The turnaround has taken hold at Biolase Technology
As the company itself noted, not only was this was the first time since 2004 that it reported a profit, but it also marks the second consecutive quarter that domestic revenues have grown over the prior year. It could be the start of a trend for the laser maker and shows that its deal with medical device distributor Henry Schein
Last quarter, Biolase agreed to make the distributor its exclusive agent and was paid a $5 million licensing fee for the privilege. The laser maker used the money to pay off its outstanding line of credit; it's now debt-free. With the ability to focus, laser-like, on growing its business, Biolase seems to have done just that.
Domestic sales rose 7% to $13.4 million, while international sales rose 1% to $6.5 million. The potential for overseas expansion remains strong. The current quarter's growth in international revenues pales beside last quarter's 84% jump, but the figure was still up 42% for the year and represented a healthy and significant 33% of total revenues.
Two drivers for future growth will be the disposable components for its laser systems as well as its deal for home-use products with Procter & Gamble
Of more immediate use will be consumables, which can create a continuing revenue stream for Biolase. Like the razor-and-blade concept of shaving, disposable tips for hand pieces should be a boon for dentists. This area has already seen a 50% increase in revenues and will be a part of the new handheld "ezlase" system introduced last month.
As I pointed out last quarter, "With no long-term debt, a paid-in-full line of credit, a new two-year $10 million credit facility, and a tough new distribution agent, Biolase looks poised to whiten smiles with a blackened bottom line." The company has now moved to profitability, which makes a forward valuation seem skewed. With a firm financial footing in place, even after its shares have risen 50% in the past three months, Biolase could be an addition to your portfolio worth smiling about.
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