Staar Surgical Company · NASDAQ:STAA
Staar Surgical — FY2013 Earnings Presentation
39 slides from Staar Surgical's earnings presentation, Feb 26, 2014
Slide 1: Q4 & Full Year 2013 Results – Investor Presentation
1 NASDAQ : STAA Q4 & Full Year 2013 Results – Investor Presentation February 26, 2014
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 statements about any of the following: any proje ctions of earnings, revenue, sales, profit margins, cash, effective tax rate or any other financial
Slide 3: Agenda
Agenda 2013 Metric Update Barry G. Caldwell Chief Executive Officer Q4 & Full Year Key Financial Results Steve Brown Chief Financial Officer Operational/2014 Key Metrics Barry G. Caldwell Chief Executive Officer 3 Q&A Session Your Questions
Slide 4: Key Operating Metrics for 2013
Key Operating Metrics for 2013 4 Q1 Q2 Q3 Revenue Growth of 8% to 10% 12% to 14% GM Expansion of 250 bps GAAP Profitable Each Quarter Consolidation Progress while Quality & Supply Maintained
Slide 5: Key Operating Metrics for 2013: Revenue Growth
Key Operating Metrics for 2013 Revenue Growth 5 Q1 Q2 Q3 Q4 Revenue Growth of 8% to 10% 12% to 14%* GM Expansion of 250 bps GAAP Profitable Each Quarter Consolidation Progress while Quality & Supply Maintained *13.2% Revenue Growth without injector sales and 14% with injector sales.
Slide 6: Metric Report: Revenue Growth (Currency Impact)
2013 Key Metric Report Revenue Growth (Currency Impact) • Q4 Growth in Japan (22.4% of Total Global Sales) – - 6% in USD/+18% in Constant Currency (CC) • Weakening of the Yen – Value in Q4 2013 was 100.5 yen to USD/Q4 2012 was 80.9 – Value for FY 2013 was 97.6 yen to USD/FY 2012 was 79.8 • Impact to
Slide 7: Metric Report: Revenue Growth (ICL Growth)
2013 Key Metric Report Revenue Growth (ICL Growth) • Q4 Sales were $11.5M, New Quarterly Record – $787k increase to Q3/13 – $2.8M increase to Q4 PY • 31% USD Increase Q4 • 29% Unit Increase Q4 • 67% of all ICL Units S hipped in December were CentraFLOW • 26% Increase in 2013 FY Revenue and 22% Incre
Slide 8: Q4 Procedure Growth in Key Markets
Korea China U.S. M East India Spain Lat Am Japan Germany France Italy U.K. 2013 2012 Visian ICL Units Increase in 10 of 12 Key Markets 2013 Key Metric Report Q4 Procedure Growth in Key Markets (Gaining Share Globally) +29% +81% +37% +3% - 2% +12% +69% - 4% +14% +67% +32% + 4 % 29% Global ICL Procedu
Slide 9: Q4 Dollar Growth in Key Markets
Korea China U.S. Spain Mid East Japan India Lat Am Germany France Italy U.K. 2013 2012 Visian ICL Dollars Increase in 11 of 12 Key Markets 2013 Key Metric Report Q4 Dollar Growth in Key Markets +42% +75% +33% +15% +17% - 7 % +13% +59% +15% +68% +51% + 8 % 31% Global ICL Dollar Growth EMEA +27% APAC
Slide 10: 2013 Procedure Growth in Key Markets
Korea China U.S. India M East Spain Lat Am Japan Germany France Italy U.K. 2013 2012 Visian ICL Units Increase in All 12 Key Markets 2013 Key Metric Report 2013 Procedure Growth in Key Markets (Gaining Share Globally) +12% +41% +19% +12% +16% +34% +43% + 4 % +25% +54% +38% +16% 22% Global ICL Proced
Slide 11: 2013 Dollar Growth in Key Markets
Korea China U.S. Spain India Japan Mid East Lat Am Germany France Italy U.K. 2013 2012 Visian ICL Dollars Increase in 11 of 12 Key Markets 2013 Key Metric Report 2013 Dollar Growth in Key Markets +15% +40% +15% +59% +18% - 4% +34% +40% +33% +54% +50% +17% 26% Global ICL Dollar Growth EMEA +41% APAC
Slide 12: Metric Report: Revenue Growth (IOL Growth)
2013 Key Metric Report Revenue Growth (IOL Growth) • Q4 Sales W ere $6.6 M , $1.3M Increase to Q3/13, $166k Less than Q4 PY • Q4 Decrease of 2 % in USD – Negative impact of $983k due to foreign exchange – Q4 Sales of $7.6M in CC, +12% to Q4 2012 • Approximately $0.4M Backorders R emain for Europe •
Slide 13: Q4 2013 IOL Revenue
Japan U.S. EMEA China Total Q4 13 Q4 12 Q4 Revenue Results 2012 - 13 Revenue in CC +$983k or 12% Increase Q4 2013 Key Metric Report Q4 2013 IOL Revenue USD - 4 % / +26% +2% +27% - 45% - 2% / +12%
Slide 14: FY 2013 IOL Revenue
Japan U.S. EMEA China Total 2013 2012 Revenue Results 2012 - 13 Revenue in CC +$3.2M or 5% Increase FY 2013 Key Metrics Report 2013 IOL Revenue USD - 1% / +24% - 8 % +23% - 55% - 7% / +5%
Slide 15: Metric Report: Gross Margin Expansion
2013 Key Metric Report Gross Margin Expansion 15 Q1 Q2 Q3 Q4 Revenue Growth of 8% to 10% 12% to 14% GM Expansion of 250 bps GAAP Profitable Each Quarter Consolidation Progress while Quality & Supply Maintained
Slide 16: Metric Report: GAAP Profitability
2013 Key Metric Report GAAP Profitability 16 Q1 Q2 Q3 Q4 Revenue Growth of 8% to 10% 12% to 14% GM Expansion of 250 bps GAAP Profitable Each Quarter Consolidation Progress while Quality & Supply Maintained
Slide 17: Metric Report: Manufacturing Consolidation
2013 Key Metric Report Manufacturing Consolidation 17 Q1 Q2 Q3 Q4 Revenue Growth of 8% to 10% 12% to 14% GM Expansion of 250 bps GAAP Profitable Each Quarter Consolidation Progress while Quality & Supply Maintained
Slide 18: Metric Report: Manufacturing Consolidation
2013 Key Metric Report Manufacturing Consolidation • Inventory Levels at the End of 2013 – ICLs +50% – TICLs (12%) as we build inventory in the U.S. – Total ICLs +10% • Communicated Officially June Closure to Employees in Switzerland • Progress Made in Q4 – Yields increasing nicely in U.S. start up
Slide 19: Very Solid Year Overall, Strong Platform for Growth
2013 Very Solid Year Overall Strong Platform for Growth • Increased Shareholder Value by 183% • Revenue Growth R ate at 19% CC/ 13% in USD • ICL Revenue Growth of 26% – IOL revenue g rowth of 5% in CC • Key Regulatory Progress – CentraFLOW in Korea, India and Argentina – TICL in U.S. • ICL Product P
Slide 20: Q4 Key Financial Results: Topics to Discuss
Q4 Key Financial Results Topics to Discuss • Revenue – Impact of Foreign Currency – Accounting for Injector Sales • Gross Margin Expansion • 2013 Key Financial Results – Operating Expenses • Shelf Registration Today 20
Slide 21: Revenue Impact of Foreign Currency
Revenue Impact of Foreign Currency • Negative Impact on Revenue of $1.1M During Q4/$3.8M FY – $983k to IOLs & $80k to Other Sales Q4 – $3.2M to IOLs, $443k to Other Sales & $145k to ICLs FY • Value of Yen Impacted Key Financial Results FY – YTD 97.6 yen to USD vs. 79.8 FY 2012 – FY Revenue results $
Slide 22: Revenue Accounting for Injector Sales
Revenue Accounting for Injector Sales • Company Sells Injectors to Third Party IOL Manufacturer – Some of these injectors are sold back to Company for sale to end customers – Very little impact the first three quarters, Not Material – The volume increased significantly Q4 • Company Determined it Mor
Slide 23: Gross Margin Expansion 2013 FY Results
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 2007 2008 2009 2010 2011 2012 2013 GM% IOL Mix ICL Mix Gross Margin Expansion 2013 FY Results 23 Q4 Mix: ICLs at 60.8% and IOLs at 34.9%.
Slide 24: Gross Margin Expansion 2013
Gross Margin Expansion 2013 Expanding Gross Margins • Key Factors in the Stall of Our G ross M argin E xpansion S uccess – Have provided a negative 260 bps impact FY • Value of Yen – FY approximately a 120 bps impact • Increase of Very L ow M argin IOL Injector S ales – FY approximately a 140 bps im
Slide 25: Financial Results Q4 2013
2013 Key Financial Results 25 Q4 2013 Q4 2012 Change Revenue $18,944 $16,466 +$2,478/+15% Gross Profit $12,976 $11,168 +$1,808/+16% Gross Profit Margin 68.5% 67.8% +70bps Operating Expenses $14,227 $12,411 +$1,816/+15% Income Before Taxes $ (1,048) $ (948) $ (100) Income Taxes $ (172) $ 466 +$ 638 N
Slide 26: Financial Results: Q4 Operating Expenses
2013 Key Financial Results Q4 Operating Expenses • One Extra Week of Salary Expenses (approximately $500k) • Sales and Marketing – Two major t rade s hows in Q4 (normally one in Q3 and other in Q4) – Commissions on Sales Increases • Regulatory Related Expenses in R&D (Approximately $200k) 26
Slide 27: Financial Results 2013 FY GAAP
2013 Key Financial Results 27 2013 2012 Change Revenue $72,215 $63,783 +$8,432/+13% Gross Profit $50,309 $44,291 +$6,018/+14% Gross Profit Margin 69.7% 69.4% +30bps Operating Expenses $49,609 $45,511 +$4,098/+9% Income Before Taxes $ 1,114 $ (519) +$1,633 Income Taxes $ 716 $ 1,244 $ (528) Net Incom
Slide 28: Q4 Non-GAAP Measures
2013 Key Financial Results Q4 Non - GAAP Measures 28 Measure Q4 2013 Q4 2012 GAAP Net Income (loss) $ (876) $ (1,414) Mfg. Consolidation Expenses $ 238 $ 656 Spain Distribution Transition Cost -- $ 582 Foreign Currency Impact $ (77) $ (102) Adjustment of Warrant Value -- $ (118) Stock - based Compen
Slide 29: 2013 FY Non-GAAP Measures
2013 Key Financial Results 2013 FY Non - GAAP Measures 29 Measure 2013 2012 GAAP Net Income (loss) $ 398 $ (1,763) Mfg. Consolidation Expenses $ 2,242 $ 2,636 Spain Distribution Transition Cost $ 442 $ 1,151 Foreign Currency Impact $ (39) $ (111) Adjustment of Warrant Value $ (27) $ (335) Stock - ba
Slide 30: 2013 FY Key Financial Results
2013 Key Financial Results 2013 FY Key Financial Results • Revenue Growth of 13% / 19% in CC – Visian ICL growth of 26% – IOL growth of 5% CC • Gross Margin 69.7%, 72.3 % GM without Negative I mpacts – Negative impact from yen valuation and low margin injectors 260 bps • Cash Position at the End of
Slide 31: Financial Results: Shelf Registration
2013 Key Financial Results Shelf Registration • STAAR Filed Shelf Registration in August 2011 for $75M – Shelf would expire in August, 2014 – Primarily was to expand the business by technology a cquisitions • STAAR filed Shelf Registration Today – Shelf set at $200M – Same purpose as 2011 Shelf • Pr
Slide 32: Operational Updates: Regulatory
Operational Updates Regulatory • CentraFLOW Submissions – Expect Japan approval within days – China, expect questions Mid - March, still believe on track for Mid - Year • V5 Preloaded ICL Submission – Expect CE Mark approval in April • FDA Toric ICL Submission – Panel Meeting postponed Feb 14 due to
Slide 33: Operational Updates: FDA Panel for TICL
Operational Updates FDA Panel for TICL • TICL Study Approved in January 2002 (over 12 years ago) – History of Warning & Deficiency Letters & BIMO Audits (2003 - 2007) • Large Number of Protocol Deviations – Approximately 2/3 patient f orms r elated – Do not believe deviations i mpacted the clinical
Slide 34: FDA Panel for TICL (Safety Profile)
Operational Updates FDA Panel for TICL (Safety Profile) • Safety Profile Established from the Parent ICL – Over 400k ICLs implanted of which over 110k have been TICLs – ICLs have been implanted for over 17 Years • MAUDE Databases used in Summaries – Based upon over 220k to 300k implants – Total AE r
Slide 35: FDA Panel for TICL (Effectiveness Profile)
Operational Updates FDA Panel for TICL (Effectiveness Profile) • Excellent Clinical Outcomes from the TICL Study – Of course, pre - op 0% of eyes were 20/20 Uncorrected – Post - op 82% were 20/20 or Better Uncorrected – Post - op 77% had Uncorrected Equal to or Better than Best Corrected pre - op –
Slide 36: Operational Updates: 2014 Annual Key Metrics
Operational Updates 2014 Annual Key Metrics • Revenue Growth of 8% to 10% • ICL Revenue Growth of 20% • Gross Margin Expansion of 300 bps, 72.7% for the Year • Profitability on a GAAP basis • Successfully Complete Project Comet at Mid - Year 36
Slide 37: Upcoming Investor Meetings
Upcoming Investor Meetings • March 3rd at Cowen Conference in Boston • March 17 th at Sidoti Conference in New York • Planned NDR Week of March 24th with Stephens • ASCRS Investor Breakfast Meeting in Boston (Saturday April 26 ) • Q1 Earnings Release and Call (Monday April 28) • May at Baird Confere
Slide 38: Thank You – Your Questions Please
Thank You YOUR QUESTIONS PLEASE 38
Slide 39: Q4 & Full Year 2013 Results
39 NASDAQ : STAA Q4 & Full Year 2013 Results – Investor Presentation February 26, 2014