SOURCE: BIOLASE Technology, Inc.

March 11, 2008 16:05 ET

BIOLASE Reports Fourth Quarter and Full Year 2007 Results

IRVINE, CA--(Marketwire - March 11, 2008) - BIOLASE Technology, Inc. (NASDAQ: BLTI), the world's leading dental laser company, today reported operating results for its fourth quarter and year ended December 31, 2007.

Fourth Quarter 2007 Results

Net revenue for the quarter ended December 31, 2007 was $20.8 million, up approximately 5 percent from the $19.8 million in the fourth quarter of 2006 and 62 percent from the $12.8 million in the third quarter of 2007. Gross profit for the fourth quarter of 2007 was 47 percent of net revenue as compared with 58 percent of net revenue in the same period of 2006. Operating expenses in the 2007 fourth quarter were $12.4 million compared to operating expenses of $10.6 million in the fourth quarter of 2006. Net loss for the fourth quarter of 2007 was $1.1 million, or $0.05 per diluted share, compared with net income of $1.0 million, or $0.04 per diluted share, in the same period of 2006.

There were a number of significant items in the fourth quarter of 2007 that impacted gross profit and net loss. Gross profit in the 2007 fourth quarter was impacted by management's decision during the period to work through inventory levels built up principally in the third quarter. The result of this was a reduction of inventory from $10.8 million at September 30, 2007 to $7.6 million at year end. The financial impact of lower manufacturing throughput as well as sales incentives and demonstration units sold in the fourth quarter of 2007 represented a more than $2.0 million reduction in gross profit.

The sale of a number of demonstration units to the Company's strategic marketing partner, Henry Schein, Inc., in the period is expected both to result in long-term benefits to the marketing and sales process and to drive a substantial reduction in BIOLASE operating costs in 2008.

Operating expenses in the fourth quarter of 2007 included restructuring charges of $802,000 and recruiting fees of $174,000 both related to the Company's recent management changes and cost reduction programs previously announced. Other income includes a favorable foreign currency adjustment of $1.4 million which was recorded in the fourth quarter of 2007.

BIOLASE Chief Executive Officer Jake St. Philip commented, "The results achieved in the fourth quarter were positive and significant in a number of key ways. First, the entire organization, under the direction of interim CEO Federico Pignatelli responded well during a time of turmoil to drive a record rebound in sales. Second, we exited the quarter with a strengthened balance sheet as a result of our ability to work through excess inventories that were built up during the weak third quarter and, finally, the organization, including our distributors and partners are entering 2008 with a renewed focus on execution at all levels of the operation."

Full Year 2007 Results

Net revenue for the year ended December 31, 2007 was $66.9 million compared with $69.7 million for 2006. Gross profit for 2007 was 52 percent of net revenue and was essentially flat as compared with 52 percent of net revenue in 2006. Operating expenses for the full year of 2007 and 2006 were $43.5 million and $41.3 million, respectively. Net loss for the year ended December 31, 2007 was $7.3 million, or $0.31 per diluted share, compared with a net loss of $4.7 million, or $0.20 per diluted share, for the year ended December 31, 2006.

The balance sheet as of December 31, 2007 showed cash and cash equivalents of $14.6 million, total assets of $44.3 million and total stockholders' equity of $16.5 million.

St. Philip continued, "The cost restructuring and redeployment that began in the fourth quarter will move forward expeditiously as we continue to review all aspects of our operation. We have been and continue to take actions to optimize the organization and rapidly improve our execution. We have outstanding technology and people to create a world-class organization and we are confident that 2008 will be a transformative year and will mark the turnaround at BIOLASE."

Conference Call

As previously announced, the Company will host a conference call today at 4:30 p.m. Eastern Time to discuss its operating results for the year ended December 31, 2007 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 (800) 762-8908 from the U.S. or, for international callers, please dial (480) 629-9031, approximately 10 minutes before the start time. A telephone replay will be available for two days by dialing (800) 406-7325 from the U.S., or (303) 590-3030 for international callers, and entering passcode number 3852217.

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,
                                    ------------------  ------------------
                                      2007      2006      2007      2006
                                    --------  --------  --------  --------
Products and services revenues      $ 19,927  $ 19,382  $ 63,085  $ 68,852
License fees and royalty revenue         913       465     3,804       848
                                    --------  --------  --------  --------
  Net revenue                         20,840    19,847    66,889    69,700
Cost of revenue                       11,046     8,297    32,364    33,211
                                    --------  --------  --------  --------
Gross profit                           9,794    11,550    34,525    36,489
                                    --------  --------  --------  --------
Other (loss) income, net                   -        (4)        -         6
                                    --------  --------  --------  --------
Operating expenses:
  Sales and marketing                  7,029     6,907    26,648    24,400
  General and administrative           3,160     2,586    10,941    11,709
  Engineering and development          1,418     1,100     5,104     4,876
  Restructuring charge                   802         -       802         -
  Patent infringement legal settlement     -         -         -       348
                                    --------  --------  --------  --------
    Total operating expenses          12,409    10,593    43,495    41,333
                                    --------  --------  --------  --------
Income (loss) from operations         (2,615)      953    (8,970)   (4,838)
Non-operating gain, net                1,411       177     1,853       311
                                    --------  --------  --------  --------
Income (loss) before taxes            (1,204)    1,130    (7,117)   (4,527)
Income tax (benefit) provision           (56)       92       163       162
                                    --------  --------  --------  --------
Net income (loss)                   $ (1,148) $  1,038  $ (7,280) $ (4,689)
                                    ========  ========  ========  ========
Net income (loss) per share:
    Basic                           $  (0.05) $   0.04  $  (0.31) $  (0.20)
    Diluted                         $  (0.05) $   0.04  $  (0.31) $  (0.20)
                                    ========  ========  ========  ========
Shares used in the calculation of
 net income (loss) per share:
    Basic                             23,889    23,702    23,853    23,472
    Diluted                           23,889    24,497    23,853    23,472



                  CONSOLIDATED BALANCE SHEETS
                       (in thousands)

                                                December 31,  December 31,
                                                    2007          2006
                                                ------------  ------------

               ASSETS
Current assets:
  Cash and cash equivalents                     $     14,566  $     14,676
  Accounts receivable, less allowance of
   $1,033 and $1,357 in 2007 and 2006,
   respectively                                       11,266        15,193
  Inventory, net                                       7,627         7,774
  Prepaid expenses and other current assets            2,317         1,346
                                                ------------  ------------
    Total current assets                              35,776        38,989
Property, plant and equipment, net                     4,040         4,851
Intangible assets, net                                 1,208         1,469
Goodwill                                               2,926         2,926
Deferred tax asset                                        50            35
Other assets                                             308           308
                                                ------------  ------------
    Total assets                                $     44,308  $     48,578
                                                ============  ============


        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Line of credit                                $      3,552  $          -
  Accounts payable                                     6,151         7,699
  Accrued liabilities                                  9,431         8,560
  Deferred revenue, current portion                    5,649         5,431
                                                ------------  ------------
    Total current liabilities                         24,783        21,690
Deferred tax liabilities                                 342           271
Deferred revenue - long-term                           2,236         4,278
Other liabilities - long-term                            456           373
                                                ------------  ------------
    Total liabilities                                 27,817        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, 25,967 and 25,741 shares
   issued; 24,003 and 23,777 shares
   outstanding in 2007 and 2006, respectively             26            26
  Additional paid-in capital                         113,430       111,415
  Accumulated other comprehensive gain                    54           108
  Accumulated deficit                                (80,620)      (73,184)
                                                ------------  ------------
                                                      32,890        38,365
  Treasury stock (cost of 1,964 shares
   repurchased)                                      (16,399)      (16,399)
                                                ------------  ------------
    Total stockholders' equity                        16,491        21,966
                                                ------------  ------------
    Total liabilities and stockholders' equity  $     44,308  $     48,578
                                                ============  ============

Contact Information

  • For further information, please contact:
    Jake St. Philip
    Chief Executive Officer
    BIOLASE Technology, Inc.
    +1-949-361-1200

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