Earnings call transcript Q1 2023

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Operator

Good day, and welcome to the BIOLASE First quarter 2023 Financial Results Conference Call. Please note this call is being recorded. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. [Operator Instructions]

I would now like to turn the conference over to Todd Kehrli of EVC Group.

begin. may You

Todd Kehrli

Good us operator. it’s and you thank quarter Thank to afternoon, discuss joining XXXX. today March for BIOLASE's for ended you, XX, everyone, financial first results

John opening to the then call Beaver, before and On more turn call Bright, Officer. operating the the Financial review over questions. in will Chief from detail first performance today BIOLASE for Jennifer President Chief the the Executive for call financials and the Officer; review company's Jennifer John to are quarter, and

we I'd initiatives number session, Q&A historical this are anticipated and that Before begin, everyone during like that strategic subsequent not of any including financial to performance. a forward-looking are facts remind made and which will statements be forward-looking regarding statements, presentation company's statements the

company's this statements be on company's as Securities completion the represent the Exchange the call. website files forward-looking subject under current of the on a based from replay in Securities statements the and of differ to XXXX. are statements view are BIOLASE's will risks forward-looking Such XX, with the Act of company's today, the A Commission. shortly after uncertainties and These could conference defined statements These materially and Private risks to XXXX made. call assumptions as cause Reform Litigation the that only actual are results and of variety May discussed expectations BIOLASE and available of today's are

first earlier financial When announcing listening results. to this XXXX to release please call, quarter today news refer the company's the issued

can be filed which Form the BIOLASE’s in report company's copy is BIOLASE found the of SEC. in of section with XX-Q, If the also you the results news available a www.biolase.com. be do website financial at will the that not Investor have on release

adjusted per a regarding EBITDA offer net non-GAAP loss release the so company's and loss The EBITDA adjusted loss disclosures. The include net encourage loss as tables review financial per well news information, we've non-GAAP provided in information share of we more reconciliation unaudited you share today's to additional to them. tables and GAAP as

I'll said, Beaver. John? to call over President Executive that With the and now Officer, Chief turn John BIOLASE's

John Beaver

Thanks, joining year and interest which us even tough appreciate BIOLASE. for our support continued Coming We continued in, year-over-year your and our Todd, the results growth, momentum achieved quarter in this we business you, and this off in-line significant thank everyone, afternoon. environment. in demonstrate excelled first

in and We quarters believe and the continue that our and efforts the continued programs. of in and that demand are dentists attending will rise evidenced number are investments pay as making coming and novel off we increasing is the education training are by from to benefiting

lasers. Despite leading level is ninth economy throughout from of seeing growth organization, our revenue the we community the can total our experiencing, quarter byproduct response our growth. industry-leading of which capital from represents headwinds increasing continued sales to we our of and momentum positive year-over-year. the This equipment enthusiasm increased the felt challenging X% year-over-year dental are many of consecutive companies with success go-to-market be are The a initiatives. is The

XX% a sales experienced growth return we of quarter, revenue our international laser the year-over-year. During increasing international with

The since first occurred time this pandemic. has

systems. We driven year-over-year, also using by XX% increased reported sales with the consumable BIOLASE our sales US consumable record quarter, during laser procedures up

lasers. they Moreover, WTP, to in among utilization addition Trial to in further Program frequent existing our our board, the historic or our Waterlase training quarter new procedures experienced This increased migrate impact can such Exclusive in our higher presale demonstrates dentists sales consumable business. shift more record coming quality we on have programs, training consumable as also on a dentists and as more

new Waterlase Epic of our generated XX% the sales first the coming year-over-year of with our technology a over the quarter XX%, XX% from along in the increase. grew our trial success laser and of rollout Academy sales continue specialists. purchasing with quarter, our from with US percentage XX% we representing after Dental to the a WTP as increased and During This of to customers Academies, adoption dentists in of coming program, see

growth metrics. all demonstrating of across our are We performance key

So investing as basis. and profitability on believe driven of training expect bottom being to growth now demand full lasers adoption and rate their margins XX% provide which is focus continue industry-leading and to why revenue our well on our strategy least our recurring benefits to of the of revenue line. growing EBITDA top education will and and And Rising our dentists lasers for to an at achieve translate our is utilization by higher we accelerate to we is adjusted the dental the intensified patients. year and line

outcomes. with few several our using lasers, now go-to-market and not because their drive dental goal the studies coming of because many not lasers. but practitioners will dental been Over represents and awareness has the years, familiar practices patient the papers to to are they're the of this believe and our growth for no, real currently to past lasers our focused a to look come. and they part I overwhelmingly dental With point lasers improve buy our peer-reviewed dental efforts, years upgrade just best-in-class to inflection market raise large said not they

our the represented Waterlase by BIOLASE approximately worldwide share dental currently all-tissue of laser has market brand. XX%

are and represents the that sales quality, and reliability after service, training go-to brand education. We

our than the X% currently a I of better outside less of demonstrate using less are needle. than we dentists the to that to do of job need moving and the dentist, reach rest with in US and US dentists believe XX% results we lasers, the dental the However,

and overall education increased training. leader. to market We our focused dentists of awareness protect of lasers other brand industry-leading patients ensuring opportunity, benefits continue by we market their addressable the on large are to reach our leverage engaging dentists XX% while market building as we and grow with position a our to this plan and the To and through

of And we outcomes. approaching During upgrade to in and practices efforts, look proactively training now as held these and they are events dental practitioners educational XXX XXXX, BIOLASE improve US patient dental over their increased the their because alone.

educational quarter, quarter held and we XXX XXXX. increase XX% an of over over first the events, of the In first from training

has As these initiatives, to leads our due in over are work a result sales. is MQLs more qualified to Since bulk XXXX, and US Leads team to which increased the convert generating increased hard efforts. number marketing increased the Marketing at the and we recent to or XXXX by of of these XXX% Qualified sales X,XXX been in the of

a first the the quarter increase, During approaching of XX% the year from to number of period. MQLs increase continued XXXX, ago

before, revenue heard this of US, it impact significant call additional believe increased in include bears repeating $XX been revenue. for this each million technology assuming revenue adoption We the XX% all approximately same but historical revenue the laser we increase on have BIOLASE, keep of generated the with the Many has we our tissue of you from in because potential US, historically, where of systems. share. This laser in or our procedures XX% adoption potential done me our outside doesn't approximately market say our X% generated consumable

strategy adoption increase three-pronged well-established a market lasers. have our of We to

dental specialist dental use academies is of in benefits to In communities. BIOLASE more lasers of to lasers. awareness to specialists down our formed first specialist The XXXX, get the expand

further academies superior our patient specialist endodontists, launched adoption lasers of periodontist, outcomes. and to pediatric we Specifically, drive for and hygienists dentists dental

give the academies, for Waterlase for general all Academy. of believe families, practitioner, product the combined into Academy we XXXX, of will these training. also specialist and pursue to academies one each We practice, our specialists, and two but to this adding only further more the training procedures further the avenue interested In in improve the Epic specialty who's an not simplify

Combined, for specialist recurring of not each of dollars our revenue of the potential dental laser markets millions systems from of the these revenue including consumables. represents hundreds year, potential sale

focus look demand alternatives dental in training increasing and Our improve higher patient practices. for advanced outcomes more into products. translated for for to is on safer, They their our education specialists these

The generate GPs general in US $XXX that not is dentists consumables. we opportunity the on We revenue in in US million second practitioner X% significant alone. laser of of with the adapter these lasers XXX,XXX initial focused believe follow-on that would over have included the

Waterlase procedures training just more using laser. procedures return trial laser. have Our generate program, XXX% our a FDA-cleared XX believe our that dentists Waterlase we do has the additional in success and which Doing or education more we'll The week, laser indications investment adoption. over two exclusive laser a on we can driving perform through in

we this year. earlier, saw XX%, over Waterlase mentioned I rate As XX% far success trial to program year-over-year increased so our over exclusive

and these approximately can goal our part big a the win-win more is XXXX do host they programs. Waterlase trial program laser procedures revenue for procedures with in-house. GPs, to GPs, a so exclusive It's is keep can additional XX of Our in because of they in-house teaching these

more That, through the other motivating technology we more in Waterlase training we driving and events, along will or Waterlase success do education program laser incorporate experiences, The have better with into exclusive adoption. the patient laser dentists trial practice.

in These Speaking in named corporate increased in office new Laser model third we Smiles and first to our education, are month, of spaces facility and located ever dental our training opened conveniently and perform by and train, headquarters training new produce to novel a content, to dental laser environment. drive our marketing adoption a studies revenue opportunity ability is materials, practitioners This test create expand equipment. new last open our the next plan will quarter. educate, to hands-on

adopt of our growth getting is our prong Finally, to lasers. the strategy universities corporate dentists third

to to more integrated and training dental is continue one-third and develop the technology postgraduate and across over to with new lasers next dental stronger the have appetite this adoption technology utilize expand and programs of patients programs country, the right of there relationships key the lasers now. We schools the our into during dentists. Waterlase schools few dental of in among in key years. generation several into with of state-of-the-art are reinforcement to about We introduction dentistry plan we We've believe large residents laser a treating

school. are today, DSO corporate right by of or dentists new dental employed Also dentists most out

We trials DSOs four have five the ongoing largest in US. of with the

begin our new these they them their to out dental practices is DSO and of go using when their the laser customers new and consumable lasers central make a for while forward, to goal for Our part lasers employed becoming our moving dentists own. to on

We can a even for make believe greater the that with continue lead years. coming to and inroads DSOs the in BIOLASE to far DSOs revenue solid

well-developed our generating very is summary, plan and desired opportunity to we large a growth the have this positive capture results. In

industry for profitability the gives training XXXX. into succeed level Furthermore, the program can the us We continued us confidence the programs leader. will believe is rising. interest inbound our well as revenue and I of achieve future Waterlase increased objectives education of we to trial enable that are exclusive the the success

further to provide I'll results. regarding that, our Jennifer With first details turn call quarter to the over

Jennifer Bright

as numbers Thank as to well achieved of provide the everyone. we going context first you, I'm John, some and around good the improvements operational during quarter. afternoon, highlight more some of the

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

for first industry-leading because increased training. performance reflects education lasers Our dental and continued of quarter our demand and consumables

For is the X% earlier, growth. mentioned first we John as $XX.X And of consecutive million, quarter, ninth of quarter growth year-over-year net representing revenue delivered year-over-year. this our

quarter increasing record Some XX% highlights BIOLASE by year-over-year, with driven additional laser. sales include consumable sales US using first consumable procedures increased

International laser year-over-year. increased system sales XX%

sales momentum We US.Waterlase of dental approximately the customer specialists. quarter our Waterlase with in with from XX% coming new continued coming customers sales new first and of adoption XX% from

the of are our These highlighting with lasers our experiencing success success positive of our program. to indicators this we dental the demand for and rate program conversion consumables. trial all increasing quarter sales increased exclusive rise our industry-leading rate are continued this of more XX% the than Lastly, year-over-year, Waterlase

in year impact First the a primarily XX% XX% to margin The issues quarter and change through to the revenue US is sell business. requiring suppliers due than that of ago. was in we US, outside a our to gross margin of percentage encountered, resulting to are where gross supply decrease higher lower us margins the new chain generated we of effect compared distributors,

we TRUNK to key own supplier supplement in-house with will components. allow At FIBER the us that third-party completed components an a of manufactured acquisition end our

occur backlog our flows and production as reduce these this improve capacity, We we quarter. reduce our as overall will be cash well expect will believe which goods cost at operating of materials will for this -- full is when

ago line, quarter. million the million to million expense expenses spending ago meeting fees $X.X operating our quarter less the loss compared the quarter shareholder for first $X.X legal a for $X.X was and of annual year required compared million year to GAAP due for loss decrease on the net the to XXXX. of was net $X.X the This quarter, consulting from were On total in mainly down quarter. for

EBITDA for adjusted XXXX. million first the quarter adjusted compared quarter EBITDA for loss of the Our million to first of an loss was $X.X $X.X

cash finished ahead, turning fiber expect cash the profitability, projecting while to approximately goods we towards topline our the to acquisition balance equivalents to have and we increases quarter due Now, are of in XXXX. sheet. looking of contribute with cost to completed drive growth, $X.X to And as million. We price trunk we the lower

We schedule beginning the XX% have of the to fiber ship in are trunk of on make in-house will second we approximately up XXXX. our fiber quarter

these We savings gross us the cost XX% to expect drive to reach margins, close will needed increased getting profitability.

events around expenses we four to also their opening no able training staff to dentists with country on also are of at now cost. little this customers, centralized be train will facility. WETP the WETP year our We to working educational at with host drive facilities have to lower prospective partner the and location to We own

about As savings savings revenue expect be and positive the significantly margins, year, With and so will the expense continued believe EBITDA adjusted John full we WETPs year. mentioned, we quite to higher the our achieve profitability expected XX we for meaningful. this will improve growth, gross host WETP

to on guidance. moving Now,

also guidance our full for year full adjusted EBITDA of we the growth XX% at least expect positive reiterating are the for I just And XXXX. revenue for year-over-year achieve as to We year. strong mentioned,

XXXX, quarter revenue also we June the XX, XX% at For year-over-year. to ending grow second least expect

the the back With call Operator? call that, to I'll open questions. the for turn to operator

Operator

Bruce conducting ahead. The with question [Operator And you. we from Benchmark Thank your is a today this session. is At go will Company. first please Jackson time, our line Bruce, question-and-answer be live, Instructions]

Bruce Jackson

just any you're working in-house in to I'm that kind inventory quarter? Good thanks second going for some fiber improvement a I production? shifting could that leverage like over afternoon the my for before and Are be capital gross of If the working got on and taking margins you've questions. get hone assuming inventory you off in gaining the moment. some to

John Beaver

the on Not so much fiber production, Bruce.

to, -- will that bit inventory believe more would capital. inventory the components continue are I be over working a We on reduced of low quarter, from run fiber. other for Its say, standpoint, course the I levels the providing little that

was will be lower our XXst. it June overall I think level inventory at XXth March at than

Bruce Jackson

Okay. the And have then do of margin gross target for the you year? a remainder

John Beaver

Yes.

we XX%. expect exit in to are close XX% year, We quarter the working the towards the getting fourth to and XXXX at as

Bruce Jackson

over shifting then And Okay. programs. to the WETP

to up, down going of those that you're same the last about said, Is doing You this XX or from be year. year?

John Beaver

Yes.

rate the about what rate, expect This it's the that. well in minimum and approaching far, XX%. year. over XX%, last projected I XX% close The to closure on so to So you're to same. at increase is We we're depending XX% success year a looking of the around at were period

me will will expect events revenue So, we what while that's the of same, And of the number gives from the generated WETP be amount confidence. higher. be

quarter obviously, year. XX% will the first we in revenue between I increase reason the heavily the things one versus those One standpoint, WETP we we had, QX revenue scheduled total half of gives last is the the year, that of two-thirds that a But not in first the year of of year, that of believe did the have quarter. versus the second with the only in for in things, more in year Bruce be of achieved reiterating me the even one-third our that and guidance half full being from weighted confidence back events is get half first

it that year a is cell XX% a at balance And to over ago, I a thing takes other as how translate to about of the process. long me when right? really our three have mentioned, into year MQL you versus is gets The look usually so, six-month excited that MQLs the increased

QX. So optimism me kind that part gives in of latter a and lot of of QX QX,

Three in other they will first me confidence be in price are for the increases we guidance fully QX quarter, things the quarter, that that weren't QX. find, the I for put for in renewed full the in effect effect gives

QX, of very So much international of talked if last I the and you seeing can't with the now. will, in of flat, sales US our off about, I of was improvements I in about like impact achieved the we international that education partial couple I because we're has the nothing, to the performance last record the should of training years depressed see show I of consumable QX. Germany, different do up, call. of end the fact COVID, somewhat expect our in after people over revenue to the been IDS at the for the the of happy was pleased amount go momentum the of number in it in for of grow how that utilization the our in really price continued year. looks balance that March as even was we we increase in continue and at that and international QX. importance for I've I made only and the or fourth business a quarter systems think, started but that in business got paying Waterlase that the overstate to are we that there, terms XX,XXX year. And

Bruce Jackson

if year. if question, And it going would last remiss be be then, was McGuire ask Great. I sometime about I published one study to Okay. didn't and this

John Beaver

cautiously to absolutely, say going yes. I'm

down I'm XXXX. and confident, Now, between as not because in yes, don't QX, me pin QX but

Bruce Jackson

Thank much. you, Super. very Okay.

John Beaver

Bruce. Thanks,

Operator

Thank you.

line Vendetti Your next ahead. from go is from Maxim your question Anthony Anthony Group. coming Please is live.

Unidentified Analyst

guys you discussed. for in actually asking Thomas This chain the taking for Anthony. I'll my here. start some by about off questions constraints line Thanks [ph] supply is of

to a like you as are the you're at high possibly this XQ? general guys to in more If you looking what on transition the production a now, could And into expect seeing how Thank just guys view, to rear expect that, you in-house you impact on XQ throughout fiber bit these we is go? little that to or color can just and level, somewhat something add headwinds continue you.

John Beaver

Yeah.

negative and gross question. gross of it margin. appreciate from, third you chain, but I impact fourth look our and that as us well, lot it XXXX, on a obviously, think margin XXXX from again started impact So in reoccur that a hit really second, at by When you seeing of in supply had was impacted -- quarters I

That's the fiber, our capability some certainly which most trunk of most bringing invest the our critical in and decision part is reason the capability, to of in-house we made expensive Waterlase the system.

as at look have forward, mentioned, fiber we over half requirements XXXX, So moving Jen are as trunk of we target on our built in-house. now to

And than cheaper two-fold to has make it's margin. a One gross so that to obviously, on benefit is, buy.

finding we half is least I'm that of cut than better seen. we've years. is our manufacturing margin going many ever we at units from many, our making quality we're what out back so of second the total the the And supplier, by what that we're is need. And And

And the me back the confidence high gross of of half greatly what quarter a year second see degree and will number. margin gives the that we'll so that in benefit our

think in terms So we of to place And with get in diligent margin. we're going really the I supply think now. stay always chain just for better is gross in manufacturer, but I an to any is that feel issue it's quarter I have each -- management happy

Unidentified Analyst

to great you. hear. That's Got

Can little towards fully that? on is recently quite of you And can total road? so you bit across holding of trying And but I and if XX then it guys in-house to many facility. the on not to traveling bit now? country. operational a be on events but only doing know call, training just just mentioned events many as opened the speak how there, speak talk guys training you events will it maybe more how WETP turning the training -- then a you understand the about versus you also just the Could

John Beaver

Sure.

center question and running. up part of the your first is was the training So

First training, May. I attended actually this

not was this its March, I've So Sunday shows, it we And fact, trained in. great being one end best training really of pediatric at facility. here the of just it was It XX at actually facility, had been dentists the open. it’s ever no, in

four But From the are five here, balance a WETP training the will it standpoint, thing the WETPs besides for there, other one of do clarity, just and or one we WETP WETPs. trainings the have right? year. the host We for facility the facility, training of another

now and in what in But conscious identified training what prior a and trainings, we and I cost with to able much partner holding way say, years. think are going a is cost mentioned to of Jen the number organizations/sites these more I reduce is would hold other, of did partnered what to we than have

with the room, had we if a always, which facility at cost arm went of WETP, hotel The and lasers. that and a in of they charge you're catering audiovisual stuff unseen kind to years, cost the and almost food, not their of and mercy an we for. had and prior that the In those leg the for the hotel is out of only -- wear along lasers getting that. that of tear

back own a you Center, BIOLASE cost can there, from country. you an I think, the bring country either don't albeit, office event here Education our we're now food. our have What static elsewhere minimal in storing our corporate at the so and shipment four is the have the, identified in at very to across we're where or forth, When the you doing lasers standpoint, facility,

So we're now significantly XXXX. reducing the WETPs in of these cost

Unidentified Analyst

sounds adoption? keep well in really It and moving as will then And get queue. like back year that as and Understood. That's then finally, hop hear. to through down out great some costs the I'll help, drive

But you be it that will shed of backlog. to light not comfortable long But would you size that are some on discussing and if take through could I think the and backlog mentioned how guys know how you work backlog, I'm you appreciated. sure total you

John Beaver

Yeah.

backlog. in time or weight you a We're when to I even a not my I'm backlog more so laser current on to much out. We the would mentioned the of consumables minimal is, time on product sure purchase we're basically it I So say, able out. ship comments. a There don't shipping have

really not backlog So today. it's a

Jennifer Bright

Yeah.

it's he the think to been was the in-house Fiber. Trunk production down the that referring coming with Fiber I backlog of Trunk the comments on

Unidentified Analyst

Got you.

John Beaver

Yeah. for by right? that, expect And would quarter. that XX% been has And reduced diminish the that to component, start to clear, that's the of And greatly to impacting to we about zero of our not one that's this sales by today. backlog laser the But of any year just today. near be from end

Unidentified Analyst

I'll Understood. Thank out. my for you taking hop questions. Thanks.

John Beaver

Okay. Thank you.

Operator

Thank you. And is as Woo question from Ed a Please reminder, the Instructions] floor Capital. remains your the go coming open And from Ascendiant is Ed, for live. questions. next [Operator today line ahead.

Ed Woo

Congratulations the on Yeah. quarter.

any With uncertain have as you cycle rates, to these in sales and the the the high economic you dentists? change environment interest out reach noticed

John Beaver

Ed, with. dentists, which had It been would deals that talking significant It impact that on we're on not us. I answer question. There would depends have say has again, a that been that So probably But Waterlase conversations have contain with maybe have here. year would ago. the and been closing once the than cycle has have it longer we been I'll dentists, I --

seeing revenue Waterlase return they payments and lower on But at we a rate. practice when they're month we Certainly, that versus go $X,XXX WTP $X,XXX, track return investment foot pre-pandemic during for show or mean for straight fact sale. on X,XXX to them would a purchase The either the that investment do to back I now a rates go have today. before interest love that levels their their paying and we monthly would traffic They're practice down. down, would a interest

to that not additional when going say to not they procedures, $X,XXX $X,XXX change the I'm much. meaningful, While compared doesn't on it earn them it's really on to

Ed Woo

question. answering wish Great. for good you luck. guys, my I Thanks And

John Beaver

Ed. you, Thank

Operator

you. Thank

And turn We the call over end John have closing Beaver the session. the reached remarks. now for to will question-and-answer of I

John Beaver

thank also Thank team thank to make delivering our and care laser to through them their I safety to dentistry. continued today's want an call. has of on want dedication. the you. everyone commitment of being tirelessly worked successful BIOLASE for Each standard in elevated and customers for I

in to Virtual with reviewing And on look be I quarter meantime, results our Healthcare forward in August. XX. in we Benchmark Conference and participating Jennifer second will May the you the

are with This please our interest at in If call. contact you meeting us. a help in operator, Curley concludes Thank and thank you, a your everyone, facilitate Have Todd event, participating this BIOLASE. to tcurley@evcgroup.com great for day. you,

Operator

participation. This conclude conference, today's you time. at does your you may lines and you. this Thank for your Thank disconnect

Biolase (BIOLQ) 11 May 232023 Q1 Earnings call transcript