Business Wire | Feb 24, 2021 04:01PM EST

STAAR Surgical Reports Fourth Quarter and Full Year 2020 Results

Feb. 24, 2021

LAKE FOREST, Calif.--(BUSINESS WIRE)--Feb. 24, 2021--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 fourth quarter and fiscal year ended January 1, 2021.

Fourth Quarter 2020 Overview

* Net Sales of $46.0 Million Up 18% from the Prior Year Quarter * ICL Sales of $39.8 Million Up 20% from the Prior Year Quarter * ICL Units Up 13% from the Prior Year Quarter * Gross Margin at 74.6% vs. 74.1% in the Prior Year Quarter * Net Income of $0.07 per Share vs. Prior Year Quarter Net Income of $0.14 per Share * Net Income in Prior Year, Fourth Quarter 2019, included a $0.07 per Share tax benefit * Cash and Cash Equivalents Ended the Quarter at $152.5 Million

Full Year 2020 Overview

* Record Net Sales of $163.5 Million Up 9% from Prior Year * ICL Sales Up 9% and Units Up 11% from the Prior Year * Gross Margin at 72.4% of Sales from 74.5% of Sales in the Prior Year * Full Year Net Income of $0.12 per Share vs. Prior Year Net Income of $0.30 per Share * Net Income in Prior Year, Full Year 2019, included a $0.07 per Share tax benefit

"Our 2020 performance reflects the continued momentum behind STAAR's commercial growth and product innovation. Consequently, we achieved strong fourth quarter results and met our original sales targets for the second half of 2020, despite the unprecedented global pandemic. Our momentum has continued into the first weeks of 2021," said Caren Mason, President and CEO of STAAR Surgical. "For the full year 2020 ICL unit growth was up 11% as compared to a 21% decline in industry-wide refractive procedures.1 STAAR's positive growth affirms the increasing adoption for our EVO ICL family of implantable lenses and illustrates that our lenses continue to capture refractive market share. We believe our lenses are likely to grow the overall market demand for refractive procedures. In 2021 we are confident that our strategies will continue to expand the ICL's position as a transformational pathway to Visual Freedom for patients seeking a life independent of glasses and frequent replacement contact lenses as we support a lens-based future of refractive vision correction."

Financial Overview - Q4 2020

Net sales were $46.0 million for the fourth quarter of 2020, up 18% compared to $38.9 million reported in the prior year quarter. The sales increase was driven by ICL revenue and unit growth of 20% and 13%, respectively, as compared to the prior year period. Other Product Sales increased 10% compared to the prior year quarter due to increased injector parts sales. ICL revenue was 87% of total Net sales for the fourth quarter of 2020.

Gross profit margin for the fourth quarter of 2020 was 74.6% compared to the prior year period of 74.1%. Factors impacting gross margin in the fourth quarter of 2020, as compared to the prior year period, include geographic sales mix partially offset by inventory reserves taken on certain lower margin IOL products which are being discontinued, and manufacturing projects.

Operating expenses for the fourth quarter were $30.2 million compared to the prior year quarter of $26.5 million. General and administrative expenses were $9.5 million compared to the prior year quarter of $7.9 million. The increase in general and administrative expenses was due to increased salary-related costs, variable compensation, corporate insurance and facilities costs. Selling and marketing expenses were $11.8 million compared to the prior year quarter of $11.2 million. The increase in selling and marketing expenses is due to increased salary-related costs and advertising and promotional expenses, partially offset by decreased travel, sales meetings and trade show expenses. Research and development expenses were $9.0 million compared to the prior year quarter of $7.4 million. The increase in research and development expenses is primarily due to increased clinical expenses associated with our EVO clinical trial in the U.S., and increased salary-related expenses and variable compensation.

Net income for the fourth quarter of 2020 was $3.3 million or $0.07 per diluted share compared with net income of $6.4 million or $0.14 per diluted share for the prior year quarter. The year over year decrease is attributable to higher provision for income taxes as the result of a $0.07 per diluted share tax benefit in 2019. Adjusted Net Income for the fourth quarter of 2020 was $6.8 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.

Financial Overview - Full Year 2020

Net sales were $163.5 million for full year ("FY") 2020, up 9% compared to $150.2 million reported in the prior year. The sales increase was driven by ICL revenue and unit growth of 9% and 11%, respectively. Other Products Sales increased 6% compared to the prior year. ICL revenue was 87% of total net sales for FY 2020.

Gross profit margin for FY 2020 decreased to 72.4% of total net sales compared to 74.5% of total net sales for FY 2019. The decrease in gross margin for the year is due to geographic sales mix, a voluntary pause in manufacturing at the Company's principal manufacturing facility commencing in March due to the pandemic, and period costs related to manufacturing projects.

Operating expenses for FY 2020 were $111.6 million compared to prior year of $100.1 million. The increase in operating expense is due to increased salary-related costs, variable compensation, corporate insurance and facilities costs, and increased clinical expenses associated with the Company's EVO clinical trial in the U.S.

Net income for FY 2020 was $5.9 million or approximately $0.12 per share compared with net income of $14.0 million or $0.30 per diluted share for the prior year. The year over year decrease in net income is due to lower operating income and a higher provision for income taxes as the result of a $0.07 per diluted share tax benefit in 2019. Adjusted Net Income for FY 2020 was $16.7 million or $0.35 per diluted share, compared with an Adjusted Net Income of $21.7 million or $0.46 per diluted share for FY 2019. The reconciliation between GAAP and non-GAAP financial information is provided in the financial tables included with this release.

Cash and cash equivalents at January 1, 2021 totaled $152.5 million, compared to $120.0 million at end of the fourth quarter of 2019. The Company generated $21.0 million in cash from operations for FY 2020.

1 Market Scope Refractive Surgery Report, January 2021.

Conference Call

The Company will host a conference call and webcast today, Wednesday, February 24 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 7649387), 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 7649387) 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 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; 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 January 3,ASSETS January 1, 2021 2020

Current assets:Cash and cash equivalents $ 152,453 $ 119,968

Accounts receivable trade, net 35,229 30,996

Inventories, net 18,111 17,142

Prepayments, deposits, and other current 10,625 6,560 assetsTotal current assets 216,418 174,666

Property, plant, and equipment, net 24,030 17,065

Finance lease right-of-use assets, net 596 1,867

Operating lease right-of-use assets, net 8,764 6,684

Intangible assets, net 270 296

Goodwill 1,786 1,786

Deferred income taxes 4,944 4,408

Other assets 608 751

Total assets $ 257,416 $ 207,523

LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Line of credit $ 1,379 $ 1,827

Accounts payable 7,874 8,050

Obligations under finance leases 360 560

Obligations under operating leases 2,485 2,700

Allowance for sales returns 4,532 3,644

Other current liabilities 24,606 17,697

Total current liabilities 41,236 34,478

Obligations under finance leases 38 366

Obligations under operating leases 6,537 4,086

Deferred income taxes 222 658

Asset retirement obligations 221 211

Pension liability 11,940 7,840

Total liabilities 60,194 47,639

Stockholders' equity:Common stock 464 448

Additional paid-in capital 338,194 304,288

Accumulated other comprehensive loss (5,545 ) (3,048 )

Accumulated deficit (135,891 ) (141,804 )

Total stockholders' equity 197,222 159,884

Total liabilities and stockholders' equity $ 257,416 $ 207,523

Consolidated Statements of Income(In 000's except for per share data)UnauditedThree Months EndedTwelve Months Ended% ofJanuary 1, 2021% ofJanuary 3, 2020Fav (Unfav)% ofJanuary 1, 2021% ofJanuary 3, 2020Fav (Unfav)SalesSalesAmount%SalesSalesAmount%Net sales100.0

%

$ 45,998

100.0

%

$ 38,883

$ 7,115

18.3

%

100.0

%

$ 163,460

100.0

%

$ 150,185

$ 13,275

8.8

%

Cost of sales25.4

%

11,697

25.9

%

10,059

(1,638

)

-16.3

%

27.6

%

45,098

25.5

%

38,231

(6,867

)

-18.0

%

Gross profit74.6

%

34,301

74.1

%

28,824

5,477

19.0

%

72.4

%

118,362

74.5

%

111,954

6,408

5.7

%

Selling, general and administrative expenses:General and administrative20.7

%

9,505

20.2

%

7,870

(1,635

)

-20.8

%

20.7

%

33,911

19.5

%

29,313

(4,598

)

-15.7

%

Selling and marketing25.6

%

11,761

28.8

%

11,203

(558

)

-5.0

%

28.0

%

45,764

30.3

%

45,491

(273

)

-0.6

%

Research and development19.5

%

8,958

19.1

%

7,409

(1,549

)

-20.9

%

19.6

%

31,918

16.8

%

25,298

(6,620

)

-26.2

%

Total selling, general, and administrative expenses65.8

%

30,224

68.1

%

26,482

(3,742

)

-14.1

%

68.3

%

111,593

66.6

%

100,102

(11,491

)

-11.5

%

Operating income8.8

%

4,077

6.0

%

2,342

1,735

74.1

%

4.1

%

6,769

7.9

%

11,852

(5,083

)

-42.9

%

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

%

1

0.5

%

192

(191

)

-99.5

%

0.1

%

238

0.6

%

988

(750

)

-75.9

%

Gain (loss) on foreign currency transactions1.0

%

476

0.8

%

304

172

56.6

%

0.5

%

864

-0.3

%

(517

)

1,381

267.1

%

Royalty income0.5

%

201

0.3

%

111

90

81.1

%

0.3

%

440

0.4

%

551

(111

)

-20.1

%

Other income (expense), net0.1

%

39

0.1

%

28

11

39.3

%

0.0

%

(44

)

0.1

%

152

(196

)

-128.9

%

Total other income (expense), net1.6

%

717

1.7

%

635

82

12.9

%

0.9

%

1,498

0.8

%

1,174

324

27.6

%

Income before provision for income taxes10.4

%

4,794

7.7

%

2,977

1,817

61.0

%

5.0

%

8,267

8.7

%

13,026

(4,759

)

-36.5

%

Provision for income taxes3.2

%

1,467

-8.7

%

(3,402

)

(4,869

)

-143.1

%

1.4

%

2,354

-0.7

%

(1,022

)

(3,376

)

-330.3

%

Net income7.2

%

$ 3,327

16.4

%

$ 6,379

$ (3,052

)

-47.8

%

3.6

%

$ 5,913

9.4

%

$ 14,048

$ (8,135

)

-57.9

%

Net income (loss) per share - basic$ 0.07

$ 0.14

$ 0.13

$ 0.32

Net income (loss) per share - diluted$ 0.07

$ 0.14

$ 0.12

$ 0.30

Weighted average shares outstanding - basic46,264

44,681

45,605

44,493

Weighted average shares outstanding - diluted48,808

47,009

47,953

46,895

ConsolidatedStatements ofIncome(In 000'sexcept for pershare data)Unaudited Three Months Ended Twelve Months Ended % of January % of January Fav (Unfav) % of January % of January Fav (Unfav) Sales 1, 2021 Sales 3, 2020 Amount % Sales 1, 2021 Sales 3, 2020 Amount % 100.0 % $ 100.0 % $ $ 18.3 % 100.0 % $ 100.0 % $ $ 8.8 %Net sales 45,998 38,883 7,115 163,460 150,185 13,275

Cost of sales 25.4 % 11,697 25.9 % 10,059 (1,638 ) -16.3 % 27.6 % 45,098 25.5 % 38,231 (6,867 ) -18.0 %

Gross profit 74.6 % 34,301 74.1 % 28,824 5,477 19.0 % 72.4 % 118,362 74.5 % 111,954 6,408 5.7 %

Selling,general andadministrativeexpenses:General and 20.7 % 9,505 20.2 % 7,870 (1,635 ) -20.8 % 20.7 % 33,911 19.5 % 29,313 (4,598 ) -15.7 %administrativeSelling and 25.6 % 11,761 28.8 % 11,203 (558 ) -5.0 % 28.0 % 45,764 30.3 % 45,491 (273 ) -0.6 %marketingResearch and 19.5 % 8,958 19.1 % 7,409 (1,549 ) -20.9 % 19.6 % 31,918 16.8 % 25,298 (6,620 ) -26.2 %developmentTotal selling,general, and 65.8 % 30,224 68.1 % 26,482 (3,742 ) -14.1 % 68.3 % 111,593 66.6 % 100,102 (11,491 ) -11.5 %administrativeexpenses Operating 8.8 % 4,077 6.0 % 2,342 1,735 74.1 % 4.1 % 6,769 7.9 % 11,852 (5,083 ) -42.9 %income Other income(expense):Interest 0.0 % 1 0.5 % 192 (191 ) -99.5 % 0.1 % 238 0.6 % 988 (750 ) -75.9 %income, netGain (loss) onforeign 1.0 % 476 0.8 % 304 172 56.6 % 0.5 % 864 -0.3 % (517 ) 1,381 267.1 %currencytransactionsRoyalty income 0.5 % 201 0.3 % 111 90 81.1 % 0.3 % 440 0.4 % 551 (111 ) -20.1 %

Other income 0.1 % 39 0.1 % 28 11 39.3 % 0.0 % (44 ) 0.1 % 152 (196 ) -128.9 %(expense), netTotal other 1.6 % 717 1.7 % 635 82 12.9 % 0.9 % 1,498 0.8 % 1,174 324 27.6 %income(expense), net Income before 10.4 % 4,794 7.7 % 2,977 1,817 61.0 % 5.0 % 8,267 8.7 % 13,026 (4,759 ) -36.5 %provision forincome taxes Provision for 3.2 % 1,467 -8.7 % (3,402 ) (4,869 ) -143.1 % 1.4 % 2,354 -0.7 % (1,022 ) (3,376 ) -330.3 %income taxes 7.2 % $ 3,327 16.4 % $ $ ) -47.8 % 3.6 % $ 5,913 9.4 % $ $ ) -57.9 %Net income 6,379 (3,052 14,048 (8,135

Net income $ 0.07 $ 0.14 $ 0.13 $ 0.32 (loss) pershare - basicNet income(loss) per $ 0.07 $ 0.14 $ 0.12 $ 0.30 share -diluted Weightedaverage shares 46,264 44,681 45,605 44,493 outstanding -basicWeightedaverage shares 48,808 47,009 47,953 46,895 outstanding -dilutedConsolidated Statements of Cash Flows(in 000's)UnauditedThree Months EndedTwelve Months EndedJanuary 1,2021January 3,2020January 1,2021January 3,2020Cash flows from operating activities:Net income$ 3,327

$ 6,379

$ 5,913

$ 14,048

Adjustments to reconcile net income to net cash provided by operatingactivities:Depreciation of property and equipment784

812

3,060

3,665

Amortization of long-lived intangibles9

8

35

34

Deferred income taxes366

(4,007

)

(849

)

(3,481

)

Change in net pension liability134

95

656

359

Stock-based compensation expense3,181

2,769

12,146

10,547

Loss on disposal of property and equipment210

-

213

14

Provision for sales returns and bad debts20

(34

)

835

275

Inventory provision511

358

1,706

1,580

Changes in working capital:Accounts receivable7,001

(242

)

(3,974

)

(4,502

)

Inventories(37

)

(771

)

(1,390

)

(950

)

Prepayments, deposits and other current assets(3,117

)

(1,083

)

(3,753

)

(1,313

)

Accounts payable(155

)

538

(812

)

1,084

Other current liabilities7,316

4,971

7,165

4,435

Net cash provided by operating activities19,550

9,793

20,951

25,795

Cash flows from investing activities:Acquisition of property and equipment(2,145

)

(2,926

)

(8,404

)

(10,095

)

Increase in patents and licenses-

(53

)

-

(83

)

Net cash used in investing activities(2,145

)

(2,979

)

(8,404

)

(10,178

)

Cash flows from financing activities:Repayment on line of credit(4

)

(506

)

(515

)

(2,018

)

Repayment of finance lease obligations(106

)

(296

)

(561

)

(1,294

)

Proceeds from vested restricted stock and exercise of stock options6,660

1,630

20,647

3,461

Net cash provided by (used in) financing activities6,550

828

19,571

149

Effect of exchange rate changes on cash and cash equivalents160

(1

)

367

203

Increase in cash and cash equivalents24,115

7,641

32,485

15,969

Cash, cash equivalents and restricted cash, at beginning of the period128,338

112,327

119,968

103,999

Cash, cash equivalents and restricted cash, at end of the period$ 152,453

$ 119,968

$ 152,453

$ 119,968

Consolidated Statements of CashFlows(in 000's)Unaudited Three Months Ended Twelve Months Ended January January January January 1, 3, 1, 3, 2021 2020 2021 2020Cash flows from operatingactivities: $ 3,327 $ 6,379 $ 5,913 $ Net income 14,048

Adjustments to reconcile netincome to net cash provided byoperatingactivities: Depreciation of property and 784 812 3,060 3,665 equipment Amortization of long-lived 9 8 35 34 intangibles Deferred income taxes 366 (4,007 ) (849 ) (3,481 )

Change in net pension liability 134 95 656 359

Stock-based compensation expense 3,181 2,769 12,146 10,547

Loss on disposal of property and 210 - 213 14 equipment Provision for sales returns and 20 (34 ) 835 275 bad debts Inventory provision 511 358 1,706 1,580

Changes in working capital: Accounts receivable 7,001 (242 ) (3,974 ) (4,502 )

Inventories (37 ) (771 ) (1,390 ) (950 )

Prepayments, deposits and other (3,117 ) (1,083 ) (3,753 ) (1,313 ) current assets Accounts payable (155 ) 538 (812 ) 1,084

Other current liabilities 7,316 4,971 7,165 4,435

Net cash provided by operating 19,550 9,793 20,951 25,795 activities Cash flows from investingactivities: Acquisition of property and (2,145 ) (2,926 ) (8,404 ) (10,095 ) equipment Increase in patents and licenses - (53 ) - (83 )

Net cash used in investing (2,145 ) (2,979 ) (8,404 ) (10,178 ) activities Cash flows from financingactivities: Repayment on line of credit (4 ) (506 ) (515 ) (2,018 )

Repayment of finance lease (106 ) (296 ) (561 ) (1,294 ) obligations Proceeds from vested restricted 6,660 1,630 20,647 3,461 stock and exercise of stock options Net cash provided by (used in) 6,550 828 19,571 149 financing activities Effect of exchange rate changes on 160 (1 ) 367 203 cash and cash equivalents Increase in cash and cash 24,115 7,641 32,485 15,969 equivalentsCash, cash equivalents and 128,338 112,327 119,968 103,999 restricted cash, at beginning ofthe periodCash, cash equivalents and $ $ $ $ restricted cash, at end of the 152,453 119,968 152,453 119,968periodReconciliation of Non-GAAP Financial MeasureAdjusted Net Income and Net Income Per Share(in 000's)UnauditedThree Months EndedTwelve Months EndedJanuary 1, 2021January 3, 2020January 1, 2021January 3, 2020Net income (as reported)$ 3,327

$ 6,379

$ 5,913

$ 14,048

Less:Foreign currency impact(476

)

(304

)

(864

)

517

Stock-based compensation expense3,181

2,769

12,146

10,547

Valuation allowance adjustment720

(3,376

)

(495

)

(3,376

)

Net income (adjusted)$ 6,752

$ 5,468

$ 16,700

$ 21,736

Net income per share, basic (as reported)$ 0.07

$ 0.14

$ 0.13

$ 0.32

Foreign currency impact(0.01

)

(0.01

)

(0.02

)

0.01

Stock-based compensation expense0.07

0.06

0.27

0.24

Valuation allowance adjustment0.02

(0.07

)

(0.01

)

(0.08

)

Net income per share, basic (adjusted)$ 0.15

$ 0.12

$ 0.37

$ 0.49

Net income per share, diluted (as reported)$ 0.07

$ 0.14

$ 0.12

$ 0.30

Foreign currency impact(0.01

)

(0.01

)

(0.02

)

0.01

Stock-based compensation expense0.07

0.06

0.25

0.22

Valuation allowance adjustment0.01

(0.07

)

-

(0.07

)

Net income per share, diluted (adjusted)$ 0.14

$ 0.12

$ 0.35

$ 0.46

Weighted average shares outstanding - Basic46,264

44,681

45,605

44,493

Weighted average shares outstanding - Diluted48,808

47,009

47,953

46,895

Note: Net income per share (adjusted), basic and diluted, may not add due to roundingReconciliation of Non-GAAP FinancialMeasureAdjusted Net Income and Net IncomePer Share(in 000's)Unaudited Three Months Ended Twelve Months Ended January January January January 1, 2021 3, 2020 1, 2021 3, 2020

$ 3,327 $ 6,379 $ 5,913 $ Net income (as reported) 14,048

Less:Foreign currency impact (476 ) (304 ) (864 ) 517

Stock-based compensation expense 3,181 2,769 12,146 10,547

Valuation allowance adjustment 720 (3,376 ) (495 ) (3,376 )

$ 6,752 $ 5,468 $ $ Net income (adjusted) 16,700 21,736

Net income per share, basic (as $ 0.07 $ 0.14 $ 0.13 $ 0.32 reported)Foreign currency impact (0.01 ) (0.01 ) (0.02 ) 0.01

Stock-based compensation expense 0.07 0.06 0.27 0.24

Valuation allowance adjustment 0.02 (0.07 ) (0.01 ) (0.08 )

Net income per share, basic $ 0.15 $ 0.12 $ 0.37 $ 0.49 (adjusted) Net income per share, diluted (as $ 0.07 $ 0.14 $ 0.12 $ 0.30 reported)Foreign currency impact (0.01 ) (0.01 ) (0.02 ) 0.01

Stock-based compensation expense 0.07 0.06 0.25 0.22

Valuation allowance adjustment 0.01 (0.07 ) - (0.07 )

Net income per share, diluted $ 0.14 $ 0.12 $ 0.35 $ 0.46 (adjusted) Weighted average shares outstanding 46,264 44,681 45,605 44,493 - BasicWeighted average shares outstanding 48,808 47,009 47,953 46,895 - Diluted Note: Net income per share (adjusted), basic and diluted,may not add due to roundingSTAAR Surgical CompanyReconciliation of Non-GAAP Financial MeasureConstant Currency Sales(in 000's)UnauditedThree Months EndedJanuary 1, 2021Effect ofConstantJanuary 3, 2020As ReportedConstant CurrencySalesCurrencyCurrency$ Change% Change$ Change% ChangeICL$ 39,846

$ (754

)

$ 39,092

$ 33,289

$ 6,557

19.7

%

$ 5,803

17.4

%

IOL3,694

(163

)

3,531

3,705

(11

)

-0.3

%

(174

)

-4.7

%

Other2,458

(85

)

2,373

1,889

569

30.1

%

484

25.6

%

Other Products6,152

(248

)

5,904

5,594

558

10.0

%

310

5.5

%

Total Sales$ 45,998

$ (1,002

)

$ 44,996

$ 38,883

$ 7,115

18.3

%

$ 6,113

15.7

%

Twelve Months EndedJanuary 1, 2021Effect ofConstantJanuary 3, 2020As ReportedConstant CurrencySalesCurrencyCurrency$ Change% Change$ Change% ChangeICL$ 141,407

$ (1,005

)

$ 140,402

$ 129,322

$ 12,085

9.3

%

$ 11,080

8.6

%

IOL13,574

(280

)

13,294

15,689

(2,115

)

-13.5

%

(2,395

)

-15.3

%

Other8,479

(177

)

8,302

5,174

3,305

63.9

%

3,128

60.5

%

Other Products22,053

(457

)

21,596

20,863

1,190

5.7

%

733

3.5

%

Total Sales$ 163,460

$ (1,462

)

$ 161,998

$ 150,185

$ 13,275

8.8

%

$ 11,813

7.9

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20210224005964/en/

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