*NEW* We are providing this transcript version in a raw, machine-assisted format and it is unaudited. Please reference the audio for any questions on the content. A standard transcript will be available later on the site per our normal procedure. Please enjoy this timely version in the interim:.
[00:00:01] Good day, ladies and gentlemen, thank you for standing by. Welcome to the STAAR Surgical third quarter financial results conference call. During today's presentation, all parties will be in a listen only mode.
Following the presentation, the call would be an open for questions, if you have a question, please, press star followed by one on your touchtone. If you are using a speaker equipment today, please lift the handset before making your selection.
This call is being recorded today, Wednesday, November 4th, Twenty twenty At this time, I would like to turn the conference over to Mr. Brian Moore, vice president, investor media relations and corporate development star surgical..
[00:00:45] Thank you, Stacey, 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 third quarter ended October 2nd, Twenty twenty.
On the call today are Karen Mason, president and chief executive officer, and Patrick Williams, chief financial officer. The press release of our third quarter results was issued just after 4:00 p.m. Eastern Time and is now available on the Star's website at WWW.YOUTUBE.COM.
Before we began, 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 statements. This includes remarks about the company's projection of 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 risk 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 Starr's public periodic filings with the FTC.
Except as required by law, Starr seems 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 Gap numbers, we have provided noncapital that 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 gap information to the non gap information is included in today's press release. Following our prepared remarks, we will open the lines to questions from publishing analyst.
We have analysts limit themselves to two initial questions. Then Rita with any follow up. We thank everyone in advance for their cooperation with this process. And with that, I'd like to turn the call over now to Karen Mason, president and CEO of STAAR..
[00:03:18] Thank you, Brian. Good afternoon, everyone, and thank you for joining us on today's call. The third quarter twenty twenty results we reported today represent yet another record level of quarterly sales and a return to the levels of growth that are more representative of the demand for our into an ideal family of Lenz's.
For the third quarter of Twenty twenty stars, net sales increased 21 percent over the prior year, driven by 25 percent global ICL unit growth as markets more fully reopened following covid-19 related shut down.
On a regional basis, I see unit growth in the third quarter was positive in a large majority of the top markets we track as compared to the second quarter of Twenty twenty one, just three of our top markets achieved positive intel unit growth, both metrics on a year over year basis.
Stand out markets for unit growth in the third quarter of Twenty twenty compared to prior year included. China up thirty three percent, Japan up 67 percent, South Korea twenty one percent. Rest of Asia Pacific up 67 percent. Spain, 24 percent. European distributor markets up 17 percent. And Germany up 13 percent.
India and the Middle East, where the two markets that remained most challenged by covid-19 during the third quarter, with each market down more than 50 percent and ICL units over the prior year period, excluding India and the Middle East, global ICL unit growth for the third quarter of Twenty twenty would have been 32 percent or seven points higher than the twenty five percent we reported.
Several factors contributing to our growth during the third quarter. First, we benefited from our strong presence and growing to share an Asia Pacific market.
Many Asia-Pac countries seem to be ahead of the curve with respect to effectively beating and managing the covid-19 challenge, life appears to be returning to normal in Asia Pacific Geography's earlier than many other locations around the globe.
For example, our employees in Japan and China report that covid-19 impacts daily life less than we're hearing from our employees in other parts of the world. Globally, we continue to support our customers and getting back to pre Koven norms while also monitoring and even though the trends are actions that could lead to business disruption.
Second, we are observing an Ebola patient in Asia and Europe that seems more motivated to reach a quick decision regarding refractive surgery, often selecting the first doctor he or she consults, whereas historically these same patients may have met with two or three doctors before making a final decision.
The feedback we are receiving from clinicians is that patients are increasingly more motivated to quickly seek visual freedom as the pandemic has been quite challenging, as expressed by their patients who wear glasses and contact lenses.
There also appears to be a sentiment among patients to do something good for themselves as one of our clinicians is being shared with us.
[00:07:02] Third, covid-19 related closures and delays, such as in the National College entrance entrance exam in China, which was pushed back to July, may have shifted some of our normal demand cycle from the second quarter into the third quarter.
And fourth, we effectively targeted and supported Geography's with significant volume opportunity during the third quarter with patient recruiting, surgeon training and marketing.
During the peak season in China, we resumed in person onsite patient educational roadshows at hospitals and hotels in the third quarter where our customers promoted Evo with high definition and premium messaging.
We had active marketing campaigns in China and Japan and Korea via digital outdoor commuter train and subway stations and or social media platforms.
We also resumed advertising in Germany and Spain as those markets more fully reopened in the U.S., we expanded our strategic relationships with surgeons through a refractive restart program to support clinics in the U.S. market reopen.
The success of this program has prompted a continuance of many facets of our surgical support into it through the fourth quarter. Finally, as a measure of our success and awareness beyond just sales are Web sites drew twice as many unique visitors in the third quarter compared to the year ago period on a year to date basis through the third quarter.
Our dogfighter visits are up nearly 250 percent over the prior year period. [00:08:46] Turning now to our pipeline of products and potential catalysts for star twenty, 20, 21 and beyond. We have made meaningful progress relating to our two new products for the U.S. and European markets.
In the U.S., the primary study analysis cohort of 300 subjects has been enrolled and implanted with our family of myopia lenses, which sets the stage for first half twenty twenty one submission to the FDA. And if marketing approval is obtained, the opening of the U.S. market to our able lenses.
Our clinical trial sites continue to adhere to clinical trial protocols. We look forward to sharing additional details when appropriate in twenty twenty when.
Today, we also announced the initial launch of commercialization of our Evo presbyopia carets, England and Europe, details on our progress, including publication of the first peer reviewed clinical paper, consumer websites launching in several countries and the first patient implant of the EBITDA. The lens of Belgium are contained.
In a separate press release we issued this afternoon with Ziba Stars introducing an implantable lens to treat presbyopia designed to deliver all of the benefits of the evil lens for myopia with the added benefit of addressing their intermediate and distance visual acuity.
Clinical trial results have been evaluated and reported in an article written by our principal investigator and medical monitor and recently published in Clinical Ophthalmology. [00:10:30] The conclusion of the study authors is as follows.
Quote, This multicenter prospective clinical investigation demonstrated the ability of the ACL to correct myopia and presbyopia, resulting in improvement of uncorrected near intermediate and distance visual acuity without compromising the quality of vision.
They eat off ideal subjects to perform tasks of daily living without glasses or contact lenses. Subjects reported significant improvements in quality of life with high levels of spectacle, independence and satisfaction, unquote.
We are conducting a phased rollout of our Evolva lenses to gather information on best practices and patient selection and patient management to optimize the objective and subjective factors that will delight patients in this large addressable market.
The initial surgeons recognized as leaders in their respective markets for refractive surgery will be implanting the lens, as well as making significant contributions to the evil FEBA playbook of best practices, thereby providing a pathway to full commercialization of the lens in the second half of Twenty twenty one.
The third quarter of Twenty twenty was a strong quarter for staff on multiple levels. Most importantly, we believe the essential fundamental demand for our appliances has gained momentum and is reflecting what we experienced recovered.
The star team remains focused on creating a Lensbaby future within refractor vision correction, where we believe we have the opportunity to move our global market share from 10 percent in the near term to 20 to 30 percent plus global market share in the foreseeable future.
[00:12:31] We feel very good about our business today, and with the exception of the unknowns which the pandemic holds, we are reiterating our outlook for the remainder of Twenty twenty provided in August, which has closed out the year with the fourth quarter in the range of approximately 43 million dollars in net sales, with the caveat of increased spending to support a strongly developing outlook for Twenty twenty one.
Patrick..
[00:13:02] Thank you, Karen, and good afternoon, everyone. So don't net sales for Q3 Twenty twenty were forty seven point one dollars million, up twenty one percent as compared to the thirty nine point one dollars million in net sales in the year ago quarter and up thirty four percent on a sequential basis from Q2 twenty twenty.
The increase in net sales was attributable to the strong growth in most markets. As Karen mentioned earlier, in terms of product mix, IDL sales represented eighty eight percent of total company net sales for the third quarter. Twenty twenty and other products represent 12 percent, which is consistent with the recent trend.
Gross profit for Q3 Twenty twenty was thirty four point nine dollars million, or seventy four point one percent of net sales as compared to gross profit of twenty nine point one dollars million, or seventy four point four percent of sales for the prior year quarter and twenty four point four million, or sixty nine point four percent of net sales for Q2 20 to 30 basis point change in gross margin as compared to prior year quarter is primarily due to geographic sales mix period costs associated with manufacturing expansion projects and an increased sales mix of injector parts which carry a lower margin than our Icko.
The 470 basis point sequential increase in gross margins from the second quarter is due to higher sales and a return to a more normalized level of manufacturing following a voluntary six week covid-19 manufacturing cost.
Consistent with our comments on the last call, we continue to expect gross margin in the low 70 percent range for the fourth quarter of Twenty twenty.
Moving down the income statement, total operating expenses for Q3, Twenty twenty for thirty dollars million as compared to twenty five point seven dollars million in the year ago quarter and twenty five point five dollars million for Q2 Twenty twenty.
We continue our cost containment measures related to non-essential variable costs while also expanding programs designed to drive growth. We expect total Q4 twenty twenty operating expenses to be similar to our Q3 twenty twenty results.
Taking a closer look at the components of operating expenses, Gené expense for Q3 twenty twenty was eight point six dollars million, compared to seven point one million for the year ago quarter and seven point eight dollars million for Q2 Twenty twenty the year over year increase in TNA is due to increased salary related expenses, variable compensation and facility costs.
The increase from Q2 twenty twenty was due to increased variable compensation, consulting costs and facility costs for the fourth quarter.
We expect Gené to be up slightly from Q3 twenty twenty as we begin investments to support 2021 and beyond selling and marketing expense with twelve point seven dollars million for Q3 Twenty twenty compared to twelve point five dollars million for the year ago quarter and ten point three million for Q2 twenty twenty the increase in selling marketing expense from the prior year quarter.
[00:16:03] We're due to increase salary related expenses, advertising and promotional activities and variable compensation offset by decreased trade show and travel expenses. And the increase from Q2 twenty twenty was due to increased advertising, promotional activities, salary related expenses, variable compensation and trade show expenses.
For the fourth quarter, we expect selling and marketing expense to be down slightly from our Q3 twenty twenty results research and development expense with eight point eight dollars million in Q3 twenty twenty compared to six point two dollars million for the year ago quarter and seven point three million for Q2.
The increase in research and development expense as compared to both periods, was primarily due to increased clinical expenses associated with our Evo Evo clinical trial in the US and the increased salary related expenses and variable compensation for the fourth quarter. We expect R&D to be up from our Q3 twenty twenty results.
Operating income in Q3 Twenty twenty was four point nine dollars million or ten point four percent of net sales, as compared to three point three dollars million or eight point five percent of net sales for the year ago, quarter to 190 basis point year over year.
Expansion and operating margin is due to leverage on fixed and variable operating expenses during the quarter. Net income for the third quarter was four million or eight cents per diluted share, compared to net income of two point four million or five cents per share in the year ago quarter.
On an ongoing basis, adjusted net income for Q3 Twenty twenty was six point seven dollars million at 14 cents per diluted share compared to adjusted net income of five point five dollars million or 12 cents per diluted share in the year ago period.
A table reconciling the Gap information to the non gap information is included in today's financial release.
Turning to our balance sheet, our cash and cash equivalents, as of October 2nd, Twenty twenty totaled one hundred twenty eight point three dollars million, twelve million dollars, compared to one hundred sixteen point three million at the end of the second quarter Twenty twenty.
The sequential increase in the second quarter is primarily attributable to nine point six dollars million in cash generated from operations. Before we open up the call to your questions, I would like to highlight several upcoming investor meeting and conferences that Star will be attending on November 17th.
Starr will be attending the Jefferys London Virtual Health Care Conference on November 19th. Starr will be participating in the Stephens Annual Investment Conference. Karen and I look forward to speaking with many of you at these events in the coming weeks, and this concludes our prepared remarks.
Operator, we are now ready to take your questions about how to ask a question..
[00:18:46] please. Press star, one of your telephone keypad, Starwind, to ask questions. And your first question comes from Anthony Petrine Jefferies. Please go ahead, sir..
[00:18:59] Hi, thank you and hope everyone's doing well and congratulations on a good quarter here, maybe Karen a couple on on kind of first and then follow up on Evolva. And just looking at the the numbers for China in particular, it actually looks like sequentially pricing sort of normalize and even improved.
And so maybe just to check our math there, good pricing in China improve. And when you look at the 33 percent implant increase and how does that stack up in terms of patients, when you sort of bifurcate between hi, my hopes and and more moderate my patients, and then I'll have a follow up on the..
[00:19:46] Well, thank you, Anthony, appreciate it. In terms of pricing in China, yes, we had a strong quarter really on Espy's globally, and a lot of that was due to mix.
And when we look at it first as ferric, our business continues to improve, as well as take a larger share of our total sales volume with regard to higher Myotis versus medium Mailleux. We definitely, especially in China, which is specific to your question, we are definitely going down the curve.
We have stories of of individuals that might have one that we're very interested in not having any need for glasses, especially wearing masks as often as we do now. So, yes, the mix in China is continuing to go down the diaper curve toward more of what is typically been a laser vision correction, targeted market..
[00:20:55] Well, that's helpful, and then the two pilots, real quick, I'll add one in there, one would be when you look at the China implant, 33 in Japan in particular, 67 is a way to splice out how much is still coming from the four procedures coming back into the fold, or is that new demand? And then just the the strategy for the launch with with Niva, is that going to be a combination of direct and distributer? And I'll get back in queue.
Thanks again..
[00:21:26] And so with regard to our third quarter revenue and how much it's new demand, how much of it is hold over me? I did return my script to the fact that there was some variation in normal.
The normal busy season, for example, in China is that young people, their college entrance exams were delayed, that maybe they're going back to school delayed, which made third quarter heavier than for some categories. Our most interested implant patients going up a bit in Q3. So there was a little bit of that.
But I believe for the most part, when we talk to our clinicians and surgeons and what we get back is that there's just this tremendous interest and enthusiasm for visual freedom. And a lot of it is related to, I think, a reaction to the pandemic. And so I would say that the majority of what we are seeing is not a over that new demand.
With regard to the visa launch, as I said in my prepared remarks, we really are working with those refractive surgeons in the major markets across Europe who are excellent at implanting our myopic, evil lens and working with them on rolling out very effectively our new pretty bioptic lens, which adds several levels of new newness, so to speak, in terms of working with patients and understanding the motivation for which visual correction need.
They have the highest regard or highest requirement. So as a result of that, there's a lot of patient selection criteria that goes into it. You have to very properly target the patients. You need to make sure that you have excellent patient management, post surgery and follow up.
And so with the best implants, we are rolling this product out and we expect by next year, hopefully in person in Barcelona, our EVO playbook will be made available and we will make the Avivah Lens commercially available to all surgeons, including those who are currently served by our distributor.
Both those are distributor markets, both those that are our normal distribution as well as hybrid..
[00:24:02] That's great. Thanks again..
[00:24:03] You're welcome..
[00:24:09] Your next question comes from Chris Cooley with Stephen..
[00:24:14] Good afternoon, everyone, and congratulations on the quarter. Appreciate you taking the questions..
[00:24:20] Thanks, Chris..
[00:24:20] If I could start with the US, maybe a little bit different here, could you help us understand what the results of program and what's the change in terms of your reach when you think about the surging population here in the United States? If we think about the current kind of premium enchanters for premium oil wells on the Cadillac side, but also higher end refactored practices, just trying to think about what your concentration is and how the refractive restart program has helped expand within that.
What kind of expectations there in advance of the launch last year? I've got a quick follow up..
[00:25:05] Sure. So the refractive restart program was designed to support surgeons who are coming back after the worst of covid and reopening their practices, many of whom had been either strong as to what I would call medium users of our visión ACL in the U.S.
The goal of the refractive restart was to help the surgeon attract patients by us providing the surgeon for a bi lateral implant patients, one of those lenses free of charge. And so the surgeon had the opportunity there to determine how they wanted to offer that benefit to their patients.
What we have found is that a majority of the refractive restart surgeons that signed on and there were hundreds.
Their goal was to really become more familiar with the Missoni and ICL in preparation for evil and also to be able to offer their patients quite an opportunity to get our lenses versus potentially LASIK procedure at maybe equal or even less price.
And so it got a lot of patients that maybe had in the past been told that either they did not qualify for a laser vision procedure. They were called again and brought back in and or new patients who came in who wanted visual freedom and were offered ebow and whom many of whom selected it.
So as a result of that, we were up sequentially, over 70 percent in units when you count those that were provided free of charge. So we've had a lot of very happy patients and a lot of very happy surgeons who are getting more and more excited about the possibility of Ebola coming to the U.S. next year..
[00:27:08] It's very crucial to cover the losses on the on the regulatory front, just want to make sure we're level set appropriately going into next year.
Do you anticipate that it will require a panel for the evil ones in the United States? And also, could you remind us expectations for when you might begin a trial or start the process for assuming would be a supplemental filing for Beevor here in the United States as well? Thank you. And again, congratulations on the quarter..
[00:27:42] Thank you for the Class three medical device going for approval. We're on a panel track. It is our assessment that based on the fact that this is a safety study where the endpoints are clear at this point, we do not expect that there will be a panel. But of course, that is a decision for the FDA.
But our belief at this point is that if and when we are able to provide the FDA with the critical information and data that supports approval, that we would then be able to go direct to to approval with regard to bring Zeva to the United States.
As soon as the full EBITDA family of Lenz's is approved by the FDA in the U.S., we are immediately going into an I.T. discussion on Brede bringing visa to the US..
[00:28:46] And your next question comes from Ryan Zimmerman at..
[00:28:52] Thank you. Congrats, my it's a sign to see a couple of questions for me. Number one, Karen just left us. Japan is doing great. It's almost half the size now of China in terms of sales. And so, you know, my previous viewpoint of that market was it was certainly a lot smaller than China.
And so I'm just wondering if you could help us understand what your penetration looks like in Japan and whether your view of that market has changed or has it gotten bigger as Japan has has outperformed just from a unit growth perspective?.
[00:29:31] Well, Japan is a very exciting story for Star. And we have been working very effectively with the key opinion leaders in Japan who are very significant in terms of the Japanese society's determination.
And so what's been going on is that with the pullback of laser vision correction procedures, which at one point were above 400000, now full refresh procedures in Japan or anywhere per those surgeons, somewhere in the 80 to 100 thousand procedures range, what we are now experiencing is, you know, above 30 percent, at least market share.
So where we are headed in Japan is to continue to work with certain groups and practices and university colleagues who want to bring only Leatherface space practices as a standard to the market. And just recently, actually, in August for Japan cover two of our surgeons, Dr. Shimizu and Dr. Kitazawa.
And they themselves in that article very clearly indicated what I just told you about laser vision, correction, what's going on in terms of never refection procedures and why the ICL is the best choice..
[00:31:12] A riot is bad, but it is a reminder, Japan, if you're looking at it, it does have our injector revenue in there. So that might be why you're you're kind of taking that overall. Japan is going higher. But the just remember that a couple of million dollars, a quarter of a revenue that does get lumped into geography..
[00:31:28] Japan is very helpful. Thank you for that clarification, Patrick. And then just a follow up on Anthony's question, just to a quick one for me. Just, you know, on the China performance, I mean, certainly the data points have been very positive for the quarter.
And I'm on wonder if you could speak a little bit to the seasonality, I guess, into the fourth quarter and and your durability of that dynamic in the fourth quarter? I think certainly with some pull forward or the dynamic of the cholangitis exams, I'm just wondering if you could kind of if you were able to quantify what that benefit was and what you expect going forward in China..
[00:32:14] Well, we talked about in August what our growth projections were and what was being reported in terms of actual number of fields implanted, and we came up with around 35 percent average. What we reported for the third quarter was 33 percent growth and that sales to the distributor.
What has been going on in a very strong China market for us is demand outweighing what we are selling. And so as a result of that, that's a good position to be in and that we expect continuing growth even into the fourth quarter and that we have used up quite a bit of the inventory in Q3.
But all of that is figured into our projection of approximately 43 million in revenue for Q4, even with the very strong China. And that's because we are looking at a global map of covid and potential challenges with the additional. So the Middle East and India continues to be on a slow recovery. But there is no doubt that China growth is very strong..
[00:33:35] And that's very helpful. And then just quickly for me and I'll come back to you, you you talked about timing with submission to the FDA. I think first half twenty one.
Are you still expecting a few months potentially of being on the market in twenty one as you start to launch Yivo in the U.S., or are you or at the very least expecting some revenue at the tail end of twenty one with Evo in the US? Thanks for taking the question..
[00:34:03] Sure. Thank you, Ryan. Well, we we would love to have equal revenue in the U.S. the minute we can get it. So at this point in time, we're uncomfortable. And I'm sure you can imagine, you know, 100 percent saying that we expect to have revenue because we've got to get through inappropriately with the FDA all the steps to approval.
But I can tell you that everything is being prepared as if we could go to market tomorrow..
[00:34:36] Ok, appreciate. Congrats again..
[00:34:38] Thank you..
[00:34:39] The next question comes from Andrew Brackman with William Blair..
[00:34:47] Good afternoon and thanks for taking the questions, Karen, maybe to go back to a point you made earlier on the call related to patients making ICL decision a little bit quicker than normal, I guess.
How should we be thinking about that trend continuing over the longer term?And I guess related to the demographics here, are there any other sort of macro changes that you've witnessed in this recovery period here?.
[00:35:12] Yeah, we we have a weekly call with global representatives about markets and momentum and covid and and other obvious business indicators of where we're headed. And one of the things that keeps happening is that.
Because of the necessary sacrifices that so many people are making, where they are unable to have the kind of social life, family events, et cetera, and because when they do go out, they have to wear masks or other apparatus that are challenging for eyeglasses and contact lens wearers, there is this sentiment that they want to do something good for themselves.
We've heard that more than once. We've heard of many times. And so you I know aware that, you know, the plastic surgery experience right now is much greater. We believe that whether you're talking about a liner's or are evil lenses or certain procedures for esthetic benefit, patients are just excited and they're anxious.
And once they make up their mind, they want it today. And so people are going into our surgeons offices around the world is going, I want TiVo, I want it out of this, and I have it.
And so that does a sea change from a couple of years ago where patients were on average, surgeons would tell us patients would wait a year from the time they started researching and having one, two or three visits with with several doctors before they'd let anybody touch their eye.
Now, we think part of the reason why this is approved as well as social media has really picked up. And I talked about the fact that our docs find her visits are up 250 percent. And, you know, when we're talking about events we do in China, hundreds of thousands of individuals, you know, he can or listen to Tip-Top presentations, et cetera.
So I just think the momentum is really out there for individuals who really want to take care of things that are challenging to them. And vision care is a really high priority..
[00:37:32] Perfect. Thanks for all that color, maybe shifting gears here, just around market share, I think you talked about 20 percent share in China sort of by year end.
So I guess first, is that sort of the assumption that you're working with? And I guess longer term, I think it was around this time last year, you had sort of talked about the 25 percent target by the end of Twenty twenty, who obviously made some big strides this year.
So I guess how should we be thinking about that longer term target over next year?.
[00:38:01] Yeah, we still are there. If we could do the 25 percent earlier, we will. The momentum is certainly, you know, the winds that are back. And it's really up to us to make sure that we take excellent advantage and do what we need to do to make sure that we can deliver to China. All of the lenders demand that we foresee.
And yes, it is in the 25 percent range, we're already past 20 percent..
[00:38:29] Perfect. Thanks you..
[00:38:31] Thank you, Andrew..
[00:38:34] And your last question comes from Bruce Jackson benchmark..
[00:38:40] Thank you for taking my question, if we could look at the seasonality in Europe in the fourth quarter, generally it's it's up sequentially this year. We've got covid-19. So the possibility of some increased lockdown and the offset of the EDF launch. Earlier, you mentioned that the EDF launches can be kind of a controlled launch.
How are you looking at all these puts and takes in terms of the sequential sales growth for Europe in the fourth quarter?.
[00:39:09] Sure. Just as a reminder, Bruce, last year we switched from our normal sequential growth quarter by quarter, three to four and into three became our largest quarter.
And it is really based now on China being a big part of our units and as a result of that, their busy season and is an overwhelming indicator for growth in the Q2 to Q3 timeframe Q4. We then usually have Europe jump in in a big way and and then Korea in the winter months that even blend into January, etc..
So the way we see it is Q3 will be our biggest quarter this year and Q4 will be very nice growth, double digit growth from prior year, but will be modulated a bit by our watching what's going on in certain markets around the world, some not still a fully recovered and others requiring shutdown.
So we just want to be careful and prudent and we measure this daily. And right now what I'm reporting is what we see for the fourth quarter..
[00:40:31] Ok, that's helpful, thank you very much..
[00:40:34] Thank you, Bruce..
[00:40:36] And now I turn the call over to Karen Mason for closing remarks..
[00:40:42] Thank you for your participation on our call today. We look forward to speaking with many of you in the days and weeks ahead. We appreciate your interest and investment in our surgical. Please take good care. All the best to all of you..
[00:41:00] Thank you for joining today's conference call, you may now disconnect..