Investing to Wealth

BIOLASE Technology Inc. (NASDAQ: BLTI)

BIOLASE Technology Inc. (BLTI) is a medical technology company that develops, manufactures and markets lasers, related products and services focused on technologies for applications and procedures in dentistry and medicine. The Company’s Waterlase Dentistry solution is a group of products, including dental laser systems that allow dentists, periodontists, endodontists, oral surgeons and other specialists to perform a range of dental procedures, including cosmetic and complex surgical applications. Its systems are designed to provide many types of dental procedures. The Waterlase Dentistry solution offers two categories of laser system products: its Waterlase family of products and its Diode family of products, which includes the Company’s ezlase system, as well as related consumables, training and services.

The Company was formerly known as Societe Endo Technic SA and changed its name to BIOLASE Technology Inc. in 1994. BIOLASE Technology Inc. was founded in 1984 and is headquartered in Irvine, California.

Source: Reuters.com, SEC Filings.

Financial Summary

BLTI will host a conference call Thursday, March 18 at 11:00 a.m. ET to discuss its operating results for the fourth quarter and year ended December 31, 2009, and to answer questions. The Company’s results release will be distributed at approximately 6:00 a.m. ET that same day.

Net revenue for the third quarter of 2009 was $12.1 million, compared to $15.3 million in the prior year quarterly period. The change in revenue was driven primarily by the inclusion of initial distributor orders for Waterlase(R) C100 laser systems in the prior year period, current economic conditions, and the amortization of historic licensing contracts. Non-laser sales benefited from a 98% increase in consumable sales and a 34% increase in global service revenues, driven by the Company’s initiatives to expand offerings in upgrades, accessories, and services to its existing customer base.

Gross margin as a percentage of net revenue for the 2009 third quarter was 48%, compared to 49% for the 2008 third quarter. Operating expenses in the 2009 third quarter were $4.9 million, compared to $11.3 million in the year-earlier quarterly period, which reflects a significant 57% decrease in Company expenditures.

GAAP net income for the 2009 third quarter was $0.9 million, or $0.04 per share, compared to a net loss of $4.5 million, or $0.19 loss per share, in the 2008 third quarter. Non-GAAP net income was $1.5 million or $0.06 per share on a non-GAAP basis for the 2009 third quarter.

Net revenue for the first nine months of 2009 was $33.0 million, compared to $53.0 million in the prior nine-month period. GAAP net loss for the first nine months of 2009 was $1.5 million, or $0.06 loss per share, compared to a net loss of $3.8 million, or $0.16 loss per share in the prior year period. Non-GAAP net income was $0.8 million or $0.03 income per share on a non-GAAP basis for the first nine months of 2009.

Source: Reuters.com, SEC Filings.

Analyst Consensus

This is the consensus forecast amongst 1 polled investment analysts. Against the BIOLACE Technology Inc company.

The one analyst offering a 12-month price target expects BLTI share price to rise to 4.00 in the next year from the last price of 1.85.

Source: www.ft.com

Consensus Estimates Analysis

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=BLTI.W

Investment Highlights

BLTI recently announced that it has received 510(k) clearance from the U.S. Food and Drug Administration to market its iLase(TM) diode laser, the world’s first personal laser for dentists and hygienists for performing a full-range of minimally invasive soft-tissue and hygiene procedures. The iLase is the first completely self-contained, hand-held dental laser that includes the laser, user interface, battery power, and controls in a single, integrated handpiece with no foot pedals or cords attached.

The iLase, which is about the size of a large pen and has five watts of power, is the only dental laser controlled by a patent-pending finger switch on the laser handpiece, which uniquely eliminates the need for a foot control pedal. It also uses BLTI’s proprietary ComfortPulse(TM) control that lets clinicians adjust the laser for maximum patient comfort and cutting speed. The iLase has 10 completely pre-set soft tissue and hygiene procedures at the push of a button, including gingivectomy, troughing for crown procedures and sulcular debridement, and a procedure for cleaning between gums and teeth for the treatment of periodontal disease. Like the ezlase(TM), the iLase can perform a comprehensive set of 25 FDA-cleared soft tissue and hygiene procedures. For a full diode solution, the ezlase goes beyond the basic iLase with 20-minute teeth whitening and FDA-cleared pain relief functions. Beyond all diode lasers, the Waterlase(R) MD Turbo(TM) is the very best soft-tissue laser with a virtually painless “cold cut” water-based wavelength, and the Waterlase provides the substantial added benefits of virtually painless procedures on teeth and bone, periodontal procedures and much more.

BLTI last week announced that it has amended its licensing and distribution agreement with Henry Schein Inc. (NASDAQ: HSIC), the largest provider of healthcare products and services to office-based practitioners. Within the United Kingdom, Australia, New Zealand, Belgium, Luxembourg, Netherlands, Spain, Germany, Italy, Austria and North America, all dental sales will continue to be provided exclusively through Henry Schein. The amended agreement provides strong incentives for Henry Schein to focus on its core customer base, and the purchase minimums have been agreed based upon that focus. In addition to the Henry Schein core customer base, BLTI will have strong incremental sales and margin incentives to penetrate additional dental offices. The agreement also allows for higher sales organization incentives, unique financing programs and increased luminary and educational events.

The new purchasing arrangement provides for minimum purchase commitments for laser equipment totaling $18 million over a 12-month term, plus a large portion of additional laser equipment sales generated by BLTI’s increased focus into the additional accounts not traditionally focused on by Henry Schein. In addition, Henry Schein will purchase other categories of products, such as consumables, parts, and services as needed, without any minimum or cap. For perspective, the total non-laser revenues of BLTI for 2009 were $11.6 million. Under the previous agreement, minimum purchase commitments totaling $42.7 million for all laser equipment, products, and services in all applicable markets through the fourteen-month period ending March 31, 2010, will be satisfied. The extended and amended agreement provides for a one-year term, and either BLTI or Henry Schein may request termination of the agreement upon 60 days’ advance written notice to the other party. The agreement may be extended by BLTI and Henry Schein for an additional six months, upon mutual agreement of the parties.

Source: http://www.biolase.com/

Technical Analysis

Source: http://stockcharts.com

BLTI’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, BLTI is trading above its upper Bollinger Band. Relative to recent price action, the stock is currently overextended and due for either a pause or retracement.

The MACD for BLTI currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

Comparative Analysis

Source: Thomson Financial

Insider Trading Activity

Source: Yahoo Finance

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