Biolase, Inc.

Good afternoon and welcome to the Biolay's fourth quarter and full year 2023 results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Todd Curley with EVC Group. Please go ahead.

Thank you, Operator. Good afternoon, everyone, and thank you for joining us today to discuss BioLase's financial results for its fourth quarter and full year ended December 31, 2023. On the call today from BioLase are Don Beaver, President and CEO, and Jennifer Bright, Chief Financial Officer. John will review the company's operating performance for the fourth quarter and full year, and then we'll turn the call over to Jennifer to review the financials in more detail before opening the call for questions. Before we begin, I'd like to remind everyone that a number of forward-looking statements, which are statements that are not historical facts, will be made during this presentation and subsequent Q&A session, including forward-looking statements regarding the company's strategic initiatives and anticipated financial performance. These forward-looking statements are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995 and are based on Biolase's current expectations and assumptions and are subject to a variety of risks and uncertainties that could cause the company's actual results to differ materially from the statements made. Such forward-looking statements only represent the company's view as of today, March 21, 2024. These risks are discussed in the company's filings with the SEC. A replay of this call will be available on the Biolays website shortly after the completion of the call. When listening to this call, please refer to the news release issued earlier today announcing the company's 2023 fourth quarter and full year financial results. If you do not have a copy of the news release, it is available in the investor section of the Biolays website at www.biolays.com. Biolase's financial results can also be found in the company's report on Form 10-K, which will be filed with the SEC. The tables we've provided in today's news release offer additional financial information, so we encourage you to review them. The tables include the reconciliation of unaudited GAAP net loss and net loss per share to non-GAAP adjusted EBITDA loss and adjusted EBITDA loss per share. as well as more information regarding the company's non-GAAP disclosures. With that said, I'll now turn the call over to BioLase's President and Chief Executive Officer, John Beaver. John?

Thanks, Todd, and good afternoon, everyone. We appreciate your participation today as we review our fourth quarter and full year financial results and review our strategic objectives. Our objective, despite the ongoing headwind created by the current economic climate, is to ensure our industry-leading dental lasers continue to attract heightened interest and demand. The modest revenue gain for the year and our significantly increased lead generation demonstrate that we are on track. Additionally, our focus on internal optimization will enable us to expand our gross margin going forward, and the cost reduction initiatives we have taken have positioned us to achieve our financial objectives in 2024. In 2023, we continue to create awareness of the benefits of laser dentistry as we held over 500 webinars, study clubs, trade shows, and training events in the U.S. alone. These investments of time and resources today are expected to yield revenue opportunities tomorrow. For example, we were highly engaged with potential customers in 2023, increasing the number of marketing qualified leads, or MQLs, generated by five times over those generated in 2018 as we continued to improve our sales and marketing efforts to reach potential customers. However, the uncertainty in the macroeconomic landscape has extended our sales cycle somewhat, as various factors, including elevated interest rates and worldwide geopolitical crises, are contributing to the prolonged decision-making process. Having said that, I want to stress this isn't unique to Violace. Other businesses in our sector are facing similar challenges as evidenced by recent industry trends. Nonetheless, we're steadfast in our commitment to sustaining revenue-generating activities. Our focus remains on converting these NQLs to cells while also continuing to raise awareness and interest in our acclaimed lasers, ensuring we're well-positioned to capitalize on the significant market opportunity in front of us. There remains a significant untapped opportunity in the dental market with more than 90% of dentists yet to embrace all-tissue laser technology. As a predominant brand in this space with approximately 60% market share globally under our word of age brand, we continue to actively engage the remaining 90% of the market. Our targeted sales and marketing efforts and enhanced training programs are expanding our reach among dental specialists and general practitioners as we emphasize the benefits of laser dental solutions to practitioners and patients alike. It's important to repeat what we said in the past. Each 1% increase in adoption of our all-tissue laser technology in the U.S. alone will equal approximately $50 million in additional revenue for biolase, assuming we maintain our estimated 60% market share. This doesn't include potential increased adoption outside the U.S., where historically approximately 30% to 40% of our revenue has been generated, or the consumable revenue generated from the procedures performed with our laser systems. Our strategy to grow market adoption of our lasers includes bolstering education training programs. Through our water laser and epic academies, we have simplified training on our products for dental specialists and dental hygienists to make clear the significant return on investment they can achieve with our lasers, not to mention the benefits to their patients. We are also actively seeking to engage the over 150,000 general practitioner dentists in the U.S. by increasing education and training through initiatives like our Water Lase Trial Program, or WTP, and our recently opened state-of-the-art training facility, the BioLase Education Center, which provides dental clinicians with an engaging learning environment tailored around laser education. We hosted 22 WTP events in 2023 with a sales conversion rate of about 45%. Our record consumable sales, which increased 20% for the full year, are an encouraging indicator and highlight the growing utilization of our laser systems within our existing customer base. During 2023, we also introduced a recurring revenue subscription model for our consumables, which has already started to gain traction, and we believe this will help accelerate our consumable revenue growth in the future. Furthermore, Our strategic partnerships with corporate dentists and academic institutions are paving the way for future adoption of laser dentistry. In summary, we believe our growth strategies will achieve the desired long-term operating results, and we remain optimistic about our ability to seize the substantial market opportunities ahead. Our goal, notwithstanding the economic headwinds, is to accelerate our revenue growth while continuing to improve operational efficiencies. Greater adoption of our dental lasers through increased education and training and the continued execution of our revenue growth plan, coupled with the expansion of our gross margins and lower operating expenses, would allow us to meet our revenue and profitability objectives for 2024, including being adjusted EBITDA positive for the full year. Now I'll hand over to Jennifer Bright, our CFO, to delve deeper into our financial performance and provide insights into guidance for the year.