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IRIDEX Announces 2019 First Quarter Financial Results

May 2, 2019

MOUNTAIN VIEW, Calif., May 02, 2019 (GLOBE NEWSWIRE) -- IRIDEX Corporation (Nasdaq: IRIX) today reported financial results for the first quarter ended March 30, 2019.

First Quarter Highlights

-- Total revenue of $10.6 million, an 11% increase year-over-year -- Cyclo G6® product revenue of $3.1 million, a 9% increase year-over-year -- Shipped a record 14,000 Cyclo G6 probes -- Shipped 114 Cyclo G6 Glaucoma Laser Systems -- Strong presence at the American Glaucoma Society and World Glaucoma Congress including 22 poster and podium presentations, matching the company’s 2018 total in one quarter

“Our first quarter results were solid, representing strong growth in our Cyclo G6 business and stabilization in the retina business. Importantly, for the first time, we saw sequential Cyclo G6 probe shipment growth from a fourth quarter to first quarter. We believe this trend signals increased probe consumption by existing customers,” said William M. Moore, President and CEO. “Our Cyclo G6 platform continues to garner market share in treating late stage glaucoma patients and I am confident we are the leader in this segment of the market. Looking ahead, we see significant opportunity to continue to grow our installed base and to drive probe utilization. Our priorities remain focused on increasing awareness of MicroPulse and our Cyclo G6 platform for the treatment of earlier stage glaucoma, selectively expanding the clinical field team, and introducing new products to increase market share.”

First Quarter 2019 Financial ResultsRevenue for the three months ended March 30, 2019 increased 11% to $10.6 million from $9.5 million during the same period of the prior year. The increase in revenue was driven by growth from Cyclo G6 product revenues and complemented by significant growth in retina product revenues.

Gross profit for the first quarter of 2019 was $4.3 million, or 40.2% gross margin, compared to $3.9 million, or 41.2% gross margin, in the same period of the prior year. The decline in gross margin was due primarily to a shift in geographic and product mix.

Operating expenses for the first quarter of 2019 were $7.3 million compared to $7.5 million in the same period of the prior year. This decrease is attributable to lower R&D, and General & Administrative spend and continues to reflect growth investments in expanding the commercial infrastructure.

Loss from operations for the first quarter of 2019 was $3.0 million, compared to loss from operations of $3.6 million for the same period of the prior year.

As of March 30, 2019, we had cash and cash equivalents of $17.2 million. Cash used in the quarter included payment of $1.4 million of accrued 2018 performance bonuses and related payroll taxes.

Guidance for Full Year 2019 IRIDEX reiterated its guidance for the full year 2019 which includes Cyclo G6 probe shipments of 58,000 to 63,000 and Cyclo G6 system shipments of 475 to 525. Total revenue for the full year is expected to be $43 million to $46 million.

Webcast and Conference Call InformationIRIDEX’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 dialing (844) 707-0665 for domestic callers or (703) 326-3030 for international callers, using conference ID: 7287797. A live and archived webcast of the event will be available on the “Investors” section of the Company’s website at: www.iridex.com. A telephone replay will also be available beginning Thursday, May 2, 2019 through Friday, May 3, 2019, by dialing (855) 859-2056 for domestic callers or (404) 537-3406 for international callers, using conference ID: 7287797.

About IRIDEXIRIDEX 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, 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 http://www.iridex.com/.

Safe Harbor StatementThis 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 the future demand, utilization and order levels for the Company’s products, plans to introduce new products, and the Company’s guidance for fiscal 2019 and future financial results. 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 Annual Report on Form 10-K for the fiscal year ended December 29, 2018, and Quarterly Reports on Form 10-Q for subsequent fiscal quarters, 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.

Investor Relations ContactLeigh Salvo(415) 937-5404 investors@iridex.com

IRIDEX CorporationCondensed Consolidated Statement of Operations(In thousands, except per share data, unaudited)

Three Months Ended -------------------- March March 30, 31, 2019 2018 -------- -------- Total revenues $ 10,595 $ 9,509 Cost of revenues 6,338 5,587 - ------ - ------ Gross profit 4,257 3,922 - ------ - ------ Operating expenses: Research and development 958 1,104 Sales and marketing 4,091 4,050 General and administrative 2,244 2,385 Total operating expenses 7,293 7,539 - ------ - ------ Loss from operations (3,036 ) (3,617 ) Other (expense) income, net (6 ) 18 - ------ - ------ Loss from operations before provision for income taxes (3,042 ) (3,599 ) Provision for income taxes 6 4 - ------ - ------ Net loss $ (3,048 ) $ (3,603 ) - ------ - ------ Net loss per share: Basic $ (0.22 ) $ (0.31 ) - ------ - ------ Diluted $ (0.22 ) $ (0.31 ) - ------ - ------ Weighted average shares used in computing net loss per share Basic 13,630 11,628 - ------ - ------ Diluted 13,630 11,628 - ------ - ------

IRIDEX CorporationCondensed Consolidated Balance Sheets(In thousands, unaudited)

March 30, December 29, 2019 2018 Assets Current assets: Cash and cash equivalents $ 17,175 $ 21,194 Accounts receivable, net 8,417 9,083 Inventories 8,701 8,794 Prepaid expenses and other current assets 766 547 - ------- - ------- Total current assets 35,059 39,618 Property and equipment, net 1,112 1,220 Intangible assets, net 96 100 Goodwill 533 533 Operating lease right-of-use assets, net 3,678 - Other long-term assets 189 201 - ------- - ------- Total assets $ 40,667 $ 41,672 - ------- - ------- Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 2,400 $ 2,516 Accrued compensation 1,544 2,962 Accrued expenses 2,086 2,763 Accrued warranty 541 622 Deferred revenue 1,742 1,639 Operating lease liabilities 1,334 - - ------- - ------- Total current liabilities 9,647 10,502 Long-term liabilities: Accrued warranty 166 238 Deferred revenue 526 586 Operating lease liabilities 2,868 - Other long-term liabilities 17 385 - ------- - ------- Total liabilities 13,224 11,711 - ------- - ------- Stockholders’ equity: Common stock 145 145 Additional paid-in capital 72,070 71,548 Accumulated other comprehensive income 78 70 Accumulated deficit (44,850 ) (41,802 ) - ------- - ------- Total stockholders’ equity 27,443 29,961 - ------- - ------- Total liabilities and stockholders’ equity $ 40,667 $ 41,672 - ------- - -------

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