Staar Surgical Company · NASDAQ:STAA
Staar Surgical — Stephens Fall Investment Conference 2011
34 slides from Staar Surgical's conference presentation, Nov 16, 2011
Slide 1: STAAR Surgical – Stephens Fall Investment Conference
STAARP® SURGICAL (NASDAQ: STAA) ar. Stephens Fall . oe) Investment Conf. _ November 16, 2011 “Fastest growing publicly traded medical device Company focused on Ophthalmology.”
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, profit margin, cash or other financial items, any statements of the plans, strategies, and objectives of managemen
Slide 3: STAAR Positioned for Increased Growth
STAAR Positioned for Increased Growth _ Two Large Market Opportunities _ Double Digit Revenue Growth _ Expanding Gross and Operating Margins _ Strong Balance Sheet _ Sustainable Competitive Advantages _ Four New Product Launches _ Robust Product Pipelines
Slide 4: Intraocular Lens Focus
Intraocular Lens Focus Lenses Placed within the Eye Refractive Lens Cataract Lens _ Sits in front ofnatural —_—_— Replaces natural crystalline lens crystalline lens _ Refractive ICL . Cataract IOL 43% of sales Q3 Yo Aare
Slide 5: Surgical Vision Correction Market
Surgical Vision Correction Market _ Global Refractive Procedure estimate of 3.6M in 2010 grows to 5.1M in 2015 > In 201097% are laser based procedures: LASIK or PRK LASIK challenged by technology limitations and negative media coverage $2 Billion Addressable Market for the STAAR ICL Source: The Glob
Slide 6: Visian ICL
Visian ICL” _ Implantable Collamer Lens better known as “the Implantable Contact Lens” _ Made from a proprietary material called Collamer® _ Corrects myopia (nearsightedness) inability to see far _ Toric ICL version corrects both myopia and astigmatism (blurred due to inability to focus) _ Premium p
Slide 7: ICL Revenue Gains
ICL Revenue Gains 1slan V Dorn vont a nao ¢$ SUONTW
Slide 8: STAAR's Value Driver
STAAR’s Value Driver The Visian ICL ~ Over $30 million annualized sales > 30% YOY Growth > 85% Gross Margins > New Product Launches _ $2 Billion Addressable Market > Currently <2% Market Share _ 10% share position in Top Ten Markets yields $200M in revenue & $170M in gross profit Sst AR®
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 <25% and declining <a \ > Novartis (Alcon) <5% Share (introduced in 2008) | The Big Guy
Slide 10: Small micro incision
Small micro incision Adds a lens into the eye Permanent but removable No induced dry eye Future options preserved pn = Incision over 1 inch-long Burns material away Cannot be reversed Potential dry eye induced May reduce future options
Slide 11: Keys to Creating Significant Value
Keys to Creating Significant Value Progress to overcome challenges of LASIK _ Making the ICL experience BETTER than LASIK >» New V4b allows treatment of ALL LASIK eligible patients and more > New V4c Version makes ICL one step procedure _ Overcoming the branding of LASIK >» Everyone knows about LASI
Slide 12: New Visian V4b ICL
New Visian V4b ICL Doubles Market of Treatable Patients _ V4b has the widest approval of any refractive option > Can treat all LASIK eligible patients and MORE _ Began European launch during Q4 2010 > Other markets will gain expanded range with V4c approval , = 5 i STAAR®
Slide 13: New Visian V4c ICL
New Visian V4c ICL Began Shipments to CE Mark Countries in October _ CentraFLOW™ technology restores natural aqueous flow within the eye utilizing the KS-AquaPORT™ _ Eliminates a procedure and additional visit by patient _ Makes procedure much more convenient (LASIK-like) _ Makes economics better fo
Slide 14: Visian ICL Growing Market Shares
Visian ICL Growing Market Shares Top Ten Targeted Refractive Markets China 900,000 +113% 1% US. 723,000 | 2011/12 Be (2%) 1% Japan 375,000 2011 2014 +197% 0.3% LatinAm 212,000 | Yes/12 | 2012 +9% 1.2% Spain 148,000 Yes Yes +4% 3% India 135,000 Yes 2012 +39% 4% S. Korea 114,000 Yes 2012 +26% 15% Germ
Slide 15: Visian ICL Product Roadmap
Visian ICL Product — Toric ICL Vy yv V y 2011/12 V4b Expanded Range i _ = Lower myopes and toric hyperopic ‘V4c (includes expanded range) y Oo Eliminates need for PI V5 (includes all features of 4b & 4c) Oo 2012 2014 2013 Preloaded, enhanced safety design ‘VG (inctudes all features of V4 & V5) Multi
Slide 16: DTC Results in Korea
DTC Results in Korea Expanded Market Share from 5% to 15% in 4 Years 2008-7%, 2009-10%, 2010-12%, 2011-15% Bus Wraps Subway Signage Radio Ads Began in 2009 Began in 2006
Slide 17: Visian ICL Direct To Consumer
Visian ICL Direct To Consumer Test, Evaluate, Enhance and Re-test Mode _ Social Networking activities > Significant increase planned for 2012 > Low cost for increased visibility > New Facebook Consumer Contest ~ 5 Winners receive Free ICL Procedures ~ ICL Facebook Fans more than Doubled _ Video segm
Slide 18: Q3 Investor Call Comments
Q3 Investor Call Comments Dr. Eric Mertens, Belgium _ First to implant V4c ICL in Europe > “No IOP concerns, patients very satisfied.” _ Started implanting ICLs in 2002 > First year 6%, 2010 was 32% of refractive procedures > Since V4b and V4c, now over 50% are ICLs > From -1.0 to -6.0 offers LASIK
Slide 19: Q3 Investor Call Comments
Q3 Investor Call Comments Dr. Roberto Zaldivar, Argentina _ 1987-1994 2,000 anterior Phakic lens _ Since 1993 over 11,000 Visian ICLs _ ICL provides the best quality of vision of all refractive procedures _ V4c is an “incredible step forward” > Eliminates the most difficult part of ICL procedure _ “
Slide 20: The ICL Technology Era Beginning?
The ICL Technology Era Beginning? Radial Keratotomy (RK): Started in 1978, Photorefractive Keratectomy (PRK): Started in 1984, LASIK: Started in 1989, Under much scrutiny in the past few years particularly in U.S. Visian ICL: Over 250,000 ICLs implanted world wide. / STAAR® Source: The Global Refrac
Slide 21: ICL Revenue Gains
ains ICL Revenue G 1slian V DAonvnt a nao $ suOTTEW
Slide 22: Cataract IOL
Cataract IOL Large & Growing Market ‘Tough Competitive Landscape 19 million IOLs to be implanted this year _ The Big Three hold 77% market share > Alcon (Novartis), AMO (Abbott), B&L (Private) _ STAAR goal: the fastest growing in target markets > Focused on only the higher margin premium IOLs > Focu
Slide 23: 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 Patent protection until 2014/manufacturing know- how much more important _ Preliminary CAST da
Slide 24: CAST Preliminary Findings
CAST Preliminary Findings _ Distance Vision: All cataract patients see very well at far distance _ Near Vision: Usually need some reading glasses > nanoFLEX SUPERIOR to all Standard IOLs _ Intermediate Vision: Usually need glasses for laptop > nanoFLEX SUPERIOR to ALL IOLs, both Standard and Premium
Slide 25: nanoFLEX
nanoFLEX CE Mark Approval during Q2 _ Began marketing activities in key European markets during Q2/initial shipments Q3 _ Believe that the nanoFLEX Toric IOL could gain approval before year end in CE Markets > Should allow profitable entry to new markets _ Upside to 2012/13 expectations (the “nanoFL
Slide 26: STAAR IOL Product Pipeline
STAAR IOL Product Pipeline eodat ec Preloaded Silicone \ 2011 Preloaded 1P Acrylic 2011 +2011/12 NP nanoFLEX IOL 2011 [e) nanoFLEX Toric 2011 nanoFLEX II e) 2012 Preloaded nanoFLEX O 2013 Accommodating IOL O 2013 *Depends on label claim pursued. Could be 2013. rs PAAR? O= In the planning stage. SURG
Slide 27: 2011 Q3 Growth
2011 Q3 Growth Comparison to Q3 2010 ($000’s) Q3 2011 | O32010 | Improvement Revenue $15,266 $13,152 +$2.1M/+16% Gross Profit Dollars $10,450 $8,260 +26.5% Gross Profit Margin 68.5% 62.8% +570bps Operating Expenses $9,713 $9,452 +3% Operating Income $737 ($1,192) +$1.9M Net Income $77 ($1,158) +$1.2
Slide 28: 2011 YTD Growth
2011 YTD Growth Comparison to Q3 YTD 2010 ($000’s) Revenue Gross Profit Dollars Gross Profit Margin Operating Expenses Operating Income Inc./Loss from Cont’d Ops YTD 2011 | YTD 2010 | Improvement $46,385 $30,940 66.7% $28,825 $2,115 $1,239 $40,569 $25,768 63.5% $27,682 ($1,914) ($3,422) +$5.8M/+14%
Slide 29: Expanding Gross Margins
Expanding Gross Margins With ICL Product Mix Gains 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% % @PIOL Mix q@pICL Mix 0.0% 2007 2008 2009 2010 §=Q1 2011 Q2 2011 Q3 2011
Slide 30: 2011 Key Metric Report Card
2011 Key Metric Report Card Double Digit Revenue Growth Grow ICL Sales by 25%, 30% Continuous Expansion of GM °f, End year at 66%, 66.5% Profitable in 3-ef4 all 4 quarters and for the full year
Slide 31: STAAR Balance Sheet
STAAR Balance Sheet _ Profitable & Generating Cash > Generated $2.5M from operations Q3 > $16.9M in Cash end of Q3 _ Company Debt Free > Only a working line of credit in Japan _ $128M in NOLs (Worth $1 a share) _ 37 million diluted shares outstanding > 1.4 million warrants at approximately $4 Sst Ni
Slide 32: Plan to Use our $128M NOLs
Plan to Use our $128M NOLs _ Consolidate four manufacturing operations to the U.S. facility _ Two years to complete with a cost of $6M > Already spent $650k YTD 2011 _ Complete by the end of 2013 _ Over $100M savings in tax and labor costs from 2014 to 2020 Fs
Slide 33: STAAR Positioned for Increased Growth
STAAR Positioned for Increased Growth _ Two Large Market Opportunities _ Double Digit Revenue Growth _ Expanding Gross and Operating Margins _ Strong Balance Sheet _ Sustainable Competitive Advantages _ Four New Product Launches _ Robust Product Pipelines
Slide 34: STAAR Surgical
STAAR® SURGICAL (NASDAQ: STAA) ar. Stephens Fall 5 oe) Investment Conf. * November 16, 2011 “Fastest growing publicly traded medical device Company focused on Ophthalmology.”
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