STAAR Surgical Company【STAA】株式ニュース

STAAR Surgical Reports Fourth Quarter and Fiscal Year 2025 ResultsMarch 3, 2026 4:01 PM
Business Wire
Confident in China Progress and Future Roadmap

A Clear Path Toward Sustainable Profitability and Growth

Board and Leadership Transitions Support Strategy Execution and Shareholder Value Creation

STAAR Interim co-CEOs Issue Letter to Shareholders

Earnings Call and Webcast Today at 5:30 PM Eastern

STAAR Surgical Company (NASDAQ: STAA), the global leader in phakic IOLs with the EVO family of Implantable Collamer® Lenses (EVO ICL™) for vision correction, today reported results for the fourth quarter and fiscal year ended January 2, 2026. STAAR’s Interim co-CEOs will be issuing a Letter to Shareholders after this earnings release, which can be found here: https://investors.staar.com/news-and-events/press-releases.

Fourth Quarter 2025 Financial Overview

Net sales of $57.8 million, up 18.1% Y/Y

Net sales excluding China of $40.3 million, down 2.1% Y/Y

Gross margin at 75.7% vs. 64.7% Y/Y

Net loss of $(18.3) million or $(0.37) per share, compared to a net loss of $(34.2) million or $(0.69) per share a year ago

Adjusted EBITDA1 breakeven or $(0.00) per share, compared to Adjusted EBITDA loss of $(20.8) million or $(0.42) per share a year ago

Fiscal Year 2025 Financial Overview

Net sales of $239.4 million, down 23.7% Y/Y

Net sales excluding China of $161.7 million, up 6.6% Y/Y

Gross margin at 76.2% vs. 76.3% Y/Y

Net loss of $(80.4) million or $(1.62) per share, compared to a net loss of $(20.2) million or $(0.41) per share a year ago

Adjusted EBITDA1 loss of $(6.6) million or ($0.13) per share compared to Adjusted EBITDA income of $23.2 million or $0.47 per share a year ago

Cash, cash equivalents and investments available for sale ended the year at $187.5 million

“Throughout fiscal 2025, we made meaningful progress on multiple fronts, including rebalancing distributor inventory and disciplined gross profit and expense management. The actions we have taken give us confidence in a clear path toward sustained profitability and growth, and we are optimistic about the business in 2026,” said Warren Foust, Interim Co-CEO of STAAR Surgical. “During 2024, China demand was challenged, which led to a double-digit decline in in-market sales2 and increased inventory in the channel. In 2025, in-market demand in China improved with an estimated mid-single-digit recovery, and inventories were reduced to normal levels. In-market demand in China accelerated in the fourth quarter, providing a positive signal for fiscal 2026. However, the in-market recovery did not translate into sales growth for STAAR during the fourth quarter because of a reduction in sub-distributor and customer inventory in China. Due to uncertainties about their future if the Company were acquired by Alcon, certain China sub-distributors and customers returned some inventory to our distributors, resulting in lower-than-anticipated fourth quarter net sales for STAAR. This uncertainty also impacted sales to distributors in other parts of the world. In 2026, with the merger question behind us, we believe we will see modest growth in in-market volume demand and expect net sales in China to increase due to rising average selling prices (ASPs) for lenses and market share gains. ASP increases are being driven by the success of our EVO+ ICL launch in China. The EVO+ ICL for China, which is manufactured in Switzerland, is not subject to US-China tariff volatility. There is excitement around the launch of EVO+ in China, and we are working closely with our distributor partners to accelerate adoption in this key market. We believe our China business is well positioned for growth this year and intend to provide investors with greater transparency into our execution there. We made substantial progress in improving our ability to track channel inventory in China during 2025 and are continuing that effort in 2026.”

Mr. Foust continued, “STAAR possesses a differentiated proprietary material with Collamer®, exceptional optical technology with EVO ICLs, and a proven ability to gain market share. With a large addressable market opportunity driven by the increasing prevalence of myopia worldwide, our leadership in lens-based refractive surgery provides us with a winning formula. As we look to the future as a standalone company, our Board, leadership team, and employees have a renewed focus on strategic execution and long-term value creation for our shareholders.”

Leadership Changes

On February 2, 2026, STAAR announced the appointment of Warren Foust and Deborah Andrews as interim co-Chief Executive Officers. STAAR’s Board of Directors have engaged Egon Zehnder, a leading global executive search and leadership advisory firm, to conduct the search for STAAR’s next Chief Executive Officer. The search will include both internal and external candidates.

Fourth Quarter 2025 Financial Results

Net sales were $57.8 million for the fourth quarter of 2025, up by 18.1% from $49.0 million in the prior year quarter. The year over year increase in net sales primarily reflected sales growth in China. Excluding China, net sales were $40.3 million, a decrease of 2.1% as compared to $41.1 million in the prior year quarter due to the timing of sales returns that disproportionally impacted the fourth quarter compared to the first three quarters of 2025.

Gross profit margin for the fourth quarter of 2025 was 75.7% of total net sales compared to the prior year quarter of 64.7% of total net sales. The increase in gross profit margin versus the prior year quarter was due primarily to the timing of the recognition of the cost of sales associated with the December 2024 China Shipment, decreased period costs resulting from cost reductions implemented in the first quarter of 2025 and the ramp up of Swiss manufacturing, partially offset by higher inventory provisions. As previously disclosed, in December 2024, the Company shipped $27.5 million of ICLs to China, for which it did not recognize revenue in the fourth quarter of 2024 due to extended payment terms with the Company’s distributor. However, cost of sales of $3.9 million associated with the December 2024 China Shipment was recorded in the fourth quarter of 2024. The revenue from this shipment was recognized in the second and third quarters of 2025, as payments were received.

Total operating expenses for the fourth quarter of 2025 were $66.6 million, compared to $59.6 million in the prior year quarter. Operating expenses for the quarter included costs related to the Company’s terminated merger transaction with Alcon of $11.2 million and costs related to restructuring of $0.7 million. Excluding the costs related to the merger and restructuring, operating expenses for the fourth quarter of 2025 were $54.7 million, a reduction of 8.2% from the prior year quarter. General and administrative expenses were $19.6 million compared to $21.3 million in the prior year quarter. The year over year decrease was primarily due to decreased outside services and facilities costs, largely offset by increased compensation related expenses. Selling and marketing expenses were $25.8 million compared to $28.4 million in the prior year quarter. The year over year decrease was due to lower advertising and promotional spending, lower trade show and sales meeting expenses, partially offset by increased compensation expenses. Research and development expenses were $9.2 million compared to $9.8 million in the prior year quarter. The year over year decrease is the result of lower clinical and investigator-initiated trials, partially offset by increased compensation expenses.

Operating loss for the fourth quarter of 2025 was $(22.8) million compared to $(27.9) million in the prior year quarter. Net loss for the fourth quarter of 2025 was $(18.3) million or $(0.37) per diluted share, down from net loss of $(34.2) million or $(0.69) per diluted share for the prior year quarter. The year over year improvement in net loss was primarily attributable to higher gross profit and lower operating expenses before merger and restructuring expenses and foreign exchange gains, partially offset by merger and restructuring expenses.

Fiscal Year 2025 Financial Results

Net sales were $239.4 million for fiscal year 2025 compared to $313.9 million in the prior year. Included in 2025 net sales was the recognition of $27.5 million in China sales from the December 2024 China Shipment, which was deferred from the fourth quarter of 2024 to the second and third quarters of 2025 due to extended payment terms with the Company’s distributor. The decrease in net sales was due to the reduction of distributor and channel inventory in China in the first half of the year partially offset by increased sales outside of China. Excluding China, net sales for fiscal year 2025 were $161.7 million, an increase of 6.6% as compared to $151.6 million in the prior year.

Gross profit margin for fiscal year 2025 was 76.2% of total net sales compared to 76.3% of total net sales for fiscal year 2024.

Operating expenses for fiscal year 2025 were $274.1 million compared to $252.2 million in the prior year. Excluding merger and restructuring expenses, operating expenses for fiscal year 2025 were $228.4 million, a 9.4% reduction from the prior year.

Operating loss for fiscal year 2025 was $(91.7) million compared to operating loss of $(12.6) million for fiscal year 2024. Net loss for fiscal year 2025 was $(80.4) million or $(1.62) per diluted share compared with net loss of $(20.2) million or $(0.41) per diluted share for the prior year.

Cash, cash equivalents and investments available for sale at January 2, 2026, totaled $187.5 million, compared to $230.5 million at the end of the fourth quarter of 2024. The Company had no outstanding debt.

For the year ended January 2, 2026, the Company repurchased approximately 376,000 shares of its common stock under its $30 million share repurchase program announced in May 2025, for a total cost of approximately $6.5 million. The average purchase price per share was $17.20. As of January 2, 2026, approximately $23.5 million remained available under the current authorization.

Earnings Conference Call and Webcast

The Company will host an earnings conference call and webcast today, Tuesday, March 3 at 5:30 p.m. Eastern / 2:30 p.m. Pacific to discuss its financial results and operational progress. To access the webcast please use the following link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=J3bNAuVd

In addition to live questions, participants may submit questions by email to ir@staar.com

1

Adjusted EBITDA and Adjusted EBITDA per share are non-GAAP financial measures. For further information on non-GAAP financial measures, please refer to the “Use of Non-GAAP Financial Measures” section of this press release. Please also refer to the tables at the end of this press release for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure.

2

In-market sales reflect sales from the Company’s distributors to customers and end-users in China. This data is collected and provided by the Company’s distributors and is used by the Company to estimate in-market demand and analyze trends. This data is unaudited by the Company and can be impacted by timing of orders placed, returns, and other factors.

Use of Non-GAAP Financial Measures

To supplement the Company’s financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables include certain non-GAAP financial measures, including Adjusted EBITDA. Management uses these non-GAAP financial measures in its evaluation of Company operating performance and believes investors will find them useful in evaluating the Company’s operating performance, including cash flow generation, and in analyzing period-to-period financial performance of core business operations and underlying business trends. Non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

EBITDA is a non-GAAP financial measure, which is calculated by adding interest income and expense, net; provision for income taxes; and depreciation and amortization to net income. In calculating Adjusted EBITDA and Adjusted EBITDA per diluted share, the Company further adjusts for stock-based compensation expense, restructuring, impairment and related charges, and commencing with the fourth quarter ended January 2, 2026, merger transaction and related costs. As stock-based compensation is a non-cash expense that can vary significantly based on the timing, size and nature of awards granted, the Company believes that the exclusion of stock-based compensation expense can assist investors in comparisons of Company operating results with other peer companies because (i) the amount of such expense in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expense can vary significantly between periods as a result of the timing of grants of new stock-based awards, including inducement grants in connection with hiring. Additionally, the Company believes that excluding stock-based compensation from Adjusted EBITDA and Adjusted EBITDA per diluted share assists management and investors in making meaningful comparisons between the Company’s operating performance and the operating performance of other companies that may use different forms of employee compensation or different valuation methodologies for their stock-based compensation. Investors should note that stock-based compensation is a key incentive offered to employees whose efforts contributed to the operating results in the periods presented and are expected to contribute to operating results in future periods. Investors should also note that such expenses will recur in the future. The Company believes that restructuring, impairment and related charges are not indicative of the underlying operating expense profile for the Company. These charges, which include costs related to severance, reduction in force and consulting expenses, impairment expenses on leasehold improvements and machinery and equipment, impairment on real property right-of-use assets, and impairment of internally developed software, are anticipated to be completed within a finite period of time and can vary significantly in any specific period. The Company believes that excluding restructuring, impairment and related charges from Adjusted EBITDA allows investors to more consistently analyze period-to-period financial performance of its core business operations and better assess the Company’s current and future continuing operations. Similarly, the Company believes that merger transaction and related costs are not indicative of the underlying operating expense profile for the Company and that excluding such costs from Adjusted EBITDA allows investors to more consistently analyze period-to-period financial performance of its core business.

The Company also presents certain financial information on a constant currency basis, which is intended to exclude the effects of foreign currency fluctuations. 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.

In the tables provided below, the Company has included a reconciliation of Adjusted EBITDA and Adjusted EBITDA per diluted share to net income (loss) and net income (loss) per diluted share, the most directly comparable GAAP financial measure, as well as supplemental financial information with net sales expressed in constant currency.

About STAAR Surgical

STAAR Surgical (NASDAQ: STAA) is the global leader in implantable phakic intraocular lenses, a vision correction solution that reduces or eliminates the need for glasses or contact lenses. Since 1982, STAAR has been dedicated solely to ophthalmic surgery, and for 30 years, STAAR has been designing, developing, manufacturing, and marketing advanced Implantable Collamer® Lenses (ICLs), using its proprietary biocompatible Collamer material. STAAR ICL’s are clinically-proven to deliver safe long-term vision correction without removing corneal tissue or the eye’s natural crystalline lens. Its EVO ICL™ product line provides visual freedom through a quick, minimally invasive procedure. STAAR has sold more than 4 million ICLs in over 85 countries. Headquartered in Lake Forest, California, the company operates research, development, manufacturing, and packaging facilities in California and Switzerland. For more information about ICL, visit www.EVOICL.com. To learn more about STAAR, visit http://www.staar.com.

We intend to use our website as a means of disclosing material non-public information about the Company and complying with Regulation FD. Such disclosures will be included on our website in the ‘Investor Relations’ sections at investors.staar.com. Accordingly, investors should monitor such portion of our website, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting the Email Alerts section at investors.staar.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often contain words such as “anticipate,” “believe,” “expect,” “plan,” “estimate,” “project,” “continue,” “will,” “should,” “may,” and similar terms. All statements in this press release that are not statements of historical fact are forward-looking statements. These forward-looking statements are neither promises nor guarantees and involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from what is expressed or implied by the forward-looking statements, including, but not limited to: our ability to grow and generate profit; our reliance on independent distributors in international markets; a slowdown or disruption to the Chinese economy; global economic conditions; disruptions in our supply chain; fluctuations in foreign currency exchange rates; international trade disputes (including involving tariffs) and substantial dependence on demand from Asia; changes in effective tax rate or tax laws; any loss of use of our principal manufacturing facility; competition; potential losses due to product liability claims; our exposure to environmental liability; data corruption, cyber-based attacks or network security breaches and/or noncompliance with data protection and privacy regulations; acquisitions of new technologies; climate changes; the willingness of surgeons and patients to adopt a new or improved product and procedure; extensive clinical trials and resources devoted to research and development; compliance with government regulations; the discretion of regulatory agencies to approve or reject existing, new or improved products, or to require additional actions before or after approval, or to take enforcement action; laws pertaining to healthcare fraud and abuse; changes in FDA or international regulations related to product approval; product recalls or failures; and other important factors set forth in the Company’s Annual Report on Form 10-K for the year ended January 2, 2026 under the caption “Risk Factors,” which is filed with the Securities and Exchange Commission (the “SEC”) and available in the “Investor Information” section of the Company’s website under the heading “SEC Filings,” as any such factors may be updated from time to time in the Company’s other filings with the SEC.

Forward-looking statements speak only as of the date they are made and, except as may be required under applicable law, the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Consolidated Balance Sheets

(in 000's)

Unaudited

ASSETS

January 2, 2026

December 27, 2024

Current assets:

Cash and cash equivalents

$

153,150

$

144,159

Investments available for sale

34,386

86,335

Accounts receivable trade, net

50,064

77,897

Inventories, net

55,496

43,305

Prepayments, deposits, and other current assets

18,449

16,244

Total current assets

311,545

367,940

Property, plant, and equipment, net

73,323

84,889

Finance lease right-of-use assets, net

-

37

Operating lease right-of-use assets, net

29,609

36,850

Cloud-based software

30,700

15,763

Goodwill

1,786

1,786

Deferred income taxes

3,365

788

Other assets

1,350

1,471

Total assets

$

451,678

$

509,524

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

11,574

$

16,704

Obligations under finance leases

-

42

Obligations under operating leases

5,872

3,894

Allowance for sales returns

10,199

6,579

Other current liabilities

40,859

43,087

Total current liabilities

68,504

70,306

Obligations under operating leases

32,481

34,807

Deferred income taxes

-

297

Asset retirement obligations

45

42

Deferred rent

89

-

Pension liability

6,375

6,737

Total liabilities

107,494

112,189

Stockholders' equity:

Common stock

498

493

Additional paid-in capital

504,682

471,449

Treasury Stock

(6,461

)

-

Accumulated other comprehensive loss

(6,511

)

(7,031

)

Accumulated deficit

(148,024

)

(67,576

)

Total stockholders' equity

344,184

397,335

Total liabilities and stockholders' equity

$

451,678

$

509,524

Consolidated Statements of Operations

(in 000's except for per share data)

Unaudited

Three Months Ended

Twelve Months Ended

% of Sales

January 2,

2026

% of Sales

December 27,

2024

Fav (Unfav)

Amount

%

% of Sales

January 2,

2026

% of Sales

December 27,

2024

Fav (Unfav)

Amount

%

Net sales

100.0

%

$

57,801

100.0

%

$

48,950

$

8,851

18.1

%

100.0

%

$

239,442

100.0

%

$

313,901

$

(74,459

)

(23.7

)%

Cost of sales

24.3

%

14,060

35.3

%

17,302

3,242

18.7

%

23.8

%

57,022

23.7

%

74,319

17,297

23.3

%

Gross profit

75.7

%

43,741

64.7

%

31,648

12,093

38.2

%

76.2

%

182,420

76.3

%

239,582

(57,162

)

(23.9

)%

Selling, general and administrative expenses:

General and administrative

33.9

%

19,593

43.6

%

21,344

1,751

8.2

%

35.8

%

85,783

28.6

%

89,898

4,115

4.6

%

Selling and marketing

44.7

%

25,839

58.1

%

28,443

2,604

9.2

%

42.8

%

102,528

37.3

%

116,978

14,450

12.4

%

Research and development

16.0

%

9,244

20.0

%

9,771

527

5.4

%

16.7

%

40,055

14.4

%

45,317

5,262

11.6

%

Total selling, general, and administrative expenses

94.6

%

54,676

121.7

%

59,558

4,882

8.2

%

95.3

%

228,366

80.3

%

252,193

23,827

9.4

%

Merger transaction and related costs

19.4

%

11,209

0.0

%

-

(11,209

)

0.0

%

7.2

%

17,135

0.0

%

-

(17,135

)

0.0

%

Restructuring, impairment and related charges

1.2

%

694

0.0

%

-

(694

)

0.0

%

12.0

%

28,632

0.0

%

-

(28,632

)

0.0

%

Total operating expenses

115.2

%

66,579

121.7

%

59,558

(7,021

)

(11.8

)%

114.5

%

274,133

80.3

%

252,193

(21,940

)

(8.7

)%

Operating loss

(39.5

)%

(22,838

)

(57.0

)%

(27,910

)

5,072

18.2

%

(38.3

)%

(91,713

)

(4.0

)%

(12,611

)

(79,102

)

(627.2

)%

Other income (expense):

Interest income, net

1.8

%

1,072

3.2

%

1,553

(481

)

(31.0

)%

1.9

%

4,594

1.9

%

5,911

(1,317

)

(22.3

)%

Gain (loss) on foreign currency transactions

(0.9

)%

(535

)

(8.7

)%

(4,260

)

3,725

87.4

%

1.1

%

2,603

(1.3

)%

(3,675

)

6,278

170.8

%

Royalty income

0.0

%

-

0.0

%

-

-

0.0

%

0.0

%

-

0.1

%

508

(508

)

(100.0

)%

Other income, net

2.9

%

1,649

0.6

%

283

1,366

482.7

%

0.9

%

2,253

0.3

%

815

1,438

176.4

%

Total other income (expense), net

3.8

%

2,186

(4.9

)%

(2,424

)

4,610

190.2

%

3.9

%

9,450

1.0

%

3,559

5,891

165.5

%

Loss before provision for income taxes

(35.7

)%

(20,652

)

(61.9

)%

(30,334

)

9,682

31.9

%

(34.4

)%

(82,263

)

(3.0

)%

(9,052

)

(73,211

)

(808.8

)%

Provision (benefit) for income taxes

(4.1

)%

(2,343

)

8.0

%

3,894

6,237

160.2

%

(0.8

)%

(1,815

)

3.6

%

11,156

12,971

116.3

%

Net loss

(31.6

)%

(18,309

)

(69.9

)%

(34,228

)

15,919

46.5

%

(33.6

)%

(80,448

)

(6.6

)%

(20,208

)

(60,240

)

(298.1

)%

Net loss per share - basic

(0.37

)

(0.69

)

(1.62

)

(0.41

)

Net loss per share - diluted

(0.37

)

(0.69

)

(1.62

)

(0.41

)

Weighted average shares outstanding - basic

49,758

49,266

49,568

49,125

Weighted average shares outstanding - diluted

49,758

49,266

49,568

49,125

Consolidated Statements of Cash Flows

(in 000's)

Unaudited

Three Months Ended

Twelve Months Ended

January 2,
2026

December 27,
2024

January 2,
2026

December 27,
2024

Cash flows from operating activities:

Net loss

$

(18,309

)

$

(34,228

)

$

(80,448

)

$

(20,208

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation of property and equipment

2,007

2,375

8,319

6,891

Amortization of capitalized cloud-based software

105

-

409

-

Non-cash operating lease expense

905

973

3,570

3,562

Impairment of fixed assets and operating leases

811

-

15,404

-

Gain on fixed asset recovery

(1,458

)

-

(1,458

)

-

Accretion/Amortization of investments available for sale

(143

)

(681

)

(198

)

(1,091

)

Deferred income taxes

(2,198

)

3,543

(2,916

)

3,590

Change in net pension liability

(292

)

188

(249

)

26

Stock-based compensation expense

8,613

4,669

30,588

27,210

Change in asset retirement obligation

4

(77

)

4

(53

)

Loss on disposal of property and equipment

51

26

74

1,694

Provision for sales returns and bad debts

2,689

(1,661

)

3,664

286

Inventory provision

2,073

909

5,334

2,782

Changes in working capital:

Accounts receivable

9,830

26,196

27,834

16,493

Inventories

(4,532

)

(4,038

)

(16,981

)

(10,000

)

Prepayments, deposits and other assets

(2,403

)

440

(1,352

)

(2,006

)

Cloud-based software

(4,700

)

(3,566

)

(15,764

)

(13,357

)

Accounts payable

2,404

2,106

(5,507

)

75

Other current and long-term liabilities

629

3,468

(4,557

)

(169

)

Net cash provided by (used in) operating activities

(3,914

)

642

(34,230

)

15,725

Cash flows from investing activities:

Acquisition of property and equipment

(1,677

)

(5,725

)

(5,820

)

(23,394

)

Purchase of investments available for sale

(48,899

)

(19,046

)

(75,363

)

(80,240

)

Proceeds from sale or maturity of investments available for sale

31,161

5,276

127,522

44,417

Net provided by (used in) investing activities

(19,415

)

(19,495

)

46,339

(59,217

)

Cash flows from financing activities:

Repayment of finance lease obligations

-

(41

)

(42

)

(165

)

Repurchase of common stock

-

-

(6,461

)

-

Repurchase of employee common stock for taxes withheld

(164

)

(109

)

(1,520

)

(1,505

)

Proceeds from vested restricted stock and exercise of stock options

114

40

3,468

7,394

Net cash provided by (used in) financing activities

(50

)

(110

)

(4,555

)

5,724

Effect of exchange rate changes on cash and cash equivalents

374

(881

)

1,437

(1,111

)

Increase (decrease) in cash and cash equivalents

(23,005

)

(19,844

)

8,991

(38,879

)

Cash and cash equivalents, at beginning of the period

176,155

164,003

144,159

183,038

Cash and cash equivalents, at end of the period

$

153,150

$

144,159

$

153,150

$

144,159

Reconciliation of Non-GAAP Financial Measure

Net Income to Adjusted EBITDA

(in 000's except for per share data)

Unaudited

2023

Q1-24

Q2-24

Q3-24

Q4-24(5)

2024(5)

Q1-25

Q2-25(5)

Q3-25(5)

Q4-25

2025(5)

Net income (loss) - (as reported)

$

21,347

$

(3,339

)

$

7,379

$

9,980

$

(34,228

)

$

(20,208

)

$

(54,211

)

$

(16,812

)

$

8,884

$

(18,309

)

$

(80,448

)

Provision (benefit) for income taxes

12,349

1,128

2,955

3,179

3,894

11,156

(275

)

(9,103

)

9,906

(2,343

)

(1,815

)

Other (income) expense, net

(5,599

)

(70

)

1,564

(7,477

)

2,424

(3,559

)

(2,915

)

(4,049

)

(300

)

(2,186

)

(9,450

)

Depreciation

5,111

1,237

1,522

1,757

2,375

6,891

2,337

1,975

2,000

2,007

8,319

(Gain) loss on disposal of property plant and equipment(2)

73

-

26

1,642

26

1,694

-

-

23

51

74

Amortization of capitalized cloud-based software

-

-

-

-

-

-

53

147

104

105

409

Restructuring, impairment and related charges(3)

-

-

-

-

-

-

22,664

5,248

26

694

28,632

Merger transaction and related costs(4)

-

-

-

-

-

-

-

-

5,926

11,209

17,135

Amortization of intangible assets

13

-

-

-

-

-

-

-

-

-

-

Stock-based compensation

23,516

6,339

9,042

7,160

4,669

27,210

6,015

7,802

8,158

8,613

30,588

Adjusted EBITDA

$

56,810

$

5,295

$

22,488

$

16,241

$

(20,840

)

$

23,184

$

(26,332

)

$

(14,792

)

$

34,727

$

(159

)

$

(6,556

)

Net income (loss) as a % of Sales

6.7

%

(4.3

)%

7.4

%

11.3

%

(69.9

)%

(6.6

)%

(127.3

)%

(38.0

)%

9.3

%

(31.6

)%

(33.6

)%

Adjusted EBITDA as a % of Sales

17.6

%

6.8

%

22.7

%

18.3

%

(42.6

)%

7.4

%

(61.8

)%

(33.4

)%

36.7

%

(0.3

)%

(2.7

)%

Net income (loss) per share, diluted - (as reported)

$

0.43

$

(0.07

)

$

0.15

$

0.20

$

(0.69

)

$

(0.41

)

$

(1.10

)

$

(0.34

)

$

0.18

$

(0.37

)

$

(1.62

)

Provision (benefit) for income taxes

0.25

0.02

0.06

0.06

0.08

0.22

(0.01

)

(0.18

)

0.20

(0.05

)

(0.04

)

Other (income) expense, net

(0.11

)

-

0.03

(0.15

)

0.05

(0.07

)

(0.06

)

(0.08

)

(0.01

)

(0.04

)

(0.19

)

Depreciation

0.10

0.03

0.03

0.04

0.05

0.14

0.05

0.04

0.04

0.04

0.17

(Gain) loss on disposal of property plant and equipment

-

-

-

0.03

-

0.03

-

-

-

-

-

Amortization of capitalized cloud-based software

-

-

-

-

-

-

-

-

-

-

0.01

Restructuring, impairment and related charges

-

-

-

-

-

-

0.46

0.11

-

0.01

0.58

Merger transaction and related costs

-

-

-

-

-

-

-

-

0.12

0.23

0.35

Amortization of intangible assets

-

-

-

-

-

-

-

-

-

-

-

Stock-based compensation

0.48

0.13

0.18

0.14

0.09

0.55

0.12

0.16

0.16

0.17

0.62

Adjusted EBITDA per share, diluted(1)

$

1.15

$

0.11

$

0.45

$

0.33

$

(0.42

)

$

0.47

$

(0.53

)

$

(0.30

)

$

0.69

$

-

$

(0.13

)

Weighted average shares outstanding - Diluted

49,427

48,907

49,811

49,731

49,266

49,597

49,344

49,520

50,549

49,758

49,568

(1)

Adjusted EBITDA per diluted share may not add due to rounding.

(2)

The Q3-2024 non cash write-off of $1.6M was related to the former EVO Experience Center.

(3)

This was related to severance, consulting expenses and impairment on operating leases, machinery and equipment, leasehold improvements and internally developed software.

(4)

These are costs related to the merger with Alcon, which was terminated on January 6, 2026.

(5)

As previously disclosed, in December 2024 the Company shipped $27.5 million of ICLs to one of its distributors in China (the “December China Shipment”). The December China Shipment was subject to extended payment terms and was paid in full during Q3 FY25 pursuant to such payment terms. Cost of sales for the December China Shipment of $3.9 million was recognized upon shipment in Q4 FY24. Net sales for the December China Shipment were recognized as payments were received, with $1.6 million and $25.9 million of net sales recognized in Q2 FY25 and Q3 FY25, respectively, at 100% gross margin. If the cost of sales was recognized during the same period as the corresponding net sales, cost of sales related to the December China Shipment would have been $0.2 million and $3.7 million in Q2 FY25 and Q3 FY25, respectively.

Sales by Geography

(in 000's)

Unaudited

Fiscal Year

Three Months Ended

Sales by Region(1)

2023

2024

2025

December 27,

2024

March 28,

2025

June 27,

2025

September 26,

2025

January 2,

2026

Americas(2)

$

22,315

$

25,229

$

28,788

$

6,387

$

6,739

$

7,307

$

7,211

$

7,531

EMEA(3)

40,063

43,511

44,733

12,286

13,110

11,436

10,364

9,823

APAC(4)

260,037

245,161

165,921

30,277

22,740

25,577

77,157

40,447

Global Sales

$

322,415

$

313,901

$

239,442

$

48,950

$

42,589

$

44,320

$

94,732

$

57,801

Global Sales Growth

13

%

(3

)%

(24

)%

(36

)%

(45

)%

(55

)%

7

%

18

%

Americas Sales Growth

13

%

13

%

14

%

20

%

9

%

10

%

20

%

18

%

EMEA Sales Growth

(2

)%

9

%

3

%

7

%

16

%

11

%

8

%

(20

)%

APAC Sales Growth

16

%

(6

)%

(32

)%

(49

)%

(62

)%

(69

)%

6

%

34

%

Global ICL Unit Growth

19

%

(6

)%

(27

)%

(39

)%

(48

)%

(63

)%

9

%

15

%

Fiscal Year

Three Months Ended

Sales by Country(5)

2023

2024

2025

December 27, 2024

March 28, 2025

June 27, 2025

September 26, 2025

January 2, 2026

China

$

184,569

$

162,287

$

77,781

$

7,823

$

(877

)

$

5,299

$

55,833

$

17,526

Growth

25

%

(12

)%

(52

)%

(81

)%

(102

)%

(92

)%

6

%

124

%

Japan

$

38,468

$

41,841

$

45,265

$

10,963

$

11,395

$

10,915

$

11,226

$

11,729

Growth

(11

)%

9

%

8

%

10

%

9

%

10

%

7

%

7

%

South Korea

$

19,880

$

21,636

$

23,380

$

5,880

$

7,522

$

4,293

$

5,491

$

6,074

Growth

11

%

9

%

8

%

17

%

12

%

9

%

8

%

3

%

United States

$

17,221

$

19,896

$

22,558

$

4,881

$

5,459

$

5,635

$

5,632

$

5,832

Growth

17

%

16

%

13

%

17

%

11

%

4

%

20

%

19

%

Global Sales Ex China

$

137,846

$

151,614

$

161,661

$

41,127

$

43,466

$

39,021

$

38,899

$

40,275

Growth

1

%

10

%

7

%

14

%

12

%

10

%

8

%

(2

)%

Notes:

(1)

Certain adjustments have been reclassed from EMEA to APAC. Prior periods have changed to conform to the current presentation.

(2)

Americas includes the United States, Canada and Latin American countries.

(3)

EMEA includes Spain, Germany, United Kingdom, European, Middle East and Africa Distributors.

(4)

APAC includes China, Japan, South Korea, India and the rest of Asia Pacific distributors.

(5)

Sales by country includes countries representing more than 5% of total sales in the most recently completed fiscal year.

Constant Currency Sales

Constant Currency Sales

(in 000's)

Unaudited

Three Months Ended

Three Months Ended

As Reported

Constant Currency

Sales

January 2,
2026

Effect of
Currency

Constant
Currency

December 27,
2024

$ Change

% Change

$ Change

% Change

Total Sales

$

57,801

$

(702

)

$

57,099

$

48,950

$

8,851

18.1

%

$

8,149

16.6

%

Twelve Months Ended

Twelve Months Ended

As Reported

Constant Currency

Sales

January 2,
2026

Effect of
Currency

Constant
Currency

December 27,
2024

$ Change

% Change

$ Change

% Change

Total Sales

$

239,442

$

(1,992

)

$

237,450

$

313,901

$

(74,459

)

(23.7

)%

$

(76,451

)

(24.4

)%

View source version on businesswire.com: https://www.businesswire.com/news/home/20260303436397/en/
Investor/Media Contact:

Connie Johnson

cjohnson@staar.com

(626) 303-7902 (ext. 2207)

Asia Investor/Media Contact:

Niko Liu, CFA

nliu@staar.com

United States: (626) 303-7902 (ext. 3023)

Hong Kong: +852 6092-5076

ir@staar.com

Original: STAAR Surgical Reports Fourth Quarter and Fiscal Year 2025 Results

STAAR Surgical Reports Strong Second Quarter Financial Results
Total Sales of $18.2 Million Increased 14% from Q2 2012 / 20% Increase on Constant Currency Basis
Visian® ICL™ Sales Grew 31% to Record $11.3 Million
Visian ICL with CentraFLOW™ Technology Continues to Drive Growth
Company Increases Revenue Growth Metric for the Year
GAAP Net Income of $0.01 per share; Non-GAAP Adjusted Net Income of $0.05 per share

MONROVIA, Calif., July 31, 2013 /PRNewswire/ -- STAAR Surgical Company (STAA), a leading developer, manufacturer and marketer of minimally invasive ophthalmic products, today reported revenue for the second quarter ended June 28, 2013 of $18.2 million, which represented 14% growth compared to $15.9 million reported for the second quarter of 2012. The results included sales of $11.3 million of the Company's Visian ICL product portfolio and $5.9 million of its IOL products. In addition, low margin Other Product sales increased to $1.0 million. The effect of foreign currency exchange during the quarter versus prior year second quarter reduced total sales by $1.0 million. On a constant currency basis revenues grew 20% during the second quarter of 2013 compared to the second quarter of 2012.
"We delivered a second consecutive quarter of solid revenue growth with some very positive trends that we believe can be built on over the next several quarters," said Barry Caldwell, President and CEO. "In our focused major markets, our Visian ICL continues to gain share over LASIK. We have now successfully implanted over 20,000 ICLs with CentraFLOW and this technology continues to be a key growth driver. During June we received approval of the ICL with CentraFLOW in Argentina and Korea. The ICL with CentraFLOW launch events took place this month in Korea and also in India where we now expect to receive the final product approval during the third quarter. Based upon our experience in Europe, the wider approval range of the Visian ICL with CentraFLOW opens up the refractive market for increased market share gains."

"We saw good growth in ICL revenues from all three of our regions despite the continued downward pressure on LASIK," added Mr. Caldwell. "Our European region grew 47% during the quarter driven by the new CentraFLOW technology, productivity from our expanded sales team in the region and the shift to a direct selling model in Spain. Our Asia Pacific region grew Visian ICL sales by 29% which was driven by 77% growth in China. With the growth renewal in China during the quarter that market was our number one market in Visian ICL revenues. During the second half of this year the region will have the new CentraFLOW approvals in Korea and India to drive incremental growth. North America grew ICL revenues by 9%. The U.S. continues to show market share gains as revenue grew 10% while units increased 15% during the quarter. Our competitors promoting LASIK continue to profile the U.S. as a very challenging market for refractive procedures."

"We sold our first nanoFLEX™ Toric IOLs in Europe during the quarter with encouraging results. IOL growth overall continued to be negatively impacted by KS IOL product supply and the worsening value of the yen. The negative impact from the value of the yen on IOL sales was $827,000 during the quarter. We had to suspend delivery of our new KS IOL products to China until we have additional supply which is dependent on our third party supplier. This interruption in supply for China resulted in reduced sales of $810,000 as compared to second quarter of 2012 and $347,000 sequentially. Our backorders in Europe increased to $1.2 million at the end of the second quarter."

"Our manufacturing consolidation project remained basically on schedule as all IOLs and 21% of myopic ICLs through final inspection were manufactured in Monrovia during June. Throughout this three year process, supply and product quality have remained our priority. As a result of higher than expected demand for the Visian ICL during the first half of the year our ICL inventory levels in Switzerland have declined below our level of comfort. We need to build more ICL units during the second half for both the increased demand and inventory replenishment. In order to accomplish this we have decided to extend completion of our manufacturing consolidation initiative until the first half of 2014. By the end of December we expect to have two thirds of all myopic ICLs and one third of all TICLs manufactured in the U.S. as well as 100% of all IOL products. Production in Switzerland will continue into the first half of next year to build more robust inventory levels for our ICL products and we plan to begin a second shift in Monrovia at the end of August. We do not anticipate this slight shift will interfere with the planned use of all of the NOLs after consolidation," Mr. Caldwell continued.
"We remain focused on expanding our market share and gaining additional approvals for our technology in key markets. I am encouraged that we have executed so well against the plan we laid out at the start of this year. While we expect to have continued headwinds due to the yen valuation, as a result of our performance during the first half of the year, and the positive momentum going into the second half of the year, we are increasing our annual revenue growth metric from the original 8 to 10% to the 12 to 14% range," concluded Mr. Caldwell.

Gross profit margin for the quarter was 69.5% compared to 69.3% in the second quarter of 2012. The highest gross margin product, the Visian ICL, represented 62% of all revenue during the quarter. Gross margin expansion was limited primarily by a 23% sequential increase in very low margin IOL injector systems sales to a third party supplier for the buildup of their acrylic preloaded product supply, which appears in the Other Product sales category. These sales generated a gross margin considerably below the Company's Visian ICL and IOL product lines gross margins. Those differences accounted for a 150 basis point difference in the gross margin results during the quarter which would have otherwise been 71%.
Operating expenses for the second quarter of 2013 were $11.9 million, up 6.4% from the $11.2 million prior year period reflecting $613,000 in related charges associated with the Company's manufacturing consolidation project and a $293,000 increase in sales and marketing expenses driven by the additions to the Company's headcount throughout 2012. The effect of foreign currency exchange on overall operating expenses was a positive $505,000.

Income taxes increased to $599,000 during the second quarter of 2013 compared to $327,000 during the second quarter of 2012. The overall tax rate was 68.3% during the quarter and the estimated tax rate for 2013 has been increased to 45% due to the Company's decision to extend the completion date of its manufacturing consolidation project to focus on meeting near term demand. Additionally, the effective tax rate for the quarter was negatively impacted because under GAAP jurisdictions with losses are excluded from the calculation for interim reporting purposes.
GAAP net income for the second quarter of 2013 was $278,000, or $0.01 on a per diluted share basis, compared with net loss of $491,000, or $0.01 on a per diluted share basis, in the second quarter of 2012, a $769,000 improvement. Adjusted net income (excluding manufacturing consolidation expenses, gain (loss) on foreign currency transactions, fair value adjustment of warrants, and stock-based compensation expense) for the quarter ended June 28, 2013 was $1.8 million or $0.05 per diluted share versus adjusted net income for the year ago quarter of $1.2 million or $0.03 per diluted share. The reconciliation between GAAP and non-GAAP financial matters is provided with financial tables included with this release.

Cash and cash equivalents on June 28, 2013 totaled $19.7 million, compared to $19.2 million at the end of the first quarter of 2013. Cash generation from operations during the quarter was $788,000, which includes the use of $613,000 for the manufacturing consolidation project. The Company also used $799,000 for the purchase of property and equipment and generated $929,000 in proceeds from stock option exercises.

For the six month period ended June 28, 2013, sales increased to $36.2 million versus $31.5 million during the first half of 2012, a 15% increase in U.S. dollars and 21% increase in constant currency. Gross profit increased by 15%. Operating expenses increased $1.7 million or 7.6%, which included key investments of $1.5 million for the consolidation project ($262,000 above prior year) and incremental spending of $916,000 in sales and marketing. Operating income increased by $1.7 million during the six month period. Income taxes were $355,000 higher and the new medical device tax was $104,000. Net Income on a GAAP basis was $749,000 or $0.02 per diluted share and the non-GAAP adjusted net income increased to $5.0 million or $0.13 per diluted share basis as compared to $2.6 million or $0.07 per diluted share during the first half of 2012.

Recent Visian Implantable Collamer® Lens (ICL) Highlights
ICL sales represented 62.0% of total sales, compared to 54.0% of sales in Q2 2012.

ICL sales increased 31% to $11.3 million from $8.6 million in Q2 2012 reflecting a 27% increase in unit sales and a 3% increase in price.

Of total Visian ICLs the mix of TICLs was approximately 33% of units and 39% of dollars.

Overall sales in the Company's 11 key markets reflected a 33% increase in revenues and 28% increase in units.

Key regulatory approvals were obtained during the quarter:
Visian ICL with CentraFLOW was approved in Korea and Argentina.
Progress was made in India with approval of the CentraFLOW technology expected within the third quarter.

The Company has been told by the FDA that the current intent is to take the TICL to the Advisory Panel. A date has not been established and the Company is responding to questions from the FDA and preparing the information needed for the Panel Package necessary for that meeting to occur.

Regional ICL Updates

Europe, Middle East, Africa (EMEA)
Visian ICL revenues grew by 47% while units increased 30% and price increased 13%.

Europe increased 52% in revenue due to gains from the CentraFLOW technology, and new sales personnel hired in 2012.

Spain grew 127% driven by the conversion from a distributor sales model to a direct model which occurred at the end of second quarter 2012. This provided end customer pricing for the market. Visian ICL unit growth was 100% for the quarter. During the second quarter of 2012 the Company credited the past distributor for their inventory in the market.

Strong growth was also seen in France +41%, Italy +35% and the UK +107%.

The Middle East revenues grew 37% after a very strong first quarter with the release of the Visian ICL with CentraFLOW.
Latin America grew 39% in revenue. Approval of the ICL with CentraFLOW in Argentina allowed the first orders to be placed late in the quarter.

Asia Pacific (APAC)
APAC grew 29% in revenue while units increased 28% and price increased 1%.

China returned to more historical growth rates as revenues increased 77% while units increased 82%. The Company believes that the impact of the negative press on LASIK one year ago may now be subsiding.

Korea grew 7% as the distributor prepared for the first sales of the Visian CentraFLOW technology which was approved in late June with the official launch at the end of July.

Japan grew 12% in revenue with unit growth at 17% as revenue was negatively impacted by currency and price.

India grew 20% in revenue. Visian CentraFLOW was launched during a key meeting in early June and regulatory approval is expected during the third quarter.

North America (NA)
NA increased revenues by 9% while units increased 13% with a 3% decline in price.

Sales in the U.S. grew 10% while units grew 15% in a market with increasing evidence that LASIK procedures are declining or flat at best.

A major corporate provider of LASIK procedures reported their refractive procedures declined 10% in the U.S. during Q2 based upon their belief that new flexible spending account guidelines are having a negative impact on elective surgeries.

Recent Intraocular Lens (IOL) Highlights
Second quarter IOL sales were $5.9 million as compared to $6.8 million during the second quarter of 2012. The negative impact of foreign exchange was $827,000 for IOLs. Without the impact of foreign exchange, global IOL revenue would have declined by approximately 1% on a constant currency basis.

IOL gross margin declined from 60% in the second quarter of 2012 to 55% in the current quarter. This was driven primarily by the negative impact of foreign exchange as the preloaded silicone IOLs are cost based in U.S. dollars and primarily sold in yen. If not for this impact the gross margin would have remained at the 60% level for the quarter.

IOLs represented 32% of total sales in the second quarter of 2013, compared to 43% of total sales in the same period of the prior year.

The Company ended the quarter with approximately $1.2 million in backorders from European customers which is a 30% increase over the backorders at the end of the first quarter. The Company's supplier of acrylic IOLs has been unable to meet the high demand for the new KS IOL products, but is working to increase supply during the second half of the year.

IOL sales in Japan represented 57% of all IOL revenues and 45% of all IOL units. During the quarter there was a 15% increase in units as compared to the second quarter of 2012. Units during the quarter increased by 2% over the first quarter of this year yet revenue declined by 6% due to the weakening of the yen value. In U.S. dollars, this reflects a flat performance to the prior year though a 21% increase in constant currency.

Due to the lack of supply in the KS IOL products, the Company has suspended delivery of product to the China market. IOL revenues during the second quarter were $810,000 less than prior year and $347,000 less than the first quarter of this year.

Shipments of the nanoFLEX Toric IOL began late in the quarter to customers in Europe.

The newly enhanced nanoFLEX II IOLs were shipped along with the reading cards for the clinical trials which started during July. The protocol is designed to measure near and intermediate visual results as well as rotational stability.

Project Comet Update
The Company's manufacturing consolidation project continued to be basically on plan through the first half of the year. The Company has decided that due to the higher demand needs resulting from increased sales of the Visian ICL products and the expected Visian Preloaded V5 ICL approval for Europe, to extend the completion date for consolidation until the first half of 2014.
Validations were successfully completed for the Visian Toric ICLs as expected and the Company plans to ship the first TICLs from Monrovia during the third quarter.

Sterile IOLs began shipping from Monrovia to Japan during the quarter and the Company exited the quarter with all IOLs globally being manufactured in Monrovia.

Manufacturing consolidation expenses were $613,000, as compared to $697,000 reported in the second quarter of 2012. Costs associated with the wind down of manufacturing operations in Japan are expected to decrease in the second half of the year.

2013 Metrics- Revenue Growth Metric Increased; Manufacturing Consolidation Extended
The Company updated its metrics as follows and will continue to report and update on each of the 2013 metrics quarterly:
Total revenue growth in the range of 12 to 14%, up from an original metric of 8 to 10%.

Gross margin expansion by a minimum of 250 bps for the year.
Profitable on a GAAP basis each quarter.

Continuous quarterly progress toward the full implementation of manufacturing consolidation from Japan and Switzerland facilities to the U.S. The timetable for complete implementation of this program has been extended to the first half of 2014. During the month of December the Company expects to have 100% of all IOL production, two thirds of ICLs and one third of TICLs manufactured in the U.S.

Conference Call
The Company will host a conference call and video webcast today, July 31, 2013 at 4:30 p.m. Eastern / 1:30 p.m. Pacific to discuss the Company's second quarter 2013 financial results and recent corporate developments. The dial-in number for the conference call is 877-703-6105 for domestic participants and 857-244-7304 for international participants, both using a passcode 23510067.
The Company will also be using slides to illustrate its second quarter results and operational progress. The slides and live webcast of the call can be accessed from the investor relations section of the STAAR website at www.staar.com.

A taped replay of the conference call will also be available beginning approximately one hour after the call's conclusion and will be available for seven days. This replay can be accessed by dialing 888-286-8010 for domestic callers and 617-801-6888 for international callers, both using passcode 40120994. 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.

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 our results when reported in U.S. dollars. When preparing its financial statements in conformance with GAAP, the Company translates foreign currency sales and expenses denominated in Japanese yen to dollars at the weighted average of exchange rates in effect during the period. As a result, the Company's reported performance may be significantly affected by currency fluctuations. 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.

"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"): manufacturing consolidation expenses, Spain distribution transition expenses, gain or loss on foreign currency transactions, the fair value adjustment of outstanding warrants issued in 2007, and stock-based compensation expenses.

We believe that "Adjusted Net Income" is useful to investors in gauging the outcome of the key drivers of our business performance: our 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 we have control.

We have excluded manufacturing consolidation and Spain distribution transition expenses because these are non-recurring expenses and their inclusion may mask underlying trends in our business performance. Expenses associated with the Company's plans to consolidate its manufacturing operations to the U.S. are largely expected to be completed at the end of 2013 and the Spain distribution transition expenses were completed at the end of the first quarter of 2013.

We have excluded gains and losses on foreign currency transactions and the fair value adjustment of warrants 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 Statement of Financial Accounting Standards ("SFAS") No. 123R. In calculating Adjusted Net Income STAAR excludes these expenses and the fair value adjustment of outstanding warrants because they are non-cash expenses and because of the complexity and 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.

We have provided below a detailed reconciliation table, which is useful to investors in providing the context to understand our Adjusted Net Income and how it differs from Net Income calculated in accordance with GAAP.