STAAR Surgical Reports Strong Second Quarter Financial 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

PR Newswire

MONROVIA, Calif., July 31, 2013

MONROVIA, Calif., July 31, 2013 /PRNewswire/ --STAAR Surgical Company
(NASDAQ: 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

  oICL sales represented 62.0% of total sales, compared to 54.0% of sales in
    Q2 2012.
  oICL 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.
  oOf total Visian ICLs the mix of TICLs was approximately 33% of units and
    39% of dollars.
  oOverall sales in the Company's 11 key markets reflected a 33% increase in
    revenues and 28% increase in units.
  oKey regulatory approvals were obtained during the quarter:

       oVisian ICL with CentraFLOW was approved in Korea and Argentina.
       oProgress was made in India with approval of the CentraFLOW technology
         expected within the third quarter.

  oThe 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

Regional ICL Updates

Europe, Middle East, Africa (EMEA)

  oVisian ICL revenues grew by 47% while units increased 30% and price
    increased 13%.
  oEurope increased 52% in revenue due to gains from the CentraFLOW
    technology, and new sales personnel hired in 2012.

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

  oThe Middle East revenues grew 37% after a very strong first quarter with
    the release of the Visian ICL with CentraFLOW.
  oLatin 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)

  oAPAC grew 29% in revenue while units increased 28% and price increased 1%.
  oChina 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.
  oKorea 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.
  oJapan grew 12% in revenue with unit growth at 17% as revenue was
    negatively impacted by currency and price.
  oIndia grew 20% in revenue. Visian CentraFLOW was launched during a key
    meeting in early June and regulatory approval is expected during the third

North America (NA)

  oNA increased revenues by 9% while units increased 13% with a 3% decline in
  oSales 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.

       oA 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

  oSecond 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.
  oIOL 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.
  oIOLs 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.
  oThe 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
  oIOL 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.
  oDue 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.
  oShipments of the nanoFLEX Toric IOL began late in the quarter to customers
    in Europe.
  oThe 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

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

The Company updated its metrics as follows and will continue to report and
update on each of the 2013 metrics quarterly:

  oTotal revenue growth in the range of 12 to 14%, up from an original metric
    of 8 to 10%.
  oGross margin expansion by a minimum of 250 bps for the year.
  oProfitable on a GAAP basis each quarter.
  oContinuous 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

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

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

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

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.

About STAAR Surgical

STAAR, which has been dedicated solely to ophthalmic surgery for over 25
years, designs, develops, manufactures and markets implantable lenses for the
eye and delivery systems therefor. All of these lenses are foldable, which
permits the surgeon to insert them through a small incision. STAAR's lens
used in refractive surgery as an alternative to LASIK is called an Implantable
Collamer® Lens or "ICL." A lens used to replace the natural lens after
cataract surgery is called an intraocular lens or "IOL." Over 350,000 Visian
ICLs have been implanted to date; to learn more about the ICL go to: STAAR has approximately 300 full time employees and
markets lenses in over 60 countries. Headquartered in Monrovia, CA, it
manufactures in the following locations: Nidau, Switzerland; Ichikawa City,
Japan; Aliso Viejo, CA; and Monrovia, CA. For more information, please visit
the Company's website at or call 626-303-7902.

Collamer® is the registered trademark for STAAR's proprietary biocompatible
collagen copolymer lens material.

Safe Harbor

All statements in this press release that are not statements of historical
fact are forward-looking statements, including statements about any of the
following: any projections of earnings, revenue, sales, profit margins, cash,
effective tax rate or any other financial items; the plans, strategies, and
objectives of management for future operations or prospects for achieving such
plans; metrics for 2013; statements regarding new products, including but not
limited to, expectations for success of new products in the U.S. or
international markets or government approval of new products; future economic
conditions or size of market opportunities; expected IOL backorder position;
expected costs of Monrovia facility expansion; expected costs and savings from
business consolidation plans and the timetable for those plans; statements of
belief, including as to achieving 2013 growth plans or metrics; expected
regulatory activities and approvals, product launches, and any statements of
assumptions underlying any of the foregoing. Important additional factors
that could cause actual results to differ materially from those indicated by
such forward-looking statements are set forth in the company's Annual Report
on Form 10-K for the year ended December 28, 2012, 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."

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:
our limited capital resources and limited access to financing; the negative
effect of unstable global economic conditions on sales of products, especially
products such as the ICL used in non-reimbursed elective procedures; the
challenge of managing our foreign subsidiaries; backlog as we prepare for our
manufacturing facility consolidation; the risk of unfavorable changes in
currency exchange rate; the discretion of regulatory agencies to approve or
reject new products, or to require additional actions before approval;
unexpected costs or delays that could reduce or eliminate the expected
benefits of our consolidation plans; the risk that research and development
efforts will not be successful or may be delayed in delivering for launch; the
purchasing patterns of our distributors carrying inventory in the market; the
willingness of surgeons and patients to adopt a new product and procedure;
patterns of Visian ICL use that have typically limited our penetration of the
refractive procedure market, and a general decline in the demand for
refractive surgery particularly in the U.S. and the Asia Pacific region, which
STAAR believes has resulted from both concerns about the safety and
effectiveness of laser procedures and current economic conditions. The Visian
Toric ICL and the Visian ICL with CentraFLOW are not yet approved for sale in
the United States.

CONTACT: Investors                   Media
         EVC Group                   EVC Group
         Douglas Sherk, 415-652-9100 Chris Gale, 646-201-5431
         Leigh Salvo, 415-568-9348

STAAR Surgical Company
Condensed Consolidated Balance Sheets
(in 000's)
                                               June 28,   December 28,
ASSETS                                         2013       2012
Current assets:
Cash and cash equivalents                      $ 19,725   $    21,675
Accounts receivable trade, net                 10,342     8,543
Inventories, net                               11,123     11,673
Prepaids, deposits, and other current assets   2,624      2,183
 Total current assets                        43,814     44,074
Property, plant, and equipment, net            6,147      5,439
Intangible assets, net                         1,689      2,142
Goodwill                                       1,786      1,786
Deferred income taxes                          189        187
Other assets                                   1,041      1,131
 Total assets                                $ 54,666   $    54,759
Current liabilities:
Line of credit                                 $  5,100  $     5,850
Accounts payable                               3,809      5,129
Deferred income taxes                          440        439
Obligations under capital leases              525        829
Other current liabilities                      5,546      5,702
 Total current liabilities                   15,420     17,949
Obligations under capital leases              276        488
Deferred income taxes                          1,014      885
Asset retirement obligations                   386        707
Pension liability                              2,909      2,988
 Total liabilities                           20,005     23,017
Stockholders' equity:
Common stock                                   366        364
Additional paid-in capital                     165,327    162,251
Accumulated other comprehensive income         671        1,580
Accumulated deficit                            (131,703)  (132,453)
 Total stockholders' equity                  34,661     31,742
 Total liabilities and stockholders' equity  $ 54,666   $    54,759

STAAR Surgical Company
Condensed Consolidated Statements of Operations
(In 000's except for per share data)
                Three Months Ended                               Six Months Ended
                % of   June     % of   June     Fav (Unfav)      % of   June     % of   June     Fav (Unfav)
                       28,             29,                              28,             29,
                Sales  2013     Sales  2012     Amount  %        Sales  2013     Sales  2012     Amount   %
Net sales       100.0% $18,164  100.0% $15,942  $       13.9%    100.0% $36,165  100.0% $31,451  $ 4,714  15.0%
Cost of sales   30.5%  5,544    30.7%  4,897    (647)   -13.2%   30.1%  10,891   30.2%  9,504    (1,387)  -14.6%
Gross profit    69.5%  12,620   69.3%  11,045   1,575   14.3%    69.9%  25,274   69.8%  21,947   3,327    15.2%
general and
 General and   21.6%  3,923    22.7%  3,633    (290)   -8.0%    21.8%  7,881    23.8%  7,493    (388)    -5.2%
 Marketing     31.2%  5,659    33.7%  5,366    (293)   -5.5%    30.3%  10,945   31.9%  10,029   (916)    -9.1%
and selling
 Research and  9.3%   1,686    9.5%   1,513    (173)   -11.4%   8.4%   3,052    9.7%   3,059    7        0.2%
 Medical       0.2%   45       0.0%   0        (45)    -100.0%  0.3%   104      0.0%   0        (104)    -100.0%
device tax
general, and    62.3%  11,313   65.9%  10,512   (801)   -7.6%    60.8%  21,982   65.4%  20,581   (1,401)  -6.8%
general and     3.4%   613      4.4%   697      84      12.1%    4.2%   1,514    4.0%   1,252    (262)    -20.9%
general and     65.7%  11,926   70.3%  11,209   (717)   -6.4%    65.0%  23,496   69.4%  21,833   (1,663)  -7.6%
Operating       3.8%   694      -1.0%  (164)    858     523.2%   4.9%   1,778    0.4%   114      1,664    1459.6%
income (loss)
Other income
 Interest      0.0%   8        0.0%   7        1       14.3%    0.0%   15       0.0%   7        8        114.3%
 Interest      -0.2%  (41)     -0.4%  (67)     26      38.8%    -0.3%  (96)     -0.5%  (162)    66       40.7%
 Gain (loss)
on foreign      0.4%   77       -1.6%  (249)    326     130.9%   -0.7%  (264)    -0.6%  (182)    (82)     -45.1%
 Other         0.8%   139      1.9%   309      (170)   -55.0%   0.6%   230      1.7%   523      (293)    -56.0%
income, net
other income    1.0%   183      0.0%   0        183     100.0%   -0.3%  (115)    0.6%   186      (301)    -161.8%
(expense), net
Income (loss)
before          4.8%   877      -1.0%  (164)    1,041   634.8%   4.6%   1,663    1.0%   300      1,363    -454.3%
provision for
income taxes
Provision for   3.3%   599      2.2%   327      (272)   -83.2%   2.5%   914      1.9%   559      (355)    -63.5%
income taxes
Net income      1.5%   $      -3.1%  $       $      156.6%   2.1%   $      -0.8%  $       $ 1,008  389.2%
(loss)                278             (491)   769                     749             (259)
Net income             $              $                               $              $ 
(loss) per             0.01           (0.01)                           0.02           (0.01)
share - basic
Net income
(loss) per             $              $                               $              $ 
share -                0.01           (0.01)                           0.02           (0.01)
average shares         36,496          36,257                           36,461          36,164
outstanding -
average shares         38,342          36,257                           37,887          36,164
outstanding -

STAAR Surgical Company
Condensed Consolidated Statements of Cash Flows
(in 000's)
                                                         Six Months Ended
                                                         June 28,   June 29,
                                                         2013       2012
Cash flows from operating activities:
 Net income (loss)                                    $   749  $  (259)
 Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
        Depreciation of property and equipment           840        627
        Amortization of intangibles                      225        350
        Deferred income taxes                            129        82
        Fair value adjustment of warrant                 (27)       (207)
        Loss on disposal of property and equipment       59         31
        Stock-based compensation expense                 2,019      1,481
        Change in net pension liability                  57         136
        Accretion of asset retirement obligation         7          -
        Other                                            111        71
 Changes in working capital:
        Accounts receivable trade, net                   (2,229)    334
        Inventories                                      71         (344)
        Prepaids, deposits and other current assets      (507)      (138)
        Accounts payable                                 (1,123)    (1,089)
        Other current liabilities                        (25)       153
         Net cash provided by operating activities  356        1,228
Cash flows from investing activities:
        Acquisition of property and equipment            (2,017)    (833)
        Decrease in restricted cash, including           -          129
        reinvested interest
         Net cash used in investing activities      (2,017)    (704)
Cash flows from financing activities:
        Repayment of capital lease lines of credit       (478)      (438)
        Proceeds from exercise of stock options          952        950
         Net cash provided by financing activities  474        512
Effect of exchange rate changes on cash and cash         (763)      (74)
Increase (decrease) in cash and cash equivalents         (1,950)    962
Cash and cash equivalents, at beginning of the period    21,675     16,582
Cash and cash equivalents, at end of the period          $19,725    $17,544

STAAR Surgical Company
Global Sales
(in 000's)
              Three Months Ended                      Year Ended
                     June           June     %               June           June     %
                     28,            29,      Change          28,            29,      Change
Geographic           2013           2012     Fav             2013           2012     Fav
Sales                                        (Unfav)                                 (Unfav)
United States 17.4%  $      20.2%  $       -1.9%    17.7%  $      20.3%  $       0.1%
                     3,154          3,216                    6,394          6,390
Japan         25.6%  4,648   25.7%  4,094    13.5%    25.9%  9,387   25.3%  7,951    18.1%
Korea         10.1%  1,834   10.8%  1,721    6.6%     10.7%  3,869   11.5%  3,624    6.8%
China         12.3%  2,230   13.4%  2,141    4.2%     11.9%  4,301   13.5%  4,247    1.3%
Spain         6.4%   1,163   3.3%   531      119.0%   6.8%   2,454   3.3%   1,041    135.7%
Other         28.2%  5,135   26.6%  4,239    21.1%    27.0%  9,760   26.1%  8,198    19.1%
International 82.6%  15,010  79.8%  12,726   17.9%    82.3%  29,771  79.7%  25,061   18.8%
 Total     100.0% $       100.0% $        13.9%    100.0% $       100.0% $        15.0%
Sales                18,164        15,942                  36,165        31,451
Product Sales
 ICLs      62.0%  $       54.0%  $       30.9%    60.5%  $       54.7%  $        27.2%
                     11,261        8,606                    21,892        17,211
 IOLs      32.3%  5,863   42.5%  6,774    -13.4%   33.8%  12,211  41.8%  13,132   -7.0%
 Total core  94.3%  17,124  96.5%  15,380   11.3%    94.3%  34,103  96.5%  30,343   12.4%
 Other     5.7%   1,040   3.5%   562      85.1%    5.7%   2,062   3.5%   1,108    86.1%
 Total     100.0% $       100.0% $        13.9%    100.0% $       100.0% $        15.0%
Sales                18,164        15,942                  36,165        31,451

STAAR Surgical Company
Reconciliation of Non-GAAP Financial Measure
(in 000's)
Unaudited                           Three Months Ended     Six Months Ended
                                    June 28,   June 29,    June 28,  June 29,
                                    2013       2012        2013      2012
Net income (loss) - (as reported)   $  278   $  (491)   $  749  $  (259)
 Manufacturing consolidation       613        697         1,514     $ 1,252
 Spain distribution transition     -          173         442       $  173
 Foreign currency impact           (77)       249         264       $  182
 Fair value adjustment of          -          (222)       (27)      $  (207)
 Stock-based compensation expense  985        794         2,019     $ 1,481
Net income - (adjusted)             $ 1,799   $ 1,200    $ 4,961  $ 2,622
Net income (loss) per share, basic  $  0.01   $ (0.01)   $  0.02  $ (0.01)
- (as reported)
 Manufacturing consolidation       $  0.02   $  0.02    $  0.04  $  0.03
 Spain distribution transition     $    - $  0.00    $  0.01  $  0.00
 Foreign currency impact           $ (0.00)  $  0.01    $  0.01  $  0.01
 Fair value adjustment of          $    - $ (0.01)   $ (0.00) $ (0.01)
 Stock-based compensation expense  $  0.03   $  0.02    $  0.06  $  0.04
Net income per share, basic -       $  0.05   $  0.03    $  0.14  $  0.07
Net income (loss) per share,        $  0.01   $ (0.01)   $  0.02  $ (0.01)
diluted - (as reported)
 Manufacturing consolidation       $  0.02   $    -  $  0.04  $  0.03
 Spain distribution transition     $    - $  0.02    $  0.01  $  0.00
 Foreign currency impact           $ (0.00)  $  0.00    $  0.01  $  0.00
 Fair value adjustment of          $    - $  0.01    $ (0.00) $ (0.01)
 Stock-based compensation expense  $  0.03   $ (0.01)   $  0.05  $  0.04
Net income per share, diluted -     $  0.05   $  0.03    $  0.13  $  0.07
Weighted average shares             36,496     36,257      36,461    36,164
outstanding - Basic
Weighted average shares             38,342     38,369      37,887    38,406
outstanding - Diluted
Note: Net income per share (adjusted), basic and diluted, may not add up due
to rounding

STAAR Surgical Company
Reconciliation of Non-GAAP Financial Measure
Constant Currency Sales
(in 000's)
        Three Months Ended
        June    Effect    Constant  June     As Reported    Constant
        28,     of                    29,                       Currency
        2013    Currency Currency  2012     $      %       $      %
                                                Change Change  Change Change
ICL   $    $      $  11,302  $        $     31%      $     31%
        11,261 41                     8,606   2,655            2,696
IOL   5,863   827        6,690       6,774    (911)   -13%     (84)    -1%
Other 1,040   143        1,183       562      478     85%      621     110%
Total  $    $        $  19,175  $15,942  $     14%      $     20%
Sales  18,164 1,011                           2,222            3,233
        Six Months Ended
        June    Effect    Constant  June     As Reported    Constant
        28,     of                    29,                       Currency
        2013    Currency Currency  2012     $      %       $      %
                                                Change Change  Change Change
ICL   $    $      $  21,966  $17,211  $     27%      $     28%
        21,892 74                              4,681            4,755
IOL   12,211  1,473      13,684      13,132   (921)   -7%      552     4%
Other 2,062   213        2,275       1,108    954     86%      1,167   105%
Total  $    $        $  37,925  $31,451  $     15%      $     21%
Sales  36,165 1,760                           4,714            6,474

SOURCE STAAR Surgical Company

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