BIOLASE(BIOL) - 2024 Q1 - Quarterly Results

First Quarter 2024 Results and Full-Year Guidance BIOLASE reports Q1 2024 results and reiterates full-year guidance, emphasizing increased laser adoption, improved margins, and reduced EBITDA loss Q1 2024 Performance Highlights BIOLASE's Q1 2024 highlights include increased Waterlase adoption, strong consumable sales, improved gross margin, and a significant reduction in Adjusted EBITDA loss - Approximately 67% of U.S. Waterlase sales came from new customers, and 42% from dental specialists, indicating increased adoption[4] - Consumable sales increased 14% year over year, marking the third strongest consumable sales quarter in company history, driven by over 600 subscriptions[4] - Adjusted EBITDA loss significantly lowered by 21% compared to the prior year's quarter due to successful cost reduction initiatives[4] Full Year 2024 Financial Guidance The company reiterates its full-year 2024 financial guidance, projecting revenue growth and positive Adjusted EBITDA Full Year 2024 Financial Guidance | Metric | Guidance | | :----------------- | :---------------------------------------- | | Net Revenue Growth | 6% to 8% year over year | | Net Revenue Amount | $52 million to $53 million | | Adjusted EBITDA | Positive results for the full year of 2024 | - Guidance reflects continued adoption of lasers and consumables by the dental community, including general dentists, specialists, hygienists, and DSOs, despite a challenging business environment[20] CEO Commentary CEO John Beaver notes Q1 revenue dip but highlights increased laser adoption, improved operational efficiency, and a strengthened balance sheet for long-term success - Increased adoption of award-winning lasers is an encouraging sign and a leading indicator for longer-term success[21] - Gross margin expanded by 700 basis points sequentially, and the expense structure saw a 9% reduction year over year[21] - Balance sheet strengthened to provide resources for maximizing growth opportunities and enhancing shareholder value[21] Company Overview This section provides an overview of BIOLASE's business, products, patent portfolio, global sales, and investor relations information About BIOLASE BIOLASE is a medical device company specializing in dental and medical laser systems, holding 241 active patents and selling over 47,700 systems globally - BIOLASE develops, manufactures, markets, and sells laser systems for dentistry and medicine[8] - As of December 31, 2023, BIOLASE's proprietary laser products incorporate approximately 241 active patents and 21 patent-pending technologies[8] - From 1998 through December 31, 2023, BIOLASE has sold over 47,700 laser systems in over 80 countries[8] Investor Relations & Contact Information BIOLASE provides details for accessing its conference call webcast and replay, along with contact information for investor inquiries - A live and archived conference call webcast is accessible on the BIOLASE Investor Relations page[7] - Phone replay for the conference call is available for one week after the call[7] - Investor inquiries can be directed to Michael Polyviou or Todd Kehrli at EVC Group LLC[27] Detailed Financial Performance (Q1 2024) A detailed analysis of BIOLASE's Q1 2024 financial performance, covering net revenue, gross margin, operating expenses, net loss, and Adjusted EBITDA Net Revenue Analysis BIOLASE's Q1 2024 net revenue decreased 3% year-over-year to $10.1 million, with U.S. and International laser revenue declines offset by consumable sales growth Q1 2024 Net Revenue Breakdown (in thousands) | Category | Q1 2024 ($) | Q1 2023 ($) | YoY Change (%) | | :----------------------------- | :---------- | :---------- | :------------- | | Net Revenue (Total) | 10,131 | 10,467 | -3% | | U.S. Laser Revenue | 2,700 | 3,500 | -22% | | U.S. Consumables & Other | N/A | N/A | +17% | | International Laser Revenue | 2,500 | 2,800 | -12% | | International Consumables & Other | N/A | N/A | +8% | Gross Margin and Operating Expenses Gross margin improved to 33% in Q1 2024, while total operating expenses decreased by 9%, leading to a 15% improvement in operating loss Q1 2024 Gross Margin and Operating Expenses (in thousands) | Metric | Q1 2024 ($) | Q1 2023 ($) | YoY Change (%) | | :---------------------- | :---------- | :---------- | :------------- | | Gross Margin | 33% | 32% | +1 pp | | Total Operating Expenses | 7,862 | 8,628 | -9% | | Operating Loss | (4,526) | (5,291) | +15% | - Gross margin improved by 1% year over year, benefiting from 100% in-house supply of trunk fiber requirements[4] - Gross margin improved by 7% compared to the prior quarter due to inventory adjustments and reserve charges[4] Net Loss and Adjusted EBITDA BIOLASE reported a Q1 2024 net loss of $6.5 million, but Adjusted EBITDA loss significantly improved by 21% year-over-year to $3.5 million Q1 2024 Net Loss and Adjusted EBITDA (in thousands, except per share) | Metric | Q1 2024 ($) | Q1 2023 ($) | YoY Change (%) | | :-------------------------------------- | :---------- | :---------- | :------------- | | Net Loss Attributable to Common Stockholders | (6,485) | (5,849) | +11% | | Net Loss Per Share (Basic & Diluted) | (0.36) | (17.83) | -98% | | Adjusted EBITDA Loss | (3,530) | (4,448) | +21% | | Adjusted EBITDA Per Share | (0.20) | (13.56) | -98.5% | Cash and Cash Equivalents As of March 31, 2024, BIOLASE held approximately $6.4 million in cash and cash equivalents Cash and Cash Equivalents | Metric | Amount (in thousands) | | :------------------------- | :-------------------- | | Cash and Cash Equivalents (March 31, 2024) | $6,393 | Condensed Consolidated Financial Statements This section presents BIOLASE's condensed consolidated statements of operations, balance sheets, and cash flows for the reported periods Condensed Consolidated Statements of Operations and Comprehensive Loss The statement details Q1 2024 net revenue of $10.1 million and a net loss of $6.5 million, compared to $10.5 million revenue and $5.8 million net loss in Q1 2023 Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric | March 31, 2024 ($) | March 31, 2023 ($) | | :-------------------------------------- | :----------------- | :----------------- | | Net revenue | 10,131 | 10,467 | | Cost of revenue | 6,795 | 7,130 | | Gross profit | 3,336 | 3,337 | | Total operating expenses | 7,862 | 8,628 | | Loss from operations | (4,526) | (5,291) | | Net loss | (6,485) | (5,849) | | Comprehensive loss | (6,571) | (5,769) | | Net loss per share (Basic and Diluted) | (0.36) | (17.83) | Condensed Consolidated Balance Sheets The balance sheet shows total assets of $34.4 million and total liabilities of $34.1 million as of March 31, 2024, with a stockholders' equity deficit Condensed Consolidated Balance Sheets (in thousands) | Metric | March 31, 2024 ($) | December 31, 2023 ($) | | :-------------------------------------- | :----------------- | :-------------------- | | Total current assets | 25,005 | 24,863 | | Total assets | 34,353 | 35,101 | | Total current liabilities | 21,427 | 19,663 | | Total liabilities | 34,084 | 33,145 | | Total mezzanine equity | 2,203 | 2,203 | | Total stockholders' equity (deficit) | (1,934) | (247) | Condensed Consolidated Statements of Cash Flows Q1 2024 saw $5.9 million net cash used in operating activities, with $5.6 million provided by financing activities, primarily from stock and warrant sales Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | March 31, 2024 ($) | March 31, 2023 ($) | | :-------------------------------------- | :----------------- | :----------------- | | Net cash used in operating activities | (5,938) | (5,658) | | Net cash provided by (used in) investing activities | 197 | (587) | | Net cash provided by financing activities | 5,647 | 8,517 | | (Decrease) increase in cash and cash equivalents | (173) | 2,351 | | Cash and cash equivalents, end of period | 6,393 | 6,532 | - Proceeds from the sale of common stock and pre-funded warrants, net of fees, were $2.8 million in Q1 2024[16] - Proceeds from the sale of warrants, net of fees, were $3.0 million in Q1 2024[16] Non-GAAP Financial Measures This section defines Adjusted EBITDA, a non-GAAP measure, and provides its reconciliation to GAAP net loss, highlighting its use for evaluating core operating performance Definition and Rationale of Adjusted EBITDA BIOLASE defines Adjusted EBITDA as net loss adjusted for specific non-cash and non-recurring items, used to evaluate core operating results and trends - Adjusted EBITDA is a non-GAAP financial measure used by management to evaluate core results of operations and trends[17][34] - Adjusted EBITDA is defined as net loss before interest, taxes, depreciation, stock-based and other non-cash compensation, severance expense, change in allowance for doubtful accounts, increase in inventory reserves, stock warrant issuance costs, and loss on warrants[17] - Non-GAAP measures are presented as supplementary information and not as a substitute for GAAP measures[17] Reconciliation of GAAP Net Loss to Adjusted EBITDA The reconciliation details adjustments from GAAP net loss to Adjusted EBITDA, showing a significant improvement in the Adjusted EBITDA loss for Q1 2024 Reconciliation of GAAP Net Loss to Adjusted EBITDA (in thousands, except per share) | Metric | March 31, 2024 ($) | March 31, 2023 ($) | | :-------------------------------------- | :----------------- | :----------------- | | GAAP net loss | (6,485) | (5,849) | | Adjustments: | | | | Interest expense, net | 622 | 577 | | Income tax provision | 19 | 1 | | Depreciation | 660 | 149 | | Severance expense | 182 | — | | Change in allowance for doubtful accounts | (27) | (17) | | Stock-based and other non-cash compensation | 113 | 691 | | Stock warrant issuance costs | 830 | — | | Loss on warrants | 556 | — | | Adjusted EBITDA | (3,530) | (4,448) | | GAAP net loss per share | (0.36) | (17.83) | | Adjusted EBITDA per share | (0.20) | (13.56) | Cautionary Statement Regarding Forward-Looking Statements This statement warns that forward-looking statements involve risks and uncertainties, and actual results may differ materially due to various factors, with no obligation to update - The press release contains forward-looking statements regarding expected revenue, revenue growth, and positive Adjusted EBITDA for 2024[12] - Readers are cautioned not to place undue reliance on these statements, as actual results may differ materially due to various factors[12] - Factors influencing actual results include adverse economic conditions, competitive pressures, customer acceptance of new products, and risks associated with business growth[12]