8-K
false000100604500010060452024-03-262024-03-26

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

March 26, 2024

 

(Date of Report (date of earliest event reported)

 

IRIDEX CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

000-27598

77-0210467

(State or other jurisdiction of
incorporation or organization)

(Commission File Number)

(I.R.S. Employer
Identification Number)

1212 Terra Bella Avenue
Mountain View, California 94043

(Address of principal executive offices, including zip code)

 

(650) 940-4700

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Securities registered pursuant to Section 12(b) of the Act:

Title of Class

 

Trading

Symbol

 

Name of Exchange on Which Registered

Common Stock, par value $0.01 per share

 

IRIX

 

Nasdaq Global Market

 

 


 

 

Item 2.02. Results of Operations and Financial Condition.

 

On March 26, 2024, IRIDEX Corporation issued a press release discussing its financial results for its fourth fiscal quarter and fiscal year ended December 30, 2023. The press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

 

This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01. Financial Statements and Exhibits.

 

 

(d)

Exhibits

 

Exhibit No.

Description

99.1

Press Release dated March 26, 2024.

 

 

 

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

-2-


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

IRIDEX CORPORATION

 

 

 

 

 

By:

 

/s/David I. Bruce

 

 

 

David I. Bruce

 

 

 

President and Chief Executive Officer

 

 

 

 

Date: March 26, 2024

 

 

 

 

-3-


EX-99.1

 

Exhibit 99.1

https://cdn.kscope.io/24a281eb811505679afd0a6872135baf-img156381773_0.jpg 

Iridex Reports Fourth Quarter and Full Year 2023 Financial Results

 

Advances strategic review to unlock shareholder value

MOUNTAIN VIEW, Calif., March 26, 2024 -- 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
o
Sold 12,700 Cyclo G6 probes, compared to 16,400 in the prior year quarter
o
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 of 7% 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 of 9% year-over-year
o
Sold 54,800 Cyclo G6 probes, compared to 59,800 in the prior year
o
Sold 164 Cyclo G6 Glaucoma Laser Systems compared to 237 in the prior year
Retina product revenue was $29.4 million, representing a decrease of 7% 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 $12.5 million compared to $15.2million during the same period of the prior year. Retina product revenue decreased 7% compared to the prior year period to $7.5 million. Total product revenue from the Cyclo G6 glaucoma product group was $3.0 million, a decrease of $1.2 million versus the fourth quarter of 2022. Other revenue decreased to $2.0 million in the fourth quarter of 2023 compared to the prior year period of $2.9 million, primarily driven by decreased royalties due to expiration of licensed patents and lower service revenue.

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 $4.9 million or a 39.2% gross margin, a decrease compared to $6.7 million, or a 43.9% gross margin, in the same period of the prior year driven by lower overhead absorption and product mix.

Operating expenses of $8.0 million in the fourth quarter of 2023 were essentially flat compared to $8.1 million in the same period of the prior year as cost optimization efforts were offset by the cost of ERP implementation and strategic review expenses.


Net loss for the fourth quarter of 2023 was $3.0 million, or $0.18 per share, compared to a net loss of $1.1 million, or $0.07 per share, in the same period of the prior year.

Cash and cash equivalents totaled $7.0 million as of December 30, 2023. Cash use of $1.0 million in the fourth quarter decreased compared to $1.8 million in the third quarter of 2023.

 

Full Year 2023 Financial Results

Revenue for the year ended December 30, 2023 was $51.9 million compared to $57.0 million in 2022. The decrease in revenue was primarily driven by soft fourth quarter results attributable to lower system and probe sales combined with decreased royalty revenue. Retina product revenue was $29.4 million compared to $31.7 million in the prior year, a decrease of 7%, driven by decreased capital system sales and distributor destocking. Total product revenue from the Cyclo G6 glaucoma product family was $13.4 million compared to $14.7 million in fiscal year 2022, driven by lower capital system sales and probe utilization resulting reimbursement uncertainty in the United States and distributor inventory reduction in the fourth quarter. Other revenue was $9.1 million in 2023 compared to $10.6 million in the prior year primarily driven by decreased royalties due to expiration of licensed patents.

Gross profit for the full year 2023 was $21.8 million, representing 42.0% gross margin, compared to $25.4 million, or 44.5% gross margin, during the prior year primarily driven by the reduction in royalty revenues and product mix.

Operating expenses for 2023 decreased 3% to $31.8 million compared to $32.9 million in the prior year. The decrease in operating expenses is primarily a result of the staffing and planned cost reductions partially offset by one-time expenses related to new ERP implementation.

Net loss for 2023 increased to $9.6 million, or $0.59 per share, compared to a net loss of $7.5 million, or $0.47 per share in the prior year.

 

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

 

 


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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

 

 


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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