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STAAR Surgical Reports 4th Quarter and Fiscal 2001 Results

  • 2002-03-06
  • Press release
MONROVIA, Calif., Mar 6, 2002 /PRNewswire-FirstCall via COMTEX/ --

Revenue and earnings in line with estimates, cash flow ahead of target

STAAR Surgical Company (Nasdaq: STAA) today reported results for the fourth quarter and year, ended December 28, 2001. Revenues and earnings excluding restructuring and other one-time charges were in line with estimates, while the Company continues to exceed its cash flow targets as it nears completion of its restructuring.

Revenues in 2001 were $51 million, compared to $54 million for 2000. Net loss was $14.8 million, or $0.87 per share, versus a net loss of $18.9 million, or $1.23 per share for 2000. Excluding the effect of restructuring and other one-time charges and the associated tax impact, the net loss for 2001 was $1.6 million, or $0.09 per share, compared to a net loss of $780,000 or $0.05 per share for 2000.

Revenues for the fourth quarter of 2001 were $12.7 million, compared to $13.8 million in the fourth quarter of 2000. There was a net loss for the quarter of $8.4 million, or $0.49 per share, versus a net loss of $1.2 million, or $0.07 per share a year ago. Excluding the effect of restructuring and other one-time charges and the associated tax impact, the net loss for the fourth quarter of 2001 was $438,000, or $0.03 per share, compared to a net loss of $293,000 or $0.02 per share for the fourth quarter of 2000.

David Bailey, President of STAAR Surgical Company said, "Our results are in line with Street estimates as we continue to progress through our business strategy to return STAAR Surgical Company back to growth and profitability. We are especially encouraged by the strong rebound in our cash flow as we remain ahead of schedule with a positive cash flow of $400,000 for the fourth quarter of 2001."

During 2001 and 2000 the Company recorded various restructuring and other one-time charges of $14.2 and $25.6 million before income taxes. Charges related to the Company's strategic plan as announced in August of 2001 totaling $12.1 million were as follows:

    * $6.4 million in inventory (which included $3.6 million for recalled
    * $2.7 million excess assets for silicone IOL production
    * $1.0 million excess assets for Collamer IOL production
    * $2.0 million realignment of international operations
Also included in the $14.2 million charge was a $2.1 million reserve on notes receivable from former officers of the Company.

In addition to these charges, a $3.0 million deferred tax asset valuation allowance was recorded in the fourth quarter of 2001 to reflect a prudent accounting policy regarding the near-term realization of this asset.

David Bailey, President and Chief Executive Officer said, "We told shareholders in our August 1, 2001 announcement of a new corporate strategy that it was necessary to record these charges to address issues found during our "root and branch" review. We don't expect additional costs to be incurred and, as we committed to shareholders in August, we have taken the necessary steps to ensure reliable operations and quality products at STAAR Surgical Company.

"We look at these charges as necessary investments. For example, we estimate that the asset write-down of $2.7 million to bring plant capacity and equipment for the Silicone IOL business in line with current market conditions and other cost savings initiatives will lower the manufacturing unit cost for the Silicone IOL by approximately 30 percent," Bailey commented. "Based on volumes within our plan, this will provide us with a payback in 15 months."


"For 2002, we are targeting revenue growth of 6 to 8 percent, or about $5 million, positive cash flow throughout the year and a pretax loss of approximately $1.5 million," said Bailey. "In considering the $1.5 pretax loss, however, it is important to understand that it includes an unfavorable impact on gross profit of $2.3 million caused by existing IOL inventory being valued at a higher cost from the year end 2001 inventory valuation due to reduced production volumes. Without this charge we would be profitable. Our targets take into account the completion of the restructuring we are going through and the conservative approach we take in introducing new products to the market place to ensure their safe application. We expect to see significantly stronger results in 2003."

Bailey concluded, "We made significant progress in 2001 by putting our strategy in place. We are ahead of schedule in many realms of the plan and expect to continue to see strong progress in our efforts to move the Company forward into 2003. Our goal remains to provide the ophthalmic community with excellent products while providing its shareholders with a strong return on their investment in STAAR Surgical Company."

Founded in 1982, STAAR Surgical Company develops, manufactures and globally distributes medical devices for use in refractive, cataract and glaucoma surgery. The Company's five product lines include silicone and Collamer(TM) foldable intraocular lenses and the Sonic WAVE(TM) phacoemulsification system, all of which are used during cataract surgery, the ICL(TM) (implantable contact lens) which is a refractive lens for the treatment of near- and far-sightedness and the AquaFlow(TM) Collagen Glaucoma Drainage Device. Regulatory approvals vary from market to market with all products except the Toric ICL(TM) available in Europe and all except the ICL(TM) in the United States.

An investor conference call on the year-end and fourth quarter will be held on Wednesday, March 6, 2002 at 1:30 p.m. Pacific Time. To participate please dial 1 (800) 773-2261 ten minutes prior to scheduled start of the conference call and give ID#3347927. A tape replay of the call will be available shortly after the conclusion of the conference until Friday, March 8, 2002 by dialing (800) 642-1687 and giving the conference ID#3347927. The conference call will also be available the Internet at , and

For additional information, about STAAR Surgical, visit the Company's web site at or . You may wish to contact David Bailey, President, STAAR Surgical, or John Bily, Chief Financial Officer, STAAR Surgical, at (626) 303-7902. To contact Bill Roberts, President, CTC, Inc., or Wayne Buckhout, CTC Inc., pleaGeneral and administrative 1,914 1,961 8,746 8,593

      Marketing and selling           4,920    5,642    20,043    21,254
      Research and development        1,264    1,175     3,800     4,215
      Restructuring                   5,671    1,500     7,780    15,276

         Total selling, general and
          administrative expenses:   13,769   10,278    40,369    49,338

    Operating income (loss)          (7,561)  (1,859)  (17,786)  (21,233)

    Total other expense                (107)     187      (455)   (4,162)

    Income (loss) before income
     taxes                           (7,668)  (1,672)  (18,241)  (25,395)

    Income tax provision (benefit)      762     (503)   (3,547)   (6,580)

    Minority interest                     6       24       139        87

    Net income (loss)               $(8,436) $(1,193) $(14,833) $(18,902)

    Net loss per share               $(0.49)  $(0.07)   $(0.87)   $(1.23)

    Weighted average shares
     outstanding                     17,133   16,859    17,003    15,378

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

                                                December 28,      December 29,
                                                     2001              2000

    Current assets                                 $35,802           $45,474
    Total assets                                    65,695            80,152

    Current liabilities                             18,661            21,171
    Total liabilities                               18,977            21,483
    Stockholders' equity - net                      46,335            58,465
    Total liabilities and equity                   $65,695           $80,152

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SOURCE STAAR Surgical Company

CONTACT:          David Bailey, President, or John Bily, Chief Financial Officer
                  of STAAR Surgical, +1-626-303-7902; or Bill Roberts, President, or Wayne
                  Buckhout of CTC Inc., +1-937-434-2700

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