Iridex Announces Fourth Quarter and Full Year 2020 Financial Results

MOUNTAIN VIEW, Calif., March 22, 2021 (GLOBE NEWSWIRE) -- Iridex Corporation (Nasdaq: IRIX) today reported financial results for the fourth quarter and year ended January 2, 2021.

Fourth Quarter Highlights

  • Total revenue in the fourth quarter increased 5% to $12.3 million year-over-year
  • Sold 13,500 Cyclo G6® probes, same as the prior year, despite continued impacts from COVID-19
    • US Sales of Cyclo G6 probes increased by 8%, setting a quarterly record
    • Sold 57 Cyclo G6 Glaucoma Laser Systems, compared to 107 the prior year, attributed to the Company’s strategic shift toward probe utilization and continued COVID-related capital purchase deferrals
  • Retina related product revenue grew nearly 11% year-over-year
    • Recently released product enhancements drove capture of previously deferred customer orders
  • Fourth quarter gross margin increased by over 400 bps to 45.4% compared to the prior year
    • Increased average selling prices combined with further efficiencies in manufacturing and overhead
  • Cash burn in the fourth quarter was $0.3 million, resulting in ending cash of $11.6 million
    • 9% reduction in operating expenses versus prior year
  • MicroPulse® Transscleral Laser Therapy (TLT) was included in the European Glaucoma Society (EGS) Terminology and Guidelines for Glaucoma and presented at its Annual Meeting in December
  • Subsequent to quarter end, the Company entered into a strategic collaboration with Topcon Corporation resulting in $19.5 million cash to Iridex
    • Topcon purchased distribution rights in certain Asia Pacific and EMEA markets
    • Iridex purchased the PASCAL® product line
    • Topcon purchased approximately 10% of Iridex equity

“Despite the challenges relating to COVID-19, our strategic initiatives generated increased demand for Iridex products that has enabled us to exceed our pre-COVID-19 revenue from the fourth quarter of the prior year,” said David I. Bruce, President and CEO of Iridex. “We saw upside in the fourth quarter from demand due to recently launched product improvements and some rebound of capital equipment purchases in the retina business. In glaucoma, US probe sales grew 8%, despite continued COVID-19 impact. We’re pleased to see the positive response to our new products and that momentum carrying into the first quarter of 2021.”

Mr. Bruce continued, “Our efforts on product improvements has steadily strengthened our competitive position, from the well-received improvements to our MicroPulse® P3 probe, to the fourth-quarter introduction of our LIO Plus Laser Indirect Ophthalmoscope (LIO) and continuing into 2021 with the launch of a new 810 wavelength laser, the first in a family of new lasers offering substantial savings in manufacturing costs and gross margin improvement.”

“We are confident that our new alliance with Topcon Corporation will further improve Iridex’s strategic positioning. Thanks to increased capital to drive new growth initiatives, increased revenue and scale from the purchase of the PASCAL® line and expanded distribution network throughout Asia Pacific and key EMEA regions, we expect the partnership to help significantly increase the market penetration of Iridex’s industry leading retina products and innovative non-incisional glaucoma therapy,” Mr. Bruce concluded.

Fourth Quarter 2020 Financial Results
Revenue for the three months ended January 2, 2021 increased 5% to $12.3 million from $11.8 million during the same period of the prior year. The increase in revenue was driven primarily by growth in the Company’s retina business.

Gross profit for the fourth quarter of 2020 increased to $5.6 million, or 45.4% gross margin, compared to $4.9 million, or 41.2% gross margin, in the same period of the prior year.

Operating expenses for the fourth quarter of 2020 decreased 9% to $5.9 million compared to $6.5 million in the same period of the prior year. This is the result of ongoing efforts to reduce operating expenses in response to COVID-19-related temporary revenue reductions during 2020.

Net Loss for the fourth quarter of 2020 was reduced to $179,000, compared to $1.6 million in the same period of the prior year. Net Loss on a per share basis was reduced to $0.01 versus $0.11 last year.

Full Year 2020 Financial Results
Revenue for the year ended January 2, 2021 decreased $7.1 million to $36.3 million from $43.4 million in 2019. The decrease was driven primarily by challenges associated with COVID-19.

Gross profit for the full year 2020 was $15.6 million, or 42.8% gross margin, compared to $17.9 million, or 41.3% gross margin, during the prior year.

Operating expenses for 2020 were reduced 18% to $22.1 million compared to $26.9 million in the prior year. This decrease is primarily from reduction in sales and marketing expenses during the COVID-19 slowdown in travel, tradeshows, and other sales and marketing activities.

Net loss for 2020 was reduced to $6.3 million, compared $8.8 million in the prior year.

Cash and cash equivalents were $11.6 million as of January 2, 2021.

Guidance for Full Year 2021
Given the continuing uncertainty in product demand due to COVID-19, combined with variability introduced by the Topcon collaboration affecting revenue recognition, sales transition effects and integration costs for the PASCAL product line, Iridex cannot provide meaningful financial guidance for 2021 at this time.

Webcast and Conference Call Information
Iridex’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: 1137827. 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 Iridex
Iridex 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 Statement
This 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 momentum, demand and utilization of the Company's products, expected cost reductions and gross margin improvements and benefits from the Topcon partnership. 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 Contact
Leigh Salvo
(415) 937-5404
investors@iridex.com

IRIDEX Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)

  Three Months Ended     Twelve Months Ended  
  January 2,     December 28,     January 2,     December 28,  
  2021     2019     2021     2019  
                               
Total revenues $ 12,304     $ 11,762     $ 36,347     $ 43,447  
Cost of revenues   6,722       6,912       20,789       25,508  
Gross profit   5,582       4,850       15,558       17,939  
                               
Operating expenses:                              
Research and development   887       788       3,282       3,682  
Sales and marketing   3,435       3,791       12,239       14,852  
General and administrative   1,560       1,888       6,620       8,379  
Total operating expenses   5,882       6,467       22,141       26,913  
                               
Loss from operations   (300 )     (1,617 )     (6,583 )     (8,974 )
Other income, net   127       82       280       209  
Loss from operations before provision for income taxes   (173 )     (1,535 )     (6,303 )     (8,765 )
Provision for income taxes   6       26       26       48  
Net loss $ (179 )   $ (1,561 )   $ (6,329 )   $ (8,813 )
                               
Net loss per share:                              
Basic $ (0.01 )   $ (0.11 )   $ (0.46 )   $ (0.64 )
Diluted $ (0.01 )   $ (0.11 )   $ (0.46 )   $ (0.64 )
                               
Weighted average shares used in computing net loss per share                              
Basic   13,898       13,783       13,842       13,707  
Diluted   13,898       13,783       13,842       13,707  
                               

IRIDEX Corporation
Condensed Consolidated Balance Sheets
(In thousands and unaudited)

  January 2,     December 28,  
  2021     2019  
Assets              
Current assets:              
Cash and cash equivalents $ 11,626     $ 12,653  
Accounts receivable, net   7,289       9,323  
Inventories   5,714       8,174  
Prepaid expenses and other current assets   730       401  
Total current assets   25,359       30,551  
Property and equipment, net   449       730  
Intangible assets, net   68       84  
Goodwill   533       533  
Operating lease right-of-use assets, net   1,428       2,764  
Other long-term assets   132       151  
Total assets $ 27,969     $ 34,813  
               
Liabilities and Stockholders' Equity              
Current liabilities:              
Accounts payable $ 1,148     $ 2,592  
Accrued compensation   1,965       2,398  
Accrued expenses   1,806       1,544  
Current portion of PPP loan   1,249       -  
Accrued warranty   166       380  
Deferred revenue   938       1,450  
Operating lease liabilities   1,409       1,414  
Total current liabilities   8,681       9,778  
               
Long-term liabilities:              
PPP Loan   1,248       -  
Accrued warranty   81       156  
Deferred revenue   289       360  
Operating lease liabilities   282       1,795  
Other long-term liabilities   22       19  
Total liabilities   10,603       12,108  
               
Stockholders' equity:              
Common stock   148       147  
Additional paid-in capital   74,181       73,093  
Accumulated other comprehensive income (loss)   (19 )     80  
Accumulated deficit   (56,944 )     (50,615 )
Total stockholders' equity   17,366       22,705  
               
Total liabilities and stockholders' equity $ 27,969     $ 34,813  
               


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