Full Press Release Details
Edited Transcript of STAA earnings conference call or presentation
Corporate Participants
STAAR Surgical Co - President & CEO
STAAR Surgical Co - CFO
Conference Call Participants
Stephens Inc. - Analyst
Benchmark Capital - Analyst
William Blair & Company - Analyst
Sidoti & Company - Analyst
Good day, ladies and gentlemen, and welcome to the STAAR Surgical
Inc. fourth quarter 2015 earnings conference call.
(Operator Instructions)
As a reminder, today's program is being recorded. I would now
like to introduce your host for today's program, Brian Moore with EVC Group. Please go ahead.
Brian Moore, EVC Group - IR [2]
Thank you, operator, and good afternoon, everyone. Thank you
for joining us on the STAAR Surgical conference call this afternoon to review the Company's financial results for the fourth quarter
and full year which ended on January 1, 2016.
Joining me on the call today are Caren Mason, President and
CEO of STAAR Surgical; and Steve Brown, CFO. The news release detailing the fourth-quarter results was issued just after 4:00 PM
Eastern time, and is now available on STAAR's website at www.staar.com.
Before we get started, let me quickly remind you that during
the course of this conference call, the Company will make forward-looking statements. We caution you that any statement that is
not a statement of historical fact is a forward-looking statement. This includes remarks about the 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 described in the forward-looking statements. The risks and uncertainties associated with the forward-looking
statements made in this conference call and webcast are described in the Safe Harbor statement, in today's press release, as well
as STAAR's public periodic filings with the SEC. STAAR assumes no obligation to update these forward-looking statements to reflect
future events or actual outcomes, and does not intend to do so.
In addition to supplement the GAAP numbers, we have provided
non-GAAP adjusted net income and diluted net income per share information. We believe that these non-GAAP numbers provide meaningful
supplemental information and are helpful in assessing our historical and future performance.
Also in order to compare our performance from period to period
without the effect of currency fluctuations, we apply the same average exchange rate applications to the prior period or a constant
currency rate to sales. A table reconciling the GAAP information to the non-GAAP information is included in today's financial release,
which is available on our website.
With that, I would now like to call over to Caren Mason, President
and CEO of STAAR Surgical.
Caren Mason, STAAR Surgical Co - President & CEO [3]
Thank you, Brian, and good afternoon, everyone. I will begin
our discussion with general commentary on the state of the business. Steve will then review key fourth quarter and full FY15 financial
results, before we open the call for your questions.
I am celebrating my first anniversary as CEO of STARR tomorrow.
It has been an exciting yet challenging year, and ultimately one of great progress.
The 2015 financial results as reported earlier today ended on
a high note after a difficult beginning to the year, and we are endeavoring to continue to the momentum into 2016. Our goal is
to increase ICL units by double digits, to expand our gross margins, and to determine by year end what our IOL offering should
look like as a true cataract care business.
Building upon the foundation we began in 2015, the following
is an abbreviated look at four of our strategic priorities for 2016. FDA remediation and continuation of quality systems overhaul
is again at the top of our list of strategic priorities. We achieved our planned commitments in 2015, and came in a little under
the $4 million budget to get the work done.
In 2016, the achievement of remediation and quality system plan
commitments as submitted to the FDA, and assuring that our global quality certifications are maintained, remain as essential goals.
Our targeted FDA remediation spend in 2016 is $2.1 million, which includes the continued advisory, directional, and assessment
supportive consultants. We will also continue to hire top talent to round out our quality and regulatory teams.
In addition, we have committed to invest capital in the acquisition
and validation of a master control quality management system. The employee led culture of quality campaign had a strong kick off
in 2015, and our plans are to strengthen this initiative each and every year so as to have it as the very foundation of the way
As our second strategic priority, we plan to create the visual
freedom market for implantable lenses. It is our belief that the market for implantable Collamer lenses as a primary and premium
refractive procedure for the correction of myopia was never properly defined and built with clinical validation as a core tenant.
Today, we are frequently contacted by individuals who marvel at the ICL vision correction they believe has been an ordinary gift,
providing them with excellent visual acuity and true visual freedom.
This past week, I received a LinkedIn request from an anesthesiologist
in Indiana. I was surprised as there was not an obvious link, I thought, between us. My voicemail then revealed that this anesthesiologist
was so overwhelmed and grateful for his ICL visual transformation that he wanted to provide testimonial and become a brand ambassador.
His story and so many others always begin with a similar statement: I had no idea that these lenses existed.
The rightful place for the ICL as a primary and premium refractive
procedure was gated as the Company positioned the ICL as an alternative to LASIK, a last attempt to provide myopic correction for
the unqualified or rejected LASIK patient. Being at the tail end of alternative refractive procedures offered, meant that very
few surgeons built their practices around the ICL and had enough surgical experience to feel truly confident performing the lens
Additionally, LASIK and other refractive procedures, having
gone in and out of fashion or suffering from clinical controversy, in essence held the ICL hostage since the ICL is relatively
unknown. You may remember our challenge in Korea in 2014 as LASIK became quite controversial due to a television expose. Our ICL
business suffered as a result of patients staying away from the surgeon's office.
The ICL's approved correction range provides ample opportunity
from low myopes to the minus 15 diopter range to meet patient vision correction requirements, and up to minus 20 diopters for the
reduction of myopia. We can and should become a primary and premium choice.
We will endeavor to build the evolution in visual freedom market
with significant clinical evidence, new corporate branding, new product branding, digital marketing, social media, consumer facing
websites. And by the end of the year, the clinical utility profile that clearly elucidates the price value equation of the ICL
versus other myopic vision correction choices.
We are also partnering with large vision care partners, such
as the recently announced a Memira Clinics of Scandinavia, with over 50 refractive surgery clinics, and IRI Hospitals of China
with over one hundred eye hospitals. They have both agreed to be strategic partners with STAAR to position their refractive ICL
procedures as primary and premium through surgeon training, clinical study cooperation, establishment of patient registries, consumer
facing marketing, and local inventories to support same or next stage surgery. We expect to add additional large refractive surgeries
to future partners in 2016.
Also as promised, we have begun the first CentraFLOW expanded
optics implantations in Europe, having received the CE Mark approval. And look forward to reporting on the clinical outcomes and
patient experience at our European experts meeting, and on the podium at ASCRS in September. And finally, our new corporate and
product branding will be introduced at ASCRS in May.
So bottom line, you won't need to remember the name of our lenses
as of the CentraFLOW Visian ICL with expanded optic after that time. We want consumers, especially millennial consumers, to have
an easy to remember name for their ICLs.
Our third strategic priority is to begin our clinical validation
and regulatory rebirth in earnest in 2016. Most of the work we are undertaking will not be discussed until we have approval and