Exhibit 99.1
Mark W. Blodgett
Chief Executive Officer September 2005
Safe Harbor Disclaimer
The statements set forth in this presentation include forward-looking statements that involve risk and uncertainties. The Company wishes to caution that a number of factors could cause actual results to differ materially from those in the forward-looking statements. These and other factors which could cause actual results to differ materially from those in the forward-looking statements are discussed in the Company’s filings with the Securities and Exchange Commission.
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Agenda
About StockerYale Current Products/Markets Growth Engine: SOF Financials
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Overview
Leading provider of inspection products, diffractive optics, and specialty fiber for the worldwide machine vision, defense, medical and optical communications markets
Global operations
North America Europe Asia
Employees: 165
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Key Statistics
NASDAQ NM Ticker STKR Stock Price $1.04 Market Capitalization $25 million 52 Week Price Range $0.66—$1.58 Book Value $0.93 Average Volume (3 months) 92,000 shares Assets, 06/30/05 $30 million Shares 24.5 million Management ownership 13%
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Investment Thesis
We have market and technology leadership in
Machine vision lasers LED technology Specialty optical fibers
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Investment Thesis
We have established a solid customer base in diverse industries
Industrial (Perceptron, SICK AG, Seagate, KLA)
Defense (BAE, Honeywell, Northrop, L3)
Medical (GE Medical, Phillips, Toshiba)
Telecom (Mitsubishi)
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Investment Thesis
Our strategy is focused on revenue and profit generation by leading niche segments of the market We are showing results – last three quarters:
5,000
Sales
4,000
3,000
2,000
Gross Profits
1,000
0
1 2 3
-1,000
EBIDTA
-2,000
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Investing for the Future
Invested $40+ Million in research and product development $3.5 M in ‘05
Plant and equipment investment totals $26 Million
IP portfolio
New product momentum
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Technology Competencies
(combined to produce application specific products)
Optical/Mechanical Electronics/Thermal Characterization Product Design Design Control & Testing & Packaging
StockerYale products have:
Optimum complexity (optics + electronics + mechanics) High-performance and flexibility Patent, license or manufacturing process protection High brand awareness
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Products
Lasers LEDs
Other Illumination Specialty Optical Fiber
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Sales Breakdown
Optical
LEDs 6% Asia 10% 15%
Americas Illumination Europe 55% Lasers 30% 35% 49%
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Machine Vision Industry
A machine vision system consists of:
Software Sensor / Camera Lighting (2D and 3D)
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Machine Vision Industry
Automated Imaging Association estimates:
Worldwide market in 2003: $3.2 billion Illumination market available to StockerYale: $270 million Projected 2005 growth: 20%
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Lasers
Structured light lasers used for 3D measurement STKR lasers holds dominant market position (35%) Performance and quality leader
Applications
Semiconductor Lumber Automotive Electronics Optimization
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Lasers—SICK AG
3D systems need a structured light (laser pattern), a camera, a computer and a I/O system (frame grabber) Laser and camera are at 45º to each other Very complex software is required Customers usually develop their own system for a specific application
From Fish Filets to Printed Circuit Boards
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Lasers—Defense
Emerging market for lasers New applications for military aircraft and civilian airplanes
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Lasers—Medical
Life & health sciences will provide non-cyclical growth opportunities:
Pathogen detection Dermatology X Ray positioning
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Laser Revenue (millions $)
14 12 10 8 6 4 2 0
2003 2004 2005* 2006*
* Projection
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LEDs
Proprietary Chip-On-Board Technology
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LEDs—COBRA
C.O.B.R.A = chip-on-board reflective array Patent pending
COBRA Combines Reflector in T-Packs with superior of thermal management of chip-on-board
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LEDs—Linescan
Design Flexibility: Compact, Uniform and Intensely Bright
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LEDs—High Speed Linescan Application
very high speed: 5 meters/sec, 50 kHz line acquisition rate
highly demanding illumination requirements
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LEDs—Inspection
Targeted Markets:
Automotive Web Inspection Medical
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LEDs – Optical Character Recognition
Light Emitting Diodes:
StockerYale’s Infrared LED Illuminator
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LEDs—Medical
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Specialty Optical Fiber
Major growth opportunity Few competitors Rapidly growing markets
Fiber optic gyroscopes Hydrophones Sensor Fiber laser delivery
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Specialty Optical Fiber
Products
Polarization maintaining
Radiation Hardened
Bend Insensitive
Ytterbium Doped Erbium Doped
Select Cut-off
Applications
Fiber gyroscopes, Current sensors, Telecom equipment Fiber gyroscopes
Fiber gyroscopes, Fiber hydrophones
Fiber Lasers
EDFA’s & ASE Sources
Laser Pig-Tails
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Specialty Optical Fiber
Products
Step Index Multimode
Near UV
Polyimide Coated
Cladding Mode Suppression Photosensitive Fiber
Borosilicate
Applications
Laser Delivery
Laser Delivery
High Temperature (Oil Wells)
Bragg Gratings Bragg Gratings
Fiber Bundles (Vision)
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SOF – Fiber Optic Hydrophones
SOF – Fiber Optic Gyroscopes
Specialty Optical Fibers:
Major market opportunity for Polarization Maintaining fiber for FOGS, fiber optic gyroscopes
IFOG
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SOF—Fiber Laser Marking System
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SOF – Fiber Laser Market
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SOF Growth
23% sequential growth for the last (4) quarters 25% expected Q2 to Q3
> 70% growth target for 2006
Defense Fiber Laser Communications
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Joint Ventures / Acquisitions
Mitsubishi & SY
Joint Distribution Research & Development Brand Building
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Quarterly Revenue Trends
6,000 5,000 4,000 3,000 2,000 1,000 0
4Q-04 1Q-05 2Q-05 3Q-05
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Gross Margin Improvement
40 35 30 25 20 15 10 5 0
2003 2004 2005
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Gradual Improvement
5,000 4,000 3,000 2,000 1,000 0 -1,000 -2,000
Sales
Gross Profits
1 2 3
EBIDTA
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Positioned for Growth
Strong global demand for automated inspection
Electronics & semiconductors remain great markets to serve Autos, lumber, food, pharmaceutical, textiles growing
Positioned for growth—LEDs and Specialty Optical Fiber
SOF for the defense industry is the largest growth opportunity
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AIA Machine Vision Index
January 1, 2003 to August 12, 2005
225
200
175
150
125
100
75
Jan-03
Apr-03
Jul-03
Oct-03
Jan-04
Apr-04
Jul-04
Oct-04
Jan-05
Apr-05
Jul-05
NASDAQ Russell 2000 AIA Machine Vision Index
+72% +62% +46%
The AIA Machine Index includes: ADTK, AUGT, CAMT, CGNX, CRC, CYBE, DSA, DATX, ESIO, EVSN, INVI, IVIS, KTEC, NATI, ORBK, PHTN, PPTV, PRCP, ROBV and STKR.
FacrSet. Prices as of market close August 12, 2005.
Prices indexed at 100 on January 1, 2003.
* Chart maintained by Adams Harkness. For questions or more information, please see www.adamsharkness.com
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Thank you!