Staar Surgical Company · NASDAQ:STAA
Staar Surgical — Non-Deal Roadshow (November 2012)
36 slides from Staar Surgical's roadshow presentation, Nov 27, 2012
Slide 1: Non-Deal Road Show November 27-29, 2012
(NASDAQ: STAA) Non - Deal Road Show November 27 - 29, 2012 ® “Fastest growing refractive technology in the world.”
Slide 2: Forward-Looking Statements
FORWARD - LOOKING STATEMENTS All statements in this press release that are not statements of historical fact are forward - looking statements, including statem ents about any of the following: any projections of earnings, revenue, sales, profit margins, cash or any other financial items; the plans,
Slide 3: STAAR Positioned Well for Strong Top Line and Bottom Line Growth
STAAR Positioned Well for Strong Top Line and Bottom Line Growth Two Large M arket O pportunities Sustainable Competitive Advantages New Product O fferings in 2012/2013 Robust New Product Pipeline Strong Balance Sheet Manufacturing Consolidations L ead to Big S avings S tarting in 2014 ®
Slide 4: STAAR Surgical 2011-2012 YTD Key Metrics
STAAR Surgical 2011 - 2012 YTD Key Metrics 2011 Full Yr. 2012 YTD Total Revenue Growth +14% +2% ICL Revenue Growth +32% +14% Gross Margin Expansion +370bps +330bps GAAP Net Income $ 1,348 ($ 349) Adjusted Net Income* $ 4,354 $ 3,722 Mfg. Consolidation On Target On Target ® * Reconciliation of Non -
Slide 5: Intraocular Lens Focus
Intraocular Lens Focus Only Lenses Placed within the Eye Cataract IOL Refractive ICL 57.4% of Sales Q3 38.1% of Sales Q3 ®
Slide 6: STAAR's Value Driver: The Visian ICL
STAAR’s Value Driver The Visian ICL In 2011 $32 million sales/$60M end customer Growth rate 14% YTD 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 7: 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 8: 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 Lens) Abbott (AMO) /Ophtec Novartis ( Alcon ) The Big Guys are in the WRONG Place and heavily invested in LASIK! LASIK is the Real
Slide 9: 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 10: Visian ICL Revenue Gains
Visian ICL Revenue Gains R ECORD Visian ICL Third Quarter 14% Revenue Increase 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 Q312 Milli ons $ ®
Slide 11: New Visian V4b ICL More Than Doubles Market of Treatable Patients
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 12: New Visian ICL with CentraFLOW
New Visian ICL with CentraFLOW During Q3 - 82% 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 ESCRS
Slide 13: 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 CentraFLOW ICL during Q3 Prevalence of: Japan ROW Myopia 40% 15% to 28% Astigmatism 50% 30% Sources: The Glob
Slide 14: Targeted ICL Market Results
Targeted ICL Market Results Q3 YTD Results 2009 - 12 Q3 YTD 09 Q3 YTD 10 Q3 YTD 11 Q3 YTD 12 ® Overall growth of 16% in targeted markets. - 2% +45% +6% +71% +29% +4% - 5% +16% +25% +49% - 11%
Slide 15: 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%) 2013? 2013 .8% Japan * 325,000 (13%) +167% 2011 Go to V5 .4% Latin Am * 219,000 +3% +8% 2012 20
Slide 16: What ICL Innovation & Pipeline Means
What ICL Innovation & Pipeline Means ? V4b Q1 2011 Expanded Range V4c Q1 2012 CentraFLOW Technology V5 Mid - Year 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 17: Korea Consumer Awareness Campaigns Expanded Market Share
Korea Consumer Awareness Campaigns 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 18: 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 19: 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 20: 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 21: 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 22: 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/No glistenings Four active material patents (first expires 2015 with some blocking patents till 2017) M anufacturing know -
Slide 23: 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 24: New IOLs Introduced at ESCRS
New IOLs Introduced at ESCRS Preloaded KS - SP in Europe and Japan Single Piece A crylic P reloaded IOL Initial trials have produced excellent results There are supply limits on product till Q1 2013 nanoFLEX Toric IOL in Europe Premium product with very good margins Should allow profitable entry to
Slide 25: 2012 Q3 GAAP Results Comparison to Q3 2011
2012 Q3 GAAP Results Comparison to Q3 2011 ($000’s) Q3 2012 Q3 2011 Improvement Revenue $15,866 $15,266 +$600/+4% Gross Profit Dollars $11,176 $ 10,450 +$726/+7% Gross Profit Margin 70.4% 68.5% +190 bps Operating Exps ex Comet $10,539 $ 9,576 +$963/+10% Operating Expenses $11,267 $ 9,713 +$1,554/+16
Slide 26: Q3 Reconciliation of non-GAAP Measure
Q3 Reconciliation of non - GAAP M easure Measure Q3 2012 Q3 2011 GAAP net income (loss) ($ 90) $ 77 Mfg. consolidation expenses $ 728 $ 137 Foreign currency impact ($ 191) $ 277 Adjustment of warrant value ($ 10) $ 153 Stock - based compensation expense $ 838 $ 523 Adjusted net income $ 1,275 $ 1,16
Slide 27: 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 YTD 2012 GM% IOL Mix ICL Mix Gross margins have expanded from 49.0% to 70.4%. Q3 Mix: ICLs at 57.4% and IOLs at 38.1%. ®
Slide 28: 2012 Nine Month YTD GAAP Results
2012 Nine Month YTD GAAP Results Comparison to Q3 YTD 2011 ($000’s) 2012 2011 Improvement Revenue $47,316 $ 46,385 +$932/+2% Gross Profit Dollars $33,122 $ 30,940 +$2,182/+7% Gross Profit Margin 70.0% 66.7% +330 bps Operating Exps ex Comet $31,119 $ 28,363 +$2,756/+10% Operating Expenses $33,098 $ 2
Slide 29: 2012 Nine Month YTD Reconciliation of non-GAAP measure
2012 Nine Month YTD Reconciliation of non - GAAP measure Measure YTD 2012 YTD 2011 GAAP net income (loss) ($ 349) $ 1,239 Mfg. consolidation expenses $ 1,980 $ 463 Foreign currency impact ($ 9) ($ 167) Adjustment of warrant value ($ 217) ($ 29) Stock - based compensation expense $2,317 $1,330 Adjust
Slide 30: The Cash Story
“The Cash Story” Record nearly $20M in Cash Q3 2012 Q3 2011 Net income (loss) ($ 90) $ 77 Non - cash $ 1,446 $ 1,320 Working capital $ 1,124 $ 1,102 Cash provided by operations $ 2,480 $ 2,499 Cash used in investing activities ($ 329) ($ 514) Cash provided by financing activities ($ 30) $ 1,583 Exch
Slide 31: New Hires during 2012
New Hires during 2012 Investment in 17 New Sales & Marketing Positions ® Region SALES MKTG Europe 4 1 Asia Pacific 3 North America 4 Global 2 8 6 Fourteen positions already added YTD: 3 new hires remaining: Sales in Spain, Clinical & Marketing in Korea and Clinical Marketing in Asia Pacific
Slide 32: STAAR Balance Sheet
STAAR Balance Sheet Profitable non - GAAP & Generating Cash $2.5M generated from operations in Q3 $19.8M in Cash end of Q3 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 33: Plan to Use our $121M NOLs Beginning in 2014
Plan to Use our $121M NOLs Beginning in 2014 Consolidate four manufacturing operations to one existing U.S. facility Two years to complete with a cost of $6M Spent $1.1M in 2011/$2.0M YTD 2012 Planned spend $500K in Q4, $2.4M in 2013 Complete mfg. consolidation by the end of 2013 Over $100M savings
Slide 34: 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 + KS - SP) Mfg. Consolidation benefits in 2014 financials
Slide 35: 2012 Nine Month GAAP Results: Effect of Consolidation to 2014
2012 Nine Month GAAP Results ($000’s ) Illustrates Effect of Consolidation to 2014 STAAR P&L At 2012 Revenue Base and Slightly Higher 2012 2014 Basis +20% Revenue Revenue $47,316 $47,316 $56,779 Gross Profit Dollars $33,122 $36,906 $44,288 Gross Profit Margin 70.0% 78.0% 78.0% Operating Expenses $33
Slide 36: Non-Deal Road Show November 27-29, 2012
(NASDAQ: STAA) Non - Deal Road Show November 27 - 29, 2012 ® “Fastest growing refractive technology in the world.”