e8vk
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 25, 2005
IRIDEX CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
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0-27598
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77-0210467 |
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.) |
1212 Terra Bella Avenue
Mountain View, California 94043
(Address of principal executive offices, including zip code)
(650) 940-4700
(Registrants 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):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
TABLE OF CONTENTS
Item 2.02. Results of Operations and Financial Condition.
On October 25, 2005, the Registrant reported its results of operations for its third fiscal
quarter of 2005, which ended on October 1, 2005. A copy of the press release issued by the
Registrant concerning the Registrants results of operations for its third fiscal quarter of 2005,
which ended on October 1, 2005, is furnished 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.
(c) Exhibits
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Exhibit No. |
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Description |
99.1
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Press Release dated October 25, 2005. |
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.
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IRIDEX CORPORATION
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By: |
/s/
LARRY TANNENBAUM
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Larry Tannenbaum |
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Chief Financial Officer, Secretary and Senior Vice President of Finance and Administration |
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Date: October 25, 2005
EXHIBIT INDEX
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Exhibit |
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No. |
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Description |
99.1
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Press Release dated October 25, 2005. |
exv99w1
Exhibit 99.1
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For Immediate Release
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Contact:
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Larry Tannenbaum |
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Chief Financial Officer |
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650-940-4700 |
UPDATED IRIDEX REPORTS STRONG THIRD QUARTER
FINANCIAL RESULTS
Revenue Grows 11%, EPS of $0.11
MOUNTAIN VIEW, CA, OCTOBER 25, 2005IRIDEX Corporation (Nasdaq/NMS: IRIX) today reported
strong financial results for the quarter ended October 1, 2005. Revenue for the period was $9.1
million, an 11% increase from the $8.2 million reported for the third quarter of 2004. The Company
achieved net income of $879,000 or $0.11 per diluted share for the third quarter of 2005 compared
with a loss of $720,000 or a loss of $0.10 per diluted share in the third quarter of 2004.
Revenue for the nine-month period ended October 1, 2005 was $26.6 million, a 12% improvement
compared with the $23.7 million reported during the same period of 2004. Net income for the
nine-month period ended October 1, 2005 was $1.3 million or $0.16 per diluted share compared with a
net loss of $604,000 or a loss of $0.08 per diluted share during the comparable period of 2004.
Net income in the third quarter and nine-month period ended October 1, 2005 includes a benefit
of approximately $0.04 per share from the adjustment to certain tax reserves following the
expiration of Federal and State statutes of limitations. Net income in the third quarter and
comparable nine-month period of 2004 included a one-time charge of
approximately $1.2 million (or $0.09 per share tax effected) to
establish a reserve for state sales taxes.
Ophthalmology sales grew to $7.9 million for the third quarter of 2005, an increase of 10%
compared with $7.2 million for the third quarter of 2004. Dermatology sales grew to $1.2 million
for the third quarter of 2005, up from $1.0 million for the corresponding quarter in 2004. During
the third quarter of 2005, strong sales growth was seen both domestically and internationally, with
domestic sales growing to $5.8 million, a 12% increase compared with $5.2 million for the third
quarter of 2004, and international sales growing to $3.3 million, a 9% increase compared with $3.0
million for the third quarter of 2004. Since international sales are denominated in US dollars,
foreign currency fluctuations had no material impact on sales growth.
Our strong financial performance during the third quarter of 2005 was driven by
year-over-year growth in all of our business segments, said Barry G. Caldwell, IRIDEX President
and CEO. We were pleased to see gross margin reaching 53.7% for the quarter. This improvement in
our gross margin was fueled primarily by atypically high gross margins on certain OEM ophthalmology
products as well as our increasing recurring revenue stream of disposable and service products.
While we believe that in the next few years IRIDEX can achieve the type
of operating efficiencies necessary to consistently reach the level of gross margin reported
this quarter, we expect the fourth quarter gross margin to be approximately 3 to 5 percentage
points below the level achieved during the third quarter and expect the 2006 gross margin to be
slightly better than long-term historical levels.
Mr. Caldwell further commented, During the quarter, we continued to build our management
team. Don Todd, who has more than 25 years of experience in medical device marketing, joined us to
lead our marketing efforts. In addition, weve begun to implement our strategy of building
disposable and services revenues by taking aggressive action to protect our strong intellectual
property positions. Were pursuing a three-pronged strategy to achieve our goal of $100 million in
profitable revenues before the end of the decade by maximizing the potential of our existing core
business, pursuing the internal development of innovative, new and incremental products, and making
strategic acquisitions. Looking ahead, we continue to expect to generate sales for the full year
in the range of $36 million to $38 million and earnings per share of approximately $0.20.
Cash, cash equivalents and available-for-sale securities as of October 1, 2005 were $20.1
million compared with $18.0 million at January 1, 2005. Inventories increased to $9.3 million at
the end of the third quarter of 2005, up from $8.9 million at January 1, 2005. Inventory turns at
the end of the third quarter of 2005 were approximately 1.8 times. At the end of the third
quarter of 2005, accounts receivable was $6.9 million, resulting in day sales outstanding (DSO) of
70 days.
Conference Call
IRIDEX management will conduct a conference call tomorrow, Wednesday, October 26th
at 9:00 a.m. EDT. Interested parties may access the live conference call via telephone by dialing
800-561-2731 US or 617-614-3528 International and entering Passcode 19986382 or by visiting the
Companys website at www.iridex.com. A telephone replay will be available beginning on October 26,
2005 through November 2, 2005 by dialing 888-286-8010 US or 617-801-6888 International and entering
Passcode 82049304. In addition, an archived version of the webcast will be available beginning
October 26, 2005 on the Companys website at www.iridex.com.
About IRIDEX
IRIDEX Corporation is a leading worldwide provider of semiconductor-based laser systems for
the ophthalmology and dermatology markets. IRIDEX products are sold in the United States through a
direct sales force and internationally through a network of independent distributors into more than
100 countries. For further information, visit the Companys website at www.iridex.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 Companys growth prospects, revenues, gross margins, earnings per share, and
profitability. Actual results could differ materially from those projected in the forward-looking
statements based on,
among other things, the actual order and shipment rate for the Companys ophthalmology and
dermatology product lines, the rate of sales to OEM customers, the rate of growth in sales of
disposables and services, the rate of introduction and market acceptance of the Companys products,
and the impact of any continuing weakness and uncertainties related to general economic conditions
or weakness in overall demand in the Companys markets, especially with regard to the Companys
dermatology products which are typically used for elective procedures that can be deferred. Risks
and uncertainties to which the Company are subject may include, but may not necessarily be limited
to, the amount of orders that the Company receives and ships, dependence on international sales and
the Companys network of independent distributors, the risks associated with bringing new products
to market, and the results of clinical trials and competition in our markets. Please see a detailed
description of these risks contained in our Quarterly Reports on Form 10-Q and Annual Report on
Form 10-K for the fiscal year ended January 3, 2004 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)
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Three Months Ended |
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Nine Months Ended |
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October 1, |
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October 2, |
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October 1, |
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October 2, |
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2005 |
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2004 |
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2005 |
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2004 |
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Sales |
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$ |
9,081 |
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$ |
8,178 |
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$ |
26,613 |
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$ |
23,679 |
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Cost of sales |
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4,202 |
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4,708 |
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13,511 |
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13,187 |
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Gross profit |
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4,879 |
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3,470 |
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13,102 |
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10,492 |
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Operating expenses: |
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Research and development |
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1,172 |
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1,025 |
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3,133 |
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3,409 |
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Sales, general and administrative |
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2,990 |
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3,855 |
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8,852 |
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8,452 |
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Total operating expenses |
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4,162 |
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4,880 |
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11,985 |
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11,861 |
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Income (loss) from operations |
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717 |
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(1,410 |
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1,117 |
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(1,369 |
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Interest and other income, net |
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157 |
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83 |
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413 |
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212 |
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Income (loss) before income taxes |
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874 |
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(1,327 |
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1,530 |
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(1,157 |
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Benefit from (provision for) income taxes |
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5 |
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607 |
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(241 |
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553 |
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Net income (loss) |
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$ |
879 |
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($720 |
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$ |
1,289 |
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($604 |
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Net income (loss) per common share basic |
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$ |
0.12 |
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($0.10 |
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$ |
0.17 |
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($0.08 |
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Net income (loss) per common share diluted |
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$ |
0.11 |
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($0.10 |
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$ |
0.16 |
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($0.08 |
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Shares used in per common share basic calculations |
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7,441 |
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7,244 |
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7,373 |
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7,171 |
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Shares used in per common share diluted calculations |
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8,102 |
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7,244 |
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7,885 |
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7,171 |
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IRIDEX Corporation
Condensed Consolidated Statements of Operations
(In thousands)
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October 1, |
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January 1, |
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2005 |
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2005 |
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(unaudited) |
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Assets |
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Current Assets: |
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Cash and cash equivalents |
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$ |
11,055 |
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$ |
10,381 |
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Available-for-sale securities |
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9,017 |
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3,323 |
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Accounts receivable, net |
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6,857 |
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7,404 |
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Inventories |
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9,327 |
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8,922 |
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Prepaids and other current assets |
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763 |
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814 |
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Current deferred income taxes |
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1,808 |
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1,808 |
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Total current assets |
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38,827 |
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32,652 |
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Long term portion of available-for-sale securities |
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4,324 |
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Property and equipment, net |
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845 |
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852 |
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Deferred income taxes |
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1,265 |
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1,265 |
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Total assets |
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$ |
40,937 |
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$ |
39,093 |
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Liabilities and Stockholders Equity |
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Current Liabilities: |
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Accounts payable |
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$ |
1,188 |
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$ |
1,233 |
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Accrued expenses |
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4,693 |
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5,167 |
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Deferred revenue |
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1,242 |
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910 |
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Total liabilities |
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7,123 |
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7,310 |
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Stockholders Equity: |
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Common stock |
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76 |
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74 |
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Additional paid-in capital |
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26,030 |
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25,281 |
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Accumulated other comprehensive loss |
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(44 |
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(35 |
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Treasury stock |
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(430 |
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(430 |
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Retained earnings |
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8,182 |
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6,893 |
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Total stockholders equity |
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33,814 |
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31,783 |
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Total liabilities and stockholders equity |
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$ |
40,937 |
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$ |
39,093 |
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