Exhibit 99.1
FOR IMMEDIATE RELEASE | Contact: | Jim Mackaness | ||
Chief Financial Officer | ||||
650 940-4700 |
August 12, 2008
Mountain View, California
Mountain View, California
IRIDEX Reports Second Quarter 2008 Financial Results
IRIDEX Corporation (Nasdaq: IRIX) today reported financial results for the second quarter ended June 28, 2008.
Revenue for the second quarter of 2008 was $12.9 million, a 15.3% decrease from the $15.2 million reported for the second quarter of 2007, but a 12.5% increase from the $11.5 million reported for the first quarter of 2008. The Company recorded net income of $0.3 million or $0.03 per diluted share for the second quarter of 2008, an improvement over both the net loss of $0.3 million or $(0.04) per diluted share reported in the second quarter of 2007 and the net loss of $0.9 million or $(0.10) per diluted share reported for the first quarter of 2008.
Ophthalmology revenues were $8.2 million in the second quarter of 2008, a 2.6% decrease from the $8.4 million in the second quarter of 2007, but up 8.4% from the $7.5 million recorded in the first quarter of 2008. Comparing second quarter 2008 to 2007, domestic ophthalmology revenues decreased 3.1% to $4.8 million and international ophthalmology revenues decreased 1.8% to $3.4 million. Ophthalmology recurring revenues, consisting of disposable products and service, increased to 54.0% of our total ophthalmology revenues for the second quarter 2008 from 47.7% during second quarter 2007.
Total aesthetics revenues were $4.8 million in the second quarter of 2008, a decrease of 30.8% from the $6.9 million in the comparable period of 2007, but 20.6% higher than the $3.9 million reported in the first quarter of 2008. In the second quarter of 2008, domestic aesthetics revenues decreased $1.5 million to $2.0 million and international aesthetics revenues decreased $0.6 million to $2.8 million when compared to the same period in 2007.
Gross profit for the second quarter of 2008 was $5.3 million, compared with $6.6 million for the second quarter of 2007. Gross margins were 41.3% and 43.2%, respectively. Operating expenses for the second quarter 2008 were $5.6 million compared with $9.1 million for 2007.
Mr. Theodore A. Boutacoff, President and CEO stated, “Operationally we continue to make progress towards financial stability as demonstrated by the substantial improvement in our quarterly operating performance year over year, reducing losses from operations from $2.6 million in the second quarter of 2007 to a loss of $0.3 million in the second quarter of 2008, primarily due to reductions in operating expenses. In addition, we received the first of five annual installments of $0.8 million relating to a legal settlement concluded in 2007 which was recorded in other income and resulted in us reporting net income of $0.3 million for the second quarter of 2008. We continue to meet our obligations to AMS having paid them $1.6
million in the second quarter, leaving a balance related to the Settlement Agreement of $1.5 million which we plan to fully satisfy by the end of our third fiscal quarter.
On a sequential quarterly basis, we continue to be encouraged by our improving ophthalmology revenues and the fact that we saw an increase in our aesthetics revenues in spite of the overall softening of the aesthetics market in 2008.”
Cash and cash equivalents were $4.1 million as of June 28, 2008 up from $4.0 million as of March 29, 2008 and working capital increased to $8.9 million from $7.6 million over the same period. Cash used in operations for the second quarter was $0.7 million which includes the $1.6 million payment to AMS and our bank debt as of June 28, 2008 was $6.0 million up from $5.3 million as of March 29, 2008.
Conference Call
IRIDEX management will conduct a conference call later today, Tuesday, August 12, 2008 at 5:00 p.m. Eastern Time. Interested parties may access the live conference call via telephone by dialing (800) 366-7449 (US) or (303) 262-2143 (International), or visit the Company’s website at www.iridex.com. A telephone replay will be available beginning on Tuesday, August 12, 2008 through Tuesday, August 19, 2008 by dialing (800) 405-2236 (US) or (303) 590-3000 (International) and entering Passcode 11118106#. 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 is a leading worldwide provider of therapeutic based laser systems, disposable laser probes and delivery devices to treat eye diseases in ophthalmology and skin disorders in the aesthetics market. 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 100 independent distributors into 107 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 Company’s financial stability, growth strategy and prospects, and the Company’s ability to meet its obligations under the AMS Settlement Agreement. 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, 2007 and our Quarterly Report on Form 10-Q for the first quarter ended March 29, 2008 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)
(unaudited)
Condensed consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 28, | June 30, | June 28, | June 30, | |||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenues | $ | 12,922 | $ | 15,249 | $ | 24,396 | $ | 27,815 | ||||||||
Cost of revenues | 7,591 | 8,665 | 14,260 | 16,023 | ||||||||||||
Gross profit | 5,331 | 6,584 | 10,136 | 11,792 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 998 | 1,588 | 2,023 | 3,317 | ||||||||||||
Selling, general and administrative | 4,589 | 7,546 | 9,107 | 15,820 | ||||||||||||
Total operating expenses | 5,587 | 9,134 | 11,130 | 19,137 | ||||||||||||
Loss from operations | (256 | ) | (2,550 | ) | (994 | ) | (7,345 | ) | ||||||||
Legal settlement | 800 | 2,500 | 800 | 2,500 | ||||||||||||
Interest and other expense, net | (218 | ) | (293 | ) | (372 | ) | (418 | ) | ||||||||
Income (loss) before income taxes | 326 | (343 | ) | (566 | ) | (5,263 | ) | |||||||||
Provision for income taxes | (51 | ) | — | (51 | ) | — | ||||||||||
Net income (loss) | $ | 275 | $ | (343 | ) | $ | (617 | ) | $ | (5,263 | ) | |||||
Net income (loss) per share — basic and diluted | $ | 0.03 | $ | (0.04 | ) | $ | (0.07 | ) | $ | (0.65 | ) | |||||
Shares used in computing net income (loss) per share — basic and diluted | 8,824 | 8,196 | 8,824 | 8,138 | ||||||||||||
IRIDEX Corporation
Condensed consolidated Balance Sheets
(In thousands)
(unaudited)
Condensed consolidated Balance Sheets
(In thousands)
(unaudited)
June 28, | December 29, | |||||||
2008 | 2007 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 4,092 | $ | 5,809 | ||||
Restricted cash | — | 3,800 | ||||||
Accounts receivable, net | 9,061 | 8,876 | ||||||
Inventories, net | 15,197 | 15,967 | ||||||
Prepaids and other current assets | 983 | 1,051 | ||||||
Total current assets | 29,333 | 35,503 | ||||||
Property and equipment, net | 1,284 | 1,621 | ||||||
Goodwill | 3,239 | 3,239 | ||||||
Other intangible assets, net | 4,771 | 5,944 | ||||||
Other long term assets | 252 | 347 | ||||||
Total assets | 38,879 | 46,654 | ||||||
Liabilities and Stockholders’ Equity | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 3,728 | $ | 2,887 | ||||
Bank line of credit | 6,000 | 4,863 | ||||||
Accrued compensation | 1,871 | 2,024 | ||||||
Accrued expenses | 4,350 | 7,809 | ||||||
Accrued warranty | 1,380 | 1,895 | ||||||
Deferred revenue | 3,131 | 3,350 | ||||||
Bank term loan-current portion | — | 5,016 | ||||||
Total current liabilities | 20,460 | 27,844 | ||||||
Stockholders’ Equity: | ||||||||
Convertible preferred stock, $.01 par value: | ||||||||
Authorized: 2,000,000 shares; | ||||||||
Issued and outstanding: 500,000 shares in 2008 and 2007 | 5 | 5 | ||||||
Common Stock, $.01 par value: | ||||||||
Authorized: 30,000,000 shares; | ||||||||
Issued and outstanding: 8,824,301 shares in 2008 and 2007 | 89 | 89 | ||||||
Additional paid-in capital | 38,922 | 38,695 | ||||||
Accumulated other comprehensive loss | (89 | ) | (88 | ) | ||||
Treasury stock, at cost | (430 | ) | (430 | ) | ||||
Accumulated deficit | (20,078 | ) | (19,461 | ) | ||||
Total stockholders’ equity | 18,419 | 18,810 | ||||||
Total liabilities and stockholders’ equity | $ | 38,879 | $ | 46,654 | ||||