STAAR Surgical Company (NASDAQ:STAA) reported impressive first quarter 2024 results, exceeding expectations and demonstrating the company's strong momentum in the global ophthalmic surgical market. The company's proprietary Implantable Collamer Lens (ICL) technology, led by the EVO ICL product line, continues to gain traction worldwide, driving robust sales growth across all key geographies.

Financials

In the first quarter of 2024, STAAR generated net sales of $77.4 million, up 5.2% year-over-year. This performance was driven by a 9.2% increase in ICL sales, which reached $77.1 million and accounted for 99.7% of total revenue. The company's other product sales, which include cataract intraocular lenses (IOLs) and related accessories, declined 92.9% year-over-year to $205,000 as STAAR has phased out its cataract IOL business to focus on the growth of its ICL portfolio.

Gross profit for the quarter was $61.0 million, or 78.9% of net sales, compared to $57.6 million, or 78.3% of net sales, in the prior year period. The year-over-year improvement in gross margin was primarily driven by favorable product and geographic mix. For the full year 2024, STAAR expects gross margins to be approximately 80% of net sales.

Regional Performance

On the regional front, STAAR delivered strong performance across all key markets. In the Asia Pacific (APAC) region, which includes China, the company reported a 9% increase in ICL sales, with China growing 10% year-over-year. In the Europe, Middle East, and Africa (EMEA) region, ICL sales grew 11%, while the Americas region, including the United States, saw a 12% increase in ICL sales, with the U.S. market growing 15%.

U.S. Market Strategy

The company's investments in its U.S. commercial strategy are paying off, as evidenced by the 21% sequential growth in U.S. ICL sales to a record $5 million in the first quarter. STAAR has been focused on building surgeon confidence in the ICL procedure through clinical data and training, as well as expanding its network of "Highway 93" accounts - a select group of U.S. practices that are committed to growing ICL as a percentage of their refractive procedure mix. The company has now signed agreements with a dozen "Highway 93" customers, including the largest commitment ever to EVO ICL in the U.S. with IQ Laser Vision.

Outlook

Looking ahead, STAAR is reiterating its fiscal 2024 net sales guidance range of $335 million to $340 million, with the expectation of being at the higher end of the range based on current trends. For the second quarter of 2024, the company anticipates net sales of approximately $95 million, reflecting continued above-market growth globally.

On the profitability front, STAAR reported a GAAP net loss of $3.3 million, or $0.07 per share, in the first quarter, primarily due to a $2.3 million foreign currency exchange loss. However, the company's adjusted EBITDA, a non-GAAP metric that management believes better reflects the underlying performance of the business, was $5.3 million, or $0.11 per share, compared to $10.0 million, or $0.20 per share, in the prior year period.

For the full year 2024, STAAR now expects adjusted EBITDA of approximately $39 million, or $0.75 per share, up from the previous guidance of $38 million, or $0.70 per share. This improvement is driven by slightly better expectations for other income/expense and higher stock-based compensation expense.

Liquidity

The company's balance sheet remains strong, with cash, cash equivalents, and investments available for sale reaching a record $252.1 million as of March 29, 2024, up from $232.4 million at the end of fiscal 2023. STAAR also made progress in reducing its accounts receivable to $64.6 million, primarily driven by improvements in the China business.

Conclusion

STAAR's continued execution and strong financial performance demonstrate the company's ability to capitalize on the growing global demand for refractive vision correction solutions. The company's focus on surgeon training, clinical data, and commercial expansion is driving increased adoption of its proprietary ICL technology, particularly in the U.S. market, where STAAR sees significant long-term growth potential.

Despite the challenging macroeconomic environment, STAAR remains confident in its ability to navigate the headwinds and deliver sustainable, profitable growth. The company's robust product pipeline, global footprint, and strong balance sheet position it well to continue outperforming the market and creating value for shareholders.