IRIDEX (IRIX) - 2024 Q1 - Quarterly Results

First Quarter 2024 Financial Results Overview This section provides an overview of Iridex Corporation's Q1 2024 financial performance, including key highlights and CEO commentary Executive Summary and Key Highlights Iridex Corporation reported its financial results for the first quarter ended March 30, 2024, showing a decrease in total revenue and specific product lines compared to the prior year, alongside a reduction in cash and cash equivalents Q1 2024 Financial Highlights (YoY Comparison) | Metric | Q1 2024 | Q1 2023 | Change | Source | | :-------------------------------- | :------ | :------ | :----- | :----- | | Total Revenue | $11.8M | $13.7M | -13.9% | chunk_6 | | Cyclo G6 Product Family Revenue | $3.0M | $3.7M | -18.9% | chunk_6 | | Cyclo G6 Probes Sold | 13,300 | 13,800 | -3.6% | chunk_6 | | Cyclo G6 Glaucoma Laser Systems Sold | 22 | 61 | -63.9% | chunk_6 | | Retina Product Revenue | $6.8M | ~$7.2M | -5.6% | chunk_6, chunk_7 | | Cash and Cash Equivalents (as of March 30, 2024) | $5.4M | N/A | -$1.6M (QoQ) | chunk_6 | CEO Commentary and Business Update CEO David Bruce noted continued longer sales cycles and capital equipment purchase deferrals in Q1, anticipating Q2 firming, highlighting new retina product interest and ongoing strategic review - Longer sales cycles and end-of-quarter capital equipment purchase deferrals continued into Q1 2024, impacting revenue[4] - Expectations for Q2 include additional firming and shipment of queued orders, indicating potential recovery[4] - Solid growth from Pascal® scanning laser systems and G6 probes internationally was offset by deferrals and revenue declines in other products[5] - New Iridex 532® and 577® single spot laser platforms for retina are generating customer interest, expected to convert into revenue in upcoming quarters[5] - The company is continuing an active strategic review process, with discussions ongoing with multiple parties for specific product lines and the entire company, following a failed initial asset sale transaction[5] Detailed First Quarter 2024 Financial Performance This section provides a detailed analysis of Iridex Corporation's revenue, gross profit, operating expenses, net loss, and cash position for Q1 2024 Revenue Analysis Total revenue for Q1 2024 decreased by 13.9% year-over-year, primarily due to lower system sales and reduced royalties from expired patents Q1 2024 Revenue Breakdown (YoY Comparison) | Revenue Category | Q1 2024 ($M) | Q1 2023 ($M) | YoY Change (%) | Primary Drivers | | :--------------- | :----------- | :----------- | :------------- | :-------------- | | Total Revenues | 11.8 | 13.7 | -13.9% | Lower system sales, decreased royalties | | Retina Product Revenue | 6.8 | 7.2 | -5.6% | Lower medical/surgical system sales, partially offset by higher Pascal system sales | | Cyclo G6 Product Group Revenue | 3.0 | 3.7 | -18.9% | Lower system sales, lower U.S. probe sales partially offset by international probe sales rebound | | Other Revenue | 2.0 | 2.8 | -28.6% | Decreased royalties (patent expiration), lower service revenue | Gross Profit and Operating Expenses Gross profit and margin declined in Q1 2024 due to lower revenue, while operating expenses decreased overall, despite increased legal costs from the strategic review Q1 2024 Gross Profit and Margin (YoY Comparison) | Metric | Q1 2024 | Q1 2023 | Change | Driver | | :----------- | :------ | :------ | :----- | :----- | | Gross Profit | $4.5M | $5.9M | -23.7% | Lower overhead absorption across reduced revenue base | | Gross Margin | 37.9% | 43.3% | -5.4 pp | Lower overhead absorption across reduced revenue base | Q1 2024 Operating Expenses (YoY Comparison) | Metric | Q1 2024 ($M) | Q1 2023 ($M) | YoY Change ($M) | Primary Drivers | | :-------------------- | :----------- | :----------- | :-------------- | :-------------- | | Total Operating Expenses | 7.8 | 8.3 | -0.5 | Cost reduction initiatives, partially offset by increased legal expenses | | Legal Expenses (increase) | N/A | N/A | +0.4 | Related to strategic review process | Net Loss and Earnings Per Share Iridex reported an increased net loss of $(3.5) million and a higher net loss per share of $(0.21) for Q1 2024 compared to the prior year Q1 2024 Net Loss and EPS (YoY Comparison) | Metric | Q1 2024 | Q1 2023 | Change | | :------------- | :------ | :------ | :----- | | Net Loss | $(3.5)M | $(2.1)M | $(1.4)M | | Net Loss Per Share | $(0.21) | $(0.13) | $(0.08) | Cash and Cash Equivalents The company's cash and cash equivalents decreased by $1.6 million during the first quarter of 2024, reaching $5.4 million Cash and Cash Equivalents | Metric | As of March 30, 2024 | Cash Use in Q1 2024 | | :-------------------- | :------------------- | :------------------ | | Cash and Cash Equivalents | $5.4M | N/A | | Cash Use | N/A | $1.6M | Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated statements of operations and balance sheets for Iridex Corporation Statements of Operations The unaudited condensed consolidated statements of operations show decreased total revenues and gross profit, leading to an increased net loss for Q1 2024 Condensed Consolidated Statements of Operations (Unaudited) | (In thousands, except per share data) | Three Months Ended March 30, 2024 | Three Months Ended April 1, 2023 | | :------------------------------------ | :-------------------------------- | :------------------------------- | | Total revenues | $11,761 | $13,706 | | Cost of revenues | 7,303 | 7,768 | | Gross profit | 4,458 | 5,938 | | Operating expenses: | | | | Research and development | 1,536 | 1,749 | | Sales and marketing | 3,747 | 4,283 | | General and administrative | 2,468 | 2,250 | | Total operating expenses | 7,751 | 8,282 | | Loss from operations | (3,293) | (2,344) | | Other income (expense), net | (133) | 266 | | Loss from operations before provision for income taxes | (3,426) | (2,078) | | Provision for income taxes | 38 | 12 | | Net loss | $(3,464) | $(2,090) | | Net loss per share: | | | | Basic | $(0.21) | $(0.13) | | Diluted | $(0.21) | $(0.13) | | Weighted average shares used in computing net loss per common share: | | | | Basic | 16,253 | 16,001 | | Diluted | 16,253 | 16,001 | Balance Sheets The unaudited condensed consolidated balance sheets show a slight decrease in total assets and stockholders' equity, with increased total liabilities from Q4 2023 to Q1 2024 Condensed Consolidated Balance Sheets (Unaudited) | (In thousands) | March 30, 2024 | December 30, 2023 | | :------------------------------------ | :------------- | :---------------- | | ASSETS | | | | Current assets: | | | | Cash and cash equivalents | $5,419 | $7,034 | | Accounts receivable, net | 9,146 | 9,654 | | Inventories | 11,003 | 9,906 | | Prepaid expenses and other current assets | 2,010 | 856 | | Total current assets | 27,578 | 27,450 | | Property and equipment, net | 265 | 351 | | Intangible assets, net | 1,558 | 1,642 | | Goodwill | 965 | 965 | | Operating lease right-of-use assets, net | 2,402 | 2,632 | | Other long-term assets | 1,324 | 1,396 | | Total assets | $34,092 | $34,436 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Current liabilities: | | | | Accounts payable | $7,991 | $4,727 | | Accrued compensation | 2,256 | 1,619 | | Accrued expenses | 1,112 | 1,996 | | Other current liabilities | 1,265 | 1,233 | | Deferred revenue, current | 2,447 | 2,404 | | Operating lease liabilities, current | 995 | 995 | | Total current liabilities | 16,066 | 12,974 | | Long-term liabilities: | | | | Deferred revenue | 9,708 | 10,025 | | Operating lease liabilities | 1,526 | 1,751 | | Other long-term liabilities | 304 | 164 | | Total liabilities | 27,604 | 24,914 | | Stockholders' equity: | | | | Common stock | 172 | 172 | | Additional paid-in capital | 88,838 | 88,444 | | Accumulated other comprehensive loss | (16) | (52) | | Accumulated deficit | (82,506) | (79,042) | | Total stockholders' equity | 6,488 | 9,522 | | Total liabilities and stockholders' equity | $34,092 | $34,436 | Additional Company Information This section provides background on Iridex Corporation, details on its Q1 2024 webcast, a safe harbor statement, and investor relations contact information About Iridex Corporation Iridex Corporation is a global leader in laser-based medical systems for ophthalmology, specializing in glaucoma and retinal diseases, utilizing its proprietary MicroPulse® technology - Iridex Corporation develops, manufactures, and markets innovative laser-based medical systems, delivery devices, and consumable instrumentation for the ophthalmology market[11] - The company's proprietary MicroPulse® technology provides safe, effective, and proven treatment for sight-threatening eye conditions[11] - Current product lines treat glaucoma, diabetic macular edema (DME), and other retinal diseases, sold directly in the U.S. and through distributors internationally in over 100 countries[11] Webcast and Conference Call Details Iridex hosted a conference call and webcast on May 14, 2024, to discuss its Q1 2024 financial results - A conference call was hosted on May 14, 2024, at 2:00 p.m. PT / 5:00 p.m. ET[10] - Investors can access the live and recorded webcast on the 'Event Calendar' page of the 'Investors' section of the Company's website at www.iridex.com[10](index=10&type=chunk) Safe Harbor Statement This statement cautions that forward-looking statements are not guarantees of future performance, and actual results may differ materially due to various risks - The announcement contains forward-looking statements concerning clinical expectations, commercial trends, market adoption, value-maximizing transactions, and product demand[13][14] - These statements are not guarantees of future performance, and actual results may differ materially due to various risks[14] - The company cannot provide assurance that it will complete any value-maximizing transactions for its stockholders[14] - A detailed description of risks is available in the Annual Report on Form 10-K filed on March 29, 2024[14] Investor Relations Contact information for investor relations inquiries is provided - Investor Relations Contact: Philip Taylor, Gilmartin Group, investors@iridex.com[15]