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IRIDEX Reports Second Quarter 2009 Financial Results
Posted by: gurufocus (IP Logged)
Date: August 13, 2009 04:29PM

Press Release: IRIDEX Reports Second Quarter 2009 Financial Results

MOUNTAIN VIEW, Calif., Aug. 13 /PRNewswire-FirstCall/ -- IRIDEX Corporation (Nasdaq: IRIX) today reported financial results for the second quarter of 2009 ended July 4, 2009.

For the second quarter of 2009, the Company recorded a net profit of $1.2 million or $0.13 per diluted share compared to a net profit of $0.3 million or $0.03 per diluted share in the second quarter of 2008. Revenue for the second quarter of 2009 was $10.5 million, an 18.6% decrease from the $12.9 million reported for the second quarter of 2008. However, gross margins improved to 45.9% from 41.3% and cash generated from operations was $1.9 million for the second quarter compared to a decrease of $0.7 million for the comparable period in 2008.

"We have recorded our second consecutive quarter of profitability which is an outstanding achievement given the current economy. Of particular note, we have also been profitable at the operating income level for two consecutive quarters," stated Mr. Theodore A. Boutacoff, President and CEO. "Our margins have improved, we are controlling our operating expenses well and our cash generation continues to be excellent. We are beginning to see the benefits of creating a very efficient and scalable business."

"At the start of 2008, we laid out our vision and strategy for the Company. Our first objective was, and continues to be, cash generation. We have been very successful in this effort and have generated over $9 million in cash over the last six quarters; of which $6.3 million was used to pay our outstanding balance to American Medical Systems in full, and we have reduced our bank debt by $1.5 million. Our second objective was to drive the Company to profitability and we have now achieved two consecutive profitable quarters. With this momentum, we are turning our attention to our third objective which is growth. As the economy improves we anticipate seeing our current business grow. In addition, together with our internal product development we are looking at opportunities outside the Company to add complementary products that will allow us to strengthen our position within existing markets."

In April 2007 we entered into an agreement with Synergetics USA, Inc. relating to the settlement of legal claims for patent infringement. The settlement agreement called for an initial payment of $2.5 million, which was received in the second quarter of 2007, and five subsequent annual payments of $0.8 million, totaling $6.5 million. We received payments of $0.8 million in the second quarters of 2008 and 2009 and expect to receive annual payments of $0.8 million relating to this agreement in the second quarters of 2010, 2011 and 2012. These amounts are shown in our income statement as part of other income.

Conference Call

IRIDEX management will conduct a conference call later today, Thursday, August 13, 2009 at 5:00 p.m. Eastern Time. Interested parties may access the live conference call via telephone by dialing (877) 941-0843 (U.S.) or (480) 629-9643 (International) and quoting Conference ID 4133387, or by visiting the Company\'s website at www.iridex.com. A telephone replay will be available beginning on Thursday, August 13, 2009 through Thursday, August 20, 2009 by dialing (800) 406-7325 (U.S.) or (303) 590-3030 (International) and entering Access Code 4133387. In addition, later today an archived version of the webcast will be available on the Company\'s website at www.iridex.com.

About IRIDEX

IRIDEX Corporation is a leading worldwide provider of therapeutic based laser systems, consumable laser probes and delivery devices used to treat eye diseases in ophthalmology and skin conditions 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 [www.irid]ex.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, relating to the Company\'s financial stability, growth strategy and prospects and future payments from Synergetics. Please see a detailed description of these and other risks contained in our Quarterly Report on From 10-Q for the quarter ended July 4, 2009 and our Annual Report on Form 10-K for the fiscal year ended January 3, 2009, each of 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.

IRIDEX Corporation
               Condensed Consolidated Statements of Operations
                    (In thousands, except per share data)
                                (Unaudited)

                                      Three Months Ended   Six Months Ended
                                       July 4,  June 28,   July 4,  June 28,
                                        2009      2008      2009      2008
                                        ----      ----      ----      ----

    Revenues                          $10,513   $12,922   $21,249   $24,396
    Cost of revenues                    5,684     7,591    11,372    14,260
                                        -----     -----    ------    ------
        Gross profit                    4,829     5,331     9,877    10,136
                                        -----     -----     -----    ------

    Operating expenses:
      Research and development            906       998     1,747     2,023
      Sales and marketing               2,211     2,665     4,562     5,278
      General and administrative        1,313     1,924     2,806     3,829
                                        -----     -----     -----     -----
        Total operating expenses        4,430     5,587     9,115    11,130
                                        -----     -----     -----    ------

    Income (loss) from operations         399      (256)      762      (994)
    Legal settlement                      800       800       800       800
      Interest and other income
       (expense), net                       6      (218)     (133)     (372)
                                          ---      ----      ----      ----
    Income (loss) before income
     taxes                              1,205       326     1,429      (566)
      Provision for income taxes           (7)      (51)       (7)      (51)
                                          ---       ---       ---       ---
    Net income (loss)                  $1,198      $275    $1,422     $(617)
                                       ======      ====    ======     =====


    Net income (loss) per share -
     basic                              $0.13     $0.03     $0.16    $(0.07)
                                        =====     =====     =====    ======

    Net income (loss) per share -
     diluted                            $0.13     $0.03     $0.16    $(0.07)
                                        =====     =====     =====    ======

    Shares used in computing net
     income (loss) per share -
        Basic                           8,844     8,824     8,835     8,824
                                        =====     =====     =====     =====
        Diluted                         9,107     8,824     8,966     8,824
                                        =====     =====     =====     =====



                             IRIDEX Corporation
                   Condensed Consolidated Balance Sheets
                              (In thousands)
                                (Unaudited)

                                                        July 4,  January 3,
                                                          2009        2009
                                                          ----        ----
                        Assets                       (unaudited)
                        ------
    Current Assets:
      Cash and cash equivalents                         $6,618      $5,307
      Accounts receivable, net                           7,354       8,199
      Inventories, net                                  10,105      11,644
      Prepaids and other current assets                    598         540
                                                           ---         ---
        Total current assets                            24,675      25,690
      Property and equipment, net                          595         832
      Other intangible assets, net                       1,313       1,474
      Other long term assets                               334         229
                                                           ---         ---
        Total assets                                    26,917      28,225
                                                        ======      ======


         Liabilities and Stockholders\' Equity
         ------------------------------------
    Current Liabilities:
      Accounts payable                                  $1,389      $2,415
      Bank line of credit                                4,478       6,000
      Accrued compensation                               1,797       1,729
      Accrued expenses                                   1,820       2,249
      Accrued warranty                                   1,185       1,345
      Deferred revenue                                   2,678       2,741
                                                         -----       -----
        Total current liabilities                       13,347      16,479
                                                        ------      ------


    Stockholders\' Equity:
      Convertible preferred stock                            5           5
      Common Stock                                          89          89
      Additional paid-in capital                        39,511      39,105
      Accumulated other comprehensive loss                (196)       (192)
      Treasury stock, at cost                             (430)       (430)
      Accumulated deficit                              (25,409)    (26,831)
                                                       -------     -------
        Total stockholders\' equity                      13,570      11,746
                                                        ------      ------
        Total liabilities and stockholders\' equity     $26,917     $28,225
                                                       =======     =======

Source: PRNewsWire



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