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Staar Surgical Co. reported first quarter revenue of $42.6 million, down 45%, as the local maker of implantable lenses faced weak demand in China.
Sales in China, by far its largest market, were $389,000 compared to $38.5 million in the same quarter a year ago. The company attributed the drop to its two distributors consuming their existing inventories.
It was the Lake Forest-based company’s first earnings under new chief executive Stephen Farrell, who was lead independent director before taking over from Tom Frinzi on Feb. 26.
“Staar’s first quarter sales were in line with expectations, but we can and will do better,” Farrell said in a May 7th statement.
The company withdrew its 2025 outlook, citing “global economic uncertainty and evolving tariff policies” (Nasdaq: STAA).
As part of its strategy to entice investors, Staar’s board of directors recently authorized a $30 million buyback of its common stock.
“We believe our shares represent an attractive investment, and this repurchase program demonstrates our belief in the intrinsic value of STAAR shares,” Farrell said.
The share repurchase will be funded by cash on hand and cash generated from operations. Staar had $222.8 million in cash, cash equivalents and investments as of March 28.
Shares in Staar rose 5% to $19.25 and a market cap of $954 million following news of the buyback. The shares almost reached $50 each a year ago.
Tariff Mitigation Strategies
Staar is on track to achieving “normalized sales” in China by the third quarter, according to Farrell.
The company said it’s actively working with its two distributors in China to better forecast demand to reduce excess inventory.
Regarding tariff concerns, Staar said it negotiated consignment agreements with these distributors and delivered consigned inventory in advance of the tariffs being implemented. The company also mentioned that it’s taking steps to ramp up production at its Switzerland site to further mitigate potential impacts of the China tariffs.
Five days after Staar announced first quarter earnings, the U.S. and China reached on May 12 a 90-day truce on tariffs. The U.S. slashed its tariff on Chinese imports from 145% to 30%. China, in turn, lowered its tariff on U.S. goods from 125% to 10%.
Recent Board Changes
The company in April made changes to its board of directors.
It appointed Louis Silverman to the board, who previously served as a board member and chairman from 2014 to 2022.
“Lou’s healthcare leadership experience, financial and operating rigor, and his knowledge of Staar will serve our Board well,” Farrell said. “I welcome him back, and I look forward to working with him again as we focus on improving our cost structure and returning Staar to growth.”
Silverman is chairman and CEO of virtual intensive care unit services provider Hicuity Health, formerly Advanced ICU Care, in St. Louis, Missouri. He serves on the boards of three other healthcare companies including Irvine-based cancer test maker Oncocyte Corp. (NYSE: OCX).
Additionally, the company announced that Aimee Weisner, who has served as director since 2022, has decided not to run for re-election to the board when her term expires at the company’s annual shareholder meeting in June.
Wei Jiang, another board director, has also agreed to take on a short-term advisory role in the company’s Asia Pacific business.