On November 6, 2019 BIOLASE, Inc. (NASDAQ: BIOL), the global leader in dental lasers, reported net revenue of $8.6 million for the third quarter ended September 30, 2019 (Press release, Biolase Technology, NOV 6, 2019, View Source [SID1234550518]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
Third Quarter and Recent Operating and Financial Highlights
The Company’s Inaugural Advancing Dentistry Symposium attracted over 250 professionals in the dental field, providing an opportunity for collaboration and immersive education around technologies and techniques that are advancing dentistry
During the symposium, a first-of-its-kind landmark study by the McGuire Institute on the clinical efficacy of Waterlase-assisted treatment of periodontitis versus open-flap gum surgery was previewed
Waterlase dental lasers received clearance in the U.S. and Canada for crown and veneer removal
Increased financial flexibility and working capital with new credit facility and bolstered balance sheet with $8.5 million equity offering
"Despite being a transition year for BIOLASE as we migrate from an R&D centric company to a full-scale commercial operation, we are progressing as expected, and I am pleased with the team’s overall performance," commented Todd Norbe, President and Chief Executive Officer. "We recently achieved a significant regulatory milestone in the U.S. and Canada as our Waterlase dental lasers received clearance for crown and veneer removal, and we successfully hosted our inaugural two-day Advancing Dentistry symposium with over 250 dental professionals in attendance. At the event, Dr. Donald Clem previewed a first-of-its-kind landmark study by the McGuire Institute on the clinical efficacy of Waterlase-assisted treatment of periodontitis versus traditional open-flap gum surgery. We expect the six-month interim data will be published by the end of 2019 and anticipate the full study data will be published in a scientific journal during the first half of 2020. I continue to believe we have developed the best product to advance dentistry and believe this data will be a positive catalyst for our business. Our focus now is on expanding the reach of this great technology."
2019 Third Quarter Financial Results
Net revenue for the third quarter of 2019 was $8.6 million, in-line with the Company’s previously disclosed revenue estimate, compared to net revenue of $10.9 million for the third quarter of 2018. U.S. laser revenue was $2.3 million for the third quarter of 2019 compared to U.S. laser revenue of $3.8 million for the third quarter of 2018, due to the U.S. sales force realignment announced last quarter. U.S. consumables and other revenue for the third quarter of 2019, which consists of revenue from consumable products such as disposable tips, decreased 5.8% compared to the third quarter of 2018. Outside the U.S., laser revenue declined to $2.8 million for the third quarter of 2019 compared to $3.3 million for the third quarter of 2018, primarily due to generating an order backlog from international distributors as we continue to seek more favorable pricing and payment terms.
Gross margin for the third quarter of 2019 was 34% compared to 36% for the third quarter of 2018. The lower gross margin reflects the impact of fixed costs on lower net revenues, partially offset by operating cost efficiencies. Total operating expenses were $7.9 million for the third quarter of 2019 compared to $8.5 million for the third quarter of 2018, a decrease of $0.6 million despite an increase in provision for bad debt relating to our former distributor in China. Operating loss for the third quarter of 2019, was $4.9 million, compared to an operating loss of $4.5 million for the third quarter of 2018, a decrease of $0.4 million year over year. As previously announced, the net loss for the third quarter of 2019 was $5.5 million, or $0.25 per share compared to a net loss of $4.7 million, or $0.23 per share for the third quarter of 2018.
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.
The Adjusted EBITDA for the third quarter of 2019 was $2.7 million, or $0.12 per share compared with Adjusted EBITDA of $3.7 million, or $0.18 per share for the third quarter of 2018.
Cash, cash equivalents, and restricted cash totaled $2.4 million as of September 30, 2019.
Subsequent to the end of the third quarter, on October 29, 2019, the Company completed an $8.5 million public offering of common stock and a private placement of convertible preferred stock, strengthening its balance sheet. On October 31, 2019, the Company secured a $3.0 million revolving line of credit from Pacific Mercantile Bank, the wholly-owned subsidiary of Pacific Mercantile Bancorp, increasing the Company’s financial flexibility and for working capital purposes.
"The new line of credit and recently completed equity offering are significant developments for BIOLASE as they significantly improve our working capital, strengthen our balance sheet and allow us to enter 2020 in a far stronger position," added John Beaver, Executive Vice President and Chief Financial Officer. "We now have the financial flexibility and resources to execute our business plan to return to sustainable, profitable revenue growth and we remain committed to achieving adjusted EBITDA break-even in the current fourth quarter."
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, 2019, 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 800-458-4148. For international participants outside the U.S./Canada, the dial-in number is 323-794-2093. For all callers, refer to the Conference ID 9068935. 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.