BIOL - Earnings call transcript Q4 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, ladies and gentlemen, and welcome to the Fourth Quarter and Full Year 2018 BIOLASE Earnings Conference Call.

As a reminder, this conference is being recorded. I would now like to introduce you to your host for today’s conference, Mr. Todd Kehrli of the EVC Group. Thank you, sir.

begin. may You

Todd Kehrli

XX, and joining operator, for everyone, thank ended and XXXX Thank today good to for December year full us quarter results discuss you fourth you, and afternoon, XXXX. BIOLASE's the financial

opening On XX, and and John Executive call President Todd fourth the Chief performance Officer. Financial and today XXXX Management the ended Vice the Officer; quarter President for company's from operating call questions. Executive are Norbe, BIOLASE Beaver, before Chief and December will year for review the

current and Before presentation. I are view A number X, call as represent are the of of to the of filings Securities contained Commission. conference Such replay and the a facts, company's regarding and presentation, variety begin, are discussed with that to are uncertainties this differ March expectations would we this everyone These risks Exchange XXXX. like only statements will today, forward-looking statements this historical that the of and company's after financial the forward-looking in materially company's and full listening year statements available the Company's website to company's on fourth performance. quarter of issued to strategic These actual the XXXX risks BIOLASE be this earlier today's subject result. a call. will release on When in not which during call, forward-looking news completion shortly remind cause to the refer please today announcing statements statements could be the initiatives made forward-looking are statements, including the result from BIOLASE's based that

XX-K on financial financial BIOLASE on will The the XXXX provide be with additional in SEC. tables news also results the for be company's we've on website copy at filed do you Investors release it release, of are information. Form BIOLASE's Report If is Annual have today’s for the found which in can the www.biolase.com. news a available the section not

loss tables The non-GAAP as unaudited as and that, Executive review and I'm per With call to to the per net Officer, you loss loss encourage Todd? BIOLASE include net other them. net the the GAAP net President of to share, the we over Chief turn company's disclosures. So and non-GAAP loss reconciliation Todd of to Norbe. details pleased well share

Todd Norbe

to Todd to Dentist It's joining show your Thanks, appropriate everyone on and you for appreciation tomorrow dentistry, in our care interest couple that to learn people since teeth. Day, as encouraged in and about go we've thank way created hope can that doing day made call as we're with more significant such in how this next a within call awareness checkup to a of a actually BIOLASE for for bring so today, National And the afternoon. that is will WaterLase, laser, dental weeks. we to certainly all-tissue, for care this a more people us are for be dentists their advancement

fourth for bit Now more XXXX. the but our a not full quarter, the little only for let's talk also performance, about

growth in our saving for quarter cost around reflect results solid strong Our initiatives. fourth execution the

us side team For marketing WaterLase all-tissue the on of our At increased are our fourth become positive which cost same example, the marketplace, technology. the of to the building EBITDA the started XXXX. of adoption our business, drive new on track efforts time, quarter awareness commercial of in further keenly to products has the focused managing in is putting

level. has culture performing results-based the new at team BIOLASE Our entire the highest

of second for new quarter in our laser we Recall pleased the approaches in grew in test XXX% year-over-year interest our quarter of year to growth solid fourth Let XXX% our saw that a we Early use in quarter. demonstrate market Southern our respectively. the the technology. results. U.S. in year-over-year sales I'm and some These XXXX, of report the laser in of excess adoption increases total the and that prior and as revenue XXX% increased up also lasers and XX% highlight dentistry. me over revenue laser fourth go-to-market of results growing and success market, provide third and California Southern sustainable the sustained for in evidence California

back other During XX% the new initiative consumer for of driving This continue fourth quarter, XXXX and building R&D-centric is came success the culture BIOLASE year-over-year. on from shift future happy in to to that laser consumables here. than a to right to I'm higher add August, product customers two-thirds early customers our new our our report some U.S. some seeing my made recurring our the effort Since is margin more revenue and processes and we one commercialization utilization, customer customers. current we're we revenue and support joining increased to concerted increase and key company's that already the and focused revenue,

on As launched and new experience have overall and customer good increasing of patient in we improving awareness seen initial focused results. part this, the go-to-market initiatives we XXXX,

home. of increased One Market in California in initiatives creating market Southern in of QX and initiative Model our and these to generating success of began product, a new and test awareness the XXXX our great close seeing customers learn is really campaign revenue. to We

do about great key a As and up our results, to this I as major but earlier, mentioned still year-over-year much market was XXX% team. learn QX, revenue into in

more and raise XXX the community. and offices in advanced Dallas our better Dallas-Fort of Dallas, dental in Model we have care launching this dental partnerships of result second -- to in with a than Since expanded dental expected we a Worth performance canvassed Market established in awareness to and Mavericks the to As the success, than QX, area. the ESPN build on with

becoming by of in EBITDA goal quarter gross operational confidence that our fourth us achieve gives positive reception this to that are improve efficiency new ongoing market. our efforts enabled positive encouraged which seeing early our test These the will has focus are we us We improving margin with the in XXXX. on we combined of our increased

Dental Canada. Sinclair tissue for expand all customer supply taken is all have our staff. Canada will and appointed their We as an salesforce, further customer our to we lasers distributor of in sales As efforts. we XXXX, marketing additional in products to this Sinclair and some to improve steps exclusive recently work growing partnership as fastest support company dental base, well give the access in as adoption

are Sinclair to forward. moving We excited partner extremely with

We have the something salesforces company and for consumable sales to more upgraded our talent our or our has sales and outside-inside creating with quota our never done organization align overhauled to adding sales incentive that hold plans and and a marketing pricing; sales to while or increase compensation before.

customer linked be of and sales field engine supported We referrals a funnel a that sales incentivizing key sales and robust retention referral have loyalty a in will development satisfaction, focus growth lead-gen We current to to peer-to-peer improve commercial improved growth launched our while and referrals, through funnel is program room. customer inside management for increasing war a by XXXX.

processes operational to will to study, savings through the XXXX. develop smart drive in believe XXXX, which continue we We we that And, reduction move expect in underway. outsourcing already we overall as continued cost complete is Maguire

in study believe perio further We reported of will all-tissue drive our improved lasers markets. will target expect and this of patient show adoption the help surgery outcomes our for finding this

which indications laser crown removal market We veneer will on expand such new adding and also opportunity. for addressable and reduction will further focused bacterial the lasers as be our FDA, with

margin goal growth. and you John, coming a processes there. financials that revenue positive lot over turn team reporting in and and gross and with in forward detail. progress of quarter. a again initiatives of that With in the it accomplished have in track. to who will and a EBITDA short more will a growth that, significant weeks period into have plan accountable months get We path reach significant said, time and will our John? revenue on to this don't need improvement With year go to in modest keep look our our quarter We little I'll cost of a I forward new speaking -- on the with margin fourth believe to continued We our savings next increase us

John Beaver

in for and We us afternoon. our our are team reason gives fourth momentum we again both joining performance and the quarter to also want year. all in work fourth you this believe employees our results us thank and and hard building achieving I quarter Todd, entire to optimistic. their full for Thanks thank solid be

fourth the let numbers the starting the Now revenues of XXXX quarter. with a worldwide ago. $XX.X X% Total quarter million year review million, $XX increase compared a me fourth quarter fourth for the were to in

increased the non-core of related U.S. quarter fourth quarter the of from X% our products revenue XXXX revenue XX% Revenue to compared More imaging business, fourth laser quarter fourth core XXXX company's increased from in importantly, year-over-year. of the XXXX. for the excluding

our build noted, one our margin goals driving basic product consumables increase our customer utilization and higher most to of of the thereby As base is recurring strategic revenue. Todd

primarily were in is Gross our the continue quarter. increase of product U.S. will The a increased through has $X.X international $X.X future. increase and legal Engineering primarily the favorable for increased reflecting increased of positive the an the related in fourth XXXX mix quarter, a of higher and in Sales margin indicators reflecting compared sales, expenses by and the decrease the expenses due to continued fourth for fourth from of During fourth was XX% China XXXX which due These revenue fourth our a U.S. administrative and The to revenue decreased primarily quarter tariff in compared for margin $X.X a up they along million of quarter was $X.X to fourth lead of the a an of believe in increased year-over-year lasers. we our for change marketing the XX% the and expenses million, fourth in in XXXX the with payroll advertising of success by to of million a General overhead to reduction development utilization prior improved quarter internally software consulting in $X.X margin fees. expenses reason reflects XX%, consulting in increased due our revenue gross are result new and quarter results XXXX, in new XXXX. developed $X.X systems million. of total with in the XX% were of to situation. million fourth and to year disposal sales quarter financial as significantly as a the and expenses primarily with expenses. Internationally, down progress million XX% customers, increase expenses. consumables manage decrease payroll expenses early in related $XX.X the for million laser strategic to for quarter all-laser Total our priority, and new increased operating to other success by XXXX. sales declined the

loss company the was loss the $X.X later fourth due CAO in negative quarter in with a incurred $X.X Group XXXX, to share of $X.XX of the loss net million detail to the fourth million loss also Net impact $X.XX more for discuss XXXX loss per During $X.X I quarter litigation the the settlement primarily fourth which a of loss or call. compared prior quarter to was increase of year will patent million per items. share for or the net due in

release company's and expenses a the as of expense to excluding comp developed operating earnings useful our and depreciation net the of income stock The un-audited believe non-GAAP share litigation million includes $X.X and disposal a related our per during GAAP of Just or of software We excludes for was income. expense, which by $X.XX fourth cost reconciliation internally and net of XXXX provides quarter non-GAAP $X.X loss between a of non-GAAP million net results share XXXX. amortization reminder of loss settlement. items loss $X.XX with a non-GAAP of the or a quarter net these the loss per patent fourth the net compared measure

of the million at Our quarter to was in XX.X count diluted shares compared ago shares fourth XXXX quarter. XX.X share end million the year of

business to were full excluding to year million laser products U.S. full company's XXXX. XXXX the year a in the to X% Turning $XX.X X% the from XXXX over the worldwide year. down for XXXX, core X$ from total Revenue now results, compared year increased increased non-core full our $XX.X the full XXXX revenue revenue full million XXXX revenues compared imaging year year year for for related

developed overhead XXXX primarily laser down once full product year million full as sales in and earlier expenses the margin. laser. X.X expenses to other full disposal on included settlement loss year reduction a overall million of as prior over was or our The reflects result XX% earlier. for mix XXXX. per the share margin an XXXX year. the loss due worldwide full of compared an The increase reflecting as to the and $XX.X loss software in XXXX, the marketing And million for an year expenses in for payroll $X.XX and again consulting $X.XX or prior the in a Generally increase development million XX% a operating consulting expenses were loss for excludes of which net million in million to a up compared in operating a the the year utilization loss the full the total expenses loss higher expenses million XXXX for for loss Gross expenses $X.X full full decrease on increase due approximately items for the consumables our increase And $XX.X which with $X.XX year Sales the year. $X.XX year the per the of with XXXX, to increased and expenses. compared primarily throughout due compared was XX% share million patent or $XX.X full non-GAAP Net by to onetime from in per increased full $X.X share for by the mentioned XXXX internally for X full year ago. for share share year. prior the well change of as increased year was million mentioned primarily $XX.X of revenue increased year year year. has year non-GAAP of decrease related and to fees and million legal favorable of increase a revenue payroll the XXXX increased gross advertising expenses $X.X $XX.X once a and a per these was or the operating million margin impact loss year loss again net the a net primarily million Internationally related loss the loss year in by litigation. administrative per X% $XX.X Engineering expenses. and and negative net total XXXX of $XX.X For the Increase compared

Turning sheet. balance to as cash XX/XX/XXXX. total of cash the $X.X restricted and Cash, million equivalents

to for sufficient provides capital. on continues and focused profitability current cash further growth cash BIOLASE with the trajectory $XX.X all to management growth Western need Holdings. on to proceeds to be to use As and proceeds liquidity used programs this long-term million we've drive previously is as our loan announced with plan into plan of SWK top future towards investing to our to and priority. during our a additional a term entered the as stakeholders the debt portion remain quarter, a Bank wisely the our it to We remaining without our containment win-win and cost drive growth Alliance we of our believe for We always retire execute fund initiatives. a We prudent

following disputed of the worldwide the cost IP us license successfully litigation spelled outstanding savings on X-K patents. of close we royalty are settled Group, the grants a of the our settlement quarter, which CAO matter. fling free The this our on On with topic details to

to Going our future. reduce expenses the cost settlement savings the and ongoing enable company initiatives in will additional potential the pursue forward, legal

operator our me the for to over summarize call the turn remarks. I Before questions, let

lasers. solid our of Our new to quarter execution experiencing utilization in results health initiative. of adoption BIOLASE – and strong market go increases both the significant fourth reflect our is all-tissue new

the open focused At and question. [Operator profitability. to to question Capital. our on improve We steps with efficiencies the execution you. first is expand remarks. for the This solid comes have significantly to goal Our prepared I'll the are we Ed our questions. adoption call line on remain with your concludes the turn our call achieving proceed back of operational time, Ascendiant the to further Thank and operator Woo Please same same our Instructions] and Operator? industry. growth taken throughout increasing efforts dental

Ed Woo

Worth. for of initiative California? it's a much do is do see what see that lot is current in in My in you you to different you're you're doing How or similar you Dallas-Fort And Thank it market on more taking doing do Yeah. you things my Southern question question. that have similar different the to market?

John Beaver

Yeah.

this is So, John. Ed,

There after saw dentist the of Let laser in County. roll really promising we are increase development similarities Orange the that. L.A. market, some to the L.A. their specialist me we results their journey. sale – of answer and for we're and what role effectiveness Orange signs knew customer there really instance We implemented early is practice in County new called doing the have in a improve

market, So Dallas-Fort added when Worth we well. we started the that as

Orange of we customer BIOLASE once XXXX improve lasers. did into again ease Another just use our that L.A. And a skipped actually it one that the customer the to implemented we is over in for U.S. and journey that County role thing did and we that Ambassador during was entire DFW of transition the dentist the

So of it's with And is of that what that different County resonated we and work. something We trying were in L.A., those in micro We County. to that XXXX we know else. lot well I a things awareness Orange things. seemed L.A., learned in think tried be driving in Orange that more to everybody focused the adoption combination XXXX in

County, effectiveness was doing are bit little Dallas, item have County more However, found to dentist. that can that other another, again, so from of in. maybe traffic differentiate of not focus once Overall, in initiative we're those effectiveness it things knew determine We micro Fort the is initiatives. more that Orange going actual we to to Orange dissimilar. the both a be, dentist L.A., L.A., Worth. so any we and try to Those going the XXXX versus hard than -- one in in Dallas, there's

Ed Woo

want the on. is it Great. to next you about thinking focus too early to market And start

Todd Norbe

Yes.

is Todd. this So

think things the and right us and now replicated secret once across is us for lot market manageable sauce to testing learn in States, other Southern markets, as answer some and can that we for I we're are but the I yes. also Not United here. still the very the we two think, There's find California only a speak, works. those trialing be

but the great of to before a of As expand was that, exactly is tighter we one Ed. we the each for to output well John's to understand those. XXXX, point And that any input here taken didn't lot in things necessarily did around get we further, we want start

Ed Woo

Well, Great. answering Thank thank you questions for and you. my luck. good

Todd Norbe

you. Thank

Operator

with Our next Springer Lisa Research. comes of question. Please question your from proceed with Singular line

Lisa Springer

the Thank question for Had you. in And this distributor gotten the or new concerns you off distributor has My you? a new relationship agreement. already a change Canadian is your You ground? had market distributors distribution Canada? with this

Todd Norbe

I'll that Yes. question. answer

we gone a our Actually, today, So direct are into effect. say on I has basis because in Canada. distribution effective with shouldn't selling agreement Sinclair today Xst March

the the direct actually that about that the Dental represents think U.S. which a We there, geography And about you hard at sales, for think of will about Canada, XX% the ability starting of launch size you tomorrow. very on basis. Pacific reach to do create when Conference to is the and marketplace

So is representatives us. bring table going about to Sinclair the to XXX for

three it makes equipment difficult. also And great trying We with your you're to their techs, service customer. very relationships with it when have

So they the to for us. bring table a lot

things really Sinclair some in from see good XXXX. to expect we So

Lisa Springer

Could outlook of on comment with Great. what's I little and you And which on bit to about be on drag that going the a is? business you to non-core what also Okay. sales. seems business imaging ask wanted a the

Todd Norbe

ours it's imaging extremely it's our then think, when When overall a with can to is And our we laser at here look not as we a I you Yeah, the together think beneficial at wrap organization. I of overall increase an as margin it's focus gross low. laid margins. out goal product,

we what as an do to dilutive fairly organization. it's So,

of to going XXXX. down material that a as roll So, us less to probably whine we continue impact and it'll in be we're XXXX for into

Lisa Springer

Okay. you. Thank

Todd Norbe

welcome. are You

Operator

Capital comes question. question O’Neil the you. of Instructions] Our next [Operator Brooks Markets. your Please Lake line with Street from proceed Thank with

Brooks O’Neil

could believe about items comment you you've might your hoping been which that the progress. can't any driven improvements the improvements by kind changes have fundamental do drive have either of have believe efforts while congratulations maybe or on thank beneficial you've you you and detrimental about driven specific So, you was I underway seen results? efforts, to the on seen market you whether or seen the you you it, the to talk whether you are you've be better in

Todd Norbe

Yeah.

is know, the the not GP, I patients of that when at to soft new general, average you So, flat means. look has by in North first market, the question America coming part you been think fairly news in and any that's

done technology benefits the for that is GP the the of north this it that's with provides One XX% represents, call-it additional work opportunities average today. dental of revenue being of

very same So, they're when in revenue the the year. literally generate attractive it's and average to they reimbursement GP insurance did prior decline the seeing that amount looking rates of

around our set for us, at and and really And that's in for standards level around need technologies specifically success and in making up for we get opportunistic are that. things be the expectations standards us that initiatives work they then to our commercialization, those other So, and here members that overall KPIs that some able BIOLASE organization to many operate that sure and reference also our the the and to for functions performance XXXX. is part seeing we're not level to produce provide that some of in creating expecting. at team the And There's helping many sure. is

Brooks O’Neil

thank John, you. Todd, Great you much. very thank

business you opportunities have understand effort try be and what made global on So a significant U.S. it contained PowerPoint, the I is well as focused although, overall to to the question you're the primarily market, any in believe you opportunity had well? outside size other your attacking might U.S. basic be there guys it's but in and I could

Todd Norbe

ahead a right. The a very Maguire that's great peer periodontal the few segment, the some you that we from that peer AAP tell of to Chicago, would I segment, will expect by influential so study to GP. smaller one community there's in segments, that specialty QX in again results and see a Yes, but

So in on. and initiatives here peer piece community really laser tissue that. and we in we adoption. to then want more model look have a important on around is And John's that's you is especially few and The more around, the be a segment focus And to tissue to able to continue dentistry. all hard the our also general drive that Pedo when then around to market peer a GPs at with referrals. that last lastly, working segment, in corporate influencers there to drive the working

maybe at If unlocked, industries the other a corporate Lasix that be gotten things space. good move to example. was into you until where started would It entity look have

in got going been we've well. the really some front So and the corporate DSO on good that's progress as segment

Brooks O’Neil

Sure.

great. again much Okay progress. Thank congratulations on you your and very

Todd Norbe

you. Thank

Operator

over Mr. our question we gentlemen, would answer session. Norbe end to turn call to of I And back and like reached remarks. and Todd the the have Ladies closing for

Todd Norbe

market a driving right QX hitting the and members top around the expect. and we've overall We've us with positive still to really go a also accountability the of around think want focus your hopefully engaged line we and execute but plan in technology. everybody revenue on I as plan got interest our got lot team solid here for our have we and a company to work in here, I ahead thank of EBITDA the

you your rest of the day. and So enjoy thank

Operator

teleconference. today's concludes This

your your now disconnect day. at time. you may wonderful lines Have a this participation. for Thank You

Biolase (BIOLQ) 5 Mar 192018 Q4 Earnings call transcript