Exhibit 99.1
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STAAR SURGICAL REPORTS IMPROVED FIRST QUARTER 2003 RESULTS
Sales Grew 10%
Gross Margins Increased to 54.4%
International ICL Unit Sales up 39% from Q102
MONROVIA, CA, May 1, 2003---STAAR Surgical Company (Nasdaq: STAA), a leading
developer, manufacturer and marketer of minimally invasive ophthalmic products,
today announced increased sales, revenue and gross margin as well as a reduced
loss per share for the first quarter ended April 4, 2003.
Total product sales in the quarter grew 10% from the first quarter of 2002 to
$12,778,662. Total revenue for the quarter was $12,825,999, up 9.3% from the
comparable period one year ago. The difference between total revenue and product
sales are royalties generated from previously licensed technology that
terminated as of March 31, 2003.
Gross margins improved for the fourth consecutive quarter to 54.4%. This
compares favorably with the 51.4% recorded in the fourth quarter of 2002 and the
48.7% reported in the same period one year ago. Operating expenses increased by
1.9% to $7.6 million and reflect increased spending on sales and marketing
internationally and increased spending on research and development related to
the Toric ICL. General and administrative expenses were down 4.8% in the quarter
from first quarter 2002 levels as a result of a decrease in legal fees.
Net loss for the quarter was $747,369, or $0.04 per share. This compares with a
net loss of $996,888, or $0.06 per share during the same period one year ago.
During the first quarter of 2002, the Company recorded a nonrecurring U.S.
income tax benefit of $1.1 million, or $0.06 per share. Without the benefit, the
net loss for the first quarter of 2002 would have been $0.12 per share.
"Our international sales growth drove the improved first quarter results," said
David Bailey, President and CEO of STAAR Surgical. "International sales grew 32%
and represented 53% of total revenue during the quarter. We were particularly
pleased with the growth in ICL sales in international markets, as unit volume
grew 39% year over year and 24% over the fourth quarter of 2002. While the
dollar's devaluation benefited international ICL sales, we also earned a higher
average selling price and generated 35% sequential sales growth.
"In international markets, gross margins improved 4.8% from the first quarter of
last year. While the U.S. market continued to be challenging for our IOL product
line, our U.S. gross margins continued to improve as a result of our lowered
manufacturing cost structures. Overall, the first quarter was our fourth
consecutive quarter of increased gross profits, which we believe could trend
even higher with an improved performance in the U.S. market."
"Our sales in the U.S. declined 8% compared to the year ago period," said Mr.
Bailey. "The IOL market is moving away from the one-piece silicone lens and this
is impacting our results. We are, however, well poised to gain three-piece
silicone market share with the new cartridges we introduced late in the first
quarter. Unit sales of our specialty Toric and collamer one-piece lenses grew
during the first quarter. We believe that we will be able to grow market share
in the non-silicone segment of the U.S. market as we move forward with the
introduction of a series of improved injectors for the three-piece collamer
lens. This material has superb optical qualities and can thus compete very
effectively against the dominant acrylics.
"Of course, the ICL continues to present our most significant opportunity for
long-term growth. We had a great ASCRS symposium in San Francisco two weeks ago
with 17 scientific presentations made on our lens. One of the major highlights
was the presentation by Dr. Stephen G. Slade of the three-year data on the U.S.
ICL clinical study. The results are very encouraging. Among the findings in this
study was that 99.4% of patients were satisfied with their ICLs three years
after implantation.
"Clearly STAAR is very excited about the data presented by Dr. Slade," continued
Mr. Bailey. "These interim results illustrate another step forward in our
corporate development and support our belief that the ICL represents a paradigm
shift in refractive surgery. This data, coupled with the 35% growth in
international ICL sales during the first quarter, lead us to believe that, when
approved, the ICL will do very well in the U.S. market. We plan to submit our
final data on the ICL to the FDA in the very near future.
During the first quarter, the Company announced that the maturity date of its $3
million domestic line of credit that was to expire on March 31, 2003, was
extended by one year. The line of credit is intended to be used for general
working capital purposes. Cash flow from operating activities for the quarter
was positive for the third consecutive quarter. Additionally during the first
quarter, STAAR reached an agreement with a former officer and director of the
Company for the repayment of notes and loan obligations. The repayment of
$830,000 will be reflected in the second quarter.
Also during the quarter the Company resolved outstanding litigation with a past
officer and this, in addition to the dismissal of a shareholder derivative
action last Friday, resolves all outstanding litigation. As a result, the
Company expects further reductions in legal costs going forward and less
diversion of management attention. "During the past two years our team has
worked extremely hard to resolve the legacy litigation we inherited. These two
developments have been resolved quite satisfactorily for the Company and now we
can focus management's time and the Company's resources on building future
value," Mr. Bailey commented.
Looking ahead, Mr. Bailey offered the following outlook for the full year 2003,
"We believe we will continue to generate double-digit sales growth in
international markets while the U.S. market will remain a challenge until we
bring to market, perhaps in the third quarter, our state of the art injector
system for the three-piece collamer IOL product. Overall, we believe we can
achieve sales growth in the high single digits to low double digits for the full
year as compared to 2002. We will continue to remain vigilant about expenses and
our goal is to achieve operating profitability during the second half of the
year assuming a 2004 U.S. launch of the ICL."
Conference Call
The Company will host a conference call and webcast today Thursday, May 1, 2003
at 4:30 p.m. EST to discuss first quarter results and current corporate
developments. The dial in number for the conference call is 800-223-9488 for
domestic participants and 785-832-1508 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 remain available
through 9:00 p.m. EST on Friday, May 2, 2003 and can be accessed by dialing
888-567-0671 for domestic callers and 402-530-0413 for international callers. To
access the live webcast of the call, go to STAAR Surgical's website at
www.staar.com and select Financials then Conference Calls. An archived webcast
will also be available at www.staar.com until the release of the Company's
second quarter 10-Q.
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 Implantable
Contact Lens as well as innovative products designed to improve patient outcomes
for cataracts and glaucoma.
Safe Harbor
All statements in this press release that are not statements of historical fact
are forward-looking statements, including any projections of earnings, revenue,
or other financial items, any statements of the plans, strategies, and
objectives of management for future operations, any statements concerning
proposed new products, services or developments, any statements regarding future
economic conditions or 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 obtain regulatory approval for new
products, acceptance of new products by medical practitioners and consumers, the
rapid pace of technological change in the ophthalmic industry, general domestic
and international economic conditions, and other factors beyond the control of
STAAR Surgical Company, including those detailed from time to time in STAAR
Surgical Company's reports filed with the Securities and Exchange Commission.
STAAR Surgical Company assumes no obligation and does not intend to update these
forward-looking statements.
Consolidated Financial Statements to Follow
STAAR Surgical Company
Condensed Consolidated Statements of Income
(in 000's except for per share data)
Unaudited
Three Months Ended
April 4, 2003 March 29, 2002
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Sales $12,779 $11,631
Royalties 47 100
Total revenue 12,826 11,731
Cost of goods sold 5,847 6,019
Gross profit 6,979 5,712
General and administrative 2,287 2,402
Marketing and selling 4,161 4,002
Research and development 1,176 1,076
Total expenses: 7,624 7,480
Operating loss (645) (1,768)
Other income (expense) 245 (120)
Loss before income taxes (400) (1,888)
Income tax provision (benefit) 329 (932)
Minority interest 18 41
Net loss $(747) $(997)
Basic and diluted loss per share $(0.04) $(0.06)
Weighted average shares 16,962 17,159
STAAR Surgical Company
Condensed Consolidated Balance Sheet
(in 000's)
April 4, 2003 January 3, 2003
Unaudited Audited
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Cash and cash equivalents $399 $1,009
Accounts receivable, net 6,634 5,992
Inventories, net 11,603 11,761
Prepaids, deposits, and other 3,118 2,845
current assets
Deferred income tax - -
Total current assets 21,754 21,607
Investment in joint venture 568 462
Property, plant, and equipment, 7,090 7,438
net
Patents and licenses, net 8,803 9,038
Goodwill, net 6,427 6,427
Deferred income tax - -
Other assets 365 393
Total assets $45,007 $45,365
Notes payable $5,246 $5,845
Accounts payable 4,918 4,394
Other current liabilities 4,773 4,386
Total current liabilities 14,937 14,625
Other-long term liabilities 89 89
Total liabilities 15,026 14,714
Minority interest 124 100
Stockholders' equity - net 29,857 30,551
Total liabilities and equity $45,007 $45,365
CONTACT: Investors Media
EVC Group EVC Group
Douglas Sherk, 415-659-2285 Sheryl Seapy, 415-272-3323
Jennifer Cohn, 415-659-2289