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STAAR Surgical will restructure its management
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MONROVIA, Calif. — STAAR Surgical (NASDAQ: STAA) announced August 1 that it will cut its workforce by 25% and restructure its management ranks to make its operations more efficient, according to chief executive officer David Bailey. The plan is the result of a “root and branch” strategy Mr. Bailey outlined at the company’s annual meeting in late May. Mr. Bailey’s goal is to help the company become cash-neutral on business operations by the end of the third quarter and both cash-positive and profitable on business operations early in 2002.
Highlights of the plan include successfully commercializing STAAR’s newest approved products, AquaFlow (granted U.S. FDA approval last month) and the Implantable Contact Lens, or ICL, which recently received Canadian approval. STAAR expects these products to account for 40% of its sales within 3 years. STAAR also plans to strengthen its research and development and marketing departments by doubling spending on them over the next 3 years. The company will also reduce the cost of manufacturing of its silicone IOL by 30% by the first quarter of 2002, which will turn the product into a profit center, according to company executives. Lastly, the company will review the events that led up to a recent voluntary recall prompted by the packaging of its three-piece Collamer lens and a material issue with the silicone IOL in an effort to eliminate the costs associated with the non-conformance.
All in all, the plan will result in STAAR taking about $12 million in charges over the next few quarters.
Mr. Bailey said that while it is “unfortunate to have to take these charges only 15 months after the company had taken a $17 million charge,” the move was necessary to let STAAR achieve a compound annual growth rate of 17% to 20% in 2002.
Solidifying upper management ranks, STAAR has appointed Richard Simmons as senior vice president responsible for overseeing worldwide operations and Lisa Marston as global director of quality systems. John Santos — STAAR’s current chief financial officer — will move to vice president corporate planning and development.