2nd Quarter 2009 US Optical Market Overview and Outlook October 4th, 2009 Steve Kodey, Director of Industry Research The Vision Council *Please note that the VisionWatch information in this presentation is for the sole use of Vision Council companies only and cannot be distributed in any form to non-members without consent from Jobson Optical Research or The Vision Council.

VisionWatch Changes to the Program and What It Means for SRD Members

Changes to the Program  January 2008: >Vendor Change Ocucom TNS >Change to Questionnaire >Change to Income Sampling and Weighting  June 2008: >Vendor Change TNS Ocucom >Change to Price Edits and Allocations >Improved Data Processing Techniques  June 2009: >Internalization of Report Writing (Faster Report Delivery) >Development of “Up to $30” Plano Sunglass Report  January 2010: >Possible Change of Sample Vendor (to improve quality of raw data) >Possible Improvement to the Method of Collecting Retailer Share Data VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100,000

Changes to the Price Edits and Retailer Allocation  Prior to June of 2008: >Older system developed in the 1990s was used >Edits only applied at the channel level or brand level >Sometimes led to inconsistencies between retailers and channels.  Now: >A detailed pricing mechanism looking at: »Retailer »Channel »Brand »Price >More interactive, more accurate, checking mechanism  No Impact on Topline Unit Sales or Demographic Shares VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100,000

New Data vs. Old Data: Differences  Shares by Channel of Trade (and Retailer): >Especially department stores, sunglass specialty stores, mass merchants, drug and grocery.  Average Retail Selling Price: >Increased from $18-$20 per pair to $34-$36 per pair. »Result of newer more accurate price edit rules  New Industry Dollar Volume (Annual Revenues): >Increased from $2.2 Billion to $3.5 Billion. »Result of higher average selling prices  Change in Purchasing Patterns for Different Income Groups: >Minimal affect on topline purchasing activity, effect mostly individual retailer shares and demographic breakdowns VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100,000

New Methodology and New AHI Weights New Methodology and OLD AHI Weights OLD Methodology and New AHI Weights OLD Methodology and OLD AHI Weights Total 100.0% Optical Independent 1.5% 1.4%3.6%3.4% Optical Chain 1.4% 1.3% Sunglass specialty 7.9% 7.6%8.0%7.8% Sport 2.5% 2.4%7.1%6.8% Better Dept & Specialty Stores 3.9% 3.8%5.3%5.0% Warehouse Club 2.2% 2.0%0.7%0.6% Grocery 0.9% 1.1%7.0%7.3% Drug 8.8% 8.5%10.2%10.6% Mass 30.0% 29.3%27.0%27.8% Flea Market 2.5% 2.6%1.8% Other 38.4% 40.0%29.3%28.9% Channel Unit Shares During the 12ME Period Mar.09 Under Different Guidelines

VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100,000 New Methodology and New AHI Weights New Methodology and OLD AHI Weights OLD Methodology and New AHI Weights OLD Methodology and OLD AHI Weights Total $35.27 $34.22$17.88$17.44 Optical Independent $ $125.78$97.86$96.42 Optical Chain $ $183.44$97.86$96.42 Sunglass specialty $ $155.74$89.79$89.75 Sport $54.30 $53.85$16.78$16.17 Better Dept & Specialty Stores $99.89 $97.60$19.08$18.71 Warehouse Club $62.78 $60.08$56.45$56.01 Grocery $14.34 $14.46$9.87$9.83 Drug $16.67 $16.81$8.29$8.35 Mass $14.50 $14.70$7.00$6.96 Flea Market $12.68 $11.72$9.94$9.00 Other $14.21 $13.44$7.68$7.36 Channel Average Prices During the 12ME Period Mar.09 Under Different Guidelines

VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100,000 September Custom Slot Experiment  VW Custom Slot Research Opportunities >Allows us to survey consumers each month about special topics and subjects.  September 2009 Survey: >Will Interview 3,000 to 4,000 recent plano sunglass buyers >We’ll ask buyers to type in the name of the retailer where they made their last purchase. >Could lead to a permanent change in the survey if results prove a change is worthwhile >We’re also asking about: >Number of multiple pair purchases >Purchase motivation factors for sunglass buyers (past and future).

VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100,000 New “Up to $30” Plano Sunglass Report  New Report That Was Released in June 2009 >Examines plano sunglass sales priced at less than $30 per pair  Includes: >Topline Unit and Dollar Sales Data Points >Demographic Composition of Purchases >Age, Gender, Region, Annual Household Income >Unit and Dollar Shares by Channel of Trade: >The same categories and groups used to look at the total sunglass market.

Trends in Vision Correction: Is America Seeing Clearly?

Vision Correction Percentage of American Adults Using Any Form of Vision Correction within Gender and Age Groups VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100,000

Vision Correction Usage: June ‘08 and June ‘09 In Millions of People * Surgery is the sum of US residents having ever had refractive surgery; not counted as vision correction users Categories: the number of US residents 18+ who use the vision correction alternative all or any part of the time Some people use more than 1 vision correction alternative ‘Squinters’: US residents who say that they need vision correction, but do not use any VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100,000

Overall Market Performance By Market Sector

Inflation not taken into consideration Vision Care Products & Services – Total U.S. Market Breakout—In Millions *All retail includes dollars spent at all retail types at any retail location on the sale of either spectacle lenses (including Rx sun), frames, contact lenses, sunglasses (plano), OTC readers, or revenue earned from refractive surgery (LASIK only) or eye examinations. This number does not include sunglass clips and reflects the dollars spent only by those U.S. residents 18 and older. Does not include retail dollars spent by/for contact lenses and exams for those 17 years of age and younger. All Retail* -1.0% +5.6% -1.2% +6.5% +6.4% -29.6% In Millions VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100, %

Plano Sunglasses OTC Readers

sunglasses Percentage of Adults Currently Wearing Plano Sunglasses VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100,000

Clip-ons Percentage of Adults Currently Wearing Clip-on Sunglasses VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100,000

Plano Sunglass Retail Sales – Dollars & Units Nominal $s – Not revised for Inflation -11.1% 2009 against % 2009 against % 2009 against % 2009 against 2007 VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100,000

US Plano Sunglass Retail Sales 12ME Jun By Channel (Millions) VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100,000

High-End Designer Sunglass Sales as a Percentage of All Plano Sunglass Sales VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100,000 Dollar Value Units--Pairs

OTC Readers Percentage of Adults Currently Wearing OTC Readers VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100,000

In millions OTC Readers Wearers & Purchases Ages 18+ Repurchase Cycle 0.63 years 0.58 years0.60 years VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100,000

$630.4M -0.2% +2.0% -1.6% +0.2% -2.6% $590.8M % change 08/09 absolute # $629.3M Retail Structure of Readers Market (Dollars) VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100,000

OTC Readers Dollar Sales Trends: Grocery / Drug / Mass / Convenience VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100, Annual Meeting 24

Number of Readers Pairs Bought Per Purchase VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100, Annual Meeting 25 All Retailers 1.7 Pairs Per Purchase Grocery / Drug / Mass / Convenience 2.2 Pairs Per Purchase

2009 / 2010 Outlook

Key Points: Future Outlook  A Slumping Economy, Jittery Consumers >Poor Economic Conditions Continue »Rising Unemployment, Layoffs, Bleak Employment Outlook »Fear of Inflation Returning as Gov. Spending Soars »Flat Productivity »Credit Crunch Refuses to Loosen >Consumer Spending and Consumer Confidence Near All Time Lows >Housing Market Continues to Remain Shaky  Optical Specific >Purchase Intent Down for Eyeglasses and Eyewear >Exam Intent is Flat Contributing to the Problem >Contact Lens Purchase Intent is Up, LASIK is Down Drastically

The Silver Lining  Government Spending Seems to Be Slowing the Recession >More Economic Stimulus Money Could Raise Consumer Spending and Consumer Confidence  Leading Economic and Optical Specific Indicators Are Rising…From Very Low Levels  Gas Prices Are Relatively Low…For Now  Stock Market is Up; Feeling is that the Worst is Behind Us; Recession May be Over After Q  The Optical Industry is Somewhat Insulated from Declines in General Retail Spending

Rolling 6 Month Averages An index based on likelihood to purchase in the next six months Each point is the average score for the six month period * $50+ Plano Sunglass Future Purchase Intent VisionWatch: A Collaboration of The Vision Council & Jobson Annual Sample Size: 100,000

Rate of change for general retail goods & eyewear purchases over the past year due to the economy. Custom Research: April 2009 Economic Situation Study

When you make your next purchase of plano sunglasses, which of the following might apply? Custom Research: April 2009 Economic Situation Study

When you make your next purchase of OTC Readers, which of the following might apply? Custom Research: April 2009 Economic Situation Study

QUESTIONS Steve Kodey The Vision Council