Exhibit 99.1
Contact: Larry Tannenbaum
Chief Financial Officer
650-940-4700
FOR IMMEDIATE RELEASE
IRIDEX REPORTS IMPROVED SECOND QUARTER OPERATING PERFORMANCE
Revenue Increases 9.1%
Net Income of $0.02 per Share
Cash Position Increases to All Time High of $18.5 Million
MOUNTAIN VIEW, CA, JULY 27, 2004---IRIDEX Corporation (Nasdaq: IRIX) today
reported improved operating performance for the quarter ended July 3, 2004.
Revenue for the quarter increased 9.1% to $8.1 million from $7.4 million
reported for the second quarter of 2003. The Company recorded net income of
$133,000, or $0.02 per share for the second quarter of 2004 as compared with a
net loss of $299,000, or $0.04 loss per share for the second quarter of 2003.
Ophthalmology sales totaled $6.7 million; an increase of 11.1% compared with the
second quarter of 2003 and increased both internationally and domestically.
Since international sales are denominated in US dollars, foreign currency
fluctuations had no material impact on sales growth. Dermatology sales were $1.4
million, an increase of $7,000 compared with the corresponding quarter in 2003.
"We believe that our ongoing investment in product reliability combined with our
asset management and cost reduction programs are continuing to generate positive
returns," said Theodore A. Boutacoff, IRIDEX President and CEO. "As a result,
gross margins and operating profits have continued to match our expectations,
and we exited the quarter with our cash position at an all time high. More
notably, particularly with the typical seasonality of our business, we were able
to generate an operating profit in the second quarter for the first time in
three years."
"We remain very excited about the progress of our Minimum Intensity
Photocoagulation (MIP) treatment protocols" continued Mr. Boutacoff. "For
example, for TTT alone there are now more than 100 published and presented
studies; including 28 clinical studies with at least 6 months, and up to 28
months (mean) follow-up. The results of these studies indicate that the TTT
approach to treating age-related macular degeneration (AMD) provides significant
therapeutic benefits to patients compared to the natural history of the disease,
which if left untreated might lead to profound vision loss or blindness. As
reported last quarter we still believe that results of the randomized TTT4CNV
study for wet AMD will likely be released during the fourth quarter of this
year," concluded Mr. Boutacoff.
Cash and cash equivalents at quarter-end was $18.5 million as compared to $16.9
million at the end of Q1 2004 and $16.3 million at the end of Q4 2003.
Inventories decreased to $8.3 million at the end of Q2 2004, down from $8.5
million at the end of Q1 2004 and $8.7 million at the end of Q4 2003. Inventory
turns at the end of Q2 2004 were slightly more than two. At the end of Q2 2004,
accounts receivable was $5.9 million, resulting in DSO of 66 days compared with
76 days at the end of Q1 2004 and 66 days at the end of Q4 2003.
CONFERENCE CALL
IRIDEX management will conduct a conference call today at 2:00 p.m. PST/5:00
p.m. EST. Interested parties may access the live conference call via telephone
by dialing (800) 603-0804 US/Canada or (706) 643-1370 International or by
visiting the Company's website at www.iridex.com. A telephone replay will be
available beginning on July 27, 2004 at 8:00 p.m. PDT, through August 3, 2004 by
dialing (800) 642-1687 US/Canada or (706) 645-9291 International and entering
Conference ID #8769060. In addition, an archived version of the webcast will be
available beginning on July 28, 2004 on the Company's website at www.iridex.com.
ABOUT IRIDEX
IRIDEX Corporation is a leading worldwide provider of semiconductor-based laser
systems for the ophthalmology and dermatology markets. IRIDEX products are sold
in the United States through a direct sales force and internationally through a
network of independent distributors into more than 100 countries. For further
information, visit the Company's 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, relating to the Company's growth prospects,
revenues, gross margins and profitability, as well as the results of studies
related to our products and developments in the businesses of users of our
products. Actual results could differ materially from those projected in the
forward-looking statements based on, among other things, the actual order and
shipment rate for the Company's ophthalmology and dermatology product lines, the
rate of introduction and market acceptance of the Company's products, the
financial consequences of states not reimbursing for all of the Company's AMD
procedures, the impact of any continuing weakness and uncertainties related to
general economic conditions or weakness in overall demand in the Company's
markets, especially with regard to the Company's dermatology products which are
typically used for elective procedures that can be deferred, and the Company's
ability to continue to reduce its costs and improve its operating efficiencies.
Risks and uncertainties to which the Company are subject may include, but may
not necessarily be limited to, the amount of orders that the Company receives
and ships, dependence on international sales and the Company's network of
independent distributors, the risks associated with bringing new products to
market, the results of clinical trials and competition in our markets. Please
see a detailed description of these risks contained in our Quarterly Reports on
Form 10-Q and Annual Report on Form 10-K for the fiscal year ended January 3,
2004 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)
Three Months Ended Six Months Ended
----------------------- -----------------------
July 3, June 28, July 3, June 28,
2004 2003 2004 2003
-------- -------- -------- --------
Sales $ 8,109 $ 7,435 $ 15,501 $ 14,661
Cost of sales 4,302 4,315 8,479 8,303
-------- -------- -------- --------
Gross profit 3,807 3,120 7,022 6,358
-------- -------- -------- --------
Operating expenses:
Research and development 1,277 1,047 2,384 1,997
Sales, general and administrative 2,404 2,564 4,597 5,028
-------- -------- -------- --------
Total operating expenses 3,681 3,611 6,981 7,025
-------- -------- -------- --------
Income (loss) from operations 126 (491) 41 (667)
Interest and other income, net 69 51 129 105
-------- -------- -------- --------
Income (loss) before income taxes 195 (440) 170 (562)
(Provision for) benefit from income taxes (62) 141 (54) 181
-------- -------- -------- --------
Net income (loss) $ 133 ($ 299) $ 116 ($ 381)
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Net income (loss) per common share - basic $ 0.02 ($ 0.04) $ 0.02 ($ 0.06)
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Net income (loss) per common share - diluted $ 0.02 ($ 0.04) $ 0.01 ($ 0.06)
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Shares used in per common share basic calculations 7,192 6,919 7,134 6,916
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Shares used in per common share diluted calculations 7,786 6,919 7,735 6,916
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IRIDEX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
July 3, January 3,
2004 2004
-------- --------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 7,744 $ 10,541
Available-for-sale securities 10,736 5,751
Accounts receivable, net 5,926 6,548
Inventories 8,296 8,721
Prepaids and other current assets 930 934
Current deferred income taxes 972 972
-------- --------
Total current assets 34,604 33,467
Property and equipment, net 791 850
Deferred income taxes 1,522 1,522
-------- --------
Total assets $ 36,917 $ 35,839
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 939 $ 1,029
Accrued expenses 3,452 3,380
Deferred revenue 726 596
-------- --------
Total liabilities 5,117 5,005
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Stockholders' Equity:
Common stock 73 70
Additional paid-in capital 24,775 23,900
Accumulated other comprehensive income (loss) (29) (1)
Treasury stock (430) (430)
Retained earnings 7,411 7,295
-------- --------
Total stockholders' equity 31,800 30,834
-------- --------
Total liabilities and stockholders' equity $ 36,917 $ 35,839
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