SOURCE: BIOLASE Technology, Inc.

November 06, 2007 06:00 ET

BIOLASE Reports Third Quarter and First Nine Months 2007 Results

IRVINE, CA--(Marketwire - November 6, 2007) - BIOLASE Technology, Inc. (NASDAQ: BLTI), the world's leading dental laser company, today reported operating results for its third quarter and first nine months ended September 30, 2007.

Third Quarter 2007 Results

Net revenue for the quarter ended September 30, 2007 was $12.8 million, down from $17.1 million in the third quarter of 2006. Gross profit for the third quarter of 2007 improved to 51 percent of net revenue as compared with 50 percent of net revenue in the same period of 2006. Operating expenses in the 2007 third quarter increased by four percent, or $422,000, to $10.2 million from $9.8 million in the third quarter of 2006. Net loss for the quarter ended September 30, 2007 was $3.5 million, or $0.15 per diluted share, compared with a net loss of $1.0 million, or $0.04 per diluted share, for the third quarter of 2006.

Interim Chief Executive Officer Federico Pignatelli commented, "Revenue results for the quarter ended September 30, 2007 were well below our expectations, notwithstanding the typically slower summer quarter. Sales of our diode laser systems continued to outpace those in the same quarter of 2006, but sales of Waterlase MD™ all-tissue laser systems showed a significant decrease. While we believe the reasons for the shortfall could be varied, these results are unacceptable and led to this morning's announcement that the Company has taken significant action."

Pignatelli continued, "As announced earlier today, I have stepped in to serve as BIOLASE's Interim CEO, and I'm pleased to report that we have made good progress in our search for a new CEO. Also, we're fortunate that independent director Jim Largent has agreed to devote time at BIOLASE to help in assessing our sales and marketing strategies and programs, which have not been effective in furthering the market's understanding of and penetration by our Waterlase all-tissue laser technology. Published reports of the clinical superiority of the technology and countless reports of significant practice-enhancing results from our user base have us convinced that Waterlase technology will ultimately become a standard in the dental suite of the future. We plan to examine every element of our programs -- marketing, messaging, promotions, product pricing, and distribution -- to be sure that we have the optimal strategies for rapid growth in the adoption rate of our Waterlase technology."

First Nine Months 2007 Results

Net revenue for the nine months ended September 30, 2007 was $46.0 million compared with $49.9 million for the same period in 2006. Gross profit for the first nine months of 2007 improved to 54 percent of net revenue as compared with 50 percent of net revenue in the same period of 2006. Operating expenses for the first nine months of 2007 and 2006 were $31.1 million and $30.7 million, respectively. Net loss for the nine months ended September 30, 2007 was $6.1 million, or $0.26 per diluted share, compared with a net loss of $5.7 million, or $0.24 per diluted share, for the nine months ended September 30, 2006.

The balance sheet as of September 30, 2007 showed cash and cash equivalents of $11.9 million, total assets of $40.0 million and total stockholders' equity of $18.1 million.

Conference Call

The Company's previously announced conference call for Thursday, November 8, 2007, is being canceled due to the management change announcement made earlier today. The Company will announce a revised conference call date and time in the near future to discuss the results, management changes, and business outlook.

About BIOLASE Technology, Inc.

BIOLASE Technology, Inc. (http://www.biolase.com), the world's leading dental laser company, is a medical technology company that develops, manufactures and markets lasers and related products focused on technologies that advance the practice of dentistry and medicine. The Company's products incorporate patented and patent pending technologies designed to provide clinically superior performance with less pain and faster recovery times. BIOLASE's principal products are dental laser systems that perform a broad range of dental procedures, including cosmetic and complex surgical applications. Other products under development address ophthalmology and other medical and consumer markets.

This press release may contain forward-looking statements within the meaning of safe harbor provided by the Securities Reform Act of 1995 that are based on the current expectations and estimates by our management. These forward-looking statements can be identified through the use of words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "may," "will," and variations of these words or similar expressions. Forward-looking statements are based on management's current, preliminary expectations and are subject to risks, uncertainties and other factors which may cause the Company's actual results to differ materially from the statements contained herein, and are described in the Company's reports it files with the Securities and Exchange Commission, including its annual and quarterly reports. No undue reliance should be placed on forward-looking statements. Such information is subject to change, and we undertake no obligation to update such statements.

                         BIOLASE TECHNOLOGY, INC.

            CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                 (in thousands, except per share amounts)

                                    Three Months Ended  Nine Months Ended
                                      September 30,        September 30,
                                    ------------------  ------------------
                                      2007     2006        2007     2006
                                    --------  --------  --------  --------
Products and services revenue       $ 11,910  $ 16,869  $ 43,158  $ 49,469
License fees and royalty revenue         902       197     2,891       384
                                    --------  --------  --------  --------
  Net revenue                         12,812    17,066    46,049    49,853
Cost of revenue                        6,228     8,448    21,318    24,914
                                    --------  --------  --------  --------
Gross profit                           6,584     8,618    24,731    24,939
                                    --------  --------  --------  --------
Other (loss) income, net                  --        (1)       --        10
                                    --------  --------  --------  --------
Operating expenses:
  Sales and marketing                  6,292     5,510    19,619    17,493
  General and administrative           2,602     2,967     7,781     9,123
  Engineering and development          1,279     1,306     3,686     3,776
  Patent infringement legal
   settlement                             --       (32)       --       348
                                    --------  --------  --------  --------
    Total operating expenses          10,173     9,751    31,086    30,740
                                    --------  --------  --------  --------
Loss from operations                  (3,589)   (1,134)   (6,355)   (5,791)
Non-operating income, net                119        94       442       134
                                    --------  --------  --------  --------
Loss before income tax provision      (3,470)   (1,040)   (5,913)   (5,657)
Income tax provision (benefit)            38       (33)      219        70
                                    --------  --------  --------  --------
Net loss                            $ (3,508) $ (1,007) $ (6,132) $ (5,727)
                                    ========  ========  ========  ========
Net loss per share:
    Basic                           $  (0.15) $  (0.04) $  (0.26) $  (0.24)
    Diluted                         $  (0.15) $  (0.04) $  (0.26) $  (0.24)
                                    ========  ========  ========  ========
Shares used in the calculation of
 net loss per share:
    Basic                             23,887    23,580    23,840    23,394
    Diluted                           23,887    23,580    23,840    23,394


                         BIOLASE TECHNOLOGY, INC.

                  CONSOLIDATED BALANCE SHEETS (Unaudited)
                 (in thousands, except per share amounts)

                                                         Sep 30,   Dec 31,
                                                          2007      2006
                                                        --------  --------
                  ASSETS
Current assets:
  Cash and cash equivalents                             $ 11,890  $ 14,676
  Accounts receivable, less allowance of $971 and
   $1,357 in 2007 and 2006, respectively                   7,497    15,193
  Inventory, net                                          10,774     7,774
  Prepaid expenses and other current assets                1,072     1,346
                                                        --------  --------
    Total current assets                                  31,233    38,989

Property, plant and equipment, net                         4,354     4,851
Intangible assets, net                                     1,200     1,469
Goodwill                                                   2,926     2,926
Deferred tax asset                                            22        35
Other assets                                                 308       308
                                                        --------  --------
    Total assets                                        $ 40,043  $ 48,578
                                                        ========  ========

    LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
  Accounts payable                                      $  6,807  $  7,699
  Accrued liabilities                                      5,920     8,560
  Deferred revenue, current portion                        5,522     5,431
                                                        --------  --------
    Total current liabilities                             18,249    21,690
Deferred tax liabilities                                     327       271
Deferred revenue, long-term                                2,841     4,278
Other liabilities, long-term                                 483       373
                                                        --------  --------
    Total liabilities                                     21,900    26,612
                                                        --------  --------
Stockholders’ equity:
  Preferred stock, par value $0.001, 1,000 shares
   authorized, no shares issued and outstanding               --        --
  Common stock, par value $0.001, 50,000 shares
   authorized, 25,852 and 25,741 shares issued and
   23,888 and 23,777 shares outstanding in 2007 and
   2006, respectively                                         26        26
  Additional paid-in capital                             112,842   111,415
  Accumulated other comprehensive gain                     1,146       108
  Accumulated deficit                                    (79,472)  (73,184)
                                                        --------  --------
                                                          34,542    38,365
  Treasury stock (cost of 1,964 shares repurchased)      (16,399)  (16,399)
                                                        --------  --------
    Total stockholders’ equity                            18,143    21,966
                                                        --------  --------
    Total liabilities and stockholders’ equity          $ 40,043  $ 48,578
                                                        ========  ========

Contact Information

  • For further information, please contact:
    Richard L. Harrison
    Executive Vice President and CFO
    BIOLASE Technology, Inc.
    +1-949-361-1200

    Jill Bertotti
    Allen & Caron
    +1-949-474-4300