Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- IRIDEX Corp (IRIX, Financial) reported a sequential revenue growth of 7% in the second quarter of 2024, indicating a recovery in their business segments.
- The company saw a 12% increase in Cyclo G6 probe sales, driven by increased awareness of reimbursement stability in the US and a strong recovery internationally.
- The retina business segment showed notable strength, with Pascal scanning laser systems growing double digits year over year.
- IRIDEX Corp (IRIX) has strengthened its balance sheet through a private placement financing, securing $3.4 million with an option for an additional $1.5 million.
- Operating expenses decreased by $0.5 million compared to the same period last year, reflecting successful cost reduction initiatives.
Negative Points
- Total revenue for the second quarter was roughly flat compared to the same period in the prior year, indicating limited year-over-year growth.
- Glaucoma revenue was down $0.3 million compared to the second quarter of 2023, primarily due to softness in system sales.
- Gross margin declined from 41.7% in the second quarter of 2023 to 40.7% in the second quarter of 2024, due to a shift in product mix and reduced high-margin royalty revenue.
- The strategic review process has been ongoing for nearly a year, with no specific updates or transactions announced yet.
- Net loss for the second quarter was $2.7 million, only a slight improvement from the $2.8 million net loss in the same period of 2023.
Q & A Highlights
Q: Can you discuss the competitive landscape for the G6 product and its long-term viability?
A: David Bruce, President and CEO, explained that the G6's non-incisional, repeatable treatment remains unique, especially for moderate-stage patients. He highlighted its use post-cataract surgery to manage rising pressures without additional incisional procedures. Bruce noted that the Belkin system targets early-stage patients and doesn't compete directly with G6 in moderate-stage cases.
Q: What are the key hurdles in the strategic review process, and why is there a focus on completing a deal by the fiscal year-end?
A: David Bruce stated that the strategic review began last August, and while the M&A environment was challenging last year, it has improved. He acknowledged that a previously anticipated transaction did not occur but remains optimistic about completing a deal this fiscal year. The process involves extensive discussions and negotiations, and while not rushed, they are committed to finding value-enhancing transactions.
Q: How has the Cyclo G6 product family performed financially this quarter?
A: Fuad Ahmad, Interim CFO, reported that Cyclo G6 revenue was $3.3 million, up $0.4 million from the previous quarter due to a recovery in probe sales. However, it decreased by $0.3 million compared to the same period last year due to ongoing capital purchase headwinds.
Q: What are the financial highlights for the retina segment this quarter?
A: Fuad Ahmad noted that retina segment revenue was $7.3 million, marking an 8% increase from the previous quarter and a 6% rise from the prior year. This growth was driven by strengthening system sales internationally and conversions from elongated purchase cycles.
Q: Can you provide an update on the company's financial position and cash flow management?
A: Fuad Ahmad stated that cash and cash equivalents totaled $4.1 million as of June 29, 2024, with a cash reduction of $1.3 million in the quarter. The recent convertible note offering added $3.4 million in net proceeds, which will be used to optimize working capital and manage short-term cash variability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
