SOURCE: BIOLASE Technology, Inc.

August 07, 2008 16:05 ET

BIOLASE Reports Second Quarter, Six-Month Results

Second Consecutive Quarter of Profitability

IRVINE, CA--(Marketwire - August 7, 2008) - BIOLASE Technology, Inc. (NASDAQ: BLTI), the world's leading dental laser company, today reported operating results for its second quarter and first six months ended June 30, 2008.

Net revenue for this year's second quarter and first six months was $18.7 million and $37.7 million, respectively, up from $18.2 million and $33.2 million in the respective prior year periods. Gross profit for the second quarter and first six months of 2008 increased $97,000 and $1.5 million, respectively. Gross margin as a percentage of sales decreased to 54 percent and 52 percent of net revenue as compared with 55 percent of net revenue for both the second quarter and first six months of 2007. Operating expenses in this year's second quarter and first six months were $9.7 million and $19.9 million compared to operating expenses of $10.9 million and $20.9 million in the respective prior year periods. Net income for the second quarter of 2008 was $622,000, or $0.03 per share, compared with a net loss of $901,000, or $0.04 loss per share, in the same period of 2007. For this year's first six months, net income was $648,000, or $0.03 per share, compared with a net loss of $2.6 million, or $0.11 loss per share.

Other income in this year's second quarter and first six months increased $81,000 and $542,000 including a gain on foreign currency of $225,000 and $841,000, respectively, compared to a gain of $15,000 and $68,000 in the same periods of 2007.

BIOLASE Chief Executive Officer Jake St. Philip said the two consecutive quarters of profitability in a challenging economic environment were encouraging and that the Company continues to push forward on organizational initiatives designed to bring BIOLASE to a normalized pattern of growth and profitability. He also noted that the Company is pleased with the improved performance in the domestic markets, which was a major focus for the first six months, and has initiated short-term corrective actions and longer-term planning to improve what has been a disappointing performance in international markets.

"We believe our new strategy is sound and, while any new strategy takes time to gain traction, it will ultimately prove itself in the marketplace," St. Philip said. "We have improved our relationship with Henry Schein, reorganized our domestic sales team and processes, and have a new emphasis on market segmentation and corresponding product development programs. Many of those programs are underway and the organization is responding well; cost controls continue to be strong and while we still anticipate somewhat uneven revenue growth in the near term, the team has made a great deal of progress toward our goals."

In July, the quarter was capped off by the introduction of the Waterlase® C100, a product that rounds out the Company's hard-tissue offering and provides a solution for practices that seek a device with fewer features than the Waterlase® MD at a lower price point. First customer deliveries of the new Waterlase C100 are expected to begin by the end of this year's third quarter.

"While overall sales grew 3 percent year-over-year in the second quarter, Waterlase sales experienced a 7 percent decline due to weaker international performance. The summer months traditionally make the third quarter a more challenging one, so this is an ideal time for launching our new two-tiered product strategy. There may be some transitional impact of these changes in the third quarter, but we are confident in the long-term benefits of our strategy," St. Philip added.

As of June 30, 2008, the balance sheet showed cash and cash equivalents of $14.5 million, total assets of $38.6 million and total stockholders' equity of $18.6 million. As of June 30, 2008, the Company also paid off all of its outstanding debt, which totaled $3.6 million as of December 31, 2007 and $2 million as of March 31, 2008.

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 second quarter and first six months ended June 30, 2008 and to answer questions. Slides will be used during this call. Directions for accessing the slides can be found below.

Phone Participation

To listen to the conference call live via telephone, please dial 1-800-762-8908 from the U.S. or, for international callers, please dial +1-480-248-5085, approximately 10 minutes before the start time. In order to access the slides that will be used on the call, click on the link provided on the Investors section of the BIOLASE website at www.biolase.com to listen to the event, register and select the "No Audio, Slides Only" option.

Webcast Participation

To listen to the conference call live and view the slide presentation 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 software.

Replay

A telephone replay will be available for two days by dialing 1-800-406-7325 from the U.S., or +1-303-590-3030 for international callers, and entering passcode number 3904490. In addition, a replay will be available on BIOLASE's website.

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.

                         --  TABLE FOLLOWS  --


                         BIOLASE TECHNOLOGY, INC.

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




                                    Three Months Ended   Six Months Ended
                                         June 30,             June 30,
                                    ------------------  ------------------
                                      2008      2007      2008      2007
                                    --------  --------  --------  --------
Products and services revenue       $ 17,795  $ 17,148  $ 35,832  $ 31,248
License fees and royalty revenue         868     1,029     1,872     1,989
                                    --------  --------  --------  --------
Net revenue                           18,663    18,177    37,704    33,237
Cost of revenue                        8,556     8,167    18,015    15,090
                                    --------  --------  --------  --------
Gross profit                          10,107    10,010    19,689    18,147
                                    --------  --------  --------  --------
Operating expenses:
   Sales and marketing                 5,052     6,934    10,657    13,327
   General and administrative          3,398     2,802     6,475     5,179
   Engineering and development         1,271     1,197     2,732     2,407
                                    --------  --------  --------  --------
     Total operating expenses          9,721    10,933    19,864    20,913
                                    --------  --------  --------  --------
Profit (loss) from operations            386      (923)     (175)   (2,766)
                                    --------  --------  --------  --------
Gain on foreign currency
 transactions                            225        15       841        68
Interest income                           26       126        84       278
Interest expense                         (36)       (7)      (60)      (23)
                                    --------  --------  --------  --------
Non-operating income, net                215       134       865       323
                                    --------  --------  --------  --------
Income (loss) before income tax
 provision                               601      (789)      690    (2,443)
Income tax (benefit) provision           (21)      112        42       181
                                    --------  --------  --------  --------
Net income (loss)                   $    622  $   (901) $    648  $ (2,624)
                                    ========  ========  ========  ========
Net income (loss) per share:
   Basic                            $   0.03  $  (0.04) $   0.03  $  (0.11)
                                    ========  ========  ========  ========
   Diluted                          $   0.03  $  (0.04) $   0.03  $  (0.11)
                                    ========  ========  ========  ========
Shares used in the calculation of
 net income (loss) per share:
   Basic                              24,164    23,841    24,110    23,816
                                    ========  ========  ========  ========
   Diluted                            24,358    23,841    24,326    23,816
                                    ========  ========  ========  ========








                         BIOLASE TECHNOLOGY, INC.

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



                                          June 30, 2008   December 31, 2007
                                        ----------------  -----------------

                     ASSETS
Current assets:
  Cash and cash equivalents             $         14,507  $         14,566
  Accounts receivable, less allowance
   of $1,018 and $1,033 in 2008 and
   2007, respectively                              5,354            11,266
  Inventory, net                                   9,340             7,627
  Prepaid expenses and other current
   assets                                          1,288             2,317
                                        ----------------  ----------------
           Total current assets                   30,489            35,776
Property, plant and equipment, net                 3,805             4,040
Intangible assets, net                             1,023             1,208
Goodwill                                           2,926             2,926
Deferred tax asset                                    65                50
Other assets                                         307               308
                                        ----------------  ----------------
           Total assets                 $         38,615  $         44,308
                                        ================  ================

  LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Line of credit                        $             --  $          3,552
  Accounts payable                                 7,208             6,151
  Accrued liabilities                              6,209             9,431
  Deferred revenue, current portion                4,068             5,649
                                        ----------------  ----------------
           Total current liabilities              17,485            24,783
Deferred tax liabilities                             379               342
Deferred revenue, long-term                        1,778             2,236
Other liabilities, long-term                         354               456
                                        ----------------  ----------------
           Total liabilities                      19,996            27,817
                                        ----------------  ----------------
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; 26,204
   and 25,967 shares issued and
   24,240 and 24,003 shares outstanding
   in 2008 and 2007, respectively                     27                26
  Additional paid-in capital                     114,849           113,430
  Accumulated other comprehensive gain               114                54
  Accumulated deficit                            (79,972)          (80,620)
                                        ----------------  ----------------
                                                  35,018            32,890
  Treasury stock (cost of 1,964 shares
   repurchased)                                  (16,399)          (16,399)
                                        ----------------  ----------------
           Total stockholders' equity             18,619            16,491
                                        ----------------  ----------------
           Total liabilities and
            stockholders' equity        $         38,615  $         44,308
                                        ================  ================

Contact Information

  • For further information, please contact:
    David M. Mulder
    Chief Financial Officer of BIOLASE Technology, Inc.
    +1-949-361-1200
    or
    Jill Bertotti
    Allen & Caron
    +1-949-474-4300.