BIOL - Earnings call transcript Q4 2023

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Operator

Good afternoon, and welcome to the BIOLASE Fourth Quarter and Full Year 2023 Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Todd Kehrli, with EVC Group. Please go ahead.

Todd Kehrli

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

and BIOLASE Officer. John from Chief today call Jennifer Bright, the Beaver, On President CEO; and Financial are

the to performance for review opening in detail review full the quarter the call the the operating we'll questions. before then financials and turn company's call over will fourth and John year, to for Jennifer more

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

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

John Beaver

quarter your review good today and appreciate everyone. objectives. financial strategic we Todd, afternoon, our as year participation results We review Thanks, fourth and and full our

year objective the by to track. despite continue current for ongoing to The attract ensure economic modest significantly and that industry-leading are increased lead demand. revenue the our the created generation demonstrate gain our heightened headwind [indiscernible] and is interest we climate Our on

on training laser going in we focus resources opportunities of are to expected the optimization objectives our we gross our achieve to continue to taken the enable will have us our have us internal financial XXXX, reduction initiatives forward to XXXX. In Additionally, positioned and create cost expand margin shows XXX today time investments over we dentistry benefits revenue the study as trade and clubs, events of of awareness and hold tomorrow. yield alone. These webinars, U.S. in

MQLs we as in of generated number potential efforts and continue example, generated to reach to qualified our sales XXXX Xx increasing with marketing For customers. highly the those were marketing XXXX, potential in we over customers engaged improve by or leads

to I to process. Having extended macroeconomic worldwide our the sustaining landscape Nonetheless, to said the BIOLASE. decision-making crises somewhat evidenced various including has trends. by in we're the sales facing our factors, are that, similar activities. recent challenges cycle sector as businesses stress geopolitical to revenue-generating and elevated Other contributing isn't commitment our interest However, industry want uncertainty this as unique rates steadfast are in prolonged in

to also the and focus in significant interest significant There in to front a while market MQLs of dental opportunity ensuring in than the raise on all-tissue to awareness sales our positioned these with of embrace on remains laser we're converting well us. capitalize more XX% Our untapped to dentists remains yet continue acclaimed opportunity market lasers, technology.

As XX% in Waterlase the XX% globally we of with space to brand the continue share a predominant market. actively remaining approximately this brand, our engage market under

consumable programs to training dental said important increase the the equal performed with BIOLASE, will laser technology the the Our maintain targeted revenue approximately the emphasized include and revenue sales patients of XX% specialists approximately adoption we or our for among our practitioners alike. in practitioners of potential This and market marketing past, and reach million outside generated benefits efforts the laser has alone XX% our in repeat XX% procedures and estimated additional general from revenue has we adoption are solutions what assuming X% U.S. our been our historically in to in to laser generated $XX It's share. doesn't enhanced U.S. expanding systems. where of dental increased each all-tissue

dental our adoption bolster and have the clear and to benefits Through the and Our academies, education significant investment programs. they Epic our Waterlase lasers, our strategy dental on lasers training with mention to hygienes products achieve our training to not their we on includes simplified can grow specialists patients. and make for return of market

our engaging WTP learning around dentists conversion rate in the a training clinicians with actively sales are state-of-the-art training increasing allured the XXX,XXX XXXX events and hosted opened by of facility, the about XX%. which practitioner dental or XX BIOLASE Education in recently education to environment like seeking education. We WTP, U.S. initiatives and laser We our an also Trial Center Program provides with engage through general Waterlase over

encouraging systems XX% consumable existing record the laser indicator for full Our an utilization base. and our the sales, highlight our year, growing which are within of customer increased

and consumable started growth to which the in traction, gain we help this strategies desired the will we growth our of our we Furthermore, adoption optimistic with market already dentists future. substantial the believe also the During corporate believe XXXX, long-term to way has paving strategic accelerate model and recurring opportunities our subscription a our for are institutions that introduced we operating for revenue remain and partnerships results, achieve revenue about ahead. ability laser our academic consumables, summary, future seize will dentistry. In

our execution goal, operating the full and Greater expenses notwithstanding including education while improve XXXX, profitability with positive lower coupled plan the dental meet accelerate our objectives Our revenue adjusted EBITDA lasers and expansion year. efficiencies. growth for our for margins the of headwinds growth to the is and our gross to of to operational our allow revenue revenue us economic continuing increase and to continued of training would being adoption

performance financial provide hand for insights Jennifer I over guidance delve into to Now the our deeper into CFO, year. to Bright, and our

Jennifer Bright

we John, of you, afternoon, and improvements the everyone. operational full year. results and during I'm year around our highlight Thank going some good the provide to more achieved context

details, our financial tables For refer financial release XX-K. results of in earnings our further please included and to our which are the

consumable mentioned and during awareness which consumables. able economic introduction of while We to and education for revenue XXXX, in we record challenging of for to million this increased revenue our $XX.X the year-over-year due his John reported dentistry education and XX% is and the million our recurring subscriptions increase, revenue through remarks, despite prepared increased the deliver training growth initiatives. As $XX.X to compared laser delivered environment, our year net sales, a we modest modest full increase training were still

reported coming is costs offset as a warranty to by own of overall and of Waterlase supply Additionally, related that improve the with XX% inventory full basis trunk sales XXXX, our unfavorable in of customers new that trunk the the Trial new of industry-leading U.S. customer we Program XXXX, Also, U.S. increased XXX mainly the cost end all John with we over are now and fiber higher for in U.S. third-party and lower dental initiative. our experiencing charges setting material stage to fiber in-house Waterlase supplier, absorption adoption a the in XX% margin our the which our environment gross fixed structure, completed gross sales expenses, for us our economic accelerated continued year's momentum vendors an source rate allows chain with indicators new a point year, components. specialists. of success of expenses. was mentioned, growth lasers as our These XXXX To XXXX in Waterlase highlighting year, the replace are in encountered from improvement abroad, reserve at for required success the components were this increase margin of which well continued as for as we acquisition an of demand XX% as XX% positive coming key the the from dental manufactured issues improves. We last to us

components backlog to improve and in reduce in is of we we XXXX XXXX, goods that through capacity producing working of were third-party now full fiber While overall operating cash quality the expect higher production our flow component. in-house significantly trunk at cost our and our

expenses performance. initiatives and to cost operational best-in-class recently reduction maintaining implemented that certain expected fixed reduce we are while Additionally, significantly overhead manufacturing

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

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

to loss and drive by operating improvements compared also efficiencies XX% XXXX to reduced efforts continued XXXX. Our operating our further

our the we gross to for are $XX.X costs drive a full $XX.X of for control year was positive expenses. and these and operating cannot in XXXX profitability. GAAP operational margin net and control we efforts can indicators While environment, net the million XXXX. ongoing compared to improvements certain of efficiency loss And loss operating optimize million macro manufacturing loss

million for full $XX.X year was adjusted compared $XX.X XXXX the EBITDA for million XXXX. Our loss to

XXXX. finished with combined balance we $X.X through the we year quarter goal and We fourth full initiatives for cost with EBITDA million million, line sales proceeds $X which projected equity equivalents raise the to fiber believe adjusted February of acquisition and execute cash of bolstered certain year growth have the price can cash we cost positive We liquidity from mentioned to XXXX. Turning to near-term increases top in and this of and achieve to believe gross growth expected earlier. volume sufficient I due lower the sheet. due our reduction earlier with trunk strategy We goods this reach an increases

our this our now we up trunk in-house of shipping acquisition, XXXX. result fiber fiber makes of trunk a are As in XXX%

increased drive to the reach getting margins to savings profitability. gross We us cost needed expect to these XX% margin closer

July expect opened Education full to the for centralized own lower the training using Center our expenses by significantly at also end which of We XXXX. WTP the year BIOLASE XXXX facility,

have between host we to little We dentists X on their no at prospective with continue to educational at and work WTP facilities cost. events nationwide location to staff customers,

XXXX, so host WTP During about XXX at quite be expense will meaningful. practitioners we the to expect XX savings events, to

on to moving guidance. Now

we While year X% first revenue to continue to to X% growth are success. quarter full the our as compared of to full higher ongoing XXXX we year progress XXXX flat quarter to and projecting expect the relatively the to demonstrate XXXX XXXX initiatives due be economic compared climate, revenue first revenue be to

the long-term our savings expected WTP positive initiatives believe to operator to success. And In to margin, higher open and for for BIOLASE is growth year call savings Additionally, cost the our improved that, I XXXX. referenced strategy, efficiency full EBITDA for the the gross expect on achieve call turn earlier, we the summary, questions. combined sustained with I'll adjusted with focus we operational positioning with a

Operator

with Company. [Operator first Bruce comes Instructions] Jackson question The from the Benchmark

Bruce Jackson

talk maybe the and other initiatives some about you've has had the impact? had, of could -- service that we dental with the especially the if study organizations any So sales McGuire

John Beaver

Yes.

questions. for thanks those Bruce, So

more technology this that gets McGuire evidence lasers another X the an impact, clinically you be. off just so not as also, word quantifiable. effective. piece the better study words, that think of tell right? had showed much we'll I results, the other the can't of better it's the but study that study the we is very And McGuire In because has out, sold for necessarily McGuire I patients, And

came DSOs, out the with a think top X work of XX working continue well. some with along [indiscernible] as I DSOs terms to X of DSOs, of the or In them we're and of Dr. number the we midsized as with other with analytics,

as line that down work to well. continue we So

revenue company iPlus another And in product product years out in The there Premier. this that record released wavelength a that to time Kind which of specific was at that quickly. came other the the maybe [indiscernible]. of Midwinter a new recall Erbium when mentioned, there showed we that to really that for you Chicago us was Premier, Waterlase catalyst a you to may OEM a Show us. thing market of specialties. iPlus We it actually for ago, couple YSGG And EdgePRO for used develop XXXX Chromium them, of be this technology, was wavelength February very

to a there this introduced business had X included everything, the all -- the a applications us -- was Waterlase, last do X that a to just it. doctors Before doctor he wanted out showed mean were laser to What premium there was market buy things. for edition OEM If the right? was month. in or buy wanted I

buy so concept want let's say, turn I a want Waterlase iPlus price dentist, they're a they company point, the Well, really am we developed what would premier that, if a immediately. the on plus modular Premier those do endo only modules, soft pay but where, X And and only. will, I lower and on and it's with you I type can tissue -- a turn getting to only

they As us, and add more they'll literally corporate and do, modules. switch the comfortable technology, to a back is those what more for flipping at we more And more that's modules. on to with easy turn very it's foresee get

product, this think going we it's the think even -- the we more. it's for going to time to penetrate and So market right is this

Bruce Jackson

the Okay. then Great. follow-up on one margins. gross And

the year? you kind you over that a anticipate XX% us a is improving If idea And rough Or like something could give just year? how this that the the by see of would target? long-term course you of that hitting of of the end is

John Beaver

Yes.

the hit the quarter XX% So revenue. in help the anticipate of quarter will fourth seasonally fourth we the do with strong

we to be for and couple and I a the buckets. seeing really year, of For how full clear quality year, -- margins from XX% a around the there. of get would line we One full internal it's manufacturing XX% the different XX%. improved is And of the expect that on trunk to we're year on average a have sight fiber

And so that's improvement. a chunk be significant to going of that

predominantly two. in another that that do improvement we're bring going two. addition, increases forecasting point bring And up that absorption, or we've implemented fixed will for price In cost business is the we revenue have our to with or point also already consumables then lined we think another

Operator

with Group. The next from Sherwood question comes Nick Maxim

Nicholas Sherwood

of been What had leads cycle, link leads? kind the the have sales conversion of the trends with the and of you number you those and qualified seeing quarter-to-quarter

John Beaver

Yes.

getting So the we're year-over-year consistent number quarter-over-quarter. has leads qualified been of pretty up and

would to see growing continue growing, expect and we continue that I XXXX. So into that to

have the the of taking a -- is longer the other year equipment European was end a little now, most going us taking higher listening I for longer seeing, our I thing. of I uncertainty and into dead are whether dental are it or recession, companies, of think medical year part close because now are but towards that those where -- early they're leads bit or also sales. kind think, not rates, an international this to that's People we're right decide seeing the on what that to have of think and And same of we around capital companies, interest we was ongoing to were seeing started this last business. talk which doctors to wars impact

being but time I we're So And with the We've on for standpoint. XXXX, would over sales we cycle in business expect will even really believe to things reason that's not planned cycle. can we around kind in we're the that EBITDA achieve our the yes, of status quo positive a that macro 'XX. planning continue increase. shortened MQLs that think the I sales that, shorten, excited will

Nicholas Sherwood

is next Awesome. traditional then lasers do rate opposed your retention that dentist continue lasers, that adopt to to my your Like percentage to what reverting what you're question of And tools? use back is, seeing? as

John Beaver

Yes.

the recent technology doctors with that's to X incorporated our use XX% So using surveys we And my lasers last the daily. was who it about use so least large a what percentage new and at it our about doctors most in to the see of that this weekly in anecdotally talking I or think, of I travels -- have doctors forth. months, have it XX

by supported And means they're all consumables have remarkable. the increase to the that is we but pretty buying consumables, only a using consumables And time. XX% had. blowout in conditions all facing the dentists further We that's in think year. laser, that were I other had are the a what was last it not that year we given

I that buy So the not the back ensure industry purchase. that case into off may But training laser XX they we've years I made good investments the really with using about years feel going the think paying doctors the doctors after it. in and education are That ago. the the to after really past, X, laser been using laser are always

Nicholas Sherwood

final sort you what programs education then Understood. major do And have and this plan year? my events question of for is

John Beaver

we XXX over planned. I So think, have, Jen as mentioned,

the We large Programs is have regional/national events that completed. be it have Midwinter, Trial Waterlase this planned We're XX every we year. at which Chicago year,

us We Association in the have up a coming California for one big Dental is May.

New well. number and York of a have as events also Greater regional We

events annual for in have frenectomy training couple we a own then are How dentists, other coming our up Dubai of year about those -- in you the I'm month in in to really up how how looking revenue third drives has care in in forward as Prague diagnose, post event the excited in we years, pediatric October. events, we're this successful when operative events couple also, treat May we perform bring Miami the frenectomies do us. And been about and in one to well last what really and a our And great well. as coming immerse and have to in international patient? For that learning where you and of internationally them the how that and do

Operator

Ascendiant The Instructions] from Woo question comes [Operator with Ed next Capital.

Edward Woo

you at Can it changed months? about in competitive environment? the Has past talk X the all

John Beaver

really, Ed. Not

competition another in that laser we we dentist. lose other head-to-head You've in dental chief that lot of comfortable company given laser companies. heard world. a me against are the by the don't say before share We wallet We're get when company our laser with -- very the matchups preeminent head-to-head the

and and I'm concerned So new that not of something laser furniture about commencing more oral about scanner in office this dentist or best in a is investment or less a that us that concerned year their nature. in

Edward Woo

would impact And you does of that -- in your much Great. the macro an have to ability that mentioned raise how prices? headwinds,

John Beaver

to a I When into go. I much In is haven't price our any been has convinced other it In somebody this we'll really going need met to I words, or is. usually think we've don't $X,XXX words, pushback. think with technology they is want increases decision. backwards not get they're buying have be incorporate this to but make ready a pricing tend and $X,XXX the difference, to had go/no-go practice, -- always their elastic, pretty -- other to

And thing knew with another see don't macro expect Nobody interest will much right? about of look talk we top that is to was. think us you when we in the XXXX rates, help XXXX in conditions, where I I rising that. -- So the

going to not to not have they now have down the longer the interest people up months. or -- certainly that term significantly the short up think XX no they going they last rates most XX believe extent in I are that may come

and clear doctors So I the some giving think visibility macro hopefully help buying that's will on the situation as to well. cycle

Edward Woo

in question. last sales are your financed What versus And Great. one percentage of cash? paid

John Beaver

and me depends, explain that answer it let that. I'll with

carry a credit we by our financing either. of U.S. X that make we carry will we Most don't years, doctor's a or the of third-party In don't are So any last words, medical sales In that long. side, that. equipment company. it's because financing over international finance long bank in cash. are sales X, of other Waterlase all robust paid on I union and are financed lasers Typically these mean, time the

companies of -- time. it's finance perfectly over So period perfectly are financing comfortable that

purchases EPIC card to the our brand credit they mainly come those cards immediately, diodes, -- tend in and consumables credit well. as more be obviously Our are and

Operator

to This over turn for concludes our closing back to John the question-and-answer session. I any Beaver remarks. like conference would

John Beaver

question And do demand greater picks was, do the Right call. Thank I California. wasn't at was has Corona, Person we attend additional run when Yes. other plant to in shift. capacity additional did But even submitted. it manufacturing already? We one you. that able the up than the now, get we question one have capacity our have

trunk And capacity so additional we can with have And always shifts. also we excess production. fiber important add our

So look to to forward I second possibly. that we're shift time add able that a

continued in great successful elevated want today's Have this standard everyone for interest team commitment safety them in you, tirelessly through of This your care everyone, of dentistry. you, Each day. operator. BIOLASE. our call. to their laser make has concludes for Thank to a our and customers being delivering Thank the thank dedication. worked I on thank to call. and I So for Also, BIOLASE want

Operator

has now The presentation. concluded. Thank attending conference you for today's

now may disconnect. You

Biolase (BIOLQ) 21 Mar 242023 Q4 Earnings call transcript