IRVINE, Calif., May 7, 2020 /PRNewswire/ -- BIOLASE,
Inc. (NASDAQ: BIOL), the global leader in dental lasers, today
announced its financial results for the first quarter ended
March 31, 2020.
"Our go-to-market strategy was demonstrating meaningful progress
prior to the COVID-19 pandemic, reflecting the changes we made
throughout 2019 to better align our business and operating
infrastructure," said Todd Norbe,
President and Chief Executive Officer. "However, we had
to adjust our operations in response to the closure of most dental
offices during the second half of the quarter, and this business
disruption had a significant negative impact on our financial
results, as we sold a limited number of lasers in March, which is
historically our strongest month of the quarter. In an effort
to maintain our presence with key constituencies to preserve these
revenue opportunities, we quickly pivoted to increasing the number
of online educational forums to showcase our industry-leading
products, which have been extremely well attended. Based on
the enthusiasm and positive feedback received, we are hopeful that
these educational events will result in additional sales leads that
we can capitalize on once dentists resume their normal business
practices.
"Additionally, we recently announced a partnership with an
intensive care unit (ICU) equipment manufacturer to supply
ICU-grade portable ventilators through BIOLASE's FDA-registered
manufacturing facility. We have experienced a steady rate of
activity and to date we have received over $14 million in orders."
2020 First Quarter Financial Results
Net revenue for the first quarter of 2020 was $4.7 million, a decrease of 54%, compared to net
revenue of $10.3 million for first
quarter of 2019. U.S. laser revenue was $1.0
million for the first quarter of 2020, a 62% decrease
compared to U.S. laser revenue of $2.6
million for the first quarter of 2019. U.S. consumables and
other revenue for the first quarter of 2020, which consists of
revenue from consumable products such as disposable tips, decreased
28% compared to the first quarter of 2019. Outside the U.S., laser
revenue declined 68% to $1.1 million
for the first quarter of 2020 compared to $3.4 million for the first quarter of 2019 and
consumables and other revenue decreased 28% year over year.
Gross margin for the first quarter of 2020 was 28%, compared to
34% for first quarter of 2019. The lower gross margin reflects the
impact of the decline in revenues relative to our fixed costs.
Total operating expenses were $6.7
million for the first quarter of 2020 compared to
$7.9 million for the first quarter of
2019, a decrease of over 15%. Operating loss for the first quarter
of 2020, was $5.4 million, compared
to an operating loss of $4.4 million
in the first quarter of 2019, an increase of 23% year over year.
Net loss for the first quarter of 2020 was $6.0 million, or $0.19 per share, compared to a net loss of
$4.9 million, or $0.23 per share, for the first quarter of
2019.
Cash, cash equivalents, and restricted cash totaled $1.8 million as of March
31, 2020.
After the end of the first quarter, BIOLASE applied for and
received a $3.0 million loan from the
Paycheck Protection Program ("PPP"). The PPP was initiated to help
small businesses defined as those businesses in the US with under
500 employees. BIOLASE has approximately 150 employees and is well
under the 500 employee defined maximum. In addition, BIOLASE
believes the PPP was intended to help small businesses like BIOLASE
mitigate the impact of significant lost business during the
COVID-19 economic shutdown and to help keep as many people employed
as possible. Given the existing market environment, BIOLASE did not
believe that it could access public equity markets to raise cash to
help make up for the significant lost revenue BIOLASE experienced
during the first quarter of 2020 and likely to continue into the
second quarter of 2020.
Additionally, both BIOLASE's President and Chief Executive
Office and Chief Financial Officer took temporary 40% salary cuts
in connection with COVID-19 cost reduction measures.
Use of Non-GAAP Measures
The Reconciliation of GAAP Net Loss to Adjusted EBITDA 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 Adjusted EBITDA and Adjusted
EBITDA per share.
Adjusted EBITDA for the first quarter of 2020 was $3.6 million, or $0.11 per share, compared with Adjusted EBITDA of
$3.2 million, or $0.15 per share, for the first quarter of
2019.
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 first quarter ended March
31, 2020, 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 800-353-6461. For
international participants outside the U.S./Canada, the dial-in number is 334-323-0501.
For all callers, refer to the Conference ID 6799229. 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.
BIOLASE's products advance the practice of dentistry and
medicine for patients and healthcare
professionals. BIOLASE's proprietary laser products
incorporate approximately patented 261 and 52 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 41,200 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,
predictions, or expectations regarding BIOLASE's revenue during the
second quarter of 2020. Forward-looking statements can be
identified through the use of words such as may," "might," "will,"
"intend," "should," "could," "can," "would," "continue," "expect,"
"believe," "anticipate," "estimate," "predict," "outlook,"
"potential," "plan," "seek," and similar expressions and variations
or the negatives of these terms or other comparable terminology.
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, the coronavirus (COVID-19) and the effects of the
outbreak and actions taken in connection therewith, 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 in the "Risk Factors" section of
BIOLASE's annual report filed on Form 10-K filed 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
|
|
|
|
March
31,
|
|
|
|
2020
|
|
|
2019
|
|
Net
revenue
|
|
|
|
4,783
|
|
|
|
|
10,326
|
|
Cost of
revenue
|
|
|
|
3,430
|
|
|
|
|
6,804
|
|
Gross
profit
|
|
|
|
1,353
|
|
|
|
|
3,522
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
|
|
2,704
|
|
|
|
|
3,879
|
|
General and
administrative
|
|
|
|
3,010
|
|
|
|
|
2,393
|
|
Engineering and
development
|
|
|
|
991
|
|
|
|
|
1,424
|
|
Change in fair value
of patent litigation settlement liability
|
|
|
|
—
|
|
|
|
|
190
|
|
Total operating
expenses
|
|
|
|
6,705
|
|
|
|
|
7,886
|
|
Loss from
operations
|
|
|
|
(5,352)
|
|
|
|
|
(4,364)
|
|
Loss on foreign
currency transactions
|
|
|
|
84
|
|
|
|
|
43
|
|
Interest expense,
net
|
|
|
|
589
|
|
|
|
|
478
|
|
Non-operating
loss
|
|
|
|
673
|
|
|
|
|
521
|
|
Loss before income
tax provision
|
|
|
|
(6,025)
|
|
|
|
|
(4,885)
|
|
Income tax
provision
|
|
|
|
(19)
|
|
|
|
|
15
|
|
Net loss
|
|
$
|
|
(6,006)
|
|
|
$
|
|
(4,900)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
|
(0.19)
|
|
|
$
|
|
(0.23)
|
|
Diluted
|
|
$
|
|
(0.19)
|
|
|
$
|
|
(0.23)
|
|
Shares used in the
calculation of net loss per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
31,509
|
|
|
|
|
21,134
|
|
Diluted
|
|
|
|
31,509
|
|
|
|
|
21,134
|
|
BIOLASE,
INC.
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
December
31,
|
|
|
|
2020
|
|
|
2019
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
|
1,511
|
|
|
$
|
|
5,789
|
|
Restricted
cash
|
|
|
|
312
|
|
|
|
|
312
|
|
Accounts receivable,
less allowance of $3,560 and $2,531 in 2020 and 2019,
respectively
|
|
|
|
4,749
|
|
|
|
|
8,760
|
|
Inventory
|
|
|
|
12,192
|
|
|
|
|
10,995
|
|
Prepaid expenses and
other current assets
|
|
|
|
1,205
|
|
|
|
|
1,163
|
|
Total current
assets
|
|
|
|
19,969
|
|
|
|
|
27,019
|
|
Property, plant and
equipment, net
|
|
|
|
1,017
|
|
|
|
|
1,193
|
|
Goodwill
|
|
|
|
2,926
|
|
|
|
|
2,926
|
|
Right of use
asset
|
|
|
|
135
|
|
|
|
|
276
|
|
Other
assets
|
|
|
|
484
|
|
|
|
|
433
|
|
Total
assets
|
|
$
|
|
24,531
|
|
|
$
|
|
31,847
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES,
REDEEMABLE PREFERRED STOCK AND
STOCKHOLDERS'
(DEFICIT) EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
|
4,056
|
|
|
$
|
|
5,332
|
|
Accrued
liabilities
|
|
|
|
4,079
|
|
|
|
|
4,744
|
|
Deferred revenue,
current portion
|
|
|
|
1,982
|
|
|
|
|
2,237
|
|
Term loan (net of
discount)
|
|
|
|
13,562
|
|
|
|
|
13,466
|
|
Total current
liabilities
|
|
|
|
23,679
|
|
|
|
|
25,779
|
|
Deferred
revenue
|
|
|
|
390
|
|
|
|
|
358
|
|
Warranty
accrual
|
|
|
|
246
|
|
|
|
|
245
|
|
Other
liabilities
|
|
|
|
1,107
|
|
|
|
|
1,123
|
|
Total
liabilities
|
|
|
|
25,422
|
|
|
|
|
27,505
|
|
Redeemable preferred
stock:
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, par
value $0.001 per share
|
|
$
|
|
3,965
|
|
|
$
|
|
3,965
|
|
Total redeemable
preferred stock
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
Common stock, par
value $0.001 per share
|
|
|
|
32
|
|
|
|
|
31
|
|
Additional paid-in
capital
|
|
|
|
236,384
|
|
|
|
|
235,594
|
|
Accumulated other
comprehensive loss
|
|
|
|
(719)
|
|
|
|
|
(701)
|
|
Accumulated
deficit
|
|
|
|
(240,553)
|
|
|
|
|
(234,547)
|
|
Total stockholders'
(deficit) equity
|
|
|
|
(4,856)
|
|
|
|
|
377
|
|
Total liabilities,
redeemable preferred stock and stockholders' (deficit)
equity
|
|
$
|
|
24,531
|
|
|
$
|
|
31,847
|
|
BIOLASE,
INC.
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(Unaudited, in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
|
2020
|
|
|
2019
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(6,006)
|
|
|
$
|
(4,900)
|
|
Adjustments to
reconcile net loss to net cash and cash equivalents
used in operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
177
|
|
|
|
258
|
|
Provision for bad
debts, net
|
|
|
987
|
|
|
|
19
|
|
Amortization of debt
discounts
|
|
|
46
|
|
|
|
38
|
|
Amortization of debt
issuance costs
|
|
|
50
|
|
|
|
49
|
|
Stock-based
compensation
|
|
|
719
|
|
|
|
757
|
|
Deferred income
taxes
|
|
|
(32)
|
|
|
|
(5)
|
|
Earned interest
income, net
|
|
|
—
|
|
|
|
(1)
|
|
Change in fair value
of patent litigation settlement liability
|
|
|
—
|
|
|
|
190
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
3,024
|
|
|
|
(650)
|
|
Inventory
|
|
|
(1,197)
|
|
|
|
225
|
|
Prepaid expenses and
other current assets
|
|
|
(142)
|
|
|
|
463
|
|
Accounts payable and
accrued liabilities
|
|
|
(1,541)
|
|
|
|
(1,514)
|
|
Deferred
revenue
|
|
|
(219)
|
|
|
|
37
|
|
Net cash and cash
equivalents used in operating activities
|
|
|
(4,134)
|
|
|
|
(5,034)
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
|
Purchases of property,
plant, and equipment
|
|
|
(9)
|
|
|
|
(8)
|
|
Net cash and cash
equivalents used in investing activities
|
|
|
(9)
|
|
|
|
(8)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
|
Payments of equity
offering costs
|
|
|
(117)
|
|
|
|
—
|
|
Proceeds from exercise
of stock options
|
|
|
—
|
|
|
|
3
|
|
Net cash and cash
equivalents (used in) provided by financing activities
|
|
|
(117)
|
|
|
|
3
|
|
Effect of exchange
rate changes
|
|
|
(18)
|
|
|
|
(49)
|
|
Decrease in cash, cash
equivalents and restricted cash
|
|
|
(4,278)
|
|
|
|
(5,088)
|
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
|
6,101
|
|
|
|
8,356
|
|
Cash, cash equivalents
and restricted cash, end of period
|
|
$
|
1,823
|
|
|
$
|
3,268
|
|
Supplemental cash
flow disclosure:
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
|
485
|
|
|
$
|
430
|
|
Cash paid for income
taxes
|
|
$
|
28
|
|
|
$
|
31
|
|
Cash paid for
operating leases
|
|
$
|
192
|
|
|
$
|
189
|
|
Non-cash accrual for
capital expenditures
|
|
$
|
7
|
|
|
$
|
24
|
|
Non-cash right-of-use
assets obtained in exchange for lease obligation
|
|
$
|
—
|
|
|
$
|
824
|
|
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. In 2019, the Company revised its non-GAAP
financial measures to include the change in allowance for doubtful
accounts in an effort to better align its Adjusted EBITDA with its
loan covenants and how management evaluates business
performance.
Adjusted EBITDA is defined as net loss before interest, taxes,
depreciation and amortization, stock-based compensation, change in
fair value of patent litigation settlement liability, and allowance
for doubtful accounts. Management uses Adjusted EBITDA 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 Adjusted EBITDA
|
|
(Unaudited)
|
|
(In thousands,
except per share data)
|
|
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2020
|
|
|
2019
|
|
GAAP net loss
attributable to common stockholders
|
$
|
|
(6,006)
|
|
|
$
|
|
(4,900)
|
|
Deemed dividend on
convertible preferred stock
|
|
|
—
|
|
|
|
|
—
|
|
GAAP net
loss
|
$
|
|
(6,006)
|
|
|
$
|
|
(4,900)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
589
|
|
|
|
|
478
|
|
Income tax
provision
|
|
|
(19)
|
|
|
|
|
15
|
|
Depreciation and
amortization
|
|
|
177
|
|
|
|
|
258
|
|
Change in fair value
of patent litigation settlement liability
|
|
|
—
|
|
|
|
|
190
|
|
Change in allowance
for doubtful accounts
|
|
|
987
|
|
|
|
|
—
|
|
Stock-based
compensation
|
|
|
719
|
|
|
|
|
757
|
|
Adjusted
EBITDA
|
$
|
|
(3,553)
|
|
|
$
|
|
(3,202)
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss
attributable to common stockholders per share, basic and diluted
|
$
|
|
(0.19)
|
|
|
$
|
|
(0.23)
|
|
Deemed dividend on
convertible preferred stock
|
|
|
—
|
|
|
|
|
—
|
|
GAAP net loss per
share, basic and diluted
|
$
|
|
(0.19)
|
|
|
$
|
|
(0.23)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
0.02
|
|
|
|
|
0.02
|
|
Income tax
provision
|
|
|
—
|
|
|
|
|
—
|
|
Depreciation and
amortization
|
|
|
0.01
|
|
|
|
|
0.01
|
|
Change in fair value
of patent litigation settlement liability
|
|
|
—
|
|
|
|
|
0.01
|
|
Change in allowance
for doubtful accounts
|
|
|
0.03
|
|
|
|
|
—
|
|
Stock-based
compensation
|
|
|
0.02
|
|
|
|
|
0.04
|
|
Adjusted EBITDA per
share, basic and diluted
|
$
|
|
(0.11)
|
|
|
$
|
|
(0.15)
|
|
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SOURCE BIOLASE, Inc.