BIOLASE(BIOL)2019-08-10 04:37Financial Data and Key Metrics Changes - Total worldwide revenue for Q2 2019 was 12.2 million in Q2 2018 [26] - U.S. revenue decreased 18% year-over-year, with Waterlase sales impacted by a 30% decline due to vacant sales territories [26][27] - Gross margin for Q2 2019 was 39%, up 370 basis points from 35% in Q2 2018, reflecting a favorable product mix and better pricing discipline [30] - Operating loss for Q2 2019 was 4.7 million in Q2 2018 [32] - Net loss for Q2 2019 was 0.18 loss per share, compared to a net loss of 0.24 loss per share in the prior year [32] Business Line Data and Key Metrics Changes - Consumables and other revenue in the U.S. increased 2% year-over-year, indicating increased utilization of lasers [28] - International revenue for Q2 2019 was 2 million compared to the prior year, primarily due to pricing discipline efforts [28] Market Data and Key Metrics Changes - Revenue from the Model Market Initiative increased 31% compared to last year's second quarter, demonstrating growing interest in the technology [17] - The pediatric market in LA, Orange County, and Dallas showed success with new sales strategies, leading to higher customer acquisition rates [18] Company Strategy and Development Direction - The company is transitioning from an R&D-centric model to a disciplined commercial organization, focusing on rebuilding the sales team and improving sales processes [13][14] - Strategic decisions included exiting the unprofitable imaging business and enhancing pricing discipline with international distributors [15][16] - The company aims to achieve EBITDA positive status in Q4 2019 through cost reduction initiatives and improved operational efficiencies [12][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth prospects despite short-term revenue impacts from strategic changes [11][23] - The focus remains on expanding the adoption of all-tissue lasers and enhancing the commercial engine to drive growth [19][23] Other Important Information - The McGuire study aims to create a new standard of care for specialists, with interim data expected by the end of 2019 [22] - The company is actively pursuing working capital initiatives, particularly in managing international receivables and inventory [49][51] Q&A Session Summary Question: Can you break out the sales by bucket and laser, imaging, consumables, services? - Consumables were slightly up, while lasers were significantly down due to strategic decisions impacting sales [38] Question: What is the plan to recover the one-third of territories that were vacant in the quarter? - The company is actively searching for new hires and implementing a rigorous assessment process to find suitable candidates [40] Question: Can you provide insight into the DSO market and its potential? - The DSO market is the largest and fastest-growing segment in the dental industry, with significant opportunities for scaling technology adoption [42] Question: Where do you see the greatest opportunity for margin expansion? - Opportunities exist in manufacturing cost reductions and increased revenue in Q4, which is typically the best quarter [45] Question: What are some of the working capital initiatives underway? - The company is focusing on improving international DSO and managing inventory while exploring additional capital raise alternatives [48][52] Question: Can you elaborate on the sales force initiatives? - The company is enhancing its hiring and training processes to ensure the right talent is brought on board [53][56] Question: When might conversations with DSOs lead to expanded relationships? - The company is actively working on generating data to demonstrate the return on investment for DSOs, which is crucial for expanding relationships [57]