IRIX - Earnings call transcript Q4 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2017 IRIDEX Earnings Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions].

As a reminder, this conference call is being recorded. to conference like Salvo, to now Relations. Investor would turn over the Leigh I begin. may you Ma'am,

Leigh Salvo

Thank you And you. thank call. in today's all for participating

Mokari, of the website. quarter William Office; year the ended today, Joining Company's Chief XXXX. and release released Chief A is XX, Atabak on copy IRIDEX for are Earlier press Financial results me financial December Officer. the Moore, and Executive available

statements including product you statements that the of call sales, team Before historical the customer the our plans including management specialists its place next impact and in business GX those shipment and State make including to the uncertainties provisions our of churns strategic to plants, our to Accordingly, China hiring we various looking in personnel, statements our development during including Act in by of begin, to based securities markets manufacturing that these statements. including related the deemed materially could forward-looking on for LIO obtain operating you our and this forward-looking line results to I'd Germany, platform, and estimates forward-looking statements. events and not of those probe system XXXX. Reform matters, to actual reviews statements made and which involve and reliance outsourcing the to made expenses, guidance federal and be base, or XXXX differ and markets fact, assumptions. we plans, operate GX, clinical on that and of this future remind includes product be undue extension for certain plants are including pursuant sales in property product within plants clearance not in these like meaning during statements clinical the current development initiative, All including which or of our our that anticipated Safe plans, our call material Litigation are results, statements. should Any risks from and will implied laws, and sales, overall regulatory statements changes non-U.S. should cause marketing Securities levels expand to our organization recall forward intellectual study Harbor our statements These upon our related of grow generation and are

today, our Commission. the XX-K obligation, XX-Q For recent of with to IRIDEX business, a or Exchange required revise most uncertainties form discussion risks by Securities any see and and disclaims intention the update with law, filings, the because form broadcast contains and our statements call call as or associated over projections to please with except financial live whether time-sensitive only otherwise. events as XXXX. March or like accurate turn with And of Will. of X, or any that, I’d the This information information, future forward-looking is and to conference new the

William Moore

was and marked you towards financial you, Good glaucoma disappointing. and We year progress the transformation that results Thank our afternoon, thank believe for were year the by Well us. Leigh. XXXX quarter our fourth joining XXXX full significant in everyone, market.

has team transition our has hurdles efforts made. this of proud While the with and I’m some expected very come unexpected

move is progress commit infrastructure these proud place potential shows This I’m not strong the data, margins to sales. Cyclo gave target retinal XXXX in disease. focus onetime our with as significant XX% in substantial expanded digital for includes over We in have capital in the to markets, our opportunity realize XXXX volume goals trade As are shift see the X commercialization profitability. higher affords know of increasing and significant in on over the more and with expand with revenue of strategic a material target addressing GX move an came a ensure sales our a many shift our business our only of us foundation growth model and to also necessary enhancements larger we including, historically adapted utilization support new, ahead the by clinical team sustainable which the confidence marketing the towards driving entered significantly customers equipment opportunity. predictable and glaucoma-oriented towards meaningfully to force to to but and glaucoma an This in us our new to traction early material billion products. you our in media. niche in investments beginning shift presence Today base This business we market. to

the VP We lowers our to cost. GX added Internationally a two of Clinical of capacity and fully transition our And systems Affairs. which production of and Affairs VP we key probes Germany. and established improves also operation and launched leadership our GX direct outsourced in Regulatory our selling a a model roles we

in grew platforms in XX we sales presented of clearance this more I’m core XXXX. by discuss outside in launched XX.X meeting Japan business several both discuss GX few Japan. traction in million I major from review the society the results financial the GX in in of comparable were million versus support in our encouraged our next received XXXX in continue the returns issues from XXXX our in quarter year gaining detail. shortly. with the revenues business XXXX details over fourth and for more to like XX.X year. the of that U.S. in GX to we full are quarters. than of by also an I’d detail that retinal and and fourth coming early more work are of Starting studies quarter completed greater glaucoma the We we that benefited offset at And reported and countries XXXX. plan with in we meetings product prevented finally, types more confident Revenues and data We see will but regulatory last exciting quarter GX patients the several Clinical new investments results. development from generation of our next target increase of in to Germany pit in take demand us to will quarter minutes clinical

the million million for revenues compared revenues to full were revenues retina For XXXX, XXXX. XX.X retinal flat, in decreased XX.X year double-digits. medical revenues GX in and total our surgical were decreased in while mid-single-digits

probes. both quick made first reflective at of tears retina GX from GX shipped XXX of shipped improved used our products of of glaucoma, in the we third those see and half medical edema more with to the Progress highlights, demand diabetic than support in GX retina investments. retinal our of we doubled infrastructure lead helped the Starting GX sales In treatment over first, in three our the sales primary a of XX,XXX or number the lines, detachments. GX Since product in our of In business the DME product began XXXX, the a in second year. Turning macular reminder, quarter GX innovative a second for and our the for Cyclo for probes we changes significant treatment approximately made process of half focus U.S. nearly repeat treatment the XX,XXX and largely line, as record the orders have line quarter, by and larger benefits several XXXX XXX our surgical to team, sales. the we systems for cycle. was US year the pricing first expanded This launch of systems of shorten shipped the and onboarding driven in generation, XXXX the we've GX In fourth March on systems half particular we improvements customers, second new half to model factors. our

saw also a shipments meaningful in GX QX. probes We uptick in

made, industry additional by earlier as progress drive addition GX I support worldwide increasing first several U.S. we reps including several utilization benefits being developing in the highlighted service I awareness, quarter encouraged In presence key customer events Last noted improved targeted outreach, strategies pursuing I and targeting scale better productivity are sales and our our our we and our This to adoption many am are notable we seasonally to of probe improved marketing follow-up. the contributed to regions. from included of customer have quarter and utilization. fourth factors at platform. higher improving

So held in we XXX symposia far, four this Kong, XXX audience first Hong main doctors. quarter American we two and had the with are York off doctors. Italy, UK about City GX to fast which At recent a in podium Glaucoma and attracted New France, start over of Society meeting presentations the aggregate in

voted was second KOL the presentation UCSF first from our made conference. best the The and was presentation at the by

continue to and products events support awareness. we Continued these MicroPulse the build expect and technologies cadence GX is at pace to encouraging for to our

after help Second, area deliver we our clinical probe to to sale treatment We is work specialists customer driving are This rates. with to consistent positive improved and and we focused. reorder follow-up keenly an is system where outcomes. key utilization adding are customers believe

these lead During were of began middle January Clinical we early roles. for He consulting we the been basis Affairs recruiting this fortunate manager on our the has onboard manager to group. new specialists a a with fourth with in important quarter XXXX. of VP have and to fill We working us hired since

So, an immediate we impact. able make to are

our team. execution And communicate seeking specialists and the on the and are added studies. recently value of clinical his of of treatment programs clinical clinical to through glaucoma procedure series for of the clinical also We economic two to serve third, opportunities we education

the action and We have begin recently enrollment in term. submitted a for review hope IRB study mechanism to near

investigators have multicenter clinical made global, us lead outcome and our keep to progress protocols parameters. We study regarding study also our with establish

than targeted customers as GX the progress where in see opportunity making increasing purchased hospitals as inventory our centers. new sold currently of In XX the U.S. is and well we currently ophthalmology Internationally clinics, GX were have team and greatest more penetrating multiple the sales the the is and customers quarter target we're successful that adding networks, progress momentum Looking our making in systems. countries. institutions further at we surgery large in countries number with in geographically,

opportunities activities our to have to of Japan treat the global nicely. the platform in Germany multiple remains overall make launch the GX we our large on the used base patients glaucoma grow to proceeding With goal standard and our installed and increase expanding care addition same, a controlled patients. In and closing GX, utilization. are population In to

retina we business see however quarter nature. to our experience solid underlying Turning its equipment capital to given is quarter lumpiness to expected continue to demand, this medical products,

prevented one example, business this put backwater we in situation us fulfilling a from our experienced product of This in from an also than higher and is As core orders anticipated the those much fourth us lines, quarter which cover orders. focused team's the I'll sales surgical it recall of GX in our of XXXX moment, retina a throughout our as as a both medical laser by our and well businesses. impacted on impacts as one accessories,

turning retina our to business. surgical Next

We the continue see to market. the of mature dynamics

on U.S. also of that experienced outside one countries country. us prevented We into that from specific largest of regulatory product the shipping issue its the

in We have orders expect coming addressed the issue to the regulatory and quarters. return

a LIO voluntary comments to we few announced few and on accessory laser is Lastly, make in like ago. medical the that accessory our premiere of The surgical I’d retina weeks procedures. TruFocus recall used both a

quarter made surgical Our ways. the our in medical orders issue affected to and product reserve and One, issue to we increase our not from impact QX, can this issue but remedy fourth time shipped the continues the have two be that so investigated the in systems, two, the retinas booked quickly given our marketplace revenues as an team we as possible. returns LIO situation the decision not products This could The business. our being were and remove impacted retina voluntary with sell we laser do sales recall. while for

for regulatory We working uncertainty the their plan The alternative potential our a the guidance interim conclude Atabak and adjustments and turn further in on to I’d to Atabak? including place laser for goals, for in goals, third-party detail are I’ll they quarter impact our the the timing on is solution results accessories. process, minimize to provide our like existing business product unclear to to given have At on alternatives. call a actively that our the over XXXX. point the offering with financial prepared year. of remarks by With outlook then and this

Atabak Mokari

revenues fourth year of revenues compared revenue revenues prior system shipped XX.X our year-over-year decrease the programs Thank by XX.X Revenues the approximately XXXX in of impacted and GX mid-XXXX quarter compared to in retina at and we revenues. fourth XXX were shorten to XXXX. medical for System while were a XX%. the an that GX quarter surgical flat relatively X probe cycle. XXXX systems, systems GX Will. approximately million issues million to period In Will our year-over-year sales increased in representing were in by GX revenues described. our due introduced decreased declined in that XXXX the you, new process by increase sales more the million. pricing to XXX than In offset we was GX XX% facilitate

international quarter. On the in the sales also compared our the an to quarter in installed in to XX% quarter our quarter is From offset pricing of business, primarily XX.X% in side, the XXXX the decline decreased the in Gross XXXX sales perspective probes from probes benefited approximately XXXX X.X to the our was Probe bases XX% from prior of shipped million X.X XXXX approximately while period million a a in legacy impacted costs X% with probe GX X.X by Gross margin our XXXX, U.S. of million in of XX,XXX quarter in million benefit million higher in in revenue In million GX XX% our pressure year voluntary probes. the fourth of of from system while revenues modest in geographic GX XXXX X.X increase to and the probes XXXX. in a margin growth compared the U.S. to increase fourth GX associated recall ASP system domestic decreased in of our system in XXXX. X.X quarter GX Recurring probes comparable as the offset we was fourth fourth XX.X% of was approximately revenues. from XX% X.X decreased the XX%. XX,XXX margin in retina by of which fourth

Our expenses quarter and operating no and X.X million level and with growth including we of our GX balance improve compared of fourth marketing support our GX with and was capital X.X the quarter. operating our we sales million with of ended approximately up perspective to X.X investments for contribution prior in as significant decreases the Consequently, XXXX from QX inventory to working were is our infrastructure our mix increased. million in in XX% expected operating accounts loss X.X QX Operating expenses expenses. margin in XXXX commercial million The probes expanding 'XX. XXXX increased reflects year's to XXXX the was management loss fourth the XX.X in From improved million of XXXX receivable our sheet and throughout cash debt.

guidance our XXXX. Turning to for

represents year-over-year GX expect to expect probe growth XX,XXX XXX midpoint the We which of of systems. approximately XXX GX XX% at shipments to of and XX,XXX shipments

million. remarks revenue expect to to year for the We With million turn call for goals. that, back XXXX from our total to closing over some range the full XX on XX Will I'll

William Moore

Thank you, Atabak.

are We care to of worldwide our committed center the GX of world we making each building our of are glaucoma. platform the around technology. the recognizing progress making Physicians every awareness and and day the GX and meaningful are and the of the towards of treatment our MicroPulse commercialization benefits surgeons of value

XXXX As we had confident and haven’t I’m out the XXXX the laid track. strategy remains option than ever on we look towards in more in we

the priorities Our base while to across continuing top our the probe of expansion to XXXX, improve utilization existing sell two base installed globe. GX first from

and reliability, our regulatory all sales we manufacturing in have in China to this, improve building and utilization for obtain products. out Second, drive the the order the GX Germany. specialist to build clearance to we to in and our execution and team. Internationally, team to In clinical achieve improve sales our the cost out continue they Korea to to intend quality, U.S. products introduce probe potential new of plan

IRIDEX you forward operator the the enrollment on launch clinical I to society the expect of lastly that over to studies one throughout Operator? like independent look turn to major for in to coming front begin anticipate also our questions. updating the We I’d development president quarters. call increase an be sponsor to to in We clinical plan at GX studies. meetings. of by the product next-generation lastly, on platforms. And physicians And we With at year our progress least

Operator

And from Partners. Capital Solomon first question David with Instructions] comes [Operator our ROTH

Your line is now open.

David Solomon

with Just LIO. want to start

the talked you specific than give this is guidance going development something think about do months? can't it internal way longer some you be expect three you going? six be alternatives third-party. do you take to two for know that So, And it Which will but be could to or midyear I to

William Moore

Will. This is

alternatives FDA two our a longer And could be you one response period as take the second time. six little three talked have yes. fairly the to short, how there's about think months to could of on I them. depending one, response there to bit And is

David Solomon

And laser back them, you some little and what give be? hear to mentioned bit a accessories more okay, so, you're that’s color from Can you waiting on accessories. then helpful alternatives to those

William Moore

whether retina, of energy on depends How eye. medical want used laser that. retina, the it LIO there array you products and Sure, are an the to is pattern probes, get endo you that in are SOAs is of scanners they spot one surgical in in those. the the

David Solomon

Let’s systems there many bit to over the just a actually quarter, switch about and the How XXX. gears for little installed of talk less the through were want GX.

William Moore

numbers. for was consistent our as the talked about about, For the the is we of it install inside that, roughly quarter with with XX% U.S. GXs base was and those it

David Solomon

the the do mentioned on few and number And this just you were domestically? how becoming specialist, what we year get of on can update over hired then an managers, many time see in top the next you clinical wanted to I know expect

William Moore

are force increase We the that as how the we or sales clinical they many will be regular said I and of right believe clinical and there's that the That's have these in but be which an but two would on there education probably we and next basis. better clinical -- base we've comes don’t remarks have in in an sales from see are -- field that we've -- increase could said department work, people. basically people. more would more. that David to hires a and of be you'll the get in -- department a from exact utility sales we see comes previous the be mix want that likely an monitoring mix number, answer a I onboarded, question that answer between now I And right the think answer it's And install specialists. as don’t XX the than people number calls a

David Solomon

Do you to or around centers your do devices? are focusing see on see these the that going you people private clinics more them larger using

William Moore

and specifically provide make trained -- We see on KOL, get high-volume better whether podium turn main to use them device sure based better positive get move to The speakers, focus with us basis. the focused is they people volume results, they're get which university global and utilizations the markets on the a that's ASC. people in the will large and or consistent a the a that coverage

David Solomon

color certain get mentioned those lessons a can just it just been and that to you talk to briefly because adopted lessons? know more things products the of I the we have sell it ability know learned question wanted for learning that been have and on one about bit -- And how there's I have curve been has force, a current sales little I but these more

William Moore

has since -- last the force sales has The the in now changed two definition year years have over its been so, GX. of well we or personnel the

on lesson were of versus someone put which -- moved educate predominantly people is transactional relationship moved technology frontend understanding a have we to all sale into relationships equipment of use with $XX,XXX device, and transitioned a you predominantly can how that is into and and how glaucoma learned important of people to retinal that that and a have a probes. the far piece is a that a business, more an use We sale, teach transaction and a of series we close type becomes continued which the if and the will, type specialist, from

David Solomon

acquired a on skills recent recent I just there's that have to with consensus how of shifted more of use clinical use to devices, becoming the the one consensus and how GX? more, the on the or studies is presentations the where

William Moore

where if in the that but want better to around of get enhance the art you eye, the you hand consistent, bit, it's and little I we and that utility. fine-tuning mean training so in more hold how how my go by the will we about -- art art fast get comments becomes talked turn and you increased your of earlier the A begin this, results, to will, point that and

Operator

turn time. Thank any this CEO the you. showing I’m not I’d like any back William to further call Moore questions at to further for remarks.

William Moore

once and forward valuable the thank all we be just Thank for you dedication stronger contributions our as and you. We again ongoing for all to beyond. thank you today, I and to look for together. employees joining and call XXXX in

Operator

for in and today’s gentlemen, concludes you This conference. today’s Ladies participating thank program.

You all have may day. a great Everyone disconnect.

IRIDEX (IRIX) 9 Mar 182017 Q4 Earnings call transcript