Staar Surgical Company · NASDAQ:STAA
Staar Surgical — Investor Presentation (October 2012)
38 slides from Staar Surgical's investor presentation, Oct 10, 2012
Slide 1: Investor Presentation October 9, 2012
(NASDAQ: STAA) Investor Presentation October 9, 2012 ® “Fastest growing refractive technology in the world.”
Slide 2: Forward-Looking Statements
FORWARD - LOOKING STATEMENTS All statements in this presentation that are not statements of historical fact are forward - looking statements, including any projections of earnings, revenue, sales, profit margins, cash or other financial items, any statements of the p lan s, strategies, and objective
Slide 3: STAAR Surgical in 2011
STAAR Surgical in 2011 Generated 14% revenue growth Grew Visian ICL sales by 32% 85% gross margin product Expanded Gross Margin 370 bps to 67.5% Gross margin dollars +21% Profitable each quarter and full year ®
Slide 4: First Half 2012 Start
First Half 2012 Start Revenue increase of 1%, slower than expected Grew Visian ICL sales by 13% Expanded GM% to 69.8% (+400 bps) GAAP loss of $259k, non - GAAP income of $2.4M Accomplished manufacturing consolidation milestones without customer disruption in supply or quality ®
Slide 5: STAAR Positioned for Strong Top Line and Bottom Line Growth
STAAR Positioned for Strong Top Line and Bottom Line Growth Two Large M arket O pportunities Sustainable Competitive Advantages New product offerings in 2012 Robust New Product Pipeline Strong Balance Sheet Mfg. consolidations lead to big savings starting in 2014 ®
Slide 6: Intraocular Lens Focus
Intraocular Lens Focus Only Lenses Placed within the Eye Cataract IOL Refractive ICL 55% of sales 1 st H 42% of sales 1 st H ®
Slide 7: STAAR's Value Driver: The Visian ICL
STAAR’s Value Driver The Visian ICL In 2011 $32 million sales/$60M to end customer Growth rate 13% 1 st H 2012 85% Gross Margins New Product Launches $3 Billion Addressable Market Currently about 2% Market Share 10% average share in Focused Markets would yield nearly $300M of end customer revenues ®
Slide 8: Visian ICL Premium Product, Premium Result
Visian ICL ® Premium Product Premium Result Implantable Collamer Lens better known as “the I mplantable Contact Lens ” Made from a proprietary material called Collamer® Corrects myopia (nearsightedness) inability to see far Toric ICL version corrects both myopia and astigmatism (blurred due to inabi
Slide 9: Visian ICL Competitive Landscape
Visian ICL Competitive Landscape STAAR is the market leader in this segment >70% Unit Market Share/85% Dollar Share Only Posterior Lens Approach Other players (Anterior Phakic Lens): Abbott (AMO) / Ophtec Novartis ( Alcon ) The Big Guys are in the WRONG Place and heavily invested in LASIK! LASIK is
Slide 10: ICL vs. LASIK
ICL vs. LASIK Small micro incision Adds a lens into the eye Permanent but removable No induced dry eye Future options preserved Incision over 1 inch - long Burns material away Cannot be reversed Potential dry eye induced May reduce future options Plus eyes in which LASIK is contraindicated . ®
Slide 11: Visian ICL Revenue Gains
Visian ICL Revenue Gains Increase of 13% YTD 0 1 2 3 4 5 6 7 8 9 10 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Milli ons $ ®
Slide 12: Targeted ICL Market Results
Targeted ICL Market Results First Half Results 2010 - 12 1H 2010 1H 2011 1H 2012 ® Transition to Direct Sales Model has short term affect. (21%) vs. (3%)
Slide 13: New Visian V4b ICL Doubles Treatable Patient Market
New Visian V4b ICL More Than Doubles Market of Treatable Patients V4b has the widest approval of any refractive option Can treat all LASIK eligible patients and MORE Available in all CE Marked countries Other markets gain expanded range on V4c approval ® 0% 10% 20% 30% 40% 50% 60% 70% 0.01 0.05 0.27
Slide 14: New Visian V4c ICL
New Visian V4c ICL During Q2 - 61% of ICLs in Europe (7,000 implanted) CentraFLOW™ technology restores natural aqueous flow within the eye utilizing the KS - AquaPORT™ Eliminates a procedure & visit (LASIK - like ) Economics better for the surgeon P remium of 10% on price of V4c Over 100 presentatio
Slide 15: Visian Toric ICL Approved in Japan
Visian Toric ICL Approved in Japan Nov. 2011 Estimated 325,000 refractive procedures with very high rate of myopia and astigmatism Surgeons at Shinagawa and Optical Express began prescribing the V4c during Q3 Prevalence of: Japan ROW Myopia 40% 15% to 28% Astigmatism 50% 30% Sources: The Global Refr
Slide 16: 2012 Targeted Visian ICL Markets
2012 Targeted Visian ICL Markets Market 2011 Total Ref. Proc. 2011 Ref. Proc. ∆ 2011 ICL ∆ TICL Approval V4c Approval ICL Share Ref. Proc. China * 1,003,000 +11% +84% 2008 2013 .7% U.S. * 763,000 +6% (1%) 2012?? 2013 .8% Japan * 325,000 (13%) +167% 2011 2014 .4% Latin Am * 219,000 +3% +8% 2012 2012
Slide 17: What ICL Innovation & Pipeline Means
What ICL Innovation & Pipeline Means ? V4b Q1 2011 Expanded Range V4c Q1 2012 CentraFLOW Technology V5 First Half 2013 Preloaded ICL V6 Second Half 2014 Multifocal/MF Toric/more sizing friendly ® Allows treatment of virtually all myopic patients. Eliminates a step in the current procedure. More conv
Slide 18: Consumer Awareness Campaigns in Korea
Consumer Awareness Campaigns in Korea Expanded Market Share from 5% to 13.4% in 5 Years How to duplicate results in additional markets? Subway Signage Began in 2006 Radio Ads Began in 2007 Bus Wraps Began in 2009 Movie Theater Commercials in 2011 ®
Slide 19: Consumer Awareness Activities
Consumer Awareness A ctivities Online Marketing Objectives ICL Awareness, Adoption, Evangelism Online Advertising Acquire traffic and interested patients New Consumer Oriented ICL website Direct patient interest to ICL surgeons Practice development ICL in office displays Staff training ®
Slide 20: ICLs Rap with Black Eyed Peas
ICLs Rap with Black Eyed Peas Allen Pindea Lindo, Jr., better known as apl.de.ap recently had Visian ICLs implanted Link to Good Morning America segment from July 26 th where his procedure was highlighted: http ://abcnews.go.com/blogs/entertainment/20 12/07/black - eyed - peas - apl - de - ap - gets
Slide 21: What STAAR Support Brings
What STAAR Support Brings? Consumer Awareness Initiatives Practice Management Programs Clinical Support ® Drives patient to ICL Technology & Surgeons. Enables practices to better manage refractive patients. Provides surgeons with ICL clinical based evidence.
Slide 22: The ICL Technology Era Beginning?
Glasses Contacts RK PRK LASIK ICL RK: Started in 1978, peaked in 1994 . PRK: Started in 1984, peaked in 2006 . LASIK: Started in 1989, Has LASIK peaked?? LASIK procedures losing share in major markets. Visian ICL: Over 300,000 ICLs implanted world wide. Gaining share in major markets . Source: The G
Slide 23: Cataract IOL
Cataract IOL 20.7 million IOLs to be implanted in 2012 (22.6M 2020) The Big Three hold 74% market share Alcon (Novartis), AMO (Abbott), B&L (Private) STAAR Strategy Focused on only the higher margin premium IOLs Focused only in markets that generate a fair profit Source: The Global IOL Market by Mar
Slide 24: Unique Collamer Material
Unique Collamer ® Material Proprietary hydrophilic material produces superior quality of vision (competitive advantage) 40% water content produces: Reduced glare or halo effect Free from glistenings Four active material patents (first expires 2015 with some blocking patents till 2017) M anufacturing
Slide 25: CAST Preliminary Findings
CAST Preliminary Findings Distance Vision : All cataract patients see very well at far distance Near Vision : Usually require reading glasses nanoFLEX SUPERIOR to all Standard IOLs Intermediate Vision : Usually require glasses for laptop nanoFLEX SUPERIOR to ALL IOLs, both Standard and Premium ®
Slide 26: New IOLs Introduced at ESCRS
New IOLs Introduced at ESCRS nanoFLEX Toric IOL in Europe Premium product with very good margins Will allow profitable entry to new markets Collamer provides competitive advantage Trials of IOL began in September Preloaded KS - SP in Europe and Japan Single piece acrylic preloaded IOL Initial trials
Slide 27: STAAR IOL Product Pipeline
STAAR IOL Product Pipeline Product R D CE Japan U.S. Preloaded Silicone √ √ √ √ 2013 Preloaded 1P Acrylic √ √ √ √ NP nanoFLEX IOL √ √ √ ○ √ nanoFLEX Toric √ ○ √ ○ 2013?? nanoFLEX II ○ ○ E 2013 ○ 2013?? Preloaded nanoFLEX ○ ○ L 2013 ○ 2014 Accommodating IOL ○ ○ 2013/14 ○ ○ ○ = In the planning stage.
Slide 28: 2012 1st Half GAAP Results Comparison
2012 1 st H GAAP Results Comparison to 1 st H 2011 ($000’s) 2012 2011 Change Revenue $ 31,451 $ 31,118 +1.1% Gross Profit Dollars $ 21,947 $ 20,490 +7.1% Gross Profit Margin 69.8% 65.8% +400 bps Operating Expenses inc Comet $ 21,833 $ 19,112 +14.2% Operating Income $ 114 $ 1,378 ($1,264) Other Incom
Slide 29: Reconciliation of Non-GAAP Measure
Reconciliation of Non - GAAP Measure 1 st H 2012 vs. 2011 Measure 2012 2011 GAAP net income (loss) ($ 259) $ 1,161 Mfg. consolidation expenses $ 1,252 $ 326 Gain (loss) foreign currency $ 182 ($ 444) Adjustment of warrant value ($ 207) ($ 182) Stock - based compensation exp $ 1,481 $ 807 Adjusted ne
Slide 30: Expanding Gross Margins With ICL Product Mix Gains
Expanding Gross Margins With ICL Product Mix Gains 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 2007 2008 2009 2010 2011 Q1 2012 Q2 2012 GM% IOL Mix ICL Mix Gross margins have expanded from 49.0% to 69.3%. Q2 Mix: ICLs at 54.0% and IOLs at 42.5%. ®
Slide 31: New Hires during 2012
New Hires during 2012 Investment in 17 Sales & Marketing Positions ® SALES MKTG Europe 4 1 Asia Pacific 3 North America 4 Global 2 8 6 Fourteen positions already added: 3 new hires remaining: Sales in Europe, Sales in Asia Pacific and Marketing in Asia Pacific
Slide 32: New Product Launches In Process during 2012
New Product Launches In Process during 2012 ICLs IOLs V4c ICL Q4 2011 to Europe nanoFLEX IOL Q4 2011 to Europe V4 ICL Q4 2011 to Brazil nanoFLEX Toric IOL Q3 2012 to Europe V4 TICL Q4 2011 to Japan KS - SP 1 Piece Preloaded Acrylic 2H 2012 to Europe and Japan ®
Slide 33: Second Half Growth Drivers
Second Half Growth D rivers Key Surgeon meetings focused on Visian ICL North American Visian Excellence Group ICL User’s Meeting, September 6 & 7 (Milano) ESCRS Meeting, September 8 to 12 (Milano) Spanish Society of Ophthalmologists Annual Meeting Introduction of two new IOLs during ESCRS KS - SP in
Slide 34: STAAR Balance Sheet
STAAR Balance Sheet Profitable non - GAAP & Generating Cash $1.2M generated from operations 1 st H $17.5M in Cash end of 1 st H Company Debt Free Only a working line of credit in Japan $121M in NOLs (Worth $1 a share) 36 million diluted shares outstanding 1.4 million warrants at approximately $4 ®
Slide 35: Plan to Use our $121M NOLs
Plan to Use our $121M NOLs Consolidate four manufacturing operations to existing U.S. facility Two years to complete with a cost of $6M Spent $1.1M in 2011/$1.3M YTD 2012 Planned spend $2.3M in 2012 Complete by the end of 2013 Over $100M savings in tax & labor from 2014 to 2020 Move effective tax ra
Slide 36: STAAR's Pathway to the Future
STAAR’s Pathway to the Future! Continued ICL market penetrations Revenue growth of 20% to 30% 85% Gross Margin New products (V5 and V6) Targeted IOL profitable growth Revenue Growth of 5% to 10% 60 %+ Gross Margin New Products (nanoFLEX Toric + Preloaded) Manufacturing Consolidation complete 2014 ®
Slide 37: STAAR View of Future Potential Results
STAAR View of Future Potential Results Projections in Green ® 2010 2011 2012 2013 2014 2015 Gross Margin % 63.8% 67.5% 71% 74% 78% 80% Op Exp % 68.6% 63.1% * 67% * 60% * 54% 50% EBIT % (6.7%) 4.3% 4% 13% 23% 30% Net Inc % (7.5%) 2.1% 2% 8% 21% 27% * Includes $1.1M in 2011, $2.3M in 2012 and $2.6M in
Slide 38: ( ) ® “Fastest growing refractive technology in the world.”
(NASDAQ: STAA) Investor Presentation October 9, 2012 ® “Fastest growing refractive technology in the world.”
STAAR Surgical — Investor Presentation (October 2012) on 6ix