EX-99.1 2 biol-ex99_1.htm EX-99.1 EX-99.1

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Exhibit 99.1

 

BIOLASE REPORTS RECORD CONSUMABLE SALES AS TOTAL SECOND QUARTER REVENUE INCREASES 17% YEAR OVER YEAR

 

Continues to Experience Positive Momentum and Expects to Achieve Improved Net Income and Positive Adjusted EBITDA for the Second Half of 2023

 

LAKE FOREST, Calif., August 10, 2023 – BIOLASE, Inc. (NASDAQ: BIOL), the global leader in dental lasers, today announced its financial results for the second quarter ended June 30, 2023.

 

Second Quarter Financial Highlights

Total revenue was $14.3 million, up 17% year over year, and the highest quarterly revenue since the fourth quarter of 2015
Consumable sales reached a record $4.1 million, increasing 36% year over year, driven by rising utilization of BIOLASE laser systems
Generated increased adoption of its industry-leading laser, with approximately 69% of U.S. Waterlase sales coming from new customers and approximately one-third from dental specialists
Gross margin improved 100 basis points to 43%
Waterlase Trial Program's ("WTP") year-to-date sales conversion success rate of approximately 56% surpassed the 2022 full year success rate by 10%

“Although we faced some macroeconomic hurdles during the quarter, we have made many improvements in the business that has led to improved financial performance as we continue to show sustainable growth and progress toward positive EBITDA performance," commented John Beaver, President and Chief Executive Officer of BIOLASE. “Our second quarter performance represents our tenth consecutive quarter of year-over-year revenue growth and demonstrates that our efforts to raise awareness of our industry-leading dental lasers continue to gain traction. Furthermore, we reported record consumable revenue, growing an impressive 36% increase from our previous record last quarter and from the second quarter of 2022, and we are hopeful that the trends in consumable usage will continue and are reflective of the improved training of our new dentists, the awareness of the value in all specialties and in particular endodontics. We continue to be subject to market dynamics that include pressure on the finances of dentists, continuing migration to dental service organizations and still a challenging environment in our international markets.

“Operationally, we achieved a WTP conversion success rate of approximately 56%, making WTP one of the most successful programs we have ever implemented. Moreover, new customers accounted for approximately 69% of our sales in the second quarter, with almost a third of the sales being generated by dental specialists. We believe that the combination of all of these positive indicators confirms the market's growing acceptance of our industry-leading lasers and inspires confidence in our growth strategy. We are also excited about the collaboration with the American Academy of Facial Aesthetics as we continue the rollout of our new fractional handpiece. I look forward to realizing the potential that Waterlase technology has for aesthetics, both for dentists and physicians.

“Concurrent with our revenue growth, we demonstrated continued improvement of our bottom line, and we believe the cost-saving initiatives we implemented during the quarter will result in additional annualized savings of $5 to $6 million beginning in the third quarter. These initiatives, along with our improving gross margins and continued revenue growth, put us on track to achieve positive adjusted EBITDA for the second half of 2023.”

 


 

Second Quarter Financial Results

Net revenue for the quarter ended June 30, 2023 was $14.3 million, an increase of 17% compared to net revenue of $12.2 million for the quarter ended June 30, 2022. U.S. laser revenue was $6.3 million for the quarter ended June 30, 2023, an increase of 14% compared to U.S. laser revenue of $5.5 million for the quarter ended June 30, 2022. U.S. consumables and other revenue for the quarter ended June 30, 2023, which consists of revenue from consumable products such as disposable tips, increased 40% year over year. International laser revenue was $2.5 million for the quarter ended June 30, 2023, essentially the same as for the quarter ended June 30, 2022. International consumables and other revenue for the quarter ended June 30, 2023, which consists of revenue from consumable products such as disposable tips, increased 24% year over year.

Gross margin for the quarter ended June 30, 2023 was 43% compared to 42% for the quarter ended June 30, 2022. The increase in gross profit as a percentage of revenue reflects improvement from changing to new suppliers, which resulted in lower warranty expenses. Total operating expenses were $10.0 million for the quarter ended June 30, 2023, compared to $10.2 million for the quarter ended June 30, 2022, a 2% decrease year over year. Operating loss for the quarter ended June 30, 2023 was $3.9 million, compared to an operating loss of $5.1 million for the quarter ended June 30, 2022, an improvement of 23% year over year.

The Company had cash and cash equivalents of approximately $6.9 million on June 30, 2023.

Net Loss and Adjusted EBITDA

The Non-GAAP Financial Measures at the end of this news release provide 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.

Net loss attributable to common stockholders for the quarter ended June 30, 2023 was $4.9 million, or $8.93 per share (as adjusted for the reverse stock split), compared to a net loss of $5.6 million, or $91.98 per share (as adjusted for the reverse stock split), for the quarter ended June 30, 2022. Adjusted EBITDA for the quarter ended June 30, 2023 was a loss of $2.3 million, or $4.24 per share (as adjusted for the reverse stock split), compared with an adjusted EBITDA loss of $4.1 million, or $66.87 per share (as adjusted for the reverse stock split), for the quarter ended June 30, 2022.

2023 Full Year Financial Guidance

BIOLASE is updating its guidance and now expects revenue for the second half of the year to be 15-20% higher than the comparable period a year ago. BIOLASE expects to achieve positive adjusted EBITDA results for the second half of 2023 (adjusted EBITDA is defined as net loss before interest, taxes, depreciation and amortization, stock-based and other non-cash compensation, severance expense, and the change in allowance for doubtful accounts).

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, 2023, and to answer questions. To access the live call, dial 1-888-506-0062 (U.S.) or +1 973-528-0011 (International) and provide the following code: 679201.

A live and archived webcast of the conference call will be accessible on the BIOLASE Investor Relations page. In addition, a phone replay will be available approximately two hours following the end of the call, and it will remain available for one week. To access the call replay, dial 1-877-481-4010 or +1 919-882-2331 (International) and enter replay passcode: 48764.

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 259 active patents and 24 patent-pending technologies designed to provide biologically and clinically superior performance with less pain and faster recovery times as of December 31, 2022. BIOLASE's innovative products provide cutting-edge technology at competitive prices to deliver superior results for dentists and patients. BIOLASE's principal products are dental laser systems that perform a broad range of dental procedures, including cosmetic and complex surgical applications. From 1998 through December 31, 2022, BIOLASE has sold over 45,500 laser systems 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 Securities Litigation Reform Act of 1995, that involve significant risks and uncertainties, including statements, regarding BIOLASE’s expected revenue and revenue growth. 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, 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, substantial doubt regarding BIOLASE's ability to continue as a going concern, inability to raise additional capital on terms acceptable to BIOLASE and those other risks and uncertainties that are described in the "Risk Factors" section of BIOLASE's most recent annual report on Form 10-K and quarterly report on Form 10-Q 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.

For further information, please contact:

EVC Group LLC

Michael Polyviou / Todd Kehrli

(732) 933-2754

mpolyviou@evcgroup.com / tkehrli@evcgroup.com

Tables to Follow

 

 


 

BIOLASE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited, in thousands, except per share data)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net revenue

 

$

14,286

 

 

$

12,235

 

 

$

24,753

 

 

$

22,401

 

Cost of revenue

 

 

8,168

 

 

 

7,094

 

 

 

15,299

 

 

 

12,531

 

Gross profit

 

 

6,118

 

 

 

5,141

 

 

 

9,454

 

 

 

9,870

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

6,189

 

 

 

5,402

 

 

 

10,812

 

 

 

10,216

 

General and administrative

 

 

2,357

 

 

 

3,141

 

 

 

4,815

 

 

 

5,717

 

Engineering and development

 

 

1,444

 

 

 

1,653

 

 

 

2,991

 

 

 

3,197

 

Total operating expenses

 

 

9,990

 

 

 

10,196

 

 

 

18,618

 

 

 

19,130

 

Loss from operations

 

 

(3,872

)

 

 

(5,055

)

 

 

(9,164

)

 

 

(9,260

)

Loss on foreign currency transactions

 

 

(235

)

 

 

(103

)

 

 

(215

)

 

 

(223

)

Interest expense, net

 

 

(583

)

 

 

(430

)

 

 

(1,160

)

 

 

(863

)

Other income (expenses), net

 

 

(147

)

 

 

 

 

 

(147

)

 

 

 

Non-operating loss, net

 

 

(965

)

 

 

(533

)

 

 

(1,522

)

 

 

(1,086

)

Loss before income tax provision

 

 

(4,837

)

 

 

(5,588

)

 

 

(10,686

)

 

 

(10,346

)

Income tax provision

 

 

(31

)

 

 

(23

)

 

 

(31

)

 

 

(40

)

Net loss

 

 

(4,868

)

 

 

(5,611

)

 

 

(10,717

)

 

 

(10,386

)

Other comprehensive loss items:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

39

 

 

 

(222

)

 

 

119

 

 

 

(263

)

Comprehensive loss

 

$

(4,829

)

 

$

(5,833

)

 

$

(10,598

)

 

$

(10,649

)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(4,868

)

 

$

(5,611

)

 

$

(10,717

)

 

$

(10,386

)

Deemed dividend on convertible preferred stock

 

 

 

 

 

 

 

 

 

 

 

(217

)

Net loss attributable to common stockholders

 

$

(4,868

)

 

$

(5,611

)

 

$

(10,717

)

 

$

(10,603

)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

$

(8.93

)

 

$

(91.98

)

 

$

(24.52

)

 

$

(173.82

)

Shares used in the calculation of net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

545

 

 

 

61

 

 

 

437

 

 

 

61

 

 

 

 


 

BIOLASE, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except per share data)

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

6,930

 

 

$

4,181

 

Accounts receivable, less allowance of $2,183 and $2,164 as of June 30, 2023 and December 31, 2022, respectively

 

 

5,717

 

 

 

5,841

 

Inventory

 

 

13,330

 

 

 

15,884

 

Prepaid expenses and other current assets

 

 

2,170

 

 

 

3,053

 

Total current assets

 

 

28,147

 

 

 

28,959

 

Property, plant, and equipment, net

 

 

6,371

 

 

 

4,278

 

Goodwill

 

 

2,926

 

 

 

2,926

 

Right-of-use assets, leases

 

 

1,910

 

 

 

1,768

 

Other assets

 

 

279

 

 

 

255

 

Total assets

 

$

39,633

 

 

$

38,186

 

LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED STOCK AND
   STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

6,314

 

 

$

5,786

 

Accrued liabilities

 

 

7,734

 

 

 

9,210

 

Deferred revenue, current portion

 

 

2,236

 

 

 

2,111

 

Current portion of term loans, net of discount

 

 

2,100

 

 

 

700

 

Total current liabilities

 

 

18,384

 

 

 

17,807

 

Deferred revenue

 

 

311

 

 

 

418

 

Warranty accrual

 

 

397

 

 

 

360

 

Non-current term loans, net of discount

 

 

11,902

 

 

 

13,091

 

Non-current operating lease liability

 

 

1,219

 

 

 

1,259

 

Other liabilities

 

 

79

 

 

 

362

 

Total liabilities

 

 

32,292

 

 

 

33,297

 

Mezzanine Equity

 

 

 

 

 

 

Series I Preferred stock, par value $0.001 per share

 

 

 

 

 

 

Series H Convertible Preferred stock, par value $0.001 per share

 

 

720

 

 

 

 

Total mezzanine equity

 

 

720

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Common stock, par value $0.001 per share

 

 

1

 

 

 

 

Additional paid-in capital

 

 

314,119

 

 

 

301,790

 

Accumulated other comprehensive loss

 

 

(614

)

 

 

(733

)

Accumulated deficit

 

 

(306,885

)

 

 

(296,168

)

Total stockholders' equity

 

 

6,621

 

 

 

4,889

 

Total liabilities, convertible redeemable preferred stock and
 stockholders' equity

 

$

39,633

 

 

$

38,186

 

 

 


 

BIOLASE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2023

 

 

2022

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

Net loss

 

$

(10,717

)

 

$

(10,386

)

Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

1,573

 

 

 

247

 

Provision for bad debts

 

 

42

 

 

 

143

 

Inventory write-offs and disposals

 

 

 

 

 

(42

)

Amortization of debt issuance costs

 

 

214

 

 

 

131

 

Change in fair value of warrants

 

 

(78

)

 

 

 

Issuance costs for warrants

 

 

224

 

 

 

 

Stock-based compensation

 

 

775

 

 

 

1,100

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

82

 

 

 

(1,986

)

Inventory

 

 

(163

)

 

 

(3,602

)

Prepaid expenses and other current assets

 

 

713

 

 

 

(236

)

Accounts payable and accrued liabilities

 

 

(1,903

)

 

 

(232

)

Deferred revenue

 

 

18

 

 

 

230

 

Net cash and cash equivalents used in operating activities

 

 

(9,220

)

 

 

(14,633

)

Cash Flows from Investing Activities:

 

 

 

 

 

 

Purchases of property, plant, and equipment

 

 

(944

)

 

 

(578

)

Net cash and cash equivalents used in investing activities

 

 

(944

)

 

 

(578

)

Cash Flows from Financing Activities:

 

 

 

 

 

 

Proceeds from the sale of common stock and pre-funded warrants, net of fees

 

 

8,502

 

 

 

5,849

 

Proceeds from the sale of Series H Convertible Preferred Stock, net of fees

 

 

2,738

 

 

 

 

Proceeds from the sale of Series H warrants, net of fees

 

 

918

 

 

 

 

Principal payment on loan

 

 

 

 

 

(1,000

)

Proceeds from the exercise of warrants

 

 

635

 

 

 

 

Net cash and cash equivalents provided by financing activities

 

 

12,793

 

 

 

4,849

 

Effect of exchange rate changes

 

 

120

 

 

 

(264

)

Increase (decrease) in cash, cash equivalents and restricted cash

 

 

2,749

 

 

 

(10,626

)

Cash, cash equivalents and restricted cash, beginning of period

 

 

4,181

 

 

 

30,175

 

Cash and cash equivalents, end of period

 

$

6,930

 

 

$

19,549

 

Supplemental cash flow disclosure:

 

 

 

 

 

 

Cash paid for interest

 

$

930

 

 

$

743

 

Cash received for interest

 

$

5

 

 

$

17

 

Cash paid for income taxes

 

$

12

 

 

$

46

 

Cash paid for operating leases

 

$

159

 

 

$

135

 

Non-cash right-of-use assets obtained in exchange for lease obligation

 

$

483

 

 

$

532

 

Deemed dividend on preferred stock

 

$

 

 

$

217

 

Common stock issued upon exercise of preferred stock

 

$

10,980

 

 

$

 

 

 

 


 

Non-GAAP Financial Measures

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.

Adjusted EBITDA is defined as net loss before interest, taxes, depreciation and amortization, stock-based and other non-cash compensation, severance expense, and the change in 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 and

GAAP Net Loss Per Share to Adjusted EBITDA Per Share

(Unaudited, in thousands, except per share data)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

GAAP net loss attributable to common stockholders

 

$

(4,868

)

 

$

(5,611

)

 

$

(10,717

)

 

$

(10,603

)

Deemed dividend on convertible preferred stock

 

 

 

 

 

 

 

 

 

 

 

217

 

GAAP net loss

 

$

(4,868

)

 

$

(5,611

)

 

$

(10,717

)

 

$

(10,386

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

583

 

 

 

430

 

 

 

1,160

 

 

 

863

 

Income tax provision

 

 

31

 

 

 

23

 

 

 

31

 

 

 

40

 

Depreciation and amortization

 

 

1,424

 

 

 

130

 

 

 

1,573

 

 

 

247

 

Severance expense

 

 

229

 

 

 

 

 

 

229

 

 

 

 

Change in allowance for doubtful accounts

 

 

59

 

 

 

59

 

 

 

42

 

 

 

143

 

Stock-based and other non-cash compensation

 

 

84

 

 

 

890

 

 

 

775

 

 

 

1,100

 

Other (income) expense, net

 

 

147

 

 

 

 

 

 

147

 

 

 

 

Adjusted EBITDA

 

$

(2,311

)

 

$

(4,079

)

 

$

(6,760

)

 

$

(7,993

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss attributable to common stockholders
   per share, basic and diluted

 

$

(8.93

)

 

$

(91.98

)

 

$

(24.52

)

 

$

(173.82

)

Deemed dividend on convertible preferred stock

 

 

 

 

 

 

 

 

 

 

 

3.56

 

GAAP net loss per share, basic and diluted

 

$

(8.93

)

 

$

(91.98

)

 

$

(24.52

)

 

$

(170.26

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

1.07

 

 

 

7.05

 

 

 

2.66

 

 

 

14.15

 

Income tax provision

 

 

0.06

 

 

 

0.38

 

 

 

0.07

 

 

 

0.66

 

Depreciation and amortization

 

 

2.61

 

 

 

2.13

 

 

 

3.59

 

 

 

4.05

 

Severance expense

 

 

0.42

 

 

 

 

 

 

0.52

 

 

 

 

Change in allowance for doubtful accounts

 

 

0.11

 

 

 

0.97

 

 

 

0.10

 

 

 

2.34

 

Stock-based and other non-cash compensation

 

 

0.15

 

 

 

14.58

 

 

 

1.77

 

 

 

18.03

 

Other (income) expense, net

 

 

0.27

 

 

 

 

 

 

0.34

 

 

 

 

Adjusted EBITDA per share, basic and diluted

 

$

(4.24

)

 

$

(66.87

)

 

$

(15.47

)

 

$

(131.03

)

 

 


 

Other (income) expense, net for the three and six months ended June 30, 2023 relates to issuance costs from the May 2023 public offering that were allocated to the Series H warrants and immediately expensed due to the liability classification of the awards. These expenses were partially offset by gains recorded on the revaluation of these awards during the period.