SOURCE: BIOLASE Technology, Inc.

March 14, 2007 06:30 ET

BIOLASE Announces Record Fourth Quarter Revenue

Company Returns to Profitability With $1.0 Million Net Income

IRVINE, CA -- (MARKET WIRE) -- March 14, 2007 -- BIOLASE Technology, Inc. (NASDAQ: BLTI), the world's leading dental laser company, today reported record quarterly revenues, an improved gross profit margin and a return to net profitability for the quarter ended December 31, 2006.

Fourth Quarter 2006 Results

Net revenue for the quarter ended December 31, 2006 rose five percent to a record $19.8 million, up from $19.0 million in the fourth quarter of 2005. Net domestic revenue for the 2006 quarter increased seven percent to $13.4 million from $12.5 million in the 2005 fourth quarter. Net international revenue increased one percent to $6.5 million in the 2006 fourth quarter, up from $6.4 million for the prior year comparable period.

Gross profit for the fourth quarter of 2006 improved to 58 percent of net revenue as compared with 52 percent of net revenue in the same period of 2005. Operating expenses in the fourth quarter of 2006 decreased to 53 percent of net revenue from 57 percent of net revenue in the same quarter of 2005, including an increase of approximately $400,000, or $0.02 per diluted share, in stock option compensation expense. Net income for the quarter ended December 31, 2006 was $1.0 million, or $0.04 per diluted share, compared with a net loss of $1.2 million, or $0.05 per diluted share, for the quarter ended December 31, 2005. Net income for the quarter ended December 31, 2006 benefited from $417,000 of license fee revenue resulting from the amortization of the $5 million payment received from Henry Schein, Inc. in August 2006.

President and CEO Jeffrey W. Jones commented, "Our fourth quarter performance was a solid finish to a fiscal year in which we saw improvements throughout our business. This was the first time since the second quarter of 2004 that we have reported a quarterly profit. The improved profitability resulted not only from higher sales volume, but also from our ongoing cost reduction and containment programs, improved working capital management, and the quarterly contribution to revenue from the amortization of the up-front license fee we received from Henry Schein, Inc. in August 2006."

Jones added, "This fourth quarter was also notable because it was the second consecutive quarter in which we achieved positive year-over-year quarterly domestic revenue growth."

2006 Full-Year Results

Net revenue for the year ended December 31, 2006 rose 12 percent to $69.7 million from $62.0 million for 2005. Net domestic revenue for 2006 was $43.7 million as compared to $43.6 million for 2005. Net international revenue for the year ended December 31, 2006 increased by 42 percent to $26.0 million as compared to $18.4 million for 2005.

Gross profit for the year ended December 31, 2006 was 52 percent of net revenue as compared with 50 percent of net revenue for 2005. Operating expenses decreased from 77 percent of net revenue in 2005 to 59 percent of net revenue in 2006, or by approximately $6.7 million, including an increase of approximately $1.0 million, or $0.04 per diluted share, in stock option compensation expense. The net loss for the year ended December 31, 2006 was $4.7 million, or $0.20 per diluted share, compared with a net loss of $17.5 million, or $0.76 per diluted share, for the year ended December 31, 2005. Net income for the year ended December 31, 2006 benefited from $556,000 of license fee revenue resulting from the amortization of the $5 million payment received from Henry Schein, Inc. in August 2006.

Jones added, "Our fiscal year 2006 was unquestionably a year of turnaround for BIOLASE, both in terms of financial performance as well as in significant accomplishments. Through our major agreements with Procter & Gamble and Henry Schein, we brought cash funding into the Company without dilution or debt. We reversed a trend of quarterly domestic sales declines that lasted for one and one-half years, and we experienced 42 percent growth in international sales in 2006. And, in the fourth quarter just ended, we achieved profitability for the first time in over two years. We're about to launch new disposables, and just this month we launched our exciting new ezlase™ state-of-the art handheld diode dental laser system, all testaments to our expanding product pipeline. The year ended with many positive indicators, and I am very enthusiastic about our prospects for a successful 2007."

Conference Call

As previously announced, the Company will host a conference call today at 9:00 a.m. Eastern Time to discuss its operating results for the fourth quarter and year ended December 31, 2006 and to answer questions.

To listen to the conference call live via the internet, visit the Investors section of the BIOLASE website at www.biolase.com. Please go to the website 15 minutes prior to the call to register, download and install the necessary audio software. A replay will be available on BIOLASE's website.

To listen to the conference call live via telephone, please dial (866) 700-7441 from the U.S. or, for international callers, please dial (617) 213-8839, approximately 10 minutes before the start time. Enter passcode number 43719161. A telephone replay will be available for two days by dialing (888) 286-8010 from the U.S., or (617) 801-6888 for international callers, and entering passcode number 82189305.

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.

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

                                Three Months Ended        Years Ended
                                    December 31,          December 31,
                                -------------------   -------------------
                                  2006       2005       2006       2005
                                --------   --------   --------   --------
Products and services revenues  $ 19,382   $ 18,775   $ 68,852   $ 61,486
License fees and royalty revenue     465        183        848        494
                                --------   --------   --------   --------
  Net revenue                     19,847     18,958     69,700     61,980
Cost of revenue                    8,297      9,135     33,211     31,051
                                --------   --------   --------   --------
Gross profit                      11,550      9,823     36,489     30,929
                                --------   --------   --------   --------
Other (loss) income, net              (4)        32          6         80
                                --------   --------   --------   --------
Operating expenses:
  Sales and marketing              6,907      6,308     24,400     24,730
  General and administrative       2,586      3,529     11,709     16,869
  Engineering and development      1,100      1,015      4,876      6,390
  Patent infringement legal
   settlement                         --         --        348         --
                                --------   --------   --------   --------
    Total operating expenses      10,593     10,852     41,333     47,989
                                --------   --------   --------   --------
Income (loss) from operations        953       (997)    (4,838)   (16,980)
Non-operating gain (loss), net       177       (126)       311       (261)
                                --------   --------   --------   --------
Income (loss) before taxes         1,130     (1,123)    (4,527)   (17,241)
Income tax provision                  92        103        162        269
                                --------   --------   --------   --------
Net income (loss)               $  1,038   $ (1,226)  $ (4,689)  $(17,510)
                                ========   ========   ========   ========
Net income (loss) per share:
    Basic                       $   0.04   $  (0.05)  $  (0.20)  $  (0.76)
    Diluted                     $   0.04   $  (0.05)  $  (0.20)  $  (0.76)
                                ========   ========   ========   ========
Shares used in the calculation
 of net income (loss) per
 share:
    Basic                          23,702     23,251     23,472     23,051
    Diluted                        24,497     23,251     23,472     23,051


                     CONSOLIDATED BALANCE SHEETS
                (in thousands, except per share data)

                                             December 31,  December 31,
                                                2006           2005
                                              --------       --------
               ASSETS
Current assets:
 Cash and cash equivalents                    $ 14,676       $  8,272
 Short-term investments, restricted                 --          9,863
 Accounts receivable, less allowance of
  $1,357 and $420 in 2006 and 2005,
   respectively                                 15,193          8,404
 Inventory, net                                  7,774          8,623
 Prepaid expenses and other current assets       1,346          1,293
                                              --------       --------
   Total current assets                         38,989         36,455
Property, plant and equipment, net               4,851          3,827
Intangible assets, net                           1,469          1,831
Goodwill                                         2,926          2,926
Deferred tax asset                                  35             --
Other assets                                       308             90
                                              --------       --------
   Total assets                               $ 48,578       $ 45,129
                                              ========       ========

   LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
 Line of credit                               $     --       $  5,000
 Accounts payable                                7,699          7,759
 Accrued liabilities                             8,933          8,612
 Deferred revenue                                5,431          2,246
 Deferred gain on sale of building, current
  portion                                           --             16
                                              --------       --------
   Total current liabilities                    22,063         23,633
Deferred tax liability                             271            202
Deferred revenue -- long term                    4,278             --
                                              --------       --------
   Total liabilities                            26,612         23,835
                                              --------       --------

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, 25,741 and 25,218
  shares issued; 23,777 and 23,254
  shares outstanding; in 2006 and 2005,
  respectively                                      26             26
 Additional paid-in capital                    111,415        106,484
 Accumulated other
  comprehensive income (loss)                      108           (322)
 Accumulated deficit                           (73,184)       (68,495)
                                              --------       --------
                                                38,365         37,693
 Treasury stock (cost of 1,964 shares
  repurchased)                                 (16,399)       (16,399)
                                              --------       --------
   Total stockholders’ equity                   21,966         21,294
                                              --------       --------
   Total liabilities and stockholders’
    equity                                    $ 48,578       $ 45,129
                                              ========       ========

Contact Information

  • For further information, please contact:
    Jeffrey W. Jones
    President & CEO
    BIOLASE Technology, Inc.

    Richard L. Harrison
    Executive Vice President and CFO
    BIOLASE Technology, Inc.
    +1-949-361-1200

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