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IRIDEX Reports 2013 Third Quarter Results

                  IRIDEX Reports 2013 Third Quarter Results

RECORD REVENUE OF $9.5 MILLION IN QUARTER

PR Newswire

MOUNTAIN VIEW, Calif., Oct. 31, 2013

MOUNTAIN VIEW, Calif., Oct. 31, 2013 /PRNewswire/ --IRIDEX Corporation
(Nasdaq: IRIX) today reported financial results for the third quarter ended
September 28, 2013.

  oRevenues were $9.5 million in the third quarter of 2013, up 21% from $7.9
    million in the prior year comparable period and up sequentially from $9.2
    million in the second quarter of 2013.
  oGross margin for the third quarter of 2013 was 49.6%, comparable to 49.6%
    in the prior year period and up from 48.7% in the 2013 second quarter.
  oFor the third quarter of 2013, operating income was $0.7 million compared
    with an operating loss of $0.6 million for the third quarter of 2012.
  oNet income from continuing operations was $0.5 million, or $0.05 per
    diluted share, for the third quarter of 2013, compared to a net loss of
    $0.6 million, or a loss of $0.06 per diluted share, in the third quarter
    of 2012.
  oGuidance for fourth quarter: The Company expects to achieve revenue
    between $10.2 million and $10.5 million, representing growth of between
    11% and 14% over the prior year period. Gross margin is anticipated to
    come in between 49% and 51%, operating expenses between $4.4 million and
    $4.6 million, and the Company anticipates generating operating income.

President and CEO Will Moore said, "We saw strong sales of both consumable
products and laser systems in the third quarter, exceeding our revenue
guidance. We are particularly pleased because historically our third quarter
is a lighter sales quarter. The integration of the independent sales force,
inherited in the US with the Peregrine deal announced last quarter, has had an
immediate positive impact on consumable sales.

"The market acceptance of our MicroPulse™ tissue sparing treatments for
diabetes related vision loss and glaucoma continues to gain ground." Continued
Moore, "We saw increased sales of MicroPulse enabled laser units this quarter
compared to last year's third quarter and standing room only in a recent
training seminar at a large trade show in Amsterdam. Our observation that
physicians and healthcare policy makers in industrialized and developing
nations are adopting value-based medicine practices and policies continues to
be validated and ties in to the tremendous value our MicroPulse and continuous
wavelength laser systems provide both to our customers and their healthcare
systems for the treatment of sight threatening diseases. This realization
creates a growing tailwind for our business and bodes well for our future."

Moore concluded, "These positive results underscore the cultural shift at the
Company allowing us to better execute in the marketplace. We are looking
forward to an active fourth quarter in which we will continue to accelerate
our market-centric initiatives, introducing three new products at the AAO
conference in November and targeting additional multi-unit tenders in
countries across Europe, the Middle East and South America."

Revenues for the first nine months of 2013 were $27.7 million, up 12% from
$24.6 million in last year's first nine months. Operating income for the first
nine months of 2013 was $2.1 million, up $3.3 million from an operating loss
of $1.2 million in last year's first nine months. Net income from continuing
operations for the first nine months of 2013 was $1.8 million compared to a
loss of $0.4 million for the first nine months of 2012, or earnings of $0.18
per share compared to a loss of $0.05 per share on a diluted basis.

During the third quarter 2013, the Company continued to execute its share
repurchase program. In total, approximately 37,000 shares have been
repurchased at an average price of $5.31 under the plan approved in February
2013.

Conference Call
IRIDEX management will conduct a conference call later today, Thursday,
October 31, 2013 at 5:00 p.m. Eastern Time. Interested parties may access the
live conference call via telephone by dialing (888) 549-7880 (U.S.) or (480)
629-9644 (International) and quoting Conference ID 4646160, or by visiting the
Company's website at www.iridex.com. A telephone replay will be available
beginning on Thursday, October 31, 2013 through Thursday, November 7, 2013 by
dialing (800) 406-7325 (U.S.) or (303) 590-3030 (International) and entering
Access Code 4646160. In addition, later today an archived version of the
webcast will be available on the Company's website at www.iridex.com.

About IRIDEX
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 both direct and independent sales forces 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 at http://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, relating to the size and growth of markets
in which the Company operates, the success of the Company's marketing and
sales efforts and operational execution, the adoption of MicroPulse laser
therapy and the Company's other products, anticipated new product releases and
the Company's projected fiscal 2013 fourth quarter 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, 2012 and Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 30 and June 29, 2013 which were 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.

TABLES FOLLOW



IRIDEX Corporation

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(unaudited)
                                    Three Months Ended    Nine Months Ended
                                    September  September  September  September
                                    28,        29,        28,        29,
                                    2013       2012       2013       2012
Total revenues                      $9,526     $7,881     $27,675    $24,631
Cost of revenues                    4,802      3,970      14,238     12,623
Gross profit                        4,724      3,911      13,437     12,008
Operating expenses:
Research and development            923        1,006      2,803      3,294
Sales and marketing                 1,869      1,875      5,340      5,861
General and administrative          1,267      1,609      3,690      4,018
Proceeds from demutualization of    0          0          (473)      0
insurance carrier
Total operating expenses            4,059      4,490      11,360     13,173
Income (loss) from operations       665        (579)      2,077      (1,165)
Legal settlement                    0          0          0          800
Other (expense) income, net         (85)       (117)      (200)      (192)
Income (loss) from continuing
operations before provision for     580        (696)      1,877      (557)
(benefits from) income taxes
Provision for (benefits from)       50         (141)      58         (134)
income taxes
Income (loss) from continuing       530        (555)      1,819      (423)
operations, net of tax
Income (loss) from discontinued     0          (190)      0          (413)
operations, net of tax
Gain on sale of discontinued        0          0          0          2,032
operations, net of tax
Income (loss) from discontinued     0          (190)      0          1,619
operations, net of tax
Net income (loss)                   $530       $(745)     $1,819     $1,196
Net income (loss) per share:
Basic
Continuing operations               $0.05      $(0.06)    $0.20      $(0.05)
Discontinued operations             0.00       (0.02)     0.00       0.18
 Net income (loss)               $0.05      $(0.08)    $0.20      $0.13
Diluted
Continuing operations               $0.05      $(0.06)    $0.18      $(0.05)
Discontinued operations             0.00       (0.02)     0.00       0.18
 Net income (loss)               $0.05      $(0.08)    $0.18      $0.13
Weighted average shares used in
computing net income (loss) per
share
 Basic                           9,796      9,005      9,044      8,974
 Diluted                         10,177     9,005      9,995      8,974



IRIDEX Corporation

Condensed Consolidated Balance Sheets

(In thousands)

(unaudited)
                                            September 28,     December 29,
                                            2013              2012
Assets
Current Assets:
 Cash and cash equivalents               $     14,089  $     11,901
 Accounts receivable, net                5,743             5,480
 Inventories                             9,998             8,035
 Prepaid and other current assets        534               1,129
 Current assets of discontinued           0                 510
operations
 Total current assets               30,364            27,055
 Property and equipment, net             526               483
 Intangible assets, net                  382               554
 Goodwill                                533               533
 Other long-term assets                  233               287
Total assets                                $    32,038   $    28,912
Liabilities and Stockholders' Equity
Current Liabilities:
 Accounts payable                        $     2,077   $     2,105
 Accrued compensation                    1,538             1,563
 Accrued expenses                        1,370             1,242
 Accrued warranty                        472               453
 Deferred revenue                        1,062             1,004
 Total current liabilities          6,519             6,367
Long-Term Liabilities:
 Other long-term liabilities             441               640
Total liabilities                           6,960             7,007
Stockholders' Equity:
 Convertible preferred stock             0                 5
 Common stock                            103               94
 Additional paid-in capital              40,308            38,958
 Accumulated deficit                     (15,333)          (17,152)
 Total stockholders' equity         25,078            21,905
Total liabilities and stockholders' equity  $    32,038   $    28,912



SOURCE IRIDEX Corporation

Website: http://www.iridex.com
Contact: Company, Jim Mackaness, Chief Financial Officer & Chief Operating
Officer, 650-940-4700; or Investor Relations, Matt Clawson, Allen & Caron,
949-474-4300, matt@allencaron.com
 
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