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Edited Transcript of IRIX earnings conference call or presentation 5-Mar-19 10:00pm GMT

Q4 2018 IRIDEX Corp Earnings Call

MOUNTAIN VIEW Mar 7, 2019 (Thomson StreetEvents) -- Edited Transcript of IRIDEX Corp earnings conference call or presentation Tuesday, March 5, 2019 at 10:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Leigh Salvo

IRIDEX Corporation - Head of IR

* Romeo R. Dizon

IRIDEX Corporation - VP of Finance

* William M. Moore

IRIDEX Corporation - Chairman of the Board of Directors, President & CEO

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Conference Call Participants

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* Jonathan David Block

Stifel, Nicolaus & Company, Incorporated, Research Division - MD & Senior Equity Research Analyst

* Scott Robert Henry

Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research

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Presentation

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Operator [1]

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Good afternoon, ladies and gentlemen, and welcome to today's conference call to discuss IRIDEX fourth quarter and full year 2018 financial results. My name is Sonia, and I'll be your operator on this call. (Operator Instructions) And as a reminder, this call is being recorded today, Tuesday, March 5, 2019, and will be available on the Investor Relations section of IRIDEX website at www.iridex.com.

I would now like to turn the meeting over to Leigh Salvo.

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Leigh Salvo, IRIDEX Corporation - Head of IR [2]

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Thank you, and thank you all for participating in today's call. Joining me are Will Moore, Chief Executive Officer; and Romeo Dizon, Vice President and Controller.

Earlier today, IRIDEX released financial results for the quarter and year ended December 29, 2018. A copy of the press release is available on the company's website.

Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements made during this call that are not statements of historical fact, including, but not limited to, statements concerning our strategic goals and priorities, product development matters, sales and marketing matters, including our presence at future industry events; sales trends; our efforts to drive adoption using key opinion leaders; planned increases in our clinical specialist team; the markets in which we operate, including South Korea and China; plans with respect to our retina business; our ability to convert backlog orders; our guidance and priorities for 2019, including expectations for overall product line revenues and G6 system and probe shipment levels; and our plans to provide public updates on any of these matters.

All forward-looking statements are based upon our current estimates and various assumptions. These 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. Accordingly, you should not place undue reliance on these statements. For a discussion of the risks and uncertainties associated with our business, please see our most recent Form 10-K and Form 10-Q filings with the SEC. IRIDEX disclaims any intention or obligation, except as required by law, to update or revise any financial projections of forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time-sensitive information, and is accurate only as of the live broadcast today, March 5, 2019.

And with that, I'll turn the call over to Will.

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William M. Moore, IRIDEX Corporation - Chairman of the Board of Directors, President & CEO [3]

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Thank you, Leigh. Good afternoon, and thank you all for joining us. Looking back on 2018, I am pleased with the many accomplishments our team made in taking the steps necessary to grow our market share and future opportunity in the treatment of glaucoma. As we entered the year, we set 2 priorities: one, to improve G6 utilization for existing installed base while continuing shipments of new G6 systems around the globe; and two, to develop and introduce new products that have potential to improve the quality, reliability and manufacturing cost of our entire portfolio.

We made progress on each of these objectives consistently throughout the year. Briefly, highlights include: an increase in G6 product revenue by approximately 34% year-over-year as a result of investments we made in building out our commercial team to increase awareness and acceptance of our G6 platform and MicroPulse technology. Consistent with our guidance range for the full year, we shipped 463 G6 laser systems and 45,900 G6 probes. During 2018, we expanded our market with the approval of the G6 laser system in South Korea, bringing the total number of countries where our G6 is sold to 60. We saw significant growth in the clinical data, supporting our G6 and MicroPulse technology, including 6 new peer-reviewed publications covering 412 lives and 22 presentations by physicians at major society meetings.

On the product development front, we advanced several exciting working prototypes of the next-generation laser systems and probes that are approaching release to the market this year. And in September, we completed a public offering of common stock with net proceeds of $10.5 million that will enable us to continue executing on our growth plans and expand our market opportunity.

On the financial front, total revenues for the full year 2018 were $42.6 million, slightly above the guidance provided in our preannouncement in January.

I am proud of our progress and confident we will continue the momentum in 2019. I'd like to take the next few minutes to briefly summarize our recent progress and offer some thoughts on priorities for 2019. Then I'll turn the call over to Romeo to review our fourth quarter financial performance and provide guidance for 2019.

Starting with our G6 in the fourth quarter, we shipped 122 G6 systems and a record 12,300 probes. Our G6 continues to gain momentum in treating late-stage glaucoma patients, and I am confident we are the leader in this segment of the market. Importantly, we are starting to see growing awareness and support among comprehensive ophthalmologists advocating for the use of our G6 in treating moderate disease stage patients, signaling the versatility of the procedure to extend treatment to patients with earlier-stage glaucoma.

For example, an article in the February issue of Ophthalmology Management, a physician from The Eye Clinic of Florida noted that in more than 300 patients he has treated with our G6 laser system, 95% are successful at 6 weeks and 82% are successful at 2 years in reducing medication. These patients typically have a mild to moderate glaucoma and not end-stage disease. He further highlighted in the article that it is possible to successfully control glaucoma without diminishing the patient's quality of life or prospects for future treatment. As we gain traction in earlier-stage treatments, we expect this not only to provide tremendous market expansion opportunity but to drive utilization in our installed base.

Looking at our G6 business geographically. In the U.S., productivity within our commercial teams steadily improve in 2018 as our sales force gained tenure, and our new clinical specialists were deployed to provide enhanced training and support. Where our sales reps and clinical specialists work together to improve our service and follow up with our existing G6 customers, we experienced greater adoption of our technology and increased probe utilization. As a result of these early indications of improvement, we anticipate hiring additional clinical staff to our team in 2019.

Increasing G6 probe revenues in the U.S. through improved sales execution leveraging our clinical specialist team continues to be a high priority. While I'm encouraged by the consistent improvement in G6 disposable sales achieved through 2018, we plan to further build and leverage KOL relationships to expand awareness through podium presentations and posters. And as I mentioned, we expect to increase our clinical specialist team to further target large hospital networks and key accounts where they can have the greatest impact on enhanced customer service and training to ensure more consistent outcomes.

Internationally, Japan was a strong reason for G6 sales throughout the year, generating a sales cadence of KOL support and probe reorders and serving as a model for expansion in other OUS countries. In Germany, we have seen great progress with our KOL strategy similar to the progression we saw with our Japanese distribution relationship. Our direct sales force in Germany is making progress in selling to KOLs and large hospitals, which we believe sets the foundation for further penetration into this market. South Korea, where the G6 was approved in mid-2018, saw an impressive ramp-up in the second half of the year, and we are encouraged by the level of early interest already demonstrated.

In summary, with our G6 approved and sold in most of the major global medical device markets, we are well positioned as the dominant player on a growing stage of the treatment for glaucoma.

From a clinical data perspective, we continue to see an excellent cadence of studies, papers and posters that support the value proposition of the G6 as evidence of the growing momentum and awareness of the benefits of MicroPulse technology. In 2018, we saw more clinical studies presented and published in peer review journals than in the prior 8 years combined. One recent study in the Journal of Cornea, an external disease was conducted to assess the outcomes of MicroPulse intraocular pressure, or IOP, control in keratoplasty eyes. In the study, 61 eyes in 57 patients received laser treatment, and the average follow-up was 21 months. Results demonstrated that at 12 months, after the last treatment, the number of eyes with IOP data were 38, and the mean IOP was 15, plus or minus 5. The study concluded that MicroPulse provides a noninvasive alternative to glaucoma filtration surgery for IOP reduction in keratoplasty eyes. It also further demonstrates the use of MicroPulse in early-stage disease treatment and the growing opportunity we see to expand use of our unique laser system into new markets.

On the marketing front, we continue to maintain a high profile at key industry events around the world that were successful in raising awareness of the benefits of MicroPulse on our noninvasive treatment for all phases of glaucoma. As noted on our last call, we had a strong presence in American Academy of Ophthalmology, which also marked the inclusion of MicroPulse as part of the events official glaucoma curriculum in their glaucoma skill transfer course.

We also recently hosted a formal wet lab at the International Society of Glaucoma Surgery in Geneva, Switzerland, with participation from physicians around the world. And further expanding awareness of MicroPulse, we launched a new website on eyetube.com (sic) [eyetube.net], the leading educational video resource for ophthalmologists.

This year, we are continuing our pace with the participation in several influential events at major congresses, most notably, the upcoming World Glaucoma Conference (sic) [World Glaucoma Congress] and the Asia-Pacific Academy of Ophthalmology, where we plan to participate in multiple clinical presentations and in-booth educational events. We have also initiated a three-pronged marketing strategy to enable heightened utilization. First we are implementing a multiple-channel marketing campaign designed to educate our installed base of clinical evidence supporting MicroPulse. Second, to waive the physician step in identifying potential patients, we launched a program that includes patient education, community PR and referring physician outreach tools designed to assist the medical staff in walking their patients through their decision process. Lastly, we introduced an MD certification program in which physicians can formally record the completion of IRIDEX's didactic training.

Turning to our retina products. Fourth quarter revenues benefited from the fulfillment of several large orders from our international distributor customers relating to the introduction of our updated TruFocus LIO Premiere. Sales in both the U.S. market and OUS markets improved slightly year-over-year. Our retina business remains a meaningful contributor to our current revenue and we expect will remain so. However, as we continue to focus primarily on G6 product sales for the treatment of glaucoma, sales of retina products had not been a growth driver for our overall business.

During 2019, we intend to continue to work towards stabilizing this line of business longer-term and plan to address opportunity in retinal disease through active participation in global industry events through key relationships with KOLs in this sector.

Turning to product development. This was another investment priority for 2018, and I'm pleased with the progress made throughout the year. More specifically, we are nearing completion on a new G6 probe that we believe will improve safety, consistency of outcomes and ease-of-use in glaucoma procedures at a reduced production cost. We also are making meaningful progress on a new laser platform and migrating into the verification and validation process. This new laser platform has multiple lasers for both glaucoma and retina. We expect to file FDA 510(k) applications for these products throughout 2019. Prototypes have already been built, and we anticipate launches later this year and early next year.

Lastly, I'd like to make a few comments on the recent resolution of our patent and trademark infringement dispute with Quantel Medical. We place a high priority defending our intellectual property, and I'm very pleased with the swift outcome of the U.S. lawsuit and intellectual property claims in Europe. Our MicroPulse technology and its brand recognition remain protected for misuse and misrepresentation. We are now able to confidently move forward in devoting our resource to further developing and marketing our proprietary laser technology for treating sight-threatening eye diseases.

In summary, we entered 2018 with a commitment to making additional investments necessary to secure our position and opportunity in the glaucoma market. I am encouraged by the increasing revenue contribution of our glaucoma business, which now accounts for more than 1/3 of our total revenue. As we begin 2019, I believe we are in a stronger position in many years. Our priorities for this year include: continued commercialization, execution and further expansion of our clinical field to support sales organization; our ongoing initiatives to expand awareness of MicroPulse for the treatment of early-stage glaucoma; and the introduction of new products that will enable us to better support our customers and expand our market share.

At this point, I'd like to turn the call over to Romeo to provide further detail on our financial results for the quarter, full year 2018 and guidance for 2019. We'll then open the call for questions. Romeo?

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Romeo R. Dizon, IRIDEX Corporation - VP of Finance [4]

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Thank you, Will. I'll begin with an update on G6 business. In the fourth quarter of 2018, G6 revenues increased approximately 16% compared to fourth quarter of 2017. We shipped 122 G6 systems in the quarter compared to 133 in the prior year period. G6 systems ASPs decreased slightly relative to the third quarter due to a higher portion of our sales coming from distributor package orders. On the G6 probe side, we shipped a record 12,300 probes in the fourth quarter of 2018 compared to 10,600 in the prior year period, an increase of 16%. Probe ASPs declined somewhat on a global basis compared to third quarter due to the higher portion of our sales being in the OUS.

From a geographic perspective, in the fourth quarter, approximately 33% of our G6 systems shipped were from the U.S. -- in the U.S., and approximately 50% of our shipments of G6 probes were also in the U.S. Total revenues for the fourth quarter of 2018 were $11.5 million, an increase of 12% compared to the fourth quarter of 2017 as growth in our G6 revenues was complemented by similar growth in our retina product revenues.

As noted on our last call, we received FDA clearance in late August to introduce our updated TruFocus LIO Premiere laser accessory to the U.S. market. This clearance allowed us to fulfill our U.S. backlog related to the voluntary LIO recall and to take and fulfill new orders. In the fourth quarter 2018, domestic systems sales increased 47% to $2.2 million, and our international systems sales increased 6% to $3.5 million. The increase in domestic systems sales were primarily fueled by an increase in our retina products sales, and our international systems sales also increased primarily due to an increase in our G6 systems sales. Recurring revenues in the fourth quarter 2018 increased 7%, up to $5.8 million, as growth in our G6 probes was partially offset by a decline in our legacy probes.

Gross margin in the fourth quarter 2018 was 41% compared to 21.2% in the fourth quarter of 2017. The improvement in gross margins was due primarily to the relief from additional cost related to our voluntary product recall we recorded in the fourth quarter of the prior year.

Operating expenses for Q4 2018 were $7.6 million, up from $7.4 million in Q4 2017. The level of operating expenses reflects our growth investments to support our expanding commercial infrastructure, including increased sales and marketing expenses. Consequently, our operating loss in the fourth quarter of 2018 was $2.9 million compared with operating loss of $5.2 million in the prior year's fourth quarter. From a balance sheet perspective, we ended the fourth quarter 2018 with $21.2 million in cash and equivalents, and we continue to carry no debt.

Turning to our guidance for 2019. We are projecting G6 probe shipments of between 58,000 to 63,000 probes, which represents growth of approximately 32% year-over-year at the midpoint, and G6 system shipments of between 475 to 525 systems. Total revenue for the full year is expected to be between $43 million and $46 million, with anticipated historical season patterns throughout the year.

With that, I'd like to turn the call over to the operator for questions. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Jon Block of Stifel.

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Jonathan David Block, Stifel, Nicolaus & Company, Incorporated, Research Division - MD & Senior Equity Research Analyst [2]

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Will, the first one might be for you. So I guess, just at a high level, how should we think about the guidance? And let me take a step back. So some struggles in 2017 in the guidance; 2018, a much better job, upside beats and raises. And so you came in line with where we were, our level of thinking, for 2019. But again, do you think you carried forward the conservatism that we saw into the '18 numbers? And is it the same thought process heading into '19?

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William M. Moore, IRIDEX Corporation - Chairman of the Board of Directors, President & CEO [3]

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I would agree with that, so the answer is yes.

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Jonathan David Block, Stifel, Nicolaus & Company, Incorporated, Research Division - MD & Senior Equity Research Analyst [4]

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Okay. And I'll just sort of jump a little bit all over the place. Romeo, the one thing I didn't hear -- and I don't know if you're willing to give it. But along with the guidance, is there a level of cash burn or a range of cash burn that we should be thinking about for 2019 to accompany the top line guidance?

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Romeo R. Dizon, IRIDEX Corporation - VP of Finance [5]

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Basically, according to plan is we've been burning about $2.5 million per quarter. And like I said, we've got sufficient cash to support the 2019 plan.

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Jonathan David Block, Stifel, Nicolaus & Company, Incorporated, Research Division - MD & Senior Equity Research Analyst [6]

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Okay. And then, Will, can you maybe put any numbers -- so you talked about G6 is getting more front and center with the comprehensive ophthalmologists. When I look at your base of roughly 1,300 in a worldwide basis, is there a way, again, to quantify -- in other words, to date, what percent -- I know there are some gray areas. But to date, what percent of your systems are owned or predominantly used by glaucoma specialists? And when we think about the incremental boxes going out the door, how has that changed and shifted over to the comprehensive guys?

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William M. Moore, IRIDEX Corporation - Chairman of the Board of Directors, President & CEO [7]

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Okay. So I'm going to go a little -- a tad gentle on this for a moment. On the OUS side, it's predominantly comprehensive ophthalmologists. They do a little bit of everything, so that gets a little fuzzy. In the U.S., we have the glaucoma specialists. And in the U.S. -- I'm going to give you rough numbers, I haven't validated this, but I would say we're probably in the -- 75% to 80% of our sales have been to glaucoma specialists, smaller -- and 20% to 25% to the comprehensives over the last year. OUS-wise, they're all going to general ophthalmologists. And wherever there are specialists, they were early-on adopters. So my viewpoint is I think the market is substantially larger as we move forward, both in the use of probes and, certainly, with the sale of boxes as well.

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Jonathan David Block, Stifel, Nicolaus & Company, Incorporated, Research Division - MD & Senior Equity Research Analyst [8]

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Okay. Maybe last one and change from me, I'm just sort of going down on my notes on some of your new products and, certainly, one thing you talked about was the probe. Any specifics on the timing later this year? Or the timing, is that later this year? And then sort of the tack-on to the -- and is there anything that we should be cognizant of? As that probe gets rolled out to your user base, just sort of them winding down their old inventory before they go ahead and stock up on the new probes.

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William M. Moore, IRIDEX Corporation - Chairman of the Board of Directors, President & CEO [9]

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Yes. I am -- at this stage, the -- we'll roll it out in a process to hospitals. Predominantly, the deal was, well, I'll call it, let's say, Asian eyes and get to the ease-of-use process because of the tight eyelids. And so then it'll be, well, I'll call it, bled into the system. There's no reason to think that the current probe is of no value. So as we go to the launch plan, there's no reason to worry about having those products. The advantage of the new one is a better coupling to the eye, so you get better full-time distribution of the light source into the eye, and it slides around the eye a little bit easier. The main thing is that the coupling piece, so that's the directional flow of the energy. I don't see a problem with inventory management at this time. Now to answer the other part of the question, when it comes out, as always, depending upon regulatory bodies like the FDA and as you go through -- trying to find out if it's a 510(k), a letter to file, more than likely, it will be a 510(k). We have finished the clinical studies with it. So we've already been out with our doctors on the KOL path to see how it works. We are initiating the first line of probes into our multi-site -- multicenter study, so that will happen. And I would expect you to see these products, the probes, in the second half of the year, maybe a little bit before, but that's about when we'll start getting them out.

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Jonathan David Block, Stifel, Nicolaus & Company, Incorporated, Research Division - MD & Senior Equity Research Analyst [10]

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Okay. Very last one, Will, I promise. Just as an add-on to that, you've specifically called out an opportunity on COGS with the new probe. Will there also be an opportunity on the ASP as well? Do we think about that as -- going out the door, is it a similar price to what's currently in the market?

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William M. Moore, IRIDEX Corporation - Chairman of the Board of Directors, President & CEO [11]

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I think you'll see it as a similar price. We should see an improvement in COGS, going from having a machine part to an injected molded part. You'll see cost reduction on our side.

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Operator [12]

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And our next question comes from Scott Henry of Roth Capital.

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Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [13]

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Just a couple of questions as I sort of digest the guidance and try to put it in as best I can. It appears that we should think about the non-G6 business as kind of flattish to down in 2019. Is that a fair assessment? Or -- I'm just trying to think of how organically you think about the non-G6 business into 2019.

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William M. Moore, IRIDEX Corporation - Chairman of the Board of Directors, President & CEO [14]

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I think the word we use in our facility, Scott, is we would like to stabilize the retina business while we're utilizing our sales force to capture more and more glaucoma business. The demand still remains there. And the other part of that -- so the question was relatively straightforward, I'm giving you more answers than you need. But the other part of that is, as I said in the call, we are developing new laser systems that will work in both retina and glaucoma, and the margin that we receive off of our current retina business is not that great. So we are just focusing on the glaucoma, stabilize the retina until which time the new retina products.

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Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [15]

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Okay. And then post stabilization with new products, you do expect this could be a growth business again. Is that fair?

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William M. Moore, IRIDEX Corporation - Chairman of the Board of Directors, President & CEO [16]

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Yes, I do believe that. Retinal diseases affect the aging population just like glaucoma, and it's a growing market. MicroPulse has taken over a fairly substantial piece of that business on a global basis, and I expect that to continue, back to the days when we were a 10%, 12% grower in that space.

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Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [17]

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Okay, great. And then in the G6 business, obviously, a good systems outlook for 2019. But probe utilization is also a key part of that model. And kind of a back of the envelope, it looks like probe utilization is kind of staying around that 35% number in 2019 versus 2018, maybe that's just being a little conservative or -- just trying to get your sense, when should we expect that probe utilization number to start ramping again? And what sort of magnitude could -- and not necessarily in 2019, could we anticipate kind of longer term?

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William M. Moore, IRIDEX Corporation - Chairman of the Board of Directors, President & CEO [18]

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Yes. I think that when you said the number, 35%, you're talking about probes per year on a laser?

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Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [19]

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I'm talking about total probes in the year divided by the installed base.

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William M. Moore, IRIDEX Corporation - Chairman of the Board of Directors, President & CEO [20]

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Okay, yes. I know people have talked about the probe utilization. We use the term utilization as well but not so much on the exact number. And the reason for that is that when we're selling a device, it's always -- they always get a package of probes and how long it takes them to get to the base, into a hospital and people trained before they start using it is always a number. So your probe number can be calculated by using a laser box account that was like 6 months ago is one way to look at it. I think that the long-term answer that I'm comfortable with, and this is -- I'm not giving guidance but as a goal is we still believe that a laser system should be consuming someplace between 6 to 8 probes per month as we move forward and move into the earlier stage. As I said earlier on the call, the majority of our sales were on late stage, which is the usage is a little bit less than that number, and I think it's been reflected in what our sales have been. But as we move forward, I expect the overall piece to -- when we stabilize on our hardware sales, I think the goal for us is to try to get up to 6 to 8 probes per month per installed laser.

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Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [21]

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Okay. That's helpful. And then just with regards to 2019, should we think about pricing as being stable? And I guess, spending, for instance, I would expect just modest inflationary growth, or should we think about more inflationary growth? Just trying to get a sense of 2019.

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William M. Moore, IRIDEX Corporation - Chairman of the Board of Directors, President & CEO [22]

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Okay. On the pricing sector, the pricing has remained consistent and been slightly up over the -- in the U.S., and it's been fairly consistent in the OUS as well, but those prices are lower because we sell through a distribution network versus direct. And the only thing that really have in play, and I would think you're talking about spending, at least you're talking about our spending versus customer trend spending, our spending is going to be pretty consistent with what it's been. We don't need to hire more folks, we've got people in place. We will be hiring some clinical folks. But the investments that we've made on the product development side, where you would see the biggest increase, hardly been made. And so I don't -- as Romeo said earlier, the burn I think is going to be consistent and it will continually drop as the probes continue to take a higher and higher percentage of our business.

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Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [23]

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Okay, great. And just a final question, I just -- I didn't quite catch it, but what percent of systems were placed in the U.S. market versus OUS?

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William M. Moore, IRIDEX Corporation - Chairman of the Board of Directors, President & CEO [24]

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Romeo, you want to grab that one?

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Romeo R. Dizon, IRIDEX Corporation - VP of Finance [25]

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I think it was -- can I get back with you on that? I don't have...

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Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [26]

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Yes, that's fine. We can catch up off-line.

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Operator [27]

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And ladies and gentlemen, this does conclude our question-and-answer session. I would now like to turn the call back over to Will Moore for closing remarks.

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William M. Moore, IRIDEX Corporation - Chairman of the Board of Directors, President & CEO [28]

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Thank you, operator. And I'd like to thank -- sorry, I just -- thanks again for joining the call today. I'm pleased with the solid performance the IRIDEX team is making. And we'd like to thank them as well as our shareholders for your continued support. We also look forward to seeing many of you during our upcoming conferences and marketing trips. Please have a great evening.

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Operator [29]

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Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.