================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 29, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________.
COMMISSION FILE NUMBER 0-27598
IRIDEX CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 77-0210467
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
1212 TERRA BELLA AVENUE, MOUNTAIN VIEW CA 94043-1824
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(ZIP CODE)
(650) 940-4700
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
--------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $0.01 PAR VALUE
--------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant as of March 20, 2002, was approximately $14,703,055 based on the
closing price reported for such date on the NASDAQ National Market System. For
purposes of this disclosure, shares of Common Stock held by each executive
officer and director and by each holder of 5% or more of the outstanding shares
of Common Stock have been excluded from this calculation, because such persons
may be deemed to be affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes.
As of March 20, 2002, Registrant had 6,862,862 shares of Common Stock
outstanding.
-------------------
DOCUMENTS INCORPORATED BY REFERENCE
Certain parts of the Proxy Statement for the Registrant's 2002 Annual
Meeting of Stockholders (the "Proxy Statement") are incorporated by reference
into Part III of this Annual Report on Form 10-K.
================================================================================
EXPLANATORY NOTE
This Annual Report on Form 10-K/A ("Form 10-K/A") is being filed as
Amendment No. 1 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 29, 2001. This Form 10-K/A is filed with the Securities and
Exchange Commission (the "Commission") for the sole purpose of revising the
Consolidated Statement of Cash Flows as a result of a transposition error.
ITEM 8. FINANCIAL STATEMENTS
Our consolidated balance sheets as of December 29, 2001 and December 30,
2000 and the consolidated statements of operations, comprehensive income (loss),
stockholders' equity and cash flows for each of the three years in the period
ended December 29, 2001, together with the related notes and the report of
PricewaterhouseCoopers LLP, independent accountants, are on the following pages.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of IRIDEX Corporation:
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of stockholders' equity, of cash flows,
and of comprehensive income (loss) present fairly, in all material respects, the
financial position of IRIDEX Corporation and its Subsidiaries (the "Company") at
December 29, 2001 and December 30, 2000 and the results of their operations,
their cash flows, and of comprehensive income (loss) for each of the three years
in the period ended December 29, 2001 in conformity with accounting principles
generally accepted in the United States of America. In addition, in our opinion,
the financial statement schedule listed in the accompanying index under 14(a)(2)
on page 59 presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related financial statements. These
financial statements and financial statement schedule are the responsibility of
the Company's management; our responsibility is to express an opinion on these
consolidated financial statements and financial statement schedule based on our
audits. We conducted our audits of these statements in accordance with auditing
standards generally accepted in the United States of America, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
/s/ PricewaterhouseCoopers LLP
San Jose, California
January 25, 2002
IRIDEX CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
December 29, December 30,
2001 2000
-------- --------
ASSETS
Current assets:
Cash and cash equivalents ............................................... $ 4,613 $ 9,998
Available-for-sale securities ........................................... 4,489 2,996
Accounts receivable, net of allowance for doubtful accounts of $318
in 2001 and $481 in 2000 ....................................... 8,066 8,010
Inventories, net ........................................................ 12,562 9,721
Prepaids and other current assets ....................................... 599 805
-------- --------
Total current assets ............................................. 30,329 31,530
Property and equipment, net ............................................. 1,535 1,903
Deferred income taxes ................................................... 1,924 1,592
-------- --------
Total assets ..................................................... $ 33,788 $ 35,025
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ........................................................ $ 1,176 $ 1,408
Accrued expenses ........................................................ 2,779 3,117
-------- --------
Total liabilities ................................................ 3,955 4,525
-------- --------
Commitments and contingencies (Note 5)
Stockholders' Equity
Convertible Preferred Stock, $.01 par value:
Authorized: 2,000,000 shares;
Issued and outstanding: none ..................................... -- --
Common Stock, $.01 par value:
Authorized: 30,000,000 shares;
Issued and outstanding: 6,815,672 shares in 2001 and
6,700,862 shares in 2000 ......................................... 69 67
Additional paid-in capital .............................................. 23,417 22,691
Accumulated other comprehensive income .................................. 3 10
Treasury Stock
Outstanding: 103,000 shares in 2001 and 76,000 shares in 2000 .... (430) (315)
Retained earnings ....................................................... 6,774 8,047
-------- --------
Total stockholders' equity ....................................... 29,833 30,500
-------- --------
Total liabilities and stockholders' equity ............. $ 33,788 $ 35,025
======== ========
The accompanying notes are an integral part of
these consolidated financial statements.
IRIDEX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 29, DECEMBER 30, JANUARY 1,
2001 2000 2000
------------ ------------ ----------
Sales ..................................................................... $ 27,275 $ 32,838 $ 26,391
Cost of sales ............................................................. 14,205 14,506 11,669
-------- -------- --------
Gross profit ........................................................ 13,070 18,332 14,722
-------- -------- --------
Operating expenses:
Research and development .............................................. 4,808 5,265 3,925
Sales, general and administrative ..................................... 10,251 10,747 9,224
-------- -------- --------
Total operating expenses ............................................ 15,059 16,012 13,149
-------- -------- --------
Income (loss) from operations ....................................... (1,989) 2,320 1,573
Interest income ........................................................... 378 552 469
Other income, net ......................................................... 48 17 87
-------- -------- --------
Income (loss) before income taxes ................................... (1,563) 2,889 2,129
Benefit from (provision for) income taxes ................................. 962 (809) (682)
-------- -------- --------
Income (loss) from continuing operations ............................ (601) 2,080 1,447
Income (loss) from operations of discontinued Laser
Research segment (net of applicable income tax benefit (provision)
of $124, $(131) and $(80), respectively in 2001, 2000 and 1999) ... (204) 336 171
Income (loss) on disposal of Laser Research segment, including (net
of applicable income tax benefit of $315, $0 and
$0, respectively in 2001, 2000 and 1999) .......................... (468) -- --
-------- -------- --------
Net income (loss) ......................................................... $ (1,273) $ 2,416 $ 1,618
======== ======== ========
Basic net income (loss) per share:
Continuing operations ..................................................... $ (0.09) $ 0.31 $ 0.22
Discontinued operations ................................................... (0.10) 0.05 0.03
-------- -------- --------
Basic net income (loss) per common share .................................. $ (0.19) $ 0.36 $ 0.25
======== ======== ========
Diluted net income (loss) per share:
Continuing operations ..................................................... $ (0.09) $ 0.29 $ 0.21
Discontinued operations ................................................... (0.10) 0.04 0.03
-------- -------- --------
Diluted net income (loss) per common share ................................ $ (0.19) $ 0.33 $ 0.24
======== ======== ========
Shares used in net income (loss) per common share basic calculations ...... 6,757 6,637 6,503
======== ======== ========
Shares used in net income (loss) per common share diluted calculations .... 6,757 7,285 6,849
======== ======== ========
The accompanying notes are an integral part of
these consolidated financial statements.
IRIDEX CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)
Accumulated
Common Stock Additional Other
------------------ Paid-in Treasury Comprehensive Retained
Shares Amount Capital Stock Income (Loss) Earnings Total
--------- ------ ---------- -------- ------------- -------- -------
Balances, January 2, 1999.............. 6,506,010 $65 $21,800 $ 7 $4,013 $25,885
Issuance of Common Stock under Stock
Option Plan..................... 51,544 107 107
Issuance of Common Stock under Employee
Stock Purchase Plan............. 58,804 1 217 218
Purchase of Treasury Stock............. (76,000) (315) (315)
Change in unrealized gains on
available-for-sale securities... (9) (9)
Net income............................. 1,618 1,618
--------- --- ------- ------ --- ------- -------
Balances, January 1, 2000.............. 6,540,358 66 22,124 (315) (2) 5,631 27,504
Issuance of Common Stock under Stock
Option Plan..................... 120,173 1 317 318
Issuance of Common Stock
under Employee Stock
Purchase Plan................... 40,331 242 242
Stock compensation expense............. 8 8
Change in unrealized gains on
available-for-sale securities... 12 12
Net income............................. 2,416 2,416
--------- --- ------- ------ --- ------- -------
Balances, December 30, 2000............ 6,700,862 67 22,691 (315) 10 8,047 30,500
Issuance of Common Stock
under Stock Option Plan........ 74,942 1 99 100
Issuance of Common Stock under
Employee Stock Purchase Plan.... 66,868 1 255 256
Purchase of Treasury Stock............. (27,000) (115) (115)
Tax Benefit of Employee Stock
Option Plan..................... 372 372
Change in unrealized gains on
available-for-sale securities... (7) (7)
Net loss............................... (1,273) (1,273)
--------- --- ------- ------ --- ------- -------
Balances, December 29, 2001............ 6,815,672 $69 $23,417 $ (430) $ 3 $ 6,774 $29,833
========= === ======= ====== === ======= =======
The accompanying notes are an integral part of
these consolidated financial statements.
IRIDEX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 29, DECEMBER 30, JANUARY 1,
2001 2000 2000
------------ ------------ ----------
Cash flows from operating activities:
Net income (loss) ....................................................... $(1,273) $ 2,416 $ 1,618
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization ....................................... 859 893 721
Tax Benefit of Employee Stock Option Plan ........................... 372 -- --
Stock compensation expense .......................................... -- 8 --
Provision for doubtful accounts ..................................... (163) 131 128
Provision for inventories ........................................... 343 285 197
Deferred income taxes ............................................... (332) (74) (846)
Amortization of intangible asset .................................... 96
Changes in assets and liabilities:
Accounts receivable .............................................. 107 119 (682)
Inventories ...................................................... (3,184) (2,750) (949)
Prepaids and other current assets ................................ 206 (368) (90)
Accounts payable ................................................. (232) 280 249
Accrued expenses ................................................. (338) (1,014) 2,420
------- ------- -------
Net cash provided by (used in) operating activities .............. (3,635) (74) 2,862
------- ------- -------
Cash flows from investing activities:
Purchases of available-for-sale securities .............................. (4,489) (3,856) (3,511)
Proceeds from maturity of available-for-sale securities ................. 2,989 4,375 5,084
Acquisition of property and equipment ................................... (491) (652) (591)
------- ------- -------
Net cash provided by (used in) investing activities .............. (1,991) (133) 982
------- ------- -------
Cash flows from financing activities:
Purchase of Treasury Stock .............................................. (115) -- (315)
Issuance of Common Stock under stock purchase and
option plans .......................................................... 356 560 325
------- ------- -------
Net cash provided by financing activities ........................ 241 560 10
------- ------- -------
Net (decrease) increase in cash and cash equivalents ........... (5,385) 353 3,854
Cash and cash equivalents, beginning of year ................................ 9,998 9,645 5,791
------- ------- -------
Cash and cash equivalents, end of year ...................................... $ 4,613 $ 9,998 $ 9,645
======= ======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Income taxes ......................................................... $ 12 $ 2,244 $ 360
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Change in unrealized gains (losses) on available-for-sale
securities ............................................................ $ (7) $ 12 $ (9)
The accompanying notes are an integral part of
these consolidated financial statements.
IRIDEX CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(IN THOUSANDS)
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 29, DECEMBER 30, JANUARY 1,
2001 2000 2000
------------ ------------ ----------
Net income (loss) ................................... $(1,273) $2,416 $ 1,618
Other comprehensive income:
Changes in unrealized gains (losses) on
available-for-sale securities ............. (7) 12 (9)
------- ------ -------
Comprehensive income (loss) ......................... $(1,280) $2,428 $ 1,609
======= ====== =======
The accompanying notes are an integral part of
these consolidated financial statements.
IRIDEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BUSINESS OF THE COMPANY
Description of Business
IRIDEX Corporation is a leading worldwide provider of
semiconductor-based laser systems used to treat eye diseases in ophthalmology
and skin afflictions in dermatology.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Statement Presentation
The consolidated financial statements include our accounts and our
wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments purchased with
an original maturity of three months or less to be cash equivalents. The Company
invests primarily in money market funds and government paper; accordingly, these
investments are subject to minimal risks.
Available-for-Sale Securities
All marketable securities as of December 29, 2001 and December 30, 2000
are considered to be available-for-sale and therefore are carried at fair value.
Available-for-sale securities are classified as current assets when they have
scheduled maturities of less than one year. Available-for-sale securities are
classified as non current assets when they have scheduled maturities of more
than one year. Unrealized holding gains and losses on such securities are
reported net of related taxes as a separate component of stockholders' equity
until realized. Realized gains and losses on sales of all such securities are
reported in interest and other income and are computed using the specific
identification cost method.
Inventories
Inventories are stated at the lower of cost or market. Cost is
determined on a standard cost basis which approximates actual cost on a
first-in, first-out (FIFO) method. Lower of cost or market is evaluated by
considering obsolescence, excessive levels of inventory, deterioration and other
factors.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation
and amortization. Depreciation is provided on a straight-line basis over the
estimated useful lives of the assets, which is generally three years.
Amortization of leasehold improvements and property and equipment is computed
using the straight-line method over the estimated useful life of the related
assets, typically three years.
Revenue Recognition
Revenue from product sales is recognized upon receipt of a purchase
order and product shipment provided no significant obligations remain and
collection of the receivables is deemed probable. Up-front fees received in
connection with product sales are deferred and recognized over the associated
product shipments. The Company accrues for estimated warranty costs upon
shipment of products in accordance with SFAS No. 5, "Accounting for
Contingencies." Actual warranty costs incurred have not materially differed from
those accrued. The Company's warranty policy is effective for shipped products
which are considered defective or fail to meet the product specifications. We
analyze historical returns, current economic trends and changes in customer
demand and acceptance of our products when evaluating the adequacy of the sales
returns allowance. Significant management judgements and estimates must be made
and used in connection with establishing the sales returns and other allowances
in any accounting period.
Research and Development
Research and development expenditures are charged to operations as
incurred.
Advertising
We expense advertising costs as they are incurred. Advertising expenses
for 2001, 2000 and 1999 were $408,000, $478,000 and $359,000, respectively.
Fair Value of Financial Instruments
Carrying amounts of our financial instruments including cash and cash
equivalents, accounts receivable, accounts payable and accrued liabilities
approximate fair values due to their short maturities. Estimated fair values for
available-for-sale securities, which are separately disclosed elsewhere, are
based on quoted market prices for the same or similar instruments.
Income Taxes
Income taxes are accounted for under Statement of Financial Accounting
Standards (SFAS) No. 109, "Accounting for Income Taxes." Under SFAS No. 109,
deferred assets and liabilities are recognized for the future consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax basis. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. Valuation allowances are established when necessary to
reduce deferred tax assets to the amounts expected to be realized.
Accounting for Stock-based Compensation
The Company accounts for stock-based compensation arrangements in
accordance with provisions of Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees"("APB 25") and complies with the
disclosure provisions of Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation"("SFAS 123").
Under APB 25, compensation expense for grants to employees is based on
the difference, if any, on the date of the grant, between the fair value of the
Company's stock and the option's exercise price. SFAS 123 defines a "fair value"
based method of accounting for an employee stock option or similar equity
investment. The pro forma disclosure of the difference between compensation
expense included in net loss and the related cost measured by the fair value
method is presented in Note 6.
The Company accounts for equity instruments issued to non-employees in
accordance with the provisions of SFAS 123 and Emerging Issues Task Force Issue
No. 96-18, "Accounting for Equity Instruments that are Issued to Other Than
Employees, or in Conjunction with Selling Good and Services," and Financial
Accounting Standards Board Interpretation No. 28, "Accounting for Stock
Appreciation Rights and Other Variable Stock Option or Award Plan" ("FIN 28").
Concentration of Credit Risk and Other Risks and Uncertainties
Our cash and cash equivalents are deposited in demand and money market
accounts of three financial institutions. Deposits held with banks may exceed
the amount of insurance provided on such deposits. Generally these deposits may
be redeemed upon demand and therefore, bear minimal risk.
We market our products to distributors and end-users throughout the
world. Sales to international distributors are generally made on open credit
terms and letter of credit. Management performs ongoing credit evaluations of
our customers and maintains an allowance for potential credit losses.
Historically, we have not experienced any significant losses related to
individual customers or group of customers in any particular geographic area.
For the years ended December 29, 2001, December 30, 2000 and January 1, 2000 no
customer accounted for greater than 10% of revenue. As of December 29, 2001,
December 30, 2000 and January 1, 2000 no customer accounted for greater than 10%
of accounts receivable.
Our products require approvals from the Food and Drug Administration and
international regulatory agencies prior to commercialized sales. Our future
products may not receive required approvals. If we were denied such approvals,
or if such approvals were delayed, it would have a materially adverse impact on
our business, results of operations and financial condition.
Reliance on Certain Suppliers
Certain components and services used by the Company to manufacture and
develop its products are presently available from only one or a limited number
of suppliers or vendors. The loss of any of these suppliers or vendors would
potentially require a significant level of hardware and/or software development
to incorporate the products or services into the Company's products.
Use of Estimates
Management makes estimates and assumptions to prepare the consolidated
financial statements in conformity with generally accepted accounting
principles. These estimates and assumptions affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Reclassification
Certain prior year amounts have been reclassified to conform to the
current year's presentation. As a result of Iridex's disposal of it's Laser
Research segment in 2001, the Company's previously reported consolidated
financial statements for 2000 and 1999 have been reclassified to present the
discontinued Laser Research segment operations separate from continuing
operations. (See Note 11.)
Fiscal Year
Our fiscal year covers a 52 or 53 week period and ends on the Saturday
nearest December 31. Fiscal year 1999, 2000 and 2001 all included 52 weeks.
Net Income (loss) per Share
Basic and diluted net income per share are computed by dividing net
income (loss) for the period by the weighted average number of shares of common
stock outstanding during the period. The calculation of diluted net income
(loss) per share excludes potential common stock if their effect is
anti-dilutive. Potential common stock consists of incremental common shares
issuable upon the exercise of stock options.
Recent Accounting Pronouncements
In July 2001, the Financial Accounting Standards Board issued SFAS No.
141 "Business Combinations," which establishes financial accounting and
reporting for business combinations and supersedes APB Opinion No. 16, Business
Combinations, and FASB Statement No. 38, Accounting for Preacquisition
Contingencies of Purchased Enterprises. It requires that all business
combinations in the scope of this Statement are to be accounted for using one
method, the purchase method. The provisions of this Statement apply to all
business combinations initiated after June 30, 2001, and also applies to all
business combinations accounted for using the purchase method for which the date
of acquisition is July 1, 2001, or later. The Company believes that adoption of
the standard will not have a material effect on the financial position or
results of operations of the Company.
In July 2001, the Financial Accounting Standards Board issued SFAS No.
142 "Goodwill and Other Intangible Assets," which establishes financial
accounting and reporting for acquired goodwill and other
intangible assets and supercedes APB Opinion No. 17, Intangible Assets. It
addresses how intangible assets that are acquired individually or with a group
of other assets (but not those acquired in a business combination) should be
accounted for in financial statements upon their acquisition, after they have
been initially recognized in the financial statements. The provisions of this
Statement are effective starting with fiscal years beginning after December 15,
2001. The Company believes that SFAS No. 142 will not have a material effect on
the financial position or results of operation of the Company.
In October 2001, the Financial Accounting Standards Board issued SFAS
144 "Accounting for the Impairment or Disposal of Long-Lived Assets" that
develops one accounting model for long lived assets that are to be disposed of
by sales and requires long-lived assets that are to be disposed of by sales be
measured at the lower of book value or fair value less cost to sell.
Additionally, SFAS No. 144 expands the scope of discontinued operations to
include all components of an entity with operations that (1) can be
distinguished from the rest of the entity and (2) will be eliminated from the
ongoing operations of the entity in a disposal transaction. SFAS No. 144
supercedes SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets to
be Disposed Of." SFAS No. 144 applies to all long-lived assets (including
discontinued operations) and consequently amends Accounting Principles Board
Opinion No. 30 (APB 30), Reporting Results of Operations Reporting the Effects
of Disposal of a segment of a business. Management does not expect the adoption
of SFAS 144 to have a material impact on the Company's financial position and
results of operations.
3. BALANCE SHEET DETAIL
Available-for-sale securities (in thousands):
UNREALIZED ESTIMATED MATURITY
COST GAINS FAIR VALUE DATES
---------- --------- ---------- -----------
As of December 29, 2001, available-for-sale
securities consisted of the following:
Government agencies........................... $ 4,486 $ 3 $ 4,489 1/02--7/02
As of December 30, 2000, available-for-sale
securities consisted of the following:
Government agencies........................... $ 2,986 $ 10 $ 2,996 2/01--7/01
There were no realized capital gains or losses recognized in 2001, 2000 and
1999.
DECEMBER 29, DECEMBER 30,
2001 2000
------------ ------------
(IN THOUSANDS)
Inventories:
Raw materials and work in process..................... $ 8,078 $ 6,168
Finished goods........................................ 4,484 3,553
------- -------
Total inventories.................................. $12,562 $ 9,721
======= =======
Property and Equipment:
Equipment............................................. $ 3,202 $ 3,229
Leasehold improvements................................ 1,872 1,829
Less: accumulated depreciation and amortization....... (3,539) (3,155)
------- -------
Property and equipment, net........................ $ 1,535 $ 1,903
======= =======
Accrued Expenses:
Accrued payroll, vacation and related expenses........ $ 870 $ 1,057
Accrued warranty...................................... 582 728
Income taxes payable.................................. -- 404
Sales and use tax payable............................. 266 195
Deferred revenue...................................... 329 146
Other accrued expenses................................ 732 587
------- -------
Total accrued expenses............................. $ 2,779 $ 3,117
======= =======
4. BANK BORROWINGS
We have a revolving line of credit agreement with a bank expiring on
October 5, 2002, which provides for borrowings of up to $4.0 million at the
bank's prime rate (4.75% at December 29, 2001). The agreement contains
restrictive covenants including prohibiting payment of dividends without the
bank's prior consent. There were no borrowings against the credit line at
December 29, 2001.
5. COMMITMENTS AND CONTINGENCIES
Lease Agreements
We lease our operating facilities under a noncancelable operating lease.
The lease, which expires in 2002, was renewed for two years. Rent expense, net
of sublease income, totaled $498,000, $289,000 and $282,000 for the years ended
December 29, 2001, December 30, 2000 and January 1, 2000 respectively. Rental
income related to a facility sublease was $11,000, $262,000 and $183,000 for the
years ended December 29, 2001, December 30, 2000 and January 1, 2000,
respectively.
Future minimum lease payments under current operating leases at December
29, 2001 are summarized as follows (in thousands):
Fiscal Year Operating Lease Payments
----------- ------------------------
2002 650
2003 687
2004 115
------
$1,452
======
License Agreements
The Company is obligated to pay royalties equivalent to 5% and 7.5% of
sales on certain products under certain license agreements. Royalty expense was
$85,000, $21,000 and $42,000 for the years ended December 29, 2001, December 30,
2000 and January 1, 2000, respectively.
Contingencies
From time to time, the Company may be engaged in certain administrative
proceedings, incidental to its normal business activities. Management believes
that liabilities resulting from such proceedings, or claims which are pending or
known to be threatened, are adequately covered by liability insurance and will
not have a material adverse effect on the Company's financial position or
results of operations.
6. STOCKHOLDERS' EQUITY
CONVERTIBLE PREFERRED STOCK
Our Articles of Incorporation authorize 2,000,000 shares of undesignated
preferred stock. Preferred Stock may be issued from time to time in one or more
series. As of December 29, 2001, we had no preferred stock issued and
outstanding.
TREASURY STOCK
In December 1998, we instituted a stock repurchase program whereby up to
150,000 shares of our Common Stock may be repurchased in the open market. We
plan to utilize all of the reacquired shares for reissuance in connection with
our employee stock programs. We repurchased 76,000 shares of Common Stock for
$315,000 in 1999. In 2000, no shares of Common Stock were repurchased. In 2001,
we repurchased 27,000 shares of Common Stock for $115,000.
STOCK OPTION PLANS
Amended and Restated 1989 Incentive Stock Plan
The Amended and Restated 1989 Plan (the "1989 Plan") provided for the
grant of options and stock purchase rights to purchase shares of our Common
Stock to employees and consultants. The terms of the 1989 Plan, which expired in
August 1999, are substantially the same as the 1998 Plan described below.
1998 Stock Plan
The 1998 Stock Plan (the "1998 Plan") provides for the granting to
employees (including officers and employee directors) of incentive stock options
and for the granting to employees (including officers and employee directors)
and consultants of nonstatutory stock options and stock purchase rights
("SPRs"). The exercise price of incentive stock options and SPRs granted under
the 1998 Plan must be at least equal to the fair market value of the shares at
the time of grant. With respect to any recipient who owns stock possessing more
than 10% of the voting power of our outstanding capital stock, the exercise
price of any option or SPR
granted must be at least equal to 110% of the fair market value at the time of
grant. Options granted under the 1998 Plan are exercisable at such times and
under such conditions as determined by the Administrator; generally over a four
year period. The maximum term of incentive stock options granted to any
recipient must not exceed ten years; provided, however, that the maximum term of
an incentive stock option granted to any recipient possessing more than 10% of
the voting power of our outstanding capital stock must not exceed five years. In
the case of SPRs, unless the Administrator determines otherwise, we have a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with us for any reason (including death or
disability). Such repurchase option lapses at a rate determined by the
Administrator. The purchase price for shares repurchased by us is the original
price paid by the purchaser. The form of consideration for exercising an option
or stock purchase right, including the method of payment, is determined by the
Administrator. The 1998 Plan expires in June 2008.
1995 Director Option Plan
In October 1995, we adopted the 1995 Director Option Plan (the "Director
Plan"), under which members of the Board of Directors are granted options to
purchase 11,250 shares upon the first to occur of their appointment or the
adoption of the Director Plan ("First Option") and an option to purchase 3,750
shares ("Subsequent Option") on July 1 of each year thereafter provided that he
or she has served on the Board for at least the preceding six months. The
options granted are at fair market value on the date of grant. The First Option
becomes exercisable as to one-twelfth (1/12) of the shares subject to the First
Option for each quarter over a three-year period. Each Subsequent Option becomes
exercisable as to one-fourth (1/4) of the shares subject to the Subsequent
Option for each quarter, commencing one quarter after the First Option and any
previously granted Subsequent Options have become fully exercisable. Options
granted under the Director Plan have a term of 10 years.
In the event of our merger with or into another corporation, resulting
in a change of control, or the sale of substantially all of our assets, each
Director Plan option becomes exercisable in full and shall be exercisable for 30
days after written notice to the holder of the event causing the change in
control.
Unless terminated sooner, the Director Plan will terminate in 2005. The
Board has authority to amend or terminate the Director Plan, provided no such
amendment may impair the rights of any optionee without the optionee's consent.
1995 Employee Stock Purchase Plan
Our 1995 Employee Stock Purchase Plan (the "Purchase Plan") was adopted
by the Board of Directors in October 1995. On April 28, 1997, the shareholders
approved an amendment to increase the total number of shares of common stock for
issuance under the Purchase Plan from 50,000 to 100,000. The Purchase Plan
permits eligible employees (including officers and employee directors) to
purchase Common Stock through payroll deductions, which may not exceed 10% of an
employee's compensation. No employee may purchase more than $25,000 worth of
stock in any calendar year or more than 1,000 shares of Common Stock in any
twelve-month period. The price of shares purchased under the Purchase Plan is
85% of the lower of the fair market value of the Common Stock at the beginning
of the offering period or the end of the offering period. The Purchase Plan will
terminate in 2005, unless terminated sooner by the Board of Directors.
Information with respect to activity under these option plans are set
forth below (in thousands except share and per share data):
OUTSTANDING OPTIONS
-------------------------------------------------------
SHARES WEIGHTED
AVAILABLE NUMBER AGGREGATE AVERAGE
FOR GRANT OF SHARES PRICE EXERCISE PRICE
--------- ---------- --------- --------------
Balances, January 2, 1999 ........ 188,744 1,317,501 $ 5,419 $4.11
Additional shares reserved ..... 150,000 -- -- --
Options granted ................ (218,394) 218,394 1,128 5.16
Options exercised .............. (47,568) (107) 1.89
Options expired ................ (11,819)
Options terminated ............. 81,134 (81,134) (364) 4.45
------- --------- ------
Balances, January 1, 2000 ........ 189,665 1,407,193 $ 6,076 $4.31
Additional shares reserved ..... 260,000 -- -- --
Options granted ................ (384,700) 384,700 3,570 9.28
Options exercised .............. (120,173) (318) 2.64
Options expired ................ (82,560)
Options terminated ............. 181,407 (181,407) (1,036) 5.71
------- --------- ------
Balances, December 30, 2000 ...... 163,812 1,490,313 $ 8,292 $5.56
Additional shares reserved ..... 290,000 -- -- --
Options granted ................ (368,050) 368,050 1,512 4.11
Options exercised .............. (74,942) (100) 1.61
Options expired ................ (29,068)
Options terminated ............. 126,604 (126,604) (873) 7.07
------- --------- ------
Balances, December 29, 2001 ...... 183,298 1,656,817 $ 8,831 $5.34
======= ========= ======
The following table summarizes information with respect to stock options
outstanding at December 29, 2001:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
-------------------------------------------- ----------------------
WEIGHTED AVERAGE WEIGHTED WEIGHTED
NUMBER REMAINING AVERAGE NUMBER AVERAGE
RANGE OF OUTSTANDING CONTRACTUAL LIFE EXERCISE EXERCISABLE EXERCISE
EXERCISE PRICES AT 12/29/01 (YEARS) PRICE AT 12/29/01 PRICE
--------------- ----------- ---------------- -------- ----------- --------
$0.16 - $2.00 136,549 2.90 $1.17 136,549 $1.17
$3.71 - $3.71 203,800 9.55 3.71 0 0.00
$3.90 - $3.94 23,000 8.63 3.91 6,132 3.94
$4.00 - $4.00 457,086 5.77 4.00 387,425 4.00
$4.03 - $4.88 199,357 8.08 4.35 78,321 4.42
$5.00 - $5.75 178,925 6.99 5.46 110,825 5.55
$6.25 - $8.88 203,500 6.47 8.27 150,603 8.23
$9.00 - $9.25 189,600 8.29 9.09 80,246 9.10
$9.50 - $12.75 57,500 8.66 11.18 14,828 10.92
$14.88 - $14.88 7,500 4.50 14.88 7,500 14.88
--------- -------
$0.16 - $14.88 1,656,817 6.92 5.34 972,249 5.08
========= =======
At December 30, 2000 and January 1, 2000 options to purchase 762,123 and 624,025
shares of Common Stock were exercisable at weighted average exercise prices of
$4.29 and $3.53, respectively.
The following information concerning our stock option and employee stock
purchase plans is provided in accordance with SFAS No. 123, "Accounting for
Stock-Based Compensation." We account for such plans in accordance with
Accounting Principles Board No. 25 and related Interpretations.
The fair value of each option grant has been estimated on the date of
grant using the Black-Scholes multiple option pricing model with the following
weighted average assumptions:
2001 2000 1999
---------------- ----------------- ----------------
GROUP A GROUP B GROUP A GROUP B GROUP A GROUP B
------- ------- ------- ------- ------- -------
Risk-free Interest Rates.... 4.45% 4.40% 6.00% 6.19% 5.58% 5.34%
Expected Life from Date
of Vesting................ 3 yrs. 2 yrs. 3 yrs. 2 yrs. 3 yrs. 2 yrs.
Volatility.................. 0.90 0.90 0.78 0.78 0.78 0.78
Dividend Yield.............. -- -- -- -- -- --
The weighted average expected life was calculated based on the exercise
behavior of each group. Group A represents officers and directors who are a
smaller group holding a greater average number of options than other option
holders and who tend to exercise later in the vesting period. Group B are all
other option holders, virtually all of whom are employees. This group tends to
exercise earlier in the vesting period.
The weighted average grant-date fair value per share of those options
granted in 2001, 2000 and 1999 was $2.82, $5.96 and $3.37, respectively.
We have also estimated the fair value for the purchase rights issued
under our 1995 Employee Stock Purchase Plan, under the Black-Scholes valuation
model using the following assumptions for 2001, 2000 and 1999:
2001 2000 1999
--------- --------- ----------
Risk-free Interest Rates.... 4.63% 5.67% 4.91%
Expected Life............... 0.5 year 0.5 year 0.5 year
Volatility.................. 0.90 0.78 0.78
Dividend Yield.............. -- -- --
The weighted average grant-date fair value per share of those purchase
rights granted in 2001, 2000 and 1999 was $2.11, $2.94 and $1.55, respectively.
The following pro forma income (loss) information has been prepared following
the provisions of SFAS No. 123:
2001 2000 1999
------- ------ ------
(amounts in thousands
except per share data)
Net income (loss) -- as reported ...................... $(1,273) $2,416 $1,618
Net income (loss) -- pro forma ........................ $(2,000) $1,640 $ 768
Net income (loss) per common share -- as reported ..... $ (0.19) $ 0.36 $ 0.25
Net income (loss) per common share -- pro forma ....... $ (0.30) $ 0.25 $ 0.12
Diluted net income (loss) per common share --
as reported ........................................ $ (0.19) $ 0.33 $ 0.24
Diluted net income (loss) per common share --
pro forma .......................................... $ (0.30) $ 0.23 $ 0.11
7. EMPLOYEE BENEFIT PLAN
We have a plan known as the IRIS Medical Instruments 401(k) trust to
provide retirement benefits through the deferred salary deductions for
substantially all employees. Employees may contribute up to 15% of their annual
compensation to the plan, limited to a maximum amount set by the Internal
Revenue Service. The plan also provides for Company contributions at the
discretion of the Board of Directors. On April 1, 2000 the Company commenced a
Company match for the 401(k) in the amount of 50% of employee contributions up
to an annual maximum of $1,000 per year. The Company contributions in fiscal
2001 totaled $99,000. The Company contributions in fiscal 2000 totaled $64,000.
No contributions were made in fiscal 1999.
8. INCOME TAXES
The provision for income taxes includes:
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 29, DECEMBER 30, JANUARY 1,
2001 2000 2000
------------ ------------ -----------
(IN THOUSANDS)
Current:
Federal ....................... $(750) $855 $1,242
State ......................... -- 28 286
----- ---- ------
(750) 883 1,528
----- ---- ------
Deferred:
Federal ....................... (184) (96) (613)
State ......................... (28) 22 (233)
----- ---- ------
(212) (74) (846)
----- ---- ------
Income tax (benefit)
provision ................. $(962) $809 $ 682
===== ==== ======
The Company's effective tax rate differs from the statutory federal
income tax rate as shown in the following schedule:
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 29, DECEMBER 30, JANUARY 1,
2001 2000 2000
------------ ------------ ----------
Income tax provision (benefit) at statutory rate .... (34)% 34% 34%
State income taxes, net of federal benefit .......... (5)% 6% 6%
Tax exempt interest ................................. (3)% (3)% (3)%
Nondeductible permanent differences ................. 4% 0% 0%
Research and experimental credits ................... (28)% (10)% (10)%
Other ............................................... 4% 1% 5%
---- ---- ----
Effective tax rate .................................. (62)% 28% 32%
==== ==== ====
In 2001, the Company's effective rate was a benefit of 62% primarily as a
result of the level of tax credits for research and development activities
relative to the loss for 2001.
The tax effect of temporary differences and carry-forwards that give
rise to significant portions of the net deferred tax assets are presented below
(in thousands):
DECEMBER 29, DECEMBER 30,
2001 2000
------------ ------------
Fixed assets ........................................ $ 304 $ 487
Accrued liabilities ................................. 419 467
Allowance for excess and obsolete inventories ....... 287 151
Research credit ..................................... 437 329
State tax ........................................... 1 --
Allowance for doubtful accounts ..................... 127 186
Other ............................................... 349 (28)
------ -------
Net deferred tax asset .............................. $1,924 $ 1,592
====== =======
9. MAJOR CUSTOMERS AND BUSINESS SEGMENTS
We operate in two reportable segments: the ophthalmology medical device
segment and the dermatology medical device segment. In both segments, we
develop, manufacture and market medical devices. Our revenues arise from the
sale of consoles, delivery devices, disposables and service and support
activities.
In the years ended December 29, 2001, December 30, 2000 and January 1,
2000, no customer individually accounted for more than 10% of our revenue.
Revenue information shown in thousands by geographic region is as
follows:
DECEMBER 29, DECEMBER 30, JANUARY 1,
2001 2000 2000
------------ ------------ ----------
United States .............. $16,004 $21,133 $16,134
Europe ..................... 5,530 5,475 4,611
Rest of Americas ........... 809 1,283 1,689
Asia/Pacific Rim ........... 4,932 4,947 3,957
------- ------- -------
$27,275 $32,838 $26,391
======= ======= =======
Revenues are attributed to countries based on location of customers.
In the years ended December 29, 2001, January 1, 2000 and January 1,
2000, no country individually accounted for more than 10% of our sales, except
for the United States, which accounted for 58.7 % of sales in 2001, 64.4% in
2000 and 61.1% in 1999.
Information on reportable segments for the three years ended December
29, 2001, December 30, 2000 and January 1, 2000 is as follows:
YEAR ENDED DECEMBER 29, 2001 YEAR ENDED DECEMBER 30, 2000 YEAR ENDED JANUARY 1, 2000
----------------------------------- ------------------------------------ -------------------------------------
Ophthalmology Dermatology Ophthalmology Dermatology Ophthalmology Dermatology
Medical Medical Medical Medical Medical Medical
Devices Devices Total Devices Devices Total Devices Devices Total
------------- ----------- -------- ------------- ----------- ------- ------------- ----------- -------
Sales $20,922 $6,353 $ 27,275 $27,065 $5,773 $32,838 $19,197 $7,194 $26,391
Direct Cost of
Goods Sold 6,772 2,595 9,367 7,796 2,051 9,847 5,907 2,054 7,961
------- ------ -------- ------- ------ ------- ------- ------ -------
Direct Gross
Margin 14,150 3,758 17,908 19,269 3,722 22,991 13,290 5,140 18,430
Total Unallocated
Costs -- -- 19,471 -- -- 20,102 -- -- 16,301
Pre-tax income
(loss) $ (1,563) $ 2,889 $ 2,129
Indirect costs of manufacturing, research and development and selling,
general and administrative costs are not allocated to the segments.
The Company's assets and liabilities are not evaluated on a segment
basis. Accordingly, no disclosure on segment assets and liabilities is provided.
10. COMPUTATION OF NET INCOME PER COMMON SHARE AND PER DILUTED COMMON SHARE
A reconciliation of the numerator and denominator of net income per
common share and diluted net income per common share is provided as follows (in
thousands, except per share amounts):
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 29, DECEMBER 30, JANUARY 1,
2001 2000 2000
------------ ------------ ----------
Numerator -- Net income (loss) per common share and
per diluted common share
Net income (loss) .............................................. $(1,273) $2,416 $1,618
======= ====== ======
Denominator -- Net income (loss) per common share
Weighted average common stock outstanding ................... 6,757 6,637 6,503
======= ====== ======
Net income (loss) per common share ............................. $ (0.19) $ 0.36 $ 0.25
======= ====== ======
Denominator -- Diluted net income (loss) per common share
Weighted average common stock outstanding ................... 6,757 6,637 6,503
Effect of dilutive securities
Weighted average common stock options ....................... -- 648 346
------- ------ ------
Total weighted average stock and options outstanding ........... 6,757 7,285 6,849
======= ====== ======
Diluted net income (loss) per common share .................. $ (0.19) $ 0.33 $ 0.24
======= ====== ======
During 2000 and 1999, there were 62,930, and 431,077 outstanding options to
purchase shares, respectively, at a weighted average exercise price of $9.82,
and $5.28 per share, respectively, were not included in the computations of
diluted net income per common share since, in each, case the exercise price of
the common shares exceeded the market price of the related options. During 2001,
options to purchase 1,656,817 shares at a weighted average exercise price of
$5.34 were outstanding but were not included in the computation of diluted net
loss per common share because their effect was antidilutive. These options could
dilute earnings per share in future periods.
11. SELECTED QUARTERLY FINANCIAL DATA, (UNAUDITED)
QUARTER
--------------------------------------------
FIRST SECOND THIRD FOURTH
------- ------ ------ ------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Year Ended December 29, 2001
Sales .............................................. $ 5,735 $7,088 $6,750 $7,702
Gross profit ....................................... $ 2,363 $3,697 $3,498 $3,512
Income (loss) from continuing operations ........... $ (924) $ 11 $ 171 $ 141
Income (loss) from discontinued operations ......... $ (893) $ -- $ -- $ 221
Net income (loss) .................................. $(1,817) $ 11 $ 171 $ 362
Net income (loss) per common share ................. $ (0.27) $ 0.00 $ 0.03 $ 0.05
Diluted income (loss) from continuing operations
per common share ................................. $ (0.14) $ 0.00 $ 0.02 $ 0.02
Diluted income (loss) from discontinued operations
per common share ................................. $ (0.13) $ 0.00 $ 0.00 $ 0.03
Diluted net income (loss) per common share ......... $ (0.27) $ 0.00 $ 0.02 $ 0.05
Year Ended December 30, 2000
Sales(1) ........................................... $ 7,996 $8,818 $8,213 $7,811
Gross profit(1) .................................... $ 4,659 $5,147 $4,441 $4,085
Income (loss) from continuing operations ........... $ 644 $ 790 $ 422 $ 224
Income (loss) from discontinued operations ......... $ 109 $ (32) $ 172 $ 87
Net income (loss) .................................. $ 711 $ 716 $ 561 $ 428
Net income (loss) per common share ................. $ 0.11 $ 0.11 $ 0.08 $ 0.06
Diluted income (loss) from continuing operations
per common share ................................. $ 0.09 $ 0.10 $ 0.06 $ 0.05
Diluted income (loss) from discontinued operations
per common share ................................. $ 0.00 $ 0.00 $ 0.02 $ 0.01
Diluted net income (loss) per common share ......... $ 0.09 $ 0.10 $ 0.08 $ 0.06
(1) Sales and Cost of Sales amounts for 2000 have been revised to reflect impact
of discontinued operations.
12. DISCONTINUED OPERATIONS
In April 2001, we discontinued our Laser Research segment. In the first
quarter of 2001, we recorded a loss of $893,000 (net of a $542,000 tax benefit).
In the fourth quarter of 2001, we adjusted the loss on discontinued operations
to $672,000 (net of a $439,000 tax benefit). Revenues for
this segment were $599,000 for 2000 and $460,000 for 1999. Costs and operating
expenses of the Laser Research segment were $132,000 for 2000 and $209,000 for
1999. Sales, general and administrative costs and indirect costs of
manufacturing historically were not allocated to the Laser Research segment.
12. SUBSEQUENT EVENTS
On January 13, 2002 a customer announced that the phase III clinical
trial of SnET2, a photodynamic drug activated by the OcuLight 664 laser system
for use in the treatment of wet AMD, did not meet the primary efficacy endpoint
of the study. As a result, the Company included a pretax charge in the fourth
quarter to cost of sales of $287,000 to reserve inventory associated with the
OcuLight 664 system.
Exhibits Exhibit Title
-------- -------------
23.1 Consent of Price WaterhouseCoopers LLP, Independent Accountants
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Mountain View, State of California, on 10th day of April, 2002.
IRIDEX CORPORATION
By: /s/ Robert Kamenski
------------------------------------------
Robert Kamenski
Chief Financial Officer and Vice
President, Administration
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Theodore A. Boutacoff and Robert
Kamenski, jointly and severally, their attorney-in-fact, each with full power of
substitution, for him in any and all capacities, to sign on behalf of the
undersigned any amendments to this Report on Form 10-K, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, and each of the undersigned does hereby
ratifying and confirming all that each of said attorneys-in-fact, of his
substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons in the capacities and on
the dates indicated.
/s/ * President, Chief Executive Officer, and April 10, 2002
---------------------------------- Director (Principal Executive Officer)
(Theodore A. Boutacoff)
/s/ Robert Kamenski Chief Financial Officer and Vice April 10, 2002
---------------------------------- President, Administration (Principal
(Robert Kamenski) Financial and Accounting Officer)
/s/ * Vice President, Corporate Business April 10, 2002
---------------------------------- Development and Director
(James L. Donovan)
/s/ * Director April 10, 2002
----------------------------------
(Robert K. Anderson)
/s/ * Director April 10, 2002
----------------------------------
(Donald L. Hammond)
/s/ * Director April 10, 2002
----------------------------------
(Joshua Makower)
/s/ * Chairman of the Board April 10, 2002
----------------------------------
(John M. Nehra)
*By: /s/ Robert Kamenski
-------------------------------
Attorney-in-Fact
-61-
EXHIBIT INDEX
Exhibits Exhibit Title
-------- -------------
23.1 Consent of Price WaterhouseCoopers LLP, Independent Accountants