IRIDEX (US:IRIX)2019-05-05 06:34Financial Data and Key Metrics Changes - Total revenues for Q1 2019 were $10.6 million, an increase of 11% compared to Q1 2018 [26] - Gross margin in Q1 2019 was 40.2%, down from 41.2% in Q1 2018 [31] - Operating loss in Q1 2019 was $3.0 million, improved from a loss of $3.6 million in the same period last year [31] - Cash and cash equivalents stood at $17.2 million, with no debt and working capital of $25.4 million [32] Business Line Data and Key Metrics Changes - Cyclo G6 product revenue grew by approximately 9% year-over-year to $3.1 million, representing 29% of total revenue [10][27] - Retina product revenues were $5.6 million, an increase of approximately 14% year-over-year, accounting for 53% of total revenue [23][29] - Cyclo G6 systems shipped totaled 114 units, with probe shipments reaching approximately 14,000, a quarterly record [11][28] Market Data and Key Metrics Changes - Approximately 53% of Cyclo G6 revenue was generated in the U.S., while 47% was from outside the U.S. [29] - In the retina business, approximately 47% of revenue was from the U.S. and 53% from outside the U.S. [30] - Strong performance noted in Japan and South Korea, driven by positive KOL influence [16] Company Strategy and Development Direction - The company aims to expand its clinical field team to support sales and increase awareness of MicroPulse technology [8] - Plans to launch the new MicroPulse P3 probe and a new laser platform are underway, expected to improve cost-effectiveness and operational efficiency [24][25] - The focus is on increasing utilization rates among existing customers and expanding the customer base [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving cash flow neutrality within the next 4 to 5 quarters, supported by growth in top-line revenue and cost containment measures [32] - The company anticipates Cyclo G6 probe shipments of 58,000 to 63,000 for 2019, representing a growth of approximately 32% year-over-year at the midpoint [33] - Management highlighted the importance of maintaining high visibility in the industry and driving brand awareness through participation in key conferences [21][22] Other Important Information - The company had a strong presence at major glaucoma conferences, with over 40 scientific presentations scheduled for the year [19][20] - Regulatory clearance for the Cyclo G6 system in China is in the final review stage, with product registration expected soon [18] Q&A Session Summary Question: Can you break down the installed base of G6 lasers in terms of utilization? - Management indicated that approximately 290 accounts are underperforming, and clinical specialists are focused on improving their utilization rates [36][37] Question: What is the commercialization strategy for China if approved? - Management stated that they have a partner with extensive infrastructure in China, and they anticipate a quick turnaround for commercialization once approval is received [40][41] Question: Why were gross margins lower than expected? - Management explained that lower margins were due to a higher percentage of OUS sales, which typically have lower margins [43] Question: Should pricing improve in the second half of the year? - Management confirmed that pricing is expected to improve significantly in the second half of the year due to the LAP program affecting revenue recognition [46][47] Question: What is the outlook for expenses going forward? - Management indicated that expenses are expected to remain lower due to cost containment measures, while still investing in growth [50][51]