Aug 13, 2020 MicroCapNewsDaily

BIOLASE Reports Second Quarter 2020 Financial Results

Clinically Proven Product Portfolio Reduces Potential Risk of Infectious Pathogens; Creates Significant Growth Opportunities as Dental Professionals Seek Safer Technologies to Treat Patients Bolstered Balance Sheet Provides Resources to Weather COVID-19 Impact and Execute Longer-Term Growth Strategy

FOOTHILL RANCH, Calif., Aug. 13, 2020 /PRNewswire/ — BIOLASE, Inc. (NASDAQ: BIOL), the global leader in dental lasers, today announced its financial results for the second quarter ended June 30, 2020 and provided a business update.

“Despite the ongoing challenges associated with the COVID-19 pandemic, the developments in the quarter and more recently position BIOLASE for success,” commented Todd Norbe, President and Chief Executive Officer.  “Our Epic Hygiene dental laser meets the Centers for Disease Control and Prevention (CDC) guidelines to minimize the risk of COVID-19, while our all-tissue Waterlase dental lasers already create 98% less aerosol than traditional dental handpieces, meeting the American Dental Association’s recommendation of reduced aerosol production to limit the spread of infectious pathogens, such as COVID-19. I believe these unique attributes will meet the rising needs of dentists and patients and will contribute significantly to our success as dental practices reopen and procedures return to pre-COVID-19 levels.  

“I also believe the oversubscribed rights offering we recently completed and the registered direct offering in June demonstrate investor confidence in our growth strategy. We believe our current liquidity position and our cost containment efforts provide us with sufficient capital to effectively execute on our growth strategy.”

2020 Second Quarter Financial Results

Net revenue for the second quarter of 2020 was $2.9 million, a decrease of 66%, compared to net revenue of $8.6 million for the second quarter of 2019. U.S. laser revenue was $0.8 million for the second quarter of 2020, a 72% decrease compared to U.S. laser revenue of $2.9 million for the second quarter of 2019. U.S. consumables and other revenue for the second quarter of 2020, which consists of revenue from consumable products such as disposable tips, decreased 68% compared to the second quarter of 2019. Outside the U.S., laser revenue declined 86% to $0.3 million for the second quarter of 2020 compared to $2.0 million for the second quarter of 2019 and consumables and other revenue decreased 39% year over year.

Gross margin for the second quarter of 2020 was 32%, compared to 39% for the second quarter of 2019. The lower gross margin reflects the impact of the decline in revenues relative to our fixed costs. Total operating expenses were $4.9 million for the second quarter of 2020 compared to $6.7 million for the second quarter of 2019, a decrease of approximately 27%. Operating loss for the second quarter of 2020, was $4.0 million, compared to an operating loss of $3.3 million in the second quarter of 2019, an increase of 19% year over year. Net loss for the second quarter of 2020 was $4.7 million, or $0.12 per share, compared to a net loss of $3.9 million, or $0.18 per share, for the second quarter of 2019.

Cash, cash equivalents, and restricted cash totaled $5.7 million as of June 30, 2020 and included proceeds from the registered direct private placement completed in June.

On July 22, 2020, the Company completed its previously announced rights offering, resulting in net proceeds to the Company of approximately $15.8 million, after deducting expenses and fees, and excluding any proceeds received upon exercise of any warrants.

Use of Non-GAAP Measures

The Reconciliation of GAAP Net Loss to Adjusted EBITDA at the end of this news release provides 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.

Adjusted EBITDA loss for the second quarter of 2020 was $2.9 million, or $0.08 per share, compared with Adjusted EBITDA loss of $2.8 million, or $0.13 per share, for the second quarter of 2019.

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, 2020, and to answer questions. For both “listen-only” participants and those participants who wish to take part in the question-and-answer portion of the call, the dial-in number in the U.S./Canada is 800-367-2403. For international participants outside the U.S./Canada, the dial-in number is 334-777-6978. For all callers, refer to the Conference ID 9516164. To access the live webcast, visit the Investor Relations section of the BIOLASE website at www.biolase.com and see “Investor Events”.

An audio archive of the webcast will be available for 30 days on the Investor Relations section of the BIOLASE website.

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 patented 257 and 43 patent-pending technologies designed to provide biologically clinically superior performance with less pain and faster recovery times. BIOLASE’s innovative products provide cutting-edge technology at competitive prices to deliver superior results for dentists and patients. BIOLASE’s principal products are revolutionary dental laser systems that perform a broad range of dental procedures, including the treatment of periodontitis, and a full line of dental imaging equipment. BIOLASE has sold over 41,200 laser systems to date 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 Litigation Reform Act of 1995, that involve significant risks and uncertainties, including statements, predictions, or expectations regarding BIOLASE’s revenue during the second quarter of 2020. 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, the coronavirus (COVID-19) and the effects of the outbreak and actions taken in connection therewith,  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, and those other risks and uncertainties that are described in the “Risk Factors” section of BIOLASE’s annual report filed on Form 10-K 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.

Tables to Follow

 

BIOLASE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

Three Months Ended

Six Months Ended

June 30

June 30

2020

2019

2020

2019

Net revenue

2,938

8,645

7,721

18,971

Cost of revenue

1,997

5,265

5,427

12,070

Gross profit

941

3,380

2,294

6,901

Operating expenses:

Sales and marketing

2,093

3,272

4,797

7,151

General and administrative

2,137

2,511

5,147

4,903

Engineering and development

690

1,124

1,680

2,549

Change in fair value of patent litigation settlement
liability

—

(190)

—

—

Total operating expenses

4,920

6,717

11,624

14,603

Loss from operations

(3,979)

(3,337)

(9,330)

(7,702)

Loss on foreign currency transactions

40

5

126

48

Interest expense, net

625

529

1,214

1,007

Non-operating loss

665

534

1,340

1,055

Loss before income tax provision

(4,644)

(3,871)

(10,670)

(8,757)

Income tax provision

53

28

34

42

Net loss

$

(4,697)

$

(3,899)

$

(10,704)

$

(8,799)

Net loss per share attributable to common stockholders:

Basic

$

(0.12)

$

(0.18)

$

(0.31)

$

(0.41)

Diluted

$

(0.12)

$

(0.18)

$

(0.31)

$

(0.41)

Shares used in the calculation of net loss per share:

Basic

37,990

21,595

34,709

21,366

Diluted

37,990

21,595

34,709

21,366

 

BIOLASE, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

June 30,

December 31,

2020

2019

(Unaudited)

(Audited)

ASSETS

Current assets:

Cash and cash equivalents

$

5,437

$

5,789

Restricted cash

312

312

Accounts receivable, less allowance of $3,581 and $2,531 in 2020
and 2019, respectively

4,119

8,760

Inventory

11,932

10,995

Prepaid expenses and other current assets

1,094

1,163

Total current assets

22,894

27,019

Property, plant and equipment, net

781

1,193

Goodwill

2,926

2,926

Right of use asset

649

276

Other assets

506

433

Total assets

$

27,756

$

31,847

LIABILITIES, REDEEMABLE PREFERRED STOCK AND

STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

2,510

$

5,332

Accrued liabilities

3,549

4,744

Deferred revenue, current portion

1,486

2,237

Term loan (net of discount)

13,544

13,466

Total current liabilities

21,089

25,779

Deferred revenue

412

358

Warranty accrual

194

245

Other liabilities

1,612

1,123

Non current term loans

3,140

—

Total liabilities

26,447

27,505

Redeemable preferred stock:

Preferred stock, par value $0.001 per share

$

—

$

3,965

Total redeemable preferred stock

Stockholders’ equity:

Common stock, par value $0.001 per share

50

31

Additional paid-in capital

247,155

235,594

Accumulated other comprehensive loss

(645)

(701)

Accumulated deficit

(245,251)

(234,547)

Total stockholders’ equity

1,309

377

Total liabilities, redeemable preferred stock and stockholders’
equity

$

27,756

$

31,847

 

 

BIOLASE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

Six Months Ended

June 30

2020

2019

Cash Flows from Operating Activities:

Net loss

$

(10,704)

$

(8,799)

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

Depreciation and amortization

488

529

Provision for bad debts, net

1,008

111

Amortization of debt discounts

74

109

Amortization of debt issuance costs

121

86

Stock-based compensation

1,519

1,204

Deferred income taxes

—

(5)

Changes in operating assets and liabilities:

Accounts receivable

3,633

1,263

Inventory

(937)

(86)

Prepaid expenses and other current assets

(14)

644

Accounts payable and accrued liabilities

(3,835)

(1,720)

Deferred revenue

(692)

37

Net cash and cash equivalents used in operating activities

(9,339)

(6,627)

Cash Flows from Investing Activities:

Purchases of property, plant, and equipment

(81)

(125)

Net cash and cash equivalents used in investing activities

(81)

(125)

Cash Flows from Financing Activities:

Proceeds from the registered direct private placement of common
stock

3,881

—

Proceeds from the sale of common stock warrants

3,031

—

Payments of equity offering costs

(991)

(38)

Borrowings on other long-term loans

3,140

—

Borrowings under term loan

—

2,500

Borrowings on credit facility

3,000

—

Repayment of credit facility

(3,000)

—

Payment of debt issuance costs

(50)

—

Proceeds from the exercise of stock options

—

4

Net cash and cash equivalents provided by financing activities

9,011

2,466

Effect of exchange rate changes

57

(38)

Decrease in cash, cash equivalents and restricted cash

(352)

(4,324)

Cash, cash equivalents and restricted cash, beginning of period

6,101

8,356

Cash, cash equivalents and restricted cash, end of period

$

5,749

$

4,032

Supplemental cash flow disclosure:

Cash paid for interest

$

466

$

831

Cash paid for income taxes

$

26

$

12

Cash paid for operating leases

$

188

$

414

Non-cash accrual for capital expenditures

$

35

$

17

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

$

570

$

824

Warrants issued in connection with debt instruments

$

67

$

209

 

Non-GAAP Disclosure

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. In 2019, the Company revised its non-GAAP financial measures to include the change in allowance for doubtful accounts in an effort to better align its Adjusted EBITDA with its loan covenants and how management evaluates business performance.

Adjusted EBITDA is defined as net loss before interest, taxes, depreciation and amortization, stock-based compensation, change in fair value of patent litigation settlement liability, and 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

(Unaudited)

(In thousands, except per share data)

Three Months Ended

Six Months Ended

June 30

June 30

2020

2019

2020

2019

GAAP net loss attributable to common stockholders

$

(4,697)

$

(3,899)

$

(10,704)

$

(8,799)

Deemed dividend on convertible preferred stock

—

—

—

–

GAAP net loss

$

(4,697)

$

(3,899)

$

(10,704)

$

(8,799)

Adjustments:

Interest expense, net

625

529

1,214

1,007

Income tax provision

53

28

34

42

Depreciation and amortization

307

268

488

529

Change in fair value of patent litigation settlement liability

—

(190)

—

—

Change in allowance for doubtful accounts

22

—

1,008

—

Stock-based compensation

801

447

1,519

1,204

Adjusted EBITDA

$

(2,889)

$

(2,817)

$

(6,441)

$

(6,017)

GAAP net loss attributable to common stockholders

   per share, basic and diluted

$

(0.12)

$

(0.18)

$

(0.31)

$

(0.41)

Deemed dividend on convertible preferred stock

—

—

—

—

GAAP net loss per share, basic and diluted

$

(0.12)

$

(0.18)

$

(0.31)

$

(0.41)

Adjustments:

Interest expense, net

0.02

0.03

0.03

0.05

Income tax provision

—

—

—

—

Depreciation and amortization

0.01

0.01

0.01

0.02

Change in fair value of patent litigation settlement liability

—

(0.01)

—

—

Change in allowance for doubtful accounts

—

—

0.03

—

Stock-based compensation

0.01

0.02

0.05

0.06

Adjusted EBITDA per share, basic and diluted

$

(0.08)

$

(0.13)

$

(0.19)

$

(0.28)

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/biolase-reports-second-quarter-2020-financial-results-301112083.html

SOURCE BIOLASE, Inc.

PR Newswire
August 13, 2020 – 1:05 PM PDT

If You Liked This Article Click To Share

Health