Business Wire | Nov 4, 2020 04:01PM EST

STAAR Surgical Reports Third Quarter 2020 Results

Nov. 04, 2020

LAKE FOREST, Calif.--(BUSINESS WIRE)--Nov. 04, 2020--STAAR Surgical Company (NASDAQ: STAA), a leading developer, manufacturer and marketer of implantable lenses and companion delivery systems for the eye, today reported financial results for the third quarter ended October 2, 2020.

Third Quarter 2020 Overview

* Record Quarterly Net Sales of $47.1 Million Up 21% from the Prior Year Quarter * Record Quarterly ICL Sales of $41.5 Million Up 23% from the Prior Year Quarter * Record Quarterly ICL Units, Up 25% from the Prior Year Quarter * Gross Margin at 74.1% vs. 74.4% in the Prior Year Quarter * Net Income of $0.08 per Share vs. Prior Year Quarter Net Income of $0.05 per Share * Cash and Cash Equivalents Ended the Quarter at $128.3 Million up from $116.3 Million in Q2 2020

"STAAR achieved 25% year-over-year global ICL unit growth for the third quarter of 2020 with demand building each month throughout the quarter. Third quarter results reflect strong growth in our North America, Europe and APAC markets, partially offset by the India and Middle East markets which significantly underperformed and were more greatly impacted by COVID-19," said Caren Mason, President and CEO of STAAR Surgical. "Standout markets in the third quarter included China up 33%, Japan up 67%, Korea up 21%, Rest of Asia Pacific up 67%, Spain up 24%, Germany up 13% and distributor markets in Europe up 17% in ICL units year over year. ICL implanted units in the U.S. were up 74% sequentially in the quarter as STAAR supported our physician customers with a Refractive Restart program designed to encourage doctor recommendation and patient selection of our current Visian ICL lenses. Lens-based practice support in the U.S. using STAAR-provided clinical and business development validation continues to gain adoption by surgeons who speak to us of happy patients today and excitement about the possibilities of a future with the EVO version of our ICL lenses."

"In a year of considerable uncertainty, STAAR is endeavoring to provide a level of predictability to both our financial performance and the clinical experience. We achieved strong unit and sales growth while also demonstrating an operating discipline that allowed increased operating income. During the third quarter we also advanced our pipeline of new products for the U.S. and Europe. We completed enrollment for the primary study analysis cohort of 300 subjects in our U.S. EVO clinical trial and are pleased to report they have now been implanted with the EVO lens and will be followed pursuant to the clinical trial protocol. Today, we also announced via press release, the initial implementation of the phased rollout of STAAR's innovative EVO Viva(tm) presbyopia-correcting lens in Europe. A paper on the EVO Viva lens has been published in Clinical Ophthalmology, consumer websites were recently launched, and the first commercial EVO Viva lens patient has been implanted in Belgium," concluded Ms. Mason.

Financial Overview - Q3 2020

Net sales were $47.1 million for the third quarter of 2020, up 21% compared to $39.1 million reported in the prior year quarter. The sales increase was driven by ICL revenue and unit growth of 23% and 25%, respectively, as compared to the prior year period. Other Product Sales increased 7% compared to the prior year quarter due to increased injector parts sales. ICL revenue was 88% of total Net sales for the third quarter of 2020.

Gross profit margin for the third quarter of 2020 was 74.1% compared to the prior year period of 74.4%. Factors negatively impacting gross margin in the third quarter of 2020, as compared to the prior year period, include geographic sales mix, period costs associated with manufacturing expansion projects, and the increased mix of injector part sales which carry a lower margin.

Operating expenses for the third quarter were $30.0 million compared to the prior year quarter of $25.7 million. General and administrative expenses were $8.6 million compared to the prior year quarter of $7.1 million. The increase in general and administrative expenses was due to due to increased salary-related expenses, variable compensation and facility costs. Selling and marketing expenses were $12.6 million compared to the prior year quarter of $12.5 million. The increase in selling and marketing expenses is due to increased salary-related expenses, advertising and promotional activities and variable compensation, offset by decreased trade show and travel expenses. Research and development expenses were $8.8 million compared to the prior year quarter of $6.2 million. The increase in research and development expenses is primarily due to increased clinical expenses associated with the EVO clinical trial in the U.S., and increased salary-related expenses and variable compensation.

Net income for the third quarter of 2020 was $3.9 million or $0.08 per diluted share compared with net income of $2.4 million or $0.05 per diluted share for the prior year quarter. Adjusted Net Income for the third quarter of 2020 was $6.7 million or $0.14 per diluted share compared to $5.5 million or $0.12 per diluted share for the prior year quarter. The reconciliation between GAAP and non-GAAP financial information is provided in the financial tables included with this release.

Cash and cash equivalents at October 2, 2020 totaled $128.3 million, compared to $116.3 million at July 3, 2020. The Company had $1.4 million drawn on its line of credit in Japan and no other debt at October 2, 2020. The sequential increase in cash is primarily due to $9.6 million of cash generated from operations during the third quarter.

Conference Call

The Company will host a conference call and webcast today, Wednesday, November 4 at 4:30 p.m. Eastern / 1:30 p.m. Pacific to discuss its financial results and operational progress. To access the conference call (Conference ID 6253229), please dial 833-350-1429 for domestic participants and 647-689-6661 for international participants. The live webcast can be accessed from the investor relations section of the STAAR website at www.staar.com.

A taped replay of the conference call (Conference ID 6253229) will be available beginning approximately one hour after the call's conclusion for seven days. This replay can be accessed by dialing 800-585-8367 for domestic callers and 416-621-4642 for international callers. An archived webcast will also be available at www.staar.com.

Use of Non-GAAP Financial Measures

This press release includes supplemental non-GAAP financial information, which STAAR believes investors will find helpful in understanding its operating performance. "Adjusted Net Income" excludes the following items that are included in "Net Income" as calculated in accordance with U.S. generally accepted accounting principles ("GAAP"): gain or loss on foreign currency transactions, stock-based compensation expenses, and valuation allowance adjustments. Management believes that "Adjusted Net Income" is useful to investors in gauging the outcome of the key drivers of the business performance: the ability to increase sales revenue and our ability to increase profit margin by improving the mix of high value products while reducing the costs over which management has control.

Management has also excluded gains and losses on foreign currency transactions because of the significant fluctuations that can result from period to period as a result of market driven factors. Stock-based compensation expenses consist of expenses for stock options and restricted stock under the Financial Accounting Standards Board's Accounting Standards Codification (ASC) 718. Valuation allowance adjustments can occur from time to time based on forecasted changes in operating results until all net operating loss carryforwards are fully utilized. In calculating Adjusted Net Income, STAAR excludes these expenses because they are non-cash expenses and because of the considerable judgment involved in calculating their values. In addition, these expenses tend to be driven by fluctuations in the price of our stock and not by the same factors that generally affect our other business expenses.

The Company also uses Constant Currency as a Non-GAAP financial measure to exclude the effects of currency fluctuations on net sales. 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 the Company's results when reported in U.S. dollars. 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.

About STAAR Surgical

STAAR, which has been dedicated solely to ophthalmic surgery for over 30 years, designs, develops, manufactures and markets implantable lenses for the eye with companion delivery systems. These lenses are intended to provide visual freedom for patients, lessening or eliminating the reliance on glasses or contact lenses. All of these lenses are foldable, which permits the surgeon to insert them through a small incision. STAAR's lens used in refractive surgery is called an Implantable Collamer(r) Lens or "ICL", which includes the EVO Visian ICL(tm) product line. More than 1,000,000 Visian(r) ICLs have been implanted to date and STAAR markets these lenses in over 75 countries. To learn more about the ICL go to: www.discovericl.com. Headquartered in Lake Forest, CA, the company operates manufacturing and packaging facilities in Aliso Viejo, CA, Monrovia, CA and Nidau, Switzerland. For more information, please visit the Company's website at www.staar.com.

Safe Harbor

All statements that are not statements of historical fact are forward-looking statements, including statements about any of the following: any financial projections, plans, strategies, and objectives of management for 2020 or 2021 or prospects for achieving such plans, expectations for sales, revenue, margin, expenses or earnings, the expected impact of the COVID-19 pandemic and related public health measures (including but not limited to its impact on sales, operations or clinical trials globally), product safety or effectiveness, the status of our pipeline of ICL products with regulators, including our EVO family of lenses in the U.S., and any statements of assumptions underlying any of the foregoing, including those relating to our product pipeline and market expansion activities. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include risks and uncertainties related to the COVID-19 pandemic and related public health measures, as well as the factors set forth in the Company's Quarterly Report on Form 10-Q for the quarter ended April 3, 2020, and Annual Report on Form 10-K for the year ended January 3, 2020 under the caption "Risk Factors," which is on file with the Securities and Exchange Commission and available in the "Investor Information" section of the company's website under the heading "SEC Filings." We disclaim any intention or obligation to update or revise any financial projections or forward-looking statement due to new information or events. 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 following: global economic conditions; the discretion of regulatory agencies to approve or reject existing, new or improved products, or to require additional actions before approval, or to take enforcement action; international trade disputes; uncertainty caused by the outcome of the U.S. election; and the willingness of surgeons and patients to adopt a new or improved product and procedure. The EVO version of our ICL lens is not yet approved for sale in the United States.

Consolidated Balance Sheets(in 000's)Unaudited ASSETS October 2, 2020 January 3, 2020Current assets:Cash and cash equivalents $ 128,338 $ 119,968

Accounts receivable trade, net 42,063 30,996

Inventories, net 18,234 17,142

Prepayments, deposits, and other current 7,368 6,560 assetsTotal current assets 196,003 174,666

Property, plant, and equipment, net 22,662 17,065

Finance lease right-of-use assets, net 640 1,867

Operating lease right-of-use assets, net 7,725 6,684

Intangible assets, net 275 296

Goodwill 1,786 1,786

Deferred income taxes 5,007 3,750

Other assets 600 751

Total assets $ 234,698 $ 206,865

LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Line of credit $ 1,353 $ 1,827

Accounts payable 7,830 8,050

Obligations under finance leases 422 560

Obligations under operating leases 2,215 2,700

Allowance for sales returns 4,427 3,644

Other current liabilities 17,612 17,697

Total current liabilities 33,859 34,478

Obligations under finance leases 73 366

Obligations under operating leases 5,571 4,086

Asset retirement obligations 216 211

Pension liability 8,587 7,840

Total liabilities 48,306 46,981

Stockholders' equity:Common stock 461 448

Additional paid-in capital 328,074 304,288

Accumulated other comprehensive loss (2,925 ) (3,048 )

Accumulated deficit (139,218 ) (141,804 )

Total stockholders' equity 186,392 159,884

Total liabilities and stockholders' equity $ 234,698 $ 206,865

Consolidated Statements of Income(In 000's except for per share data)UnauditedThree Months EndedNine Months Ended% ofOctober 2, 2020% ofSeptember 27, 2019Fav (Unfav)% ofOctober 2, 2020% ofSeptember 27, 2019Fav (Unfav)SalesSalesAmount%SalesSalesAmount%Net sales100.0

%

$

47,081

100.0

%

$

39,055

$

8,026

20.6

%

100.0

%

$

117,462

100.0

%

$

111,302

$

6,160

5.5

%

Cost of sales25.9

%

12,210

25.6

%

10,004

(2,206

)

-22.1

%

28.4

%

33,401

25.3

%

28,172

(5,229

)

-18.6

%

Gross profit74.1

%

34,871

74.4

%

29,051

5,820

20.0

%

71.6

%

84,061

74.7

%

83,130

931

1.1

%

Selling, general and administrative expenses:General and administrative18.2

%

8,589

18.2

%

7,098

(1,491

)

-21.0

%

20.8

%

24,406

19.3

%

21,443

(2,963

)

-13.8

%

Selling and marketing26.9

%

12,649

31.9

%

12,463

(186

)

-1.5

%

29.0

%

34,003

30.8

%

34,288

285

0.8

%

Research and development18.6

%

8,751

15.8

%

6,156

(2,595

)

-42.2

%

19.5

%

22,960

16.1

%

17,889

(5,071

)

-28.3

%

Total selling, general, and administrative expenses63.7

%

29,989

65.9

%

25,717

(4,272

)

-16.6

%

69.3

%

81,369

66.2

%

73,620

(7,749

)

-10.5

%

Operating income10.4

%

4,882

8.5

%

3,334

1,548

46.4

%

2.3

%

2,692

8.5

%

9,510

(6,818

)

-71.7

%

Other income (expense):Interest income, net0.0

%

1

0.6

%

266

(265

)

-99.6

%

0.2

%

237

0.7

%

796

(559

)

-70.2

%

Gain (loss) on foreign currency transactions1.0

%

468

-1.5

%

(584

)

1,052

180.1

%

0.3

%

388

-0.7

%

(821

)

1,209

147.3

%

Royalty income0.2

%

93

0.3

%

106

(13

)

-12.3

%

0.2

%

239

0.4

%

440

(201

)

-45.7

%

Other income (expense), net-0.1

%

(63

)

0.1

%

26

(89

)

-342.3

%

0.0

%

(83

)

0.1

%

124

(207

)

-166.9

%

Total other income (expense), net1.1

%

499

-0.5

%

(186

)

685

368.3

%

0.7

%

781

0.5

%

539

242

44.9

%

Income before provision for income taxes11.5

%

5,381

8.0

%

3,148

2,233

70.9

%

3.0

%

3,473

9.0

%

10,049

(6,576

)

-65.4

%

Provision for income taxes3.2

%

1,489

1.9

%

760

(729

)

-95.9

%

0.8

%

887

2.1

%

2,380

1,493

62.7

%

Net income8.3

%

$

3,892

6.1

%

$

2,388

$

1,504

63.0

%

2.2

%

$

2,586

6.9

%

$

7,669

$

(5,083

)

-66.3

%

Net income (loss) per share - basic$

0.08

$

0.05

$

0.06

$

0.17

Net income (loss) per share - diluted$

0.08

$

0.05

$

0.05

$

0.16

Weighted average shares outstanding - basic45,903

44,563

45,394

44,426

Weighted average shares outstanding - diluted48,180

46,857

47,589

46,848

Consolidated Statements of Income(In 000's except for per share data)Unaudited Three Months Ended Nine Months Ended % of October 2, % of September Fav (Unfav) % of October 2, % of September Fav (Unfav) Sales 2020 Sales 27, 2019 Amount % Sales 2020 Sales 27, 2019 Amount %Net sales 100.0 % $ 47,081 100.0 % $ 39,055 $ 8,026 20.6 % 100.0 % $ 117,462 100.0 % $ 111,302 $ 6,160 5.5 %

Cost of sales 25.9 % 12,210 25.6 % 10,004 (2,206 ) -22.1 % 28.4 % 33,401 25.3 % 28,172 (5,229 ) -18.6 %

Gross profit 74.1 % 34,871 74.4 % 29,051 5,820 20.0 % 71.6 % 84,061 74.7 % 83,130 931 1.1 %

Selling,general andadministrativeexpenses:General and 18.2 % 8,589 18.2 % 7,098 (1,491 ) -21.0 % 20.8 % 24,406 19.3 % 21,443 (2,963 ) -13.8 %administrativeSelling and 26.9 % 12,649 31.9 % 12,463 (186 ) -1.5 % 29.0 % 34,003 30.8 % 34,288 285 0.8 %marketingResearch and 18.6 % 8,751 15.8 % 6,156 (2,595 ) -42.2 % 19.5 % 22,960 16.1 % 17,889 (5,071 ) -28.3 %developmentTotal selling,general, and 63.7 % 29,989 65.9 % 25,717 (4,272 ) -16.6 % 69.3 % 81,369 66.2 % 73,620 (7,749 ) -10.5 %administrativeexpenses Operating 10.4 % 4,882 8.5 % 3,334 1,548 46.4 % 2.3 % 2,692 8.5 % 9,510 (6,818 ) -71.7 %income Other income(expense):Interest 0.0 % 1 0.6 % 266 (265 ) -99.6 % 0.2 % 237 0.7 % 796 (559 ) -70.2 %income, netGain (loss) onforeign 1.0 % 468 -1.5 % (584 ) 1,052 180.1 % 0.3 % 388 -0.7 % (821 ) 1,209 147.3 %currencytransactionsRoyalty income 0.2 % 93 0.3 % 106 (13 ) -12.3 % 0.2 % 239 0.4 % 440 (201 ) -45.7 %

Other income -0.1 % (63 ) 0.1 % 26 (89 ) -342.3 % 0.0 % (83 ) 0.1 % 124 (207 ) -166.9 %(expense), netTotal other 1.1 % 499 -0.5 % (186 ) 685 368.3 % 0.7 % 781 0.5 % 539 242 44.9 %income(expense), net Income before 11.5 % 5,381 8.0 % 3,148 2,233 70.9 % 3.0 % 3,473 9.0 % 10,049 (6,576 ) -65.4 %provision forincome taxes Provision for 3.2 % 1,489 1.9 % 760 (729 ) -95.9 % 0.8 % 887 2.1 % 2,380 1,493 62.7 %income taxes Net income 8.3 % $ 3,892 6.1 % $ 2,388 $ 1,504 63.0 % 2.2 % $ 2,586 6.9 % $ 7,669 $ (5,083 ) -66.3 %

Net income $ 0.08 $ 0.05 $ 0.06 $ 0.17 (loss) pershare - basicNet income(loss) per $ 0.08 $ 0.05 $ 0.05 $ 0.16 share -diluted Weightedaverage shares 45,903 44,563 45,394 44,426 outstanding -basicWeightedaverage shares 48,180 46,857 47,589 46,848 outstanding -dilutedConsolidated Statements of Cash Flows(in 000's)UnauditedThree Months EndedNine Months EndedOctober 2, 2020September 27, 2019October 2, 2020September 27, 2019Cash flows from operating activities:Net income$

3,892

$

2,388

$

2,586

$

7,669

Adjustments to reconcile net income to net cash provided by operatingactivities:Depreciation of property and equipment758

870

2,276

2,853

Amortization of long-lived intangibles9

9

26

26

Deferred income taxes154

133

(1,215

)

526

Change in net pension liability146

61

522

264

Stock-based compensation expense3,126

2,558

8,965

7,778

Loss on disposal of property and equipment-

14

3

14

Provision for sales returns and bad debts210

341

815

309

Inventory provision379

435

1,195

1,222

Changes in working capital:Accounts receivable(2,566

)

2,273

(10,975

)

(4,260

)

Inventories(421

)

(285

)

(1,353

)

(179

)

Prepayments, deposits and other current assets1,536

924

(636

)

(230

)

Accounts payable(954

)

(17

)

(657

)

546

Other current liabilities3,320

2,090

(151

)

(536

)

Net cash provided by operating activities9,589

11,794

1,401

16,002

Cash flows from investing activities:Acquisition of property and equipment(2,049

)

(2,568

)

(6,259

)

(7,169

)

Increase in patents and licenses-

-

-

(30

)

Net cash used in investing activities(2,049

)

(2,568

)

(6,259

)

(7,199

)

Cash flows from financing activities:Repayment on line of credit(3

)

(513

)

(511

)

(1,512

)

Repayment of finance lease obligations(109

)

(317

)

(455

)

(998

)

Proceeds from vested restricted stock and exercise of stock options4,429

719

13,987

1,831

Net cash provided by (used in) financing activities4,317

(111

)

13,021

(679

)

Effect of exchange rate changes on cash and cash equivalents166

(39

)

207

204

Increase in cash and cash equivalents12,023

9,076

8,370

8,328

Cash, cash equivalents and restricted cash, at beginning of the period116,315

103,251

119,968

103,999

Cash, cash equivalents and restricted cash, at end of the period$

128,338

$

112,327

$

128,338

$

112,327

Consolidated Statements of Cash Flows(in 000's)Unaudited Three Months Ended Nine Months Ended October 2, September October 2, September 2020 27, 2019 2020 27, 2019

Cash flows from operatingactivities:Net income $ 3,892 $ 2,388 $ 2,586 $ 7,669

Adjustments to reconcilenet income to net cashprovided by operatingactivities: Depreciation of property 758 870 2,276 2,853 and equipment Amortization of 9 9 26 26 long-lived intangibles Deferred income taxes 154 133 (1,215 ) 526

Change in net pension 146 61 522 264 liability Stock-based compensation 3,126 2,558 8,965 7,778 expense Loss on disposal of - 14 3 14 property and equipment Provision for sales 210 341 815 309 returns and bad debts Inventory provision 379 435 1,195 1,222

Changes in workingcapital: Accounts receivable (2,566 ) 2,273 (10,975 ) (4,260 )

Inventories (421 ) (285 ) (1,353 ) (179 )

Prepayments, deposits and 1,536 924 (636 ) (230 ) other current assets Accounts payable (954 ) (17 ) (657 ) 546

Other current liabilities 3,320 2,090 (151 ) (536 )

Net cash provided by 9,589 11,794 1,401 16,002 operating activities Cash flows from investingactivities: Acquisition of property (2,049 ) (2,568 ) (6,259 ) (7,169 ) and equipment Increase in patents and - - - (30 ) licenses Net cash used in (2,049 ) (2,568 ) (6,259 ) (7,199 ) investing activities Cash flows from financingactivities: Repayment on line of (3 ) (513 ) (511 ) (1,512 ) credit Repayment of finance (109 ) (317 ) (455 ) (998 ) lease obligations Proceeds from vested 4,429 719 13,987 1,831 restricted stock and exercise of stock options Net cash provided by 4,317 (111 ) 13,021 (679 ) (used in) financing activities Effect of exchange rate 166 (39 ) 207 204 changes on cash and cashequivalents Increase in cash and cash 12,023 9,076 8,370 8,328 equivalentsCash, cash equivalents and 116,315 103,251 119,968 103,999 restricted cash, atbeginning of the periodCash, cash equivalents and $ 128,338 $ 112,327 $ 128,338 $ 112,327 restricted cash, at end ofthe periodReconciliation of Non-GAAP Financial MeasureAdjusted Net Income and Net Income Per Share(in 000's)UnauditedThree Months EndedNine Months EndedOctober 2, 2020September 27, 2019October 2, 2020September 27, 2019Net income (as reported)$

3,892

$

2,388

$

2,586

$

7,669

Less:Foreign currency impact(468

)

584

(388

)

821

Stock-based compensation expense3,126

2,558

8,965

7,778

Valuation allowance adjustment154

-

(1,215

)

-

Net income (adjusted)$

6,704

$

5,530

$

9,948

$

16,268

Net income per share, basic (as reported)$

0.08

$

0.05

$

0.06

$

0.17

Foreign currency impact(0.01

)

0.01

(0.01

)

0.02

Stock-based compensation expense0.08

0.06

0.20

0.18

Valuation allowance adjustment-

-

(0.03

)

-

Net income per share, basic (adjusted)$

0.15

$

0.12

$

0.22

$

0.37

Net income per share, diluted (as reported)$

0.08

$

0.05

$

0.05

$

0.16

Foreign currency impact(0.01

)

0.01

(0.01

)

0.02

Stock-based compensation expense0.07

0.06

0.19

0.17

Valuation allowance adjustment-

-

(0.02

)

-

Net income per share, diluted (adjusted)$

0.14

$

0.12

$

0.21

$

0.35

Weighted average shares outstanding - Basic45,903

44,563

45,394

44,426

Weighted average shares outstanding - Diluted48,180

46,857

47,589

46,848

Note: Net income per share (adjusted), basic and diluted, may not add due to roundingReconciliation of Non-GAAP Financial MeasureAdjusted Net Income and Net Income Per Share(in 000's)Unaudited Three Months Ended Nine Months Ended October 2, September October 2, September 2020 27, 2019 2020 27, 2019

Net income (as reported) $ 3,892 $ 2,388 $ 2,586 $ 7,669

Less:Foreign currency impact (468 ) 584 (388 ) 821

Stock-based compensation 3,126 2,558 8,965 7,778expenseValuation allowance 154 - (1,215 ) -adjustmentNet income (adjusted) $ 6,704 $ 5,530 $ 9,948 $ 16,268

Net income per share, basic $ 0.08 $ 0.05 $ 0.06 $ 0.17(as reported)Foreign currency impact (0.01 ) 0.01 (0.01 ) 0.02

Stock-based compensation 0.08 0.06 0.20 0.18expenseValuation allowance - - (0.03 ) -adjustmentNet income per share, basic $ 0.15 $ 0.12 $ 0.22 $ 0.37(adjusted) Net income per share, $ 0.08 $ 0.05 $ 0.05 $ 0.16diluted (as reported)Foreign currency impact (0.01 ) 0.01 (0.01 ) 0.02

Stock-based compensation 0.07 0.06 0.19 0.17expenseValuation allowance - - (0.02 ) -adjustmentNet income per share, $ 0.14 $ 0.12 $ 0.21 $ 0.35diluted (adjusted) Weighted average shares 45,903 44,563 45,394 44,426outstanding - BasicWeighted average shares 48,180 46,857 47,589 46,848outstanding - Diluted Note: Net income per share (adjusted), basic and diluted, may not add due toroundingSTAAR Surgical CompanyReconciliation of Non-GAAP Financial MeasureConstant Currency Sales(in 000's)UnauditedThree Months EndedOctober 2, 2020Effect ofConstantSeptember 27, 2019As ReportedConstant CurrencySalesCurrencyCurrency$ Change% Change$ Change% ChangeICL$

41,493

$

(346

)

$

41,147

$

33,815

$

7,678

22.7

%

$

7,332

21.7

%

IOL3,325

(76

)

3,249

4,093

(768

)

-18.8

%

(844

)

-20.6

%

Other2,263

(25

)

2,238

1,147

1,116

97.3

%

1,091

95.1

%

Other Products5,588

(101

)

5,487

5,240

348

6.6

%

247

4.7

%

Total Sales$

47,081

$

(447

)

$

46,634

$

39,055

$

8,026

20.6

%

$

7,579

19.4

%

Nine Months EndedOctober 2, 2020Effect ofConstantSeptember 27, 2019As ReportedConstant CurrencySalesCurrencyCurrency$ Change% Change$ Change% ChangeICL$

101,561

$

(251

)

$

101,310

$

96,033

$

5,528

5.8

%

$

5,277

5.5

%

IOL9,880

(117

)

9,763

11,984

(2,104

)

-17.6

%

(2,221

)

-18.5

%

Other6,021

(92

)

5,929

3,285

2,736

83.3

%

2,644

80.5

%

Other Products15,901

(209

)

15,692

15,269

632

4.1

%

423

2.8

%

Total Sales$

117,462

$

(460

)

$

117,002

$

111,302

$

6,160

5.5

%

$

5,700

5.1

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20201104005614/en/

CONTACT: Investors & Media Brian Moore Vice President, Investor, Media Relations and Corporate Development (626) 303-7902, Ext. 3023 bmoore@staar.com