IRIDEX Reports Third Quarter 2009 Financial Results

Friday, November 13, 2009 General News
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MOUNTAIN VIEW, Calif., Nov. 12 IRIDEX Corporation (Nasdaq: IRIX) today reported financial results for the third quarter of 2009 ended October 3, 2009.

For the third quarter of 2009, the Company recorded a net profit of $0.6 million or $0.07 per diluted share compared to a net loss of $0.2 million or $(0.03) per diluted share for the third quarter of 2008. Revenue for the third quarter of 2009 was $10.4 million, a 13.2% decrease from the $12.0 million reported for the third quarter of 2008. However, gross margins improved to 49.2% from 41.6% and cash generated from operations was $2.4 million compared to a decrease of $0.9 million.

"Our cash generation remains excellent, we have generated $5.2 million in cash from operations for the year to date and our cash balance now stands at $7.9 million and we have reduced our debt from $6.0 million to $3.5 million" stated Mr. Theodore A. Boutacoff, President and CEO. "We continue to see the benefits of creating a very efficient and scalable business."

"We have recorded our third consecutive quarter of profitability which is an outstanding achievement given the current economy. Of particular note, we have been profitable at the operating income level for three consecutive quarters, generating $1.0 million in operating income this quarter and $1.7 million year to date. Although our revenues were down, the majority of the decrease was in our aesthetics and OEM businesses and we were pleased to see a rebound in demand for ophthalmology systems domestically. Our margins have improved and we are controlling our operating expenses well."

"Looking forward, the outlook for our business is improving. We had a very successful American Academy of Ophthalmology where we introduced two new products; the Dual Port IQ 532 green laser system and the Modular Multi-wavelength laser solution. In addition, our recently introduced IQ 577 yellow laser was featured in a number of physician presentations which outlined the significant clinical and patient benefits of the product. We believe these products and their acceptance, together with other initiatives we are undertaking, provide us with growth opportunities for 2010."

Conference Call

IRIDEX management will conduct a conference call later today, Thursday, November 12, 2009 at 5:00 p.m. Eastern Time. Interested parties may access the live conference call via telephone by dialing (888) 561-1721 (U.S.) or (480) 629-9868 (International) and quoting Conference ID 4181294, or by visiting the Company's website at www.iridex.com. A telephone replay will be available beginning on Thursday, November 12, 2009 through Thursday, November 19, 2009 by dialing (800) 406-7325 (U.S.) or (303) 590-3030 (International) and entering Access Code 4181294. 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 and delivery devices. We provide solutions for multiple specialties, including ophthalmology, dermatology and otolaryngology. 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 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 products, growth strategy and prospects. Please see a detailed description of these and other risks contained in our Quarterly Report on From 10-Q for the quarter ended October 3, 2009 and our Annual Report on Form 10-K for the fiscal year ended January 3, 2009, each of which was 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 Nine Months Ended October 3, September 27, October 3, September 27, 2009 2008 2009 2008 ---- ---- ---- ---- Revenues $10,400 $11,987 $31,649 $36,383 Cost of revenues 5,278 6,997 16,650 21,257 ----- ----- ------ ------ Gross profit 5,122 4,990 14,999 15,126 Operating expenses: Research and development 888 972 2,635 2,995 Sales and marketing 2,204 2,732 6,766 8,011 General and administrative 1,061 1,516 3,867 5,345 ----- ----- ----- ----- Total operating expenses 4,153 5,220 13,268 16,351 --- ---- ----- ------ Income (loss) from operations 969 (230) 1,731 (1,225) Legal settlement - - 800 800 Interest and other expense, net (64) (54) (197) (426) --- --- ---- ---- Income (loss) before income taxes 905 (284) 2,334 (851) Provision for (benefit from) income taxes 259 (35) 266 16 --- --- --- --- Net income (loss) $646 $(249) $2,068 $(867) ==== ===== ====== ===== Net income (loss) per share - basic and diluted $0.07 $(0.03) $0.23 $(0.10) ===== ====== ===== ====== Shares used in computing net income (loss) per share - basic 8,845 8,824 8,845 8,824 ===== ===== ===== ===== Shares used in computing net income (loss) per share - diluted 8,900 8,824 9,003 8,824 ===== ===== ===== ===== IRIDEX Corporation Condensed Consolidated Balance Sheets (In thousands) (unaudited) October 3, January 3, 2009 2009 ---- ---- Assets (unaudited) ------ Current Assets: Cash and cash equivalents $7,884 $5,307 Accounts receivable, net 7,148 8,199 Inventories, net 9,666 11,644 Prepaids and other current assets 489 540 --- --- Total current assets 25,187 25,690 Property and equipment, net 547 832 Other intangible assets, net 1,233 1,474 Other long term assets 357 229 --- --- Total assets 27,324 28,225 ====== ====== Liabilities and Stockholders' Equity ------------------------------------ Current Liabilities: Accounts payable $1,314 $2,415 Bank line of credit 3,500 6,000 Accrued compensation 2,157 1,729 Accrued expenses 2,147 2,249 Accrued warranty 1,168 1,345 Deferred revenue 2,713 2,741 ----- ----- Total current liabilities 12,999 16,479 ------ ------ Stockholders' Equity: Convertible preferred stock 5 5 Common Stock 89 89 Additional paid-in capital 39,657 39,105 Accumulated other comprehensive loss (233) (192) Treasury stock, at cost (430) (430) Accumulated deficit (24,763) (26,831) ------- ------- Total stockholders' equity 14,325 11,746 ------ ------ Total liabilities and stockholders' equity $27,324 $28,225 ======= =======

SOURCE IRIDEX Corporation


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