Staar Surgical Company · NASDAQ:STAA
Staar Surgical — Investor Presentation (May 2013)
29 slides from Staar Surgical's investor presentation, May 7, 2013
Slide 1: Visian ICL, Fastest Growing Technology in the World
1 NASDAQ : STAA Visian ICL, Fastest Growing Technology in the World May 2013
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 stateme nts about any of the following: any projections of earnings, revenue, sales, profit margins, cash, effective tax rates or any other financia
Slide 3: Generating Strong Top and Bottom Line Growth
Generating Strong Top and Bottom Line Growth • Two Large Market Opportunities • Sustainable Competitive Advantages • New Product Offerings in 2013/2014 • Robust New Product Pipeline • Strong Balance Sheet • Manufacturing Consolidation Savings 2014 3
Slide 4: Intraocular Lens Focus
Intraocular Lens Focus Only 4 Lenses Placed within the Eye Cataract IOL Refractive ICL 59% Q1 Sales 55% in 2012 35% Q1 Sales 41% 2012
Slide 5: STAAR's Value Driver
STAAR’s Value Driver 5 • $3B Addressable Market • Currently about 2% Market Share • $10.6M Sales/$20M End Customer in Q1 – $80M End Customer Sales Annualized • Sales Growth Rate 24% in Q1 – 85% Gross Margins – New Product Launches • 10% Share in Focused Markets Yields Nearly $300M of End Customer Sa
Slide 6: Visian ICL
Visian ICL • Implantable Collamer ® Lens Better Known as the “Implantable Contact Lens” • Made f rom a Proprietary Material Called Collamer • Corrects Myopia (Nearsightedness/Inability to See Far) • Toric ICL (TICL TM ) Version Corrects Both Myopia and Astigmatism (Blurred D ue to Inability to Focus
Slide 7: Competitive Landscape
Competitive Landscape • STAAR Is the Market Leader – >65% Unit Market Share – 75% Dollar Share – Only Posterior Lens Approach • Other Players (Anterior Lens) – Abbott - AMO – Ophtec – Novartis - Alcon ( “Dear Dr.” Letters) • The Big Guys Are in the WRONG Place! • LASIK is the Real Competition! Sourc
Slide 8: ICL vs. LASIK
ICL vs. LASIK ICL • Small Micro Incision • Adds Lens into the Eye • Permanent but Removable • No Induced Dry Eye • Future Options Preserved LASIK • Incision over 1 Inch - Long • Burns Material Away • Cannot Be Reversed • Potential Dry Eye • May Reduce Future Options 8
Slide 9: Visian ICL with CentraFLOW (V4c ICL)
Visian ICL with CentraFLOW ™ (V4c ICL) • CentraFLOW™ Technology Assists the Natural Aqueous Flow within the Eye Utilizing the KS - A quaport ™ • Eliminates a Procedure and Visit - (LASIK - like) • Economics Better for t he Surgeon • 10% Price Premium • Over 16,000 Implants Indicate Predictable IOP a
Slide 10: The ICL Technology Era Beginning?
The ICL Technology Era Beginning? • RK: Started in 1978, Peaked in 1994 • PRK: Started in 1984, Peaked in 2006 • LASIK: Started in 1989, has LASIK Peaked?? – Big Guys Heavily Invested – LASIK Procedures Losing Share in Major Markets • Visian ICL: – Over 350,000 ICLs Implanted World W ide – Gaining S
Slide 11: Targeted ICL Markets
Targeted ICL Markets 11 Market 2012 Total Ref. Proc. 2012 Ref. Proc. ∆ 2012 ICL Proc. ∆ ICL Share Ref. Proc. ICL Share Gain China * 830,000 (21%) +37% 1.2% x U.S.* 623,700 Flat +2% 1.0% x Japan* 254,000 (22%) 102% .9% x Latin Am* 227,260 +4% (6%) 1.2% India* 148,550 +5% +26% 4.2% x S. Korea* 138,260
Slide 12: Visian ICL Sales Increased in 10 of 11 Target Markets
Korea China U.S. Spain Japan M East India Lat Amer Germany Italy U.K. Q1 12 Q1 13 2013 Key Metric Report Revenue Growth (Targeted Market ICL Growth) Q1 Results 2012 - 13 Visian ICL Sales Increased in 10 of 11 Target Markets + 7 % +12% +14% +156% +22% +25% +94% +23% +63% - 10% +7%
Slide 13: ICL Innovation & Pipeline
ICL Innovation & Pipeline V4b Q1 2011 - Expanded Range , Allowing Treatment of Virtually All Myopic Patients Available CE Markets; new markets in 2013 V4c Q1 2012 - CentraFLOW Technology Eliminates a Step in Current Procedure ( LASIK - like) Available CE Markets; new markets in 2013 V5 Mid - Year 20
Slide 14: Consumer Awareness Activities
Consumer Awareness Activities • Visits to www.visianinfo.com Grew 122 % during 2012 • Website Voted Best in Class for M edical C ategory Sites by IMA • Over 600 Patient Leads to ICL Surgeons • Viewing of Visian ICL on YouTube G rew Tenfold during 2012 • New Visian ICL Blog Site Generated over 60,000
Slide 15: What Our Support Delivers
What Our Support Delivers Consumer Awareness Initiatives Drives Patient to ICL Technology & Surgeons Practice Management Programs Enables Practices to Better Manage Refractive Patients Clinical Support Provides Surgeons with ICL Clinical Based Evidence 15
Slide 16: Cataract IOL: Large & Growing Market, Tough Competitive Landscape
• 21M IOLs Implanted in 2012 ( 25.2M 2017) • The Big Three Hold ≈70% Market Share – Novartis (Alcon), Abbott (AMO), B&L ( Private/IPO) • STAAR Strategy – Focused on Only the Higher Margin Premium IOLs – Focused Only in Markets that Generate a Fair Profit Large & Growing Market Tough Competitive Land
Slide 17: New IOL Products
New IOL Products 17 • Q1 13 Sales W ere $6.3 million, Essentially F lat Year - over - Year • 10% Growth in Constant Currency – Negative Impact of $646k Due to Foreign E xchange • Approximately $900,000 in Backorders from European Customers • Acceptance of the KS IOL Products H as E scalated • Introd
Slide 18: Unique Collamer Material Competitive Advantage
Unique Collamer ® Material 18 Competitive Advantage • Proprietary Hydrophilic Material Produces Superior Quality of Vision • 40 % Water Content Produces Reduced Glare or Halo Effect – No Glistenings • Several Active Material P atents (next significant one expires 2015 with some blocking patents till
Slide 19: Q1 2013 GAAP Results
Q1 2013 GAAP Results 19 Q1 2013 Q1 2012 Change Revenue $18,001 $15,509 $2,492/16.1% Gross Profit $12,654 $10,902 $1,752/16.1% Gross Profit Margin 70.3% 70.3% NC Operating Exps ex Comet $10,669 $10,069 $600/6.0% Operating Expenses $11,570 $10,624 $946/8.9% Operating Income $ 1,084 $ 278 $806/290% Oth
Slide 20: Q1 Non-GAAP Measures
Q1 Non - GAAP Measures ($000’s) 20 Measure Q1 2013 Q1 2012 GAAP Net Income $471 $232 Mfg. Consolidation Expenses $901 $555 Spain Distribution Transition Cost $442 $0 Foreign Currency Impact $341 $(67) Adjustment of Warrant Value $ (27) $14 Stock - based Compensation Expense $1,034 $687 Adjusted Net
Slide 21: Expanding Gross Margins
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 2007 2008 2009 2010 2011 2012 Q1 2013 GM% IOL Mix ICL Mix 70.3% 59% 35% Expanding Gross Margins 21 Seventh consecutive year of gross margin expansion. Operating Metric to add 250 bps in 2013.
Slide 22: STAAR Balance Sheet
STAAR Balance Sheet • Profitable and Generating Cash – $19.2M in Cash as of 3 /29/13 – $3.2M Generated in Cash during 2012 • Working L ine of C redit in Japan at 1.4% Interest Rate • $ 121M in NOLs (Worth $ 1.00/share) • 36.7M Diluted Shares Outstanding – 1.4M Warrants at Approximately $ 4.00 22
Slide 23: Project Comet
Project Comet • Consolidate Four Manufacturing Operations (Japan, U.S., Switzerland) to One E xisting U.S. Facility • 3 + Years to Complete at a Cost of $6.2M – Spent $1.1M in 2011/$2.6M in 2012 – Planned Spend $2.5M in 2013, Q1 $900k • Complete Manufacturing Consolidation by the End of 2013 • Over
Slide 24: Project Comet Update
Project Comet Update • Project On Plan and On Budget • Completed Validation of V4, V4b, and V4c ICLs, and Initiated Manufacturing • Shipped First U.S. Manufactured ICLs in Jan 2013 • Obtained Regulatory Approval for U.S. Manufactured ICLs to Markets with 70% of Unit Volume • All Non - sterile IOLs f
Slide 25: STAAR's Pathway to the Future!
STAAR’s Pathway to the Future! • Continued ICL Market Penetrations – Double Digit Revenue Growth – 85 % Gross Margin – New Products (V4c, V5 and V6) • Targeted IOL Profitable Growth – Single Digit R evenue Growth – 60 %+ Gross Margin Target – New Products ( nanoFLEX Toric + KS - SP) • Project Comet
Slide 26: Post Comet Operating Model Potential
Post Comet Operating Model Potential 26 Metric 2013 Analyst Ests * If $80M If $90M If $100M Revenue $70.3 $80.0 $90.0 $100.0 Gross Margin % 71.6% 77.0% 78.5% 80% Gross Margin $ $50.3 $61.6 $70.6 $80.0 Operating Exps. $46.5 $46.5** $48.5 $50.0 Operating Inc. $ $ 3.8 $15.1 $22.1 $30.0 Operating Inc. %
Slide 27: Key Drivers for Growth
Key Drivers for Growth • Increased Investments in Sales & Marketing and R&D – Added 19 Sales & Marketing Positions (Potential 4 more) • Planned New Product Launches – V4c & V5 ICLs, KS - SP and nanoFLEX Toric IOLs • Continued Excellent Execution of Project Comet – Drives to near 80% GM and 10% Tax R
Slide 28: Solid Start to 2013
Solid Start to 2013 • Total Sales Grow by 16% to $18M / 21% Growth on Constant Currency Basis – Negative FX Exchange of $750k • Visian ICL Sales Increase by 24% • IOL Sales Flat – 10% Growth in Constant Dollars – $900k Backorder on Preloaded Acrylic IOLs in Europe • Gross Margin 70.3% • GAAP Net Inc
Slide 29: Visian ICL, Fastest Growing Technology in the World
29 NASDAQ : STAA Visian ICL, Fastest Growing Technology in the World May 2013