STAAR Surgical Reports Fourth Quarter

STAAR Surgical Reports Fourth Quarter

MONROVIA, CA, March 2, 2017-STAAR Surgical Company

(NASDAQ: STAA), a leading developer, manufacturer and marketer of implantable lenses and companion delivery systems for the eye

today reported financial results for the fourth quarter ended December 30, 2016.

Fourth Quarter 2016 Overview

Full Year 2016 Overview

"We delivered solid fourth quarter performance

that included record quarterly sales for STAAR, record quarterly ICL sales and units and gross margin improvement of

1.4 points as compared to prior year fourth quarter," said Caren Mason, President and CEO. "The 2016 investments

in the clinical, quality, regulatory, research and development, marketing and operations headcount and programs resulted

in appreciable progress toward the achievement of three year transformational goals targeted for completion in

2017. Significantly, we ended the year having completed remediation and quality system internal commitments due in 2016 in

response to past FDA observations. We expect that in 2017, we will complete this work and remediation expense should be

reduced while the upgrade and increase in number of dedicated quality personnel, new quality management software system

implementation and continual process management and improvements will remain as an integral base business expense. As we

enter the third year of our three-year transformation, we again expect double digit ICL unit growth and expanding gross

margins as compared with year-end 2016. We will continue to increase our investments in clinical affairs, corporate

infrastructure, sales and marketing and research and development. Total operating expenses may trend higher in

2017 as we achieve the base business spending level to fortify the business and prepare for growth. Also of note, our

first-in-man clinical trial for the next generation ICL with EDOF continued in the fourth quarter and the results continue to

be positive. Our goal is to introduce this upgraded lens in 2017," added Ms. Mason.

Net sales were $22.1 million for the fourth quarter of 2016,

up 6% compared to $20.9 million reported in the prior year quarter. The sales increase was driven by ICL revenue and unit growth

of 11% and 10%, respectively. Sales of injector parts grew by 2% with IOL revenue flat compared to the prior year quarter. For

the full year, ICL revenue and units increased 15% and 11%, respectively.

For the fourth quarter of 2016, gross profit margin was 71.7%

compared to the prior year period of 70.3%. An increased mix of higher margin ICL units and lower inventory reserves drove the

margin improvement of 1.4 points.

Operating expenses for the quarter decreased $0.1 million to

$14.6 million compared to the prior year quarter. General and administrative expense was $3.9 million, $1.0 million lower than

the prior year quarter primarily due to lower compensation costs. Marketing and selling expense was $6.4 million, $0.6 million

higher than the prior year quarter primarily due to international selling and promotional costs. Research and development expense

was $4.3 million, $0.3 million higher than the prior year quarter due to investments in project-related spending and quality system

improvements, partially offset by lower clinical and FDA remediation expenses. Remediation expense for the quarter was on budget.

The net loss for the fourth quarter of 2016 was $0.2 million

or approximately breakeven per share compared with a net loss of $0.8 million or $0.02 per share for the prior year quarter.

The adjusted net income for the fourth quarter of 2016 was $0.8

million or $0.02 per diluted share, compared with an adjusted net income of $0.5 million or $0.01 per diluted share for the prior

year quarter. The reconciliation between GAAP and non-GAAP financial information is provided in the financial tables included with

Cash and cash equivalents at December 30, 2016 totaled $14.0

million, compared to $13.4 million at the end of the fourth quarter of 2015 and $14.3 million at the end of the third quarter of

2016. Continued focus on optimizing the Company's cash position through revenue growth, expense mitigation, working capital

management, and equipment leasing generated an increase in cash of $0.7 million, offset by the effect of exchange rate changes

on cash and cash equivalents of $1.0 million. The Company generated $1.0 million in cash from operating activities during the year.

The Company will host a conference

call and webcast on Thursday, March 2, 2017 at 4:30 p.m. Eastern / 1:30 p.m. Pacific to discuss its financial results and operational

progress. To access the conference call (Conference ID 73119606), please dial 855-765-5684

for domestic participants and 262-912-6252 for international participants. The live webcast can be accessed from the investor relations

section of the STAAR website at www.staar.com.

A taped replay of the conference

call (Conference ID 73119606) will be available beginning approximately one hour after the

call's conclusion for seven days. This replay can be accessed by dialing 855-859-2056 for domestic callers and 404-537-3406

for international callers. An archived webcast will also be available at www.staar.com.

Use of Non-GAAP Financial Measures

This press release includes supplemental non-GAAP financial

information, which STAAR believes investors will find helpful in understanding its operating performance.

"Adjusted Net Income (or Loss)"

excludes the following items that are included in "Net Income (or Loss)" as calculated in accordance with U.S. generally

accepted accounting principles ("GAAP"): gain or loss on foreign currency transactions, stock-based compensation expenses,

and quality remediation expenses.

Management believes that "Adjusted Net Income (or Loss)"

and "Adjusted Net Income (or Loss) Per Share are useful to investors in gauging the outcome of the key drivers of the business

performance: the ability to increase sales revenue and our ability to increase profit margin by improving the mix of high value

products while reducing the costs over which management has control.

Management has excluded quality remediation expenses because

their inclusion may mask underlying trends in our business performance.

Management has also excluded gains and losses on foreign currency

transactions because of the significant fluctuations that can result from period to period as a result of market driven factors.

Stock-based compensation expenses consist of expenses for stock

options and restricted stock under the Financial Accounting Standards Board's Accounting Standards Codification (ASC) 718.

In calculating Adjusted Net Income (or Loss) STAAR excludes these expenses 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.

About STAAR Surgical

STAAR, which has been dedicated solely to ophthalmic surgery

for over 30 years, designs, develops, manufactures and markets implantable lenses for the eye with companion delivery systems.

These lenses are intended to provide visual freedom for patients, lessening or eliminating the reliance on glasses or contact lenses.

All of these lenses are foldable, which permits the surgeon to insert them through a small incision. STAAR's lens used in

refractive surgery is called an Implantable Collamer Lens or "ICL". More than 670,000 Visian ICLs have been implanted

to date. To learn more about the ICL go to: www.discovericl.com. STAAR has approximately 336 full-time equivalent employees

and markets lenses in over 60 countries. Headquartered in Monrovia, CA, the company operates manufacturing facilities in Aliso

Viejo, CA and Monrovia, CA. For more information, please visit the Company's website at www.staar.com.

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 financial projections,

including those relating to the plans, strategies, and objectives of management for future operations or prospects for achieving

such plans, expectations for sales, marketing and clinical initiatives, remediation or other expense, success and timing of new

or improved products, investment imperatives, 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 30, 2016 under the caption "Risk Factors,"

which is on file with the Securities and Exchange Commission and available in the "Investor Information" section of

the company's website under the heading "SEC Filings." We disclaim any intention or obligation to update or revise

any financial projections or forward-looking statement due to new information or events.

These statements are based on expectations and assumptions as

of the date of this press release and are subject to numerous risks and uncertainties, which could cause actual results to differ

materially from those described in the forward-looking statements. The risks and uncertainties include the following: 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; changes in currency exchange rates; the discretion

of regulatory agencies to approve or reject existing, new or improved products, or to require additional actions before approval

(including but not limited to FDA requirements regarding the Visian Toric ICL and/or actions related to the FDA Warning Letter

and Form FDA-483s), or to take enforcement action; research and development efforts may not be successful or may be delayed in