IRIDEX Announces 2019 Third Quarter Financial Results
November 07 2019 - 04:05PM
IRIDEX Corporation (Nasdaq: IRIX) today reported financial results
for the third quarter ended September 28, 2019.
Third Quarter Highlights
- Total revenue of $10.7 million
- Cyclo G6® product family revenue of $3.0 million, a 3.6%
year-over-year increase
- Shipped 11,600 Cyclo G6 probes, a 12% year-over-year
increase
- Shipped 82 Cyclo G6 Glaucoma Laser Systems, compared to 117 the
prior year
- Achieved $1.5 million reduction in operating expenses versus
the third quarter of 2018
- Ergonomically improved MicroPulse P3® glaucoma probe ready for
commercial roll-out, following favorable initial clinical
experience
- Additional clinical evidence of MicroPulse® transscleral laser
therapy’s strong efficacy, durability and safety profile, including
the first peer-reviewed publication on the use of the technology on
patients with good vision and mild to severe glaucoma, concluding
that MicroPulse transscleral therapy is an effective alternative
and could be offered to patients prior to incisional glaucoma
procedures (published in the Journal of Glaucoma)
“Following my first full quarter as CEO, I was pleased with both
the stability of our retina business and growth in our glaucoma
business, particularly as we execute the transition from a prior
emphasis on customer site placements to a new emphasis on physician
adoption and procedure growth,” said David I. Bruce, President and
CEO. “We believe the fourth quarter rollout of our enhanced
glaucoma probe is a key step helping drive this transition. In
addition, our focus on cost efficiency resulted in a 20% reduction
in operating expenses during the quarter versus last year.”
Third Quarter 2019 Financial ResultsTotal
revenue for the three months ended September 28, 2019 of $10.7
million, represented a decrease of 5.8% from $11.3 million during
the same period of 2018.
Revenue from IRIDEX’s Cyclo G6 glaucoma products was $3.0
million, representing growth of 3.6% over the same period in the
prior year. The ongoing strategic shift from the Company’s previous
focus on site placements resulted in a 30% decline in Cyclo G6
system shipments; however, Cyclo G6 system revenues declined only
12%, as the average selling price improved compared to the prior
year period during which discounted packages were promoted. Cyclo
G6 probe shipments grew 12% as the Company transitioned sales
drivers to focus on reorder growth and adding ongoing customers,
which more than offset the effect of discontinuing discount
packages. However, the combination of reduced volume packages,
inventory usage and launch of the updated MicroPulse P3 glaucoma
probe is temporarily depressing overall probe growth. Accordingly,
the Company adjusted its full year probe shipment guidance to
53,000 to 56,000, which at the midpoint reflects year-over-year
growth of 20%.
Revenue from retina products in the quarter was $5.8 million,
versus $5.2 million in the prior quarter and $6.7 million in the
third quarter of 2018. During the third quarter of 2018, the
Company booked approximately $1.3 million in orders from its
Chinese distributor ahead of the pending U.S. tariff increases,
compared to approximately $0.4 million in the third quarter of
2019. In addition, last year’s third quarter retina revenue
included significant backorder volume following clearance of the
voluntary recall of its LIO products.
Gross profit for the third quarter of 2019 was $4.3 million, a
40.2% gross margin, compared to $4.6 million, a 40.4% gross margin
in the same period of the prior year.
Operating expenses for the third quarter of 2019 decreased to
$6.1 million compared to $7.6 million in the same period of the
prior year. The decrease reflects the Company’s focus on operating
costs and cash usage, including reductions in headcount and related
costs, lower administrative expenses, and efficiencies gained in
adjustments to the Company’s sales, marketing and engineering
programs.
The loss from operations for the third quarter of 2019 decreased
to $1.9 million, compared to a loss from operations of $3.1 million
for the same period of the prior year.
Net cash used in the quarter was $2.7 million, resulting in cash
and cash equivalents of $12.9 million and no debt as of September
28, 2019.
Guidance for Full Year 2019 IRIDEX reiterated
its revenue guidance for the full year 2019 of $41 million to $44
million and Cyclo G6 system shipments of 375 to 425. The Company
revised its guidance for shipments of Cyclo G6 probes from 58,000
to 63,000 down to 53,000 to 56,000, which at the midpoint reflects
year-over-year growth of 20%. The reduction in guidance reflects
the impact of the Company’s sales transition towards reorder growth
and acquiring new ongoing customers, along with customer inventory
adjustments resulting from the roll out of improved glaucoma probes
in the United States.
Webcast and Conference Call InformationIRIDEX’s
management team will host a conference call today beginning at 2:00
p.m. PT / 5:00 p.m. ET. Investors interested in listening to
the conference call may do so by dialing (844) 707-0665 for
domestic callers or (703) 326-3030 for international callers, using
conference ID: 4584326. A live and archived webcast of the event
will be available on the “Investors” section of the Company’s
website at: www.iridex.com.
About IRIDEXIRIDEX Corporation is a worldwide
leader in developing, manufacturing, and marketing innovative and
versatile laser-based medical systems, delivery devices and
consumable instrumentation for the ophthalmology market. The
Company’s proprietary MicroPulse® technology delivers a
differentiated treatment that provides safe, effective, and proven
treatment for targeted sight-threatening eye conditions. IRIDEX’s
current product line is used for the treatment of glaucoma and
diabetic macular edema (DME) and other retinal diseases. IRIDEX
products are sold in the United States through a direct sales force
and internationally primarily through a network of independent
distributors into more than 100 countries. For further information,
visit the IRIDEX website at www.iridex.com.
Safe Harbor StatementThis announcement contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Act of 1934, as amended, including those statements
concerning the future demand, utilization and order levels for the
Company's products, and the Company’s guidance for fiscal year 2019
and future financial results. These statements are not guarantees
of future performance and actual results may differ materially from
those described in these forward-looking statements as a result of
a number of factors. Please see a detailed description of these and
other risks contained in our Annual Report on Form 10-K for the
fiscal year ended December 29, 2018, and Quarterly Reports on Form
10-Q for subsequent fiscal quarters, each of which was filed with
the Securities and Exchange Commission. Forward-looking statements
contained in this announcement are made as of this date and will
not be updated.
Investor Relations ContactLeigh Salvo(415)
937-5404investors@iridex.com
IRIDEX
CorporationCondensed Consolidated Statements of
Operations(In thousands, except per share
data)(unaudited)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 28, |
|
|
September 29, |
|
|
September 28, |
|
|
September 29, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
$ |
10,664 |
|
|
$ |
11,320 |
|
|
$ |
31,685 |
|
|
$ |
31,133 |
|
Cost of revenues |
|
|
6,381 |
|
|
|
6,744 |
|
|
|
18,596 |
|
|
|
18,367 |
|
Gross profit |
|
|
4,283 |
|
|
|
4,576 |
|
|
|
13,089 |
|
|
|
12,766 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
1,007 |
|
|
|
1,149 |
|
|
|
2,894 |
|
|
|
3,154 |
|
Sales and marketing |
|
|
3,508 |
|
|
|
4,144 |
|
|
|
11,061 |
|
|
|
12,362 |
|
General and administrative |
|
|
1,621 |
|
|
|
2,343 |
|
|
|
6,491 |
|
|
|
7,209 |
|
Total operating expenses |
|
|
6,136 |
|
|
|
7,636 |
|
|
|
20,446 |
|
|
|
22,725 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(1,853 |
) |
|
|
(3,060 |
) |
|
|
(7,357 |
) |
|
|
(9,959 |
) |
Other income (expense),
net |
|
|
75 |
|
|
|
(8 |
) |
|
|
127 |
|
|
|
16 |
|
Loss from operations before
provision for income taxes |
|
|
(1,778 |
) |
|
|
(3,068 |
) |
|
|
(7,230 |
) |
|
|
(9,943 |
) |
Provision for income
taxes |
|
|
7 |
|
|
|
6 |
|
|
|
22 |
|
|
|
14 |
|
Net loss |
|
$ |
(1,785 |
) |
|
$ |
(3,074 |
) |
|
$ |
(7,252 |
) |
|
$ |
(9,957 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.13 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.53 |
) |
|
$ |
(0.85 |
) |
Diluted |
|
$ |
(0.13 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.53 |
) |
|
$ |
(0.85 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used
in computing net loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
13,768 |
|
|
|
11,925 |
|
|
|
13,682 |
|
|
|
11,732 |
|
Diluted |
|
|
13,768 |
|
|
|
11,925 |
|
|
|
13,682 |
|
|
|
11,732 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IRIDEX
Corporation Condensed
Consolidated Balance Sheets (In
thousands and unaudited)
|
|
September
28, |
|
|
December
29, |
|
|
|
2019 |
|
|
2018 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
12,948 |
|
|
$ |
21,194 |
|
Accounts receivable, net |
|
|
8,784 |
|
|
|
9,083 |
|
Inventories |
|
|
8,896 |
|
|
|
8,794 |
|
Prepaid expenses and other current assets |
|
|
590 |
|
|
|
547 |
|
Total current assets |
|
|
31,218 |
|
|
|
39,618 |
|
Property and equipment,
net |
|
|
876 |
|
|
|
1,220 |
|
Intangible assets, net |
|
|
88 |
|
|
|
100 |
|
Goodwill |
|
|
533 |
|
|
|
533 |
|
Operating lease right-of-use
assets, net |
|
|
3,056 |
|
|
|
- |
|
Other long-term assets |
|
|
187 |
|
|
|
201 |
|
Total assets |
|
$ |
35,958 |
|
|
$ |
41,672 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
2,429 |
|
|
$ |
2,516 |
|
Accrued compensation |
|
|
1,944 |
|
|
|
2,962 |
|
Accrued expenses |
|
|
1,634 |
|
|
|
2,763 |
|
Accrued warranty |
|
|
376 |
|
|
|
622 |
|
Deferred revenue |
|
|
1,528 |
|
|
|
1,639 |
|
Operating lease liabilities |
|
|
1,388 |
|
|
|
- |
|
Total current liabilities |
|
|
9,299 |
|
|
|
10,502 |
|
|
|
|
|
|
|
|
|
|
Long-term liabilities: |
|
|
|
|
|
|
|
|
Accrued warranty |
|
|
137 |
|
|
|
238 |
|
Deferred revenue |
|
|
366 |
|
|
|
586 |
|
Operating lease liabilities |
|
|
2,151 |
|
|
|
- |
|
Other long-term liabilities |
|
|
17 |
|
|
|
385 |
|
Total liabilities |
|
|
11,970 |
|
|
|
11,711 |
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
|
Common stock |
|
|
147 |
|
|
|
145 |
|
Additional paid-in capital |
|
|
72,793 |
|
|
|
71,548 |
|
Accumulated other comprehensive income |
|
|
102 |
|
|
|
70 |
|
Accumulated deficit |
|
|
(49,054 |
) |
|
|
(41,802 |
) |
Total stockholders' equity |
|
|
23,988 |
|
|
|
29,961 |
|
|
Total liabilities and stockholders' equity |
|
$ |
35,958 |
|
|
$ |
41,672 |
|
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