Jim Mackaness Chief Financial Officer 650 940-4700

Mountain View, California

IRIDEX Reports Fourth Quarter and Full Year 2007 Financial Results

Corporation (Nasdaq: IRIX) today reported final financial results for the fourth

quarter and full year ended December 29, 2007.

Revenue for the fourth quarter of 2007 was $14.1 million, a 56.5% increase from the $9.0

million reported for the fourth quarter of 2006. The Company s net loss was $15.8 million or $1.82

per diluted share for the fourth quarter of 2007 compared with a loss of $3.8 million or $0.48 per

diluted share in the fourth quarter of 2006. The prior year financial results do not include the

AMS/Laserscope aesthetics acquisition, which was completed on January 16, 2007. The fourth quarter

results for 2007 include an impairment charge of $14.7 million for write down of goodwill and

intangible assets acquired from the AMS/Laserscope aesthetics acquisition which represents $1.69

Revenues for the fiscal year ended December 29, 2007 were $55.5 million, compared with $35.9

million reported for 2006, a 54.6% increase. The increase was primarily the result of the

AMS/Laserscope aesthetics acquisition. The Company s net loss was $22.3 million or $2.69 per

diluted share for the 2007 fiscal year compared with a loss of $5.8 million or a loss of $0.75 per

diluted share in 2006.

Mr. Theodore A. Boutacoff, President and CEO stated, The AMS/Laserscope aesthetics

acquisition has been very challenging for the Company as indicated by our results for 2007. Our

three primary objectives and strategy for 2008 are as follows:

(1) Establish financial stability in the Company. We have already taken actions that include

refinancing our debt and executing an operating plan that generates sufficient cash to pay off the

remaining obligation to AMS for the acquisition by the end of our fiscal Q3 2008.

(2) Focus on our Ophthalmology business. Exploit our recognized leadership in this market

where we have many opportunities to grow systems and recurring revenues.

(3) Strengthen our Aesthetics business. Focus on building our sales and service channels to

allow us to realize the market potential of the acquired products, and investigate opportunities to

improve our competitive position in the market by enhancing the value of our existing platforms.

Gross margin for the fourth quarter of 2007 was 44.6%, compared with 55.5% for the fourth

quarter of 2006. Gross margin for the full year 2007 was 43.7% of revenues, compared with 52.4% for

2006. The primary contribution to the gross margin reduction was the addition of lower margin

Laserscope products and services into our product mix and $1.8 million of amortization expense

charged to Cost of Goods Sold in 2007 for intangible assets acquired in the Laserscope aesthetics

acquisition. These gross margin reductions were greater than the benefits gained from economies of

scale realized in manufacturing during 2007.

Operating expenses for the fourth quarter 2007 were $22.0 million compared with $7.0 million

for 2006. The fourth quarter results for 2007 include an impairment charge of $14.7 million for the

write down of goodwill and intangible assets acquired from the AMS/Laserscope aesthetics

acquisition. A similar comparison for full year 2007 reflects operating expenses of $48.4 million

compared to $23.6 million for full year 2006.

Ophthalmology revenues were $8.9 million in the fourth quarter of 2007 compared with $7.7

million in 2006, an increase of 16.4%. Domestic ophthalmology revenues increased 12.4% to $5.3

million. International ophthalmology revenues increased 22.9% to $3.6 million.

For the 2007 fiscal year, total ophthalmology revenues grew to $32.3 million, compared with

$30.8 million for 2006, an increase of 4.9%. Domestic sales contributed 58.1% of total

ophthalmology revenues while international contributed 41.9%. Total domestic revenues were $18.8

million in 2007, an increase of 3.3% from 2006. Total international ophthalmology revenues were

$13.6 million for the fiscal year 2007, an increase of 7.3% compared to 2006.

Ophthalmology recurring revenues, consisting of disposable products and service, which

represented 48.6% of our total ophthalmology revenues in 2007, were up 13.7% from $13.8 million in

2006 to $15.7 million in 2007.

Our ophthalmology franchise is a healthy and growing business, continued Mr. Boutacoff.

Our margins remain strong with approximately half of revenues being generated from recurring

revenues. The therapeutic ophthalmology market, in which we participate, is also less influenced

by recessionary pressures than those medical markets which are based upon primarily elective or

private pay procedures.

Total aesthetics revenues were $5.2 million in the fourth quarter of 2007 compared with $1.4

million in the comparable period of 2006, primarily because of the AMS/Laserscope acquisition. In

the fourth quarter 2007 domestic aesthetics revenues increased $1.4 million to $2.3 million and

international aesthetics revenues increased $2.5 million to $2.9 million.

Full year 2007 aesthetics revenues were $23.2 million compared with $5.1 million in 2006,

primarily the result of the AMS/Laserscope aesthetics acquisition. Domestic aesthetics revenues

were $11.1 million for the full year 2007, an increase of $7.5 million from 2006. International

aesthetics revenues were $12.0 million for the full year 2007, an increase of $10.6 million

The AMS/Laserscope aesthetics acquisition has been challenging and our results have not

matched our original expectations, continued Mr. Boutacoff. This has culminated in a review of

the value of goodwill and intangible assets created at the time of the acquisition and realizing an

impairment charge of $14.7 million to reflect our current expectations for the business. We believe

that the products acquired in the transaction remain attractive to the market but we recognize that we have yet

to establish an adequate sales channel to exploit its potential, particularly in the US. Our focus

in 2008 is to establish that channel.

Cash and cash equivalents were $5.8 million as of December 29, 2007 (this does not include

$3.8 million in restricted cash), down from $21.1 million at December 30, 2006. Inventories were

$16.0 million as of December 29, 2007, compared with inventories of $9.5 million at December 30,

2006. Inventory turns were 1.3 turns in 2007, compared with 1.9 turns for the full year 2006.

Accounts receivable were $8.9 million as of December 29, 2007, compared with $6.1 million as of

December 30, 2006. Quarterly days sales outstanding improved to 57 days in 2007 compared with 61

The Company s financial statements and audit opinion for the fiscal year ended December 29,

2007, which were filed with its Annual Report on Form 10-K on April 10, 2008, included a going

concern qualification received from its independent registered public accounting firm. This

announcement is being made in compliance with Nasdaq Marketplace Rule 4350(b)(1)(B), which requires

separate disclosure of receipt of an audit opinion that contains a going concern qualification.

This announcement does not represent any change or amendment to the Company s 2007 financial

statements or to its Annual Report on Form 10-K.

management will conduct a conference call later today, Thursday, April 10, 2008 at 5:00

p.m. Eastern Time. Interested parties may access the live conference call via telephone by dialing

(800) 240-7305 (US) or (303) 262-2130 (International), or visit the Company s website at

www.iridex.com. A telephone replay will be available beginning

on Thursday, April 10, 2008

through Thursday, April 17, 2008 by dialing (800) 405-2236 (US) or (303) 590-3000 (International)

and entering Passcode 11111765#. In addition, later today an archived version of the webcast will

be available on the Company s website at www.iridex.com.

IRIDEX Corporation is a leading worldwide provider of therapeutic based laser systems,

disposable laser probes and delivery devices to treat eye diseases in ophthalmology and skin

disorders in the aesthetics market. 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