IRIDEX reports revenues of $12.1 million for fourth quarter 2015

IRIDEX CorporationMar 4 2016

IRIDEX Corporation (Nasdaq: IRIX) today reported financial results for the fourth quarter and year ended January 2, 2016.

• Revenues were $12.1 million for the fourth quarter of 2015, representing a record quarter for the Company, up 3 percent from $11.8 million for the 2014 fourth quarter and up 23 percent from $9.8 million for the third quarter of 2015. For the full year 2015, revenues were $41.8 million compared to $42.8 million for the full year 2014. Full year revenues were impacted by the previously reported supply chain issues that forced the Company to slow shipments of laser systems throughout the second and third quarters of 2015.
• Gross margin for the 2015 fourth quarter was 45.3 percent compared to 50.1 percent for the fourth quarter of the prior year. For the full year 2015, gross margin was 47.8 percent compared to 50.0 percent for the full year 2014. Gross margin was impacted in 2015 by special introductory prices for the Cyclo G6™ glaucoma laser system, product mix and lower manufacturing overhead absorption due to the decrease in revenues resulting from the previously reported supply chain issues encountered in the second and third quarters of 2015.
• Operating income for the 2015 fourth quarter was $0.5 million compared to $1.0 million for the 2014 fourth quarter. For the full year 2015, operating income was $0.3 million compared to $2.6 million for the full year 2014. The decline in operating income for the year was due primarily to both lower revenues and gross margin, and increased operating expenses of $0.8 million.
• Net income for the fourth quarter of 2015 was $0.4 million, or $0.04 per diluted share, compared to $8.8 million, or $0.86 per diluted share, for the prior year period. Net income for the fourth quarter of 2014 included an adjustment of the Company's earn-out liability of $1.0 million and a credit to income tax expense of $8.8 million for the release of the Company's deferred tax valuation allowance, both of which were non-cash items. Net income for the full year 2015 was $0.5 million, or $0.05 per diluted share, compared to net income of $10.0 million, or $0.97 per diluted share, for the full year 2014.
• Guidance: The Company expects revenue growth for the full year 2016 to be in the low double-digits, with stronger growth in the second half of the year as the installed base of Cyclo G6 systems grows and drives an increase in revenues of the Company's disposable probes. For the first quarter of 2016, the Company anticipates revenues of $11.5 million to $11.8 million, which represents growth of 7 percent to 9 percent from the first quarter of 2015, and operating expenses to be $5.0 million to $5.3 million.

President and CEO Will Moore said, "Demand for our products was very strong in the fourth quarter. We delivered sequential revenue growth of 23 percent for the quarter, driven by sales of our MicroPulse® lasers and Cyclo G6 glaucoma laser system. Revenue from the Cyclo G6 system exceeded our expectations for the fourth quarter. We believe that the strong reception of our suite of MicroPulse laser products is validation of our value-base medicine strategy."

Moore continued, "In the year ahead, we intend to continue building on our strong foundation to increase market share in the growing retinal disease and glaucoma markets. We plan to launch additional probes for the Cyclo G6 system in 2016, adding flexibility for physicians and greater revenue potential for the platform. Glaucoma is a large and growing global market opportunity for us, and we believe that the launch of the Cyclo G6 system in Europe and other regions will provide sustainable revenue for the years ahead. We also plan to continue to be opportunistic in acquiring or partnering with ophthalmic companies to expand our technologies, while continuing to execute our share repurchase program. We intend to focus our initiatives in 2016 on driving sustained top-line growth to deliver long-term value to shareholders."

Recent Business Highlights

• IRIDEX demonstrated the Cyclo G6 glaucoma laser system at the American Academy of Ophthalmology's annual meeting to a very positive reception.
• IRIDEX added a novel intra-ocular pressure device called a tonometer to its suite of commercial products for the global glaucoma market.

Share Repurchase Program
For the full year 2015, the Company repurchased approximately 200,000 shares at an average price of $7.82 per share. Approximately $1.1 million remains available under the program which expires in August 2016.