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STAAR Surgical Reports Significant First Quarter Progress

  • 2009-05-05
  • Press release

Substantial Improvements in Gross Margin Percentage and Operating Expense Reductions

    U.S. Visian ICL(R) Revenues Increase 24%

    Cash Used in Operations Reduced to $448,000

    Net Loss Reduced to $1.7 Million: Adjusted EBITDA of $384,000

MONROVIA, Calif., May 5 /PRNewswire-FirstCall/ -- STAAR Surgical Company (Nasdaq: STAA), a leading developer, manufacturer and marketer of minimally invasive ophthalmic products, today reported significant progress for the first quarter ended April 3, 2009 reflecting the continued successful execution of key strategies.

    First Quarter Financial Highlights

    --  Global sales for the first quarter were $18.3 million, a 5% increase
        over the first quarter of 2008 on a constant currency basis, and a 2%
        increase on a GAAP reporting basis.
    --  International sales achieved 9% growth year-over-year on a constant
        currency basis and 5% growth on a GAAP reporting basis.  International
        sales totaled $14.0 million versus $13.4 million reported in the same
        period for 2008.
    --  U.S. sales declined by 6% to $4.2 million compared with the same
        period in 2008 due to a 33% decline in other product sales and an 8%
        decline in IOL sales.   These declines were partially offset by a 24%
        increase in U.S. Visian ICL sales.
    --  Gross profit margin rose to 57%, a 13 percentage point improvement
        over the 43% gross margin reported for the first quarter of 2008.
        Excluding the impact of charges for the acquisition of STAAR Japan in
        2008, gross margin in the first quarter improved 500 basis points.
        The U.S. reported a 10% percentage point gross profit improvement,
        while international operations reported a 200 basis point improvement,
        led by STAAR Japan with a 700 basis point improvement.
    --  Operating expenses declined by $5.0 million, or 30%, when compared to
        the $16.5 million reported for the first quarter of 2008.  Excluding
        the impact of the STAAR Japan acquisition in 2008, expenses during the
        first quarter declined by $1.2 million, or 9% compared to the prior
        year period.  Operating expense as a percentage of total revenue
        dropped to 63% compared to 92% reported for the prior year quarter, or
        70% in the prior year quarter when acquisition charges are excluded.
    --  Operating loss improved by $7.6 million, which is an 87% decrease over
        the $8.7 million loss reported in 2008.  Operating loss improved $2.2
        million, or 66%, when acquisition charges in 2008 are excluded.

    --  Cash used in operating activities decreased to $448,000 from the $3.4
        million used in the first quarter of 2008, representing a $3.0 million
        improvement.  Cash used in operating activities during the fourth
        quarter of 2008 was $991,000.


    First Quarter Visian ICL Highlights

    --  Global Visian ICL(R) sales grew to $5.1 million, which is an 18%
        increase over the $4.3 million reported in same period of the prior
        year.
    --  U.S. Visian ICL sales grew by 24% to $1.4 million, compared to $1.1
        million in 2008.
    --  The Visian ICL was highlighted in a major media story about Steve
        Holcomb, the captain of the Gold Medal Winning U.S. Olympic Men's
        Bobsled Championship Team.  Prior to receiving the Visian ICL his poor
        vision had almost forced him out of the sport.  Television news and
        other media across the country featured the product during the
        quarter, with coverage in at least eight different states.
    --  In the U.S. the Company reached the level of 40 Visian ICL
        "Advocates," which was the target for year-end 2008.  The total number
        of "Regular Users" increased by 18% compared to the average during the
        course of 2008, while the volume per Regular Users increased by 29%
        over this same period.
    --  International Visian ICL sales grew to $3.7 million which is a 17%
        increase compared to the $3.2 million sales reported in the prior
        year.

    --  Revenue grew in several key countries, including Korea at 33% growth,
        India at 201%, Japan at 17%, Spain at 16%, France at 92% and the U.K.
        19%.


    Recent Cataract Highlights

    --  Global IOL sales increased by 3% while the non IOL portion of cataract
        sales declined by 12%, reflecting the strategy in the U.S. to
        deemphasize product lines that have historically yielded low gross
        margins.
    --  International IOL sales grew to $6 million, which is a 7% increase
        over sales of $5.6 million in the prior year. During the quarter
        preloaded IOL sales increased by 13% over prior year, and sales in
        STAAR Japan increased by 26%.
    --  U.S. IOL sales declined by 8% for the quarter, despite the fact that
        during the first two months sales were flat compared to the prior
        year.  Unit volume of low margin IOLs decreased as the Company
        continued its strategy to deemphasize low margin product lines.
        Decreased sales of low margin IOLs were largely offset by increased
        average selling prices of NTIOL products.
    --  The announced release of the Afinity(TM) Collamer Aspheric Single
        Piece New Technology Intraocular Lens (NTIOL), the third STAAR IOL
        lens with NTIOL designation should provide additional momentum for the
        U.S. market.  This lens upgrades and will ultimately replace STAAR's
        most popular spherical IOL.  As a result of this on-going strategy,
        IOL margins should continue to increase in the U.S.

    --  Members of the Collamer Accommodating Study Team began implanting the
        Afinity(TM) Collamer Aspheric Single Piece IOL the week of April 20th.

"Results for the first quarter compared to the period one year ago clearly demonstrate our continued execution of announced strategies," said Barry G. Caldwell, President and CEO of STAAR Surgical. "Though I would have liked to have seen higher revenue, we have focused our sales and marketing resources on our highest margin product lines, which negatively impacted revenue growth, but led to the continued improvement in our gross margin. Due to a manufacturing issue, now behind us, our gross margin was temporarily reduced by approximately 130 basis points during the first quarter. At the same time, we have continued to focus on significantly lowering our operating expenses globally. Those efforts have resulted in the reduction of cash used in operations during the quarter to $448,000 from $3.4 million in the prior period. Despite significant legal expenses, we generated adjusted EBITDA of $384,000 during the first quarter. Our net operating loss was $1.1 million for the quarter including non-cash expenses of $1.5 million and legal expenses of $0.7 million.

"During the quarter, we believe we made progress on the key regulatory approvals we are seeking in Japan and the U.S. for the Visian ICL and Visian Toric ICL. While we didn't generate cash during the quarter as was our goal, we did significantly reduce cash used in operations by 87% from the first quarter of 2008, and 55% from the fourth quarter of 2008. Given that the first quarter is typically our most challenging quarter from a cash from operations perspective, we continue to believe we will generate cash from operations for the full year, continue to improve overall gross margin, decrease operating expense and move to profitability," added Mr. Caldwell.

Financial Performance for the First Quarter Ended April 3, 2009

Total product sales for the quarter were $18.3 million, representing a 5% increase on a constant currency basis, and a 2% increase over the $18.0 million sales as reported for the first quarter of 2008. Total international sales increased to $14.0 million a 9% rise on a constant currency basis and a 5% rise when compared to the $13.4 million reported in the prior year period. STAAR Japan sales grew 10% on a constant currency basis, and 26% on a GAAP reporting basis. Total U.S. sales for the first quarter were $4.2 million, a 6% decrease compared with sales of $4.5 million last year. U.S. Visian ICL sales grew 24% to $1.4 million, while U.S. IOL sales declined 8% to $2.2 million.

Gross profit for the first quarter was $10.3 million, or 57% of revenue, compared with $7.8 million, or 43% of revenue, in the prior year period. The gross margin for the first quarter of 2008 was negatively impacted by costs associated with the acquisition of the remaining interests of STAAR Japan. Excluding these costs, gross margin during the first quarter of 2008 was 52%, resulting in a 500 basis point improvement when compared with 2009. The increase in gross margin was due to the Company's sales and marketing focus on higher margin products such as ICLs, Preloaded IOLs and NTIOLs and the corresponding decrease in lower margin product sales. Gross margin during the quarter reflects the negative impact of a manufacturing process issue that has since been resolved.

General and administrative expenses for the quarter were $4.3 million, a decrease of 4% when compared with $4.4 million last year. The decrease resulted from across the board cost reduction efforts implemented during 2008, which were largely offset by legal expenses during the quarter. Legal expenses were approximately $700,000 for the quarter, which included the cost of trial in the Parallax case.

Marketing and selling expenses for the first quarter dropped approximately $700,000 to $5.8 million versus $6.5 million in 2009. This 11% decrease was due to reduced salaries, travel, commissions and consulting fees in the U.S. and reduced promotional activities internationally.

Research and development expenses for the quarter were $1.4 million, an 18% decline compared with the first quarter of 2008. The decrease was due to reduced expenses and reorganization of the Regulatory and Clinical Affairs area, as well as more focused use of resources as we rationalize our global research and development activities.

Net loss for the first quarter ended April 3, 2009 totaled $1.7 million, or $0.06 per common share. For the same period in 2008, the Company reported a net loss of $8.9 million, or $0.30 per common share. Non-cash charges for the first quarter of 2009 and 2008 totaled $1.5 million and $5.5 million, respectively. Approximately $5.4 million of the first quarter 2008 net loss was due to purchase accounting charges in the acquisition of STAAR Japan.

On April 3, 2009, the Company had total cash of $3.7 million versus $5.0 million at January 2, 2009. During the quarter, cash used in operations totaled $448,000 compared with $3.4 million in the first quarter of 2008, $2.8 million in the second quarter of 2008, $1.1 million in the third quarter of 2008 and approximately $1.0 million in the fourth quarter of 2008.

Litigation updates

In the Parallax Medical System, Inc. litigation in the Orange County Superior Court of the State of California, the Company has filed a Motion for Judgment Notwithstanding the Verdict (JNOV) and a Motion for a New Trial. The court has tentatively set a date of May 8 to hear arguments on these motions. After the court has ruled and entered final judgment, the Company will have 30 days to file an appeal, then an additional 10 days to post an appeal bond covering the judgment. In the Scott Moody, Inc. litigation, which is before a different judge in the Orange County Superior Court, STAAR's lead attorney, Mark A. Borenstein, has been appointed to a judgeship in the Los Angeles County Superior Court by Governor Schwarzenegger. The Company has engaged Callahan & Blaine, a prominent Orange County law firm, to assume representation in the Moody case. STAAR will request a continuance so the new firm has adequate time to prepare for trial.

Conference Call

The Company will host a conference call and webcast on Tuesday, May 5, 2009 at 4:30 p.m. Eastern Time to discuss the Company's first quarter and current corporate developments. The dial-in number for the conference call is 800-762-8908 for domestic participants and 480-629-9031 for international participants.

A taped replay of the conference call will also be available beginning approximately one hour after the call's conclusion and will be available for seven days. This replay can be accessed by dialing 800-406-7325 for domestic callers and 303-590-3030 for international callers, both using passcode 4058578#. To access the live webcast of the call, go to STAAR Surgical's website at www.staar.com. An archived webcast will also be available at www.staar.com.

About STAAR Surgical

STAAR Surgical is a leader in the development, manufacture and marketing of minimally invasive ophthalmic products employing proprietary technologies. STAAR's products are used by ophthalmic surgeons and include the Visian ICL, a tiny, flexible lens implanted to correct refractive errors, as well as innovative products designed to improve patient outcomes for cataracts and glaucoma. Manufactured in Switzerland by STAAR, the ICL is approved by the FDA for use in treating myopia, has received CE Marking and is sold in more than 50 countries. Collamer(R) is the brand name for STAAR's proprietary collagen copolymer lens material. More information is available at www.staar.com.

Safe Harbor

All statements in this press release that are not statements of historical fact are forward-looking statements, including statements about any of the following: projections of earnings, revenue, sales, cash or other financial items; the plans, strategies, and objectives of management for future operations or prospects for achieving such plans; strategies or objectives; prospects for appeal of the adverse verdict in the Parallax litigation; continued growth of the ICL, TICL or other products in the U.S. or international markets; expected cost savings; our future performance; statements of belief; and any statements of assumptions underlying any of the foregoing.

These statements are based on expectations and assumptions as of the date of this press release and are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. The risks and uncertainties include the need to satisfy any final judgment in the Parallax case or post an appeal bond, and the resulting effect on our liquidity, our limited capital resources and limited access to financing, the need to defend other litigation similar to the Parallax case and to satisfy judgment in the event of an adverse ruling in that case, for which we have taken no reserve, the effect the global recession may have on sales of products, especially products such as the ICL used in non-reimbursed elective procedures, the challenge of managing our foreign subsidiaries, the risk that we will not succeed in introducing improved products that restore the profitability of our U.S. IOL product line, our ability to resolve FDA concerns over the clinical study for the Toric ICL and to overcome negative publicity resulting from warning letters and other correspondence from the FDA Office of Compliance, the willingness of surgeons and patients to adopt a new product and procedure, and the potential effect of recent negative publicity about LASIK on the demand for refractive surgery in general in the U.S.

STAAR currently lacks the cash to satisfy the final judgment expected to result from the $4.9 million verdict in the Parallax case (the "Judgment"), or to fund the bond necessary to pursue appeal. Execution of judgment is currently stayed until 40 days after entry of final judgment; if STAAR cannot satisfy the Judgment or post an appeal bond before the stay expires, STAAR could be required to petition for protection under federal bankruptcy laws, which could further impair its financial position and liquidity, and would likely result in a default under STAAR's $5 million senior secured promissory note held by Broadwood Partners, L.P. If it becomes likely that STAAR will not be able to satisfy the Judgment or post an appeal bond before the stay expires, STAAR will likely be required to reclassify its indebtedness under the promissory note as current indebtedness, which could adversely affect third-party assessments of STAAR's creditworthiness. STAAR assumes no obligation to update its forward-looking statements to reflect future events or actual outcomes and does not intend to do so.

As reported in the Company's Annual Report on Form 10-K for the fiscal year ended January 2, 2009, the Parallax verdict, along with STAAR's history of recurring losses, negative cash flows and limited access to capital has raised substantial doubt regarding STAAR's ability to continue as a going concern. The preliminary financial information provided with this press release has been prepared assuming STAAR Surgical will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. This preliminary financial information does not include any adjustments that might result from the outcome of this uncertainty.

Use of Non-GAAP Information

This news release presents selected items from the Company's Condensed Consolidated Statements of Operations as reported in accordance with U.S. generally accepted accounting principles ("GAAP"), and also on a non-GAAP basis after excluding certain non-recurring expenses, and excluding changes in currency. Additionally, this news release contains a discussion of Adjusted EBITDA which is also a non-GAAP measure of performance. None of these measures are a substitute for measures determined in accordance with GAAP, and may not be comparable to the same measures as reported by other companies.

The term "EBITDA" refers to a financial measure defined as earnings before net interest, income taxes, depreciation and amortization. "Adjusted EBITDA" refers to EBITDA before stock-based compensation expense and purchase accounting charges. This non-GAAP measure is used by management and the Company's Board of Directors to evaluate the Company's progress towards profitability and positive cash flows. The Company believes this measure of performance might also be useful to investors for the same reasons. Adjusted EBITDA is presented in the table below.

When reviewing financial information to assess the effectiveness of initiatives to enhance long-term performance by reducing expenses, management may eliminate the effect of significant non-recurring expenses in order to discern underlying trends. In the 2008 fiscal year, the Company's results were significantly affected by the following non-recurring expenses classified in the GAAP reconciliation table as "purchase A/C [accounting] charges": a $1.5 million purchase accounting charge related to inventory purchased in the acquisition of STAAR Japan, Inc. and a $3.8 million charge for the settlement of a pre-existing distribution arrangement in connection with the STAAR Japan, Inc. acquisition. Because the effect of purchase accounting charges can overwhelm the effect of meaningful trends in the Company's business performance, management evaluates its performance excluding these non-recurring items. The Company believes that this non-GAAP measure is also helpful to investors in discerning underlying trends. The table below shows the effects of the excluded non-recurring items.

The Company conducts a significant part of its activities outside the U.S. It receives sales revenue and pays expenses principally in U.S. dollars, Swiss francs, Japanese yen and Euros. The exchange rates between dollars and non-U.S. currencies can fluctuate greatly and can have a significant effect on our results when reported in U.S. dollars. When preparing its financial statements in conformance with GAAP, the Company translates foreign currency sales and expenses to dollars at the weighted average of exchange rates in effect during the period. As a result, the Company's reported performance may be significantly affected by currency fluctuations. In order to compare the Company's performance from period to period without the effect of currency, the Company will apply the same average exchange rate applicable in the prior period, or the "constant currency" rate to sales or expenses in the current period as well. Because changes in currency are outside of the control of the Company and its managers, management finds this non-GAAP measure useful in determining the long term progress of its initiatives and determining whether its managers are achieving their performance goals. The Company believes that the non-GAAP constant-currency sales results measures provided in this press release are similarly useful to investors to give insight on long term trends in the Company's performance without the external effect of changes in relative currency values. The table below shows sales results calculated in accordance with GAAP, the effect of currency, and the resulting non-GAAP measure expressed in constant currency.

    CONTACT:  Investors                       Media
              EVC Group                       EVC Group
              Douglas Sherk, 415-896-6820     Christopher Gale, 646-201-5431
              Michael Pollock, 415-896-5862


    (Tables to Follow)



    STAAR Surgical Company
    Condensed Consolidated Statements of Operations
    (In 000's except for per share data)
    Unaudited

                                                        Three Months Ended
                                                        ------------------
                                                      April 3,       March 28,
                                                        2009            2008
                                                        ----            ----

    Net sales                                   100%  $18,283  100%   $17,960

    Cost of sales                                43%    7,944   57%    10,205
                                                        -----          ------

    Gross profit                                 57%   10,339   43%     7,755
                                                       ------           -----

    Selling, general and administrative
     expenses:
      General and administrative                 23%    4,282   25%     4,441
      Marketing and selling                      32%    5,779   36%     6,467
      Research and development                    8%    1,412   10%     1,718
      Loss on settlement of pre-existing
       distribution arrangement                   0%        -   21%     3,850
                                                            -           -----

         Total selling, general and
          administrative expenses:               63%   11,473   92%    16,476
                                                       ------          ------

    Operating loss                               -6%   (1,134) -49%    (8,721)
                                                       ------          ------

    Other income (expense):
      Interest income                             0%        3    0%        28
      Interest expense                           -1%     (233)  -1%      (201)
      Gain on foreign currency                    0%       75    1%       128
      Other income, net                           0%       63    0%        84
                                                           --              --
        Other (expense) income, net              -1%      (92)   0%        39
                                                          ---              --

    Loss before provision for income taxes       -7%   (1,226) -48%    (8,682)

    Provision for income taxes                    2%      436    1%       258
                                                          ---             ---

    Net loss                                     -9%  $(1,662) -50%   $(8,940)
                                                      =======         =======

    Loss per share:
    Basic and diluted                                  $(0.06)         $(0.30)
                                                       ======          ======

    Weighted average shares outstanding:
    Basic and diluted                                  29,641          29,488
                                                       ======          ======



    STAAR Surgical Company
    Global Sales
    (in 000's)
    Unaudited


                                       Three Months Ended
                                       ------------------
                                 April 3,      March 28,      %
    Geographic Sales               2009         2008       Change
                                   ----         ----       ------
    United States                 $4,238       $4,524        -6%

    Germany                        6,125        6,440        -5%
    Japan                          3,535        2,811        26%
    Korea                            986          747        32%
    Other                          3,399        3,438        -1%
                                   -----        -----
      Total
       International
       Sales                      14,045       13,436         5%

                                 -------      -------
        Total Sales              $18,283      $17,960         2%
                                 =======      =======


    Product Sales
        IOLs                      $8,146       $7,948         2%
        ICLs                      $5,065       $4,279        18%
        Other                      5,072        5,733       -12%
                                   -----        -----
      Total                      $18,283      $17,960         2%
                                 =======      =======



    STAAR Surgical Company
    Condensed Consolidated Balance Sheets
    (in 000's)
    Unaudited

                                                          April 3,  January 2,
                                                            2009        2009
                                                            ----        ----
    Cash and cash equivalents                              $3,722      $4,992
    Short-term investments                                      -         179
    Accounts receivable trade, net                          7,883       8,422
    Inventories                                            16,301      16,668
    Prepaids, deposits, and other current assets            2,474       2,009
                                                            -----       -----
       Total current assets                                30,380      32,270
                                                           ------      ------
    Property, plant, and equipment, net                     5,629       5,974
    Intangible assets, net                                  5,162       5,611
    Goodwill                                                7,545       7,538
    Other assets                                            1,140       1,189
                                                            -----       -----
       Total assets                                       $49,856     $52,582
                                                          =======     =======


    Accounts payable                                       $5,910      $6,626
    Line of credit                                          2,020       2,200
    Deferred income taxes - current                           282         282
    Obligations under capital leases - current                965         989
    Other current liabilities                              11,325      11,366
                                                           ------      ------
       Total current liabilities                           20,502      21,463
                                                           ------      ------
    Notes payable - long-term, net of discount              4,482       4,414
    Obligations under capital leases - long-term              885       1,335
    Deferred income taxes - long-term                         872         897
    Other long-term liabilities                             1,949       1,678
                                                            -----       -----
    Total liabilities                                      28,690      29,787

    Series A redeemable convertible preferred stock         6,772       6,768

    Common stock                                              301         295
    Additional paid-in capital                            139,878     138,811
    Accumulated other comprehensive income                  1,768       2,812
    Accumulated deficit                                  (127,553)   (125,891)
                                                         --------    --------
    Total stockholders' equity                             14,394      16,027
                                                           ------      ------
    Total liabilities, redeemable convertible preferred
     stock and stockholders' equity                       $49,856     $52,582
                                                          =======     =======



    STAAR Surgical Company
    Condensed Consolidated Statements of Cash Flows
    (in 000's)
    Unaudited
                                                        Three Months Ended
                                                        ------------------
                                                        April 3,  March 28,
                                                          2009       2008
                                                          ----       ----
    Cash flows from operating activities:
     Net loss                                           $(1,662)   $(8,940)
     Adjustments to reconcile net loss to net cash
      used in operating activities:
      Depreciation of property and equipment                575        802
      Amortization of intangibles                           197        250
      Amortization of discount                               68         59
      Fair value adjustment of warrant                      (50)       (24)
      Loss on disposal of property and equipment              2         75
      Stock-based compensation expense                      608        438
      Loss on settlement of pre-existing
       distribution arrangement                               -      3,850
      Pension accounting                                     64          -
      Other                                                   3         51
    Changes in working capital, net of
    business acquisition:
      Accounts receivable                                   273     (1,442)
      Inventories                                           (56)     1,984
      Prepaids, deposits and other current assets           (72)      (828)
      Accounts payable                                     (120)       284
      Other current liabilities                            (278)        71
                                                           ----         --
            Net cash used in operating activities          (448)    (3,370)
                                                           ----     ------

    Cash flows from investing activities:
      Cash acquired in acquisition of Canon Staar,
       net of acquisition costs                               -      2,743
      Acquisition of property and equipment                (154)      (234)
      Proceeds from sale of property and equipment           38          -
      Proceeds from sale of short-term investments            -         33
      Net change in other assets                            (24)        (1)
                                                            ---        ---
            Net cash provided by (used in)
             investing activities                          (140)     2,541
                                                           ----      -----

    Cash flows from financing activities:
      Borrowings under lines of credit                        -        940
      Repayments of lines of credit                           -       (940)
      Repayment of capital lease lines of credit           (282)      (152)
                                                           ----       ----
            Net cash used in financing activities          (282)      (152)
                                                           ----       ----

    Effect of exchange rate changes on cash
     and cash equivalents                                  (400)       608
                                                           ----        ---

    Decrease in cash and cash equivalents                (1,270)      (373)
    Cash and cash equivalents, at
     beginning of the period                              4,992     10,895
                                                          -----     ------
    Cash and cash equivalents, at end of the period      $3,722    $10,522
                                                         ======    =======



    STAAR Surgical Company
    GAAP Reconciliation Tables
    (in 000's)
    Unaudited
                                                    Three Months Ended
                                                    ------------------
                                                    April 3,  March 28,
                                                      2009       2008
                                                      ----       ----
                    Adjusted EBITDA
    Net loss                                         (1,662)    (8,940)
    Income taxes                                        436        258
    Interest income                                      (3)       (28)
    Interest expense                                    233        201
    Depreciation                                        575        802
    Amortization                                        197        250
                                                        ---        ---
    EBITDA                                             (224)    (7,457)
                                                       ----     ------
    Stock-based compensation                            608        438
    Cost of sales                                         -      1,500
    Loss on settlement of pre-existing
     distribution arrangement                             -      3,850
                                                        ---      -----
    Adjusted EBITDA                                     384     (1,669)
                                                        ===     ======





                                  April 3, 2009
    Sales in Constant             -------------
     Currency                       Effect of              March 28,
                       As Reported  Currency   Ex-Currency    2008
                       -----------  ---------  ----------- ---------
    US                      4,238          -       4,238      4,524
    International          14,045       (598)     14,643     13,436
                           ------       ----      ------     ------
    Total                  18,283       (598)     18,881     17,960
                           ======       ====      ======     ======



                                      Q1 2009 vs. Q1 2008
                                      -------------------
                               As Reported            Ex-Currency
                               -----------            -----------
    Sales in  Constant
       Currency           $ Change    % Change    $ Change     % Change
                          --------    --------    --------     --------
    US                      (286)        -6%        (286)         -6%
    International            609          5%       1,207           9%
    Total                    323          2%         921           5%



                                                                      As
                                                                   Reported
                                        % of      April 3,  % of   March 28,
        Statement of Operations         Sales       2009    Sales     2008
                                        -----       ----    -----     ----

    Net sales                            100%     $18,283    100%   $17,960
    Cost of sales                         43%       7,944     57%    10,205
                                                    -----            ------
    Gross profit                          57%      10,339     43%     7,755
                                                   ------             -----
    Selling, general and
     administrative
     expenses:
      General and administrative          23%       4,282     25%     4,441
      Marketing and selling               32%       5,779     36%     6,467
      Research and development             8%       1,412     10%     1,718
      Loss on settlement of pre-
       existing distribution
       arrangement                                      -     21%     3,850
                                                        -             -----
         Total selling, general and
          administrative expenses:        63%      11,473     92%    16,476
                                                   ------            ------
    Operating loss                        -6%      (1,134)   -49%    (8,721)
                                                   ------            ------
    Other income (expense):
      Interest income                      0%           3      0%        28
      Interest expense                    -1%        (233)    -1%      (201)
      Gain on foreign currency             0%          75      1%       128
      Other income, net                    0%          63      0%        84
                                                      ---               ---
        Total other
         (expense)
         income, net                      -1%         (92)     0%        39
                                                      ---               ---
    Loss before
     provision for
     income taxes                         -7%      (1,226)   -48%    (8,682)
    Income tax provision                   2%         436      1%       258
                                                      ---               ---
    Net loss                              -9%     $(1,662)   -50%   $(8,940)
                                                  =======           =======
    Loss per share:
     basic and diluted                             $(0.06)           $(0.30)
                                                   ======            ======
    Weighted average shares
     outstanding: basic and
     diluted                                       29,641            29,488
                                                   ======            ======



                                     Purchase  Ex Purchase   % of
        Statement of Operations      A/C Chgs    A/C Chgs   Sales
                                     --------    --------   -----

    Net sales                             $-      $17,960    100%
    Cost of sales                     (1,500)       8,705     48%
                                      ------        -----
    Gross profit                       1,500        9,255     52%
                                       -----        -----
    Selling, general and
     administrative
     expenses:
      General and administrative           -        4,441     25%
      Marketing and selling                -        6,467     36%
      Research and development             -        1,718     10%
      Loss on settlement of pre-
       existing distribution
       arrangement                    (3,850)           -      0%
                                      ------            -
         Total selling, general and
          administrative expenses:    (3,850)      12,626     70%
                                      ------       ------
    Operating loss                     5,350       (3,371)   -19%
                                       -----       ------
    Other income (expense):                                    0%
      Interest income                      -           28      0%
      Interest expense                     -         (201)    -1%
      Gain on foreign currency             -          128      1%
      Other income, net                    -           84      0%
                                           -           --
        Total other
         (expense)
         income, net                       0           39      0%
                                           -           --
    Loss before
     provision for
     income taxes                      5,350       (3,332)   -19%
    Income tax provision                   -          258      1%
                                           -          ---
    Net loss                          $5,350      $(3,590)   -20%
                                      ======      =======
    Loss per share:
     basic and diluted                 $0.18       $(0.12)
                                       =====       ======
    Weighted average shares
     outstanding: basic and
     diluted                          29,488       29,488
                                      ======       ======



SOURCE  STAAR Surgical Company

    -0-                           05/05/2009
    /CONTACT:  Investors, Douglas Sherk, +1-415-896-6820, Michael Pollock,
+1-415-896-5862, Media, Christopher Gale, +1-646-201-5431, all of EVC Group

for STAAR Surgical Company/
    /Web Site:  http://www.staar.com /
    (STAA)

CO:  STAAR Surgical Company

ST:  California
IN:  HEA MEQ
SU:  ERN CCA

PR
-- SF11508 --
3108 05/05/2009 16:08 EDT http://www.prnewswire.com