BIOLASE, Inc. (NASDAQ: BIOL), the world's leading dental laser
manufacturer and distributor, today reported unaudited financial
results for the fourth quarter and year ended December 31, 2012.
Financial Highlights of the 2012 Fourth Quarter:
- Net revenue of $19.1 million for Q4 2012, a 45.0% increase over
$13.2 million for Q4 2011, and a 12.4% increase over the midpoint
of the Company's guidance of $16.5 million to $17.5 million.
- Net income of $1.0 million, or $0.03 per share, as compared to
a net loss of $2.0 million or a loss of $0.06 per share for Q4
2011.
- Non-GAAP net income of $1.7 million, or $0.05 per share, as
compared to a non-GAAP net loss of $1.3 million, or a loss of $0.04
per share, for Q4 2011.
- Unit sales of WaterLase® systems increased by 42.0% as compared
to Q4 2011 levels.
- Revenues from the sale of WaterLase systems increased $2.6
million, or 29.2%, as compared to Q4 2011 levels.
- Revenues from the sale of diode laser systems increased $1.3
million, or 79.9%, as compared to Q4 2011 levels.
2012 Financial Highlights:
- Net revenue of $57.4 million, as compared to $48.9 million in
the prior year. Excluding the effects of the $1.1 million inventory
repurchase in Q2 2012 and one-time prepaid purchase orders from
Henry Schein, Inc. (NASDAQ: HSIC) ("Schein") in 2011 totaling $5.9
million, non-GAAP adjusted revenue for 2012 increased $15.5
million, or 36.1%, over 2011, which was in line with our guidance
of 36%.
- Revenues from the sale of WaterLase systems increased $6.8
million, or 23.1%, as compared to the prior year. Excluding the
effects of the $1.1 million inventory repurchase in Q2 2012, and
one-time prepaid purchase orders of WaterLase systems from Schein
in 2011 totaling $2.3 million, non-GAAP adjusted revenue for
WaterLase systems in 2012 increased $10.2 million, or 37.7%, over
2011.
- Net loss improved to $3.1 million, or a loss of $0.10 per
share, as compared to a net loss of $4.5 million, or a loss of
$0.15 per share, for 2011.
- Non-GAAP net loss improved to $431,000 for 2012, as compared to
a non-GAAP net loss of $1.4 million in 2011.
Operating highlights of and subsequent to the 2012 fourth
quarter include:
- Received U.S. Food and Drug Administration ("FDA") clearance
for the EPIC 10™ diode laser.
- Received FDA clearance for 940nm Diolase 10™ diode soft-tissue
laser for a broad spectrum of medical procedures; includes
clearance for over 80 procedures in 19 additional medical
markets.
- Launched the EPIC™ V-Series™ veterinary soft-tissue diode
laser.
- Launched a website to showcase BIOLASE's wholly-owned
subsidiary OCCULASE and to expand the multiple applications of its
proprietary WaterLase technology into ophthalmology.
- Issued broad new patent for treating eye conditions, including
Presbyopia, Cataracts, and Glaucoma; provides additional support
for ophthalmic applications.
- Appointed Samir Chowdhury, Ph.D., as General Manager and
Colleen Boswell as Vice President, Regulatory Affairs.
- Declared a one-half percent stock dividend payable on March 29,
2013, to stockholders of record as of March 15, 2013.
Federico Pignatelli, Chairman and CEO, said, "For the past two
years, BIOLASE has undergone a radical restructuring, which was
substantially completed at year-end 2012. Now we can concentrate on
continued execution and the meaningful expansion of our business in
2013 and beyond."
"Overall 2012 was a year of execution where we met or exceeded
our guidance throughout the year and went on to generate cash from
operations in the fourth quarter. We have expanded our offerings of
internally developed lasers and in-licensed cone beam and CAD/CAM
imaging products while significantly strengthening our intellectual
property and patent portfolio. As a result of these efforts, our
annual revenue for 2012 increased significantly over 2011 and more
than doubled that of 2010," noted Pignatelli. "With a number of
solid initiatives in place, including new product launches, the
recent approval of over 80 new procedures in 19 additional medical
markets, and the launch of EPIC V-Series in to the veterinary
market, we expect BIOLASE to continue to grow strongly in
2013."
Fourth Quarter Financial Results Net revenue for the 2012 fourth
quarter totaled $19.1 million, compared with $13.2 million in the
2011 fourth quarter. The increase of $5.9 million, or 45.0%, was
primarily driven by increased sales of the Company's all-tissue
WaterLase systems, diode soft-tissue laser systems, and imaging
systems.
The number of WaterLase systems sold increased by 42.0% in the
2012 fourth quarter as compared to the prior year quarter. Such
growth was the result of successful efforts of our direct sales
force in North America. Revenues from the sale of WaterLase systems
increased $2.6 million, or 29.2%, to $11.7 million in the 2012
fourth quarter as compared to $9.1 million in the prior year
quarter. WaterLase system sales comprised approximately 61.5% of
net revenues for the 2012 fourth quarter compared to 69.0% for the
prior year quarter. The majority of these WaterLase revenues in
both quarters were from sales of the Company's flagship WaterLase
iPlus all-tissue laser system.
"The number of WaterLase systems sold increased by a larger
percentage than WaterLase revenues quarter over quarter because of
our strategy to offer systems of varying capabilities at multiple
price points. The iPlus is our flagship product and our primary
revenue driver, and we expect this to continue in 2013. By offering
multiple product configurations across a range of price points, we
believe we can attract more customers, drive adoption, and generate
more significant product and consumables revenue," said Fred Furry,
Chief Operating Officer and Chief Financial Officer.
Revenues from the sale of diode laser systems increased $1.3
million, or 79.9%, to $2.8 million in the 2012 fourth quarter as
compared to $1.5 million in the prior year quarter. Diode laser
system sales comprised approximately 14.4% of net revenues for the
2012 fourth quarter compared to 11.6% for the prior year quarter.
BIOLASE received the CE Mark for the EPIC 10 in the final days of
September 2012, and received notice of its regulatory clearance
from the FDA on October 1, 2012.
Furry added, "As expected, sales of diode laser systems
increased significantly in the fourth quarter, and we anticipate
that the EPIC 10 will continue to be a strong contributor to
revenue in 2013 and beyond. We also believe that the low price
point of our EPIC diode soft-tissue laser system will continue to
broaden the demand for lasers and create an up-sell opportunity for
our more expensive, all-tissue WaterLase systems."
Imaging revenues, which included both cone beam and CAD/CAM,
totaled approximately $1.6 million, or 8.6% of net revenue, during
the 2012 fourth quarter as compared to $138,000, or 1.0% of net
revenue, for the prior year quarter.
Gross profit as a percentage of net revenue was 46.6% as
compared to 42.2% for the prior year quarter. This
quarter-over-quarter increase was primarily due to higher unit
sales of WaterLase systems, diode laser systems, and imaging
systems, increased consumables, and increased license fees and
royalty revenue, combined with decreased costs of revenues as
service and warranty expenses continue to decline as manufacturing
processes and quality continue to improve.
Operating expenses totaled $7.7 million, or 40.4% of net sales,
as compared to $7.5 million, or 56.9% of net sales, in the 2011
fourth quarter. The increased sales and marketing expense is
primarily a result of sales commissions accrued on higher system
revenues as well as higher payroll and consulting costs associated
with the development of our direct sales force in North America and
an increase in convention costs, which were offset by a decrease in
the cost of supplies.
General and administrative expenses decreased to $1.8 million
during the 2012 fourth quarter as compared to $2.0 million for the
prior year quarter.
Engineering and development totaled $1.0 million during the 2012
fourth quarter, essentially flat with the prior year quarter.
As a result, net income for the 2012 fourth quarter totaled $1.0
million, or $0.03 per share, compared to a net loss of $2.0
million, or a loss of $0.06 per share, for the 2011 fourth
quarter.
After removing interest expense of $99,000, non-cash
depreciation and amortization expenses of $140,000, and non-cash
stock-based, other equity instruments, and other non-cash
compensation expense of $383,000, the 2012 fourth quarter resulted
in non-GAAP net income of $1.7 million, or $0.05 per share,
compared with a non-GAAP net loss of $1.3 million, or ($0.04) per
share, for the 2011 fourth quarter.
2012 Financial Results GAAP net revenue for the year ended
December 31, 2012, totaled $57.4 million, compared with net revenue
of $48.9 million in the prior year. Domestic revenues were $40.6
million, or 70.7% of net revenue, for 2012 compared to $32.8
million, or 67.1% of net revenue, for 2011. International revenues
for 2012 were $16.8 million, or 29.3% of net revenue compared to
$16.1 million, or 32.9% of net revenue for 2011.
Adjusting for the inventory re-purchased in connection with the
Schein termination agreement, non-GAAP adjusted revenue for 2012
was $58.5 million, which was the midpoint of our initial annual
revenue guidance for 2012. This represents an increase of $9.6
million, or 19.7% as compared to net revenue of $48.9 million for
2011. When excluding both the 2012 inventory re-purchased in
connection with the Schein termination agreement, which was offset
against our 2012 second quarter, and the 2011 non-recurring event
of equipment sales to Schein for irrevocable purchase orders of
$5.9 million; non-GAAP adjusted revenue for 2012 represents a 36.1%
increase over non-GAAP adjusted revenue for the prior year, which
was in line with our guidance of 36%.
The number of WaterLase systems sold during 2012 increased by
37.1% as compared to the prior year, primarily due to increased
sales of WaterLase iPlus systems and sales of MD Turbo™ systems,
including 100% of the equipment that the Company re-purchased in
connection with the Schein termination agreement.
Net revenues from the sale of WaterLase systems, including the
effect of the $1.1 million inventory repurchase from Schein during
the 2012 second quarter, increased $6.8 million, or 23.1%, for 2012
as compared to the prior year. Excluding the effect of the Schein
inventory re-purchase and the 2011 non-recurring event of equipment
sales to Schein for irrevocable purchase orders of $2.3 million;
non-GAAP adjusted net revenue from the sales of our WaterLase
systems for 2012 increased by $10.2 million, or 37.7%, compared to
2011.
WaterLase system sales comprised approximately 62.8% of gross
revenues for 2012 compared to 59.9% for the prior year. The
majority of these WaterLase revenues were from sales of the
Company's flagship WaterLase iPlus all-tissue laser system.
Revenues from the sale of diode laser systems decreased $2.9
million, or 31.2%, to $6.3 million for 2012 as compared to $9.2
million for 2011. Diode laser system sales comprised approximately
11.0% of net revenues for 2012 compared to 18.8% for the prior
year. Excluding the effect of the 2011 non-recurring diode sales to
Schein for irrevocable purchase orders of $3.6 million, non-GAAP
adjusted net revenue from the sales of our diode systems for 2012
increased by $729,000, or 13.1%, compared to 2011. Diode laser
system sales were negatively impacted during 2012 due to market
anticipation of new EPIC 10 diode laser system which was cleared by
the FDA in October 2012.
Imaging system net revenue, which included our in-licensed cone
beam and CAD/CAM products, totaled approximately $3.4 million, or
5.9% of net revenue, in 2012, as compared to $238,000, or 0.5% of
net revenue, in 2011.
Pignatelli commented, "We added cone beam digital imaging to our
product offerings in late 2011, and further enhanced our imaging
products with the addition of CAD/CAM intra-oral scanning in late
2012. These in-licensed imaging systems are expected to generate
greater revenue growth while increasing awareness in our core
internally developed laser products."
Gross profit as a percentage of net revenue was 46.2% for 2012
as compared to 43.6% for the prior year. The year-over-year
increase was primarily due to increased sales of WaterLase systems
and increased sales of ancillary consumables, coupled with lower
costs of revenues, reflecting lower service and warranty expenses
due to ongoing improvements in manufacturing processes and
quality.
Operating expenses totaled $29.0 million for 2012, or 50.6% of
net sales, as compared to $25.3 million, or 51.8% of net sales, for
2011. The increase was primarily due to increased sales commission
earned on higher revenues, increased convention costs associated
with the imaging product lines, increased payroll and consulting
fees related to further development of the Company's direct sales
force, and increased media and advertising costs.
The net loss for 2012 was $3.1 million, or a loss of $0.10 per
share, compared with a net loss of $4.5 million, or a loss of $0.15
per share, for 2011.
After removing interest expense of $239,000, non-cash
depreciation and amortization expenses of $513,000, and non-cash
stock-based, other equity instruments, and other non-cash
compensation expense of $1.9 million, the non-GAAP net loss for
2012 was $431,000, or a loss of $0.01 per share, compared with a
non-GAAP net loss of $1.4 million, or a loss of $0.05 per share,
for 2011.
Liquidity and Capital Resources As of December 31, 2012, BIOLASE
had approximately $7.5 million in working capital. Cash and cash
equivalents totaled approximately $2.5 million at December 31,
2012, compared to $1.3 million at September 30, 2012, and $3.3
million at December 31, 2011.
Accounts receivable totaled $11.7 million at December 31, 2012,
compared to $10.3 million at September 30, 2012, and $8.9 million
at December 31, 2011. Stockholders' equity was $11.8 million at
December 31, 2012. In addition, the Company had two revolving
credit facilities totaling $8.0 million, with $6.4 million of
available borrowings, in excess of the $1.6 million outstanding, at
December 31, 2012.
Financial Outlook For the 2013 first quarter, BIOLASE expects
net revenue of approximately $14.0 million to $15.0 million. The
midpoint of $14.5 million reflects expected growth of approximately
18% as compared to the 2012 first quarter. After the 2013 first
quarter the Company does not plan to provide quarterly guidance for
the rest of 2013.
For the year ending December 31, 2013, the Company expects net
revenue of approximately $68 million to $72 million. The midpoint
of $70 million represents a 22% increase over 2012 net revenue and
would also represent record revenue for the Company. The Company
also expects to generate cash from operations for the year ending
December 31, 2013.
Conference Call As previously announced, BIOLASE will hold a
conference call to discuss these financial results as follows:
Date: Wednesday, March 6, 2013
Time: 4:30pm EST
Dial-in numbers: 1-877-941-1428 (toll-free/U.S. & Canada)
1-480-629-9665 (toll/international)
Live webcast: www.biolase.com, under 'Investors'
The archived webcast will be available for 30 days on the
Company's website, www.biolase.com, in the 'Investors' section
under 'Audio Archive'.
About BIOLASE, Inc. BIOLASE, Inc. is a biomedical company that
develops, manufactures and markets dental lasers and also
distributes and markets dental imaging equipment and CAD/CAM
systems; products that are focused on technologies that advance the
practice of dentistry and medicine. The Company's laser products
incorporate approximately 314 patented and patent-pending
technologies designed to provide biologically clinically superior
performance with less pain and faster recovery times. Its imaging
products provide cutting-edge technology at competitive prices to
deliver the best results for dentists and patients. BIOLASE's
principal products are dental laser systems that perform a broad
range of dental procedures, including cosmetic and complex surgical
applications, and a full line of dental imaging equipment. BIOLASE
has sold more than 22,000 lasers worldwide. Other products under
development address ophthalmology and other medical and consumer
markets.
WaterLase®, WaterLase MD®, iPlus®, WaterLase MD Turbo™, and
EPIC™ are trademarks of BIOLASE, Inc.
TRIOS® is a registered trademark of 3Shape A/S.
For updates and information on WaterLase and laser dentistry,
find BIOLASE online at www.biolase.com, Facebook at
www.facebook.com/biolaseinc, Twitter at twitter.com/biolaseinc, and
YouTube at www.youtube.com/biolasevideos.
Non-GAAP Financial Measures The non-GAAP financial measures
contained herein are a supplement to the corresponding financial
measures prepared in accordance with generally accepted accounting
principles ("GAAP"). The non-GAAP financial measures presented
exclude the items summarized in the table on page 10 of this press
release. Management believes that adjustments for these items
assist investors in making comparisons of period-to-period
operating results and that these items are not indicative of the
Company's on-going core operating performance.
Management uses non-GAAP net income (loss) and non-GAAP net
income (loss) per basic and diluted share in its evaluation of the
Company's core after-tax results of operations and trends between
fiscal periods and believes that these measures are important
components of its internal performance measurement process.
Management believes that providing these non-GAAP financial
measures allows investors to view the Company's financial results
in the way that management views the financial results.
The non-GAAP financial measures presented herein have certain
limitations in that they do not reflect all of the costs associated
with the operations of the Company's business as determined in
accordance with GAAP. 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. The non-GAAP financial measures presented by
the Company may be different from the non-GAAP financial measures
used by other companies.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995 Statements contained in this press release that
refer to BIOLASE's estimated or anticipated future results or other
non-historical facts are forward-looking statements, as are any
statements in this press release concerning prospects related to
BIOLASE's strategic initiatives, product introductions and
anticipated financial performance. Forward-looking statements can
also 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. Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect BIOLASE's current
perspective of existing trends and information 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
affecting BIOLASE's business. These factors include, among others,
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 may be detailed, from time-to-time, in BIOLASE's
reports filed with the SEC. BIOLASE does not undertake any
responsibility to revise or update any forward-looking statements
contained herein.
(financial tables follow)
BIOLASE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- --------------------
2012 2011 2012 2011
--------- --------- --------- ---------
Products and services revenue $ 19,044 $ 13,137 $ 58,332 $ 48,419
Non-recurring event -- -- (1,141) --
License fees and royalty revenue 36 20 165 439
--------- --------- --------- ---------
Net revenue 19,080 13,157 57,356 48,858
--------- --------- --------- ---------
Cost of revenue 10,190 7,609 32,019 27,540
Non-recurring event -- -- (1,141) --
--------- --------- --------- ---------
Net cost of revenue 10,190 7,609 30,878 27,540
--------- --------- --------- ---------
Gross profit 8,890 5,548 26,478 21,318
--------- --------- --------- ---------
Operating expenses:
Sales and marketing 4,867 4,395 16,250 13,075
General and administrative 1,804 2,023 8,075 7,936
Engineering and development 1,027 1,073 4,684 4,311
--------- --------- --------- ---------
Total operating expenses 7,698 7,491 29,009 25,322
--------- --------- --------- ---------
Income (loss) from operations 1,192 (1,943) (2,531) (4,004)
--------- --------- --------- ---------
Loss on foreign currency
transactions (38) (78) (175) (88)
Interest expense (99) 1 (239) (305)
--------- --------- --------- ---------
Non-operating loss, net (137) (77) (414) (393)
--------- --------- --------- ---------
Income (loss) before income tax
provision 1,055 (2,020) (2,945) (4,397)
Income tax provision 14 10 111 89
--------- --------- --------- ---------
Net income (loss) $ 1,041 $ (2,030) $ (3,056) $ (4,486)
========= ========= ========= =========
Net income (loss) per share:
Basic $ 0.03 $ (0.06) $ (0.10) $ (0.15)
========= ========= ========= =========
Diluted $ 0.03 $ (0.06) $ (0.10) $ (0.15)
========= ========= ========= =========
Shares used in the calculation
of net income (loss) per share:
Basic 31,284 31,248 31,308 29,907
========= ========= ========= =========
Diluted 31,406 31,248 31,308 29,907
========= ========= ========= =========
BIOLASE, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except per share data)
December 31,
--------------------------
2012 2011
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 2,543 $ 3,307
Accounts receivable, less allowance of $304
and $289 in 2012 and 2011, respectively 11,680 8,899
Inventory, net 11,142 11,312
Prepaid expenses and other current assets 1,552 1,808
------------ ------------
Total current assets 26,917 25,326
Property, plant and equipment, net 1,509 1,148
Intangible assets, net 300 212
Goodwill 2,926 2,926
Deferred tax asset 16 8
Other assets 305 187
------------ ------------
Total assets $ 31,973 $ 29,807
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Lines of credit $ 1,637 $ --
Accounts payable 7,663 7,804
Accrued liabilities 6,267 6,177
Customer deposits 582 165
Deferred revenue, current portion 3,226 2,136
------------ ------------
Total current liabilities 19,375 16,282
Deferred tax liabilities 663 594
Deferred revenue, long-term 3 25
Other liabilities, long-term 138 337
------------ ------------
Total liabilities 20,179 17,238
------------ ------------
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock, par value $0.001 -- --
Common stock, par value $0.001 34 33
Additional paid-in capital 140,747 138,507
Accumulated other comprehensive loss (320) (360)
Accumulated deficit (112,268) (109,212)
------------ ------------
28,193 28,968
Treasury stock (cost of 1,964 shares
repurchased) (16,399) (16,399)
------------ ------------
Total stockholders' equity 11,794 12,569
------------ ------------
Total liabilities and stockholders' equity $ 31,973 $ 29,807
============ ============
BIOLASE, INC.
Reconciliation of GAAP Financial Results to Non-GAAP Financial Measures
(unaudited, in thousands, except per share data)
Three months ended Twelve months ended
December 31, December 31,
--------------------- --------------------
2012 2011 2012 2011
---------- --------- --------- ---------
GAAP net revenue $ 19,080 $ 13,157 $ 57,356 $ 48,858
Add: inventory re-purchase in
connection with Schein
Termination Agreement -- -- 1,141 --
Less: equipment sales to Schein
for irrevocable purchase
orders -- -- -- (5,877)
---------- --------- --------- ---------
Non-GAAP adjusted revenue $ 19,080 $ 13,157 $ 58,497 $ 42,981
========== ========= ========= =========
GAAP net income (loss) $ 1,041 $ (2,030) $ (3,056) $ (4,486)
Adjustments:
Interest expense 99 (1) 239 305
Depreciation and amortization
expense 140 133 513 695
Stock-based, other equity
instruments, and other non-
cash compensation expense 383 638 1,873 2,051
---------- --------- --------- ---------
Non-GAAP net income (loss) $ 1,663 $ (1,260) $ (431) $ (1,435)
========== ========= ========= =========
GAAP net income (loss) per
share:
Basic and diluted $ 0.03 $ (0.06) $ (0.10) $ (0.15)
Adjustments:
Interest expense 0.00 0.00 0.01 0.01
Depreciation and amortization
expense 0.00 0.00 0.02 0.02
Stock-based, other equity
instruments, and other non-
cash compensation expense 0.02 0.02 0.06 0.07
---------- --------- --------- ---------
Non-GAAP net income (loss) per
share:
Basic and Diluted $ 0.05 $ (0.04) $ (0.01) $ (0.05)
========== ========= ========= =========
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