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STAAR Surgical Reports Third Quarter Results
Date:10/30/2007

ter of 2006.

Total U.S. sales during the first nine months of 2007 were $14,991,000, down 12.2% compared with $17,080,000 in the same period of 2006. U.S. refractive sales during the first nine months of 2007 were $3,276,000, down 4.6% compared with the same period of 2006.

Gross profit margin for the third quarter increased 2.1% to 49.7% compared with 47.6% in the third quarter of 2006 driven by an increase in high margin refractive sales in the product mix. This increase was partially offset by higher inventory reserve expense and manufacturing engineering costs. Gross profit margin in the second quarter of 2007 was 48.5%.

Selling, general, and administrative expenses for the third quarter of 2007 were $10,387,000, up 15.1% from $9,027,000 in expenses reported for the third quarter of 2006.

General and administrative expenses for the third quarter of 2007 were $2,868,000, up 8.7% compared with $2,598,000 in expenses reported for the third quarter of 2006. The increase in general and administrative expenses was primarily due to increased international travel associated with increased oversight of foreign subsidiaries and increased bank charges associated with the termination of the Wells Fargo credit line.

Marketing and selling expenses for the third quarter of 2007 increased 13.5% to $5,775,000 compared with $5,090,000 in the third quarter of 2006. The increase for the quarter is primarily due to increased salaries and expenses due to global headcount increases, the unfavorable effect of currencies on expenses partially offset by decreased U.S. sales commissions.

Research and development expenses for the third quarter of 2007 increased 4.4% to $1,743,000 compared with $1,670,000 reported for the third quarter of 2006. The increase is due to increased salaries and benefits and severance costs associated with our recent restructuring.

Other expense for the third quarter of 2007 was $409,000 compared with income of $105,000 r
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SOURCE STAAR Surgical Company
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