BIOLASE MAINTAINS MOMENTUM AND REPORTS NINTH CONSECUTIVE QUARTER OF YEAR

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11 May, 2023, 16:21 ET

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Educational and Training Programs Introducing Broader Community of Dentists to Experience Industry-Leading Dental Lasers for the First Time

LAKE FOREST, Calif., May 11, 2023 /PRNewswire/ -- BIOLASE, Inc. (NASDAQ: BIOL), the global leader in dental lasers, today announced its financial results for the first quarter ended March 31, 2023.

First Quarter Financial Highlights

"Our results for the first quarter were largely in-line with our prior expectations that we discussed on our 2022 earnings call a couple of months ago, and it's encouraging that we achieved another quarter of year-over-year growth despite the comparable periods being tougher," commented John Beaver, President and Chief Executive Officer. "I believe the sales team's enthusiasm, which is being felt throughout the organization, is a combination of our go-to-market initiatives and the positive response they are getting from the broader dental community – especially those new to our award-winning lasers. We believe the effort and investments we are making today will pay off in the coming quarters, as evidenced by the rising demand and the rising number of dentists that are attending our many training events and those benefitting from our novel educational programs. For example, the Waterlase Exclusive Trial Program is generating stellar results and we believe is creating a tailwind that gives us greater confidence that we can achieve our revenue growth and profitability outlook for the full year. In addition, our record quarter in consumable sales represents a historic shift in laser utilization, and further demonstrates the impact more frequent, higher quality training and pre-sale training programs such as WETP can have on our consumable business and achieving margin growth."

First Quarter Financial Results

Net revenue for the quarter ended March 31, 2023 was $10.5 million, an increase of 3% compared to net revenue of $10.2 million for the quarter ended March 31, 2022. U.S. laser revenue was $3.5 million for the quarter ended March 31, 2023, a decrease of 14% compared to U.S. laser revenue of $4.0 million for the quarter ended March 31, 2022. U.S. consumables and other revenue for the quarter ended March 31, 2023, which consists of revenue from consumable products such as disposable tips, increased 19% year over year. International laser revenue was $2.8 million for the quarter ended March 31, 2023, up 22% compared to $2.3 million for the quarter ended March 31, 2022.

Gross margin for the quarter ended March 31, 2023 was 32% compared to 47% for the quarter ended March 31, 2022. The decrease in gross profit is primarily due to the impact of supply chain issues we have encountered requiring us to change to new suppliers, and the effect of an increase in the percentage of our revenue generated outside the U.S., where margins are lower than our U.S. business. Total operating expenses were $8.6 million for the quarter ended March 31, 2023, compared to $8.9 million for the quarter ended March 31, 2022, a 3% decrease year over year. Operating loss for the quarter ended March 31, 2023 was $5.3 million, compared to an operating loss of $4.2 million for the quarter ended March 31, 2022, an increase of 26% year over year.

The Company had cash and cash equivalents of approximately $6.5 million on March 31, 2023.

Net Loss and Adjusted EBITDA

The Non-GAAP Financial Measures 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.

Net loss attributable to common stockholders for the quarter ended March 31, 2023 was $5.8 million, or $0.18 per share, compared to a net loss of $5.0 million, or $0.81 per share, for the quarter ended March 31, 2022. Adjusted EBITDA for the quarter ended March 31, 2023 was a loss of $4.4 million, or $0.14 per share, compared with an adjusted EBITDA loss of $3.9 million, or $0.64 per share, for the quarter ended March 31, 2022.

2023 Second Quarter and Full Year Financial Guidance

BIOLASE is anticipating second-quarter net revenue to grow at least 25% year over year. The Company is also reiterating its 2023 full-year revenue guidance for net revenue to increase at least 25% year over year and expects to achieve positive adjusted EBITDA results for the full year of 2023 (adjusted EBITDA is defined as net loss before interest, taxes, depreciation and amortization, stock-based and other non-cash compensation, and the change in allowance for doubtful accounts).

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 first quarter ended March 31, 2023, and to answer questions. To access the live call, dial 1-877-545-0523 (U.S.) or +1 973-528-0016 (International) and provide the following code: 180082.

A live and archived webcast of the conference call will be accessible on the BIOLASE Investor Relations page. In addition, a phone replay will be available approximately two hours following the end of the call, and it will remain available for one week. To access the call replay, dial 1-877-481-4010 or +1 919-882-2331 (International) and enter replay passcode: 48342.

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 266 actively patented and 25 patent-pending technologies designed to provide biologically and 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 dental laser systems that perform a broad range of dental procedures, including cosmetic and complex surgical applications. From 1998 through December 31, 2022, BIOLASE has sold over 45,500 laser systems 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 Securities Litigation Reform Act of 1995, that involve significant risks and uncertainties, including statements, regarding BIOLASE's expected revenue and revenue growth. 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, 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, substantial doubt regarding BIOLASE's ability to continue as a going concern, inability to raise additional capital on terms acceptable to BIOLASE and those other risks and uncertainties that are described in the "Risk Factors" section of BIOLASE's most recent annual report on Form 10-K and quarterly report on Form 10-Q 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.

For further information, please contact:

EVC Group LLCMichael Polyviou / Todd Kehrli(732) 933-2754[email protected] / [email protected]

Tables to Follow

BIOLASE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited, in thousands, except per share data)

Three Months Ended

March 31,

2023

2022

Net revenue

10,467

10,166

Cost of revenue

7,130

5,437

Gross profit

3,337

4,729

Operating expenses:

Sales and marketing

4,622

4,814

General and administrative

2,459

2,577

Engineering and development

1,547

1,544

Total operating expenses

8,628

8,935

Loss from operations

(5,291)

(4,206)

Gain (loss) on foreign currency transactions

(120)

Interest expense, net

(577)

(433)

Non-operating loss, net

(557)

(553)

Loss before income tax provision

(5,848)

(4,759)

Income tax provision

(1)

(17)

Net loss

(5,849)

(4,776)

Other comprehensive loss items:

Foreign currency translation adjustments

(41)

Comprehensive loss

(5,769)

(4,817)

Net loss

(5,849)

(4,776)

Deemed dividend on convertible preferred stock

—

(217)

Net loss attributable to common stockholders

(5,849)

(4,993)

Net loss per share attributable to common stockholders:

Basic and Diluted

(0.18)

(0.81)

Shares used in the calculation of net loss per share:

Basic and Diluted

32,806

6,159

BIOLASE, INC.CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands, except per share data)

March 31,

December 31,

2023

2022

ASSETS

Current assets:

Cash and cash equivalents

6,532

4,181

Accounts receivable, less allowance of $2,124 and $2,164 as of March 31, 2023 and December 31, 2022, respectively

5,158

5,841

Inventory

17,775

15,884

Prepaid expenses and other current assets

2,499

3,053

Total current assets

31,964

28,959

Property, plant, and equipment, net

4,719

4,278

Goodwill

2,926

Right of use asset

2,078

1,768

Other assets

257

255

Total assets

41,944

38,186

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

7,540

5,786

Accrued liabilities

7,977

9,210

Deferred revenue, current portion

2,082

2,111

Term loan, net of discount

1,400

700

Total current liabilities

18,999

17,807

Deferred revenue

355

418

Warranty accrual

426

360

Non current term loans, net of discount

12,496

13,091

Non current operating lease liability

1,432

1,259

Other liabilities

362

Total liabilities

33,786

33,297

Stockholders' equity:

Common stock, par value $0.001 per share

Additional paid-in capital

310,802

301,782

Accumulated other comprehensive loss

(653)

(733)

Accumulated deficit

(302,017)

(296,168)

Total stockholders' equity

8,158

4,889

Total liabilities, redeemable preferred stock and stockholders' equity

41,944

38,186

BIOLASE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands)

Three Months Ended

March 31,

2023

2022

Cash Flows from Operating Activities:

Net loss

(5,849)

(4,776)

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

Depreciation and amortization

149

117

Provision (recoveries) for bad debts

(17)

Provision for sales returns

—

Amortization of debt issuance costs

107

Stock-based compensation

691

209

Changes in operating assets and liabilities:

Accounts receivable

700

(1,085)

Inventory

(1,890)

(1,682)

Prepaid expenses and other current assets

240

(186)

Accounts payable and accrued liabilities

303

(986)

Deferred revenue

(92)

157

Net cash and cash equivalents used in operating activities

(5,658)

(8,021)

Cash Flows from Investing Activities:

Purchases of property, plant, and equipment

(587)

(304)

Net cash and cash equivalents used in investing activities

(587)

(304)

Cash Flows from Financing Activities:

Proceeds from the sale of common stock and pre-funded warrants

8,503

—

Proceeds from the exercise of common stock warrants

—

Net cash and cash equivalents provided by financing activities

8,517

—

Effect of exchange rate changes

(41)

(Decrease) increase in cash, cash equivalents and restricted cash

2,351

(8,366)

Cash, cash equivalents and restricted cash, beginning of period

4,181

30,175

Cash, cash equivalents and restricted cash, end of period

6,532

21,809

Supplemental cash flow disclosure:

Cash paid for interest

470

377

Cash received for interest

Cash paid (received) for income taxes

(14)

Cash paid for operating leases

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

464

444

Deemed dividend on preferred stock

—

217

Non-GAAP Financial Measures

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.

Adjusted EBITDA is defined as net loss before interest, taxes, depreciation and amortization, stock-based and other non-cash compensation, and the change in 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 and GAAP Net Loss Per Share to Adjusted EBITDA Per Share(Unaudited, in thousands, except per share data)

Three Months Ended

March 31,

2023

2022

GAAP net loss attributable to common stockholders

(5,849)

(4,993)

Deemed dividend on convertible preferred stock

—

217

GAAP net loss

(5,849)

(4,776)

Adjustments:

Interest expense, net

577

433

Income tax provision

Depreciation and amortization

149

117

Change in allowance for doubtful accounts

(17)

Stock-based and other non-cash compensation

691

209

Adjusted EBITDA

(4,448)

(3,916)

GAAP net loss attributable to common stockholders per share, basic and diluted

(0.18)

(0.81)

Deemed dividend on convertible preferred stock

—

0.04

GAAP net loss per share, basic and diluted

(0.18)

(0.77)

Adjustments:

Interest expense, net

0.02

0.07

Income tax provision

—

Depreciation and amortization

—

0.02

Change in allowance for doubtful accounts

—

0.01

Stock-based and other non-cash compensation

0.02

0.03

Adjusted EBITDA per share, basic and diluted

(0.14)

(0.64)

SOURCE BIOLASE, Inc.

BIOLASE, Inc.