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STAAR Surgical Reports Results for Fiscal 2000

  • 2001-03-20
  • Press release

MONROVIA, Calif., March 20 /PRNewswire/ -- STAAR Surgical Company (Nasdaq: STAA) reported results for the year-end and fourth quarter ended December 29, 2000. Revenues for the year were $54 million compared to $59 million for the prior year. Net loss was $18.9 million or $1.23 per share. Excluding the effective restructuring that was recorded in the second quarter of 2000 net loss was $780,000, or $0.05 per share, compared to $2.2 million or $0.15 per share in the prior year. For the fourth quarter, revenues were $13.7 million compared to $15.8 million for last year's fourth quarter. Net loss was $1.2 million, or $0.07 per share compared to net income of $277,000 or $0.02 per share.

During the fourth quarter, the Company took a charge of $1.5 million to establish a reserve against a receivable note to previous president and chairman John R. Wolf. Company stock was used as collateral against the note. The recent sharp drop in the stock price necessitated this reserve. The Company believes this reserve is prudent in light of the pending lawsuits Wolf has against the Company.

David Bailey, President of STAAR Surgical Company said, "Sales declined $5 million or 9 percent for the year primarily due to adverse currency fluctuation of $2.9 million on a strengthening U.S. dollar and a $1.6 million loss of Canon STAAR sales.

"Profits were also impacted by higher marketing and sales expenses which rose $1.4 million for the cost of sales training seminars to prepare for the roll out of the Aqua-Flow(TM) and increased compensation for a larger domestic sales force," Bailey explained. "Cost of sales increased slightly due to a change in product mix with more Collamar(TM) intraocular lens (IOL)(TM) sales which carry a higher cost of production as a percentage of sales."

The Company recorded a pre-tax charge to earnings of $24 million before tax benefits in the second quarter of fiscal 2000. The charges related to the Company's restructuring of its Japanese joint venture and certain subsidiaries, inventory adjustments, patents and other assets, and the costs associated with changes in Company management.

Bailey added, "In fiscal 2001 we expect earnings to breakeven on approximately $55 million in sales. There are three basic reasons for the lower estimates: (1) erosion in the silicone IOL market. (2) Slower growth of the Collamar IOL than previous management expected. (3) Slower roll-out for the Aqua-Flow than was previously stated, due to the conservative nature of glaucoma physicians.

"Despite the disappointing results and lower estimates, STAAR Surgical has a strong future driven by excellent technology," Bailey said. "Since the first of the year I have traveled to each of our facilities, including those in Germany and Switzerland to assess and evaluate our operations. I have found many untapped opportunities and I am even more enthusiastic about STAAR's potential. "I have flown to Japan twice in the last two months to meet with executives of Canon in hopes to resume our relationship with this fine company. The Japanese market holds significant opportunity for our products and in order to maintain momentum it would be my preference to settle our differences with Canon and move forward together."

Bailey concluded, "During the coming year changes will be made to make STAAR more profitable on a go forward basis and better able to react to our markets. Our goal will be to provide the ophthalmic community with excellent products and to increase the return on investment in STAAR Surgical Company."

Founded in 1982, STAAR Surgical Company develops, manufactures and globally distributes minimally invasive medical devices for use in refractive, cataract and glaucoma surgery. The Company's principal product line includes foldable intraocular lenses, which are used as replacements for the natural lens in cataract procedures. STAAR also markets two products internationally: an Implantable Contact Lens(TM), which is a refractive lens for the treatment of nearsightedness and farsightedness and the AquaFlow(TM) collagen glaucoma drainage device. All of the Company's products except the Toric ICL(TM) and Sonic Wave(TM) have received CE Marking for distribution in the European Union.

An investor conference call on the year-end and fourth quarter will be held on Tuesday, March 20, 2001 at 1:30 p.m. Pacific Time. To participate please dial 1 (800) 567-7916 ten minutes prior to scheduled start of the conference call and give ID#60759. A tape replay of the call will be available shortly after the conclusion of the conference until Tuesday, March 27, 2001 by dialing (800) 642-1687 and giving the conference ID#60759. The conference call will also be available the Internet at , and .

Certain statements in this press release constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements involve risks and uncertainties that may cause the Company's actual results to be materially different. Factors that could impact the Company's future results are set forth in the cautionary statements included in Exhibit 99 to the Company's latest Form 10-K filed with the Securities and Exchange Commission.

STAAR Surgical Company

Condensed Consolidated Statements of Operations

(in 000's except for per share data)

                        Three Months Ended            Year Ended
                    December 29,  December 31,  December 29, 2000 December 31,
                      2000          1999     Including    Excluding    1999
                                           Restructuring Restructuring
      Sales         $13,510       $15,769     $53,986      $53,986    $58,955
      Royalties         274            58         448          448        253

    Total revenue    13,784        15,827      54,434       54,434     59,208

    Cost of goods
      sold            5,365         6,724      26,329       21,115     22,935

    Gross profit      8,419         9,103      28,105       33,319     36,273

     General and
      administrative  1,961         2,415       8,593        8,144      7,939
     Marketing and
      selling         5,641         5,560      21,254       21,254     19,879
     Research and
      development     1,176         1,212       4,216        4,216      4,339
      impairment, and
      Other non-
      charges             -             -      13,776            -          -

    Total expenses:   8,778         9,187      47,839       33,614     32,157

     income (loss)     (359)          (84)    (19,734)        (295)     4,116

    Other income
     (expense)       (1,313)           31      (5,662)        (964)      (682)

    Income (loss)
     before income
     taxes           (1,672)          (53)    (25,396)      (1,259)     3,434

    Income tax
     provision         (503)         (369)     (6,580)        (565)       862

    Minority interest    24            39          86           86        418

    Net income
     (loss)          (1,193)          277     (18,902)        (780)     2,154

    Diluted earnings
     per share       ($0.07)        $0.02      ($1.23)      ($0.05)     $0.15

    Shares for
     diluted EPS     16,589        14,889      15,378       15,378     14,756

SOURCE STAAR Surgical Company

CONTACT: Bill Roberts or Ellen Geron of CTC, 937-434-2700; or David Bailey, CEO, or John Santos, CFO, both of STAAR Surgical, 800-292-7902/

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