Full Press Release Details
IRIDEX Reports 2014 Fourth Quarter, Year-End Results
Record Revenues for the Quarter and the Year
Mountain View, CA. - March 5, 2015 - IRIDEX Corporation (Nasdaq: IRIX) today reported financial results for the fourth quarter and year ended January 3, 2015.
President and CEO Will Moore said, "The strong top line results at year end indicate an evolving global recognition of MicroPulse lasers as a key solution to providing value based medicine - a clinically durable and cost-effective tool for preventing vision loss." Moore continued, "Tenders from developing nations for both MicroPulse and continuous wave lasers were drivers internationally and that activity is expected to continue into 2015 - a year in which our new glaucoma initiatives and technologies will be rolled out in a controlled manner and will begin to make an impact on growth toward the back end of the year."
"Last week I attended the American Glaucoma Society's annual meeting and am very excited by the reception from doctors of our new Cyclo G6TM Glaucoma Laser Platform. Early indications are that the doctors grasp the safety profile of MicroPulse and welcome the potential of a new early treatment regimen when they see that patient compliance with meds is likely to become an issue. This is the first step towards widespread adoption. We anticipate that the Cyclo G6 laser platform will ultimately support a variety of intuitive single use probes to treat multiple stages of Glaucoma and has the potential to significantly alter the revenue growth profile of the Company."
Recent Business Highlights
Share Repurchase Program
During the 2014 fourth quarter, the Company continued to execute its share repurchase program. For the full year 2014, we repurchased approximately 562,000 shares at an average price of $8.29 per share and we have approximately $0.9 million available under the current program for future investments.
Adjustment of contingent liability
We continue to generate revenues from our RetinaLabs acquisition, and anticipate generating revenues from our Ocunetics transaction. Both of these deals were structured with an earn-out component. Because our expectations of the future revenues to be generated from these deals has increased, we now anticipate increasing our payments under the earn-out conditions. We have increased the contingent liability on the balance sheet by $1.0 million with a resulting fourth quarter charge to interest and other expense of $1.0 million. This is a non-cash item.
Release of deferred tax valuation allowance
We have a deferred tax asset on our balance sheet, primarily as a result of net operating losses that we have been carrying forward. The deferred tax asset has historically been recorded at net $0 on the balance sheet because we have also been carrying a valuation allowance for the full amount of the deferred tax asset. Based on the continued strong performance of the Company, notably 3 years of profitability and 9 consecutive profitable quarters management believes that it is more likely than not that the Company will realize the deferred tax asset. This has resulted in us booking a credit to the income tax expense for $8.8 million, and recognizing a current deferred tax asset of $1.6 million and a long term deferred tax asset of $7.2 million on the balance sheet. This is a non-cash item.
IRIDEX management will conduct a conference call later today, Thursday, March 5, 2015, at 5:00 pm Eastern Time. Interested parties may access the live conference call by dialing (877) 407-0784 (US) or (201) 689-8560 (International) and requesting the IRIDEX 2014 Fourth Quarter Results Conference Call, or by visiting the Company's website at www.iridex.com. A telephone replay will be available beginning on Thursday, March 5, 2015 through Thursday, March 12, 2015 by dialing (877) 870-5176 (US) or (858) 384-5517 (International) and entering Replay Pin # 13600459. In addition, later today an archived version of the webcast will be available on the Company's website at www.iridex.com.
IRIDEX Corporation was founded in 1989 and is a worldwide leader in developing, manufacturing, and marketing innovative and versatile laser-based medical systems, delivery devices and consumable instrumentation for the ophthalmology market. 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 70 independent distributors into over 100 countries. For further information, visit the IRIDEX 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, including those statements concerning its preliminary and anticipated revenues, the impact of future changes in currency exchange rates, future demand and order levels for the Company's products, the markets in which the Company operates, trends in treatment and product adoption and usage, product plans and future product releases, the Company's guidance concerning fiscal 2015 first quarter and annual financial results, including anticipated ranges of revenue, gross margin, operating expenses and gross margin rates, the Company's share repurchase program, and the Company's strategic plans and objectives. These statements are not guarantees of future performance and actual results may differ materially from those described in these forward-looking statements as a result of a number of factors. Please see a detailed description of these and other risks contained in our Annual Report on Form 10-K for the fiscal year ended December 28, 2013, 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.
| Company Contact: | Investor Relations Contact: | |
| Jim Mackaness | Matt Clawson | |
| Chief Financial Officer | Pure Communications | |
| & Chief Operating Officer | 949-370-8500 | |
| 650-940-4700 | matt@purecommunicationsinc.com |
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
| Three Months Ended | Twelve Months Ended | ||||||
| January 3, | December 28, | January 3, | December 28, | ||||
| 2015 | 2013 | 2015 | 2013 | ||||
| Total revenues | $ 11,778 | $ 10,598 | $ 42,814 | $ 38,273 | |||
| Cost of revenues | 5,877 | 5,448 | 21,409 | 19,686 | |||
| Gross profit | 5,901 | 5,150 | 21,405 | 18,587 | |||
| Operating expenses: | |||||||
| Research and development | 1,033 | 881 | 4,629 | 3,684 | |||
| Sales and marketing | 2,371 | 2,380 | 8,155 | 7,720 | |||
| General and administrative | 1,513 | 1,333 | 6,034 | 5,023 | |||
| Proceeds from demutualization of insurance carrier | - | - | - | (473) | |||
| Total operating expenses | 4,917 | 4,594 | 18,818 | 15,954 | |||
| Income from operations | 984 | 556 | 2,587 | 2,633 | |||
| Other expense, net | 955 | 171 | 1,255 | 371 | |||
| Income from operations before (benefit from) provision for income taxes | 29 | 385 | 1,332 | 2,262 | |||
| (Benefit from) provision for income taxes | (8,735) | (27) | (8,706) | 31 | |||
| Net income | $ 8,764 | $ 412 | $ 10,038 | $ 2,231 | |||
| Net income per share: | |||||||
| Basic | $0.89 | $0.04 | $1.01 | $0.24 | |||
| Diluted | $0.86 | $0.04 | $0.97 | $0.22 | |||
| Weighted average shares used in computing net income per share: | |||||||
| Basic | 9,815 | 9,848 | 9,892 | 9,245 | |||
| Diluted | 10,235 | 10,431 | 10,357 | 10,104 |
Condensed Consolidated Balance Sheets
| January 3, | December 28, | ||
| 2015 | 2013 | ||
| Assets | |||
| Current assets: | |||
| Cash and cash equivalents | $ 13,303 | $ 13,444 | |
| Accounts receivable, net | 8,337 | 7,345 | |
| Inventories | 9,119 | 10,605 | |
| Prepaids and other current assets | 510 | 576 | |
| Deferred income taxes - current | 1,625 | - | |
| Total current assets | 32,894 | 31,970 | |
| Property and equipment, net | 735 | 543 | |
| Intangible assets, net | 284 | 328 | |
| Goodwill | 533 | 533 | |
| Deferred income taxes - long term | 7,151 | - | |
| Other long-term assets | 221 | 303 | |
| Total assets | $ 41,818 | $ 33,677 | |
| Liabilities and Stockholders' Equity | |||
| Current liabilities: | |||
| Accounts payable | $ 1,758 | $ 2,278 | |
| Accrued compensation | 1,863 | 1,891 | |
| Accrued expenses | 1,770 | 1,592 | |
| Accrued warranty | 469 | 468 | |
| Deferred revenue | 1,179 | 1,133 | |
| Total current liabilities | 7,039 | 7,362 | |
| Long-term liabilities: | |||
| Other long-term liabilities | 1,043 | 461 | |
| Total liabilities | 8,082 | 7,823 | |
| Stockholders' equity: | |||
| Common stock | 108 | 104 | |
| Additional paid-in capital | 38,511 | 40,671 | |
| Accumulated deficit | (4,883) | (14,921) | |
| Total stockholders' equity | 33,736 | 25,854 | |
| Total liabilities and stockholders' equity | $ 41,818 | $ 33,677 |