BIOLASE announced its financial results for the third quarter, which ended September 30, 2022.
2022 Third Quarter Highlights
- Total revenue was $12.0 million, up 26% year over year
- U.S. laser sales increased 35% year over year and U.S. consumable sales increased 22% year over year, driven by increased procedures using BIOLASE lasers
- Continued momentum with new customers and dental specialists with over 90% of U.S. Waterlase sales coming from new customers and approximately 40% of U.S. Waterlase sales coming from dental specialists
- Waterlase Exclusive Trial Program success rate remained at over 50% year to date, highlighting the program’s success
“I am pleased to report continued increasing demand for our industry leading lasers, which is being driven by the execution of our growth strategy,” commented John Beaver, President, and Chief Executive Officer. “Our total revenue increased 26% year over year, with U.S. laser sales increasing 35% year over year and U.S. consumable sales growing 22% year over year. Our strong performance reflects continued positive momentum from our Waterlase Exclusive Trial Program, as our success rate remained at over 50% year to date. This initiative, along with the extra emphasis on education and training for endodontists, periodontists, pediatric dentists, and dental hygienists, generated increased adoption of our laser technology in the U.S. this quarter with over 90% of our U.S. Waterlase sales coming from new customers and approximately 40% of U.S. Waterlase sales coming from dental specialists.
“With less than 10% of the U.S. dental community currently using dental lasers, we are confident that we can leverage the enhanced capabilities of our product to drive further adoption and become the new standard of care. With every one percentage point increase in market adoption of laser technology in the U.S. alone, we estimate it will generate an additional $50.0 million in revenue for BIOLASE, assuming we maintain our current 60% market share. With the continued success of our sales initiatives, we believe we are well positioned for continued revenue growth in 2022 and beyond.”
2022 Third Quarter Financial Results
Net revenue for the third quarter of 2022 was $12.0 million, an increase of 26% year over year. U.S. laser revenue was $4.6 million for the third quarter of 2022, up 35% when compared to U.S. laser revenue of $3.4 million for the third quarter of 2021.
U.S. consumables and other revenue for the third quarter of 2022, which consists of revenue from consumable products such as disposable tips, increased 22% compared to the third quarter of 2021.
Outside the U.S., laser revenue was $2.8 million for the third quarter of 2022, up 1% compared with the same quarter in 2021, and consumables and other revenue was down 2% at $0.8 million when compared to the same quarter in 2021.
Gross margin for the third quarter of 2022 was 20%, compared to 51% for the third quarter of 2021. The lower gross margin in 2022 is largely a result of the impact of a $1.7 million charge for inventory. This inventory charge was driven by certain supply chain issues that we have encountered requiring us to change to new suppliers along with end of life designation for certain products and components.
In addition, the lower margin resulted from the launch of OEM products at the beginning of 2022 and an Employee Retention Credit under the CARES Act received during the three months ended September 30, 2021 that did not occur in 2022, partially offset by the recognition of more product training revenue during the third quarter of 2022.
Total operating expenses were $10.1 million for the third quarter of 2022 compared to $7.5 million for the third quarter of 2021. Operating loss for the third quarter of 2022 was $7.7 million, compared to an operating loss of $2.7 million in the third quarter of 2021.
The company reported cash and cash equivalents of $10.0 million on September 30, 2022.
Net Loss and Adjusted EBITDA
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.
Net loss for the third quarter of 2022 was $8.4 million compared to a net loss of $3.3 million for the third quarter of 2021. Net loss per share for the quarter was $1.10 compared to $0.54 for the third quarter of 2021 (as adjusted for the reverse stock split).
Adjusted EBITDA loss for the third quarter of 2022 was $5.6 million compared with Adjusted EBITDA loss of $2.5 million for the third quarter of 2021. Adjusted EBITDA loss per share for the quarter was $0.74 compared to $0.40 for the third quarter of 2021 (as adjusted for the reverse stock split).
2022 Fourth Quarter and Full Year Revenue Guidance
Based on currently available information and the continued operating momentum the company has experienced through the first nine months of the year, BIOLASE is anticipating fourth quarter net revenue to exceed $13.0 million, which would represent growth of at least 5% year over year. The company is increasing its 2022 full year revenue guidance and now expects full year net revenue to increase at least 20% from 2021 levels.
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, 2022, and to answer questions.
To access the live call, dial 1-888-506-0062 (U.S.) or +1 973-528-0011 (International) and provide the following code: 720380.
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: 46951.
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 302 patented and 28 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, 2021, BIOLASE has sold over 43,300 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 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, the coronavirus (COVID-19) and the effects of the outbreak and actions taken in connection therewith, 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, 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.