IRIDEX Corporation (NASDAQ: IRIX) stock lost over 3.9% on weak first quarter of 2018 performance. Their domestic system sales fell 41% to $1.3 million during the first quarter of 2018 against $2.1 million in the first quarter of 2017. The international system sales fell 13% to $2.6 million against $3.0 million in the comparable quarter. The Gross margin fell 41.2% during the quarter against 42.6% in the first quarter of 2017. Gross margin was hurt by an unfavorable geographic mix and less efficient overhead absorption partly offsetting the benefit of a higher margin G6 revenues and the reversal of a portion of the reserves related to the LIO recall. Recurring revenues in rose 5% to $5.7 million during the quarter against $5.4 million in the prior year period as growth in their G6 probes was partially offset by a decline in their legacy probes.

On the other hand, G6 revenues rose over 50% yoy during the quarter against pcp. The group shipped 99 G6 systems against 64 in pcp while System ASP was slightly higher relative to the fourth quarter.

The group’s shift towards a glaucoma disposables-oriented business model is on track. Revenues rose 50% yoy for their Cyclo G6 system for the treatment of glaucoma. The Total revenues reached $9.5 million boosted by new G6 system placements and a better probe utilization. The group shipped 99 G6 systems and delivered a record 11,600 probes during the quarter. They shipped 973 G6 systems and more than 78,000 G6 probes since 2015.  The group continued to improve the G6 probe utilization from their current installed base, while launched new products with scope for a better quality, reliability and manufacturing costs of all their products. The group enhanced the G6 probe utilization in the U.S. via a better sales execution while integrating their clinical specialist team is a high priority. The group is also witnessing a higher levels of productivity as their new sales reps gain tenure while their new clinical specialists have finished training