Q1 2004
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Q1 2004. Forward Looking Statement Disclosure.

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Q1 2004

Q1 2004

Forward looking statement disclosure

Forward Looking Statement Disclosure

  • This presentation includes forward-looking information, including statements related to future market trends effecting the contact lens industry, the supply of and demand for eye care practitioners, possible strategies and actions by the Company and its competitors and the Company’s manufacturing costs.

  • Actual results could differ materially from those discussed in this presentations.

  • Detailed information concerning factors that could cause actual results to differ from those discussed in this presentation is available in the Company’s filings with the SEC, including the sections entitled “Risk Factors.”

  • The Company does not undertake to revise or update any forward-looking statements to reflect future events or circumstances.

Ocular sciences is

Ocular Sciences is...

  • A leader in the $3.6 billion soft contact lens market

  • The only major manufacturer to focus solely on the eye care practitioner

  • Reducing product cost through innovative manufacturing

  • Developing innovative new products

  • Generating double-digit international sales growth

  • Executing an earnings growth strategy

2003 worldwide soft contact lens market

2003 Worldwide Soft Contact Lens Market

Projected Growth Rate

2003 - 2007

2003 Total Revenue: $3.6 billion

Source: 2003 OSI Long Range Plan

2003 worldwide disposable soft contact lens market

2003 Worldwide Disposable Soft Contact Lens Market

% of Sales in U.S. dollars by product category






Source: 2003 OSI Long Range Plan

Growth rate disposable toric

Growth Rate: Disposable Toric

2003 – 2007

Worldwide annual sales in millions

CAGR = 17%

Source: 2003 OSI Long Range Plan

Growth rate daily disposable

Growth Rate: Daily Disposable

2003 – 2007

Worldwide annual sales in millions

CAGR = 10%

Source: 2003 OSI Long Range Plan

Ocular s differentiating qualities

Ocular’s Differentiating Qualities

  • Comfort

  • Handling

  • Patient preference

  • Revolutionary Toric design

  • Natural lens coloring

Superior products comfort

Superior Products: Comfort

  • Patented Low-Edge Apex Design

  • Minimal Lens-lid Interaction

Ocular Sciences:

Low Edge Apex

Other Manufacturers:

High Edge Apex

Superior products handling

Superior Products: Handling

  • Dry Cast Molding

  • Enhanced Shape Retention

  • Visual Acuity

Biomedics 55 UV

86 patient preference

86% Patient Preference

  • Acuity

  • Comfort

  • Handling

  • Overall Performance

Results:86% of these patients preferred Ocular’s lens over their current lens.

* Independent clinical study evaluated preferences among 289 patients.

Revolutionary biomedics toric design

Revolutionary Biomedics® Toric Design

Lens Surface Comparison

Sharp Surface

Smooth Surface

Competitive Brand

Biomedics ® Toric

Revolutionary biomedics toric design1

Revolutionary Biomedics® Toric Design


  • Increased stability

  • Improved visual acuity

  • Consistent performance

  • Greater comfort

  • Ease of fitting

  • Less chair time

Toric market share

Toric Market Share

Source: CLI

Unique natural biomedics colors

Unique, Natural Biomedics® Colors

  • Clinically proven Biomedics 55 design

  • No refit required for existing Biomedics 55 wearers

  • Proprietary ink technology/natural look

  • Revising color offering

  • Exclusive Cover Girl® marketing agreement

Innovative marketing strategy

Innovative Marketing Strategy

  • Direct to professional only distribution

  • Customized product and branding by channel

  • Competitive pricing

  • Blue Chip customer base

  • High patient retention

  • International expansion

Customized branding by channel

Customized Branding by Channel



  • Channel


Hydrogenics™ 60




Independent Practitioner

Retail Optical

Mass Merchandiser

Dr. Smith

Customized branding

Customized Branding

  • Benefits:

  • Assures channel brand exclusivity

  • Reduces possibility of price shopping

  • Patients receive prescription that is brand specific

  • Practitioners retain greater percentage of refill orders, increasing recurring revenue stream

High patient retention

High Patient Retention

  • Percent of patients returning to original prescribing practitioner

Blue chip customer base

Blue Chip Customer Base

International market opportunities

International Market Opportunities


Low penetration rate

Launch of Toric and Color lenses

Private label expansion



International Market Opportunities


Second largest contact lens market

Acquired direct market presence

Strong competitive position in daily regimen segment

New manufacturing technology enhances competitive position

Strong product pipeline

Executing an earnings growth strategy

Executing an Earnings Growth Strategy

  • New product development

  • International opportunities

  • Drive domestic market share

  • Lower manufacturing costs

New product development

New Product Development

  • Toric

  • Enhanced spherical offering

  • Silicone hydrogel

  • Multi-focal

New product timeline

New Product Timeline






Q2 04

Q1 05

Q3 05

38% Water content lens launched

Intro superior bi-weekly disposable sphere

Launch daily wear lenses in Japan

Launch superior disposable toric lens in U.S.

Launch superior disposable toric lens in Europe

Global launch improved sphere lens

Launch silicone hydrogel lens in Europe / Launch multifocal lens in U.S. / Disposable toric lens approved in Japan

Launch silicone hydrogel in U.S.

Target: Over 25% of sales represented by products introduced in the past 5 years

International growth

International Growth

Annual sales in US dollars

Geographical sales





United States


United States


Geographical Sales



Drive domestic market share

Drive Domestic Market Share

  • New product offerings

  • Direct support for the ECP

  • Focused sales organization

Lower manufacturing costs

Lower Manufacturing Costs

  • Gen II technology delivers:

  • 20% of the labor

  • one-third less the facility space

  • 40% less production cost

Lower manufacturing costs1

Lower Manufacturing Costs

Gen II technology timetable:

  • All daily disposables on Gen II by end of 2003

  • 25% of weekly disposables on Gen II by end of 2003

  • 80% of high volume production levels by end of 2004

  • $20MM in product cost savings in 2004

  • $40MM in annual product cost reductions by 2005

Lower manufacturing costs2

Lower Manufacturing Costs

Annual unit production cost % decrease

% decrease

Q1 2004

Q4 2003 Financial Highlights

  • RevenueUp 19%

  • - International up 31%

  • - Toric up 75%+

  • Gross Margin55.6%

  • Operating Expense %Down to 39.8%

  • 2003 Full Year Free

  • Cash Flow$34 million*

*Prior to Restructuring and Other Related Costs

Balance sheet highlights in millions

Balance Sheet Highlights(in millions)

  • As of Dec. 31, 2003

  • Cash $ 47

  • Debt $ 16

  • Equity$306

  • Working Capital $126

Q1 2004

2004 Operating Model

  • Revenue:$335 - $342 million

  • Gross Margins:55.5% - 56.5%

  • Operating Expense:39% - 41%*

  • Net Income:$43 - $44 million*

  • Earnings Per Share: $1.72 – 1.75*

  • *Prior to Restructuring and Other Related Costs

Investment considerations

Investment Considerations

  • a leader in the $3 billion soft contact lens market.

  • the only major manufacturer to focus solely on the eye care practitioner.

  • reducing product cost through innovative manufacturing.

  • generating double-digit international sales growth

  • executing an earnings growth strategy

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