STAAR Surgical Company

good day ladies and gentlemen thank you for standing by welcome to the star surgical fourth quarter and fiscal year financial results conference call during today's presentation all parties will be in a listen only mode following the presentation the call will be open for questions if you have a question please press the star followed by one on your touch tone phone if you're using speaker equipment today, please lift the handset before making your selection. This call is being recorded today, Wednesday, February 23rd, 2022. At this time, I would like to turn the conference over to Mr. Brian Moore, Vice President and investor, Media Relations and Corporate Development for Star Surgical.

Thank you, operator, and good afternoon, everyone. Thank you for joining us on the Star Surgical Conference call this afternoon to discuss the company's financial results for the fourth quarter and fiscal year ended December 31, 2021. On the call today are Karen Mason, President and Chief Executive Officer, and Patrick Williams, Chief Financial Officer. The press release of the fourth quarter results was issued just after 4 p.m. Eastern Time. and is now available on STAR's website at www.star.com. Before we begin, 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 STARS public periodic filings with the SEC. Except as required by law, STARS 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 adjusted earnings per share and sales in constant currency. We believe that 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 today's press release. Following our prepared remarks, we will open the line to questions from publishing analysts. We ask analysts limit themselves to two initial questions, then re-queue with any follow-ups. We thank everyone in advance for their cooperation with this process. And with that, I would now like to turn the call over to Karen Mason, President and CEO of STAR.

Thank you, Brian. Good afternoon, everyone, and thank you for joining us on today's call. The fourth quarter results we reported today are consistent with the preliminary results we announced last month. Fourth quarter results contributed to another record year of sales, profit, cash flow, and growth achievement for STAR in fiscal 2021. We achieved all of this despite some ongoing COVID and operations-related headwinds. Our results were driven by global ICO unit growth for the full year fiscal 2021, which was up 48% year over year, and almost three times the 17% increase in global industry refractive procedures. Turning to the fourth quarter, we achieved strong growth in several markets, including ICO unit growth in China, up 44%, Japan up 45%, South Korea up 35%, India up 74%, and Latin America up 30%, all as compared to the prior year quarter. All the major regions we track achieved positive ICL unit growth year over year for the fourth quarter of 2021. European geographies, as many of you know, were most impacted by the emerging Omicron COVID variant during the fourth quarter of 2021. COVID impacted certain of our European customers and, in the US, Star's manufacturing operations. Employee absenteeism was the major headwind in both cases, with staff and employees quarantining at various times during the fourth quarter, mostly due to household or contact tracing COVID protocols. We believe the worst of these headwinds are now lessening. Global demand for our ICL continues unabated through the first seven weeks of the first quarter of 2022, including record orders from surgeons in China. Based on our current demand and supply forecasts, we are reaffirming our previously provided outlook for fiscal 2022 net sales of approximately $295 million, subject to no unforeseen impact from COVID on our business. $295 million in net sales represents 28% year-over-year growth, which is an acceleration from our pre-pandemic level of growth in fiscal 2019 and would represent another record year of sales for STAR. Patrick will provide details on the calendarization and composition of our sales outlook shortly. Turning to the US, our submission of clinical data for SARS-Evo family of myopia lenses remains under customary interactive FDA review. While our expectation of pre-COVID approval timelines by the FDA has now passed, we remain confident regarding an approval of our PMA supplements. We will provide further comment on the process and our interactions with the FDA when permitted and appropriate to do so. The U.S. is the second largest market in the world for refractive procedures. We estimate that there are a very significant 100 million U.S. adults who are potential candidates for our implantable columnar lenses. These adults are age 21 to 45 with myopia in the range of minus 3 diopters and minus 15 diopters, which are our currently approved ranges in the US. In 2022, we plan to invest more heavily in consumer awareness building programs designed to accelerate the paradigm shift to lens-based vision correction. We are seeking commitments from new and exciting celebrity brand ambassadors in the US and abroad who plan to share their journeys to the visual freedom provided by our EVO lenses. We will also continue to engage surgeons and their staffs globally through clinical validation, education, and strategic cooperation in fiscal 2022. Our implantable columnar lenses are suitable for a wide range of vision correction, which in some markets extends down the diopter curve to minus 0.5 diopters. I am pleased to report today that for the full year of fiscal 2021, almost two-thirds of our ICLs sold globally were in the range of minus 0.5 to minus 10 diopters. In April, we will engage the uptown community with a strong presence at the American Society of Cataract and Refractive Surgery, the ASCRS annual meeting in Washington, D.C., where we anticipate thousands of U.S. surgeon and clinic attendees. Our medical monitor for our U.S. study, Dr. Mark Packer, submitted his abstract to ASCRS, and we look forward to sharing the clinical data at that time. Later this year in September, We plan to host an experts meeting ahead of the European Society of Cataract and Refractive Surgery, the ESCRS Annual Congress, which is also historically attended by a strong contingent of global surgeons, where we plan to kick off the full commercialization of our presbyopia lenses. All told, we anticipate fiscal 2022 will be another record year of Commercial and Financial Progress for STAR. Patrick?