STAAR SURGICAL CO Q4 FY2024 earnings call

• Fiscal 2024 results were negatively impacted by weak China macroeconomic conditions, especially in Q4. Outside China, strong growth was seen in various regions. - China's consumer confidence and spending were low, leading to fluctuating ICL procedure demand. An order of $27.5 million ICLs shipped to China in December 2024 was not recognized as revenue due to extended payment terms. - Focus on sell through in China rather than sell in, working with distributors to manage inventory. - EVO ICL continues to be a choice for refractive vision correction, and plans for EVO Plus in China with potential pricing upside. - Continued investment in commercial activities in growing markets while managing expenses.

For fiscal 2024, net sales were approximately $314 million. China ICL sales were negatively impacted by weak macroeconomic conditions, with Q4 ICL sales in China at $7.5 million and full year China ICL sales at $161 million, down 13% year-over-year. Outside of China, STAAR generated $152 million of ICL sales, which was a growth of 17% in the fourth quarter and 13% for fiscal 2024. In the Americas, ICL sales growth was 22% in Q4 and 15% for fiscal 2024, with US sales growth 22% and unit growth 21% in Q4. EMEA ICL sales had 9% growth in Q4 and 10% for fiscal 2024. APAC excluding China saw 20% growth in Q4 and 14% for fiscal 2024, with Japan, South Korea, and India contributing to growth.

• Anticipates ICL sales excluding China of $165 million to $175 million for fiscal 2025, a growth range of 9% to 15%. - China ICL sales expected in range of $75 million to $125 million. - No longer expects to achieve Vision 2026 Target Sales and Operating Model. - Adjusted EBITDA outlook: loss per quarter in first half of 2025, then gain range in second half, resulting in full year loss range of $50 million to $15 million. - Expect cash, cash equivalents, and investments available for sale to be $150 million to $175 million by end of 2025.

• China macroeconomic uncertainties affecting ICL sales. - Inventory issues in China due to elevated inventory levels and distributor payment term extensions. - Geopolitical and tariff risks impacting importation and sales. - Competition from Eyebright entering the market, which could impact market share.

Q: How did the China inventory issues occur and what assures investors these won't recur?

A: China inventory issues arose due to elevated inventory levels and distributor request for extended payment terms. STAAR believes these were transitory and will not happen again, with focus on sell through and managing relationships.

Q: What's the basis for the China volume decline and rebound assumptions?

A: Lower end of range assumes continued refractive market deterioration, upper end assumes rebound due to potential government stimulus and market recovery. Assumptions based on market trends and historical performance.

Q: How is STAAR managing cash burn and operating expenses?

A: Managing cash burn by controlling CapEx, working capital, and operating expenses. Focus on supporting growing markets and making targeted cost cuts while maintaining investment in commercial activities.