IRVINE, Calif., Aug. 8, 2019 /PRNewswire/ -- BIOLASE,
Inc. (NASDAQ: BIOL), the global leader in dental lasers, today
reported net revenue of $8.7 million
for the second quarter ended June 30,
2019, a decrease of 29% compared to the second quarter of
2018.
Second Quarter Highlights
- New customer growth, reduced expenses and a favorable change
in product mix led to gross margin expansion of almost 370 basis
points
- Operating expenses decreased 25% year over year
- Operating loss decreased 29% year over year
- U.S. consumables and other revenue increased 2% year over
year
- Model market laser revenue, which includes Southern California and Dallas/Ft. Worth, increased 31% year over
year
"Our second quarter performance reflects the impact of changes
we made to drive our go-to-market strategy and strengthen the
long-term growth prospects and profitability of our business," said
Todd Norbe, President and Chief
Executive Officer. "We are realigning our direct sales team to
achieve these goals and have added new sales talent by actively
recruiting through a new assessment process to hire the right
personnel. During the second quarter, we also discontinued
our imaging business that was selling at a loss and took steps to
hold pricing and eliminate extended payment terms in our
international business."
"At the same time, we saw continued growth in our Model Market
revenue, which increased 31% year over year in the second quarter.
We had great success with a new go-to-market sales strategy that we
rolled out to the pediatric markets in Los Angeles/Orange
County and Dallas. For this
new program, we increased training and collaboration with the
customer that resulted in a more than 60% increase in our customer
acquisition. We expect to roll out this initiative in additional
select geographic areas in the U.S. in the fourth quarter and are
optimistic about this exciting new sales program, which is about
putting education first."
"Through the prudent cost reductions, we were able to reduce our
operating expenses by 25% and increase gross margin by almost 370
basis points in the second quarter despite lower revenue. The
combination of our revenue-driving initiatives, improved gross
margin and operating performance positions us well to being EBITDA
positive in the fourth quarter of this year."
2019 Second Quarter Financial Results
Net revenue for the second quarter of 2019 was $8.7 million, a decrease of $3.5 million, compared to net revenue of
$12.2 million for the second quarter
of 2018. U.S. laser revenue was $2.9
million for the second quarter of 2019, a $1 million decrease compared to U.S. laser
revenue of $3.9 million for the
second quarter of 2018. U.S. consumables and other revenue for the
second quarter of 2019, which consists of revenue from consumable
products such as disposable tips, increased 2% compared to the
second quarter of 2018. Outside the U.S., laser revenue declined to
$2.0 million for the second quarter
of 2019 compared to $4.0 million for
the second quarter of 2018, primarily due to generating an order
backlog from international distributors as we continue to seek more
favorable pricing and payment terms.
Gross margin for the second quarter of 2019 was 39%, compared to
35% for second quarter of 2018. The higher gross margin reflects
new customer growth, reduced expenses and a favorable change in
product mix with an increase in laser sales, which have a higher
margin than the Company's other product offerings. Total operating
expenses were $6.7 million for the
second quarter of 2019 compared to $9.0
million for the second quarter of 2018, a decrease of
$2.3 million. Operating loss for the
second quarter of 2019, was $3.3
million, compared to an operating loss of $4.7 million for the second quarter of 2018, a
decrease of $1.4 million year over
year. Net loss for the second quarter of 2019 was $3.9 million, or $0.18 per share, compared to a net loss of
$4.9 million, or $0.24 per share for the second quarter of
2018.
Cash, cash equivalents, and restricted cash totaled $4.0 million as of June
30, 2019.
Use of Non-GAAP Measures
The Reconciliation of GAAP Net Loss to Non-GAAP Net Loss table
at the end of this news release provides the details of the
Company's non-GAAP disclosures and the reconciliation of GAAP net
loss and net loss per share to the Company's non-GAAP net loss and
net loss per share.
The non-GAAP net loss for the second quarter of 2019 was
$2.8 million, or $0.13 per share compared with a non-GAAP net loss
of $4.1 million, or $0.20 per share for the second quarter of
2018.
Conference Call Information
BIOLASE, Inc. will host a conference call today at 4:30 p.m. Eastern Time to discuss its operating
results for the second quarter ended June
30, 2019, and to answer questions. For both "listen-only"
participants and those participants who wish to take part in the
question-and-answer portion of the call, the dial-in number in the
U.S./Canada is 877-407-4019. For
international participants outside the U.S./Canada, the dial-in number is 201-689-8337.
For all callers, refer to the Conference ID 13687240. To access the
live webcast, visit the Investor Relations section of the BIOLASE
website at www.biolase.com and see "Investor Events".
An audio archive of the webcast will be available for 30 days on
the Investor Relations section of the BIOLASE website.
About BIOLASE
BIOLASE is a medical device company that develops, manufactures,
markets, and sells laser systems in dentistry and medicine and also
markets, sells, and distributes dental imaging equipment, including
three-dimensional CAD/CAM intra-oral scanners and digital dentistry
software. BIOLASE's products advance the practice of dentistry
and medicine for patients and healthcare professionals.
BIOLASE's proprietary laser products incorporate approximately
153 patented and 80 patent-pending technologies designed to provide
biologically clinically superior performance with less pain and
faster recovery times. BIOLASE's innovative products provide
cutting-edge technology at competitive prices to deliver superior
results for dentists and patients. BIOLASE's principal
products are revolutionary dental laser systems that perform a
broad range of dental procedures, including cosmetic and complex
surgical applications, and a full line of dental imaging equipment.
BIOLASE has sold over 39,600 laser systems to date in over 80
countries around the world. Laser products under development
address BIOLASE's core dental market and other adjacent
medical and consumer applications.
For updates and information on Waterlase iPlus®, Waterlase
Express™, and laser dentistry, find BIOLASE online
at www.biolase.com, Facebook at www.facebook.com/biolase,
Twitter at www.twitter.com/biolaseinc, Instagram
at www.instagram.com/waterlase_laserdentistry, and LinkedIn
at www.linkedin.com/company/biolase.
BIOLASE®, Waterlase® and Waterlase iPlus® are registered
trademarks of BIOLASE, Inc.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements, as that
term is defined in the Private Litigation Reform Act of 1995, that
involve significant risks and uncertainties, including statements
regarding the anticipated roll out of new go-to-market sales
strategies, the Company's efforts to achieve its goal of becoming
EBITDA positive. Forward-looking statements can be identified
through the use of words such as "anticipates," "expects,"
"intends," "plans," "believes," "seeks," "estimates," "may,"
"will," "should," and variations of these words or similar
expressions. Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect BIOLASE's current
expectations and speak only as of the date of this release. Actual
results may differ materially from BIOLASE's current expectations
depending upon a number of factors. These factors include,
among others, adverse changes in general economic and market
conditions, competitive factors including but not limited to
pricing pressures and new product introductions, uncertainty of
customer acceptance of new product offerings and market changes,
risks associated with managing the growth of the business, and
those other risks and uncertainties that are described, from
time-to-time, in the "Risk Factors" section of BIOLASE's annual
reports filed on Form 10-K with the Securities and Exchange
Commission. Except as required by law, BIOLASE does not undertake
any responsibility to revise or update any forward-looking
statements.
Tables to Follow
BIOLASE,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(Unaudited)
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30
|
|
June
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net
revenue
|
$
|
8,645
|
|
$
|
12,154
|
|
$
|
18,971
|
|
$
|
22,174
|
Cost of
revenue
|
|
5,265
|
|
|
7,846
|
|
|
12,070
|
|
|
14,833
|
Gross
profit
|
|
3,380
|
|
|
4,308
|
|
|
6,901
|
|
|
7,341
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
3,272
|
|
|
4,657
|
|
|
7,151
|
|
|
8,548
|
General and
administrative
|
|
2,511
|
|
|
2,969
|
|
|
4,903
|
|
|
6,006
|
Engineering and
development
|
|
1,124
|
|
|
1,361
|
|
|
2,549
|
|
|
2,650
|
Change in fair value
of patent litigation settlement liability
|
|
(190)
|
|
|
—
|
|
|
—
|
|
|
—
|
Total operating
expenses
|
|
6,717
|
|
|
8,987
|
|
|
14,603
|
|
|
17,204
|
Loss from
operations
|
|
(3,337)
|
|
|
(4,679)
|
|
|
(7,702)
|
|
|
(9,863)
|
Loss (gain) on foreign
currency transactions
|
|
5
|
|
|
187
|
|
|
48
|
|
|
(20)
|
Interest expense,
net
|
|
529
|
|
|
35
|
|
|
1,007
|
|
|
47
|
Non-operating
loss
|
|
534
|
|
|
222
|
|
|
1,055
|
|
|
27
|
Loss before income
tax provision
|
|
(3,871)
|
|
|
(4,901)
|
|
|
(8,757)
|
|
|
(9,890)
|
Income tax
provision
|
|
28
|
|
|
10
|
|
|
42
|
|
|
42
|
Net loss
|
$
|
(3,899)
|
|
$
|
(4,911)
|
|
$
|
(8,799)
|
|
$
|
(9,932)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.18)
|
|
$
|
(0.24)
|
|
$
|
(0.41)
|
|
$
|
(0.48)
|
Diluted
|
$
|
(0.18)
|
|
$
|
(0.24)
|
|
$
|
(0.41)
|
|
$
|
(0.48)
|
Shares used in the
calculation of net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
21,595
|
|
|
20,538
|
|
|
21,366
|
|
|
20,504
|
Diluted
|
|
21,595
|
|
|
20,538
|
|
|
21,366
|
|
|
20,504
|
BIOLASE,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
2019
|
|
2018
|
|
(unaudited)
|
|
(unaudited)
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
3,720
|
|
$
|
8,044
|
Restricted
cash
|
|
312
|
|
|
312
|
Accounts receivable,
less allowance of $952 and $850 in 2019 and 2018, respectively
|
|
9,740
|
|
|
11,112
|
Inventory
|
|
12,334
|
|
|
12,248
|
Prepaid expenses and
other current assets
|
|
952
|
|
|
1,591
|
Total current
assets
|
|
27,058
|
|
|
33,307
|
Property, plant and
equipment, net
|
|
1,585
|
|
|
1,975
|
Goodwill
|
|
2,926
|
|
|
2,926
|
Other
assets
|
|
793
|
|
|
308
|
Total
assets
|
$
|
32,362
|
|
$
|
38,516
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
5,878
|
|
$
|
5,953
|
Accrued
liabilities
|
|
4,899
|
|
|
7,538
|
Deferred
revenue
|
|
2,513
|
|
|
2,476
|
Total current
liabilities
|
|
13,290
|
|
|
15,967
|
Deferred income
taxes, net
|
|
72
|
|
|
77
|
Warranty
accrual
|
|
735
|
|
|
447
|
Other
liabilities
|
|
1,145
|
|
|
100
|
Term loan
|
|
13,328
|
|
|
10,836
|
Total
liabilities
|
|
28,570
|
|
|
27,427
|
Stockholders'
equity:
|
|
|
|
|
|
Preferred stock, par
value $0.001 per share
|
|
—
|
|
|
—
|
Common stock, par
value $0.001 per share
|
|
22
|
|
|
21
|
Additional paid-in
capital
|
|
229,972
|
|
|
228,430
|
Accumulated other
comprehensive loss
|
|
(711)
|
|
|
(670)
|
Accumulated
deficit
|
|
(225,491)
|
|
|
(216,692)
|
Total stockholders'
equity
|
|
3,792
|
|
|
11,089
|
Total liabilities
and stockholders' equity
|
$
|
32,362
|
|
$
|
38,516
|
BIOLASE,
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited, in
thousands)
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
June
30,
|
|
2019
|
|
2018
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
Net loss
|
$
|
(8,799)
|
|
$
|
(9,932)
|
Adjustments to
reconcile net loss to net cash and cash equivalents
used in operating activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
529
|
|
|
509
|
Provision for bad
debts
|
|
111
|
|
|
230
|
Provision for sales
allowance
|
|
—
|
|
|
59
|
Amortization of debt
discounts
|
|
109
|
|
|
17
|
Amortization of debt
issuance costs
|
|
86
|
|
|
25
|
Stock-based
compensation
|
|
1,204
|
|
|
1,258
|
Deferred income
taxes
|
|
(5)
|
|
|
2
|
Earned interest
income, net
|
|
—
|
|
|
(1)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable
|
|
1,263
|
|
|
(504)
|
Inventory
|
|
(86)
|
|
|
(1,769)
|
Prepaid expenses and
other current assets
|
|
644
|
|
|
105
|
Accounts payable and
accrued liabilities
|
|
(1,720)
|
|
|
2,074
|
Deferred
revenue
|
|
37
|
|
|
(418)
|
Net cash and cash
equivalents used in operating activities
|
|
(6,627)
|
|
|
(8,345)
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
Purchases of property,
plant, and equipment
|
|
(125)
|
|
|
(110)
|
Net cash and cash
equivalents used in investing activities
|
|
(125)
|
|
|
(110)
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
Principal payments
under capital lease obligation
|
|
—
|
|
|
(46)
|
Borrowings under lines
of credit
|
|
—
|
|
|
1,823
|
Payments under line of
credit
|
|
—
|
|
|
(1,823)
|
Borrowings under term
loan
|
|
2,500
|
|
|
—
|
Payments of debt
issuance costs
|
|
(38)
|
|
|
(87)
|
Payments of equity
offering costs
|
|
—
|
|
|
(138)
|
Proceeds from exercise
of stock options
|
|
4
|
|
|
2
|
Net cash and cash
equivalents provided by (used in) financing activities
|
|
2,466
|
|
|
(269)
|
Effect of exchange
rate changes
|
|
(38)
|
|
|
(26)
|
Decrease in cash, cash
equivalents and restricted cash
|
|
(4,324)
|
|
|
(8,750)
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
8,356
|
|
|
11,896
|
Cash, cash equivalents
and restricted cash, end of period
|
$
|
4,032
|
|
$
|
3,146
|
Supplemental cash
flow disclosure:
|
|
|
|
|
|
Cash paid for
interest
|
$
|
831
|
|
$
|
—
|
Cash paid for income
taxes
|
$
|
12
|
|
$
|
15
|
Cash paid for
operating leases
|
$
|
414
|
|
$
|
—
|
Non-cash accrual for
capital expenditures
|
$
|
17
|
|
$
|
—
|
Non-cash right-of-use
assets obtained in exchange for lease obligation
|
$
|
824
|
|
$
|
—
|
Warrants issued in
connection with debt instruments
|
$
|
209
|
|
$
|
—
|
Non-GAAP Disclosure
In addition to the financial information prepared in conformity
with generally accepted accounting principles in the U.S. ("GAAP"),
this press release includes certain historical non-GAAP financial
information. Management believes that these non-GAAP financial
measures assist investors in making comparisons of period-to-period
operating results and that, in some respects, these non-GAAP
financial measures are more indicative of the Company's ongoing
core operating performance than their GAAP equivalents.
Non-GAAP net loss is defined as net loss before interest, taxes,
depreciation and amortization, and stock-based compensation.
Management uses non-GAAP net loss in its evaluation of the
Company's core results of operations and trends between fiscal
periods and believes that these measures are important components
of its internal performance measurement process. Therefore,
investors should consider non-GAAP financial measures in addition
to, and not as a substitute for, or as superior to, measures of
financial performance prepared in accordance with GAAP. Further,
the non-GAAP financial measures presented by the Company may be
different from similarly named non-GAAP financial measures used by
other companies.
BIOLASE,
INC.
|
Reconciliation of
GAAP Net Loss to Non-GAAP Net Loss
|
(Unaudited)
|
(In thousands,
except per share data)
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP net loss
attributable to common stockholders
|
$
|
(3,899)
|
|
$
|
(4,911)
|
|
$
|
(8,799)
|
|
$
|
(9,932)
|
Deemed dividend on
convertible preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
GAAP net
loss
|
$
|
(3,899)
|
|
$
|
(4,911)
|
|
$
|
(8,799)
|
|
$
|
(9,932)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
529
|
|
|
35
|
|
|
1,007
|
|
|
47
|
Income tax
provision
|
|
28
|
|
|
10
|
|
|
42
|
|
|
42
|
Depreciation and
amortization
|
|
268
|
|
|
246
|
|
|
529
|
|
|
509
|
Change in fair value
of patent litigation settlement liability
|
|
(190)
|
|
|
—
|
|
|
—
|
|
|
—
|
Stock-based
compensation
|
|
447
|
|
|
557
|
|
|
1,204
|
|
|
1,258
|
Non-GAAP net
loss
|
$
|
(2,817)
|
|
$
|
(4,063)
|
|
$
|
(6,017)
|
|
$
|
(8,076)
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss
attributable to common stockholders per share, basic and diluted
|
$
|
(0.18)
|
|
$
|
(0.24)
|
|
$
|
(0.41)
|
|
$
|
(0.48)
|
Deemed dividend on
convertible preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
GAAP net loss per
share, basic and diluted
|
$
|
(0.18)
|
|
$
|
(0.24)
|
|
$
|
(0.41)
|
|
$
|
(0.48)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
0.03
|
|
|
—
|
|
|
0.05
|
|
|
—
|
Income tax
provision
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Depreciation and
amortization
|
|
0.01
|
|
|
0.01
|
|
|
0.02
|
|
|
0.02
|
Change in fair value
of patent litigation settlement liability
|
|
(0.01)
|
|
|
—
|
|
|
—
|
|
|
—
|
Stock-based
compensation
|
|
0.02
|
|
|
0.03
|
|
|
0.06
|
|
|
0.06
|
Non-GAAP net loss per
share, basic and diluted
|
$
|
(0.13)
|
|
$
|
(0.20)
|
|
$
|
(0.28)
|
|
$
|
(0.40)
|
BIOLASE,
INC.
|
GAAP Net Revenue
Less Imaging Systems
|
(Unaudited, in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net
revenue
|
$
|
8,645
|
|
$
|
12,154
|
|
$
|
18,971
|
|
$
|
22,174
|
Imaging systems
revenue
|
|
(63)
|
|
|
(371)
|
|
|
(615)
|
|
|
(954)
|
Net revenue excluding
imaging systems
|
$
|
8,582
|
|
$
|
11,783
|
|
$
|
18,356
|
|
$
|
21,220
|
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SOURCE BIOLASE, Inc.