IRIDEX CORP Q4 FY2024 earnings call

• Successful implementation of the cost-reduction program announced on the last call was completed in the fourth quarter.
• Stabilization and positive outlook for the business continuing through Q1, particularly in glaucoma.
• Recently announced strategic investment by Novel Innovations and its relation to the broader strategic review and efforts to maximize shareholder value.
• Cost-reduction program execution: acted quickly after Patrick Mercer was appointed CEO on October 31, 2024, with severance expenses mostly covered in the fourth quarter numbers, expecting adjusted EBITDA positive and cash flow positive for the year while generating revenue in line with 2024.
• Focus on 2025: modernizing manufacturing process to decrease costs and increase product supply capacity; fully capitalizing on opportunities created by the LCD implemented in November 2024, seeing utilization increase.
• Leveraging financial and strategic flexibility from the Novel transaction to accomplish business improvement and strategic goals, with a special call in mid-April to discuss the evolving strategy in depth.

For the fourth quarter ended December 28, 2024, IRIDEX's total revenue was $12.7 million, up from $12.5 million in the same period of the prior year and up $1.1 million or 10% sequentially from Q3 2024. The Cyclo G6 glaucoma product family had total product revenue of $3.3 million, an increase of 9% versus the fourth quarter of 2023, with 13,300 Cyclo G6 probes sold (compared to 12,700 in the prior year quarter) and 47 Cyclo G6 glaucoma laser systems sold (compared to 35 in the same quarter of the prior year). Retina product revenue was $7.3 million, a decrease of 3% compared to the prior year period, due to deferral of capital purchases internationally, partially offset by increased sales in the U.S. Other revenue, including royalties, services, and other legacy products, was $2.1 million in the fourth quarter of 2024, compared to $2.0 million in the prior year period, primarily driven by higher service revenue. In terms of revenue contribution%, Cyclo G6 glaucoma product family contributed approximately 26% ($3.3M / $12.7M), retina product contributed approximately 57.5% ($7.3M / $12.7M), and other revenue contributed approximately 16.5% ($2.1M / $12.7M). Gross profit for the fourth quarter was $5.6 million with a 44.0% gross margin, up from $4.9 million and 39.2% in the same period of the prior year. Operating expenses were $6.1 million in the fourth quarter, a decline of $1.9 million from $8.0 million in the same period of the prior year. Net loss for the fourth quarter was $0.8 million or $0.05 per share, compared to a net loss of $3.0 million or $0.18 per share in the same period of the prior year. Adjusted EBITDA for the fourth quarter was $0.4 million, an improvement of $2.4 million from negative $2.0 million in the comparable quarter of the prior year.

• Expect to be adjusted EBITDA positive and cash flow positive for the year 2025 while generating revenue in line with 2024.
• Plan to pre-announce first quarter 2025 results in April; this is a one-time event due to the insider trading window being closed for over a year and the view that the business is significantly undervalued.

• Forward-looking statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. For a discussion of the risks and uncertainties associated with the business, please see the most recent Form 10-K and Form 10-Q filings with the SEC.
• Uncertainties related to the ongoing strategic review process and potential impacts on transactions.

Q: Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.

A: Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.