Q4 2023 STAAR Surgical Co Earnings Call
Operator: Good day, ladies and gentlemen. Thank you for standing by. Welcome to the STAAR Surgical 4th Quarter and Fiscal Year 2023 Financial Results Conference Call. During today's presentation, all parties will be in a listen-only mode.
Good day, ladies and gentlemen.
Thank you for standing by.
Speaker Change: Welcome to the STAAR surgical fourth quarter and fiscal year 2023 financial results Conference call.
Speaker Change: During todays presentation, all parties will be in a listen only mode.
Operator: Following the presentation, the call will be open to questions. If you have a question, please press the star key followed by the 1 on your touchtone phone. If you are using speaker equipment today, please lift the handset before making your selection. This call is being recorded today, Monday, February 26th, 2024. At this time, I would like to turn the conference over to Mr. Brian Moore, Vice President, Industrial Relations and Corporate Development for STAAR Surgical. Please go ahead.
Speaker Change: Following the presentation the call will be opened for questions.
Speaker Change: If you have a question. Please press the star followed by the one on your Touchtone phone.
Speaker Change: If you are using speaker equipment today, please lift the handset before making your selection.
Speaker Change: This call is being recorded today Monday February 26 2024.
Speaker Change: At this time I would like to turn the conference over to Mr. Brian Moore, Vice President of Investor Relations and corporate development for STAAR surgical. Please go ahead. Thank you operator, good afternoon, everyone. Thank.
Brian Moore: Thank you, Operator. Good afternoon, everyone. Thank you for joining us on the STAAR Surgical Conference call to discuss the company's financial results for the fourth quarter and fiscal year ended December 29, 2023. On the call today are Tom Frenzy, President and Chief Executive Officer, and Patrick Williams, Chief Financial Officer. The press release about our fourth quarter and full year results was issued just after 4 p.m. Eastern Time.
Brian Moore: Thank you for joining us on the STAAR surgical conference call to discuss the company's financial results for the fourth quarter and fiscal year ended December 29 2023.
On the call today are Tom Frenzy, President and Chief Executive Officer, and Patrick Williams, Chief Financial Officer.
Brian Moore: The press release of our fourth quarter and full year results was issued just after four P. M. Eastern time, we have posted the earnings release in the Investor Relations section of <unk> website at Www Dot Star Dot com.
Brian Moore: We have posted the earnings release in the investor relations section of STAAR's website at www.staar.com. Before we begin, let me quickly remind you that the company comments during this call will include forward-looking statements. We caution you that any statement that is not a statement of historical fact is a forward-looking statement.
Brian Moore: Before we begin let me quickly remind you that the company comments. During this call will include forward looking statements. We caution you that any statements. There is not a statement of historical fact is a forward looking statement. This includes remarks about the company's projections expectations plans beliefs and prospects.
Brian Moore: This includes remarks about the company's projections, expectations, plans, beliefs, and prospects. These statements are based on 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 expressed or implied by the forward-looking statement. The risks and uncertainties associated with these forward-looking statements are described in the Safe Harbor Statement in today's press release, as well as STAAR's Public Periodic Report 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.
Brian Moore: These statements are based on 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 expressed or implied by the forward looking statements.
Brian Moore: The risks and uncertainties associated with these forward looking statements are described in the Safe Harbor statement in today's press release as well as staar's public periodic with the SEC.
Brian Moore: 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.
Brian Moore: In addition on this call and in the press release, we discuss certain non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA per share. We also provide sales data in constant currency definition and reconciliations to GAAP are included in today's press release.
Brian Moore: In addition, on this call and in the press release, we discuss certain non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA per share. We also provide sales data in constant currency. Determination and reconciliations to GAP are included in today's press release. For brevity, unless otherwise specified, all comparisons on today's call will be on a year over year basis versus the relevant period. Following our prepared remarks, we will open the line to questions from publishing analysts. We ask analysts to limit themselves to two initial questions, then resume with any follow-up.
Brian Moore: For brevity, unless otherwise specified all comparisons on today's call will be on a year over year basis versus the relevant period.
Brian Moore: Following our prepared remarks, we will open the line to questions from publishing analysts, we ask analysts to limit themselves to two initial questions then re queue with any follow ups.
Brian Moore: Finally, 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 section. Accordingly, investors should monitor our investor website in addition to following our press releases, SEC filings, and public conference calls and webcasts. And with that, I would now like to turn the call over to Tom Frenzy. Tom said,
Brian Moore: Finally, we intend to use our website as a means of disclosing material nonpublic information and for complying with our disclosure obligations under regulation FD.
Brian Moore: Such disclosures will be included on our website in the Investor Relations section Accordingly investors should monitor our Investor Web site. In addition to following our press releases SEC filings and public conference calls and webcast.
Brian Moore: And with that I would now turn the call over to Tom Frenzy Tom.
Tom Frenzy: Thanks, Brian. Good afternoon, and thank you everyone for joining us. I join you today from the American-European Congress of Ophthalmic Surgeons Symposium. We're pleased to share that STAAR has an increased podium presence and there continues to be significant interest in our lens-based technology. Evo ICL.
Tom Frenzy: Thanks, Brian Good afternoon, and thank you everyone for joining us.
Tom Frenzy: I join you today from the American European Congress of Ophthalmic surgeon Symposium.
Tom Frenzy: I am pleased to share that star has an increased podium presence and there continues to be significant interest in our lens based technology Evo ICL with that as a backdrop I am pleased to report that we delivered strong net sales cash generation and profitability in 2023 for.
Tom Frenzy: With that as a backdrop, I am pleased to report that we delivered strong net sales, cash generation, and profitability in 2023. For the third consecutive year, global ICL unit growth exceeded refractive industry growth by over 25 points. STAAR's business model is rare to find.
Tom Frenzy: For the third consecutive year global ICL unit growth exceed it refractive industry growth by over 25 points.
As far as the business model is rare to find.
Tom Frenzy: We are growing profitably with high gross margins, and we have the ability to continue to drive higher operating margins. And with a record $232 million of cash and investments as of year end, we have a pristine balance sheet and significant flexibility. The number of patients with myopia, which our technology treats, continues to grow and is expected to reach 5 billion by 2050. Our strong financial position allows us to execute against this opportunity throughout the business cycle. Turning to our results, the net sales we reported today are consistent with the preliminary results we projected in early January.
Tom Frenzy: We are growing profitably with high gross margins and we have the ability to continue to drive higher operating margins and with a record $232 million of cash and investments as of year end, we have a pristine balance sheet and significant flexibility.
Tom Frenzy: The number of patients with myopia, which our technology treats continues to grow and is expected to reach 5 billion by 2050.
Tom Frenzy: Our strong financial position allows us to execute against this opportunity through the business cycle.
Tom Frenzy: Turning to our results. The net sales we reported today are consistent with the preliminary results, we projected and early January.
Tom Frenzy: We achieved 22% ICL growth in the fourth quarter and 18% ICL sales growth in fiscal 2023. Our APAC and EMEA regions, up 26% and 18%, respectively, drove ICL sales growth in the quarter. EMEA, up 9% sequentially in the fourth quarter, generated solid growth, demonstrating the geographic breadth and diversification of STAAR's business. STAAR's geographic diversity provides a strong underpinning for refractive procedure growth and expands the target market for EVO procedures. By country, standout ICL sales growth in the fourth quarter included China up 30%, Japan up 16%, South Korea up 39%, Germany up 21%, and our other APAC region, which includes emerging markets such as Singapore, Thailand, and Vietnam, was up 21%.
Tom Frenzy: We achieved 22% ICL growth in the fourth quarter, and 18% ICL sales growth in fiscal 2023.
Tom Frenzy: Our APAC and EMEA regions up, 26% and 18% respectively drove ICL sales growth in the quarter.
Tom Frenzy: EMEA up 9% sequentially in the fourth quarter generated solid growth demonstrating the geographic breadth and diversification of.
Tom Frenzy: Starz business.
Tom Frenzy: Large geographic diversity provides a strong underpinning.
Tom Frenzy: <unk> procedure growth and it expands the target market for Evo procedures.
Tom Frenzy: By country standout ICL sales growth in the fourth quarter included China up 30%, Japan up 16%.
Tom Frenzy: South Korea up 39%.
Tom Frenzy: Germany up 21%.
Tom Frenzy: In our other APAC region, which includes emerging markets, such as Singapore, Thailand, and Vietnam was up 21%.
Tom Frenzy: We anticipate that APAC, including China and India, will remain a region of remarkable growth for STAAR as ICL continues to take market share and expand the overall addressable market. The region has some of the highest GDP growth among large economies, with many markets seeing increases in incomes and population. China, for example, has 12 cities with populations larger than New York City, and this continues to spur our development in this market.
Tom Frenzy: We anticipate that APAC, including China, and India will remain a region a remarkable growth for star as the ICL continues to take market share and expand the overall addressable market.
Tom Frenzy: <unk> had some of the highest GDP growth among large economies with many markets seen increases in incomes and population.
Tom Frenzy: For example has 12 cities with populations larger than New York City.
Tom Frenzy: Continued sparing our development in this market, we are investing in people and infrastructure to realize the growing opportunity.
Tom Frenzy: We're investing in people and infrastructure to realize the growing opportunity. We have added a second large distributor with broad reach, including Tier 3 and 4 cities. We have also extended our relationship with our longtime reliable distributor, Shanghai Langshan.
Tom Frenzy: We have added a second large distributor with broad reach including tier three and four cities. We have also extended our relationship with our long time reliable distributor Shanghai Lang Shang our expanded hybrid infrastructure in China with over 80 in country Star employees response.
Tom Frenzy: Our expanded hybrid infrastructure in China, with over 80 in-country STAAR employees responsible for demand generation, will allow for improved customer service, including more real-time and next-day availability of our lenses. I look forward to traveling to Okinawa, Japan, for our APAC Experts Summit next month before proceeding to mainland China to support our local operations as well as host investor meetings in Shanghai and Shenzhen. Turning to the U.S., our sales for the fourth quarter were approximately $4.2 million, flat sequentially and consistent with our previously provided expectations for the period. The U.S. is the second largest market in the world for refractive procedures and remains an important growth opportunity for STAAR.
Tom Frenzy: <unk> for demand generation will allow for improved customer service, including more real time and next day availability of our lenses.
Tom Frenzy: Look forward to traveling to Okinawa, Japan for APAC experts summit next month before proceeding to mainland China to support our local operations as well as host investor meetings in Shanghai and Shenzhen.
Tom Frenzy: Turning to the U S. Our sales for the fourth quarter were approximately $4 2 million.
Tom Frenzy: Flat sequentially and consistent with our previously provided expectations for the period.
Tom Frenzy: The U S is the second largest market in the world for refractive procedures remains an important growth opportunity for start.
Tom Frenzy: Our U.S. Highway 93 go-to-market initiative is beginning to show progress, as demonstrated by the strategic agreement we announced last month with Sharp Vision. The initial target purchase amount under that agreement of 1,000 ICL units annually represents approximately 25% of the group's refractive procedure volume. Given the outstanding outcomes Sharp Vision has experienced with the Evo ICL, they want to make it available to more of their patients, and they are pricing the procedure at a small premium relative to laser vision correction, and Sharp Vision sees this as a great win-win opportunity, and we believe it is a model we can continue to leverage as we drive growth in the U.S. We anticipate several more customers will join the fast lane of our Highway 93 initiative with In addition, we believe we can successfully deploy aspects of our U.S. Highway 93 initiative in other regions to drive growth. Using Highway 93 as a model, we are in the process of launching similar initiatives in key European markets.
Tom Frenzy: Our U S. Highway 93 go to market initiative is beginning to show progress as demonstrated by the strategic agreement, we announced last month with sharp vision.
Tom Frenzy: The initial target purchase amount under that agreement of 1000 ICL units annually represents approximately 25% of the group's refractive procedure volume.
Tom Frenzy: Given the outstanding eat outcomes sharp vision has experienced with the Evo ICL. They wanted to make it available to more of their patients and they are pricing that procedure at a small premium relative to laser vision procedures star and sharp vision see this is a great win win opportunity and we believe it is a mark.
Tom Frenzy: So we can continue to leverage as we drive growth in the U S.
Tom Frenzy: We anticipate several more customers will join the fast lane of our highway 93 initiatives with large volume commitments in 2024.
Tom Frenzy: Placing us on a path along with other initiatives to achieve meaningful sequential growth in the U S. In the second half of this year.
Tom Frenzy: Further we believe we can successfully deploy aspects of our U S Highway 93 initiatives.
Tom Frenzy: Other regions to drive growth user.
Tom Frenzy: Using highway 93 is a model you are in the process of launching similar initiatives in key European markets now I would like to turn to the projects and investments, we're making to drive growth and global ICL market share.
Tom Frenzy: Now, I would like to turn to the projects and investments we are making to drive growth in the global ICL market share. The first of our initiatives is increasing surgeon confidence in the measurement of the eye and lens selection. We anticipate publication of two peer-reviewed clinical papers relating to preoperative measurement of the eye around the ASCRS conference in April. The papers should help our surgeons utilize the ICL nomogram for their specific biometer, which is a measuring device.
Tom Frenzy: The first of our initiatives is increasing surging confidence and measurement of the eye and lend selection.
Tom Frenzy: We anticipate publication of two peer reviewed clinical papers relating to preoperative measurement of the eye around the a S. E. R. S Conference in April.
Tom Frenzy: Paper should help our surgeons utilize the ICL noma Graham, but there are specific biometer, which as a measuring device.
Tom Frenzy: We're also exploring technical solutions such as AI-based lens size selection tools currently used successfully by some surgeons. Additionally, we're preparing to introduce intermediate lens sizes, as requested by surgeons in China, to further increase their confidence and willingness to select Evo as their solution of choice for patients seeking visual freedom from eyeglasses and contacts.
Tom Frenzy: We're also exploring technical solutions, such as AI based lens size selection tools.
Tom Frenzy: Currently used successfully by some surgeons.
Tom Frenzy: Our diligence phase includes the funding of a study already underway. Additionally, we're preparing to introduce intermediate lens sizes as requested by surgeons in China.
Tom Frenzy: To further increase their confidence and willingness to select evo as their solution of choice for patients seeking visual freedom from eyeglasses and contacts.
Tom Frenzy: Finally.
Tom Frenzy: We recently established the Department of Global Professional Education and Training under our Chief Medical Officer, which brings together strategic and professional education, clinical training, and commercial training under a single leadership point. It will more closely align training, education, and commercial activities globally to enhance knowledge and understanding of our ICL technology and its benefits to patients and practice. Our second initiative to drive growth is an increased focus on further expanding our market opportunity by moving down the dioptic curve to lower levels of vision correction, initially by becoming the first choice in minus 6 diopters to minus 8 diopters globally.
Tom Frenzy: We recently established a department of global professional education and training under our Chief Medical Officer, which brings together strategic and professional education.
Clinical training and commercial training under a single leadership point.
Tom Frenzy: The department will more closely align training education and commercial activities globally.
Tom Frenzy: Enhanced knowledge and understanding of our ICL technology, and its benefits to patients and practices.
Tom Frenzy: Our second initiative to drive growth is increased focus on further expanding our market opportunity by moving down the diopter curve the lower levels of vision correction initially by becoming the first choice and minus six diopters to minus eight diopters globally.
Tom Frenzy: The mix of lenses we sell less than or equal to minus 8 diopters today is approximately 32% of our ICL sales. As many of you know, Evo ICL is already the preferred choice for higher diopter levels of correction above minus 8 diopters. Our strategy to move down a diopter curve includes focused and coordinated downstream marketing to our physician customers that advances Evo's customer value proposition and supports it with easily understood clinical evidence, a master brand message, and other proof points. Third, we will innovate with new products and solutions. We recently launched the new Surgeon Loaded Injector in the U.S., which is easier to load and should result in better efficiency.
Tom Frenzy: The mix of lenses, we sell less than or equal to <unk>.
Tom Frenzy: Minus eight diopters today is at approximately 32% of our ICL sales as many of you know Evo ICL was already as a preferred choice for higher diopter levels of correction above minus eight diopters.
Tom Frenzy: Our strategy to move down the diopter curve includes focused and coordinated downstream marketing to our physician customers.
Tom Frenzy: Vance is egos customer value proposition supported by easily understood clinical evidence a master brand message and other proof points.
Tom Frenzy: Third we will innovate with new products and solutions we.
Tom Frenzy: We recently launched the new surgeon loaded injector in the U S, which is easier to load and should result in better efficiency.
Tom Frenzy: We will launch our new Stella ICL ordering and planning system in the first half of 2024, which is also designed to enhance efficiency. In early 2025, we anticipate that EvoPlus, already available in nearly all of our other large markets, will be available in China. Work is also underway on the next generation of EVO lenses to extend our leadership in lens-based refractive vision correction. The initiatives and developments just discussed give us increased confidence, and today, we affirm our net sales outlook for fiscal year 2024 of $335 million to $340 million, and we continue to believe the path towards our vision 2026 three-year CAGR of 15 to 20 percent remains intact. Patrick.
Tom Frenzy: We will launch our new stellar ICL ordering and planning system in the first half of 'twenty 'twenty four which is also designed to enhance efficiency.
Tom Frenzy: In early 2025, we anticipate that Evo plus already available in nearly all of our other large markets.
Tom Frenzy: We'll be available in China work is also underway on the next generation of Evo lenses to extend our leadership in lens based refractive vision correction.
Tom Frenzy: The initiatives and developments just discussed.
Tom Frenzy: This increased confidence and today, we affirm our net sales outlook for fiscal year 2024 of 335 million to $340 million and we continue to believe the path towards our vision 2026, three year CAGR of 15% to 20% remains intact.
Tom Frenzy: Jack.
Tom Frenzy: Patrick.
Patrick Williams: Thank you, Tom, and good afternoon, everyone. Total net sales for Q4 2023 were $76.3 million, as compared to net sales of $64 million in the prior year quarter. As a reminder, Q1 and Q4 have historically represented our seasonally lowest quarter. The $12.2 million increase in Q4 2023 net sales is attributable to a 22% or $13.5 million increase in ICL sales and a decrease in other product cataract IOLs, which the company has discontinued consistent with our previous announcement. The spread between ICL sales and unit growth was minimal for both the quarter and the fiscal year, which illustrates the stability of our ASPs with fluctuations based primarily on country mix and spheric versus toric product mix. For the quarter, ICL sales and units increased 22% and 19%, respectively. For the year, ICL sales and units increased 18% and 19%, respectively.
Thank you Tom and good afternoon, everyone.
Jack: Net sales for Q4, 2023 were $76 $3 million as compared to net sales of $64 million in the prior year quarter. As a reminder, Q1 and Q4 has historically represented our seasonally lowest quarters.
Jack: The $12 $2 million increase in Q4 2023, net sales is attributable to a 22% or $13 $5 million increase in ICL sales and a decrease in other product cataract IOL LS, which the company has discontinued consistent with our previous announcement.
Jack: The spread between ICL sales and unit growth was minimal for both the quarter and the fiscal year, which illustrates the stability of our asp's with fluctuations.
Asian, based primarily on country mix and spirit versus toward product mix.
Jack: For the quarter, ICL sales and units increased 22% and 19% respectively.
Jack: For the year, ICL sales and units increased 18% and 19% respectively.
Patrick Williams: As Tom mentioned, we anticipate total net sales for fiscal 2024 of $335 million to $340 million. Our outlook contemplates above-average rates of growth in the two largest markets for refractive surgery, China and the U.S., at approximately 10% ICL sales growth and flat growth across all other geographies, primarily due to the dynamic macroeconomic environment. Our outlook also reflects higher growth rates in the second half of 2024. For Q4 2023, gross profit was $60.7 million, or 79.6% of net sales, as compared to gross profit of $49.8 million, or 77.7% of net sales for the prior year quarter, and $63.6 million, or 79.2% of net sales for Q3 2023. The 190 basis point year-over-year increase in gross margin is due primarily to product mix.
Jack: As Tom mentioned, we anticipate total net sales for fiscal 2024 or $335 million to $340 million, our outlook contemplates above average rates of growth in the two largest markets for refractive surgery, China and the U S at approximately 10% ICL sales growth and flat growth across all <unk>.
Jack: Other geographies, primarily due to the dynamic macroeconomic environment.
Our outlook also reflects higher growth rates in the second half of 2024.
Jack: For Q4, 2023, gross profit was $60 $7 million or 79, 6% of net sales as compared to gross profit of $49 $8 million or <unk> 77, 7% of net sales for the prior year quarter, and $63 $6 million or 79, 2% of net sales for Q3 2023.
The 190 basis point year over year increase in gross margin is due primarily to product mix.
Patrick Williams: For 2024, we expect gross margins to be approximately 80% for each quarter and the full year. Moving down the income statement, total operating expenses for Q4 2023 were $50.3 million as compared to $48.8 million in the prior year quarter and $57.3 million in Q3 2023. Taking a closer look at the components of operating expenses, G&A expense for Q4 2023 was $16.9 million compared to $14.8 million in the prior year quarter and $19.3 million in Q3 2023. The year-over-year increase in GNA is primarily due to increased outside services and facility costs.
Jack: For 2024, we expect gross margin will be approximately 80% for each quarter and the full year.
Jack: Moving down the income statement total operating expenses for Q4, 2023 were $53 million as compared to $48 $8 million in the prior year quarter and $57 $3 million in Q3 2023.
Jack: Taking a closer look at the components of operating expenses G&A expense for Q4, 2023 was $16 $9 million compared to $14 $8 million in the prior year quarter and $19 $3 million in Q3 2023.
Jack: The year over year increase in G&A is primarily due to increased outside services and facility costs for.
Patrick Williams: For 2024, we expect G&A expense will be approximately $24 million per quarter and slightly higher as a percent of net sales in prior periods as we invest further in back office infrastructure and scalability. Selling and marketing expense was $22.6 million for Q4 2023 compared to $24.2 million in the prior year quarter and $26.6 million in Q3 2023. The decrease in selling and marketing expense from the prior year is due to decreased compensation-related expenses and marketing, promotional, and advertising activities.
Jack: For 2024, we expect G&A expense will be approximately $24 million per quarter and slightly higher as a percent of net sales in the prior year periods as we invest further in back office infrastructure and scalability.
Jack: Selling and marketing expense was $22 $6 million for Q4, 2023 compared to $24 $2 million in the prior year quarter and $26 $6 million in Q3 2023.
Jack: The decrease in selling and marketing expense for the prior year is due to decreased compensation related expenses and marketing promotional and advertising activities.
Patrick Williams: For 2024, we expect selling and marketing expense will be approximately $30 million per quarter, which is consistent with prior periods as a percent of net sales. Research and Development Expense was $10.9 million in Q4 2023 compared to $9.8 million in the prior year quarter and $11.5 million for Q3 2023. The year-over-year increase in R&D is due to increased compensation-related expenses. For 2024, we expect R&D expense will be approximately $13 million per quarter, which is also consistent with prior periods as a percent of net sales. Gap operating income in Q4 2023 was $10.4 million, or 13.7% of net sales, as compared to $1 million, or 1.5% of net sales in the prior year quarter.
Jack: For 2024, we expect selling and marketing expense will be approximately $30 million per quarter, which is consistent with prior periods as a percent of net sales.
Jack: Research and development expense was $10 $9 million in Q4, 2023 compared to $9 $8 million in the prior year quarter and $11 $5 million for Q3 2023.
The year over year increase in R&D is due to increased compensation related expenses.
Jack: For 2024, we expect R&D expense will be approximately $13 million per quarter, which is also consistent with prior periods as a percent of net sales.
Jack: GAAP operating income in Q4, 2023 was $10 $4 million or 13, 7% of net sales as compared to $1 million or one 5% of net sales in the prior year quarter.
Patrick Williams: GAAP operating income for fiscal 2023 was $28.1 million, or 8.8% of net sales, as compared to $43.8 million, or 15.4% of net sales for fiscal 2022. We continue to expect GAAP operating margin for fiscal year 2024 to be at least breakeven, as we stated during our preliminary results and outlook in early January. For Q4 2023, net income was $7.8 million, or $0.16 per diluted share, compared to net income of $6.8 million, or $0.14 per diluted share, in the prior year quarter. Moving forward, we will be introducing a profitability metric that we believe more accurately represents the underlying performance of our business model, and we will report on this quarterly. We believe that an adjusted EBITDA financial metric, or adjusted earnings before interest, taxes, depreciation, amortization, and stock-based compensation, provides investors with an additional tool for evaluating the company's core operating performance and a proxy for cash generation.
Jack: GAAP operating income for fiscal 2023 was $28 1 million or eight 8% of net sales as compared to $43 8 million or 15, 4% of net sales for fiscal 2022.
Jack: We continue to expect GAAP operating margin for fiscal year 2024 will be at least breakeven as we stated during our preliminary results and outlook in early January.
Jack: For Q4, 2023, net income was $7 $8 million or <unk> 16 cents per diluted share compared to net income of $6 $8 million, our 14th cents per diluted share in the prior year quarter.
Jack: Moving forward, we will be introducing a profitability metric that we believe more accurately represents the underlying performance of our business model and we will report on this quarterly.
Jack: We believe that an adjusted EBIT of financial metric or adjusted earnings before interest taxes, depreciation amortization and stock based compensation provides investors with an additional tool for evaluating the companys core operating performance and a proxy for cash generation.
Patrick Williams: We use this non-GAAP financial measure in our own evaluation of operating performance and believe it is a more useful reflection of our progress. A table reconciling net income to adjusted EBITDA for prior periods is included in today's financial release. In order to reconcile adjusted EBITDA for net income for our fiscal 2024 profitability outlook, we are providing the following line item details: Provision for income tax to be calculated using an effective tax rate of approximately 35% per quarter subject to no significant change in our valuation allowance; other income expense of approximately $500,000 expense per quarter.
Jack: We use this non-GAAP financial measure in our own evaluation of operating performance and believe it is a more useful reflection of our progress.
Table reconciling net income to adjusted EBITDA for prior periods is included in today's financial release.
Jack: In order to reconcile adjusted EBITDA or net income for our fiscal 2020 for profitability outlook. We are providing the following line item details.
Provision for income tax would be calculated using an effective tax rate of approximately 35% per quarter subject to no significant change in our valuation allowance.
Jack: Other income expense of approximately 500000 dollar expense per quarter.
Patrick Williams: Depreciation to be approximately $1 million per quarter, amortization to be zero per quarter, and stock-based compensation to be approximately 7.5 million dollars per quarter. Depending on where we end up in the net sales range of $335 million to $340 million for fiscal year 2024, we expect adjusted EBITDA will be approximately $36 million, or approximately 10.5% of net sales, and using approximately 52 million shares outstanding results in an adjusted EBITDA per diluted share Turning now to our balance sheet, our cash, cash equivalents, and investments available for sale reached a record $232.4 million for fiscal year end 2023 as compared to $225.5 million for fiscal year end 2022. Accounts receivable was $94.7 million at the fiscal year-end 2023 compared to $62.4 million at the fiscal year-end 2022.
Jack: Depreciation to be approximately $1 million per quarter.
Jack: Amortization to be zero per quarter, and stock based compensation to be approximately $7 $5 million per quarter.
Depending on where we end up in the net sales range of 335 million to $340 million for fiscal year 2024, we expect adjusted EBITDA will be approximately $36 million or approximately 10, 5% of net sales.
Jack: And using approximately 52 million shares outstanding resulted in adjusted EBITDA per diluted share of approximately 70 sets.
Jack: Turning now to our balance sheet, our cash cash equivalents and investments available for sale reached a record $232 4 million for fiscal year end 2023, as compared to $225 $5 million for fiscal year end 2022.
Jack: Accounts receivable was $94 $7 million of the fiscal year in 2023 compared to $62 $4 million at fiscal year end 2022.
Patrick Williams: In the middle of 2023, we saw an increase in accounts receivable, but we viewed this as temporary. Furthermore, we are increasing account receivable collections this quarter and expect to bring down our accounts receivable balance to approximately $65 million by the end of Q1 2024. In fiscal 2023, we invested $18.2 million in property and equipment.
Jack: In the middle of 2023, we saw an increase in accounts receivable, but we view this as temporary fair.
Jack: Further we are increasing account receivable collections this quarter and expect to bring down our accounts receivable balance to approximately $65 million by the end of Q1 2024.
Jack: In fiscal 2023, we invested $18 $2 million in property and equipment for fiscal 2024, we expect to invest approximately $30 million in property and equipment, our strategic investments in property and equipment, primarily to support manufacturing capacity expansion information technology and support.
Patrick Williams: For fiscal 2024, we expect to invest approximately $30 million in property and equipment. Our strategic investments in property and equipment are primarily to support manufacturing capacity expansion, information technology, and support. We look forward to meeting with many of you in the days and weeks ahead. Tomorrow we will participate in a Jeffries West Coast bus tour, and in March we will participate in the Oppenheimer Health Care Conference and the Sidoti Small Cap Conference. As Tom mentioned earlier, we will also participate in in-person investor meetings in China, in the cities of Shanghai and Shenzhen.
Jack: We look forward to meeting with many of you in the days and weeks ahead Tomorrow, we will participate in the Jefferies West Coast Bus tour and in March we will participate in the Oppenheimer Healthcare conference and the Sidoti small cap conference.
Jack: As Tom mentioned earlier, we will also participate in in person investor meetings in China, and the cities of Shanghai and Shenzhen.
Operator: We expect to report our first quarter results in early May. This concludes our prepared remarks. Operator, we are now ready to take questions. Thank you. If you would like to ask a question, please press STAAR, then 1 on your telephone keypad. If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys.
Jack: We expect to report our first quarter results in early May.
This concludes our prepared remarks, operator, we are now ready to take questions.
Speaker Change: Thank you.
Speaker Change: Like to ask a question. Please press Star then one on your telephone keypad.
Speaker Change: If you are using a speaker phone we ask you. Please pickup your handset before pressing the keys.
Patrick Wood: To withdraw your question, please press star then two. And once again, we do ask that you please limit yourself to two questions. Our first question today comes from Patrick Wood at Morgan Stanley. Please go ahead.
Speaker Change: To withdraw your question. Please press Star then two.
Speaker Change: Once again, we do ask you please limit yourself to two questions.
Our first question today comes from Patrick Wood of Morgan Stanley. Please go ahead.
Patrick Wood: Amazing. Thank you very much for taking the questions I think for the first one I'd love to hear a little bit more about shop, obviously, 25% of the refractive volume as a vote of confidence lower down the diopter curve is how.
Patrick Wood: Thank you very much for taking the questions. I think for the first one, I'd love to hear a little bit more about SHARP. Obviously, 25% of the refractive volume is a vote of confidence lower down the dioptric curve.
Patrick Wood: So how did that discussion come about? How did you land on that side of things? And equally, you sort of suggested that going forward, there was an expectation that we might see a few more deals of this magnitude, and that's what's giving you confidence in the second half for the U.S. Am I understanding that right? The larger sort of long-term collaborations driving a lot of that? Yeah, Patrick. This is Tom.
Patrick Wood: Did that discussion come about how did you land on that side of things and equally you sort of suggested that going forward. You. There was an anticipation that we might see a few more deals of this magnitude and that's what's giving you confidence in the second half for the U S. M. I am understanding that right the largest sort of long ton collaborations driving a lot of that growth.
Patrick Wood: Yeah. Patrick This is Tom first of all thank you for the question.
Tom Frenzy: And yeah.
Tom Frenzy: First of all, thank you for the question, and yeah, I think Sharp Vision is a great example of our Highway 93 initiatives beginning to bear fruit, as we've indicated in the press release and reiterated in my prepared remarks. I think how it came about with Dr. Sharp was they saw the results they were getting as they began that journey with EVO and just got more and more comfortable such that they were willing to commit 25% of the volume. And I think that number is only going to grow as they continue to do the procedure, see the postoperative outcomes, see the quality of vision that we produce, no dry eye syndrome, preserve the integrity of the cornea, etc., etc. So I think it was a logical progression as they used EVO more and more.
Tom Frenzy: Sharp vision is a great example of our highway 93 initiatives beginning to bear fruit as we've indicated in the press release and reiterated in my.
My prepared remarks, I think how it came about with with Doctor sharp well.
Tom Frenzy: It was they saw the results they were getting as they began that journey with Evo and just got more and more comfortable such that they were willing to commit 25% of the volume.
Tom Frenzy: And I think that's only going to grow as they continue to do the procedure see the post operative outcomes see the quality of vision that we produce no dry eye syndrome.
Tom Frenzy: Preserving the integrity of the cornea etcetera, etcetera. So I think it was a logical progression.
Tom Frenzy: As they used evo more and more I think relative to.
Tom Frenzy: I think relative to additional deals, you know, our commercial team is working hard. And I can tell you as I sit here at this ACOS meeting this morning, there was a discussion among about 150 surgeons in attendance about what their threshold is for considering ICL surgery. And I can tell you probably the majority of the room was very comfortable going down to minus 3, 4, and 5 myopes as they walked in the door.
Tom Frenzy: Additional deals that you know our commercial team is working hard.
Tom Frenzy: I can tell you as I sit here at this eight coast meeting. This morning, there was a discussion among about 150 surgeons in attendance.
Tom Frenzy: What's their what's their threshold for considering the ICL surgery and I can tell you.
Tom Frenzy: Probably the majority of the room was very comfortable going down to minus three four and five miles as they walk in the door, that's very different than when I sat in this meeting a year ago. So.
Tom Frenzy: That's very different than when I sat in this meeting a year ago. So certainly, the momentum is shifting, and we feel very good about how we're positioned. That's very helpful.
Tom Frenzy: Certainly the momentum is shifting and we feel very good about how we're positioned.
Tom Frenzy: It's very helpful. And then maybe very quickly one follow up on the margin structure looking into 'twenty for obviously, a chunk of selling or marketing incremental dollars year on year driving driving some of that margin down I guess, what where is the highest priority spend and how should we think about the return in terms of growth from that driving that 20.
Patrick Williams: And then maybe, very quickly, one follow-up on the margin structure looking into 2024. Obviously, you know, a chunk of selling and marketing incremental dollars year on year, driving some of that margin down. I guess, where is the highest priority spend and how should we think about the return in terms of growth from that, driving that 26 sort of mid-term outlook? Yeah, Patrick. It's Patrick over here.
Thanks to the midterm outlook.
Tom Frenzy: Yeah, Patrick it's Patrick over here.
Patrick Williams: You know, at the end of the day, we still value ourselves as a growth company, and we believe we're in the early innings, not just in markets like China, where we have a 20% market share, but across the world. So we're heavily investing that incremental dollar into the commercial organization, whether that be sales infrastructure, or whether that be marketing. What I would say about marketing, though, historically, you've seen us do a little bit more brand awareness and global brand awareness. We are changing that a little bit where we will be focused more on co-marketing with practices at the, we'll call it, ground root or root level. And we believe that's gonna help us drive a lot more adoption within some of these key accounts, which gets along the lines of focused on Highway 93. And then, as Tom said in his prepared remarks, rolling that out to other regions like Europe. Thank you. And our next question today comes from John Young with Canaccord. Please go ahead.
Patrick Wood: You know at the end of the day, we still value ourselves as a growth company and we believe we're in the early innings not just in markets like China, where we have 20% market share but across the world. So we are heavily investing that incremental dollar into the commercial organization, whether that be sales infrastructure or whether that be marketing.
Patrick Wood: What I would say on the marketing, though historically, you've seen us do a little bit more brand awareness and global brand awareness, we are changing that a little bit where we will be focused more on co marketing with the practices at the we'll call. It the the ground route or the roots level and we believe that's going to help us drive a lot more adoption within some of these key.
Patrick Wood: <unk>, which gets along the lines of focused on highway 93 and that as Tom said in his part of his prepared remarks.
The the rolling that out to other regions like Europe.
Speaker Change: Thank you and our next call.
Speaker Change: So that it comes from John Young with Canaccord. Please go ahead.
John Young: Patrick, thanks for taking our questions tonight. Just to circle back to the Sharp Vision announcement and what you spoke about on the call this evening, I'd be interested to just kind of talk about what are the factors that got the ability to make the economics work in terms of being able to price this at just a slight premium to LASIK. And how repeatable will that be across the US and possibly elsewhere, OUS?
John Young: Hi, Tom Patrick Thanks for taking my questions Tonight.
John Young: Circle back with the sharp vision announcement, two and when you spoke on the call. This evening I'd be interested you could just kind of top out what are the factors that got the ability to make the economics work in terms of being about prices at just a slight premium to what you say and how repeatable would that'd be across the U S and possibly elsewhere.
John Young: O U S and as a follow up to that what should we assume for your U S. A F 2024.
John Young: And, you know, as a follow-up to that, what should we assume for US ASPs in 2024? Well, again, I think the economics work because Sharp Vision controls its own setting of care environment, and I think that plays a very important role, as we've said often going forward. So I think, you know, our procedure deserves to be marked at a premium. I think we all believe that based upon the outcomes we produce. But does it need to be doubled?
Speaker Change: Well again, I think the economics work, because sharp vision controls their own setting of care environment.
Speaker Change: And I think.
Speaker Change: That plays a very important role as we as we've said often going forward. So.
Speaker Change: So I think you know our procedure deserves to be marked at a premium I think we all believe that based upon the outcomes we produce.
Speaker Change: Does it need to be double.
Tom Frenzy: Probably not, and I think the setting of care certainly plays a role in that. And that certainly is how Sharp Vision is able to maintain a premium because the procedure deserves it, but not such a premium that it becomes a deterrent as a minus four or five walks in the door contemplating a vision correction. So the second part of your question, John, was
Probably not and and I think setting of care certainly plays a role in that and that certainly is how sharp vision is able to you know me.
Speaker Change: Maintain a premium because the procedure deserves it but not such a premium that becomes a deterrent as a minus four five walks in the door contemplating a vision correction.
Speaker Change: So the second part of your question John was.
Tom Frenzy: It was just on ASPs in the United States for next year and, you know, how repeatable will this pricing structure of a slight premium be for the rest of the U.S. Yeah, listen up, I believe ASPs will hold their own. I'll let Patrick speak to the specific numbers, but again, with the healthy margins, we can afford to be as flexible as we need to be, but certainly, our ASPs are still contemplated very strongly within our budget. Yeah, and I would just add as a reminder that when we did Vision 2026 last year, we talked about the fact that we wanted to keep a little bit of an extra cushion in our gross margin, which we also said around 80% in that Vision 2026, so that has contemplated that as we penetrate markets like the US, which is still less than 10% of our revenue overall, there would be some reduction in ASP mostly related to just higher volume. Right?
Speaker Change: It was just an ESP in the United States for next year, and just you know how repeatable well.
Speaker Change: <unk> structure.
Speaker Change: Slight premium being for the rest of the U S.
Speaker Change: Yeah listen I I I I believe as fees will hold their own I'll, let patrick speak to the specific numbers, but but again.
Speaker Change:
Speaker Change: With the healthy margins, we can afford to be as flexible as we need to be but certainly our RSP. Our asps are still contemplate it very strongly within our budget.
Patrick Wood: Yeah, and I would just add as a reminder, we did say that this should be about 80% gross margin in our outlook. When we did vision 2026 last year, we talked about the fact that we wanted to keep a little bit of extra.
Patrick Wood: Extra cushion in our gross margin, which we also sit around 80% and that vision 2026. So that has contemplated that as we penetrate markets like the U S, which is still less than 10% of our revenue overall that there would be some reduction in ASP, mostly related to just higher volume right and so we still feel very good.
Patrick Williams: And so we still feel very good about maintaining that 80% as we go forward. And in fact, we believe as we move forward over the next several years, there could be some upside to that from efficiencies within our manufacturing, as well as more opportunities with the economy across many markets that we're in right now. Thank you. And our next question today comes from Margaret Andrew with William Blair. Please go ahead.
Patrick Wood: [noise] about maintaining that 80% as we go forward and in fact, we believe as we move forward over the next several years there could be some upside to that from efficiencies within our manufacturing as well as a more opportunities of economics.
Patrick Wood: Many markets that we're in right today.
Speaker Change: Thank you and our next one.
Speaker Change: So they come from Margaret Andrew with William Blair. Please go ahead.
Deborah J. Andrews: Hey, good afternoon, guys. Thanks for taking the question. I maybe wanted to start with guidance. You guys maintain the revenue guidance since you brought it out five, six weeks ago. You're two shares away from the quarter. I was hoping you could give us context over how trends maybe have moved throughout the quarter, especially in some of these key geographies like, you know, China, Europe, etc.
Deborah J. Andrews: Hey, good afternoon, guys. Thanks for taking the question.
Deborah J. Andrews: Maybe just wanted to start with guidance.
Deborah J. Andrews: You guys maintained the revenue guidance since you pre announced five six weeks ago. Your T shirts, the way into the quarter.
Deborah J. Andrews: I was hopeful you could give us context over how trends maybe have moved throughout the quarter, especially in some key geographies like China.
Deborah J. Andrews: China, Europe et cetera.
Speaker Change: Yeah. Thanks Margaret.
Speaker Change: Listen I I feel very good about how the year has started I think it's certainly premature to give any more detail than just that but we're.
Tom Frenzy: You know, listen, I feel very good about how the year has started. I think it's certainly premature to give any more detail than just that. But, you know, pleased with what's happening in China, pleased with what's happening in the US. Europe has some nice momentum. So we just feel we're well positioned. Teams are focused. We have a great plan in front of us, and it's all about execution.
Speaker Change: Pleased with what's happening in China pleased with what's happening in the U S. Europe has some nice momentum. So we just feel we're well positioned teams are focused we have a great plan in front of us and and it's all about execution.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: And then you know maybe on the on the E.
Speaker Change: P. S side positive EPS leaves a pretty wide gap of results for 2024, or so how should we think about that.
Tom Frenzy: Okay, helpful. And then, you know, maybe on the EPS side, positive EPS leaves a pretty wide gap between results for 2024. So how should we think about that? And how should we really think about the, throughout the years? If you want it on a Justin Bieber song, that's fine too.
Speaker Change: And how should we really think about the kitchen.
Speaker Change: Crop years.
Speaker Change: Adjusted EBITDA, that's fine too.
Speaker Change: Yeah, So clearly we.
Speaker Change: Yes, I'm sorry, you broke up you were breaking up again repeat that last part please one more time.
Speaker Change: Cadence just try it trying to trying to get a good sense of cadence or first half versus second half as it relates to us.
Patrick Williams: Yeah, so clearly we, Sorry, Mark. You broke up. You were breaking up at the end.
Patrick Williams: Repeat that last part, please, one more time. Cadence? I'm just trying to get a good sense of cadence for the first half versus the second half as it relates to profitability. So, you know, in my detailed comments, I did break out all the different line items for GNA, R&D, and sales and marketing. So I think that should be able to get the models there. As a reminder, for Q1, we said approximately $72 million. So that will be the low point throughout the year as we go.
Speaker Change: Profitability and expenses.
Speaker Change: Yeah.
Speaker Change: So it might detail.
Speaker Change: And my detailed comments.
Speaker Change: Comments I did break out all the different line items for G&A, R&D and sales and marketing. So I think that should be able to get the models. There as a reminder, Q1, we said approximately $72 million so that will be the low point throughout the year as we go most models probably have us growing revenue in the first half of the year.
Speaker Change: That mid single digits and in the second half of the year and what I would call low double digits that gets you to the full year growth number that we put in the $3 35 to $3 40.
Patrick Williams: Most models probably have us growing revenue in the first half of the year in the mid-single digits and in the second half of the year in what I would call low-double digits. That gets you to the full-year growth number that we put in at 335 to 340. We clearly introduced a new profitability metric, which we think is more indicative of our cash generation, where we've taken out non-cash items. And I think what that shows is that we continue to see leverage and can continue to generate cash. Even in a year where we had to build infrastructure and we, you know, candidly repeated revenue two times in a row. So we feel very good about where we are, the resetting that we did this year, and where we're going forward. So, you know, I'm sure the models will get modeled correctly.
Speaker Change: Clearly introduced a new profitability metric, which we think is more indicative of our cash generation, where we've taken out noncash items.
Speaker Change: And I think what that shows is that we continue to see leverage and can continue to generate cash even in a year, where we had to build infrastructure and we you know candidly repeated revenue two times in a row. So we feel very good about where we're at there.
Speaker Change: The resetting that we did this year and where we're going for it so.
Speaker Change: Well I'm sure the models you'll get.
Speaker Change: Modeled correctly and just keep in mind Q2 tends to be our biggest year are our biggest quarter just because of the high season this related to China, which is a.
Speaker Change: 65% to 70% of our revenue in that quarter.
Speaker Change: Thank you and our next question today comes from George Sellers with Stephens, Inc. Please go ahead.
Patrick Williams: And just keep in mind, Q2 tends to be our biggest year or our biggest quarter, just because of the high season that's related to China, which is, you know, 65, 70% of our revenue in that quarter. Thank you. And our next question today comes from George Sellers with Stevens Inc. Please go ahead.
George Sellers: Hey, Thanks for taking the question.
I'm just curious in the U S. What percentage of procedures right now are with patients who are contraindicated for lasik and where are you in penetrating that piece of the market.
George Sellers: Yeah.
George Sellers: Oh Jeez, Georgia.
Speaker Change: I'm not sure you're honest with you.
George Sellers: Hey, thanks for taking the question. I'm just curious, in the U.S., what percentage of procedures right now are with patients who are contraindicated for LASIK, and where are you in penetrating that piece of the market? I'm not sure, to be honest with you.
Speaker Change: I think the.
Speaker Change: Patients walking in the door as we said about 32% fall below minus.
Speaker Change: Minus eight.
Speaker Change: Today, we think we're going to continue to grow that.
Tom Frenzy: I think you know the patients walking in the door, as we said, about 32% fall below minus eight today. We think we're going to continue to grow that. People that are walking in that aren't good candidates for laser vision correction, you know. It'd be a guesstimate on my part, and I'd rather go to the market research and get you something very specific, and we'll follow up with you directly.
Speaker Change: People that are walking in that arent good candidates for our laser vision correction.
Speaker Change: It would be a guesstimate on my part and I'd, rather go to the market research and gets you something very specific and we will follow up with you directly.
Speaker Change: Okay, and maybe taking a step back in and gone back to the pricing commentary earlier could you just give us an update on your pricing strategy globally or are there some markets where.
Tom Frenzy: Okay. And maybe taking a step back and going back to the pricing commentary earlier, could you just give us an update on your pricing strategy globally? Are there some markets where you could potentially look to increase price? And then what's your view on lowering prices in the U.S., sort of more broadly? Pricing really depends on how we go to market in any particular part of the world. We have purely distributor markets, we have hybrid markets, and we have direct markets, and obviously, pricing and margins reflect that go-to-market strategy. But I think, again, as Patrick mentioned, we have an awful lot of flexibility as to how we want to price the technology around the world and still maintain very healthy margins in that 80% range. I think for the US, again, we've always been open to where volume commitments are made. We have the ability to be as flexible as we need to be.
Speaker Change: You could potentially look to increase price and then what's sort of your view on lowering price in the U S sort of more broadly.
Speaker Change: Thanks for taking the question I'm looking at.
Speaker Change: But pricing really depends on how we go to market in any particular part of the World. You know we have purely distributor markets. We have hybrid markets and we have direct markets and obviously, you know pricing and margins.
Speaker Change: Reflect that go to market strategy.
Speaker Change: But I think again.
Speaker Change: As Patrick mentioned, we have an awful lot of flexibility.
Speaker Change: As to how we want to price the technology around the world and still maintained very healthy.
Speaker Change: Margins in that 80% range I think for the U S. Again, we've always been open to where volume commitments are made.
Speaker Change: We have the ability to be as flexible as we need to be but we also recognize too that we're producing a premium outcome. So just finding that proper balance between volume and price and the good news is we have the flexibility to be able to react to our customers' needs.
Tom Frenzy: But we also recognize, too, that we're producing a premium outcome, so just finding that proper balance between volume and price. And the good news is we have the flexibility to be able to react to a customer's needs. Thank you. And our next question today comes from Ryan Zimmerman at BTIG. Please go ahead. Good afternoon. Thanks for taking the question. Hey Ryan, how are you.
Speaker Change: Thank you and our next question today comes from Ryan Zimmerman of <unk>.
Please go ahead.
Ryan Zimmerman: Good afternoon. Thanks for taking the question Ryan how are you Ryan.
Ryan Zimmerman: Good to hear from you guys. I want to ask about China a little bit. We've talked to some investors there. Curious if you could speak to pricing in China and you know where it stands with your distributor. You added a new distributor. And what places like, what prices places like Iyer are charging? Has there been any change in pricing? Do you expect any change in pricing? I'd appreciate any commentary there.
Ryan Zimmerman: Good to hear from you guys I wanted to ask about China, a little bit we've talked to some investors. There curious if you could speak to.
Ryan Zimmerman: Pricing in China.
Ryan Zimmerman: And you know where it stands with your distributor you added a new distributor.
Ryan Zimmerman: And and what places like what prices.
Ryan Zimmerman: Places like ire are charging has there been any change in pricing do you expect any change in pricing.
Ryan Zimmerman: Any commentary there.
Tom Frenzy: Yeah, no, sure, I appreciate the question, Ryan. I think from a pricing point of view, again, as we've said, in China, a customer like Ayer ultimately controls what they charge the patient. I think as we negotiated our relationship with Lanshan, Shanghai Lanshan, as well as brought on an additional distribution partner, we were very pleased with the economics that were negotiated in those deals. However, we're not in a position to share those, nor will we going forward.
Speaker Change: Yeah No sure I appreciate the question Ryan I think from a pricing point of view.
Speaker Change: Again, as we've said in in China.
Speaker Change: A customer like I or ultimately controls what they charge to the patient I think as we negotiated our relationship with lying Shang Shanghai line Shang as well as bring on an additional distribution partner, we were very pleased with the economics that we're negotiating those deals.
Speaker Change: We're not in a position to share those nor will we going forward, but rest assure we were very pleased with the economics associated with those relationships in terms of moving forward and I think you know pricing has been fairly stable and in that marketplace as I said.
Tom Frenzy: But rest assured, we were very pleased with the economics associated with those relationships in terms of moving forward. And I think, you know, pricing has been fairly stable in that marketplace. As I said, you know, where we control the business directly, we have even more flexibility, but I think we feel good about pricing. STAAR continues to see Evo ICL Surgery as a real profit center for them moving forward and will continue to support the technology 110%. Yeah, just a reminder, Ryan, and I think Tom hit it there. We don't get a lot of fluctuations in our ASP due to any changes in pricing across customers. Those are all set in stone pretty much for at least 12 months in advance for the majority of our accounts there.
Speaker Change: Where we control the business direct we have even more flexibility, but I think we.
Speaker Change: We feel good about pricing ire continues to see Evo ICL surgery as a real profit center for them moving forward and continue to support the technology, 110%.
Speaker Change: Yeah, just a reminder, Ryan and I think Tom hit it there.
Speaker Change: We don't get a lot of fluctuations in our ASP due to any changes in pricing across customers and those are all set in stone pretty much for at least 12 months in advance for the majority of our accounts there. The other thing that I would add is we do know that ire continues to charge a premium for Evo ICL lenses upwards of maybe.
Patrick Williams: The other thing that I would add is that Eyer continues to charge a premium for Evo ICL lenses, upwards of maybe even 2x of what they charge for LASIK and even Smile now, where they have seen some reduction in pricing. And so, you know, there's been a lot of chatter out there, but one of the things they focused on was how they could make up for any lost volume by making up for perhaps switching that out to a higher ASP, which is clearly what our product does. So if anything, we're seeing more of a movement towards Evo ICL because of the higher premium that we're able to, and they're able to garner in the end market. OK. Very helpful. And then just to just follow up.
Speaker Change: <unk> of what they charge for Lasik and even smile now where they have seen some reduction in pricing and so you know theres been a lot of chatter out there, but one of the things. They focused on is how can they make up for any lost volume by making up for perhaps switching that up to a higher ASP, which is clearly what our product does so if.
Speaker Change: Anything we're seeing more of a movement towards Evo ICL because of the higher premium that we're able to they're able to garner in the end markets over there.
Speaker Change: Okay.
Speaker Change: Very helpful. And then just to just to follow up.
Ryan Zimmerman: In terms of introducing EvoPlus in China and, you know, Tom... Appreciate your comments or your thoughts around either a tiered product strategy or what you're doing as it relates to competition for ICLs in China and kind of what your expectation is there. Yeah, no, I appreciate the question, Ryan.
Speaker Change: In terms of introducing Evo Pos in China, and you know.
Speaker Change: Tom.
Speaker Change: Great your comments or your thoughts around either a tiered product strategy or or what you're doing as it relates to competition.
Speaker Change: Sales in China, and kind of what your expectation is is there.
Tom: Yeah no.
Tom: Appreciate the question Ryan as we've said in the past I think Evo plus affords us some flexibility in that marketplace both from.
Tom Frenzy: As we've said in the past, I think EvoPlus affords us some flexibility in that marketplace, both from a pricing segmentation point of view, as well as customer segmentation or market segmentation. And again, as competition comes, we think it may come at some point in the latter part of this year or early 2025. You know, keep in mind that the competition that's coming is only going to be spherical. They won't have a torque offering.
Speaker Change: Our pricing segmentation point of view.
Ryan Zimmerman: As well as the customer segmentation market segmentation and again as competition comes we think it may come at some point in the latter part of this year or early 2025.
Ryan Zimmerman: Keep in mind that competition, that's coming is only gonna be spherical they won't have a torque offering that's certainly going to limit their attractiveness to the marketplace, but I think what evo plus gives us the flexibility that if we had to compete on price. We now have two products in the marketplace and one can compete.
Tom Frenzy: That's certainly going to limit their attractiveness to the marketplace. But I think EvoPlus gives us the flexibility that if we had to compete on price, we now have two products in the marketplace, and one can compete when necessary on price, and we can maintain a premium price for EvoPlus as we move forward. So I think it does afford us flexibility. Again, as you've heard me say time and time again, competition coming is a good thing. I think all boats do rise.
When necessary on price and we can maintain a premium.
Ryan Zimmerman: Price for Evo plus as we move forward. So I think it does afford us flexibility again as you've heard me say time and time again competition come in is a good thing I think all boats rise it validates the size of the market opportunity and we think we're very well positioned and have first mover advantage with nearly.
Tom Frenzy: It validates the size of the market opportunity, and we think we're very well positioned and have a first mover advantage with nearly 3 million implants completed, and that the safety and efficacy of our technology is very well established, particularly in that part of the world. Thank you. And our next question today comes from Anthony Petrone with Mizzou Group. Please go ahead. Thanks, maybe I'll stay on China for a moment and maybe anything you could share about, you know, where we are in, you know, 1Q. You do have the Lunar New Year, you know, just kind of finishing up here about a week ago.
Ryan Zimmerman: 3 million implants are completed.
Ryan Zimmerman: That the safety the efficacy of our technology is very well established particularly in that part of the world.
Ryan Zimmerman: Okay.
Ryan Zimmerman: Thank you and our next question today comes from Anthony Petrone with Mizuho Group. Please go ahead.
Anthony Charles Petrone: Thanks, maybe they'll stay on on China for a moment and maybe anything you can share about you know where we are in <unk>.
Anthony Charles Petrone: <unk> you do have the lunar new year, you know just kind of finishing up here about a week ago, it's usually a little bit of a lull, but as we come out of that you know.
Anthony Charles Petrone: It's usually a little bit of a lull, but as we come out of that, you know, how are trends shaping up in 1Q? And then just a follow-up on competition in the region there, just to confirm that that competitive lens, at least as far as the company's intelligence suggests, is not a collagen lens. It's a polymer lens, if you will.
How are trends shaping up in <unk> and <unk>.
Anthony Charles Petrone: And then just.
Anthony Charles Petrone: Follow up on competition in the region, there and just to confirm that that competitive lens at least as far as the company's intelligence suggests that it's not a college and lends it say.
Speaker Change: Polymer lines, if you will thanks, yes.
Tom Frenzy: Thanks. Yes, Anthony, that's correct. It is an acrylic versus our polymer material, and as you've heard me say time and time again, you know, part of the secret sauce of STAAR's technology is that material.
Speaker Change: Hey, Anthony that's correct. It is an acrylic versus our column are material and as you've heard me say time and time again part of the secret sauce of stars technology is that material. So again.
Tom Frenzy: So, again, I think it's healthy that the competition is coming, but we're prepared. I think in terms of the Lunar New Year and how China has been going so far, again, as I've mentioned earlier, very encouraged by the start of the year. The other thing that encouraged me is the spending that went on in that marketplace associated with the Lunar New Year was very encouraging from an overall economic point of view. So I think we continue to feel confident that our team in China, particularly now with two distribution partners, we're well-positioned to continue to see growth in that part of the world, particularly in China. Thank you. And our next question today comes from Matthew O'Brien with Piper Sandler. Please go ahead.
Speaker Change: I think it's healthy the competition's coming but.
Speaker Change: Were prepared I think in terms of the lunar new year, and how China has been going so far again.
Speaker Change: As I've mentioned earlier very encouraged by the start of the year.
Speaker Change: Equally thing that encourage me as the spending that went on in that marketplace associated with the lunar new year was very encouraging from an overall economy point of view.
Speaker Change: Thank God, we continue to feel confident.
Speaker Change: That our team on China, particularly now with two distribution partners were well positioned to continue to see.
Speaker Change: Growth in that part of the world, particularly in China.
Speaker Change: Thank you and our next one.
Matthew O'brien: So that comes from Matthew O'brien with Piper Sandler. Please go ahead.
Matthew O'brien: Afternoon. Thanks for taking my question just sticking on the pricing side in the U S. Specifically is the reduction in ASP and you're going to be greater than 20%.
Matthew O'brien: Afternoon, thanks for taking the question. Just sticking on the pricing side in the U.S. specifically, is the reduction in ASD going to be greater than 20 percent? Is that going to flow down, or how do you ensure that it flows down to the patient level specifically?
Matthew O'brien: Is that going to slow down or how do you ensure that it flows down to the patient level specifically in <unk>.
Tom Frenzy: And maybe a little bit on the elasticity of demand as far as you can see in terms of lowering the price and what that can do in terms of growth here in the state. Yeah, I will tell you that any price degradation is not going to be at the 20% level, that's for sure. And again, keep in mind that the end user price to the patient is really a function of the internal mechanisms within any given practice. Setting of care does play a role, and you know, that's the. In a sense, if you think back about the U.S. business, we're creating a new channel, lens-based refractive surgery, and we're changing practice patterns.
Matthew O'brien: Maybe a little bit on the elasticity of demand as far as you can see in terms of lowering the price and what that can do in terms of growth here in the states.
Speaker Change: Yeah, I will tell you that any price degradation who's not going to be at the 20% level.
Speaker Change: That for sure and again keep in mind the end user price to the patient is really a function of the internal mechanisms within any given practice setting of care does play a role.
Speaker Change: That's the.
Speaker Change: If you think back about the U S business, we're creating a new channel lens based refractive surgery, and we're changing practice patterns that takes time and we're beginning to see our efforts over the last 12 to 15 months begin to bear fruit and I think as practices set themselves up for success.
Tom Frenzy: That takes time, and we're beginning to see our efforts over the last 12 to 15 months begin to bear fruit. And I think as practices set themselves up for success to become more lens-based versus corneal-based, you know, pricing plays a role, but it's not the only role in that entire ecosystem working together from the front receptionist back to the surgeon and everyone in between. That all has to be aligned and focused appropriately with the right sales speak, the right collateral materials, with our help from a co-marketing relationship, et cetera, et cetera. And as that all comes together, you know, price becomes a component, but it's not the driving component to a successful practice. Matt, I think that's a really key point that Tom brought up because now we've gotten maybe three or four questions on pricing and as Tom, you know, said, and I'll just repeat it so that everyone hears it, pricing is a component, but if you go back and think about what we've talked about since early January during our initial pre-announcement, we talked about the importance of increasing surgeon confidence, we've talked about these papers that are going to come out to help that, and Tom's prepared remarks, he talked about the new department that we created, all of this is focused on increasing surgeon confidence to make our procedure not only more predictable, but more efficient for them, and that ultimately will result in what Tom did a little bit of a straw poll at the meeting he is at where they're going to move down the diopter curve, and so that's what gives us the confidence on not only this year, but as we move forward to our Vision 2026. Okay, appreciate that.
Speaker Change: To become more lens base versus corneal base pricing plays a role, but it's not the only role in that entire ecosystem working together from the front receptionist back to the surgeon and everyone in between that all has to be aligned and focused appropriately with the right sales speak.
Speaker Change: Right collateral materials with our help from co.
Speaker Change: Co marketing.
Speaker Change: Relationship et cetera, et cetera, and as that all comes together you know price becomes a component, but it's not the driving component to a successful practice.
Speaker Change: I think that's a really key point that they're talking about after that we've gotten maybe three or four questions on pricing and as Tom.
Speaker Change: Said and I'll just repeat it so that everyone hears that pricing is a component, but if you go back and think about what we've talked about since early January during our initial pre announcement, we talked about the importance of increasing surgeon confidence we've talked about these papers that are going to come out to help that in Tom's prepared remarks, he talked about the new department that we created.
Speaker Change: All of this is focused on increasing surgeon confidence to make our procedure not only more predictable and more efficient for them and that ultimately will result in what Tom did a little bit of a strong pull at the meeting is at where theyre going to move down the diopter curve and so that's what gives us the confidence I don't only this year, but as we move forward to our vision 2026.
Speaker Change: Okay I appreciate that.
Matthew O'brien: And then just the rest of the world, or I guess China plus the rest of the world, you know, you just came off a really good Q4, you know, and I'm looking at the 10% number for China and then kind of flat for the rest of the world. Just can you talk a little bit about some of the puts and takes in there? Because it seems pretty conservative in terms of your view on the OUS business.
Speaker Change: Just the rest of the world or I guess, China, plus rest of world.
Speaker Change: You just came off of a really good Q4, and I'm looking at the 10% number for China, and then kind of flat for the rest of the world.
Speaker Change: Can you talk a little bit about some of the puts and takes in there because it seems pretty conservative in terms of your view on the <unk>.
O U S business.
Tom Frenzy: Again, I'm not sure what you're really factoring in from an economic perspective in China or just other parts of the world, but we'd just love to hear some of the things you are contemplating and then how conservative that outlook is specifically. Thank you. Yeah, thanks, Matt. You're using the word conservative. I think I'll use the word prudent.
Speaker Change: I'm not sure what Youre really factoring in from an economic perspective, China or just other parts of the world, but just love to hear some of the things you are contemplating and then how conservative that that outlook is specifically. Thank you yeah. Thanks, Matt I again, you're using the word conservative I think I'll use the word prudent I think look at Theres still uncertainty.
Speaker Change: And in the World.
Speaker Change: There are headwinds and I think.
Tom Frenzy: I think there's still uncertainty out in the world, macro headwinds. And I think certainly we've said not only China but the U.S. would grow at 10% and all the other markets would be relatively flat. But again, we're contemplating another year of growth outpacing refractive growth around the world. Most markets are down to flat at best, and we're going to continue to grow even in flat markets. So I think it is too early to tell.
Speaker Change: Certainly, we've said not only China, but the U S. We grow at 10% and and all the other markets would be relatively flat, but again, we're contemplating another year of growth outpacing the refractive growth around the world most markets are down.
Speaker Change: To flat at best and we're going to continue to grow even in flat markets. So I think you know too early to tell we feel good about the start of the year and I would just encourage you to stay tuned and we'll keep you all posted.
Tom Frenzy: We feel good about the start of the year, and I would just encourage you to stay tuned, and we'll keep you all posted. Thank you. And our next question today comes from David Saxon with Needham. Please go ahead. Hi guys, this is Joseph on behalf of David.
Speaker Change: Thank you and our next question today comes from David Saxon with Needham. Please go ahead.
Hi, guys. This is Joseph on for David.
Joseph: Um, maybe just looking at 2024. We were just kind of curious how meaningful, if at all, the STAAR ordering platform launch is going to be for 2024, especially in the back half. Does it make it easier for STAAR to fulfill orders or is it more about the, you know, improving user interface? And I guess also, if we could just maybe get an update on that call center program, you know, how's that been going? You know, has it been driving volumes, anything noticeable? Yeah, thank you, Joseph, for the question. You know, look, Stella, I think, is all about operation efficiency within a practice.
Joseph: Maybe just looking at 2024.
Joseph: We are just kind of curious how meaningful if at all that the stellar ordering platform.
Joseph: You know the launches, it's going to be to 2020 for especially in the back half.
Joseph: Does it make it easier for for startups to fill the orders or is it more about the you know improving user interface.
Joseph: And I guess also.
Joseph: If we could get just maybe just get an update on that call Center program, how has that been going it's been driving volumes anything noticeable.
Speaker Change: Yeah. Thank you Joseph for the question.
Speaker Change: Look at Stella I think is all about our operation efficiency within a practice is it going to drive meaningful growth.
Tom Frenzy: Is it going to drive meaningful growth in the U.S. business? Probably not, but it certainly is going to make our customers more efficient, and we think out of that comes a real positive. So it's more about operation efficiency.
<unk> two to the U S business.
Speaker Change: Probably not but it certainly is going to make our customers more efficient and we think out of that.
Speaker Change: It comes a rural positive so it's more about our operation efficiency, but it is an improved gui, so it'll be easier for them to place their orders et cetera.
Tom Frenzy: It is an improved GUI, so it'll be easier for them to place their orders, etc. So, at the end of the day, we think that's very, very positive. In terms of the second part of your question, if you'll repeat that for me, yeah, just the update on the call center program. Yeah, Celllytics, you know, continues to be a test for us. We're about four and a half, five months into it since we brought it wider in November. You know, we like what we're seeing, but I think it's still too early to tell.
Speaker Change: So in the end of the day, we think that's very very positive.
Speaker Change: In terms of the second part of your question if youll repeat that for me.
Speaker Change: Yes, just the update on on the call Center program, Yes, Yes, Bolitics continues to be.
Speaker Change: Hum.
Speaker Change: Test for us were about four and a half five months into when we brought it a wider in November.
Speaker Change: We like what we're seeing I think it's still too early to tell we're generating good information as Ive previously stated about outpatient find us.
Tom Frenzy: We're generating good information, as I've previously stated, about how patients find us, what physicians are being sought after, et cetera, et cetera. We're generating probably about three really strong qualified leads a day. But we're, you know, we're still watching it. We're still learning.
Speaker Change: What physicians are R. B.
Speaker Change: Being sought after et cetera, et cetera, we're generating probably about three really strong qualified leads a day.
But we're you know we're still watching it we're still learning and we'll keep you positive update it as we have a positive news moving forward.
Tom Frenzy: And we'll keep you updated as we have positive news moving forward. Thank you. And our next question today comes from Steve Lutschman with Oppenheimer. Please go ahead.
Speaker Change: Thank you and our next question today comes from Steve Lichtman with Oppenheimer. Please go ahead.
Steve Lutschman: Thank you. Good evening, guys. Tom, based on your estimates, what was the overall refractive market growth in the U.S. and worldwide in 2023? And what does your outlook for 2024 assume in terms of that growth in the U.S. and worldwide? Yeah, appreciate that, Steve. I think in the U.S., it wasn't about growth. It was a real deceleration.
Steve Lichtman: Thank you eating guys, Tom if based on your estimates what what was the overall refractive market growth in the U S and worldwide in 'twenty three and what is your outlook for 'twenty four assume in terms of that growth in the U S and worldwide.
Steve Lichtman: I appreciate that Steve I think in the U S. It wasn't about growth it was a real deceleration.
Tom Frenzy: I think in the fourth quarter, you know, the market research isn't out yet, but it would suggest that there was about 20 percent down in many of the U.S. practices in the fourth quarter, and that's after going through the first three quarters, anywhere from 9 to 15 percent down. So the market was significantly down, and us being up 14, 15 percent in the U.S., again, you know, outpacing that market. I'd say around the world, you know, places like China, at 23, you saw a nice first half growth and then a deceleration in the second half that brought it back down to, you know, mid-single-digit growth overall, and we think it's going to be a slow ramp up in the first half of China in 24 and maybe get back to mid-single-digits to 10% in the back half of the
Tom: I think in the fourth quarter.
Tom: The market research isn't out yet, but it would suggest that it was about 20% down and in many of the U S practices in the fourth quarter.
Tom: And that's after up through the first three quarters anywhere from 9% to 15% down so market was significantly down and us being up 14, and 15% in U S. Again, outpacing that market I'd say around the world.
Tom: She has like China 23, you saw a nice first half growth and then a deceleration in the second half that brought it back down to mid single digit growth overall, and we think it's gonna be a slow ramp up in the first half of China in 'twenty, four and maybe get back to mid.
Tom: Mid single digits to 210% in the back half of the year.
Tom Frenzy: So I think, you know, the trend is continuing to be a deceleration of refractive procedures, which in a certain way is just the inverse for us, because we continue to outpace the market. And I think people are recognizing that Evo-ICL is not only better medicine based on the outcomes that we're producing, but it can be a better business. And more and more practices around the world are embracing lens-
Tom: So I think the trend is continuing to be a deceleration of refractive procedures.
Tom: Which in a certain way is just the inverse for us because we continue to outpace the market and I think.
Tom: People are recognizing that Evo ICL is not only better medicine.
Tom: By the outcomes that we're producing but it can be better business and more and more practices around the world are embracing lens based refractive surgery.
Tom Frenzy: Thanks, Tom. Patrick, just in terms of where investments are in the P&L, it looks like sales and marketing will be up maybe just a little bit year over year, but we will see a step up on the G&A side. So again, can you talk about what that G&A investment is in any more detail? Yeah, so primarily one of the reasons, if you think about 2023 and going back, we did see an increase in what I'll call compensation, including stock-based compensation. We brought on quite a few C-suite members, including Tom, who joined us a little over a year ago. And so we're seeing the effect of that carrying through our GNA line. To your point, the guidance that I gave was a full gap number on GNA, but as you exclude stock-based comp primarily from GNA, you're going to see a much more normalized number.
Speaker Change: Thanks, Tom.
Speaker Change: Patrick just in terms of sort of where investments are in the P&L. It looks like sales and marketing will be up maybe just a little bit year over year, but we will see a step up on the G&A side. So again can you talk about what that G&A and investment is and any more detail.
Patrick Wood: Yeah. So primarily it is one of the reasons. If you think about 2023 and going back we did see an increased in our what I'll call compensation, including stock based compensation. We brought on quite a few C suite members, including Tom who joined US a little over a year ago and so we're seeing the effect of that carrying through our G&A line to your point.
Patrick Wood: The guidance that I gave was a full GAAP number on G&A, but if you exclude out stock based comp primarily out of G&A youre going to see a much more normalized number R&D and sales and marketing like you said are pretty in line with where the street was at.
Patrick Williams: R&D and sales and marketing, like you said, are pretty in line with where the street was at, but we're consistent with what we said in early January, which is slightly above operating margin and break even on pure net income, but the adjusted EBITDA profitability is north of 10%. And the model is built so that if we do exceed or come in at the high end of our guidance or even go over that, you'll see that incremental dollar translate to the bottom line quite strongly as it historically has. Thank you. And our next question today comes from Tom Stephan with Stifel. Please go ahead.
Patrick Wood: But we're consistent with what we said in early January which is slightly above on operating margin.
Patrick Wood: Breakeven on pure net income, but the adjusted EBIT.
Patrick Wood: EBIT profitability is north of 10% and the model is built so that if we do exceed or come in at the high end of our guidance or even go over that that youll see that that incremental dollar.
Patrick Wood: Translate to the bottom line quite strongly as it historically has.
Thank you and our next question today comes from Tom Stefan with Stifel. Please go ahead.
Tom Stephan: Great. Hey guys, thanks for the questions. I wanted to follow up on Shaina and the second distributor that you guys added. Maybe you could elaborate a bit on the strategic rationale there and, I guess, the impetus for adding an additional distributor? Why now? And was your existing partner maybe lacking in certain areas?
Great Hey, guys. Thanks for the questions.
Tom Stefan: I wanted to follow up on.
Tom Stefan: On China in the second distributor that you guys added.
Tom Stefan: Maybe can you elaborate a bit on the strategic rationale there and I guess, the impetus for adding an additional distributor.
Tom Stefan: Why now and what's your existing partner may be lacking in certain areas.
Tom Frenzy: No, I think, Tom, it's just a natural evolution of the business when, you know, Lang Shang and STAAR partnered together when we were just really launching in China. We've grown together. But clearly, as the opportunities in that market continue to grow, it just was a natural evolution of, you know, it was time to take on an additional partner. I think their depth and breadth will help us continue to gain, share, and grow our business in China, particularly, as we mentioned in our prepared remarks in Tier 3 and Tier 4 cities. So, I think both coexist nicely and really continue to position STAAR Surgical and the Evo ICL for future growth. Thank you. And our next question comes from Jim Sedoti with Sedoti and Company. Please go ahead.
Tom Stefan: No.
Speaker Change: I think Tom it's just a natural evolution of the business win.
Speaker Change: Lang Shang and star partner together.
Speaker Change: We were just really launching in China, we've grown together.
Speaker Change: But clearly as the opportunities and that market continues to grow it just was a natural.
Speaker Change: Evolution of.
Speaker Change: It was time to take on.
Speaker Change: An additional partner I think that their depth and breadth.
Speaker Change: Help us continue to gain share and grow our business in in in China, particularly as we mentioned in our prepared remarks in tier three and tier four cities. So I think both the co exist nicely.
Speaker Change: Continuing to position.
Speaker Change: STAAR surgical and the Evo ICL for.
Speaker Change: For future growth.
Speaker Change: Thank you and our next question comes from Jim Sidoti with Sidoti <unk> Company. Please go ahead.
Jim Sedoti: Hi, good afternoon, and thanks for taking the questions. Can you talk about, you know, the steps you've taken to make it easier for lens selection? And, you know, are there additional steps you can take on that front? Yeah, Jim, thanks for the question. I mean, it really is one of our key focuses. And as we've said in our prepared remarks, you know, we're looking at a lot of different things in the area of AI. We certainly have these two papers coming out that are going to add a lot of strong support for how to approach the preoperative, intraoperative, and postoperative management of EVO potential candidates. And, you know, just getting our infrastructure set up with this global training initiative we're doing around clinical and practice development and sales to really have that, really best-in-class, combined with all the other efforts we're doing, we just believe we're surrounding the customer appropriately to make this a very predictable, very routine procedure.
Jim Sidoti: Hi, good afternoon, and thanks for taking the questions.
Jim Sidoti: Can you talk about the steps you've taken to to make it easier for one selection and are there additional steps you can take that on that front.
Jim Sidoti: Yeah, Jim Thanks for the question I mean, it really is one of our key focuses in and as we've said in our prepared remarks.
Jim Sidoti: We're looking at a lot of different things in the area of AI.
Jim Sidoti: Certainly.
Jim Sidoti: These two papers coming out that are going to add a lot of <unk>.
Jim Sidoti: Strong support for.
Jim Sidoti: How to approach the preoperative intra operative and post operative management of Evo.
Jim Sidoti: Potential candidates.
Jim Sidoti: And just getting our infrastructure set up with this global training initiatives were doing around clinical and practice development and sales.
Jim Sidoti: To really have that that.
Jim Sidoti: Really best in class combined with all the other efforts we're doing we just believe we're surrounding the customer appropriately to.
Jim Sidoti: To make this a very predictable a very routine procedure.
Alright.
Jim Sedoti: Alright, and then as a follow-up, the relationship with Sharp Vision, you know, how long did it take to get that contract signed, and do you think having that in place will make it easier to get additional physicians to sign on? Yeah, I think not only having that contract in place, but just the momentum that is beginning to build in the U.S. marketplace, you know, Sharp Vision is a manifestation of that. But as I said, sitting here at this meeting and seeing the amount of enthusiasm and interest, people are beginning to talk more and more about lens-based refractive surgery and why that may make sense.
Jim Sidoti: Then a follow up the relationship with sharp vision.
Jim Sidoti: Long did it take to get that contract signed and do you think having that in place we will make it easier to get additional.
Jim Sidoti: Additional physicians to sign on.
Jim Sidoti: Yes, I think not only having that contract in place, but just the momentum that is beginning to build.
In the U S marketplace sharp vision is a manifestation of that but as I said sitting here at this meeting and seeing the amount of enthusiasm and interest.
Jim Sidoti: That people are beginning to talk more and more about lens based refractive surgery and why that may make sense. So I think.
Tom Frenzy: So, I think, naturally, the effort we've been putting in for the past 15 months is going to start to bear fruit, as we said, in the back half of this year. And we continue to feel good about how the year has started for us. So, I think, you know, more contracts will come. We have good leadership for the U.S. business. Warren Faust, our chief operating officer, is taking a real hands-on approach and working very closely with our U.S. leadership. So, I think I feel very positive about our efforts to date and feel good about the marketplace beginning to recognize the value of Evo ICL. Thank you. This concludes the STAAR Surgical Q4 earnings call. You may now disconnect your lines, and we thank you all for attending today's presentation.
Jim Sidoti: Naturally the effort we've been putting in for the past 15 months is going to start to bear fruit as we said.
Jim Sidoti: In the back half of this year and we continue to feel good about how the year has started for us.
Speaker Change: Thank you no more contracts will come.
Speaker Change: We have good leadership for the U S business Warren <unk>, our Chief operating officer has taken a real hands on approach and working very closely with our U S leadership.
Speaker Change: So I think I feel very positive.
Speaker Change: About our efforts to date and feel good about.
The marketplace beginning to recognize the value of Evo ICL.
Speaker Change: Thank you.
Speaker Change: Concludes the STAAR surgical Q4 earnings call.
Speaker Change: You may now disconnect your lines and we thank you all for attending today's presentation.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.