STAAR Surgical's CEO Discusses Q2 2012 Results - Earnings Call Transcript

STAAR Surgical Company (STAA)

Q2 2012 Earnings Conference Call

August 1, 2012 16:30 ET

Executives

Doug Sherk – Investor Relations

Barry Caldwell – President and Chief Executive Officer

Deborah Andrews – Chief Financial Officer

Don Todd – President, Asia-Pacific

Hans Blickensdoerfer – President, Europe, Middle East, Africa, and Latin America

Don Fagen – Vice President, North America

Analysts

Chris Cooley – Stephens Inc

Raymond Myers – The Benchmark Company

Christine Healy – Canaccord Genuity

Rick D'Auteuil – Columbia Management

Joe Munda – Sidoti & Company

Bruce Jackson – Northland Capital Markets

Jason Mills – Canaccord Genuity

Larry Haimovitch – HMTC

Presentation

Operator

Thank you for standing by. Welcome to the STAAR Surgical Second 2012 Financial Results Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions) This conference is being recorded today, Wednesday, August 1, 2012.

I would now like to turn the conference over to Doug Sherk. Please go ahead sir.

Doug Sherk

Thank you, operator, and good afternoon, everyone. Thank you for joining us for the STAAR Surgical conference call and webcast to review the company’s financial results for the second quarter which ended on June 29, 2012. The news release announcing the second quarter results crossed the wire about a half an hour ago and it’s available at STAAR’s website at www.staar.com. Today’s call is also being broadcast live via webcast.

In addition, a slide presentation will accompany remarks by management. To access both the webcast and the presentation slides, go to the Investor Relations section of STAAR’s website at www.staar.com. If you are listening via telephone to today’s call, I would like to review the slides that accompanying management’s remarks. Please navigate that a live webcast as I have just reviewed and choose the no-audio/slides-only option. In addition, an archived replay and slides will be available on the STAAR website.

Before we get started, 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 any projections of earnings, revenues, sales, profit margin, cash or other financial statements. Any statements about plans, strategies or objectives of management for future operations or prospects for achieving such plans, any statements concerning proposed new products, including expectations for success of the ICL or other products in the U.S. or international markets, government approval of new products or developments or other future actions of the FDA or other regulators, the outcome of product research and development or any clinical study, any statements regarding future economic conditions or performance, the size of market opportunities, statements of beliefs and any statements of assumptions underlying any of the foregoing.

These statements are based on expectations and assumptions as of the date of this conference call and are subject to numerous risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks are described in the Safe Harbor statement in today’s press release and in the Risk Factors section of our Annual Report on Form 10-K, investors or potential investors should read these risks. 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 basic and diluted net income per share information that excludes manufacturing consolidation expenses, gains on foreign currency, or losses on foreign currency, fair market value adjustments for warrants and stock-based compensation, we believe these non-GAAP numbers provide meaningful supplemental information and are helpful in assessing our historical and future performance. A table reconciling the GAAP information to the non-GAAP information is included in our financial release, which is available on our website and in our slide presentation.

Now, with that out of the way, let me turn the call over to Barry Caldwell, President and Chief Executive Officer of STAAR Surgical.

Barry Caldwell

Thank you, Doug and good afternoon everyone. Thank you for joining us today for our review of the second quarter 2012 results. With me today on the call was Deborah Andrews, our CFO. Also on the call are our three commercial regional heads, who are in talent to preserve our five-year strategic plan to STAAR’s Board of Directors tomorrow. So, via phone, I’d like to introduce to you Don Todd, who is President of our Asia-Pacific region; Hans Blickensdoerfer, who is President of Europe, Middle East, Africa, and Latin America; and Don Fagen, who is Vice President, North America.

I’ll start with an overview of the quarter and ask our commercial heads to weigh in at times. I will also review our 2012 key metrics in light of the results for the quarter. Deborah will provide a detailed look at our second quarter financial results and discuss progress with our manufacturing consolidation project.

Before we take your questions, I will review with the three commercial heads anticipated progress and key drivers during the second half of the year and our expected performance. As we announced a couple of weeks ago, our second quarter revenue growth was not what we had expected. So, it was an unusual combination of three dynamics, which limited our sales.

Let’s look at the results. ICL revenues increased by 4%, IOL revenues decreased by 4%, and as we have planned, the other defocused category of products continued to decline at a rate of 38% during the quarter. That resulted in an overall 2% decline in total revenue for the quarter.

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