BIOLASE Technology, Inc. (BIOLASE), a dental devices company, has reported net revenue of $64.6 million for the full year of 2008, compared with the net revenue of $66.9 million in the previous year-end. It has reported net loss of $9.1 million, or $0.38 loss per share, for the full year of 2008, compared with the net loss of $7.3 million, or $0.31 loss per share, in the previous year-end.
Net revenue for the fourth quarter was $11.6 million, compared with $20.8 million in the year- ago quarter. Gross margin as a percentage of net revenue for the fourth quarter and year ended December 31, 2008, was 47% and 51%, respectively, as compared with 47% and 52% of net revenue for the fourth quarter and year ended December 31, 2007.
BIOLASE chief executive officer David M. Mulder said, “The top line result for BIOLASE as for most medical capital equipment suppliers has been impacted substantially by macroeconomic factors from late summer through today. It is the full awareness of those economic conditions and resulting corporate challenges that has led management to a series of significant and necessary changes in our structure and organization that will lead to improved financial footing and the ability to succeed during this very challenging time. These changes will put us in a much stronger position to both manage within our means and to prosper and generate cash as full implementation of the restructuring takes hold in Q2 and beyond.”
Mulder continued, “Beyond the changes made to secure base revenues and align costs during these difficult times, we continue to pursue growth plans for the future. I am pleased with our process improvements over the past few months and our R&D efforts will continue to focus on maintaining innovation leadership. Our long term success, however, will be driven by the passion of employees and luminary doctors who understand and value what Waterlase Dentistry can do for a practice and its patients. Our world market penetration into the dental market place is still just under 1%, but we have pushed up to and well past 5% in penetration in several key geographies, domestically and internationally. We have found that one key trait these areas have in common is strong product champions. As we reposition the company to succeed in this new world economy, we are dedicated to increasing the number of these champions that are spreading the knowledge and the passion for this revolutionary way to perform dentistry — a vision shared by parents of children who do not have to experience shots and drills and doctors who are attracting more patients and doing more procedures with improved patient relations, our luminaries and our distributors, most notably our visionary partner, Henry Schein.”
Operating expenses in the 2008 fourth quarter and year were $10.3 million and $41.4 million compared with operating expenses of $12.4 million and $43.5 million in the respective prior year periods. Operating expenses for 2008 included a $1.2 million charge for the October legal settlement with Diodem and the associated legal fees in that quarter plus about $587,000 related to impairment of intangible assets and property. The 2007 period includes restructuring charges of $802,000 related to management changes in November 2007. In 2008, the company had significant initiatives including the new sales process and CRM program, new market messaging and materials, and several customer service programs, including education and training.
Other income in the fourth quarter included a loss on foreign currency of $390,000 compared with a favorable foreign currency adjustment of $1.3 million in the same period of 2007. Other income for the full year 2008 included a $186,000 loss on foreign currency compared with a gain of $1.4 million for the year-earlier. The foreign currency fluctuations were driven by inter-company payables from the foreign subsidiaries to BIOLASE. In mid-October, BIOLASE restructured these payables into capital contributions, which is expected to significantly reduce future foreign currency gains and losses reflected in other income.
Net loss for the fourth quarter of 2008 was $5.3 million, or $0.22 loss per share, compared with a net loss of $1.1 million, or $0.05 loss per share, in the same period of 2007.
Cash on hand at December 31, 2008 was $11.2 million, with $5.4 million drawn from a line of credit with Comerica. The line of credit was repaid in the first quarter of this year with cash on hand and closed. With the changes described above, the company believes it will have sufficient resources to meet obligations and sustain operations.