Staar Surgical Company · NASDAQ:STAA
Staar Surgical — 3rd Annual Benchmark One on One Investor Conference 2012
38 slides from Staar Surgical's conference presentation, May 31, 2012
Slide 1: 3rd Annual Benchmark One on One Investor Conference
® (NASDAQ: STAA) 3rd Annual Benchmark One on One Investor Conference May 31, 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 plans, strategies, and objectives of m
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: STAAR 2012 Key Metrics
STAAR 2012 Key Metrics Increase revenues 15% Grow Visian ICL sales by more than 32% Expand Gross Margin to 71% (350 bps) Profitable each quarter and full year Accomplish manufacturing consolidation milestones without customer disruption in supply or quality Off To a Good Start in Q1 ®
Slide 5: STAAR Positioned for Strong Growth
STAAR Positioned for Strong Growth Two Large Market Opportunities Strong Balance Sheet Sustainable Competitive Advantages Six new product offerings in 2012 Robust New Product Pipeline Mfg. consolidations leads to big savings ®
Slide 6: Intraocular Lens Focus
Intraocular Lens Focus Lenses Placed within the Eye Refractive Lens Cataract Lens Sits in front of natural Replaces natural crystalline lens crystalline lens Refractive ICL Cataract IOL 56% of sales Q1 41% of sales Q1 ®
Slide 7: STAAR's Value Driver
STAAR’s Value Driver The Visian ICL Over $32 million sales/$60M to end customer Growth rate 32% 2011/25% Q1 85% Gross Margins New Product Launches $3 Billion Addressable Market Currently about 2% Market Share 10% average share position in Focused Markets would yield $270M of end customer revenue ®
Slide 8: Visian ICL
® Visian ICL Premium Product Premium Result 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 inabili
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 the
Slide 10: ICL vs. LASIK
ICL vs. LASIK Small micro incision Incision over 1 inch-long Adds a lens into the eye Burns material away Permanent but removable Cannot be reversed No induced dry eye Potential dry eye induced Future options preserved May reduce future options Plus eyes in which LASIK is contraindicated. ®
Slide 11: Visian ICL Revenue Gains
Millions $ 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 Visian ICL Revenue Gains Q411 Q112 25% Increase Q1 2012 vs. 18% Q1/11 & 32% full year ®
Slide 12: APAC and top targeted markets 2012 Q1 Results
APAC and top 11 targeted markets 2012 Q1 Results +30% +50% Q1 2011 Q1 2012 APAC Top 11 ®
Slide 13: Key ICL Asia Pacific markets Q1 2012 Results
Key ICL Asia Pacific markets Q1 2012 Results +37% +110% Q1 2011 +93% +47% Q1 2012 Japan India China Korea ®
Slide 14: 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 Available in all CE Marked countries Other markets gain expanded range on V4c approval 70% Hyperopic Myopic 60% 50% 40% 30% 20% 10% 0% > +6 +2 t
Slide 15: New Visian V4c ICL
New Visian V4c ICL During Q1-58% of ICLs in Europe (>1,000 implanted) CentraFLOW™ technology restores natural aqueous flow within the eye utilizing the KS-AquaPORT™ Eliminates a procedure and additional visit by patient Less time & more convenient (LASIK-like) Economics better for the surgeon Premiu
Slide 16: Visian Toric ICL Approved in Japan
Visian Toric ICL Approved in Japan Estimated 325,000 refractive procedures with very high rate of myopia and astigmatism Prevalence of: Japan ROW Myopia 40% 15% to 28% Astigmatism 50% 30% Dr. Tomita believes that 75% of his ICL usage will be TICL compared to 40% ROW Very attractive market as direct
Slide 17: 2012 Targeted Visian ICL Markets
2012 Targeted Visian ICL Markets Market 2011 Proc. Proc ∆ ICL ∆ TICL V4c Share China * 1,003,000 +11% +84% 2008 2012/13 .7% U.S.* 763,000 +6% (1%) 2012 2013 .8% Japan* 325,000 (13%) +167% 2011 2014 .4% Lat Am* 219,000 +3% +8% 2012 2012 1.3% Spain* 155,000 +5% +5% 2002 2011 3.3% India* 141,000 +4% +3
Slide 18: Visian ICL Product Pipeline
Visian ICL Product Pipeline Product R D CE Japan U.S. Toric ICL √ √ √ 2011 2012 V4b Expanded Range √ √ 2010 NP NP Lower myopes and toric hyperopic V4c (Includes expanded range) Eliminates need for PI √ √ 2011 ○ ○ V5 (Includes all features of 4b & 4c) Preloaded, enhanced safety design ○ ○ 2012 2014 2
Slide 19: Q1 Innovation Updates
Q1 Innovation Updates Inventions completed during the quarter allowing Collamer lens to be sterilized in preloaded system. Key feature on the Visian V5 ICL Key surgeons evaluated during ASCRS meeting with very good feedback Believe same system can be used to preload nanoFLEX IOLs ®
Slide 20: V5 ICL Eliminates Multiple Steps
V5 ICL Eliminates Multiple Steps Saves Time and Less Risk of Errors ®
Slide 21: What the ICL Innovation Means
What the ICL Innovation Means V4b Q1 2011 Expanded Range Allows treatment of virtually all myopic patients. V4c Q1 2012 CentraFLOW Technology Eliminates a step in the current procedure. V5 Q1 2013 Preloaded ICL More convenient, less procedure time, no delivery issues. ®
Slide 22: DTC Results in Korea
DTC Results in Korea Expanded Market Share from 5% to 13.4% in 5 Years How to duplicate results in additional markets? Radio Ads Bus Wraps Subway Signage Began in 2007 Began in 2009 Began in 2006 Movie Theater Commercials in 2011 ®
Slide 23: The ICL Technology Era Beginning?
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?? Under much scrutiny in the past few years particularly in U.S. LASIK procedures losing share in major markets. Vis
Slide 24: Cataract IOL
Cataract IOL Large & Growing Market Tough Competitive Landscape 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
Slide 25: 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 data sugges
Slide 26: 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 27: nanoFLEX IOL Family in Europe
“nanoFLEX IOL Family” in Europe Initial nanoFLEX shipments 2011 2ndH Rollout to limited countries nanoFLEX Toric IOL (NEW PRODUCT) Premium product with very good margins Will allow profitable entry to new markets Collamer will be an excellent competitive advantage over other toric IOLs First shipmen
Slide 28: STAAR IOL Product Pipeline
STAAR IOL Product Pipeline Product R D CE Japan U.S. Preloaded Silicone √ √ √ √ 2012 Preloaded 1P Acrylic √ √ √ √ NP nanoFLEX IOL √ √ √ ○ √ nanoFLEX Toric √ ○ √ ○ 2012/13 nanoFLEX II ○ ○ 2012 ○ 2012 Preloaded nanoFLEX ○ ○ 2013 ○ 2014 Accommodating IOL ○ ○ 2013/14 ○ ○ ○= In the planning stage. ®
Slide 29: 2012 Q1 GAAP Results
2012 Q1 GAAP Results Comparison to Q1 2011 ($000’s) Q1 2012 Q1 2011 Improvement Revenue $15,509 $14,849 +$660/+4.4% Gross Profit Dollars $10,902 $ 9,629 +$1,273/+13% Gross Profit Margin 70.3% 64.8% +550bps Operating Exps ex Comet $10,069 $ 9,288 +$781/+8% Operating Expenses $10,624 $ 9,421 +$1,203/+
Slide 30: Reconciliation of Non-GAAP Measure
Reconciliation of Non-GAAP Measure Measure Q1 2012 Q1 2011 GAAP net income $ 232 $ 300 Mfg. consolidation expenses $ 555 $ 133 Gain foreign currency ($ 67) ($ 372) Adjustment of warrant value $ 14 ($ 103) Stock-based compensation exp $ 687 $ 355 Adjusted net income $ 1,421 $ 313 Adjusted income per
Slide 31: Expanding Gross Margins With ICL Product Mix Gains
Expanding Gross Margins With ICL Product Mix Gains 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% GM% IOL Mix ICL Mix 0.0% 2007 2008 2009 2010 2011 Q1 2012 Gross margins have expanded from 49% to 70.3%. Q1 Mix: ICLs at 55.5% and IOLs at 41%. ®
Slide 32: 2012 Key Metric Report Card
2012 Key Metric Report Card Q1 Q2 Q3 Q4 2012 Increase revenues by 15% Exceed 2011 Visian ICL sales growth of 32% Continuous expansion of GM % to achieve 71% for the full year Profitable each quarter and full year Successfully implement Comet without disruption of product supply ®
Slide 33: 2011 Key Metric Report Card
2011 Key Metric Report Card Increased 3 of 4 Metrics Mid-Year Q1 Q2 Q3 Q4 2011 Double Digit Revenue Growth Grow ICL Sales by 25%, 30% Continuous Expansion of GM %, End year at 66%, 66.5% Profitable in 3 of 4 all 4 quarters and for the full year ®
Slide 34: Six New Product Launches In Process during 2012
Six New Product Launches In Process during 2012 ICLs IOLs V4c ICL nanoFLEX IOL Q4 2011 to Europe Q3 2011 to Europe Additional approvals 2012 V4 ICL nanoFLEX Toric IOL Q4 2011 to Brazil Q2 2012 to Europe V4 TICL KS-SP 1 Piece Preloaded Acrylic Q4 2011 to Japan 2H 2012 to Europe and Japan ®
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/$555k in Q1 Planned spend of $2M to $2.5M in 2012 Complete by the end of 2013 Over $100M savings in tax and labor costs from 2014 to 2020 Move e
Slide 36: STAAR Balance Sheet
STAAR Balance Sheet Profitable & Generating Cash $9.7M swing in cash generation from operations $16.4M in Cash end of Q1 Company Debt Free Only a working line of credit in Japan $121M in NOLs (Worth $1 a share) 37 million diluted shares outstanding 1.4 million warrants at approximately $4 ®
Slide 37: STAAR's Path to 2014
STAAR’s Path to 2014 Continued ICL market penetrations 85% Gross Margin New products (V5 and V6) Targeted IOL profitable growth 60%+ Gross Margin New Products (nanoFLEX Toric + Preloaded) Manufacturing Consolidation complete 2014 STAAR moves to over $100M in revenue, near or at 80% gross margins and
Slide 38: 3rd Annual Benchmark One on One Investor Conference
® (NASDAQ: STAA) 3rd Annual Benchmark One on One Investor Conference May 31, 2012 “Fastest growing refractive technology in the world.”
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