IRIDEX Announces Second Quarter 2020 Financial Results
August 06 2020 - 4:05PM
IRIDEX Corporation (Nasdaq: IRIX) today reported financial results
for the second quarter ended June 27, 2020.
Second Quarter Summary
- Total revenue declined 40% to $6.2 million versus $10.4 million
in the prior year period
- Cost control measures limited net loss to $2.8m, a 15% increase
compared to $2.4 million during the same period in the prior
year
- April experienced the low point for revenue, with a steady
increase during the rest of the quarter
- Cyclo G6® product family revenue was $2.1 million versus $3.4
million in the prior year period
- Shipped 7,866 Cyclo G6 probes and 42 Cyclo G6 Glaucoma Laser
Systems
- Cyclo G6 probe shipments in June exceeded 80% of pre-COVID
levels
- Ending cash balance was $11.6 million, an increase of
approximately $500,000 from March 28, 2020
Commenting on the quarter, David I. Bruce, President and CEO of
IRIDEX, said, "The worldwide suspension of non-urgent procedures
for parts of the first and second quarters significantly impacted
our short-term sales volumes. However, I am proud of the
IRIDEX team's adjustments and ongoing commitment in this
challenging environment. Despite the revenue impact, there
were several encouraging catalysts. We saw a rebound begin in our
Cyclo G6 probe shipments in May, followed by a significant step up
in June. Conversion among U.S. customers to our recently revised
glaucoma probe is largely completed, and international conversions
have exceeded 50%, well ahead of our initial goals. The operations
restructuring late last year and earlier this year significantly
reduced operating expenses, and coupled with expense adjustments
made during the pandemic, led to our net loss remaining nearly
stable compared to the prior year and our net loss for the first
half of 2020 was significantly less than the first half of 2019,”
stated Mr. Bruce.
“Treatment for glaucoma cannot be deferred indefinitely, and we
are seeing a solid recovery path in our Cyclo G6 probe business as
ambulatory surgical centers and hospitals resume treatment.
Combining this recovery with significant additional physician
awareness generated during COVID shelter-in-place periods by
participation from over 2,500 physicians and partners in our
virtual events, and renewed interest from both new and existing
customers to adopt our revised MP3 probe, gives us confidence in
our opportunity to drive strong long-term growth in our glaucoma
business,” concluded Mr. Bruce.
Second Quarter 2020 Financial ResultsRevenue
for the three months ended June 27, 2020 decreased 40% to $6.2
million from $10.4 million during the same period of the prior
year. All segments of the business were affected by the global
reduction in business activity driven by pandemic isolation
measures. Recovery of revenue was led by our single-use probe
products for glaucoma and retina surgery.
Gross profit for the second quarter of 2020 was $2.4 million,
representing a 38.7% gross margin. The decline of 4.9 percentage
points compared to the prior year was as a result of fixed overhead
expenditures being absorbed over a lower sales volume. End-user
pricing and component materials costs remained consistent with
prior periods.
Operating expenses for the second quarter of 2020 decreased 26%
to $5.2 million compared to $7.0 million in the same period of the
prior year. The decrease in operating expenses was the result of
significant cost savings measures implemented in the second half of
2019 and a reduction in variable expenses as COVID-19 resulted in
reduced business activity in the second quarter.
Loss from operations for the second quarter of 2020 increased to
$2.8 million, compared to $2.5 million for the same period of the
prior year, resulting in a net loss of $0.20 per share versus a net
loss of $0.18 during the same period last year. For the first half
of 2020, operating loss decreased 19% to $4.4 million versus $5.5
million in the first half of 2019, representing a net loss of $0.32
per share versus a net loss of $0.40 during the same period last
year.
Cash increased during the quarter by approximately $500,000 and
the Company ended the quarter with $11.6 million in cash and cash
equivalents. The Company received a $2.5 million loan under the
U.S. Treasury Department’s Paycheck Protection Program that may be
wholly or partly forgiven if IRIDEX fulfills certain requirements
under the program.
Guidance for Full Year 2020 The COVID-19
outbreak continues to create a broadly variable business
environment for IRIDEX. The degree and timing to which these
variables will impact the Company’s future business is uncertain.
As a result, IRIDEX is unable to provide a meaningful guidance
range for its full year 2020 results.
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: 6486158. 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 impact of COVID-19 on our business, the recovery in
procedures and products sales, the future demand, utilization and
order levels for our products 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 28, 2019, 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 |
|
|
Six Months Ended |
|
|
|
June
27, |
|
|
June 29, |
|
|
June
27, |
|
|
June 29, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
$ |
6,219 |
|
|
$ |
10,426 |
|
|
$ |
15,240 |
|
|
$ |
21,021 |
|
Cost of revenues |
|
|
3,813 |
|
|
|
5,877 |
|
|
|
8,918 |
|
|
|
12,215 |
|
Gross profit |
|
|
2,406 |
|
|
|
4,549 |
|
|
|
6,322 |
|
|
|
8,806 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
807 |
|
|
|
929 |
|
|
|
1,526 |
|
|
|
1,887 |
|
Sales and marketing |
|
|
2,693 |
|
|
|
3,462 |
|
|
|
5,845 |
|
|
|
7,553 |
|
General and administrative |
|
|
1,690 |
|
|
|
2,626 |
|
|
|
3,388 |
|
|
|
4,870 |
|
Total operating expenses |
|
|
5,190 |
|
|
|
7,017 |
|
|
|
10,759 |
|
|
|
14,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(2,784 |
) |
|
|
(2,468 |
) |
|
|
(4,437 |
) |
|
|
(5,504 |
) |
Other income, net |
|
|
9 |
|
|
|
58 |
|
|
|
18 |
|
|
|
52 |
|
Loss from operations before
provision for income taxes |
|
|
(2,775 |
) |
|
|
(2,410 |
) |
|
|
(4,419 |
) |
|
|
(5,452 |
) |
Provision for income
taxes |
|
|
5 |
|
|
|
9 |
|
|
|
12 |
|
|
|
15 |
|
Net loss |
|
$ |
(2,780 |
) |
|
$ |
(2,419 |
) |
|
$ |
(4,431 |
) |
|
$ |
(5,467 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.20 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.40 |
) |
Diluted |
|
$ |
(0.20 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.40 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used
in computing net loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
13,792 |
|
|
|
13,648 |
|
|
|
13,789 |
|
|
|
13,639 |
|
Diluted |
|
|
13,792 |
|
|
|
13,648 |
|
|
|
13,789 |
|
|
|
13,639 |
|
|
|
|
|
IRIDEX
CorporationCondensed Consolidated Balance
Sheets(In thousands and unaudited)
|
|
|
|
|
|
|
|
|
June
27, |
|
|
December
28, |
|
|
|
2020 |
|
|
2019 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
11,624 |
|
|
$ |
12,653 |
|
Accounts receivable, net |
|
|
5,784 |
|
|
|
9,323 |
|
Inventories |
|
|
7,847 |
|
|
|
8,174 |
|
Prepaid expenses and other current assets |
|
|
508 |
|
|
|
401 |
|
Total current assets |
|
|
25,763 |
|
|
|
30,551 |
|
Property and equipment,
net |
|
|
589 |
|
|
|
730 |
|
Intangible assets, net |
|
|
76 |
|
|
|
84 |
|
Goodwill |
|
|
533 |
|
|
|
533 |
|
Operating lease right-of-use
assets, net |
|
|
2,156 |
|
|
|
2,764 |
|
Other long-term assets |
|
|
158 |
|
|
|
151 |
|
Total assets |
|
$ |
29,275 |
|
|
$ |
34,813 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
557 |
|
|
$ |
2,592 |
|
Accrued compensation |
|
|
1,552 |
|
|
|
2,398 |
|
Accrued expenses |
|
|
1,445 |
|
|
|
1,544 |
|
Current portion of PPP loan |
|
|
1,110 |
|
|
|
- |
|
Accrued warranty |
|
|
244 |
|
|
|
380 |
|
Deferred revenue |
|
|
1,222 |
|
|
|
1,450 |
|
Operating lease liabilities |
|
|
1,445 |
|
|
|
1,414 |
|
Total current liabilities |
|
|
7,575 |
|
|
|
9,778 |
|
|
|
|
|
|
|
|
|
|
Long-term liabilities: |
|
|
|
|
|
|
|
|
PPP Loan |
|
|
1,387 |
|
|
|
- |
|
Accrued warranty |
|
|
130 |
|
|
|
156 |
|
Deferred revenue |
|
|
302 |
|
|
|
360 |
|
Operating lease liabilities |
|
|
1,068 |
|
|
|
1,795 |
|
Other long-term liabilities |
|
|
19 |
|
|
|
19 |
|
Total liabilities |
|
|
10,481 |
|
|
|
12,108 |
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
|
Common stock |
|
|
148 |
|
|
|
147 |
|
Additional paid-in capital |
|
|
73,619 |
|
|
|
73,093 |
|
Accumulated other comprehensive income |
|
|
73 |
|
|
|
80 |
|
Accumulated deficit |
|
|
(55,046 |
) |
|
|
(50,615 |
) |
Total stockholders' equity |
|
|
18,794 |
|
|
|
22,705 |
|
|
Total liabilities and stockholders' equity |
|
$ |
29,275 |
|
|
$ |
34,813 |
|
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