IRIX - Earnings call transcript Q4 2018

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Operator

Good afternoon, ladies and gentlemen, and welcome to today's conference call to discuss IRIDEX Fourth Quarter and Full Year 2018's Financial Results. My name is Soni [ph] and I'll be your operator on this call. After the presentation we'll conduct the question-and-answer session instructions will be provided at that time. [Operator Instructions] As a reminder, this call is being recorded today Tuesday, March 5, 2019 and will be available on the Investor Relations section of IRIDEX website at www.iridex.com. I would now like to turn the meeting over to Leigh Salvo.

Leigh Salvo

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

results Executive are Earlier Romeo financial of and the Will on A me is company's XX, Officer ended today, the December year Moore, released press Controller. Joining copy and website. Chief and XXXX. quarter President Dizon, IRIDEX available release for the Vice

any you differ in on place forward-looking which plans anticipated business, not respects statements reliance orders, our results that to priorities; of which and include implied Before revenues, including these All this not China; actual statements probe from our and during make ability levels; historical specialists statements upon not made sales we key management forward-looking Korea team, we and the could South statements shipment current These of retina on including presence within product backlog marketing priorities provide uncertainties the our in of and materially our matters provisions that statements. plans statements undue will overall are statements. Safe begin, these laws, including planned made to including Act involve events convert forward-looking and I'd or for and drive matters. Securities of clinical you future like to XXXX. limited product these federal the opinion to pursuant line and assumptions. trends, development based the and but sales during statements meaning leaders, those to call Any industry that our statements Accordingly, are guidance events; public increases Litigation to to XXXX our that matters; with securities of concerning by or for and operate, risks remind expectations fact, using should Harbor our estimates GX to updates adoption call at this efforts system are goals Reform our markets strategic material Private various cause our

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

Will Moore

Good you, us. you afternoon, Thank joining all Leigh. for thank and

treatment with necessary steps I'm team Looking Glaucoma. the back and to made the future XXXX of share opportunity on in accomplishments in grow pleased our taking market our many the

technology. our our year. GX result awareness year, for our entire One; two quality, these As guidance and the and as made the potential shipments and new utilization the cost we around priorities. portfolio. develop range of GX Consistent year-over-year we GX year, new XX,XXX have the GX investments to through approximately and entered existing by increase while our consistently GX XX% building systems continuing in probes. highlights each acceptance of for increase product set full and to with made including, an manufacturing for to GX XXX revenue on Briefly, reliability improve the out we team at shipped in we And installed the that of platform laser improve, two; commercial globe. products progress introduce We is base objectives MicroPulse to

significant eyes is GX six covering review XX the [indiscernible] sold approval in where meetings. XXX the bringing total We clinical Korea countries peer expanded market laser During our system GX number supporting including saw publications technology our society of South GX MicroPulse and with and major XXXX, the by of our presentations at new we the to data in XX. physicians

advanced generation are exciting executing approaching several laser plans $XX.X expand September, working common will of front, On probes and the our proceeds continue And market net growth that on next us we a and the public prototypes system product release our year. that with this enable completed stock market million offering development to of opportunity. we've in the of

XXXX. $XX.X and our next probes. some the the fourth in to few quarter, Then for momentum for confident to for with full XX,XXX quarter turn a briefly thoughts I'll financial Romeo Starting pre-announce slightly and the offer provide in On front, to in minutes and over of in guidance our would call recent shipped our our summarize the I'm guidance continue priorities financial XXXX. and were I to review performance like on we'll progress the GX above GX million XXXX. systems record year total our revenues XXXX fourth January. provided XXX the proud the progress we take

Glaucoma treating confident GX momentum the late continues gain to we're patients segment the market. I'm Our of leader and stage in in this

patients, to awareness and the procedure support treatment our signaling extend the to earlier stage see growing among of use starting with comprehensive in moderate GX for treating the we're to versatility glaucoma. disease ophthalmologist Importantly, advocating patients stage of

not Clinic of than GX successful, our issue We without diminishing treatment. are a is it article end in two and resisting from laser that system, Florida ophthalmology he of in life at prospects XX% or successfully treated highlighted future typically for position in with patients February XXX the Eye with six weeks For have article the to control years These that XX% in successful glaucoma example, disease. possible noted glaucoma the are patients of patients quality has medication. further an mild-to-moderate a stage and more management

our traction in we provide utilization stage base. opportunities, gain this drive expect only installed to expansion tremendous we treatments to not As earlier market but in

service our tenure training greater and and specialist in US specialists the GX clinical suddenly in and new support. follow-up geographically, productivity business our improve sales our within XXXX adoption our teams and probe of to gained experience GX and our with commercial together were reps enhanced deployed we existing our Where at force increased technology our our sales to provide clinical Looking customers, as improved utilization. work

result in of indications be high these we sales and clinical additional As of XXXX. improvement, continues our to a priority. team through early leveraging step GX in to anticipate a specialist revenues hiring execution improved team our probe clinical and Increasing US

training throughout GX relationship. Japanese and ensure more similar probe the encouraged and I to mentioned, other our expand the key increase with progress through KOL hospital enhancement our I'm customer impact of and networks outcomes. expect and service by achieved for we've Internationally, progress and to awareness serving generating In through a we saw reorders GX with Germany, possible in to plan in and target posters have greatest sales with specialists a KOL we distribution clinical cadence to solid support seen consistent as further great the reason where the relationships they as improvement can XXXX leverage to to build Japan, OUS While strong countries. on year, sales for the and further strategy team consistent accounts we large our presentations expansion model KOL

into we Our hospitals for making the to further believe force penetration market. Germany in foundation this is direct progress selling sets in KOL's sales which and large

impressive level most saw with stage in half growing in GX South that the GX. papers we're Korea data the demonstrated. approved encouraged medical excellent of in the where support approved positioned on global the the sold posters up summary the mid-XXXX was glaucoma. perspective, of device of interest for GX a early an as of studies, and year our of already to markets. value We're dominant a proposition second From and ramp well by continue of major see the of an player treatment we and the a clinical cadence In

momentum demonstrate of than and XX XX As the to and assess of XX was markets. expand patients IOP early demonstrated combined. the and further follow-up Glaucoma months filtration concluded of use for laser the mean outcomes the benefits conducted opportunity at study Disease and the intraocular the that MicroPulse that we non-evasive into the of reduction MicroPulse an number review treatment and eight we system months. after saw was eyes was plus prior data Results eyes in last pressure laser Journal and treatment or journals Keratoplasty In recent and External see and IOP of stage eyes. a MicroPulse or evidenced average XX of in XX use awareness XX alternative In treatment Cornea The XXXX, to studies IOP presented also the our Keratoplasty controlled in IOP study, study unique more of eyes. new to surgery the growing It provides for X. received was MicroPulse. One in peer growing clinical years published of disease minus

the continue maintain the on MicroPulse glaucoma. world key non-invasive front, at for that industry On events all profile stages in marketing benefits around a of we awareness were of high our raising that successful to treatment

As awareness had of around inclusion enable Pacific glaucoma Formal further educational major from international also course. strategy World website the as resource launched of at Academy presentation marks of events of with also Asia which in in ophthalmologist. at Academy skill pace strong of booth physicians upcoming and Geneva in we're for plan we of noted in transfer with This Glaucoma at Glaucoma utilization. We of we congresses. we the several and to educational MicroPulse a multiple Switzerland year in video Ophthalmology surgery a their Wetlab Ophthalmology We've eyetube.com marketing initiated on a heightened MicroPulse three-prong leading notably society Most the our in curriculum Conference official the participation part participate last new where glaucoma events call, clinical presence hosted events. expand to American the on the influential continuing recently the [ph] participation world

clinical MicroPulse. a we're educate of First implementing supporting design evidence installed channel to our base marketing multiple campaign

PR to a outreach medical staff to process. their assist education, tools patients we decision potential the the that design in referring identifying Second, patients and position physician through program patient walking staff includes launched weigh their community and

of in record the Lastly we IRIDEX's didactic introduce physicians MD training. [ph] can certification program which completion formally

the introduction fourth our US the our Turning market from revenues customers of OUS year-over-year. of the TruFocus Sales our relating LIO distributed improved products, quarter to benefited orders both several market in large updated from and fulfillment slightly Premiere. international retina to

will business contributor expect and retina current so. revenue remains to Our meaningful we a remain

of as However, to have on sales for for sales treatment not the focus Glaucoma overall products growth business. of retina been driver a primarily continue we product GX

KOLs with towards to disease opportunity global address this participation During to continue we events plan and through term key line stabilizing intend relationships in in longer to work active business in this XXXX, retinal of through sector. industry

product development, production safety, new that to a in priority progress we another Turning investment on believe will probe I'm improve year. of throughout at reduced XXXX pleased consistency specifically we're and the nearing More cost. with made use Glaucoma procedures for a this was ease and the outcomes of completion GX

progress and and new a laser We platform laser multiple This meaningful and process. also on are for platform new Glaucoma the validation both into verification lasers making migrating retina. has

products applications early expect and XXXX. this these We for and later been next to year built already types anticipate XX-K Product we have file FDA, launches X-K, year. throughout

our enter additional eye further marketing encouraged resource the and I'm our sight dispute on third a property summary, treating more necessary threatening patent defending of in outcomes brand like our confidently property trademark, which claims our and recent our now of intellectual XXXX the infringement revenue to Quantel would contribution than the for intellectual increasing with now commitment the devoting by misrepresentation. and secure and pleased in misuse I technology investments glaucoma We're In swift opportunity and and Europe, to Lastly protective Medical. to technology its move priority a our We place accounts US total for of our resolution to high in and position business comments to few proprietary I'm we make forward able with Glaucoma market. a revenue. of recognition MicroPulse developing very for laser with diseases. lawsuit making

include and for As better to sales year the us Ongoing further this would treatment continued Romeo the our enable will the a stage expand stronger we results glaucoma that the I then introduction to field share. guidance the full expand open early for products quarter we're call for Romeo? and new for many expansion on to our At like MicroPulse execution to began awareness I customers detail position point, over years our financial in our and clinical support and support turn XXXX, and to questions, further XXXX market our of of priorities We'll initiatives to this year organization. believe provide commercialization, of call in XXXX. of for

Romeo Dizon

the fourth begin update I'll of quarter fourth XXX GX Will. slightly systems GX GX distributor compared approximately orders. our business. on quarter GX period. you shipped an quarter systems compared to increased from Thank to in of XXX XXXX. portion XX% In year XXXX ASPs revenues the in the package due the relative third prior the higher to to coming a quarter sales decreased We

in OUS. the of GX we the XXXX our revenues a of shipment the XXXX, GX the in XX% GX the to compared somewhat similar the decline quarter Total of probes US. approximately in On our also complemented fourth XX,XXX fourth retina XX%. From perspective being global product XX% the of prior in record growth sale Probe our quarter compared million shipped by XXXX of the GX portion third of in period, ASPs basis approximately year US probe due our growth of $XX.X quarter higher a in probes in our systems in of an compared quarter in fourth to revenues the fourth revenues. an as were and side, XX,XXX to to quarter geographic increase XX% the increase were the shipped was for a

the fulfill last accessory our sales the in our increased backlog in to to $X.X by in million domestic take The sales. XX% release our primarily to due our quarter X% the recall sales our offset of partially $X.X our from margin and also were primarily million. million in our FDA XXXX systems fourth to quarter of million system our our US was [indiscernible] probes. XXXX a marketing noted cost with in As in reflects fourth year's our $X.X investments sales. including to XX% In growth in million fulfill prior related our were Recurring increased August loss our level commercial voluntary $X.X late QX, to prior of international retina in fourth operating in expanding the This updated gross Consequently we was probes product revenues recorded expenses was call, fourth quarter sales the the an US and million XXXX. decline The systems increased our in primarily in for increase systems In $X.X legacy in quarter. operating additional XXXX expenses increased XX.X% up sales quarter fourth support recall, received to and LIO XXXX in fourth million product the margin international clearance expenses. X% fueled GX infrastructure XXXX. GX quarter compared voluntary loss That Gross we an to by LIO operating XXXX, $X.X clearance of Premiere year. to improvement increase domestic to in to the new August market. the in orders. TruFocus from was compared laser system the and increase Operating the our related due QX, to introduce sales increased of fourth to up and in quarter $X.X

cash $XX.X we sheet and to balance perspective, our no of continue debt. carry we equivalents quarter in XXXX fourth with ended million the For and

year. with between shipments we're XX,XXX GX shipments XXX With and to of of represents of probes XXX over to and year-over-year call year million guidance season XX% our $XX systems. the full XXXX, historical the I'd probe Total throughout expected for midpoint approximately Turning growth at between Operator? to that XX,XXX operator turn to the questions. like projecting which to between patterns GX million to for anticipated for be $XX is the the revenue systems

Operator

Instructions] from [Operator of comes first John question our Stifel. Block

Your is now open. line

John Block

first for Will, be the one might you.

let about guidance? the much just So guidance. the guess in do and me level, raises. how step beats XXXX we upside XXXX and a job, at think back, better take so And a I a struggles high

XXXX. we were saw thinking is XXXX? XXXX again, the the we so of you do and carry into came forward conservatism for into where level our think at you that you same thought process with line in And heading But numbers

Will Moore

that, is I answer with would agree the yes.

John Block

place sort about a the top all a for I'll guidance of Romeo, with or cash we be didn't don't burn level should there the the I XXXX thinking know Okay But guidance? and burn to of it. just over jump that line and accompany along bit give if willing a one range little you're thing cash of and I hear to is

Romeo Dizon

according $X.X plan. I quarter plan said, burning about support cash per the is Basically to like we to we've and got been sufficient million XXXX

John Block

can but what the gray owned is center over we look to-date is front that and base and specialist. other door, has maybe of the any changed Will, ophthalmologist. of to-date I And getting what guys? when percent talked how used worldwide percent. again When And know think GX and boxes or about to put there glaucoma X,XXX incremental so is areas words, systems your I some are your - the by out you comprehensive quantifying in going shifted about way comprehensive there with predominantly more a numbers roughly you the at basis, of

Will Moore

tangential little Okay, so this moment. I'm going for on to a a

John Block

Okay.

Will Moore

everything, comprehensive we in I'm they a an have predominantly gets side haven't On little I I US, - little US glaucoma smaller - they're - and all general validated years. In they it we're been give would the the to early the bit numbers specialist do XX%, specialist glaucoma OUS our were they to XX% fuzzy. of XX% XX% and on in wherever rough and the you it's going of a to adopters. are comprehensive so have few wise, the ophthalmologist, specialist ophthalmologist going the to last probably over to say OUS sales

is is, move So both larger sale I my and market of of boxes as the probes we forward as use point the view well. certainly with substantially think in the

John Block

to should May. one of Okay, was, the rolled maybe down specifics new year toward my of there certainly the Is I'm and and your sort sort this just and about on nose that? change their in probes. thing ahead probe. that going later Any the talked one probe then and tack last old of just from base you the your timing some and is sort down be - that [indiscernible] anything we up out guys. user before they go cognizant onto stock as of of winding Thanks new gets on products

Will Moore

stage get we'll roll that ease out to it, use and this say hospitals the of tight of process well predominantly eyelids. to Asian it with in because deal eyes I that call a At we'll the

full but distribution a that easier. a I then value, the eyes, coupling will of so around one get we've the see light of probes it with so expect clinical to answer it, is slides time questions. would time X-K, that start problem out to year, will The to more the we'll We're The reason go you likely XX-K go There's path half like thing flow we a as with it's and to bit And better always directional little see maybe other the KOL of probe this be it advantage to energy. find our the as eye product. the when been with X-K, the so launch where file inventory of it through don't when reason see When piece is out, the of study, second And source multi-center it, and works. part is management getting the current it studies the out the on to our of and be at the that's these upon that's letter main it now happen. system. the about will the how already into eye out. finish them doctors little into to those trying regulatory coupling the you we having think to about call there's a XX-K. dependent plan, comes the worry through FDA we into bled so bodies new no first better no so no line initiating bit I you before probes the

John Block

Okay just that. and promise add-on one, I very an last to

an also towards they're opportunity opportunity what's as the on new ASP the I in as on going think COGS you to specially we well probe. the think in Well with called being as about market. price growing out similar

Will Moore

see an an I should price, COGS having part part. machine it from injection see going moulded similar a think improvement you'll as to we in

our see You'll - side. it reduction on

John Block

enough. follow-up Fair offline. I'll Thanks guys.

Operator

Thank comes you. question ROTH And Henry of next Capital. Scott our from

open. Your line now is

Scott Henry

It guidance a non-GX is couple think sort that I about digest just of questions, Just in business flattish it to of should the down non-GX fair you think of or as I we kind the the XXXX, appears as about in business to assessment is and in XXXX? organically put try can. think that how best to trying

Will Moore

I relatively we other that said you would the word our Scott, of as to still we're is force we was more the and more think in answer business. other stabilize The the is, retina in than glaucoma more while remains our giving question business capture call. that the there straightforward. I'm part sales to I you part and demand to facility need like utilizing the use

not new the and great. laser is developing will and work retina retina both systems margin our are that in off we that business We current that glaucoma of receive

on we're out. we're come the retina So just retina focused the and new stabilized trying glaucoma the until products

Scott Henry

and a is new this then business growth could with stabilization products, do that post you again, be Okay fair? expect

Will Moore

XX%, growing a days and of space. I Yes piece were to over we I MicroPulse the a the do that that substantial to that. disease a glaucoma just expect back affected and fairly basis that business believe like Retinal taken on market. continue has population lower ageing when it's has XX% global in

Scott Henry

XXXX, back a of is is and XXXX. the key that utilization The probe model envelope in then, obviously get longer good systems GX being utilization just of sort the maybe And XX kind of that around and of that's also sense. should magnitude ramping number utilization versus looks again part XXXX, in your the kind to expect term? what conservative like anticipate outlook necessarily XXXX just trying probe staying could kind or not great. in start probe for that to of a we number and business we it Okay, of When a little

Will Moore

I think number saw you that about when the per a talking year you're laser? XX, on probes

Scott Henry

talking year total I'm by the installed divided probes the base. about in

Will Moore

to Okay, yes. I reason know much on but so that people a when have not is using, in device it it how a a the get exact utilization. hospital selling of train and is and term probes they always talked We always them get about and the start long probe use people number the for as the well, they to utilization the number. takes before to package we're that, device

look ago, that So like way it. six your months laser is a by account to probe using one be box number can was at calculated

we sales be usage - the think to, is six that stage, the majority have with with as been, I as I'm goal piece and expect that been the but believe earlier as we some move forward which laser said in giving probes the not guidance we little are late move is place less I'm and when move earlier of number should we I per forward system than still long-term stabilize as eight between a stage as to comfortable into consuming what month on reflected call, the I answer that the overall a our a think to I our sales. hardware bit sales our it's on

month, us six goal to I laser. the to eight installed get that probes to per up for try think is per

Scott Henry

And that's Okay, inflationary pricing should spending growth about has or a about regards trying helpful. then of just with sense XXXX, more XXXX. get stable growth, [indiscernible] I inflationary think modest and just expect we we to would just I should thank think you to guess been

Will Moore

network and the consistent slightly OUS but distribution only in the we're been about versus think up spending. remained US the on spend, so I - sector. has because a you're when spending consistent you're lower pricing in and the and prices we trends our fairly talking it's those have play pricing been Okay, about things as The customer really are versus And talking in well, direct.

Our spending pretty place what some investments is been, hire would we've folks, made drop the the be the consistent be hiring made and said where to we increase to going will the we in continue clinical people it so with and will I think already the biggest - folks, it's where see and more we've going as product take need side but to on percentage our higher don't you got consistent continue of earlier don't business. Romeo been is burn I higher to as probes to a development

Scott Henry

versus OUS? of Okay systems the great market didn't and just percent were what placed in the final question. US I quite catch But it.

Will Moore

do that one? to grab you want Romeo,

Romeo Dizon

was that? [indiscernible]. don't have on with I back it think - I can you I get

Scott Henry

fine, taking can Yes you that's for we Thank offline. the questions. guys catch up

Operator

like conclude Thank to remarks. This our session. back gentlemen. now the you. Will for call over to question-and-answer and does ladies And I closing would Moore turn

Will Moore

like would I call as would I - support. operator. performance the to shareholders Thanks again your for I'm just. today. our as with Thank like for joining is well the IRIDEX solid sorry them continued our you to thank making pleased thank and

upcoming during trips. many our to and a marketing We conferences also you great look of evening. have forward seeing Please

Operator

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

all may day. have great a disconnect. Everyone You

IRIDEX (IRIX) 5 Mar 192018 Q4 Earnings call transcript