IRIDEX Reports 2013 First Quarter Results

                  IRIDEX Reports 2013 First Quarter Results

Profits Increase as Commercial Progress and Operational Streamlining Continue

PR Newswire

MOUNTAIN VIEW, Calif., May 2, 2013

MOUNTAIN VIEW, Calif., May 2, 2013 /PRNewswire/ -- IRIDEX Corporation (Nasdaq:
IRIX) today reported financial results for the first quarter ended March 30,

  oOphthalmology revenues in the first quarter were $8.9 million, a first
    quarter record, compared to $8.3 million in the prior year period.
  oGross margin for the first quarter was 47.3%, compared to 48.0% in the
    prior year period. Margins were impacted in the quarter by strong
    international sales through our distributor network with a product mix
    favoring laser systems, which have lower margins than the Company's
    consumable products.
  oOperating expenses were $3.8 million in the first quarter which were
    reduced to $3.3 million as a result of the Company receiving $0.5 million
    in the form of a cash distribution from an insurance carrier. This
    compares to $4.2 million in the prior year period.
  oIncome from continuing operations for the first quarter was $0.9 million,
    or $0.10 per basic share ($0.09 per diluted share), compared with a loss
    from continuing operations of $0.3 million, or $0.03 loss per basic and
    diluted share, in the prior year period. 
  oGuidance for second quarter 2013: The Company expects to achieve revenues
    between $8.9 million and $9.2 million and gross margins between 47% and
    49%. Operating expenses are expected to be between $4.0 million and $4.2

CEO William M. Moore said, "We demonstrated good execution in the first
quarter as the Company increased revenues and profits. In addition to these
commercial and operational gains, we completed the successful product launch
of TxCell™, our high speed scanning laser delivery system, and concluded
negotiation of a beneficial selling and supply chain agreement with Peregrine
Surgical. Of particulate note, the percentage of customers ordering new lasers
with MicroPulse™ in the first quarter was approximately double that seen in
last year's period, giving us one more indication that we are edging towards a
technology-driven tipping point in the market."

Moore continued, "We will look to grow and increase profitability, invest in
products that our customers want and that can be delivered to the market
rapidly, and be opportunistic in acquiring or partnering with ophthalmic
companies that have developed excellent technologies. Peregrine is a great
example of such a partnership, as it allows us to market additional consumable
products at different price points. The relationship should lower our supply
chain costs and we are already, jointly, working on new product initiatives in
the high-margin consumable product category."

The preceding commentary relates to the results of the Company's continuing
ophthalmology business. In February 2012, the Company sold its aesthetics
laser business and the financial statements reflect the results of its
aesthetics laser business as discontinued operations.

Recent Business Highlights

  oThe Company entered into a global distribution and supply agreement with
    Peregrine Surgical, Ltd., a privately held company based in New Britain,
    Pennsylvania. Under the agreement, IRIDEX will become a worldwide
    distributor for Peregrine labeled products and Peregrine Surgical will
    become part of the IRIDEX supply chain for the manufacture of certain
    IRIDEX products.
  oFollowing a fourth quarter 2012 FDA 510(k) CE clearance, the Company
    commenced its full commercial launch of its TxCell Scanning Laser Delivery
    System. This new product saves significant time in a variety of laser
    photocoagulation procedures by allowing physicians to deliver the laser in
    a multi-spot scanning mode, a more efficient method for these procedures
    than the traditional single spot mode. Management believes that the
    clinical and practice benefits of this technology will accelerate the
    adoption of the proprietary MicroPulse  technology as it applies to
    several clinical procedures.
  oFebruary 28, 2013 the Board approved a new one year $3.0 million stock
    repurchase program.

Conference Call

IRIDEX management will conduct a conference call later today, Thursday, May 2
at 5:00 p.m. Eastern Time. Interested parties may access the live conference
call via telephone by dialing (877) 941-2927 (U.S.) or (480) 629-9725
(International) and quoting Conference ID 4615855, or by visiting the
Company's website at A telephone replay will be available
beginning on Thursday, May 2, 2013 through Thursday, May 9, 2013 by dialing
(800) 406-7325 (U.S.) or (303) 590-3030 (International) and entering Access
Code 4615855. In addition, later today an archived version of the webcast will
be available on the Company's website at


IRIDEX Corporation was founded in 1989 and 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. We maintain a deep commitment to the success of our
customers, with comprehensive technical, clinical, and service support
programs. IRIDEX is dedicated to a standard of excellence, offering superior
technology for superior results. IRIDEX products are sold in the United States
through a direct sales force and internationally through a combination of a
direct sales force and a network of approximately 70 independent distributors
into over 100 countries. For further information, visit the Company's website

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, relating to the size and growth of and
trends in the markets in which the Company operates, including market adoption
of new technologies; the success of the Company's development, marketing and
sales efforts, including the adoption of MicroPulse laser therapy devices; the
Company's growth strategy; the Company's acquisition strategy; the Company's
sales revenue growth, operational plans, and profitability expectations; the
Company's projected fiscal 2013 financial results; and the Company's share
repurchase program. 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, 2012 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.


IRIDEX Corporation

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

                                               Three Months Ended
                                               March 30,       March 31,
                                               2013            2012
Total revenues                                 $    8,939  $     8,305
Cost of revenues                               4,708           4,319
Gross profit                                   4,231           3,986
Operating expenses:
Research and development                       996             1,182
Sales and marketing                            1,625           1,864
General and administrative                     1,186           1,176
Proceeds from demutualization of insurance     (473)           -
Total operating expenses                       3,334           4,222
Income (loss) from continuing operations       897             (236)
 Other expense, net                           (18)            (27)
Income (loss) from continuing operations       879             (263)
before provision for income taxes
Provision for income taxes                     5               2
 Income (loss) from continuing operations,    874             (265)
net of tax
 Loss from discontinued operations, net of    -               (162)
 Gain on sale of discontinued operations, net -               2,032
of tax
 Income from discontinued operations, net of  -               1,870
Net income                                     $     874  $     1,605
Net income (loss) per share:
Basic -
 Continuing operations                        $0.10           ($0.03)
 Discontinued operations                      0.00            0.21
 Net income                                   $0.10           $0.18
Diluted -
 Continuing operations                        $0.09           ($0.03)
 Discontinued operations                      0.00            0.21
 Net income                                   $0.09           $0.18
Weighted average shares used in computing net  8,511           8,933
income (loss) per share - basic
Weighted average shares used in computing net  9,802           8,933
income (loss) per share - diluted

IRIDEX Corporation

Condensed Consolidated Balance Sheets

(In thousands)

                                           March 30,         December 29,
                                           2013              2012
Current assets:
Cash and cash equivalents                  $     11,581  $     11,901
Accounts receivable, net                   6,031             5,480
Inventories                                8,147             8,035
Prepaid expenses and other current assets  1,123             1,129
Current assets of discontinued operations  510               510
Total current assets                       27,392            27,055
Property and equipment, net                440               483
Other intangible assets, net               489               554
Goodwill                                   533               533
Other long-term assets                     298               287
Total assets                               $    29,152   $    28,912
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable                           $     1,280  $     2,105
Accrued compensation                       1,442             1,563
Accrued expenses                           1,372             1,242
Accrued warranty                           446               453
Deferred revenue                           943               1,004
Total current liabilities                  5,483             6,367
Long-term liabilities:
Other long-term liabilities                542               640
Total liabilities                          6,025             7,007
Stockholders' equity:
 Convertible preferred stock             5                 5
Common stock                               95                94
Additional paid-in capital                 39,305            38,958
Accumulated deficit                        (16,278)          (17,152)
Total stockholders' equity                 23,127            21,905
Total liabilities and stockholders' equity $    29,152   $    28,912


Contact: IRIDEX, Jim Mackaness, CFO & COO, +1-650-940-4700 or Investor
Relations, Matt Clawson, Allen & Caron, +1-949-474-4300
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