Company: STAA
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000950170-25-024813
Chunk: 19

Company: STAAR SURGICAL CO
Filing Date: 2025-02-21
Form: 10-K
Item: Item 1
Chunk 19
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 sales by promoting and demonstrating our products with physicians. Our clinical affairs personnel provide training and educational courses globally.

Two customers, our China distributors who sell into China and Hong Kong, accounted for approximately 51% of our consolidated net sales during fiscal 2024. Net sales to our China distributors during each of the last three fiscal years were as follows: 

    Net Sales to China Distributors

    Fiscal Year
     
    Net Sales($, in thousands)

    Net Sales as Percentage of Consolidated Net Sales

    2024
     
    $
    161,321

    51.4
    %

    2023
     
    $
    185,554

    57.6
    %

    2022
     
    $
    148,167

    52.1
    %

6

Our agreements with our distributors in China provide for minimum inventory requirements based on forecasted demand. These requirements are intended to establish minimum levels of inventory in-country to mitigate potential delays associated with importation and logistics, as well as to establish a sufficient supply of lenses to support quick and efficient delivery and fulfillment for surgical procedures. Our distributors often purchase lenses above the minimums required by their agreements. During fiscal 2024, our distributors purchased lenses above such minimums in anticipation of higher procedural volumes during what is typically a summer “high season” in China.  Due to dynamic macroeconomic conditions and other factors, the number of ICL procedures performed during the high season and the second half of 2024 overall was lower than expected. Accordingly, our distributors in China held, as of December 27, 2024, elevated levels of ICL product inventory.  Given the size of the Company’s business in China relative to its net sales in the rest of the world, macroeconomic conditions in China have a significant impact on the Company’s business, operations, and financial results. The sluggish economy and weak consumer consumption in China negatively impacted the Company’s financial results for fiscal 2024, and as discussed further in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” is expected to continue to impact demand for our ICLs in China in fiscal 2025. 

Backlog 

We generally keep sufficient inventory on hand to ship product immediately or shortly after receipt of an order. As we offer different types of ICLs to treat different refractive conditions, and our ICLs are manufactured to address refractive prescriptions across a broad range of correction, we maintain