LENSAR, Inc.

Good morning, and thank you for your participation. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference call will be recorded. I would now like to turn the call over to Cameron Radinovic of Burns McLellan. Mr. Radinovic, please go ahead.

Thank you, Operator. Good morning, and welcome to the Lenzar Fourth Quarter and Full Year 2023 Financial Results Conference Call. Earlier this morning, the company issued a press release providing an overview of its financial results for the quarter and full year ended December 31st, 2023. This press release is available on the investor relations section of the company's website at www.lenzar.com. Joining me on the call today is Nick Curtis, Chief Executive Officer of Lenzar, who will review the company's recent business and operational progress. Following his comments, Tom Staub, Chief Financial Officer of Flensar, will provide an overview of the company's financial highlights before turning the call back over to the operator to facilitate answering any questions you may have. Today's conference call will contain certain forward-looking statements, including those statements regarding future results, unaudited and forward-looking financial information, as well as the company's future performance and or achievements. These statements are subject to known and unknown risks and uncertainties, which may cause the company's actual results, performance, or achievements to be materially different from any future results or performance expressed or implied in this presentation. You should not place undue reliance on these forward-looking statements. For additional information, including a detailed discussion of the company's risk factors, please refer to the company's documents filed with the Securities and Exchange Commission, which can be accessed on the website. In addition, this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, March 4th, 2024. LENZAR undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this live call. With that, it's my pleasure to turn the call over to Nick Curtis. Nick?

Thank you, Cam, and good morning to everyone. Thank you for joining us on our fourth quarter 2023 conference call. 2023 was by all measures, a very strong year for our company. I'm confident that the significant momentum built throughout the year will continue in 2024. I'm excited to share with you both our achievements of the past 12 months, as well as some of the numerous reasons we're so excited for the future. As Tom will review in greater detail, fourth quarter revenue grew 18% compared to a year ago, while full year revenue increased 19% in 2023 compared to 2022, also marking our highest annual revenue in the company's history. I can safely say that since launching in the mid-third quarter of 2022, Ally has exceeded our expectations. We placed a total of 44 systems last year, approximately 50% above our initial guidance of 30 placements in the first full year of commercial launch. It is also significant to note half of our 2023 placements were with surgeons and sites new to Lensar, a majority that have converted to Ally from competitive devices. Although Ally is currently only available in the U.S., we grew our total worldwide install base by 13% to approximately 305 systems, comprising both the next generation Ally and our legacy LLS. This significant growth was achieved despite issues in South Korea, whereby an ongoing dispute between third-party payers and healthcare providers has resulted in premium cataract procedures being virtually nonexistent in what was previously a robust market. If you focus on our total revenue growth without South Korea, 2023 revenue increased 26% compared to 2022. Once again, this growth percentage is even more impressive if you consider the fact that we're currently limited to installing allies in the U.S. Accordingly, our U.S. installed base grew over 23%, a strong performance in any event. Importantly, demand for the technology remained strong as we finished 2023 with a backlog of nine systems and a robust pipeline of potential Ally customers that we are diligently working to convert in the year ahead. In addition to this strong growth in our installed base, we continue to report highly encouraging utilization trends with full year procedure volume up 4% over 2022 and fourth quarter procedures increasing nearly 20% compared to the year ago period. Similar to the revenue story, our full year procedure growth becomes even more impressive when you exclude the effect of South Korea, which has essentially been shut down since mid-2022. Backing out South Korea activity for both 22 and 23, our worldwide procedure volumes increased 15% over last year. We continue to demonstrate with our customers the benefits Ally offers, primarily with the significant speed, performance, astigmatism management, and overall ergonomic efficiency compared to legacy technologies. These benefits will drive further adoption of Ally, as well as increased utilization as surgeons' comfort levels continue to grow and they see firsthand the value that our platform can create within their practice. As our installed base and utilization continues to expand, Peer-to-peer referrals will become increasingly credible sources for those that are considering the right time to replace their older competitive devices with Ally. Again, this is not really a matter of if the technology gets replaced, but when is the optimal time to upgrade. To that end, we recently completed four time and motion studies in ASCs with different model workflows and determined that surgeons can save up to eight minutes per case staff can save up to 19 minutes per case by streamlining workflow due to Ally performance and efficiencies and reducing the number of staff interactions with the patient. Ultimately, this can result in patients spending up to 51 minutes less time in a surgical facility using Ally as compared to using a LensX laser and manually marking patients preoperatively. Using average CMS payment schedules, average conversion rates, and market scope data of the average charge per patient for performing astigmatic incisions and managing astigmatism, surgeons and staff can end their day 90 to 120 minutes earlier, saving the ASC up to $12,000 per surgical day and up to $540,000 per year. Alternatively, in very busy centers where time and OR capacity is a consideration, surgeons can choose to treat more patients generating an additional $8,000 of revenue per day or $364,000 per year, while ASCs can garner an additional $11,000 in facility fees and staff costs per day or $497,000 per year. This makes Ally a very compelling value proposition, providing a solid return on investment and alternative to the big company bundles. As you can see, independent data is beginning to emerge in support of our longstanding belief that Ally offers a better device and overall technology solution to optimize the cataract surgical experience for surgeons, staff, and patients. While the growth we've delivered over the last year is exciting on its own, looking at it in the context of the broader sector tells a similarly promising story. In the fourth quarter, our US market share reached 16.9% according to MarketScope. This marks our seventh consecutive quarter of gains in our primary geography. and representing a 2.8% gain in market share since launching Ally in the US. Additionally, there is a significant number of competitive systems currently in use that are based on data technology and approaching end of life. Demographics of an aging population and organic growth in cataract surgeries on average represent 3% plus organic growth per year. The benefits of femtosecond laser-assisted cataract surgery are contributing to a higher annual growth rate. expected to be between 5% and 8%. Visually significant astigmatism, for which Ally is ideally suited, affects 70% to 90% of all cataract patients. This data, combined with the benefits surgeons, staff, and patients recognize with Ally, provide strong support for our expectation that Lensar has the potential to achieve 20% plus year-over-year growth for the foreseeable future. Our growth to date and this anticipated growth are fueled not only by allies' efficiencies and business opportunities as previously outlined, but also the significant clinical contribution allies making for surgeons and their patients. Specifically, we now have four peer review papers demonstrating the superiority of Lensar's proprietary astigmatic guiding technology in tele access that enables surgeons to create astigmatic incisions and guide toric IOL alignment and deliver better outcomes to their patients. The most recent peer-reviewed paper was published this month in the Journal of Cataract and Refractive Surgery, where renowned professors Tim Schultz, MD, and Burkhard Dick, MD, from Ruhr University Eye Hospital in Bochum, Germany, compared their outcomes using LENZAR iris registration technology with the IntelliAXIS refractive capsulorhexis compared to those using another axis of astigmatism alignment tool from Zeiss called the Callisto to align toric intraocular lenses and found that IntelliAxis guided statistically significant improvements in outcomes for their cataract patients. Turning to our outlook for 2024 and beyond, we believe that there are multiple reasons to be optimistic, both specific to Lensar and related to the broader market. First, we've achieved this meaningful growth despite the continued freeze in South Korea. Revenue after Q2 was essentially zero for the following six quarters. We can't speculate as to when the market might reopen, but clearly it's a matter of when and not if it happens. However, the bigger question is when it does, how significant a role will South Korea play in terms of our future growth, particularly once Ally is available? To put it in perspective, South Korea represented less than 1% of our product and service revenue in 2023. This compares to 7.4% and 14.9% of our product and service revenue in fiscal 22 and 21 respectively. Our in-market distributors stated that when the third-party payer issues are resolved, the result will be a market estimated to be roughly 50% the size that it was prior to the shutdown. As a reminder, Ally is currently available for use only in the United States, but we expect this to evolve in the year ahead. We submitted Ally for CE Mark certification in the European Union in September of 2022, and we expect a decision on certification later this year. Our distributors are well equipped and excited to make Ally available to European surgeons quickly once we receive marketing authorization. Enthusiasm for Ally within the international ophthalmic community is significant and extends beyond our distributors to the surgeons they serve. These surgeons are witnessing the results being achieved by their American counterparts and are eager to experience the many advantages of the Ally Adaptive Cataract Treatment System firsthand for the benefit of their practices and more importantly, their patients. We're approaching a perfect storm. Combining an industry that has been ripe for innovation which we're addressing through our world-class technology, the anticipation of an expanded geographic footprint through new regulatory clearances, and improving global market conditions. I believe we're well-positioned to translate these favorable dynamics into significant growth in the years to come. We have a clear set of objectives focused on maximizing the success of Ally, and I'm proud to say that we are well on our way to making our vision a reality. Now let me turn the call over to Tom to cover our financial highlights for the quarter and year. Tom?