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BriteSmile Reports First Quarter 2005 Results WALNUT CREEK, Calif., May 5 /PRNewswire-FirstCall/ -- BriteSmile, Inc. (NASDAQ:BSML), a leading international provider of state-of-the-art teeth-whitening systems, today released results for the quarter ended March 26, 2005. Total revenue for the first quarter of 2005 was $10.2 million, or 14% below the first quarter of 2004. The number of whitening procedures performed in the first quarter declined 3% compared to last year. The net loss was $(3.0) million or $(0.28) per share in the first quarter ended March 26, 2005 compared with $(1.2) million or $(0.12) per share in the first quarter of 2004. Earnings before interest, tax, depreciation, and amortization (EBITDA) was a loss of $(2.5) million in the first quarter 2005, excluding a $0.7 million non-cash charge to BriteSmile's income statement related to the stock grant to the new CEO hired in January 2005. This compares to an EBITDA of $0.6 million in the first quarter of last year. EBITDA is a non-GAAP financial measure. More information regarding this non-GAAP financial measure, and a reconciliation of EBITDA to net loss, the most directly comparable GAAP measure, is provided below. Other key highlights for the first quarter were: * Center whitening fees of $4.4 million were 2% higher than last year. * Associated Center whitening fees of $4.4 million were 12% lower than the first quarter of 2004. * Product sales and other revenue of $1.4 million were 45% lower than last year. The decrease compared to the first quarter of last year was primarily due to the launch of the BriteSmile-to-Go(TM) (BTG) take-home whitening pen in the dental distribution channel that continued into the first quarter of 2004. * Signed a lease to open our eighteenth whitening spa in Tyson's Corner, Virginia, which is planned to open in the third quarter of this year. * Launched integrated professional and consumer press campaign to publicize the oral health benefits of the BriteSmile(TM) whitening procedure. "Although revenues are beginning to show some positive momentum following the fourth quarter of 2004, we are not satisfied with the EBITDA loss," said Gregg Coccari, BriteSmile CEO. "We are continuing to perform numerous marketing tests and are implementing new sales initiatives to optimize our sales and marketing efforts and improve revenue momentum. In addition, we are continuing our footprint expansion with the announcement of our newest spa scheduled to open in Tyson's Corner in the third quarter of this year." BriteSmile has developed and manufactures the most advanced teeth whitening technology available, as well as manages state-of-the-art BriteSmile Professional Teeth Whitening Centers. BriteSmile Centers are currently operating in Beverly Hills, Irvine, Palo Alto, Walnut Creek and La Jolla, CA; Houston, TX; Denver, CO; Boston, MA; Boca Raton, FL; Atlanta, GA; New York, NY; Chicago and Schaumburg, IL; and, Phoenix, AZ. In addition to BriteSmile Centers, the Company has established more than 5,000 Associated Centers. Of the BriteSmile Associated Centers, more than 2,000 are located outside of the United States, in more than 75 countries. For more information about BriteSmile's procedure, call 1-800-BRITESMILE or visit the Company's Website at http://www.britesmile.com/. This release, other than historical information, consists of forward- looking statements that involve risks and uncertainties such as the Company's ability to continue past revenue and EBITDA growth, its ability to establish Associated Centers and Professional Teeth Whitening Centers, the ability of those Centers to attract clients, the development and introduction of new products, acceptance of those new products in the marketplace, development of new strategic and marketing relationships in the United States and internationally, and the Company's continued ability to secure financing to support its expansion. Readers are referred to the documents filed by BriteSmile with the Securities and Exchange Commission, specifically the Company's most recent reports on Forms 10-K and 10-Q, that identify important risk factors which could cause actual results to differ from those contained in the forward-looking statements. BriteSmile and its affiliates disclaim any intent or obligation to update these forward-looking statements. Non-GAAP Financial Information BriteSmile provides non-GAAP EBITDA or earnings before interest, taxes, depreciation and amortization as additional information for its operating results. These measures are not in accordance with, or an alternative for, financial measures calculated in accordance with generally accepted accounting principles, including net income or loss, the most directly comparable GAAP measure, and may be different from non-GAAP measures used by other companies. BriteSmile's management believes this non-GAAP measure is useful to investors because of: (i) the significant amount of non-cash depreciation and amortization incurred by the Company in its operating results ($1.6 million in the first quarter of 2005 and $1.7 million in the first quarter of 2004), (ii) the non-cash amortization of the discount on debt of $0.6 million in the first quarter of 2005, (iii) the mark-to-market gain related to the convertible notes of $2.7 million in the first quarter of 2005, and (iv) non-cash charge for $0.7 million for stock issuance upon hire of the new CEO. Investors are cautioned that the items excluded from EBITDA are significant components in understanding and assessing BriteSmile's financial performance. BRITESMILE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DATA (unaudited) ($ in thousands, except share data) 13 weeks ended 13 weeks ended March 26, March 27, 2005 2004 REVENUES: Center whitening fees, net $4,432 $4,341 Associated Center whitening fees, net 4,368 5,007 Product and other revenue 1,353 2,422 Total revenues, net 10,153 11,770 OPERATING COSTS AND EXPENSES: Operating and occupancy costs 4,201 4,106 Selling, general and administrative expenses 8,366 6,842 Research and development expenses 75 172 Total Operating Costs and Expenses, excluding depreciation, amortization and stock grant non-cash charge 12,642 11,120 Operating income (loss) before depreciation and amortization (EBITDA) excluding stock grant non-cash charge (2,489) 650 Depreciation and amortization 1,591 1,673 Stock grant non-cash charge 693 -- Loss from operations (4,773) (1,023) Amortization of discount on debt (637) (63) Gain on mark-to-market of convertible note instruments 2,730 -- Other Income/(Expense), net (208) (99) Loss before income tax provision (2,888) (1,185) INCOME TAX 96 57 Net loss $(2,984) $(1,242) BASIC AND DILUTED NET LOSS PER SHARE $(0.28) $(0.12) WEIGHTED AVERAGE SHARES - BASIC AND DILUTED 10,491,815 10,192,292 Reconciliation of Non-GAAP financial measures - EBITDA to Net Loss (unaudited) ($ in thousands) 13 weeks ended 13 weeks ended March 26, March 27, 2005 2004 Net loss $(2,984) $(1,242) Add back: Interest expense, net 208 99 Add back: Amortization of debt discount 637 63 Add back: Income tax expense 96 57 Add back: Depreciation and amortization 1,591 1,673 (Gain)/loss from mark-to-market of financial instruments related to convertible debt (2,730) -- EBITDA (3,182) 650 Add back: stock grant non-cash charge 693 -- EBITDA excluding stock grant non-cash charge $(2,489) $650 BRITESMILE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) ($ in thousands, except share data) March 26, December 25, 2005 2004 ASSETS CURRENT ASSETS: Cash and cash equivalents $13,948 $18,880 Trade accounts receivable, net of allowances of $469 and $448, respectively 1,986 2,118 Inventories 1,130 1,635 Prepaid expenses and other 1,003 704 Total current assets 18,067 23,337 PROPERTY AND EQUIPMENT, net 12,252 12,426 OTHER ASSETS 3,325 3,843 INTANGIBLES, net 5,305 5,469 TOTAL ASSETS $38,949 $45,075 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $4,817 $5,182 Accrued liabilities 5,797 6,867 Deferred revenue 1,651 1,049 Current portion of long-term debt and capital lease obligations 1,854 2,137 Total current liabilities 14,119 15,235 LONG-TERM LIABILITIES: Long-term debt and capital lease obligations 11,625 15,650 Other long term liabilities 1,627 1,608 Total long-term liabilities 13,252 17,258 Total liabilities 27,371 32,493 STOCKHOLDERS' EQUITY: Common stock, $.001 par value; 50,000,000 shares authorized; 10,522,646 and 9,525,265 shares issued and outstanding, respectively 38 38 Additional paid-in capital 172,581 170,601 Accumulated deficit (161,041) (158,057) Total shareholders' equity 11,578 12,582 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $38,949 $45,075 DATASOURCE: BriteSmile, Inc. CONTACT: investors, Kenneth A. Czaja, CFO, +1-925-941-6260, or media, Chris Edwards, +1-925-279-2926 Web site: http://www.britesmile.com/

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