# STAAR SURGICAL CO (STAA)

Informational only - not investment advice.

CIK: 0000718937
SIC: 3851 Ophthalmic Goods
SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 38](/major-group/38/) > [SIC 3851 Ophthalmic Goods](/industry/3851/)
Latest 10-K filed: 2026-03-03
SEC page: https://www.sec.gov/edgar/browse/?CIK=718937
Filing source: https://www.sec.gov/Archives/edgar/data/718937/000071893726000004/staa-20260102.htm

## At a glance

FY2025 · period end 2026-01-02 · filed 2026-03-03 · accession 0000718937-26-000004 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000718937.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 239,442,000 USD | 2025 | verified |
| Net income | -80,448,000 USD | 2025 | verified |
| Assets | 451,678,000 USD | 2025 | verified |
| Free cash flow | -40,050,000 USD | 2025 | computed |
| Net margin | -33.60% | 2025 | computed |
| Operating margin | -38.30% | 2025 | computed |
| Revenue YoY | -23.72% | 2025 | computed |
| ROE | -23.37% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

No market price, no rating, no forecast on this site. Not investment advice.

### Peer percentile fingerprint

| Ratio | STAA | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | -33.6% | 3.1% | 18 | 148 |
| Operating margin | -38.3% | 6.4% | 17 | 145 |
| Revenue growth | -23.7% | 8.3% | 2 | 153 |
| FCF margin | -16.7% | 7.4% | 19 | 152 |
| ROE | -23.4% | 2.4% | 26 | 145 |
| ROA | -17.8% | 1.1% | 24 | 154 |
| Liabilities / equity | 0.31 | 0.82 | 16 | 150 |
| Current ratio | 4.55 | 2.81 | 73 | 153 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC major-group 38 SIC Major Group 38, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 239442000 | USD | 2025 | 2026-03-03 |
| Net income | -80448000 | USD | 2025 | 2026-03-03 |
| Assets | 451678000 | USD | 2025 | 2026-03-03 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-03. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000718937.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 82,432,000 | 90,611,000 | 123,954,000 | 150,185,000 | 163,460,000 | 230,472,000 | 239,442,000 | 322,415,000 | 313,901,000 | 239,442,000 |
| Net income | -12,129,000 | -2,139,000 | 4,968,000 | 14,048,000 | 5,913,000 | 27,511,000 | 39,665,000 | 21,347,000 | -20,208,000 | -80,448,000 |
| Operating income | -12,655,000 | -3,631,000 | 6,595,000 | 11,852,000 | 6,769,000 | 33,339,000 | 43,802,000 | 28,097,000 | -12,611,000 | -91,713,000 |
| Gross profit | 58,369,000 | 64,280,000 | 91,510,000 | 111,954,000 | 118,362,000 | 178,637,000 | 223,383,000 | 252,651,000 | 239,582,000 | 182,420,000 |
| Diluted EPS | -0.30 | -0.05 | 0.11 | 0.30 | 0.12 | 0.56 | 0.80 | 0.43 | -0.41 | -1.62 |
| Operating cash flow | 1,049,000 | 2,853,000 | 12,767,000 | 25,795,000 | 20,951,000 | 43,962,000 | 35,715,000 | 14,594,000 | 15,725,000 | -34,230,000 |
| Capital expenditures | 3,205,000 | 1,046,000 | 2,245,000 | 10,095,000 | 8,404,000 | 13,645,000 | 18,108,000 | 18,188,000 | 23,394,000 | 5,820,000 |
| Share buybacks |  |  |  |  |  |  |  |  |  | 6,461,000 |
| Assets | 65,477,000 | 67,932,000 | 167,339,000 | 207,523,000 | 257,416,000 | 345,778,000 | 418,818,000 | 488,692,000 | 509,524,000 | 451,678,000 |
| Liabilities | 27,572,000 | 24,996,000 | 34,913,000 | 47,639,000 | 60,194,000 | 87,220,000 | 82,706,000 | 102,738,000 | 112,189,000 | 107,494,000 |
| Stockholders' equity | 37,905,000 | 42,936,000 | 132,426,000 | 159,884,000 | 197,222,000 | 261,568,000 | 336,112,000 | 385,954,000 | 397,335,000 | 344,184,000 |
| Cash and cash equivalents | 13,999,000 | 18,520,000 | 103,877,000 | 119,968,000 | 152,453,000 | 199,706,000 | 86,480,000 | 183,038,000 | 144,159,000 | 153,150,000 |
| Free cash flow | -2,156,000 | 1,807,000 | 10,522,000 | 15,700,000 | 12,547,000 | 30,317,000 | 17,607,000 | -3,594,000 | -7,669,000 | -40,050,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | -14.71% | -2.36% | 4.01% | 9.35% | 3.62% | 11.94% | 16.57% | 6.62% | -6.44% | -33.60% |
| Operating margin | -15.35% | -4.01% | 5.32% | 7.89% | 4.14% | 14.47% | 18.29% | 8.71% | -4.02% | -38.30% |
| Return on equity | -32.00% | -4.98% | 3.75% | 8.79% | 3.00% | 10.52% | 11.80% | 5.53% | -5.09% | -23.37% |
| Return on assets | -18.52% | -3.15% | 2.97% | 6.77% | 2.30% | 7.96% | 9.47% | 4.37% | -3.97% | -17.81% |
| Liabilities / equity | 0.73 | 0.58 | 0.26 | 0.30 | 0.31 | 0.33 | 0.25 | 0.27 | 0.28 | 0.31 |
| Current ratio | 2.35 | 2.82 | 5.47 | 5.07 | 5.25 | 5.56 | 6.03 | 5.62 | 5.23 | 4.55 |

## As-reported value updates

4 tracked differences above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period.

Ledger: /company/STAA/revisions/


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000718937.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q2 | 2022-07-01 |  |  | 0.26 | reported discrete quarter |
| 2022-Q3 | 2022-09-30 |  |  | 0.21 | reported discrete quarter |
| 2023-Q1 | 2023-06-30 |  |  | 0.12 | reported discrete quarter |
| 2023-Q3 | 2023-09-29 | 80,308,000 | 4,817,000 | 0.10 | reported discrete quarter |
| 2023-Q4 | 2023-12-29 | 76,273,000 | 7,756,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-29 | 77,356,000 | -3,339,000 | -0.07 | reported discrete quarter |
| 2024-Q2 | 2024-06-28 | 99,005,000 | 7,379,000 | 0.15 | reported discrete quarter |
| 2024-Q3 | 2024-09-27 | 88,590,000 | 9,980,000 | 0.20 | reported discrete quarter |
| 2024-Q4 | 2024-12-27 | 48,950,000 | -34,228,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-28 | 42,589,000 | -54,211,000 | -1.10 | reported discrete quarter |
| 2025-Q2 | 2025-06-27 | 44,320,000 | -16,812,000 | -0.34 | reported discrete quarter |
| 2025-Q3 | 2025-09-26 | 94,732,000 | 8,884,000 | 0.18 | reported discrete quarter |
| 2025-Q4 | 2026-01-02 | 57,801,000 | -18,309,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-04-03 | 93,522,000 | 5,206,000 | 0.10 | reported discrete quarter |
| 2026-Q2 | 2026-07-03 | 93,535,000 | 8,058,000 | 0.16 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from STAA's latest 10-K: [/company/STAA/business/](/company/STAA/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from STAA's latest 10-K: [/company/STAA/risk-factors/](/company/STAA/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/718937/000071893726000037/staa-20260703.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-08-12
Report date: 2026-07-03

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Special Note Regarding Forward-Looking Statements

The matters addressed in this Item 2 that are not historical information constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and the Private Securities Litigation Reform Act of 1995, and is subject to the safe harbor created therein. In some cases readers can recognize forward-looking statements by the use of words like “anticipate,” “estimate,” “expect,” “project,” “intend,” “may,” “plan,” “believe,” “will,” “should,” “could,” “forecast,” “potential,” “continue,” “ongoing” (or the negative of those words and similar words or expressions), although not all forward-looking statements contain these words. Forward-looking statements include, without limitation, statements regarding the intent, belief or current expectations of the Company and its management regarding any of the following: demand for our Implantable Collamer® Lenses; the benefits of our leadership realignment and related efforts; the timing of and our ability to manufacture and supply 100% of EVO and EVO+ ICLs for China from Switzerland; China macroeconomic conditions, procedure volumes, demand, and inventory levels; any projections of or guidance as to future earnings, revenue, sales, profit margins, expense rate, cash, effective tax rate, product mix, capital expense or any other financial items; the plans, strategies, and objectives of management for future operations or prospects for achieving such plans; potential outcomes and timing of the Company’s enterprise resource planning implementation; statements regarding new, existing, or improved products, including but not limited to, expectations for success of new, existing, and improved products in the U.S. or international markets or government approval of new or improved products; commercialization of new or improved products; future economic conditions or size of market opportunities globally; expected costs of operations; statements of belief, including as to achieving business plans for 2026 and beyond; expected regulatory activities and approvals, product launches, and any statements of assumptions underlying any of the foregoing.

Although we believe that the expectations reflected in these forward-looking statements are reasonable, we caution investors and prospective investors that any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties, assumptions and other factors, which if they do not materialize or prove correct, could cause actual results to differ materially from those expressed or implied by such forward-looking statements. We caution you not to place undue reliance on these forward-looking statements and to note they speak only as of the date hereof. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, without limitation, our ability to grow and generate profit; our reliance on independent distributors in international markets; a slowdown or disruption to the Chinese economy; global economic conditions; disruptions in our supply chain; fluctuations in foreign currency exchange rates; international trade disputes (including involving tariffs) and substantial dependence on demand from Asia; changes in effective tax rate or tax laws; any loss of use of our principal manufacturing facility; competition; potential losses due to product liability claims; our exposure to environmental liability; data corruption, cyber-based attacks or network security breaches and/or noncompliance with data protection and privacy regulations; acquisitions of new technologies; climate changes; the willingness of surgeons and patients to adopt a new or improved product and procedure; extensive clinical trials and resources devoted to research and development; compliance with government regulations; legal proceedings, claims and regulatory actions; the discretion of regulatory agencies to approve or reject existing, new or improved products, or to require additional actions before or after approval, or to take enforcement action; laws pertaining to healthcare fraud and abuse; changes in FDA or international regulations related to product approval; product recalls or failures; and other important factors, including those described in our Annual Report on Form 10-K in “Item 1A. Risk Factors” filed on March 3, 2026.

We disclaim any intention or obligation to update or review these financial projections or forward-looking statements due to new information or other events except as required by law.

The following discussion should be read in conjunction with the Company’s unaudited Condensed Consolidated Financial Statements, including the related notes, provided in this report.

We intend to use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included on our website in the ‘Investor Relations’ sections. Accordingly, investors should monitor such portions of our website, in addition to following our press releases, SEC filings and public conference calls and webcasts.

Overview

STAAR Surgical Company designs, develops, manufactures, and sells implantable lenses for the eye and accessory delivery systems used to deliver the lenses into the eye. We are the leading manufacturer of phakic implantable lenses used worldwide in corrective or “refractive” surgery. We have been dedicated solely to ophthalmic surgery for over 40 years. Our goal is to position our refractive lenses throughout the world as primary and premium solutions for patients seeking visual freedom from wearing eyeglasses or contact lenses while achieving excellent visual acuity through refractive vision correction.

20

We generate worldwide revenue almost exclusively from sales of our Implantable Collamer® Lenses, or “ICLs.” Our ICLs are made from Collamer, which is a proprietary collagen copolymer material created and exclusively used by STAAR to make our lenses soft, flexible and biocompatible with the eye. Our ICLs are phakic lenses, meaning that they are implanted into the eye without removing the eye’s natural crystalline lens. This distinguishes an ICL procedure from other refractive procedures, as it does not involve the removal of corneal eye tissue. All of our ICLs are foldable, which allows the surgeon to insert them into the eye through a small incision during minimally invasive surgery. Further, while ICLs are intended to be permanent, our ICLs are reversible lens implants, meaning they can be removed by a doctor if desired.

STAAR employs a commercialization strategy that strives for sustainable, profitable growth. Our growth strategy includes making our complete ICL product line available in our existing geographic markets and expanding into attractive markets where we do not sell our products today. In addition, we are focused on driving awareness of the ICL procedure and the clinical benefits of our ICLs, and providing surgeon training, support and education, particularly in our newer markets.

Business Environment and Factors Affecting Comparability

For the three months ended July 3, 2026, net sales were $93.5 million, up 111.0% from $44.3 million for the three months ended June 27, 2025. The increase was primarily driven by strong sales performance in China, while distributor inventory was maintained at or below contractual levels. Net sales to our two distributors in China were $52.3 million for the three months ended July 3, 2026, compared to net sales of $5.3 million in the prior-year period.

Gross margin increased year-over-year to 74.5% from 74.0%, reflecting cost reduction initiatives implemented in the first quarter of 2025. This improvement was partially offset by higher per-unit manufacturing costs associated with low production volumes at the new Swiss facility during 2025. As production in Switzerland scales in 2026, we expect unit costs to improve. However, gross margin will continue to be impacted by tariffs until we can supply 100% of EVO and EVO+ ICL lenses for China from Switzerland, which should happen by the end of 2026.

Selling, general and administrative expenses were $59.6 million in the second quarter of 2026, compared to $62.8 million in the second quarter of 2025. Excluding restructuring, impairment, and related charges of $5.2 million recorded in the previous year that were not repeated this year, second quarter of 2025 selling, general and administrative expenses would have been $57.5 million. Second quarter of 2026 selling, general and administrative expenses included year-over-year increases driven primarily by higher depreciation expense and consulting costs associated with the Company’s enterprise resource planning (“ERP”) implementation, which launched during the second quarter of 2026, as well as increased severance expense tied to headcount reductions in Global Marketing. These items, along with various other miscellaneous increases, were partially offset by lower compensation-related expenses.

The ERP implementation represented a significant operational undertaking for the Company during the quarter. As sales volumes grew, unforeseen operational challenges emerged that required extensive daily manual intervention from teams across the organization. Through these concentrated efforts, the Company successfully met its sales targets for the quarter. While certain implementation-related issues persist, the Company has developed a comprehensive remediation plan and anticipates resolving these matters in the third quarter of 2026. The Company expects to continue to invest and add functionality to its systems.

As a result of significantly increased sales and higher gross profit, GAAP net income for the second quarter of 2026 was $8.1 million or $0.16 per diluted share, up from a net loss of $(16.8) million or $(0.34) per share for the prior year quarter. Cash and investments available for sale increased to $181.5 million at July 3, 2026 from $163.9 million at April 3, 2026, and we expect to continue to generate cash during the remainder of the year.

Critical Accounting Estimates

This Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses and analyzes data in our unaudited Condensed Consolidated Financial Statements provided in this report, which we have prepared in accordance with U.S. generally accepted accounting principles. Preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Senior management has discussed the development, selection and disclosure of these estimates with the Audit Committee of our Board. Actual results may differ, significantly at times, from these estimates if actual conditions differ from our assumptions.

Management believes that there have been no significant changes during the six months ended July 3, 2026 to the items that we disclosed as our critical accounting estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended January 2, 2026.

21

Results of Operations

The following table shows the percentage of our total sales represented by certain items reflect

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/718937/000071893726000004/staa-20260102.htm
Complete FY 2026 MD&A: /company/STAA/mda/fy2026/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high
Filing date: 2026-03-03
Report date: 2026-01-02

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to promote understanding of our financial condition and results of operations. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the Consolidated Financial Statements and the Notes to those statements included in this Annual Report. This discussion includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of numerous factors, including those described in this Annual Report in Item 1A. “Risk Factors.”

Overview

STAAR Surgical Company designs, develops, manufactures, and sells implantable lenses for the eye and accessory delivery systems used to deliver the lenses into the eye. We are the leading manufacturer of phakic implantable lenses used worldwide in corrective or “refractive” surgery. We have been dedicated solely to ophthalmic surgery for over 40 years. Our goal is to position our refractive lenses throughout the world as primary and premium solutions for patients seeking visual freedom from wearing eyeglasses or contact lenses while achieving excellent visual acuity through refractive vision correction.

STAAR generates worldwide revenue almost exclusively from sales of our Implantable Collamer Lenses, or “ICLs.” Our ICLs are made from Collamer, which is a proprietary collagen copolymer material created and exclusively used by STAAR to make our lenses soft, flexible and biocompatible with the eye. Our ICLs are phakic lenses, meaning that they are implanted into the eye without removing the eye’s natural crystalline lens. This distinguishes an ICL procedure from other refractive procedures, as it does not involve the removal of corneal eye tissue. All of our ICLs are foldable, which allows the surgeon to insert them into the eye through a small incision during minimally invasive surgery. Further, while ICLs are intended to be permanent, our ICLs are reversible lens implants, meaning they can be removed by a doctor if desired.

We market and sell our ICLs for refractive surgery to treat myopia (nearsightedness) as our “EVO” family of lenses. We believe our EVO lenses are an “Evolution in Visual Freedom” designed to provide premium refractive outcomes while optimizing patient comfort. Our EVO family of lenses includes our EVO ICL, EVO+ ICL, and EVO Visian ICL. Our newest offering, EVO Viva, has an extended depth of focus (EDoF) optic, which is designed to treat myopia with presbyopia (age-related loss of ability to focus). We also market and sell an ICL lens to treat hyperopia (farsightedness), which we call our Visian ICL. We make our ICL product offerings available in multiple models, powers and lengths, including some with toric ICL (TICL) versions to correct for astigmatism (blurred vision). Not all of our products are currently available in all markets where we sell ICLs today.

STAAR employs a commercialization strategy that strives for sustainable, profitable growth. Our growth strategy includes making our complete ICL product line available in our existing geographic markets and expanding into attractive markets where we do not sell our products today. In addition, we are focused on driving awareness of the ICL procedure and the clinical benefits of our ICLs, and providing surgeon training, support and education, particularly in our newer markets. Historically, the Company also manufactured and sold intraocular lenses (or IOLs) for use in surgery to treat cataracts. As the Company has focused its business and strategy on its ICL product offerings, we have phased out our cataract IOL product line. For the fiscal year ended January 2, 2026, approximately 100% our net sales were generated from sales of ICLs.

Termination of Alcon Merger Agreement

As previously disclosed, on August 4, 2025, STAAR entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Alcon Research, LLC, a Delaware limited liability company (“Alcon”), and Rascasse Merger Sub, Inc., a Delaware corporation and a wholly owned direct subsidiary of Alcon (“Merger Sub”). The Merger Agreement provided, among other things, that subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Alcon. The Company and Alcon entered into two amendments to the Merger Agreement, on November 7, 2025 and December 9, 2025, and the Company held a special meeting of stockholders (the “Special Meeting”) to vote on the Merger on January 6, 2026. At the Special Meeting, the Company’s stockholders voted against the Merger, and the Merger Agreement was terminated in accordance with its terms effective January 6, 2026. None of the Company, Alcon or Merger Sub was required to pay any termination fee as a result of the termination of the Merger Agreement, and the parties are responsible for their respective costs and expenses related to the Merger Agreement and the transactions contemplated thereby. During fiscal 2025, we incurred $17.1 million in professional fees and expenses related to the Merger, which are recorded as Merger transaction and related costs on the Consolidated

37

Statement of Operations. Following the termination of the Merger Agreement, on January 14, 2026, STAAR entered into a letter agreement (the “Cooperation Agreement”) with Broadwood Partners, L.P. and its affiliates (“Broadwood”), the Company’s largest stockholder. The Cooperation Agreement provided for certain governance and leadership changes, as well as reimbursement by the Company of approximately $7.0 million in expenses incurred by Broadwood and other stockholders in connection with their engagement with the Company, including the Special Meeting. See Note 1 – Organization and Description of Business and Accounting Policies – Termination of Alcon Merger Agreement and Note 19 – Subsequent Events to the Consolidated Financial Statements for information about the Merger Agreement and the Cooperation Agreement.

Business Environment and Factors Affecting Comparability

Given the size of the Company’s business in China relative to its net sales in the rest of the world, macroeconomic conditions in China have a significant impact on the Company’s business, operations, and financial results. We reported net sales of $239.4 million, $313.9 million, and $322.4 million for fiscal years 2025, 2024, and 2023, respectively. The significant decreases in net sales were primarily due to the dynamics within our business in China where the continued sluggish economy and weak consumer consumption contributed to fluctuating demand for ICL procedures. We incurred net losses of $80.4 million and $20.2 million for fiscal years 2025 and 2024, respectively. Prior to fiscal 2024, we had reported over ten years of annual net sales growth, and we had delivered net income profitability since 2018.

Aggregate net sales to our two distributors in China were $77.8 million for fiscal year 2025, compared to $162.3 million for fiscal year 2024. China net sales for fiscal year 2025 included $27.5 million related to the previously disclosed December 2024 ICL shipment that was subject to extended payment terms, and which was paid in full in fiscal 2025 pursuant to such payment terms (the “December China Shipment”). As previously disclosed, we shipped $27.5 million of ICLs in December 2024 to one of our distributors in China for which the distributor requested extended payment terms through September 2025. Given the extended payment terms, net sales for the shipment were not recognized by us until payments were received. As the cost of sales associated with the December China Shipment was recognized in December 2024, the payments, when made, were recognized at 100% gross margin in the applicable quarter.

During fiscal 2025, our distributors in China purchased fewer ICLs, as they were able to satisfy procedural demand largely from their existing inventory. Our distributors in China have historically purchased products from us in bulk shipments in advance of anticipated demand, which they use to satisfy orders from hospital customers based on scheduled surgeries. During fiscal 2024, our distributors in China purchased lenses above contracted minimums in anticipation of higher procedural volumes during what is typically a summer “high season” in China. Due to dynamic macroeconomic conditions and other factors, the number of ICL procedures performed during the high season and the second half of 2024 overall was lower than expected. Accordingly, our distributors in China held, as of December 27, 2024, elevated levels of ICL product inventory. The level of inventory owned by our distributors in China has decreased substantially since December 27, 2024, and has returned to contractual levels. As anticipated, we reported lower China ICL sales in fiscal 2025 compared to fiscal 2024.

In April 2025, in response to the announcement of tariffs by the United States on Chinese goods, China announced retaliatory tariffs on U.S.-origin goods. In order to mitigate potential financial exposure from such tariffs, we negotiated and implemented consignment agreements with our two distributors in China, and we delivered consigned inventory to China in advance of the implementation of tariffs and delivered additional consignment inventory throughout fiscal 2025. While the tariff situation is evolving, we believe that these efforts to increase the amount of ICLs in China reduce the Company’s tariff risk in China in the near-term. In addition, we are rapidly ramping up our production capabilities in Switzerland to supplement our manufacturing capacity in the United States to provide optionality under multiple tariff scenarios.

Given that we maintained consigned inventory in China in 2025, purchases by our distributors were satisfied in part from our consigned inventory, rather than through bulk purchases. As our China distributor inventory levels have normalized, we intend to reduce our consigned inventory levels in China going forward. We reduced our China inventory levels in 2025, and we have taken steps to mitigate the risk of elevated inventory buildup by our distributors, while at the same time maintaining sufficient ICL inventory in China to support quick and efficient delivery and fulfillment for surgical procedures.

In 2025, we expanded our manufacturing capabilities for our ICL products in our Nidau, Switzerland facility. As we ramp up ICL manufacturing in Nidau, Switzerland, our costs are expected to increase given the expense of operating two sites and lower site utilization impacts cost absorption. The on-going operation of two manufacturing

38

sites will create pressure on gross margins. Over the longer term, as we grow revenue and align sales with manufacturing production, we would expect our gross margin to improve. We also expect the operation of two manufacturing sites will lead to higher inventory levels in the near-term.

During fiscal 2026, we will continue to assess appropriate inventory levels, both inventory held by us and inventory held by our distributors. We generally keep sufficient inventory on hand to ship product immediately or shortly after receipt of an order. In addition, our distributors hold their own inventory in-country based on forecasted demand. During fiscal 2026, we expect to adjust our production output based on forecasted demand and optimize the level of inventory held by us and held by our distributors.

See Item 1. “Business,” for a discussion of:

•
Operations

•
Principal Products

•
Distribution and Customers

•
Competition

•
Regulatory Matters

•
Research and Development

Strategic I

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2026 MD&A: /company/STAA/mda/fy2026/
All MD&A years: /company/STAA/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/STAA/mda/fy2024/): filed 2025-02-21; accession 0000950170-25-024813 (https://www.sec.gov/Archives/edgar/data/718937/000095017025024813/staa-20241227.htm)
- [FY 2023 MD&A](/company/STAA/mda/fy2023/): filed 2024-02-27; accession 0000950170-24-020572 (https://www.sec.gov/Archives/edgar/data/718937/000095017024020572/staa-20231229.htm)
- [FY 2022 MD&A](/company/STAA/mda/fy2022/): filed 2023-02-23; accession 0001564590-23-002249 (https://www.sec.gov/Archives/edgar/data/718937/000156459023002249/staa-10k_20221230.htm)
- [FY 2021 MD&A](/company/STAA/mda/fy2021/): filed 2022-02-23; accession 0001564590-22-006264 (https://www.sec.gov/Archives/edgar/data/718937/000156459022006264/staa-10k_20211231.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 3851 Ophthalmic Goods) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm

Macro-to-micro threads including this sector: [Inflation (CPI / PCE / PPI)](/thread/inflation-cpi-pce-ppi/), [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Money & trade](/thread/money-trade/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/), [Industrial orders & inventories](/thread/industrial-orders/), [Trade & external](/thread/trade-external/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/STAA.md · JSON record: /company/STAA.json · verified financials: /company/STAA/financials.json / /company/STAA/financials.csv · machine TOC for the whole site: /llms.txt