BIOL - Earnings call transcript Q3 2021

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Operator

Good day, and welcome to the BIOLASE 2021 Third Quarter Financial Results Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Todd Kehrli of the EVC Group. Please go ahead, sir.

Todd Kehrli

Thank you, operator. thank results joining ended for XXXX. and discuss today September everyone, financial BIOLASE’s the afternoon you us for to XX, Good third quarter

questions. the the of to the Finance. Beaver, will review call is Officer; On over operating Jennifer Jennifer and John from financials performance then company’s the Chief the for and President review and call quarter before Executive John Vice Bright, the today call third to for President opening BIOLASE turn

release of news this call the When call. today’s listening XXXX completion earlier differ website BIOLASE’s are results company’s begin, forward-looking to are, Securities the with the defined refer number the statements of of third to facts, like the the we materially session, A of company’s and the a November and as are the These statements to statements the forward-looking this risks company’s in that this historical statements and of to replay including of a Before current call, results. after everyone the that XXXX Q&A to uncertainties presentation. only will Such regarding financial be during as Litigation company’s view I’d cause the based Act remind actual company’s today and XXXX. that not performance. and Exchange Private today made statements, on any Commission. will XX, available BIOLASE’s assumptions strategic variety and subsequent shortly quarter this are represent discussed forward-looking contained please expectations presentation forward-looking initiatives under Reform in which announcing forward-looking risks be statements on from subject Securities issued These filings are are statements could and

you the found we not results Relations tables news biolase.com. the also been we’ve provided for so a with be are The has BIOLASE today’s it you X-K Form information, financial available of news If report release, section include can at EBITDA on Officer, in BIOLASE’s company’s the which loss copy and additional and a Investor financial that now in is filed GAAP share of have SEC. the do in tables release as loss the loss website to unaudited non-GAAP loss as net net John company’s Beaver. call to John? them. over President adjusted regarding well With Executive per information per I’ll adjusted disclosures. to encourage reconciliation and non-GAAP some share, review The Chief of turn the said, the BIOLASE’s EBITDA more

John Beaver

this Thanks, everyone thank your joining Todd, interest you for BIOLASE. us and continued afternoon. in We appreciate

The quarter for third quarter another outstanding BIOLASE. was

for driven environment better strong a market-leading lasers safer Our standard procedures are adoption and and dental as dental than patients by ensure practitioners delivered dental traditional procedures. a lasers, of new customer growth for care provide continued

numbers continues as our This reported year-over-year business revenue XX% revenue of to of keeping year-over-year. growth delivered dentistry. looking we In against to delivering care, third Before on of the we growth and while the Each quarter, at of three impacts our of $X.X lingering represents the the and the In each business pandemic. and patient year, the successful of the safe elevated the million through laser low points customer growth looking would patients you quarter. improve the uncertainty and for at our dedication resiliency strong strategy. the an backdrop demonstrated first quarter, and third making and Quickly economic their I the have standard throughout pandemic. of team doing BIOLASE another for rebound quarters consecutive of outcomes the representing our results so, showed numbers, commitment like you COVID COVID-XX have them strong validated now congratulate to and stellar

last for delivered our XXXX, the demand has dentists went our lasers lasers, which through how training, of using their XX% pre-pandemic also performance the third to was period. This performance to of comparison, which times is to safety strong rise focus pre-pandemic driven compared comparable on Given due informative quarter we in the to intensified dental believe in quarters, increased solid industry we and compared in this it’s to at XXXX, education provide leading and and been by patients. our a our I look increase unprecedented revenue

customers reported efforts and coming Additionally, new are marketing, lasers education community. are interest the our of training sales of specialists, dental provide the and working. U.S. generated from by over published laser patient studies XX% highlighting dental quarter approximately outcomes, our the generating With sales our during improved from increased XX% Waterlase messaging,

lasers, We practitioners education now best-in-class dental patient dental improve with as dental to the and safety have built to coming us upgrade they and are and and practices training, look outcomes. the

Our better for dental industry provide leading care lasers dental procedures. standard a of

education with focus our leading especially on to specialists. mentioned, adoption, increase dental training is I and As

and have XX Over the of – past communities. formed our the we dental academies to specialists dental laser the expand to lasers of specialists benefits awareness months,

pediatric each Specifically, market communities week drive for is launched last adoption laser. our hygienists launched academy BIOLASE we specialists they and academies we of within specialists of an have meaningful. specifically opportunity further focused these dental The to for dentists, endodontist, periodontist, very on just exist

through each opportunities. run of these Let addressable market quickly me

those believe There In on based are with additional consumable X% dentists and would start pediatric our additional follow our approximately in adopting we additional we lasers, calculations, dentists. of on X,XXX sales. pediatric an laser sales pediatric for in dentists in that U.S. $XX an million result drive BIOLASE. internal Let’s turn, the sales

many for and assisted after these Dentistry. procedures. suffering approximately findings our are U.S. because adoption BIOLASE treatment and periodontist. patient This published Waterlase the Periodontology, a & for Journal Americans laser protocols million disease. we additional that so perio course International McGuire a were establish perio perio Perio are calculations, was suffering well which With internal as of further studies by significant disease, new would the generate year believe includes We and studies would an periodontists they study already in in the have of of Waterlase laser revenue drive determine of as of significantly a patients. in study, periodontist follow. $XX we there adopt from surgery, additional in Journal confirmed not that the million lasers, significant from Restorative the believe Several these studies will periodontist best are better outcomes XX of Americans XX% reported for these that of on Second, X,XXX our Based consumable are revenue, treatment including

approximately and quickly as as standard new is Waterlase U.S. thought top are X,XXX Third, of the care endodontics. in leadership in establishing there endodontists a and

Buchanan has and we facility on As endodontics. part training as programs with endodontic announced one continued continuing Dr. at dental endodontists education of XX in well global his focus over Barbara, leaders as state-of-the-art Dr. will a around lectured our and in hands-on in California, training clinical with courses Buchanan during for partnership advisory both Santa schools taught world. the the expand laser increase symposiums that DELabs, the of years, training quarter, and Stephen for adoption hands-on education and

new an in now endodontics have training be to practice and laser Dr. in his With techniques laser, expert most his technology with technology endodontics. our programs. of Buchanan We’re the advanced instruments and as development will for working in reputation and of Dr. the practice research proud because Buchanan’s

the providing natural significant believe to approval products, we developed if During the new care with fluidic the FDA making anticipate laser endodontists – field a the year. into announced irrigation in we the additional on Waterlase products. use calculations, of Based reach as a our make an routinely work cleaning internal them of year applied that EdgePro has this in follow. seeking the the this EdgeEndo standard first second all and for new technology assisted revenue we quarter endodontics. solution least during partner but this more revenue, device their XX% from offer $XX techniques. plans approximately device for fourth an consumable of endodontist adopt lasers, a we would that of global of a thinking generate product endodontists quarter, This there current before Approximately We million device laser to sales leader in hygienists of Last, develop dental our been not in would the for XX% disinfecting XXX,XXX endodontists micro end including U.S. endodontic are additional not EdgeEndo, commercializing and

hygienists new Epic laser of utilize quality Our empower Academy it adopt hygienists revenue, revenue. and $XX preventative to of the dental consumable follow-on their to in will care the provide an Hygiene million lasers, would an additional our X% lasers additional highest dental patients. including not If therapeutic generate to

to products higher grow as of dental specialists Our already these more for advanced practice. safer, alternatives focus look each demand specialists for our see translated on their into has

patients lasers industry in excellent safety position us possible. benefits puts to treat the way an safest advanced Our in and

these not million the including in significant of practitioner of XX% doesn’t in revenue lasers, adoption each laser of only these not opportunities, X, plus by additional laser this revenue. I detailed dentists, discussed As $XXX does the revenue, tissue we in adopt BIOLASE for follow-on securing with of consumables. U.S. generate general why laser the additional of into will today. our X% over market million a dental it include penetration X% is if of BIOLASE. markets, XX% take from just which consumables. lasers. increase $XX laser market generate XXX,XXX small specialists approximately just even dental every to U.S. account margin in our the This the that from have impact the we opportunity historically all And higher in a will estimate million Today, market market We associated approximately is exists in an sales, with to the revenue GPs additional yet technology of dental international U.S. in $XXX revenue calculations percentage approximately our adoption which large adopt is equal

ability experienced front addressable So results. the are With to our over provide Jennifer positive I’ll confident many and profitable quarter sustainable and we’ve four markets revenue with achieve growth to call significant the for we our of the quarters, years over past turn momentum third details in further us, regarding in that, come. to to these Jen?

Jennifer Bright

we highlight and is this providing context improvements more of around you, good on quarter. achieved as of past everyone. to as the well remarks My prepared during some focus numbers, the Thank operational my John, afternoon, some goal

please find XX-Q. release refer details, further you’ll our of to in financial results, tables our the For financial earnings and which

as revenue from net of third more we emerging training. have delivered COVID-XX. performance as business reflects traction for $X.X demonstrates a a during momentum of increased generated our leading We representing dental as industry growth and well result our increased million, dental year-over-year. a lasers demand practitioners, quarter XX% education operating to normalized strong Our environment for since the low return periods the increased This

momentum compared revenue we importantly, we We industry were experiencing continued XX%, revenue quite XX%, reflective growth as international increased positive believe QX pandemic. reopen. that year’s QX and let system which XX%. as we also are last implement happy to the in third Either XXX%. and the lasers, continue safety to report all pleased XX% increased additional And quarter And share me increased from was U.S. due other abroad the more are includes to our comparable. consumables highlights, dental revenue with year-over-year, we and demand this and Since indicators for increased and leading to of delivered to revenue dental some very increased they pre-COVID offices U.S. results. year-over-year revenue anomaly, sales measures increasing XXXX QX laser more an

improved During from a we contribution gross the despite since significantly a carry through sell sales, international margin margin which distributors. higher quarter, lower

This able the employee resulted impact average an gross increase revenue significantly for were our effect during quarter, XX%, X,XXX we million QX CARES XXXX. of credit improved points prices at the in to the a year-over-year. profit year-over-year, by reflecting fact, basis Act gross sold the In under a selling expansion margin during retention the and third increase in $X.X and products of

improve due primarily for and consulting operating net special the as to in loss $X.X engineering $X.XX $XX,XXX meeting than million the the fourth quarter, increased share with expenses, travel quarter. expenses, $X.X commission for increase achieving the for $X.XX ago and was fees $X.X expenses industry million quarter XXXX line, the of XXXX, more were related quarter net million the related and On total in stockholders our to This continue from advertising year sales of or share trade third for the incurred in targets, show products. be per leading costs, for quarter to expenses was expense to and connection per compared or of GAAP projects XXXX. we held less income

million adjusted EBITDA share, flat the quarter per per compared loss EBITDA third relatively to loss third adjusted the when XXXX. $X.XX which million of is $X.X Our of quarter an $X.X $X.XX for for was or share or

we quarter past year, Now, let’s cash during $XX.X the We and balance the sheet. we decisions to without million, strategic capital moving of over and growth equivalent strong, the having us will the to and the with years execute proactive historically turn believe remains today’s guidance. finished resources And provide our the several balance markets. sheet strategies on for access took with to to it cash

million. quarter We’re back continuing working. we’re we I’ll for the questions. currently open call for summary, forecasting and XX, strong $XX.X the are our our In quarter the significant quarter operator for had to fourth XXXX With call revenue demand are strengthen confident revenue actions be above fourth Operator? that that, December experience dental and another with to high revenue the to and of BIOLASE to ending lasers level and turn the margin expansion, growth XXXX

Operator

Instructions] [Operator Kyle you. take our Thank first of We’ll Colliers. question Bauser from

Kyle Bauser

updates, were right experiencing John we’ve before Hi, COVID Jennifer, kind the it congratulations and like momentum of that feels recaptured you hit. on

territories favorable bring been glad are on curious start here. active labor on potentially it Has kind I’ll QX also Maybe are to has of see territory’s new item. trying How shortages, a that? many to fill? there just So, to How been housekeeping you there the reps difficult on currently? guide many

John Beaver

to our you drop a that year had territories year. may for during our XXXX, roughly a year, doing? Kyle revenue recall was the with Yes, half how open issue we back big of third than as during are Going the you the more

it are two not to is and two we XX I business, that our we I’m open. so filled, going And almost And but I has XX, having significant to we happy Today, just that are report for have having, all believe pretty be us. open only territories normal, have a on territories impact of us think of consistent course in to normal have open.

territories previously we the up demand, well. market three to come and recently In closed opened been the, conditions have closed back that addition, hired on come pandemic had to during add And to that we felt we were they’ve were prior those to back waiting in we people. to as that

hiring say new but two, for we do year, earlier territories territories as this the field, for we all have now, So three we’ve well. that not in had except only which added we’re

you’ve the Now, labor shortage. mentioned

great I dental we’ve year, keep what think employee that gone and think that really the what today, resignation, affects everybody. said industry. this Yes, our do trying we’ve population our bought is right, our having into we’re strategy in able to they call to been people it, the but into I

So, have I’m team for humbled very majority the that vast together. stayed the

Kyle Bauser

margin the some of improved side that. I Appreciate No, territories really there’s to that’s great. culture and has like good the gross filled. with it guess but those some, keeping And sounds really corporate attraction led things.

but higher was just just margin Can of a and we little about ASP. largely a missed should going obviously high, the Sorry, how higher this, so bit sales, you favorable gross of modeling revenue how if function mix was more forward? be that kind I talk curious on but it

John Beaver

Yes, sold. that that hits manufacturing, so costs percentage cost [Technical of the other goods Difficulty] of of of part

and will QX. QX it favorable And in not in total, that $XXX,XXX to was so $XXX,XXX had we in reduction about that and expenses we in is QX have

we than as than to obviously. certainly amount a and continue strong third we, when we QX expect Other about Jennifer in as guided that fourth quarter that, of be of higher fourth “one-timer margins numbers, quarter than quarter, So as half be If revenue the think XXXX. about you maybe won’t that higher expect though, recurrent”. hit

bump the been certainly in and margin to that, in a with attainment. to and up revenue better, dilution, fixed gross we So cost for right. gross get able part things look to to ways we’ve that’s do played a continuing think in margin faster, do higher what due smarter, I we’re With

Kyle Bauser

be this? to too? of then important? this should that’s thinking or late may, Could if of No, the adoption Waterlase kind trying top-line And maybe and be about XXXX it. just that we a how sense get should how Got I about we a maybe more helpful. think of is profitability, lastly, growing on event Just

John Beaver

Yes.

So know I’ve the that in you as fourth think said strongest past, I is typically our quarter quarter.

because it’s And And so expect get would we EBITDA, don’t stuff. always the focus QX. on for That’s next I positive all year about talk we EBITDA profitability, equity in expectation. you accounting into interest, that when the whole my internally;

And next EBITDA has be in for standpoint, plan significant place and of So one fairly year that quarter year, deep the to included we a variable positive be a this positive. EBITDA that’s of EBITDA retention I year fourth vesting, then put XXXX. full to earlier employee from expect only

think imagine and you of full all can our employees is around for that the when XXXX. So, year EBITDA being focus about positive and that, that you our focus

I XXXX, positive finish So, in and said, fourth [Technical and EBITDA XXXX. I in the positive for Difficulty] as quarter we’ll expect EBITDA XXXX

Kyle Bauser

appreciate on here great. the update. and color I congrats the That’s

Operator

question comes Bruce next of Company. Our from Jackson Benchmark the

Bruce Jackson

Hi, for my thank taking you questions.

have Difficulty] the on assuming machines? parts team back then to experienced components you the also go I’m disclean Just any that for impacted [Technical obtaining or labor. and

John Beaver

not in terms been fairly our for manufacturing treating. manufacturing long tenured. we much around people the so team seen disruption has of with have Yes, awhile very And team

every delays. in chain the to the side we’re, same manufacturing again, that. have happy on about with we supply boat report and other company, some just side, I’m once However, parts I think seen

expect. we XXXX, we’ve of feel in into change the addressed what all address confident shape that look we to fairly As good we

to XXXX. to in already XXXX on work starting be revenue Our we’re and

diligent that you is have when options. as our safety different past. balance the now we’re So, we’ve constantly the sheet Ordering supply you may slightly higher good more looking we’re seen at than have see is for we stock in kept while a, more, inventory

things doing like come, what’s needed. that So to sales when ensure the that we’re, can manufacture some we

Bruce Jackson

Okay. nice double some last some a and powered markets, pretty grant into to next experienced That’s could through have difficult there a you segue you we have sales in quarter and my just company has effectively. us appear was, question, tell some maybe environment

then coming color just impact quarter? you the spread how into a give was third you of fourth little quarter things the noticed if COVID-XX are sales geographic I us any wondering So, the could, like and if on the and out of from

John Beaver

feeling to where are we of good about we’re overall terms pretty in So, getting access doctors.

to still because is story. I’ll talk Now, international U.S first, different little a bit

up, during I in So with way months U.S. variant have been city-by-city it’s events, of a rate events in Delta shut enough an where not those breaking and this last cancel scared goes a decides couple and think, state-by-state, people. out XX and didn’t a months, quarter would had I the the in the And people events. indoor And do just it areas. infection a XX in And of of the might the have the that WTP of is Delta certainly because out, going normal of to numbers variant. really that we’re event to that in couple state last been come We was they get state, times. lot we has or down some in we’ve instances, the believe COVID, to

Miami of fairly seen at community was events American just was into go was the one And dental Meeting Perio in had. that. we Miami. larger Beach it haven’t the as attended quarter, of we the has in that well and of much first So, fourth I Academy

New up the it Thanksgiving. be forth while it probably and gave trade in still we going well the the less ago past, And other hope when I we York show shows expected coming it. about than traffic has think well. will as be six have to months attended thinking after better that got were than will been We’ve right dental me, that be So Greater these so are would

more COVID. still, think international an is I However, the issue than of U.S.

call on the us. for much last it said country-by-country issue quarter I a very really of is As

up countries sure read. open shut you’ve some Some and have opening countries then back I’m up again then as open up, is are down

And third so training international have terms being we’re nimble where came shows, where say I’d we have events, we and very, quarter in have where just back of nicely. we

the So, team’s I addressing doing issues. and those well think

Bruce Jackson

last usual. refer FDA’s this XXX(k) the device Then The slower a submitted the great. than question. little Okay, quarter in EdgePro clock bit you typically XX-day

So about the thinking of around QX like year? maybe should this, we end quarter next be early the or

John Beaver

XXX(k). Well, it as this would submit a or Special S

the is know quarter, typically get out XX not expect so delays this commercial still we the a of done quarter. XX-day, still we our of we And FDA, believe approval but course, XX-day, this here it some some what a in hands that in is we’ll days, get of from terms would fourth and lot fourth but a and the sales, of have it sales for quarter in and

Bruce Jackson

great. Thank right, my taking you All for questions.

John Beaver

Thanks, Bruce.

Operator

Bullock next our question from Group. of take We’ll Maxim Matt

Matt Bullock

Hi, thanks for taking my questions.

of Just Could EdgePro. a if that you the margin, submitting Special Congrats terms for, what maybe price would any detail, or provide gross not you list quick be corporate us whether give sense gross in it can’t to that margin? or we XXX(k). on or of level follow-up kind accretive on expect for of

John Beaver

Yes.

can’t information. So of any we, that I give

be seller marketer agenda. that, obviously that the We will or the will not retail of be,

at same that. them, we our label we time, for of because private margin typical won’t and margin is, are sales than marketing So, what basically and but the the be have manufacturing associated all lower will with the expense

out So just, and geography and the statement. where really come costs income those it’s

Matt Bullock

Helpful. of then, Excellent. there may sales, is of be. service maybe highlight pipeline organizations, in want dental whatever anything terms to it with And agreements, you progress

John Beaver

come, quickly, move it more say to progress but our more progress where report to make to I’m the Most soon I in continue information space. progress. as come, we those is, We I’d are organizations this nothing hopefully year. to out of pretty today. It with but Yes, happy in DSO of say don’t slow would

Matt Bullock

much. back very the queue. you hop Okay. Understood. I’ll Thank in

John Beaver

Thank you.

Operator

question next Capital. Ascendiant We’ll from Woo Ed of Instructions] take [Operator our

Ed Woo

margins? and any long-term inflation you. impact on about tell you your Thank can Yes,

John Beaver

thanks Yes, Ed.

our margin personnel as the team inflation parties seeing the prices. and mentioned done Jen supply consultants, sales of part holding for tremendous doing that a is, third for do the job continue from are deals continuing in that and packaging are We’ve And think comments, to We’ll the done valuable her we And dentists. average reason price gross by chain. having for we really we’ve board to in that. have value selling is both So, had increased across lasers. we’re in sell

we So, average we we’re even think we’re at saying, on prices. that what selling stay least with doing can what inflation with

Ed Woo

Great. Thank you and wish you guy’s good luck.

John Beaver

Thank you, Ed.

Operator

That time, concludes John At back today’s turn Mr. closing for the question-and-answer session, Beaver. you this to conference I will remarks.

John Beaver

everyone want today’s on Thank And I call. you. to being thank for

revenue With before flexibility the We financial healthier we and us. many positive to capitalize the past have BIOLASE place a opportunities changes today, we positioned long-term the greater made in the infrastructure year, commercial now believe and on over are for is company growth growth.

dental treatment in in meantime, as confident revenue Investor look are to We’re will in them our time. Look for worldwide. the fourth for X. significant receive We growth including achieve several patients results on reviewing safest to investor allow ability provide our And March. way events, business Conference our and the solutions in our plan, we the prospect long-term growth possible. Benchmark in December and sustained and quarter dentists believe to profitability be that I participating forward and Jennifer over

at meetings hosting be XX XX. also will in JPMorgan Healthcare Conference and San the January Francisco, We

you in day. for our We us. you concludes interest If you’re participating to and Thank a forward you. Thank thank This BIOLASE. operator, your Have it. of events, look call. in with a any everyone meeting great schedule these please

Operator

for today’s Thank concludes participation. your This call. you

You may now disconnect.

Biolase (BIOLQ) 11 Nov 212021 Q3 Earnings call transcript