Biolase Inc., a Lake Forest-based maker of dental lasers, reported sales climbed 24% to $48.5 million in 2022.
Wall Street’s been anything but supportive of that sales boost, with its stock remaining in a downward trend over the course of the past year.
Shares in the company (Nasdaq: BIOL), which has been in business for nearly 40 years, are off more than 95% over the past year.
The most recent downturn occurred when the company tried to raise $4.5 million for working capital and general corporate purposes. The $4.5 million capital raise was the second this year; it raised $9.9 million in January.
Wall Street pushed the shares down 40% on May 24 to 8 cents and a $2.6 million market cap.
The company, which dates to 1984 when it was formed in France, has sold over 45,500 laser systems in over 80 countries since 1998.
Biolase is best known for its Waterlase iPlus, which uses a combination of water and laser energy to perform procedures that are traditionally done by drills and scalpels. The company says its technology is used in about 10,000 dental practices out of roughly 180,000 in the U.S.
Biolase, which employed 188 as of Dec. 31, says it has 266 actively patented and 25 patent-pending technologies.
“We believe the effort and investments we are making today will pay off in the coming quarters, as evidenced by the rising demand and the rising number of dentists that are attending our many training events and those benefitting from our novel educational programs,” Chief Executive John Beaver said in a first-quarter statement issued May 11.
The company is no stranger to a fluctuating stock price; since going public in the early 1990s, Biolase’s stock price has been volatile.
In the early 2000s, its shares topped $93 apiece, putting its valuation over the $1 billion mark for a short period.
Since then, the company’s seen numerous executive shake-ups and company pivots. Its headquarters have moved from San Clemente to Irvine to Lake Forest over that time.
Loss of Faith
Besides the share dilution, several other factors may have caused Wall Street’s loss of faith.
n Its first-quarter sales increased only 3% to $10.5 million.
Nonetheless, the company in its May 11 first-quarter report reiterated that its 2023 revenue will climb 25% to $60.6 million, thus implying sales will boom in the second half this year.
Biolase’s outlook is in stark contrast to a larger rival, dental equipment maker Envista Holdings Corp. (NYSE: NVST). The Brea-based company on May 3 reported first-quarter sales declined 0.7% to $632.5 million, saying customers are postponing purchases of large capital equipment due to rising interest rates.
- Biolase’s gross margin fell to 32% from 47% a year earlier because “supply chain issues we have encountered requiring us to change to new suppliers” and an increase in foreign sales that have lower margins.
- The company’s operating loss rose 26% to $5.3 million. It predicted it will achieve “positive adjusted EBITDA” in 2023.
- The company hasn’t reported an annual GAAP profit since 2003, according to Business Journal research.
- It burned $5.7 million loss in cash flow during the first quarter. The company had cash and cash equivalents of $6.5 million as of March 31.
- Biolase is facing a lawsuit alleging intellectual theft of two patents from neighboring Sonendo Inc., a Laguna Hills-based maker of equipment to treat root canals (NYSE: SONX). Biolase called the charges “patently absurd” and said it intends to defend the matter.