BIOLASE(US:BIOL)2019-05-10 21:20Financial Performance - Total net revenue for Q1 2019 was $10,326,000, a 3% increase from $10,020,000 in Q1 2018[9] - Gross profit for Q1 2019 was $3,522,000, compared to $3,033,000 in Q1 2018, reflecting a 16% increase[9] - The net loss for Q1 2019 was $4,900,000, slightly improved from a net loss of $5,021,000 in Q1 2018[9] - The Company reported total revenue of $10.3 million for the three months ended March 31, 2019, up from $10.0 million for the same period in 2018[50] - The Company’s revenue from end customers was $6.3 million for the three months ended March 31, 2019, compared to $6.1 million for the same period in 2018[53] - The Company’s international revenue was $4.2 million for the three months ended March 31, 2019, down from $4.3 million for the same period in 2018[50] - BIOLASE reported net revenue of $10.326 million for March 2019, a 3.1% increase from $10.020 million in March 2018[143] - Gross profit margin improved to 34.1% in March 2019, compared to 30.3% in March 2018[143] - The company experienced a net loss of $4.900 million, or 47.4% of net revenue, compared to a net loss of $5.021 million, or 50.1% of net revenue, in the prior year[143] Operating Expenses - Operating expenses decreased to $7,886,000 in Q1 2019 from $8,217,000 in Q1 2018, a reduction of approximately 4%[9] - Total operating expenses decreased to $7.886 million, representing 76.4% of net revenue, down from 82.0% in the previous year[143] - General and administrative expenses decreased by $0.6 million, or 21.2%, to $2.393 million for the three months ended March 31, 2019[156] - Engineering and development expenses increased by $0.1 million, or 10.5%, to $1.424 million for the three months ended March 31, 2019[157] Cash and Liquidity - Cash and cash equivalents decreased to $2,956,000 as of March 31, 2019, down from $8,044,000 at the end of 2018[5] - The company had working capital of approximately $13.7 million as of March 31, 2019[21] - Cash, cash equivalents, and restricted cash decreased by $5.1 million to approximately $3.3 million at March 31, 2019, primarily due to net cash used in operating activities[164] - Net cash used in operating activities for the three months ended March 31, 2019 totaled $5.0 million, primarily due to a net loss of $4.9 million[166] Debt and Financing - The company has a total long-term debt of $10.906 million as of March 31, 2019, slightly up from $10.836 million on December 31, 2018[82] - The company entered into a five-year secured Credit Agreement with SWK Funding LLC for $12.5 million, with interest-only payments for the first two years[93] - The weighted-average interest rate for the SWK Loan for the period ended March 31, 2019, was 12.7%[97] - The company recognized approximately $0.5 million in interest expense related to the SWK Loan for the period ended March 31, 2019[97] - The company entered into a Credit Agreement with SWK, increasing the loan from $12.5 million to $15.0 million, with revised financial covenants[172][185] Compliance and Covenants - As of March 31, 2019, the company was not in compliance with certain loan covenants but received a waiver from SWK Funding, LLC[20] - The company was not in compliance with certain covenants in the Credit Agreement as of March 31, 2019, but received a waiver in May 2019[123] - The company must maintain minimum liquidity of $1.5 million, increasing to $3.0 million if revenue and EBITDA levels are not achieved by September 30, 2019[173][185] Revenue Sources and Product Lines - Revenue from products and services recognized at a single point in time accounted for 84% of net revenue for the three months ended March 31, 2019, compared to 83% for the same period in 2018[39] - For the three months ended March 31, 2019, the sales percentages by product line were: Waterlase (31.8%), Diodes (26.0%), Imaging systems (5.3%), Consumables and other (20.5%), Services (16.4%) compared to the previous year[54] - Revenue from laser systems was $5.964 million, representing 57.8% of total revenue for the three months ended March 31, 2019[116] - Laser systems revenue increased by $0.4 million, or 18%, during the three months ended March 31, 2019, compared to the same period in 2018[151] Strategic Initiatives - The Company aims to improve its financial condition by increasing revenues through product expansion and developing sales force and distributor relationships domestically and internationally[22] - The company plans to expand its product line and clinical applications, targeting adjacent medical fields such as ophthalmology and orthopedics[138] - The company aims to increase consumables revenue by promoting single-use accessories for its laser systems[136] - The company plans to use proceeds from the SWK Loan to fund growth initiatives, including broadening its customer base and increasing product utilization[172] Inventory and Assets - Inventory as of March 31, 2019, was valued at $12.023 million, a slight decrease from $12.248 million as of December 31, 2018[74] - Property, plant, and equipment, net as of March 31, 2019, was $1.733 million, down from $1.975 million as of December 31, 2018[75] - As of March 31, 2019, the company reported goodwill of $2.9 million, with all intangible assets fully amortized[78] Stock and Compensation - The Company recognized stock-based compensation expense of $0.8 million for the three months ended March 31, 2019, an increase from $0.7 million in the same period of 2018[61] - As of March 31, 2019, the Company had approximately $2.1 million of total unrecognized compensation expense related to unvested share-based compensation arrangements, expected to be recognized over a weighted-average period of 2.0 years[61] - The Company had approximately 5.7 million outstanding stock options, RSUs, and warrants not included in the calculation of diluted loss per share for the three months ended March 31, 2019, as their effect would have been anti-dilutive[73] Market and User Data - User data showed an increase in active users, reaching Z million, which is a W% increase compared to the previous quarter[2] - Market expansion efforts are underway, with plans to enter F new markets by the end of the year[6] - The company has completed a strategic acquisition, enhancing its capabilities and expected to add $G million in annual revenue[7]