IRIDEX Announces Third Quarter 2020 Financial Results

MOUNTAIN VIEW, Calif., Nov. 09, 2020 (GLOBE NEWSWIRE) -- IRIDEX Corporation (Nasdaq: IRIX) today reported financial results for the third quarter ended September 26, 2020.

Third Quarter Summary

  • Total revenue of $8.8 million, a decline of 17% versus $10.7 million in the prior year period, and an increase of 42% sequentially from $6.2 million in the second quarter of 2020
  • Sold 11,400 Cyclo G6 probes, a 6% increase over probes sold in the third quarter of 2019 and a 44% increase over the 7,900 probes sold in the second quarter of 2020
  • Sold 37 Cyclo G6 Glaucoma Laser Systems compared to 82 in the prior year period, reflecting ongoing COVID-related capital purchase deferrals, as well as the Company's sales strategy shift to focus on deeper procedure adoption among existing users, repeat orders and thus increased probe sales
  • Cyclo G6® product family revenue was $2.8 million, down 6% compared to the third quarter of 2019, and up 31% from $2.1 million in the second quarter of 2020
  • Ending cash balance was $11.9 million, an increase of approximately $0.3 million from June 27, 2020 and a year-to-date reduction of approximately $0.7 million
  • Product portfolio advancements include FDA clearance of the Company’s new 810 laser platform with broad indications in glaucoma and retina treatment, and introduction of a new Laser Indirect Ophthalmoscope (LIO) delivery device that aids retinal disease specialists in performing laser procedures

“We are encouraged by continued recovery from the trough we experienced during the second quarter as a result of COVID. We are particularly pleased to see our glaucoma probe volume exceed last year’s third quarter, despite the continuing worldwide impact of COVID on our customers and their patients,” said David I. Bruce, President and CEO of IRIDEX. "In addition, by being effective with cost controls and cash preservation measures, we have maintained a healthy operating runway with cash on hand. Despite the challenges presented by COVID, the successful release and adoption of our revised MicroPulse P3 probe has aided us as we continue to focus on growing awareness and adoption of our non-incisional MicroPulse Transscleral Laser Therapy for glaucoma and strengthening our retina laser business which will drive our long-term growth.

I am also pleased with the progress we've made on our new laser platform, including receipt of FDA clearance on our 810 laser, the first in a family of new lasers that offers significant savings in manufacturing costs and gross margin improvement as they are introduced next year,” concluded Bruce.

Third Quarter 2020 Financial Results
Revenue for the three months ended September 26, 2020 was $8.8 million, a decrease of 17% from $10.7 million during the same period of the prior year. Our business continues to be 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 third quarter of 2020 was $3.7 million, representing a 41.5% gross margin. Gross margins remaining essentially flat compared to the prior year period.

Operating expenses for the third quarter of 2020 decreased 10% to $5.5 million compared to $6.1 million in the same period of the prior year. The decrease in operating expenses was the result of reduction in variable expenses as COVID impacted business activity and cost savings measures implemented over the past year.

Net loss for the third quarter of 2020 decreased to $1.7 million, compared to $1.8 million for the same period of the prior year, resulting in a net loss of $0.12 per share versus a net loss of $0.13 per share during the same period last year.

Cash and cash equivalents increased during the quarter by approximately $0.3 million and the Company ended the quarter with $11.9 million in cash and cash equivalents.

Interim CFO Transition
The Company has amended its agreement with FLG Partners LLC, a leading Silicon Valley CFO services and board advisory firm (FLG Partners) to replace the current FLG Partners service provider, James Mackaness, with Fuad Ahmad. Mr. Mackaness had notified the Company of his need to transition due to other commitments. Mr. Ahmad will serve as the Company’s Interim Chief Financial Officer effective November 11, 2020.

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: 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 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 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 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     Nine Months Ended  
  September 26,     September 28,     September 26,     September 28,  
  2020     2019     2020     2019  
                               
Total revenues $ 8,803     $ 10,664     $ 24,043     $ 31,685  
Cost of revenues   5,149       6,381       14,067       18,596  
Gross profit   3,654       4,283       9,976       13,089  
                               
Operating expenses:                              
Research and development   869       1,007       2,395       2,894  
Sales and marketing   2,959       3,508       8,804       11,061  
General and administrative   1,672       1,621       5,060       6,491  
Total operating expenses   5,500       6,136       16,259       20,446  
                               
Loss from operations   (1,846 )     (1,853 )     (6,283 )     (7,357 )
Other income, net   135       75       153       127  
Loss from operations before provision for income taxes   (1,711 )     (1,778 )     (6,130 )     (7,230 )
Provision for income taxes   8       7       20       22  
Net loss $ (1,719 )   $ (1,785 )   $ (6,150 )   $ (7,252 )
                               
Net loss per share:                              
Basic $ (0.12 )   $ (0.13 )   $ (0.44 )   $ (0.53 )
Diluted $ (0.12 )   $ (0.13 )   $ (0.44 )   $ (0.53 )
                               
Weighted average shares used in computing net loss per share                              
Basic   13,893       13,768       13,824       13,682  
Diluted   13,893       13,768       13,824       13,682  
 

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

  September 26,   December 28,  
  2020   2019  
Assets            
Current assets:            
Cash and cash equivalents $ 11,932   $ 12,653  
Accounts receivable, net   6,083     9,323  
Inventories   7,004     8,174  
Prepaid expenses and other current assets   542     401  
Total current assets   25,561     30,551  
Property and equipment, net   451     730  
Intangible assets, net   72     84  
Goodwill   533     533  
Operating lease right-of-use assets, net   1,693     2,764  
Other long-term assets   149     151  
Total assets $ 28,459   $ 34,813  
             
Liabilities and Stockholders' Equity            
Current liabilities:            
Accounts payable $ 1,475   $ 2,592  
Accrued compensation   1,889     2,398  
Accrued expenses   1,682     1,544  
Current portion of PPP loan   1,526     -  
Accrued warranty   182     380  
Deferred revenue   1,072     1,450  
Operating lease liabilities   1,387     1,414  
Total current liabilities   9,213     9,778  
             
Long-term liabilities:            
PPP Loan   971     -  
Accrued warranty   102     156  
Deferred revenue   286     360  
Operating lease liabilities   616     1,795  
Other long-term liabilities   19     19  
Total liabilities   11,207     12,108  
             
Stockholders' equity:            
Common stock   148     147  
Additional paid-in capital   73,837     73,093  
Accumulated other comprehensive income   32     80  
Accumulated deficit   (56,765 )   (50,615 )
Total stockholders' equity   17,252     22,705  
 
Total liabilities and stockholders' equity $ 28,459   $ 34,813  

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