IRIDEX Corp. (NASDAQ:IRIX) filed Quarterly Report for the period ended 2010-10-02.
Iridex Corp. has a market cap of $29.7 million; its shares were traded at around $3.486 with a P/E ratio of 12.3 and P/S ratio of 0.7. IRIX is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:For the three months ended October 2, 2010, total revenue increased 4.0% to $10.8 million compared to $10.4 million for the same three month period in 2009. For the nine months ended October 2, 2010, total revenue was $31.5 million compared to $31.6 million for the same nine month period in 2009.
Total ophthalmology revenues increased $0.5 million, or 5.8%, from $7.4 million to $7.9 million; domestic ophthalmology systems revenue increased $0.4 million, or 21.6%, from $1.6 million to $2.0 million; international ophthalmology systems revenue remained unchanged at $1.7 million; ophthalmology recurring revenues consisting of consumables and service, increased $0.1 million, or 3.9%, from $4.1 million to $4.2 million; and OEM revenues decreased 52.2% from $0.3 million to $0.1 million. Domestic system sales benefited from us successfully winning a US Military order for $0.5 million, international system sales remain strong, and the increase in ophthalmology recurring revenues over the prior year quarter represents the first increase over the comparable period in eight quarters which we attribute to improving market conditions. OEM revenues are generated from a long standing relationship and revenues are expected to decline as this product reaches its end of life. Aesthetics revenues in total increased $0.1 million or 5.1%, from $2.7 million to $2.8 million; domestic aesthetics system revenues remained unchanged at $0.6 million; international aesthetics system revenues increased $0.3 million or 56.4%, from $0.6 million to $0.9 million; and service revenues decreased $0.2 million, or 16.2%, from $1.5 million to $1.3 million. We saw some stability return to the domestic market and international sales recovered from the downturn experienced in the preceding quarter caused by the recent European economic setbacks. Aesthetics systems revenues can fluctuate period to period due to the timing of individual deals because of the relatively high price and low volume of systems being sold. This effect is magnified for international sales where distributors often place multiple system orders at one time.
Total ophthalmology revenues increased $0.9 million, or 3.9%, from $21.8 million to $22.7 million; domestic ophthalmology systems revenue increased $0.7 million, or 19.4%, from $3.5 million to $4.2 million; international ophthalmology systems revenue increased $0.8 million, or 14.3%, from $5.5 million to $6.3 million; ophthalmology recurring revenues decreased $0.6 million, or 4.8%, from $12.8 million to $12.2 million; and OEM revenues decreased $0.5 million, or 44.6% from $1.1 million to $0.6 million. Domestic systems sales are showing signs of recovery as the domestic economy stabilizes, international systems sales have continued to show strong demand across multiple geographic markets and recurring revenues are beginning to turn to the positive with improving market conditions. As mentioned above, OEM revenues are generated from a long standing relationship and revenues are expected to decline as this product reaches its end of life. Aesthetics revenues in total decreased $0.5 million or 6.2%, from $8.7 million to $8.2 million; domestic aesthetics system revenues remained unchanged at $1.8 million; international aesthetics system revenues also remained unchanged at $2.3 million; and service revenues decreased $0.5 million, or 10.5%, from $4.6 million to $4.1 million.
General and administrative expenses increased by $0.1 million or 6.0%, to $1.1 million from $1.0 million for the three months ended October 2, 2010 compared to the same three month period in 2009 and decreased by 9.7% to $3.5 million from $3.9 million for the nine months ended October 2, 2010 compared to the same nine month period in 2009 due to decreases in spending in various administrative expenses. We continue to look for ways to control costs across all administrative categories.
For the comparable nine month periods: The legal settlement relates to monies received from Synergetics associated with a 2007 settlement of legal claims for patent infringement. The settlement 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. The annual payment of $0.8 million was received in the second quarter of 2009 and in the second quarter of 2010, leaving a balance of $1.6 million to be received over the next two years. Interest and other income (expense) relates to currency gains or losses, interest earned on cash deposits or interest incurred on the bank debt for those periods in 2009 where we had bank debt outstanding.
As of October 2, 2010, we had cash and cash equivalents of $7.1 million and working capital of $16.1 million compared to cash and cash equivalents of $9.4 million, bank debt of $3.5 million and working capital of $13.2 million as of January 2, 2010. During the first quarter of 2010 the Company repaid amounts owed to Wells Fargo Bank and terminated the credit agreement. During the second quarter of 2010 the Company entered into a new credit agreement with Silicon Valley Bank and currently has no amounts outstanding refer to Note 6 for details.
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