Annual Report and Accounts 2006 - Optos

Operational and Financial Review
continued
North America
North America remains the largest
opportunity for the Company, and our
excellent progress continued during
the year. Revenues in North America
grew by 41% to $64.7 million, with
$59.3 million generated in the United
States and $5.4 million in Canada.
Primary care optometry remains our
core customer target segment in
North America, where we estimate
that there are approximately 21,300
addressable practices, of which 20,000
are located in the United States. An
addressable practice is one that is
sufficiently clinically focused and large
enough to commercially integrate the
P200 device and the optomap® Retinal
Exam. During the year, we installed
508 new devices in the United States
and closed the year with an installed
base of 2,324 P200 devices. In Canada,
our installed base grew by 42 to 151.
Our total installed base in North
America at the year end stood at 2,475,
up by 29% from 1,925 at the end of our
last financial year, and representing
12% of the estimated addressable
market.
During the year, we extended our
collaboration with electronic medical
records providers and produced
digital animations to promote the
optomap® Retinal Exam. We also
worked in partnership with Johnson
& Johnson, Marco, Officemate and
Eyemaginations on an exhibit that
demonstrated to practitioners
ways of delivering the optimum
patient experience during an eye
health examination. These initiatives
were well received at the major
optometric and ophthalmic meetings
and exhibitions during the year,
including the American Academy
of Ophthalmology, the American
Optometric Association, the South
Eastern Congress of Optometry, Vision
Source and Vision Expo East and West.
At each of these, we secured new
customer contracts and extended the
contract life of many of our existing
customers.
We continued to operate our Optos
Academy programme, which has
proven popular with practitioners
and practice staff at major exhibition
events. These educational workshops
are designed to provide attendees
with updates on topics such as
disease trends in primary eyecare,
reimbursement guidelines and using
our Retinal Exam Annual Protocol
(“REAP”) to drive compliance levels,
and targeted ophthalmoscopy,
which is a programme we launched
to explain to practitioners how they
can use the optomap® Retinal Exam
as the first step in every annual
comprehensive examination. We
believe that this type of educational
support, combined with the clinical
and financial benefits of having our
P200 device installed in the practice,
provides practitioners with compelling
reasons to offer the optomap® Retinal
Exam to all their patients.
“Revenues in Europe grew by 24%
to $3.0 million, with $2.3 million
generated by our UK business and
$0.7 million in Germany. ”
Bruce Doney, Senior Embedded Software/
FPGA Engineer; Fiona Macpherson,
Principal Engineer; and, Richard Moore,
Senior Development Engineer.
Our existing customer base in North
America is comprised primarily of
independently owned and operated
eyecare practices. This customer group
remains a priority, and the addressable
market within this segment continues
to hold significant potential. We
have also determined that there are
commercial opportunities within
the corporate optical and eyecare
chain customer segment. We have
stepped up our efforts to capture new
business from within this segment. A
National Accounts Group under the
leadership of a Senior Sales Director
has been established, with the
remit to secure additional business
from within the eye-health focused
corporate optometric chains, practices
with multiple locations and military
establishments.
We signed an agreement with
LensCrafters Inc., a leading US-based
optical retail chain, where 60 of the
optometric practices connected with
the 1,200 retail locations owned by
LensCrafters and its affiliates installed
our P200 device. In the latter part of
the year, a test-marketing television
advertising campaign was launched
in the Jacksonville, Florida area by
Pearle Vision, a LensCrafters affiliate.
This direct consumer campaign
focused on presenting the Pearle
Vision practitioner as a trusted eye
healthcare provider, and has led
to increased adoption rates of the
optomap® Retinal Exam. We believe
that the agreement with LensCrafters
Inc. provides us with a valuable
commercial platform to generate
additional business from within
LensCrafters and its affiliates. During
the year, OptiCare Eye Health & Vision
Centers Inc. installed the P200 device
in each of its 18 eyecare practices in
the state of Connecticut.
Seven of the sixteen schools of
optometry now use the P200 device
and include the optomap® Retinal
Exam as part of the curriculum and
educational training programme.
Our aim is to have our P200 device in
every such institution to ensure that
all students entering the profession
have had extensive exposure to our
P200 device and the optomap®
Retinal Exam during their training and
before being admitted to practice.
In the seven existing locations, our
device is being used to facilitate
patient care and to assist students in
the recognition of retinal conditions
and abnormalities. We also advocate
that the schools of optometry use
the optomap® Retinal Exam as a
reliable confirmation of findings
24%
Increase in revenues in Europe.
With $2.3 million generated by our UK
business and $0.7 million in Germany.
118
Total installed base in Europe.
Up by 40% from 84 at the same
time last year.
when teaching the use of other
methods of examining the retina using
conventional manual instrumentation.
This is achieved by first looking at
the optomap® Retinal Exam and
then directing the student to find
the condition using, for example, a
Binocular Indirect Ophthalmoscope.
This approach – which we have
named Targeted Ophthalmoscopy
– is recommended in all of our private
practice and corporate locations as
well as in the university setting.
The United States is our largest country
market and we believe offers the most
potential for us to significantly grow
our business. Accordingly, during the
year, we put in place a number of
initiatives designed to capitalise on the
US opportunity. In the latter part of the
financial year, we implemented a new
programme known as Partner Visit
Protocol (“PVP”), which is designed to
increase practice revenue by enabling
our Customer Focus Teams to work
more closely with our customers to
integrate the optomap® Retinal Exam
deeper into their practices. Customers
have welcomed this initiative and we
are seeing improved revenue per site
in those practices where PVP has been
fully implemented.
Optos plc Annual Report & Accounts 2006 13