Staar Surgical Company · NASDAQ:STAA
Staar Surgical — Investor Presentation (April 2013)
33 slides from Staar Surgical's investor presentation, Apr 10, 2013
Slide 1: Fastest Growing Refractive Technology in the World
1 NASDAQ : STAA “Fastest Growing Refractive Technology in t he World” April 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 or any other financial items; the plans, s
Slide 3: Positioned Well for Strong Top and Bottom Line Growth
Positioned Well for 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: Regaining Momentum Key Metrics
Regaining Momentum 4 Key Metrics 2011 2012 2013 YTD * Total Revenue Growth +14% +2% +16% ICL Revenue Growth +32% +14% +24% Gross Margin Expansion +370bps +190bps GAAP Net Income (000’s) $1,348 ($1,763) Non - GAAP Net Income (000’s) $4,353 $4,786 Manufacturing Consolidation On Target On Target On Tar
Slide 5: Intraocular Lens Focus
Intraocular Lens Focus Only 5 Lenses Placed within the Eye Cataract IOL Refractive ICL 55.0% of Sales 2012 40.7% of Sales 2012
Slide 6: STAAR's Value Driver: The Visian ICL
STAAR’s Value Driver 6 • $35M Sales/$66M End Customer in 2012 • Sales Growth Rate 22% Last Two Years – 85% Gross Margins – New Product Launches • $ 3B Addressable Market • Currently about 2% Market Share • 10% Share in Focused Markets Yields Nearly $300M of End Customer Sales The Visian® ICL TM
Slide 7: Visian ICL Sales Gains
0 2 4 6 8 10 12 Visian ICL Sales Gains RECORD Visian ICL Q1 2013 Milli ons $ Quarterly ICL Sales Past Six Years 7 22% Sales Growth Past Two Years
Slide 8: 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 9: 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 – Ophtec – Novartis (Sent “Dear Dr.” Letters) • The Big Guys Are in the WRONG Place! • LASIK is the Real Competition! Source: Data ba
Slide 10: 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 10
Slide 11: 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 14,000 Implants Indicate Predictable IOP a
Slide 12: 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 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: Targeted ICL Markets
Targeted ICL Markets 16 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 17: Cataract IOL: Large & Growing Market
• 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 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: New IOL Products
New IOL Products 19 • Preloaded KS - SP in Japan and Europe – Single Piece A crylic P reloaded IOL – Very Successful L aunch with High Demand – There Are Supply L imits During 2013 • nanoFLEX TM Toric IOL in Europe – Premium Product with Very G ood M argins – Should Allow P rofitable E ntry to New M
Slide 20: FY 2012 Highlights
FY 2012 Highlights • Visian ICL Gained Market Share in Key Markets – Added 19 New Sales/Marketing Positions Since Q4 2011 • Enhanced Social Media Marketing • Increased Marketing Investment by 20%, R&D by 10% • Continued Successful Execution of Project Comet • Cash Generation/Balance Sheet Improvemen
Slide 21: FY 2012 Results
FY 2012 Results 21 FY 2012 FY 2011 Change Revenue $63,783 $62,765 $1,018/1.6% Gross Profit $44,291 $42,369 $1,922/4.5% Gross Profit Margin 69.4% 67.5% +190 bps Operating Exps ex Comet $42,875 $38,526 $4,349/11% Operating Expenses $45,511 $39,586 $5,925/15% Operating Income (Loss) $(1,220) $2,783 $(4
Slide 22: 2012 Reconciliation of Non-GAAP Measure
2012 Reconciliation o f Non - GAAP Measure 22 Measure 2012 2011 GAAP Net Income (loss) $(1,763) $1,348 Mfg. Consolidation Expenses $2,636 $1,060 Spain Distribution Transition Cost $1,151 $0 Foreign Currency Impact $(111) $(86) Adjustment of Warrant Value $(335) $117 Stock - based Compensation Expens
Slide 23: 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 GM IOL Mix ICL Mix Expanding Gross Margins Seventh Consecutive Year of Gross Margin Expansion 2012 Mix: ICLs at 55% and IOLs at 41 % 23 69.4% 55% 41%
Slide 24: STAAR Balance Sheet
STAAR Balance Sheet • Profitable and Generating Cash – $22M in Cash as of 12/31/12 – $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 24
Slide 25: 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 • Complete Manufacturing Consolidation by the End of 2013 • Over $100M Savi
Slide 26: 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 27: 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 28: Key Drivers for Growth
Key Drivers for Growth • Increased Investments in Sales & Marketing and R&D • Planned New Product Launches • World - wide Market Share Gains for the ICL; Encouraging IOL Trends • Continued Excellent Execution of Project Comet • Spain Converted to Direct Sales in Q212 • Enhancements to Our Management
Slide 29: Investing in the Future
$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 2010 2011 2012 GM$ S&M$ G&A$ R&D$ Cons$ Investing in the Future 29 Leveraging Infrastructure
Slide 30: Investment in New Sales & Marketing Positions
Investment in 19 New Sales & Marketing Positions 30 Region 2011 2013 Var. Europe 5 11 +6 Asia Pacific 31 37 +6 North America 13 17 +4 Social Media ─ 3 +3 49 68 +19 Since 2011
Slide 31: Key Operating Metrics for 2013
* As provided on February 28, 2013 Key Operating Metrics for 2013* • Revenue Growth of 8% to 10% • GM Expansion of 250 bps • GAAP Profitable Each Quarter • Consolidation Progress while Quality & Supply Maintained 31
Slide 32: Solid Start to 2013
Solid Start to 2013 • Total Sales Grow by 16% to Approximately $18M – Negative FX exchange of $750k • Visian ICL Sales Increase by 24% • Visian ICL Sales in Europe Increase by 57% – CentraFLOW ICL Technology – Expanded Sales Team • Visian ICL Sales in U.S. Increase by 12% • IOL Sales Flat – 10% Grow
Slide 33: Fastest Growing Refractive Technology in the World
33 NASDAQ : STAA “Fastest Growing Refractive Technology in t he World” April 2013