior year quarter was primarily due to increased clinical expenses associated with our Evo clinical trial in the U S and increased variable compensation the.
Slight sequential increase in R&D is due to an increase in salary related costs, partially offset by lower clinical spending.
We expect quarterly R&D for 2021 to remain similar to our Q4 2020 in absolute dollars, which should yield some leverage in R&D as a percentage of a higher level of anticipated sales throughout 2021.
Operating income in Q4, 2020 was $4 $1 million of eight eight percentage of sales as compared to $2 3 million or six percentage of sales for Q4 2019.
The 280 basis point year over year expansion in operating margin is due to leverage on the fixed and variable operating expense during the quarter.
Net income in Q4 was $3 3 million or seven cents per diluted share compared to a net income of $6 4 million or 14 per share in Q4 2019 the.
The lower net income in the fourth quarter of 2020 as compared to 2019 is due to a higher provision for income taxes. As the result of the <unk> per share tax benefit from our 2019 tax valuation release.
On the non-GAAP basis, adjusted net income for two for 2020 was $6 8 million of <unk> 14 per diluted share compared to adjusted net income of $5 5 million or <unk> 12 per diluted share in Q4 2019, a table reconciling the GAAP information to the non-GAAP information is included in today's financial release.
Now to our balance sheet, our cash and cash equivalents as of January one 2021 totaled $152 5 million.
Up $24 2 million compared to $128 $3 million at the end of the third quarter 2020.
The sequential increase from the third quarter is primarily attributable to $19 $6 million in cash generated from operations.
As we look ahead in 2021, we anticipate increasing our capex investments as we continue investing in expanding our manufacturing capacity footprint scaling production for our New Zealand and infrastructure scalability for.
The full year 2021, we anticipate a total capex spending to be in the range of $15 million to $20 million.
Finally star will be participating in the credit Suisse virtual West Coast Investor bus trip on March 20, <unk> and.
And we look forward to speaking with many of you. There. This concludes our prepared remarks, operator, we're now ready to take questions.
Thank you at this time I would like to inform everyone in order to ask the question. Please press the star one on your telephone keypad again does the star one to ask the question.
We have your first question from Chris Cooley from Stephens. Your line is open.
Good evening I hope everyone is well.
Just maybe just for the first two and then I'll hop back in queue.
<unk>.
Do you think about the growth of console in the second half of the year clearly.
Strong rebound the Karen on the ICL front.
But didn't hear just to reiterate sooner for the long term targets in a realizable NAV.
Items for 'twenty, one formally but.
Just when we think about the unit.
The growth longer term for the ICL.
What youre seeing now is still keeps those those long range plan targets within reach.
And then what gives you confidence along that just off the base business and then I've got a follow up.
Sure. Thank you for a much Chris.
We definitely are very confident around the momentum in the business. Obviously, we're seeing a lot of the great trajectory in the second half of 2020 continue into 2021.
So if you look at our long term commitment for either the growth rate of 25%.
35% of ICL unit growth the end of 2022.
Committed to achieving those gross wells.
Ideally as we look at 2021, when you think about obviously in the first half very fine growth year over year.
Talked a little bit of about when we look at sequential growth.
We'll retain the seasonality, but when we look at year over year of growth, especially in the first half of it it can be very healthy and then as we project the half of the year.
We have a number of any of these either with Evo Veeva edition and in the <unk>.
Fourth quarter with Evo in the U S to even add on to what we think will be very healthy growth in 2021.
Hey, Chris.
Maybe I could just add something with the our prepared marks that we said it will give hopefully a very strong signal of our longer term confidence and I talked about the capex spend where we are increasing it in 2021 is a really scaling year for us for a scalability year of about $15 million to $20 million, which is about twice of what we did in 2020, so hopefully.
That's another strong signal by us that we have a lot of.
Confidence in where we think this business can go over the next several years.
No that's great on a piece of it.
And then just some of the second question in parts of it I really appreciate all of the granularity you provided.
Through the middle of the income statement and also as it pertains to the gross line of course, we think about 2021, it really helps.
I'm curious, though as you make these understandable investments in infrastructure and personnel.
Getting ready for the launch of vivo in the fourth quarter here in the United States and obviously the continued ramp up of Veeva abroad.
And then hopefully here in the U S. Shortly thereafter.
When we exit 'twenty one I'm just curious are we out of the spin route where.
Or I should say is the company out of the spend rate at that point, where you can start to drive leverage or is that just the initial kind of close and you'll need to further continue that kind of operating spitz to spin stubhub.
In the EU of thereafter, as we think about building out the commercial infrastructure here in the U S sort of sounds like China as well now thank you.
Sure. It's a good question and certainly caren can add on it I think it's a little it's a little early for us to give I would say some of those longer term projections since we're starting to.
We're awaiting the U S approval.
And we're starting to see the penetration within some of the other markets including.
Getting our our beginnings of Veeva right in Europe, and then hopefully as we spread that out throughout the world. So I think what you've seen in the model is that it's a fairly simplified model.
Leverage.
On a fairly nominal what I would say our revenue scale compared to our peer groups or other medical device companies that are in the high growth stage like we are so I'm very confident in our ability to have expansion.
I would expect you will see expansion as we move forward through the years, we've got a nice tailwind related to our gross margins as it relates to geography mix.
As a reminder, with the U S coming on board it will be of direct market. It's one of the larger.
For a more premium markets out there from an ASP standpoint, and so we're going to get a nice tailwind over the next.
Several years related to building out that market.
And then some of the other direct markets as well, including Veeva, which is right now of premium product for us compared to our current EBIT land. So.
That does not keep me up at night of any sort of margin operating margin expansion. So we feel very good about the ability to move forward.
With all of that said, we will hold off and no people are eager to see kind of what does this look like since.
Since our last Investor day, we're looking forward of doing an investor day at some point in the not so just the future and you can expect we will give some some future looks not only on the sales side, but through some of the leveraging of the P&L.
We have your next question from Anthony Petrone from Jefferies. Your line is open.
Hi, Thanks, good afternoon, everyone all of them.
Staying healthy of couple questions one would be on Veeva.
One on U S. Evo and then and then one for Patrick just on on the distributor trends on Veeva.
And maybe just an update on expectations for the full scale European launch at ESC the.
European Cataract meeting later this year.
What are the latest thoughts there just as we continue to navigate COVID-19. So that would be question, one and more so what does that full scale launch look like.
Will there be more direct sales reps added ahead of that.
And then also in regards to the DPC will you ramp that up ahead of the Es Crs meeting later this year. The second question on Evo timelines would be similar should we.
Expect a ramp in DTC and sales force ahead of that.
And then I'll have a follow up for Patrick Thanks.
Okay. Thanks for joining.
As Anthony when we.
Of the volume the bar.
In Europe.
Our goal is to continue to add surgeons.
Who are certified and doing very well with ease of myopia, Ron says throughout Europe over the next six plus months and during that time, we continue to add which we've already got we already have initial commentary on what works and what we can advise surgeons to do.
Well prepare of patients for their expected vision near.
Near intermediate and distance.
Should have that playbook ready to go for all surgeons.
Who are in approved markets.
Probably by I would say September we were thinking of doing it and the experts meeting, which we do every year a few days for E. S. T. R US having the vs lands' end playbook being the primary discussion points.
With surgeons on the podium who would be able to share their hurdles as well as the patient experience and the direct to consumer experience.
We are hesitating a bit on the timing not because we won't be ready, but because we're really not sure yet whether the Amsterdam meeting is going to take place.
In terms of an in person meeting rather than virtual and we would really prefer to roll. This out if we can either in the combined hybrid virtual in person meeting or an in person meeting there's so much to share.
When you're on one of our experts meeting. It's on there are 350 people in the room and everyone's trying to grab the microphones of share their experiences it's truly exciting and something we think gave of deserves. So we'll see what the timing will be of the experts meeting to rollout.
The bar with our leading surgeons around the world and approved markets with regard to adding salespeople, we definitely are adding direct indirect markets and we have been very very good at building new hybrid market, such as in Benelux, France and Italy.
And we have done a good job of upgrading distributors, where necessary all three direct hybrid and distributors the we'll be managing the vivo low.
In terms of Evo in the U S.
We have a full rollout that is already.
In approval phases, we have been hiring people in the U S are really strong and strategic account management.
We have a number of exceptional programs that will be rolling out that of them very successful.
In Europe and in China, both from social media from the digital marketing as well as testimonials and individuals who are very well respected share.
Share their veeva the excuse me the Evo experience. So the U S will be a exceptional market, we believe for consumer outreach and in each of the markets in the United States, where we will be rolling out the Evo lens with significant and strong partners who are strategic.
Partners of Star, who are of Kols, who are in big practices with lots of refractive procedures. The year all of that is being planned.
To be ready and available for fourth quarter.
Thank you so much if I can just for Patrick.
Can you maybe walk us through how distributor <unk>.
<unk> stocking the restocking kind of played out exiting 2020, and how those trends will play.
Play out in the first half of 2021. Thank you so much.
Yeah. So we got a quite a few questions about that and I think what everyone needs to take away is that there is theres no unusual net to the business from a stocking destocking et cetera, what we see at the end of the year is what I would call a normal.
A normal pattern of.
Of the business, where some of the distributors are looking to make sure that their levels are appropriate across the different skus right and so they're really looking to write set that and so we saw a little bit of that in some of the the larger distributors like we have in China. The single one we have there.
The people shouldn't read anymore into that normal course of business for moving forward.
There's a lot of momentum in the business right now everyone's ordering direct markets distributor markets et cetera. So.
Everything is it is really running it at the normal pattern.
Thank you.
Of course.
We have your next question from Brian Weinstein from William Blair. Your line is open.
Hi, Good afternoon. This is Andrew on today, Thanks for taking the question.
Maybe we can start on U S market dynamics here, Karen you've sort of always talked about the core demographic for Evo in Asia, and sort of being that bucket of the young professionals with the higher level of disposable income. So maybe as we think about the U S market here can you just give us a little bit of an idea of how you view the demographic here for that.
And as a corollary to that any differences in how we should be thinking about maybe some consumer of macro sensitivity to the product here versus other areas around the globe.
Thank you for joining us for Andrew and answered. Your question, Yes, we do believe the kind of graphic holds globally.
21, 35 year olds.
Many of whom the daily contact lenses and the glasses more than they would like.
The strong interest in having visual freedom.
For April in the workplace.
Through exercise of sports and other activities just be totally free to do whatever they need to do without any dependence on vision correction apparatus. So we expect that to continue and to be very strong.
For the U S consumer is especially interested in lenses that have such great benefits such as the day.
The ability to be upgraded and the fact that there is no dry eye syndrome. The fact that there is exceptional night vision.
And also the niche.
Hum.
That this is quiet in the eye and Biocompatible and so I think with.
The tremendous strength, which are picked up so beautifully in social media around the world as really excited and happy with.
<unk> of the Evo lenses love sharing their stories.
What will happen in the U S and maybe even be more aggressive in.
And that we have the greatest consumers in the world in the United States.
And I think that in terms of.
Going forward.
Through the awesome for being prepared and ready for a consumer world in the United States debt becomes aware of even though I know that we're there.
Great. Thank you that was very helpful. And then I guess, maybe a question on cash year of.
Obviously, what a difference of couple of years makes for for you guys and certainly.
Congrats for the team for all of the cash flow generation over the last couple of years, but now I guess with over $150 million sort of on the balance sheet and recognizing Patrick you gave a lot of good color on the internal investments here.
We did notice that shelf that you have so maybe I guess, bringing it out bigger picture here can you talk maybe some longer term strategic.
Functions that you might be investing behind what you've outlined today or even maybe some thoughts on M&A that might make you want to tap into that Jeff. Thanks for the question.
Yeah, no great question, and actually kind of glad you brought it up people should not be reading into the shelf other than that's just good corporate governance public company should have the shelf that registered in current at all times. So.
That would be my response related to the shell in terms of capital capital deployment et cetera.
In my short time here and you can look back the company has done just an incredible job of generating nice cash flow once again, what I considered to be off of a smaller revenue base compared to other high growth companies and so I think thats. The testament to the discipline that we have and making good investments as well as the simplicity and beauty.
Of the model that we have in our ability to penetrate.
We will continue to make investments primarily in the sales and marketing side as we talked about the drive market share, but we will continue to believe that we can generate the cash so at this point.
<unk> got a healthy balance sheet.
No debt to speak of.
And we're in a good space to grow our business organically.
And I think from that standpoint, that'll be our our answer.
Unless something else Pops up, but we've got early innings in terms of where we're out of the Evo business.
So we're very excited and have the capital needs to support that.
We have your next question from Bruce Jackson from the Benchmark Company. Your line is open.
Hi, good afternoon, and thank you for taking my question I'd like to go back to the comment you made during your prepared remarks about the product mix now of being tilted more towards the low diopter lenses and I was wondering if you got there with any.
Any actions and price for promotion.
<unk>.
What what other for the actions you might take to get get more of a low diopter mix, because youre coming up against the the lasik procedures, where price might become.
The factor I would like to get your thoughts just generally on that.
Sure. Thank you Bruce for joining us.
In terms of what we have done over the past few years to encourage.
The lower diopter ranges for the refractory patient.
First of all of the on the pricing price.
For spirit lenses only.
Did have the lesser cost associated with those lenses for the surge in with their choice as to whether or not they wanted the past that advantage onslaught of patients to further encourage them to Gulf with lens, rather than a lasik procedure.
At the same time and I think of this is really important a number of our strategic partners around the world and Kols did clinical validation studies and presented the papers about the fact that the lower diopter patients is equally well served as the higher diopter patients.
With outstanding results and then we also made sure that in the society and major countries, which we've talked about before such as Japan, and Germany The day.
And of the standard of care has really been reflected these changes in practice patterns for land sales practices by moving approval levels from maybe a minus theater of minus nine down from minus three and in certain instances down to a minus of.
So it is a combination of clinical validation.
Backing by the leading Kols with a person of society standard of care and then by properly pricing to incentivize the surgeon and location to look at the ICL is always premium and primary and will be more expensive the laser vision, but we believe conservatively so but narrowing.
The GAAP a bit.
Okay. That's great very helpful. And then if I could just get one more question then about China coming out of the.
The Chinese new year, if you could just give us a little color around how things are developing and how it relates.
Versus your plan for the year.
We're very excited about China.
China's my enthusiasm.
With our lands and as result of them.
Yes.
After Chinese new year for.
We already are taking up to levels at or above.
Where we were proud of.
And our growth trajectory in China.
The very strong were very excited.
About.
Q1, and getting ready for.
The real big spend in Q2 and Q3.
So things are going very very well in China.
Alright Fabulous thank you very much.
Thank you.
We have for your next question from Ryan Zimmerman from <unk>. Your line is open.
Yes, thanks for taking the questions I appreciate it just made of follow up around some of the pricing trends. It was up about a little over 5% of zinc and.
Just some of the best we've seen in one and Patrick maybe if you want to chime in just kind of how to think about pricing.
Into 'twenty, one and what was the what was the result in the <unk>.
Here was it a function of geography of lens type maybe more toric, so help us understand that and maybe how you think that plays out.
<unk> in 'twenty, one with all of all of the new products that you are potentially introducing really in later part of the year.
Yes, sure I think Oh go ahead current okay.
Take it.
The so where are we really are is that for us is becoming a bigger part of mix in almost every market.
Theres just tremendous enthusiasm in bringing patients who have traditionally and to this day not had very good options with any of them.
They need a tour of glass and so we're getting a lot of demand.
Even more of an unusual in Asia as a percentage.
Some cases were moving beyond 47 of the 50% above 50 per cent per tour.
That obviously benefits us in terms of ASP.
In terms of price around the world. We are marketing based on what we think is the value story.
We also worked very diligently with our partners on the strategic commitments and so we ask our partners to grow their businesses you have asked us of 20 or 30%.
On average in terms of.
What they are going to commit to in return for a lot of what we provide.
But definitely in terms when you had net and when you had much increasing volume.
And a consistency around the way, we sell and the way we reward.
We expect this positive pricing trends to continue and advantage us in 2021.
Sure.
Okay, that's very helpful.
I don't know if Patrick do you have anything else the.
The one for your feeling.
No secret it on the that's okay.
Great and then Karen just.
Another one with the Evo launch.
Over the course really in the back half of 'twenty, one in the U S.
Given the the number of physicians that are currently implanting the <unk>, how do you expect adoption to play out with Evo.
In the U S should mimic kind of how veeva is going right now or do you expect all of those physicians that are in the U S too.
The dark Evo whats call. It day, one just trying to get a sense for how quickly kind of off the gate you could have sales on that lens in the U S.
So different story with movement from Disney in ICL without the central for it to Evo busy nics versus Veeva myopia and just how the correction is great for work and so what we expect debt.
Right out of the gates.
There will be an of surgeons, who have either participated in the clinical trial are already kols were already fronting strategic partners.
The or who have very successfully joined us in refractory restart over the last several months.
We have for returns to are committing to.
All of the land space.
The others to expect that their percentage of laser vision correction for.
The first is ICL procedures will flip so if they were 74 laser vision it'll be 70 30.
So that's a much faster adoption the.
In much stronger.
Ross back at the gate.
With me on purpose because it is a multi multi day.
The correction procedure.
Just for every possible advantage you have a great lens like ours.
On the make this as simple as possible very few sort of have done the refractive presbyopia.
This is a whole new game to be able to do this.
For lens with you know without doing an in line or a clip on the cornea.
So we are taking our time to have an extraordinary experience for all surgeons can handle the fever. So bottom line of stay tuned with the FDA approval in the U S. We expect to have a great launch.
I'm showing no further questions at this time I would now like to turn it back to MS. Caren Mason, President and CEO for any closing remarks.
Thank you operator, and thanks, everyone for your participation on our call today.
With many of you in the days and weeks ahead. We appreciate your interest and investment is for our surgical please take good care and all of the best of all of them.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
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