BIOLASE(BIOL) - 2024 Q2 - Quarterly Results

Executive Summary BIOLASE reported strong Q2 2024 consumable revenue, improved gross margin, and positive market reception for its new Waterlase iPlus Premier laser system Q2 2024 Highlights BIOLASE achieved record consumable revenue with over 600 subscriptions and improved gross margin to 40% through cost reductions - Achieved second-highest consumable revenue ever and over 600 recurring subscriptions, projecting over $2 million in scheduled shipments over the next twelve months[3] - Gross margin increased to 40% in Q2 2024, up from 33% in Q1 2024, driven by cost reduction efforts[3] - The U.S. launch of the Waterlase iPlus Premier laser system received a positive response, highlighting strong interest in industry-leading products[3] CEO Commentary CEO John Beaver highlighted strong consumable revenue and improved gross margin, positioning the company for future growth despite market challenges - Consumable revenue was strong, marking the second-highest ever, with over 600 recurring subscriptions[3] - Gross margin improved to 40% from 33% in Q1 2024, attributed to earlier cost reduction efforts[3] - Despite revenue challenges from higher interest rates, the company believes it is well-positioned for future growth when market conditions improve[3] Second Quarter 2024 Financial Results This section details BIOLASE's Q2 2024 financial performance across revenue, gross margin, operating expenses, net loss, and Adjusted EBITDA Revenue Performance Net revenue for Q2 2024 decreased to $11.6 million, primarily due to declines in U.S. laser revenue and international consumables Revenue Performance | Revenue Category | Q2 2024 (Millions) | Q2 2023 (Millions) | YoY Change (Millions) | Percentage Change | | :------------------------- | :----------------- | :----------------- | :-------------------- | :---------------- | | Net Revenue | $11.6 | $14.3 | -$2.7 | -18.9% | | U.S. Laser Revenue | $3.6 | $6.3 | -$2.7 | -42.9% | | U.S. Consumables & Other | N/A | N/A | N/A | -5% | | International Laser Revenue| $2.4 | $2.5 | -$0.1 | -4.0% | | International Consumables | N/A | N/A | N/A | -12% | Gross Margin and Operating Expenses Gross margin decreased to 40% in Q2 2024, while total operating expenses significantly reduced, improving the operating loss Gross Margin and Operating Expenses | Metric | Q2 2024 | Q2 2023 | YoY Change | Percentage Change | | :--------------------- | :----------- | :----------- | :----------- | :---------------- | | Gross Margin | 40% | 43% | -3 pp | -6.98% | | Total Operating Expenses | $7.8 million | $10.0 million| -$2.2 million| -22% | | Operating Loss | $3.2 million | $3.9 million | -$0.7 million| -17.9% (Improvement)| - Cash and cash equivalents stood at approximately $5.3 million as of June 30, 2024[5] Net Loss and Adjusted EBITDA Net loss attributable to common stockholders improved significantly, while Adjusted EBITDA loss slightly increased year-over-year Net Loss and Adjusted EBITDA | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | YoY Change (Millions) | | :---------------------------------------- | :----------------- | :----------------- | :-------------------- | | Net Loss Attributable to Common Stockholders | -$2.8 | -$14.2 | +$11.4 (Improvement) | | Net Loss Per Share | -$0.08 | -$26.14 | +$26.06 (Improvement) | | Adjusted EBITDA Loss | -$2.5 | -$2.3 | -$0.2 (Worsening) | | Adjusted EBITDA Per Share | -$0.08 | -$4.24 | +$4.16 (Improvement) | Full Year 2024 Financial Guidance This section provides BIOLASE's updated financial outlook for full-year 2024, including revenue and Adjusted EBITDA expectations Revenue Outlook BIOLASE updated its full-year 2024 revenue guidance to 2023 levels, reflecting H1 headwinds and a lower H2 capital equipment forecast - Updated 2024 full-year revenue guidance to be similar to 2023, reflecting H1 headwinds and a lower H2 capital equipment revenue forecast[6] Adjusted EBITDA Outlook The company expects a full-year 2024 Adjusted EBITDA loss between $6 million and $8 million, an improvement from 2023 Adjusted EBITDA Outlook | Metric | FY 2024 Guidance (Millions) | FY 2023 Actual (Millions) | Improvement (Millions) | | :--------------------- | :-------------------------- | :------------------------ | :--------------------- | | Adjusted EBITDA Loss | $6 - $8 | $12.8 | $4.8 - $6.8 | Company Overview This section provides background on BIOLASE, a medical device company specializing in dental and medical laser systems About BIOLASE BIOLASE is a medical device company focused on developing and selling laser systems for dentistry and medicine globally - BIOLASE is a medical device company focused on dental and medical laser systems[8] - As of December 31, 2023, the company had approximately 241 active patents and 21 patent-pending technologies[8] - Since 1998, BIOLASE has sold over 47,700 laser systems in more than 80 countries globally[8] Financial Statements This section presents BIOLASE's condensed consolidated statements of operations, balance sheets, and cash flows Condensed Consolidated Statements of Operations and Comprehensive Loss Net revenue for Q2 2024 was $11.555 million, with net loss attributable to common stockholders improving to $(2.798) million Condensed Consolidated Statements of Operations and Comprehensive Loss | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :---------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net revenue | $11,555 | $14,286 | $21,687 | $24,753 | | Gross profit | $4,609 | $6,118 | $7,946 | $9,454 | | Total operating expenses | $7,829 | $9,990 | $15,691 | $18,618 | | Loss from operations | $(3,220) | $(3,872) | $(7,745) | $(9,164) | | Net loss | $(2,798) | $(4,868) | $(9,283) | $(10,717) | | Net loss attributable to common stockholders | $(2,798) | $(14,245) | $(9,283) | $(20,094) | | Net loss per share (Basic and Diluted) | $(0.08) | $(26.14) | $(0.36) | $(45.98) | Condensed Consolidated Balance Sheets Total assets decreased to $30.641 million as of June 30, 2024, while stockholders' equity (deficit) worsened to $(4.329) million Condensed Consolidated Balance Sheets | Metric | June 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :---------------------------------------- | :--------------------------- | :------------------------------- | | Cash and cash equivalents | $5,272 | $6,566 | | Total current assets | $22,094 | $24,863 | | Total assets | $30,641 | $35,101 | | Total current liabilities | $31,176 | $19,663 | | Total liabilities | $32,767 | $33,145 | | Total stockholders' equity (deficit) | $(4,329) | $(247) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities improved to $(6.672) million for the six months ended June 30, 2024 Condensed Consolidated Statements of Cash Flows | Cash Flow Category | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :------------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net cash and cash equivalents used in operating activities | $(6,672) | $(9,220) | | Net cash and cash equivalents provided by (used in) investing activities | $257 | $(944) | | Net cash and cash equivalents provided by financing activities | $5,219 | $12,793 | | (Decrease) increase in cash and cash equivalents | $(1,294) | $2,749 | | Cash and cash equivalents, end of period | $5,272 | $6,930 | Non-GAAP Financial Measures This section defines and reconciles non-GAAP financial measures, primarily Adjusted EBITDA, to their GAAP equivalents Definition and Rationale This section defines Adjusted EBITDA and explains management's rationale for using non-GAAP measures to assess core operating performance - Adjusted EBITDA is defined as net loss before interest, taxes, depreciation, stock-based and other non-cash compensation, severance expense, change in allowance for doubtful accounts, increase in inventory reserves, stock warrant issuance costs, and loss on warrants[15] - Management uses non-GAAP financial measures to assist investors in comparing period-to-period operating results and believes they are more indicative of the Company's ongoing core operating performance[14][15] Reconciliation of GAAP Net Loss to Adjusted EBITDA This section provides a detailed reconciliation of GAAP net loss to Adjusted EBITDA for both quarterly and year-to-date periods Reconciliation of GAAP Net Loss to Adjusted EBITDA | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :---------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | GAAP net loss attributable to common stockholders | $(2,798) | $(14,245) | $(9,283) | $(20,094) | | GAAP net loss | $(2,798) | $(4,868) | $(9,283) | $(10,717) | | Adjustments (Total) | $253 | $2,557 | $3,209 | $3,957 | | Adjusted EBITDA | $(2,545) | $(2,311) | $(6,074) | $(6,760) | | Adjusted EBITDA per share | $(0.08) | $(4.24) | $(0.24) | $(15.47) | Cautionary Statement Regarding Forward-Looking Statements This section warns that forward-looking statements are subject to risks and uncertainties, and actual results may differ materially - Forward-looking statements in the press release involve significant risks and uncertainties, including those concerning expected revenue and revenue growth[10] - Readers are cautioned not to place undue reliance on these statements, as actual results may differ materially due to factors such as general economic and market conditions, competitive pressures, customer acceptance of new products, and risks associated with managing business growth[10] - The company explicitly states that it does not undertake any responsibility to revise or update any forward-looking statements, except as required by law[11]