BIOL - Earnings call 3 2023

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Operator

Good day, and welcome to the BIOLASE Third Quarter 2023 Financial Results Conference Call. Please note, this call is being recorded. [Operator Instructions]

I would now like to turn the conference over to Michael Polyviou. Sir, the floor is yours.

Michael Polyviou

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

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

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

encourage section in Exchange tables news company's financial can per that have John and BIOLASE's Form non-GAAP tables we loss a loss report be turn news The found to XX-Q, said, reconciliation adjusted net in which website now loss the and the them. well Beaver. the disclosures. With net available John, is we over in please BIOLASE's to go to and regarding include per filed not release, the with Officer, of unaudited I'll Investor share so loss adjusted release also If as EBITDA www.biolase.com. GAAP, Commission. The Chief as financial and you provided review the of results Securities additional company's it more will information Executive of information, ahead. share, be copy Relations call the offer BIOLASE do you at on non-GAAP the President EBITDA today's the

John Beaver

you discuss Thank joining our us quarter earnings everyone. for afternoon, third results. today Good to

to ongoing by experience increased macroeconomic evidenced in our revenue as third dental other is their commentary. caused many being results performance. quarter The rising by extending cycle sales in lasers environment interest generation, uncertainty continue headwinds we by our through our business were companies While the experienced impact did our sector lead also industry-leading and recent the our and same impact

to volumes. contributing process, interest lower including and rates factors the several are longer patient there believe We decision-making higher

state. returns be we that minimize critical drive to much in our in economy award-winning revenue-generating the However, believe a awareness and position to greater more lasers it we stronger maintain impact is our the when interest activities to and a normalized

from effort in command market are Having of front to obvious. brand. all-tissue this is we the of our our X% us. as the U.S. business. laser in practice. the well opportunity to than with worldwide less proposition on the dental significant of said all-tissue market is dentists we Waterlase also their Currently, believe in solutions to the XX% grow prepared an opportunity that, laser And positioned to are their laser take dentists value may goal I to using than Our seek And worldwide XX% be capitalize benefit our potential in and approximately go-to as driver leader growth less we

than an This to working untapped who all-tissue this and XX%. BIOLASE However, a service are of attract their other XX% quality, are opportunity a for engage practice. hard using training, and to in not establish more laser dentists market to market sale brand significant and having premium after ourselves we we as need for represents reliability

it periodontists, have made significantly return with have hygienists. these investment We we dental EPIC for not efforts to lasers, to significant our Through the on Waterlase our and their dental they patients. pediatric the dentists, our and as engage specialists benefits products specialists endodontists academies, simplified increased achieve our to clear such and on mention training can

are education. The BIOLASE opened state-of-the-art training also facility, Education initiatives XXX,XXX dental training our state-of-the-art the a increasing over patient which practitioner BIOLASE clinicians U.S. and in office, Education access adjacent engaging is recently program which an Center, provides engaging general tailored dentists education like provides to trial with We live Center laser the environment by education. learning actively and around Waterlase to through our LaserSmile, dental the

provide education this nationally much increased need to and dentists our their to market with continue more these even quarter platform laser and better laser they of more more and These cost that changes training drive helping this events year, effective. We to adoption dentistry. for by advanced initiatives to safer and explore excited patients event training about training providing alternatives made move through and a making ways program are next to improve us

increased our installed consumable On the our the XX% sales, adoption, in laser year-over-year base continues systems the of by in utilization encouraged the top quarter by we of laser are as continued third to increase. which growth our

adopt dental laser soft to our dentists dentistry our lasers increased Waterlase partnerships tissue have we careers. and customer acquisition integrated lead universities. efforts to lasers, with generation difficult our in pursue macro for in dentists postgraduate and leader, generate industry even this the corporate programs pathway a continue new continued As their early schools actively and Several future and creating already EPIC to environment,

to briefly Turning operations.

efforts our and by in fruit expanded optimization our the in beginning several XX% year-over-year improved margin reduction quarters internal have are to third Our as operating the past quarter. gross and evidenced considerably over results loss bear the

The have performance allow improved economy success as losses bottom I line our to operating perform position greater dramatically better us operating efficiencies the for the top our stronger reduced improves. and goals. will our expect and us in achieve greater leaner posture and far future and and

in macro COVID summary, at to preparing confident our adapted of capture same coming this training while In as time in of irrespective our was the And efficiently, still We're a the continued We're environment same this the us. results increase market significantly our revenue operate substantial We more macroeconomic pandemic better lasers result, are quarter, execution days. out the our caused front ability to growth uncertainty of issues in opportunity the for the impacted we to while dental greater education prepared by of to plan. business doing environment. the our adoption and drive our performance during improved. the of thing

addressing to toward While insights the Financial year. the into that more remainder at call. will the of to our I Chief same for your and at the Jennifer? management our your financial call us for expense our results the for in-depth the prudent turn end participation. you said, will Officer, provide Bright, questions guidance over our Jennifer achieving time, again Thank forward objective. With profitability our propel of quarter We the discuss to look

Jennifer Bright

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

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

John consumable our revenue a laser impact macroeconomic environment result continued mentioned, while our education our training. quarter reflects performance As of to third grow our having sales, of increased is on and dental the as

decrease higher revenue some For representing our of quarter, macro result our to includes $XX.X driven This were decline third of metrics. of being difficult achieve systems. these is X% net promising by a by Despite year-over-year we We as the which sales year-over-year. revenue XX% able utilization increased the headwinds, consumable we interest environment, laser million, rates. reported increased a

also and compared lower to resulted from of We higher-margin our with impact from the margin improvements gross which changing reflects ago year reserves along suppliers, to mix in X,XXX the consumable sales expanded expenses basis favorable which points, warranty a inventory by new quarter.

efficiencies the our and efforts drive improvements during resulted significantly Lastly, a reduced ago year the further to operating loss in compared operating continued to down XX% quarter. quarter,

these ongoing efforts While we can indicators and to macro the profitability. operating costs are in certain drive and we And improvements optimize expenses. margin gross operating manufacturing operational positive our control efficiency of cannot loss and control environment,

quarter. in our margin was During compared gross year the quarter, the ago to third XX% XX%

lower that in third-party the the quarter. cost us allowed an and acquisition us to own the This our XXXX, inventory of this fiber reduce has of supplier a changing end mentioned, to expenses has from for I supplement helped which at represents compared As components goods manufacturing key overall year suppliers, in-house has components. resulted components. those new with trunk completed improvement we warranty an ago Also, of to reserves

for On decrease the were the $X.X broader efforts due impacting ability company's the the base. organization is million expense roughly quarter. down was the to XXXX million, to efficiencies in line, total delivering second U.S. quality workforce strategies mainly company's The during which operating BIOLASE's reduction the greater in significantly unparalleled reduction expenses workforce. quarter, and part cost year a announced customer revenue-generating global of throughout its initiatives to gain This we XX% savings value without ago continue included our to the from $XX.X

of to cost million to expect We $X savings initiatives. annualized $X million due generate approximately cost to savings these

compared loss loss for loss $X.X million compared share quarter million third was for XXXX. net $X.X for of quarter $X.XX GAAP quarter third to the $XXX.XX the net the for net quarter a XXXX. was GAAP of the of per to

per finished turning continue balance the compared XXXX. cash $XX.XX We quarter Our gross sheet. of toward achieving equivalents reduce million XXXX. as Adjusted expand looking of to cash to progress continue operating now continued drive we the ahead, third adjusted our margin our was loss $X.X for of third expect profitability, $X.X And of our further. with quarter profitability. And approximately the we million the and loss quarter quarter adjusted the and third positive expenses These was $X.XX $X.X to EBITDA towards quarter the million. our loss share to for for for trends compared an EBITDA EBITDA to indicate

shipped quarter, trunk well reach continue we needed will increased gross is of internal believe will own in-house gross to us profitability. the third to made fiber to cost savings expected The closer the and that our up projections. margin of get fiber XXX% Our margin we ahead in the XX% drive

we and We also which on facility, July, our opened Education own centralized train have expenses this customers. the staff dentists using expect to by X Center, year WTP prospective to BIOLASE drive significantly end at training lower the of

continue host We nationwide little at to cost. to their locations facilities at work with also educational to WTP events no

Despite we Moving on environment, year-over-year guidance. expect growth. the to continue revenue macro to difficult

from improved now quarter we've the compared cost operations that, call comparable savings our are year we to year year revenue gross X% the be full the XXXX both projecting to net and I'll significantly fourth be margin, full savings expected Operator? the loss We full X% to to to WTP call XXXX. With higher With revenue. for back for open than XXXX and higher to the expect questions. turn in operator initiatives the periods implemented,

Operator

And Benchmark Company. Instructions] question first Bruce from Jackson from our we'll take [Operator

Bruce Jackson

and quarter start of of fourth goes last spending up I quarter of are off shaping with is that Generally wanted the fourth on, revenue revenue? your a the quarter sort strongest currently things like to guide. speaking, minute terms how there's the in lot

John Beaver

Yes.

factored guidance much in can where the during pretty quarter fourth fourth the to last year. of full for year. of the year quarter still this were last the our number and far quarter that that's year, we so I from we is So expect fourth beat tracking into

Bruce Jackson

And Okay. vigorous wanted the I other about on the the to was ] then [ question profit. lift ask

expansion sources any with? So can in-house gross fiber that margin work was other certainly you have Do of of an you that. important component

John Beaver

Beyond already Bruce? incorporated, what we've

Bruce Jackson

like there achieve can of -- through any mean savings I you Or other example? a is now chain, types cost it for absorption? overhead of are supply matter Yes.

John Beaver

and to Right. and nail with the Yes. gross on expect margin. absorption, but One are improve is obviously, looking are our the higher that sold at cost continually we standpoint. our number And goods projects a fixed our an could hit reduce also, cost production from head. both the the Those X higher of you revenue that standpoint -- material efficiency of a ways volumes, we

though, have place probably So year. an this impact won't fourth that those I we'll some year, on am our cautiously get quarter, of put optimistic in next

Operator

And Capital. Street Frank we'll Takkinen take our next question from from Lake

Nelson Cox

that a Frank. here. This It with margin is jump ago. Nelson Cox like which continue sounds a on should question, year improving continuing from it from nice had gross for Maybe

a us and Just out maybe for to color, beyond that? bit you where wondering margins shooting if expect of give maybe more would provide then can a in you what level sense 'XX we're

John Beaver

Yes.

Nelson, would that XXXX So in to margins I year be expect in that, XX% Jen, next gross level her remarks. referenced approaching

go be XXXX should target beyond. volume can but for the all we to and as up, will way get sure I to certainly we as the close the certainly get mid-XXs to XX% XXs. continues to a in think can high next as Not we we But year be that get it. in could XX%,

Nelson Cox

improving of not about what recently? to any so, challenging me noteworthy quarter? understand challenging the with then much help seasonality maybe of how you've Can talked was seasonality that, related maybe see a improving you And during if And did the And seen just give macro backdrop. slowdown or That's you've environment. the versus overall sense you helpful. the us

John Beaver

Sure.

in back been for is revenue a of by followed by pretty followed by years, So this QX. quarter followed that QX, goes throughout seasonality, our consistent And many QX, years. pattern terms has and the traditionally, QX, best

in higher the August, be we lowest historically. QX, time deals we started expected September say, belief would for be . We the just So certain is second said that standpoint, Having close. one until time macro would it a interest this in higher seasonally from that my because that, not I up of we kind to rates seeing, normally have a doctors but therefore, our completed possibility, frame, closed have seeing are equipment. we could to knew the And a quarter seen longer of monthly really our is taking that the recently. payments frame, and

and a just financial to [ what sales taken they've haven't is they we've so bit those little intelligence seen as So gone longer close away, ] various for look forth.

to that cautiously war top we would diminished. in were Having we went XX thought the Russia many are somewhat been internationally, in we sales fourth quarter. And certainly, optimistic year to that I'm that and delay that So ago occur, sales have to have nil. Ukraine or we pretty so and an are going XX in war be Israel our up the is to will did still macroeconomic unique, standpoint, third our one and from because of headwinds the good them quarter-over-quarter though some almost in a still markets. on thought revenue. X And on there. we would those of we then international the quarter there had quarter our international are close sales able countries, a the Even going to our that, said in the their Ukraine third typically, of sales quarter

get X their of last one years addition, promising about the In to Japan. taking after we've that is really registration developed year markets over in

strength yen be. making a than the against and dollar, the higher ourselves there, product selling have dollar hurt company historical U.S. However, the cost U.S. really Japanese of normally it being would U.S. our

work distributors We with figure ways that significant us to continue as that, Japanese well. out been to to but mitigate for has our

Nelson Cox

Any a anticipated Got BIOLASE clinical response are more reaction fresh demand data, talk see it. XX-month about outcomes Realizing can the expecting quick repair? one And then expected to to one. the for it's you you from maybe perspective?

John Beaver

Yes.

came same outcomes expected, and were the were recall . The years much about as this clinically were were follow-up on traditional the treatment a ago messaging the you X-month X follow-ups. and better. that report results which the the the patient-reported that So initial as may findings to is that out

so be Academy study We came And -- are maybe McGuire follow-up. not Annual maybe publicize Perio XX-month publish is Meeting to the positioned this coincidentally, weekend. American of update will we on the out well that recent the

And so some in specialists hopefully, see we'll area. on movement that

have specialist acceleration. We up you and have ] us something as show what help speed to to [ that

Nelson Cox

Congrats again.

Operator

to Ascendiant And Woo go Ed Capital. from next, we'll

Edward Woo

about the don't of Is have X near macro off You Or dropping or you're and X lengthen. environment people money they some of maybe sales talking because it causing better the getting economic see are kind these the just to -- just don't -- term? environment said that is quarters? certain cycle the

John Beaver

working we but I more through any go they So we'd another buy. of to out. figure about I'm need thought this haven't we It's It's I'm they that that said months going still really on financing to know seen more no yes, or that. and want X the to sales to X still have interested I'm the don't

had up lull Ed. this in it's as sales, when I delayed the and ] XXXX that we're certainly our recession and then. some hopeful buying and decided start needed today, don't were mentioned catch we And they with we'll I for in if part things back differentiate and add lost 'XX a or that on can us just fence decided really their they practice. is of here we I'm declining. earlier, which they additional and may do in see So those their dentists just not [ saw actually But streams of to and think revenue in rates to practice certainly some the XXXX but interest any that back . And sales, I'd laser that on we been recession I are bring that have it come believe don't a

expect reaching -- more going to dentists us this had of technology. differentiate practice I be we more be that dentists that their will with some on, to if And would out even continues so which will this

Edward Woo

well another? pretty to it it weakness much some across limited the group specialists? was dissecting versus Great. a dentists bit, all as is of one And Or just as little general

John Beaver

or There much sector more across that GP board. pretty specialist the wasn't or the than specific No, others. one was less the impacted it's

Operator

[Operator Benchmark. Instructions] Jackson from take we'll And Bruce another from question

Bruce Jackson

the depending the do I ask you -- statistical briefly you that the on help long think equivalents in guidelines bit maybe this And the approached what to impact were achieve data able little is way? a And significance some to upon McGuire on process about how of run? us is. you help radiographic it And the wanted to works? was will you and trial guidelines. cutoff tell about But the going in just

John Beaver

shift the going seismic taught to McGuire change I don't programs. is is surgery perio surgery way in think in in study Bruce, post-grad So or a perio for that changing create guidelines the

However, a GPs, and this I periodontists doing think periodontal and surgery GPs U.S. more doing than important it did of it GP XXX,XXX periodontal and many them of X,XXX probably in open X,XXX because have you or size, surgery because lot periodontists there doing are periodontists. is the

would outcomes. patients, I of the one -- still patient-reported patient and particular, go think a surgery. And key the blow case on in in study is to of happy people, reported that knew away technology. challenges But with familiar were more think it here outcomes. kind There's dentists become believed would patient we the that's that. long way to equivalent in that a improvement statistically is perio acceptance. to we the perform the as our we I the was surgery key for that traditional We clinically the We

one don't is they've that anybody to traditional ever the surgeries for in they of most heard past, that. there invasive had or are, the has to is If somebody their them. had want that period It perio or the family about happen surgery long has healing and having in someone

I McGuire and of where time this better that of with benefit study that's the pain, there's less way say, healing think, showing it, a I more, less invasive by doing So doing the is. would real of a a way quicker

Bruce Jackson

that statistically And the outcomes, was significant, patient difference correct?

John Beaver

that surgeries, My both statistically reaction is, if would to of right? I you've Because almost was significant. have is, course, It it to seen be.

Bruce Jackson

times And of had that is something trial the this? the professionals that randomized-controlled and this first like -- of a one generalists you've

John Beaver

Yes.

up. dental any type you that that glad is company of trial It brought ever has the Bruce, So done. laser first this

XX have a and best-in-class we kind a like everything. so It companies took And way. This our type it just really anything dental no track progress laser do study the this right dentists this do was first long it. before. I of time performing ever us to wanted and to of done of

or and that it's are, results I years started about they But and X think X the we glad we we're what ago. completed. were here were this certainly that

Operator

questions remarks. [Operator appear And be there to John call this further at turn the no time. to back closing Instructions] I'll for Beaver

John Beaver

technology patients you, Each Thank for care thank That's to I remarks, at there on took successful this everyone just It our thank the dentistry. that I and could issues. parents of X of the for continued I call. talked frenectomy team because a today's the and scared. of and to came child. never amazing standard that my the down morning. them was customers prepared they will want to in and is their having This elevated properly, young Also, our old has was our room. laser commitment this done to make the tirelessly their want was I about delivering minutes Karen. what -- we're The talk about laser worked what dedication. had can baby BIOLASE and being sleeping parents, not tell I frenectomy And safety in with not having there down had I was when through were first an employees. everyone They they X-day went latch do. but feeding baby we LaserSmile was our office some out our

all to Just their of and to customers office a the come makes come and story want us to our patients. support and and like patients, get excited our up that

Have call. day. a So thank This great everyone. our you, concludes

Operator

you. your gentlemen, you for participation. thank We today's conclude does this teleconference. Thank and Ladies

great time, a disconnect lines your at day. may this You and have

Biolase (BIOLQ) 9 Nov 232023 Q3 Earnings call transcript