Iridex Reports Fourth Quarter and Full Year 2023 Financial Results
- Generated total revenue of $12.5 million in the fourth quarter of 2023
- Experienced a 7% decrease in Retina product revenue year-over-year
- Launched new Iridex 532® and Iridex 577® Lasers in the U.S. Market in January 2024
- Engaged in the RUNWAY Study to demonstrate the safety and effectiveness of MicroPulse® TLT for post-cataract glaucoma patients
- Cash and cash equivalents as of December 30, 2023, were approximately $7.0 million
- Ongoing strategic review process to benefit stockholders
- Decrease in Cyclo G6 product family revenue and sales
- Reduction in Retina product revenue
- Withdrawal of Medicare reimbursement LCDs impacting U.S. demand for glaucoma systems
- Net loss increased to $9.6 million for the full year 2023
- Lower gross profit and gross margin in 2023 compared to the prior year
Insights
The financial results reported by Iridex Corporation for Q4 and the full year of 2023 indicate a notable downturn in revenue and an increased net loss compared to the previous year. The reduction in total revenue from $57.0 million in 2022 to $51.9 million in 2023, alongside a decrease in gross margin from 44.5% to 42.0%, suggests a contraction in the company's profitability. This performance could be attributed to several factors, including the impact of Medicare reimbursement policy changes, supply chain disruptions and strategic reviews affecting distributor behaviors.
From an investor's perspective, the company's ability to manage operating expenses, which decreased slightly despite the introduction of a new ERP system and strategic review costs, may be seen as a positive sign of cost control. However, the decline in cash and cash equivalents by $1.0 million in the quarter raises concerns about liquidity and cash burn rate. The company's strategic review process and potential asset sales could be a pivotal factor for its future financial stability and investor sentiment.
The medical device sector is highly sensitive to regulatory changes and reimbursement policies, as evidenced by Iridex's performance following the Medicare reimbursement LCDs withdrawal. The company's report highlights the importance of such policies on product demand, particularly in the U.S. market. It's essential for investors to monitor regulatory environments as they can significantly impact medical device companies' revenues and market strategies.
Additionally, the mention of new product launches and positive reactions at a key industry conference suggests that Iridex is focusing on innovation to drive future growth. The introduction of new laser platforms could potentially revitalize sales and improve competitive positioning. However, the actual market acceptance and the financial impact of these new products will be important to assess in the coming periods.
The decrease in sales of Cyclo G6 Glaucoma Laser Systems and probes indicates a potential shift in market dynamics or competitive pressures within the ophthalmic laser market. The reported decline in international distributor orders may reflect not only the strategic review but also broader market trends, such as increased competition or alternative treatment modalities gaining traction. Investors should consider the company's R&D pipeline and how its products align with current and emerging medical practices in glaucoma and retinal disease treatment.
The RUNWAY Study and the UK multicenter registry for MicroPulse TLT clinical studies are significant undertakings that could enhance the company's clinical credibility and support long-term growth if the outcomes are positive. However, the costs and timelines associated with clinical trials are substantial and thus, the company's ability to manage these while navigating current financial challenges will be critical to observe.
Advances strategic review to unlock shareholder value
MOUNTAIN VIEW, Calif., March 26, 2024 (GLOBE NEWSWIRE) -- Iridex Corporation (Nasdaq: IRIX), a worldwide leader providing innovative and versatile laser-based medical systems, delivery devices, and procedure probes for the treatment of glaucoma and retinal diseases, today reported financial results for the fourth quarter and full year ended December 30, 2023, and provided a business update.
Fourth Quarter 2023 Results & Recent Highlights
- Generated total revenue of
$12.5 million , compared to$15.2 million in the prior year period - Cyclo G6® product family revenue in the fourth quarter of
$3.0 million , compared to$4.2 million in the prior year period- Sold 12,700 Cyclo G6 probes, compared to 16,400 in the prior year quarter
- Sold 35 Cyclo G6 Glaucoma Laser Systems in the fourth quarter of 2023, compared to 78 in the prior year quarter
- Retina product revenue was
$7.5 million , representing a decrease of7% year-over-year - Launched new Iridex 532® and Iridex 577® Lasers in U.S. Market in January 2024
- Completed clinical protocol and engaged first sites for the RUNWAY Study, a large-scale, multicenter prospective trial to demonstrate the safety and effectiveness of MicroPulse® TLT for post-cataract glaucoma patients
- Enrolled first patient in UK multicenter registry for MicroPulse TLT clinical studies led by Imperial College Healthcare NHS Trust with over 20 other sites to participate
- Withdrawal of the restrictive Medicare reimbursement Local Coverage Determinations (LCDs) in late December 2023 that had suppressed U.S. demand for glaucoma systems and probes
- Cash and cash equivalents as of December 30, 2023 was approximately
$7.0 million , a reduction of$1.0 million in the quarter. The previously announced initiatives to reduce operating expenses and cash usage resulted in the lowest quarterly cash use of 2023.
Full Year 2023 Results
- Generated total revenue of
$51.9 million , compared to$57.0 million in 2022 - Cyclo G6 product family revenue of
$13.4 million , a decrease of9% year-over-year- Sold 54,800 Cyclo G6 probes, compared to 59,800 in the prior year
- Sold 164 Cyclo G6 Glaucoma Laser Systems compared to 237 in the prior year
- Retina product revenue was
$29.4 million , representing a decrease of7% year-over-year
“In the fourth quarter we experienced a combination of unique events that impacted our revenue. These included: (i) the LCDs, which restricted Medicare reimbursement for our laser treatment in moderate glaucoma, and caused surgeons to temporarily reduce orders for procedure probes and defer adoption of laser systems in the US, (ii) continued physician capital equipment purchasing deferrals related to higher financing costs, (iii) supply chain limitations that created a larger than typical yearend backlog, and (vi) the largest impact was from a double-digit decline in orders from key international distributors as they reduced inventory significantly in reaction to our previously-announced strategic options review and Iridex’ launch of new platforms. The aggregate effect was lower revenue in the quarter and weaker than expected overall 2023 performance.”
Mr. Bruce continued, “During the first quarter of 2024, we are seeing business flows more consistent with historical pattens, this includes (i) U.S. glaucoma orders trending toward more normalized levels following retirement of the LCDs; (ii) improving seasonally-adjusted capital purchasing trends especially for Pascal® scanning laser systems; (iii) the resolution of the supply chain issues; and (iv) normalizing distributor orders. In January at the Hawaiian Eye and Retina conference we saw continuing interest in our new Pascal scanning laser and introduced our new Iridex 532 and Iridex 577 single spot platform of retina lasers and we intend to capitalize on our improved and refreshed retina portfolio as the year unfolds.”
“We have been, and continue to be, actively pursuing our strategic review process since announcing it in the third quarter last year. Discussions are ongoing with multiple parties relating to all aspects of our business, and we are open to any transaction or series of transactions that will benefit our stockholders. We believe we are on track to reach our first agreement on the sale of certain assets soon,” Bruce added.
Fourth Quarter 2023 Financial Results
Revenue for the three months ended December 30, 2023 was
Fourth quarter revenue was impacted by several factors. In the retina business, deferral of capital purchases led to lower system sales in the U.S. and internationally, international distributors destocked inventory in advance of new laser platform launches and to minimize any potential impact from transactions resulting from Iridex’s strategic review. The Company experienced isolated supply chain limitations which caused deferral of product shipment and elevated order backlog. In glaucoma the reimbursement uncertainty in the U.S. led to temporary softness in glaucoma probe and new system sales. Internationally, the largest distributor significantly reduced normal replenishment orders causing a meaningful decline in probe and systems sales in the quarter.
Gross profit for the fourth quarter of 2023 was
Operating expenses of
Net loss for the fourth quarter of 2023 was
Cash and cash equivalents totaled
Full Year 2023 Financial Results
Revenue for the year ended December 30, 2023 was
Gross profit for the full year 2023 was
Operating expenses for 2023 decreased
Net loss for 2023 increased to
Webcast and Conference Call Information
Iridex’s management team will host a conference call today beginning at 2:00 p.m. PT / 5:00 p.m. ET. Investors interested in listening to the conference call may do so by accessing the live and recorded webcast on the “Event Calendar” page of the “Investors” section of the Company’s website at www.iridex.com.
About Iridex Corporation
Iridex Corporation 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. The Company’s proprietary MicroPulse technology delivers a differentiated treatment that provides safe, effective, and proven treatment for targeted sight-threatening eye conditions. Iridex’s current product line is used for the treatment of glaucoma and diabetic macular edema (DME) and other retinal diseases. Iridex products are sold in the United States through a direct sales force and internationally primarily through a network of independent distributors into more than 100 countries. For further information, visit the Iridex website at www.iridex.com.
MicroPulse® is a registered trademark of Iridex Corporation, Inc. in the United States, Europe and other jurisdictions. © 2024 Iridex Corporation. All rights reserved.
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 clinical expectations and commercial trends, market adoption and expansion, value-maximizing transactions, demand for and utilization of the Company's products and results and expected sales volumes. The Company can provide no assurance that it will complete any value-maximizing transactions on behalf of its stockholders. 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 Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 20, 2023. Forward-looking statements contained in this announcement are made as of this date and will not be updated.
Investor Relations Contact
Philip Taylor
Gilmartin Group
investors@iridex.com
| IRIDEX Corporation | ||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 30, 2023 | December 31, 2022 | December 30, 2023 | December 31, 2022 | |||||||||||||
| Total revenues | $ | 12,458 | $ | 15,195 | $ | 51,869 | $ | 56,972 | ||||||||
| Cost of revenues | 7,573 | 8,531 | 30,062 | 31,604 | ||||||||||||
| Gross profit | 4,885 | 6,664 | 21,807 | 25,368 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 1,694 | 1,450 | 6,829 | 7,175 | ||||||||||||
| Sales and marketing | 3,867 | 4,826 | 16,237 | 18,178 | ||||||||||||
| General and administrative | 2,405 | 1,798 | 8,748 | 7,557 | ||||||||||||
| Total operating expenses | 7,966 | 8,074 | 31,814 | 32,910 | ||||||||||||
| Loss from operations | (3,081 | ) | (1,410 | ) | (10,007 | ) | (7,542 | ) | ||||||||
| Other income, net | 181 | 276 | 527 | 60 | ||||||||||||
| Loss from operations before provision for income taxes | (2,900 | ) | (1,134 | ) | (9,480 | ) | (7,482 | ) | ||||||||
| Provision for income taxes | 60 | 14 | 90 | 65 | ||||||||||||
| Net loss | $ | (2,960 | ) | $ | (1,148 | ) | $ | (9,570 | ) | $ | (7,547 | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic | $ | (0.18 | ) | $ | (0.07 | ) | $ | (0.59 | ) | $ | (0.47 | ) | ||||
| Diluted | $ | (0.18 | ) | $ | (0.07 | ) | $ | (0.59 | ) | $ | (0.47 | ) | ||||
| Weighted average shares used in computing net loss per common share: | ||||||||||||||||
| Basic | 16,245 | 15,990 | 16,128 | 15,938 | ||||||||||||
| Diluted | 16,245 | 15,990 | 16,128 | 15,938 | ||||||||||||
| IRIDEX Corporation | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (In thousands) | ||||||||
| FY 2023 | FY 2022 | |||||||
| December 30, 2023 | December 31, 2022 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 7,034 | $ | 13,922 | ||||
| Accounts receivable, net | 9,654 | 9,768 | ||||||
| Inventories | 9,906 | 10,608 | ||||||
| Prepaid expenses and other current assets | 856 | 1,468 | ||||||
| Total current assets | 27,450 | 35,766 | ||||||
| Property and equipment, net | 351 | 462 | ||||||
| Intangible assets, net | 1,642 | 1,977 | ||||||
| Goodwill | 965 | 965 | ||||||
| Operating lease right-of-use assets, net | 2,632 | 1,665 | ||||||
| Other long-term assets | 1,396 | 1,455 | ||||||
| Total assets | $ | 34,436 | $ | 42,290 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,727 | $ | 3,873 | ||||
| Accrued compensation | 1,619 | 2,448 | ||||||
| Accrued expenses | 1,996 | 1,548 | ||||||
| Other current liabilities | 925 | 968 | ||||||
| Accrued warranty | 308 | 168 | ||||||
| Deferred revenue | 2,404 | 2,411 | ||||||
| Operating lease liabilities | 995 | 1,037 | ||||||
| Total current liabilities | 12,974 | 12,453 | ||||||
| Long-term liabilities: | ||||||||
| Accrued warranty | 138 | 106 | ||||||
| Deferred revenue | 10,025 | 11,742 | ||||||
| Operating lease liabilities | 1,751 | 732 | ||||||
| Other long-term liabilities | 26 | 26 | ||||||
| Total liabilities | 24,914 | 25,059 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock | 172 | 169 | ||||||
| Additional paid-in capital | 88,444 | 86,802 | ||||||
| Accumulated other comprehensive loss | (52 | ) | (24 | ) | ||||
| Accumulated deficit | (79,042 | ) | (69,716 | ) | ||||
| Total stockholders’ equity | 9,522 | 17,231 | ||||||
| Total liabilities and stockholders’ equity | $ | 34,436 | $ | 42,290 | ||||
FAQ
What was Iridex 's total revenue in the fourth quarter of 2023?
What challenges did Iridex face in 2023?
What new products did Iridex launch in January 2024?
What study did Iridex engage in to demonstrate safety and effectiveness for post-cataract glaucoma patients?
What was Iridex 's cash and cash equivalents as of December 30, 2023?
