STAAR Surgical Reports Third Quarter

STAAR Surgical Reports Third Quarter

MONROVIA, CA, November 3, 2016-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 third quarter ended September 30, 2016.

Third Quarter 2016 Overview

"We delivered another successive record

quarter for ICL units sold and signed two additional Strategic Cooperation Agreements during the quarter" said Caren

Mason, President and CEO. "In addition, we have finalized the initial clinical design of our new extended depth of field

EVO+ Visian ICL posterior chamber phakic lens and the initial clinical results are positive. The EVO and EVO+ ICL lenses are made

of Collamer , our proprietary highly biocompatible material that allows for long-term implantation. As patients age, they begin

to lose near and then intermediate vision due to presbyopia, a long-term, natural progressive loss of accommodation experienced

by all people," added Ms. Mason. "These lenses are designed to provide good vision for patients of all ages and prescriptions

within our approved ranges while potentially extending by many years the period of time before reading glasses are required,"

said Vice President of Research and Development, Keith Holliday Ph.D. "Hyperopic [far-sighted] patients may benefit most

from an extended depth of field as such patients suffer from the effects of presbyopia soonest. Subtle changes have been made to

the optical surfaces of our EVO+ lens design to modify the hyperfocal distance of an eye implanted with the lens. This leads to

an increase in the depth of field for the patient. As the lens is implanted between the cornea and the crystalline lens it works

together with the crystalline lens without having to surgically alter the cornea," added Dr. Holliday.

Net sales were $20.1 million for the third quarter of 2016,

up 7% compared to $18.8 million reported in the prior year quarter. The sales increase was driven by ICL revenue and unit growth

of 15% each, and IOL revenue growth of 6%. These increases were partially offset by planned lower sales of injector parts in the

third quarter and a delay in orders from Canadian surgeons awaiting EVO Toric lens approval, which occurred on September 21, 2016.

For the first nine months of 2016, ICL revenue and units increased 16% and 11%, respectively.

For the third quarter of 2016, gross profit margin was 74.2%

compared to the prior year period of 68.3%. An increased mix of higher margin ICL units, lower ICL unit costs, higher average selling

prices, and lower inventory reserves combined to improve gross margin by approximately 5.9 points.

Operating expenses for the quarter increased $1.8 million to

$16.6 million compared to the prior year quarter primarily due to costs related to quality system improvements and investments

made in the international selling and marketing organizations. General and administrative expense was $5.0 million and the change

from the prior year quarter was not material. Marketing and selling expense was $7.1 million, $0.9 million higher than the prior

year quarter due to the re-branding efforts and international selling and promotional costs. Research and development expense was

$4.5 million, an increase of $0.8 million due to investments in quality system improvements, clinical affairs, and project-related

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

The net loss for the third quarter of 2016 was $1.8 million

or $0.04 per share compared with a net loss of $1.8 million or $0.04 per share for the prior year quarter.

The adjusted net loss for the third quarter of 2016 was $0.9

million or $0.02 per share, compared with an adjusted net loss of approximately breakeven and breakeven per 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 September 30, 2016 totaled $14.3

million, compared to $16.1 million at the end of the third quarter of 2015 and $12.7 million at the end of the second quarter of

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

management, and equipment leasing generated the increase in cash from the second quarter of 2016 to the third quarter of 2016.

The Company has generated $0.9 million in cash from operating activities during the first nine months of the year.

The Company will host a conference call and webcast on Thursday,

November 3 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 97993546), 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 97993546)

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

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 600,000 Visian ICLs have

been implanted to date. To learn more about the ICL go to: www.discovericl.com. STAAR has approximately 360 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, 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 January 1,

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

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

delivering products for launch or may exceed anticipated costs; the purchasing patterns of our distributors carrying inventory

in the market; the willingness of surgeons and patients to adopt a new or improved product and procedure; and patterns of Visian

ICL use that have typically limited our penetration of the refractive procedure market. The Visian Toric ICL and the Visian ICL

with CentraFLOW, now known as EVO Visian ICL, are not yet approved for sale in the United States.