BIOLASE Reports Strong Sequential Revenue Growth In Third Quarter 2020
BIOLASE, Inc. (NASDAQ: BIOL) reported a significant rebound in its third quarter 2020 results, with total revenue reaching $6.5 million, a 124% increase sequentially from Q2, although down 24% year over year. U.S. laser revenue rose 16% year over year to $2.7 million, driven by higher average selling prices. Operating expenses decreased by 24% to $5.9 million, leading to a reduced operating loss of $3.7 million. The company also strengthened its balance sheet via an $18 million equity raise, with cash reserves totaling $19.2 million as of September 30, 2020.
- U.S. laser revenue increased 16% year over year.
- Total revenue more than doubled sequentially, increasing 124% from Q2.
- Operating expenses decreased by 24% year over year.
- Cash and equivalents totaled $19.2 million, bolstered by an $18 million equity raise.
- Total revenue decreased by 24% compared to the same quarter in 2019.
- Outside U.S. laser revenue declined 64% year over year.
- Net loss after preferred stock dividend was $17.4 million, or $0.21 per share.
FOOTHILL RANCH, Calif., Nov. 12, 2020 /PRNewswire/ -- BIOLASE, Inc. (NASDAQ: BIOL), the global leader in dental lasers, today announced its financial results for the third quarter ended September 30, 2020.
Third Quarter 2020 Financial Highlights:
- U.S. laser revenue increased
16% year over year - U.S. consumables and other revenue increased
25% year over year - New customers represented over
90% of U.S. laser sales in the quarter - Total revenue more than doubled sequentially, while down
24% year over year - Operating expenses decreased
24% year over year - Significantly strengthened balance sheet with an
$18.0 million equity raise
"Our significantly improved third quarter revenue was driven by several factors, including
2020 Third Quarter Financial Results
Net revenue for the third quarter of 2020 was
Gross margin for the third quarter of 2020 was
Cash, cash equivalents, and restricted cash totaled
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 third quarter of 2020 was
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 third quarter ended September 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 9286776. 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 259 and 41 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 41,500 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 third 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 | Nine Months Ended | ||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||
Net revenue | $ | 6,539 | $ | 8,646 | $ | 14,260 | $ | 27,617 | |||||||||||
Cost of revenue | 4,265 | 5,677 | 9,692 | 17,746 | |||||||||||||||
Gross profit | 2,274 | 2,969 | 4,568 | 9,871 | |||||||||||||||
Operating expenses: | |||||||||||||||||||
Sales and marketing | 2,678 | 3,515 | 7,475 | 10,665 | |||||||||||||||
General and administrative | 2,300 | 3,210 | 7,446 | 8,114 | |||||||||||||||
Engineering and development | 963 | 1,126 | 2,644 | 3,665 | |||||||||||||||
Total operating expenses | 5,941 | 7,851 | 17,565 | 22,444 | |||||||||||||||
Loss from operations | (3,667) | (4,882) | (12,997) | (12,573) | |||||||||||||||
(Gain) loss on foreign currency transactions | (53) | 19 | 68 | 68 | |||||||||||||||
Interest expense, net | 568 | 551 | 1,782 | 1,559 | |||||||||||||||
Other (income) expense, net | (4,209) | — | (4,209) | — | |||||||||||||||
Non-operating loss | (3,694) | 570 | (2,359) | 1,627 | |||||||||||||||
Income (loss) before tax provision | 27 | (5,452) | (10,638) | (14,200) | |||||||||||||||
Income tax provision | 15 | 26 | 49 | 68 | |||||||||||||||
Net income (loss) | $ | 12 | $ | (5,478) | $ | (10,687) | $ | (14,268) | |||||||||||
Net income (loss) | $ | 12 | $ | (5,478) | $ | (10,687) | $ | (14,268) | |||||||||||
Deemed dividend on convertible preferred stock | (17,378) | — | (17,378) | — | |||||||||||||||
Net loss per share attributable to common stockholders: | $ | (17,366) | $ | (5,478) | $ | (28,065) | $ | (14,268) | |||||||||||
Basic | $ | (0.21) | $ | (0.25) | $ | (0.56) | $ | (0.66) | |||||||||||
Diluted | $ | (0.21) | $ | (0.25) | $ | (0.56) | $ | (0.66) | |||||||||||
Shares used in the calculation of net loss per share: | |||||||||||||||||||
Basic | 81,341 | 21,898 | 50,366 | 21,545 | |||||||||||||||
Diluted | 81,341 | 21,898 | 50,366 | 21,545 | |||||||||||||||
BIOLASE, INC. | ||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||
(In thousands, except per share data) | ||||||||||
September 30, | December 31, | |||||||||
2020 | 2019 | |||||||||
(Unaudited) | (Audited) | |||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 18,847 | $ | 5,789 | ||||||
Restricted cash | 312 | 312 | ||||||||
Accounts receivable, less allowance of | 3,393 | 8,760 | ||||||||
Inventory | 12,592 | 10,995 | ||||||||
Prepaid expenses and other current assets | 903 | 1,163 | ||||||||
Total current assets | 36,047 | 27,019 | ||||||||
Property, plant and equipment, net | 742 | 1,193 | ||||||||
Goodwill | 2,926 | 2,926 | ||||||||
Right of use asset | 2,061 | 276 | ||||||||
Other assets | 220 | 433 | ||||||||
Total assets | $ | 41,996 | $ | 31,847 | ||||||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 2,592 | $ | 5,332 | ||||||
Accrued liabilities | 4,279 | 4,744 | ||||||||
Deferred revenue, current portion | 1,616 | 2,237 | ||||||||
Term loan (net of discount) | 12,946 | 13,466 | ||||||||
Total current liabilities | 21,433 | 25,779 | ||||||||
Deferred revenue | 412 | 358 | ||||||||
Warranty accrual | 204 | 245 | ||||||||
Other liabilities | 1,097 | 1,119 | ||||||||
Non current lease liability | 1,859 | 4 | ||||||||
Non current term loans | 3,140 | — | ||||||||
Total liabilities | 28,145 | 27,505 | ||||||||
Redeemable preferred stock: | ||||||||||
Series E Preferred stock, par value | $ | — | $ | 3,965 | ||||||
Total redeemable preferred stock | — | 3,965 | ||||||||
Stockholders' equity: | ||||||||||
Series F Preferred Stock, par value | 141 | — | ||||||||
Common stock, par value | 93 | 31 | ||||||||
Additional paid-in capital | 259,385 | 235,594 | ||||||||
Accumulated other comprehensive loss | (534) | (701) | ||||||||
Accumulated deficit | (245,234) | (234,547) | ||||||||
Total stockholders' equity | 13,851 | 377 | ||||||||
Total liabilities, redeemable preferred stock and stockholders' equity | $ | 41,996 | $ | 31,847 | ||||||
BIOLASE, INC. | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(Unaudited, in thousands) | |||||||
Nine Months Ended | |||||||
September 30, | |||||||
2020 | 2019 | ||||||
Cash Flows from Operating Activities: | |||||||
Net loss | $ | (10,687) | $ | (14,268) | |||
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: | |||||||
Depreciation and amortization | 527 | 754 | |||||
Provision for bad debts | 1,263 | 1,243 | |||||
Provision for sales returns | 87 | — | |||||
Amortization of discounts on lines of credit | 123 | 103 | |||||
Amortization of debt issuance costs | 240 | 130 | |||||
Change in fair value of warrants | (5,850) | — | |||||
Issuance costs for common stock warrants | 1,640 | — | |||||
Earned interest income | — | 2 | |||||
Stock-based compensation | 2,367 | 1,974 | |||||
Deferred income taxes | — | (6) | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 4,017 | 1,393 | |||||
Inventory | (1,597) | 711 | |||||
Prepaid expenses and other current assets | 430 | 1,011 | |||||
Accounts payable and accrued liabilities | (3,445) | (1,157) | |||||
Deferred revenue | (562) | 36 | |||||
Net cash and cash equivalents used in operating activities | (11,447) | (8,074) | |||||
Cash Flows from Investing Activities: | |||||||
Purchases of property, plant, and equipment | (78) | (138) | |||||
Net cash and cash equivalents used in investing activities | (78) | (138) | |||||
Cash Flows from Financing Activities: | |||||||
Proceeds from the issuance of common stock | 6,912 | — | |||||
Proceeds from the issuance of Series F Convertible Preferred Stock | 2,700 | — | |||||
Proceeds from the issuance of July 2020 Warrants | 15,300 | — | |||||
Payments of equity offering costs | (1,281) | (50) | |||||
Payments of warrant issuance costs | (1,640) | — | |||||
Borrowings on other long-term loans | 3,140 | — | |||||
Borrowings under term loan | — | 2,500 | |||||
Principal payment on term loan | (700) | — | |||||
Borrowings on credit facility | 3,000 | — | |||||
Repayment of credit facility | (3,000) | — | |||||
Proceeds from the exercise of common stock warrants | 46 | — | |||||
Payment of debt issuance costs | (75) | (38) | |||||
Proceeds from exercise of stock options | — | 4 | |||||
Net cash and cash equivalents provided by financing activities | 24,402 | 2,416 | |||||
Effect of exchange rate changes | 181 | (157) | |||||
Decrease in cash, cash equivalents and restricted cash | 13,058 | (5,953) | |||||
Cash, cash equivalents and restricted cash, beginning of period | 6,101 | 8,356 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 19,159 | $ | 2,403 | |||
Supplemental cash flow disclosure: | |||||||
Cash paid for interest | $ | 1,438 | $ | 1,315 | |||
Cash paid for income taxes | $ | 21 | $ | 19 | |||
Cash paid for operating leases | $ | 417 | $ | 414 | |||
Non-accrual for accrual for equity offering costs | $ | — | $ | 191 | |||
Non-cash accrual for capital expenditures | $ | — | $ | 4 | |||
Non-cash settlement of performance award liability | $ | 151 | $ | — | |||
Non-cash right-of-use assets obtained in exchange for lease obligation | $ | 2,037 | $ | 824 | |||
Deemed dividend on preferred stock | $ | 17,378 | $ | — | |||
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 | Nine Months Ended | |||||||||||||||||
September 30 | September 30 | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||
GAAP net loss attributable to common stockholders | $ | (17,366) | $ | (5,478) | $ | (28,065) | $ | (14,268) | ||||||||||
Deemed dividend on convertible preferred stock | 17,378 | — | 17,378 | — | ||||||||||||||
GAAP net income (loss) | $ | 12 | $ | (5,478) | $ | (10,687) | $ | (14,268) | ||||||||||
Adjustments: | ||||||||||||||||||
Interest expense, net | 568 | 551 | 1,782 | 1,559 | ||||||||||||||
Income tax provision | 15 | 26 | 49 | 68 | ||||||||||||||
Depreciation and amortization | 46 | 268 | 527 | 754 | ||||||||||||||
Change in allowance for doubtful accounts | 256 | 1,131 | 1,263 | 1,243 | ||||||||||||||
Stock-based compensation | 847 | 770 | 2,367 | 1,974 | ||||||||||||||
Other (income) expense, net | (4,209) | — | (4,209) | — | ||||||||||||||
Adjusted EBITDA | $ | (2,465) | $ | (2,732) | $ | (8,908) | $ | (8,670) | ||||||||||
GAAP net loss attributable to common stockholders per share, basic and diluted | $ | (0.21) | $ | (0.25) | $ | (0.56) | $ | (0.66) | ||||||||||
Deemed dividend on convertible preferred stock | 0.21 | — | 0.35 | — | ||||||||||||||
GAAP net income (loss) per share, basic and diluted | $ | 0.00 | $ | (0.25) | $ | (0.21) | $ | (0.66) | ||||||||||
Adjustments: | ||||||||||||||||||
Interest expense, net | 0.01 | 0.03 | 0.04 | 0.07 | ||||||||||||||
Income tax provision | — | — | — | — | ||||||||||||||
Depreciation and amortization | — | 0.01 | 0.01 | 0.03 | ||||||||||||||
Change in allowance for doubtful accounts | — | 0.05 | 0.02 | 0.06 | ||||||||||||||
Stock-based compensation | 0.01 | 0.04 | 0.04 | 0.09 | ||||||||||||||
Other (income) expense, net | (0.05) | — | (0.08) | — | ||||||||||||||
Adjusted EBITDA per share, basic and diluted | $ | (0.03) | $ | (0.12) | $ | (0.18) | $ | (0.41) | ||||||||||
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SOURCE BIOLASE, Inc.
FAQ
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