BIOLASE Reports Third Quarter 2012 Financial Results

BIOLASE Reports Third Quarter 2012 Financial Results 
Net Revenue Increases 5.5% to $13.8 Million, Quarter Over Quarter;
Core WaterLase Unit Sales Increase 29.9%, Quarter Over Quarter; Core
WaterLase Non-GAAP Adjusted Revenues Increase 42.0%, Year-to-Date
Over Prior Period; Non-GAAP Net Income of $96,000 in Q3 2012 
IRVINE, CA -- (Marketwire) -- 11/05/12 --  BIOLASE, Inc. (NASDAQ:
BIOL), the world's leading dental laser manufacturer and distributor,
today reported unaudited financial results for the three- and
nine-months ended September 30, 2012. Financial highlights include: 


 
--  Net revenue of $13.8 million, as compared to $13.1 million for Q3
    2011, within the Company's stated quarterly guidance of $13.5 million
    to $15 million.
--  Unit sales of WaterLase(R) systems increased by 29.9% as compared
    to Q3 2011 levels.
--  Revenues from the sale of WaterLase systems increased $1.1 million, or
    12.7%, as compared to Q3 2011 levels.
--  Net loss of $548,000, or ($0.02) per share, as compared to a net loss
    of $1.0 million or ($0.03) per share for Q3 2011.
--  Non-GAAP net income of $96,000, or $0.00 per share, as compared to a
    non-GAAP net loss of $397,000, or ($0.01) per share, for Q3 2011.
--  Net revenue of $38.3 million for the nine-month period, as compared to
    $35.7 million for the same period in 2011.
--  Year-to-date revenues from the sale of WaterLase systems increased
    $4.1 million, or 20.3%, as compared to the prior year period.
    Excluding the effects of the $1.1 million inventory repurchase in Q2
    2012 and one time prepaid purchase orders from Henry Schein, Inc.
    (NASDAQ: HSIC)‎ ("Schein") for WaterLase systems in 2011
    totaling $2.3 million, revenues for the nine month period increased
    $7.5 million, or 42.0%, over the prior year period.
--  Excluding the effects of the $1.1 million inventory repurchase in Q2
    2012 and one-time prepaid purchase orders for product sales during
    2011 totaling $5.9 million, non-GAAP adjusted net revenue for the nine
    month period was $39.4 million, up $9.6 million, or 32.2%, as compared
    to the same period in 2011.

  
Operating highlights of and subsequent to the 2012 third quarter
include: 


 
--  Received CE Mark for the EPIC 10(TM) diod
e laser system in the final
    days of September 2012.
--  Received notice of regulatory clearance for the EPIC 10 from the U.S.
    Food and Drug Administration ("FDA") on October 1, 2012.
--  Two additional 510(k) submissions filed and currently under review
    with the FDA; three key submissions related to our core technologies
    currently planned to be filed in Q4 2012.
--  Entered into an agreement with 3Shape Corporation to distribute its
    TRIOS(R) intra-oral scanning technologies for digital
    impression-taking in the U.S. and Canada.
--  Achieved sales milestone with BIOLASE'S 20,000th laser sold worldwide.
--  Opened an in-house state-of-the-art technology and training center at
    BIOLASE headquarters.
--  Completed the build-out of the BIOLASE inside sales organization.
--  Partnered with Professor Norbert Gutknecht, DDS, PhD, and the Aachen
    Center for Laser Dentistry, the world's largest dental laser clinic,
    to promote laser dentistry worldwide through clinical laser education,
    training, and research, and welcomed Dr. Gutknecht to the newly formed
    BIOLASE Dental Advisory Board.
--  Awarded a new patent that substantially strengthens our intellectual
    property portfolio in the area of laser endodontics.
--  Declared a one-half percent stock dividend payable on September 28,
    2012, to stockholders of record as of September 14, 2012.

  
Federico Pignatelli, Chairman and CEO, said, "Sales of our core
WaterLase line of products increased by nearly 13% quarter over
quarter and 20% year over year. This strong growth testifies to the
successful execution of our sales and marketing strategies. While we
met our revenue guidance for the third quarter, we are cautiously
reducing our range of annual revenue guidance to adjust for the
timing delay in obtaining regulatory clearance for our new EPIC 10
soft tissue diode laser. We received CE Mark clearance for the EPIC
10 with only 2 days remaining in the quarter and FDA approval in the
fourth quarter, which limited the number of units that we could ship
in the quarter.  
"In addition to our top line growth, we are very pleased that the
combination of improved margins and lower general and administrative
expenses enabled us to generate non-GAAP net income during the
quarter," noted Pignatelli. 
Third Quarter Financial Results
 Net revenue for the third quarter of
2012 totaled $13.8 million, compared with $13.1 million in the third
quarter of 2011. The increase of $720,000, or 5.5%, was primarily
driven by increased sales of the Company's all-tissue WaterLase
systems and increased imaging revenues, partially offset by lower
diode systems sales as customers anticipated the launch of the EPIC
10. The 2011 third quarter revenue included $0.9 million in sales to
Schein to satisfy one-time prepaid purchase orders. Excluding these
amounts, net revenue for the 2012 third quarter represents a 13.4%
increase over non-GAAP adjusted net revenue of $12.2 million for the
third quarter of 2011. 
The number of WaterLase systems sold increased by 29.9% in the third
quarter of 2012 as compared to the prior year quarter, primarily due
to increased sales of the WaterLase iPlus(R) systems and pre-owned
WaterLase MD Turbo(TM) systems. Revenues from the sale of WaterLase
systems increased $1.1 million, or 12.7%, to $9.3 million in the
third quarter of 2012 as compared to $8.2 million in the prior year
quarter. The 2011 third quarter revenue from the sale of WaterLase
systems includes approximately $200,000 in sales to Schein to satisfy
one-time prepaid purchase orders. Excluding this amount, revenue from
the sale of WaterLase systems for the third quarter of 2012 increased
by $1.2 million, or 15.2%, over non-GAAP adjusted net revenue for the
prior year quarter. WaterLase system sales comprised approximately
67.2% of net revenues for the third quarter of 2012 compared to 62.9%
for the prior year quarter. The majority of these WaterLase revenues
were from sales of the Company's flagship WaterLase iPlus all-tissue
laser system.  
Diode laser system sales comprised approximately 6.5% of net revenues
for the third quarter of 2012 compared to 16.6% for the prior year
quarter. Diode laser sales were impacted in the third quarter of 2012
pending regulatory clearance of the new EPIC 10 diode laser system.
BIOLASE received the CE Mark for the EPIC 10 in the final days of
September 2012, and received notice of its regulatory clearance from
the FDA on October 1, 2012. As a result, the Company expects that
diode laser system sales will increase significantly beginning with
the fourth quarter of 2012. 
Pignatelli added, "The EPIC 10 is an exceptional diode laser platform
and an exciting new product in the field. It offers more precise
cutting, improved patient comfort, and 15 pre-programmed
commonly-performed soft tissue procedures, including pain therapy. We
believe EPIC 10 has the potential to become a very successful
soft-tissue surgical product. We have experienced tremendous interest
and have generated a healthy backlog both domestically and
internationally since receiving CE Mark approval and regulatory
clearance from the FDA. As a result, we expect the EPIC 10 will be a
strong contributor to revenue in the fourth quarter of 201
2 and
beyond." 
Imaging revenues totaled approximately $675,000, or 4.9% of net
revenue, during the third quarter of 2012 as compared to $100,000, or
0.7% of net revenue, for the prior year period, an increase of 575%.  
Gross profit as a percentage of net revenue was 45.6% as compared to
40.7% for the prior year period. The year-over-year increase for the
third quarter was primarily due to increased sales of WaterLase
systems, increased license fees and royalty revenue, and decreased
costs of revenues as service and warranty expenses continue to
decline as manufacturing processes and quality continue to improve.  
Operating expenses totaled $6.7 million, or 48.4% of net sales, as
compared to $6.3 million, or 47.9% of net sales, in the third quarter
of 2011. The increased costs reflect the Company's continued
investment in growing its core business, as follows:  


 
--  Sales and marketing increased by $418,000, or 13.0%, to $3.6 million
    during the third quarter of 2012 as compared to $3.2 million for the
    prior year period. The increase was primarily due to increased sales
    commissions of $285,000 and increased convention costs of $166,000.
--  General and administrative expenses decreased to $1.8 million during
    the third quarter of 2012 as compared to $2.0 million for the prior
    year period.
--  Engineering and development totaled $1.2 million during the third
    quarter of 2012 as compared to $1.1 million for the prior year period.
    The $143,000 increase was primarily due to additional costs related to
    product development.

  
As a result, the net loss for the third quarter of 2012 was $548,000,
or ($0.02) per share, compared to a net loss of $953,000, or ($0.03)
per share, for the third quarter of 2011.  
After removing interest expense of $98,000, non-cash depreciation and
amortization expenses of $126,000, and non-cash stock-based, other
equity instruments and other non-cash compensation expense of
$420,000, this year's third quarter resulted in non-GAAP net income
of $96,000, or $0.00 per share, compared with a non-GAAP net loss of
$397,000, or ($0.01) per share, for the third quarter of 2011.  
Nine Months Financial Results
 GAAP net revenue for the nine months
ended September 30, 2012, totaled $38.3 million, compared with net
revenue of $35.7 million in the prior year period. The 2012
nine-months revenue reflects a $1.1 million reduction related to the
repurchase of WaterLase MD Turbo laser system inventory from Schein,
which was completed in April 2012. The 2011 nine-month revenue
includes $5.9 million in sales to Schein to satisfy one-time prepaid
purchase orders. Excluding these amounts, non-GAAP adjusted net
revenue for the nine months ended September 30, 2012, of $39.4
million represents a 32.2% increase over non-GAAP adjusted net
revenue of $29.8 million in the prior year period. 
The number of WaterLase systems sold during the nine months ended
September 30, 2012, increased by 35.1% as compared to the prior year
period, primarily due to increased sales of the WaterLase iPlus
systems and pre-owned WaterLase MD Turbo systems. Gross revenues from
the sale of WaterLase systems, excluding the $1.1 million inventory
repurchase from Schein during the second quarter, increased $5.2
million, or 25.9%, to $25.4 million for the nine months ended
September 30, 2012, as compared to $20.2 million in the prior year
period. The 2011 nine month revenue from the sale of WaterLase
systems includes $2.3 million in sales to Schein to satisfy one-time
prepaid purchase orders. Excluding this amount, non-GAAP adjusted net
revenue from the sale of WaterLase systems for the nine months ended
September 30, 2012, increased by $7.5 million, or 42.0%, over
non-GAAP adjusted net revenue for the prior year period. WaterLase
system sales comprised approximately 63.5% of net revenues for the
nine months ended September 30, 2012, compared to 56.6% for the prior
year period. The majority of these WaterLase revenues were from sales
of the Company's flagship WaterLase iPlus all-tissue laser system.  
Pignatelli commented, "While we continue to look for distribution
opportunities to leverage the BIOLASE direct sales force and service
engineers, our primary growth drivers for the foreseeable future will
be revenue growth in our core WaterLase products and from the
highly-anticipated EPIC 10. We have begun implementing several
consumer-based initiatives that we believe will enhance this demand
in 2013 by driving patients to laser dentists and creating more pull
from the marketplace." 
Imaging revenues totaled approximately $1.7 million, or 4.5% of net
revenue, during the nine months ended September 30, 2012, as compared
to $100,000, or 0.3% of net revenue, for the prior year period.  
Gross profit as a percentage of net revenue was 46.0% for the nine
months ended September 30, 2012, as compared to 44.2% for the prior
year period. The year-over-year increase was primarily due to
increased sales of WaterLase systems, coupled with lower costs of
revenues reflecting lower service and warranty expenses due to
ongoing improvements in manufacturing processes and quality, offset
by reduced diode systems sales and reduced license fees and royalty
revenue.  
Operating expenses totaled $21.3 million for the nine months ended
September 30, 2012, or 55.7% of net sales, as compared to $17.8
million, or 50% of net sales, in the prior year period. The increased
costs were primarily in sales and marketing and engineering and
development, and reflect the Company's continued investment in
growing its core business. 
The net loss for the nine months ended September 30, 2012, was $4.1
million, or ($0.13) per share, compared with a net loss of $2.5
million, or ($0.08) per share, in the prior year period. 
After removing interest expense of $140,000, non-cash depreciation
and amortization expenses of $373,000, and non-cash stock-based,
other equity instruments and other non-cash compensation expense of
$1.5 million, the non-GAAP net loss for the nine months ended
September 30, 2012, was $2.1 million, or ($0.07) per share compared
with a non-GAAP net loss of $175,000, or ($0.01) per share, for the
nine months ended September 30, 2011.  
Liquidity and Capital Resources
 As of September 30, 2012, BIOLASE
had approximately $6.2 million in working capital. Cash and cash
equivalents and restricted cash totaled approximately $1.3 million at
September 30, 2012, compared to $1.7 million at June 30, 2012, and
$3.3 million at December 31, 2011. Accounts receivable totaled $10.3
million compared to $9.6 million at June 30, 2012, and $8.9 million
at December 31, 2011. Stockholders' equity was $10.3 million at
September 30, 2012. In addition, the Company had two revolving credit
facilities totaling $8.0 million, with $5.1 million of available
borrowings, in excess of the $2.2 million outstanding, at September
30, 2012. 
Financial Outlook
 BIOLASE expects net revenue for the fourth quarter
of 2012 of approximately $16.5 million to $17.5 million, which
reflects expected growth of 26% to 34% as compared to the same period
last year. The Company also expects to generate non-GAAP net income
and be cash flow positive in the fourth quarter of 2012. 
Due to the timing in obtaining regulatory clearance for our new EPIC
10 soft tissue diode laser, BIOLASE expects non-GAAP adjusted gro
ss
revenue of $55 million to $58 million for 2012, which excludes the
$1.1 million reduction in net revenue from the inventory re-purchase
from Schein during the 2012 second quarter. Therefore, the Company's
GAAP revenue guidance, which includes the $1.1 million reduction in
net revenue from the inventory re-purchase from Schein during the
2012 second quarter, is effectively $53.9 million to $56.9 million
for fiscal 2012. 
Conference Call
 As previously announced, BIOLASE will hold a
conference call to discuss these financial results as follows: 


 
Date:             Monday, November 5, 2012                                  
Time:             4:30pm EST                                                
Dial-in numbers:  1-877-941-4775 (toll-free/U.S. & Canada)                  
                  1-480-629-9761 (toll/international)                       
Live webcast:     http://www.biolase.com/, under 'Investors'            

 
The archived webcast will be available for 30 days on the Company's
website, www.biolase.com, in the 'Investors' section under 'Audio
Archive'.  
About BIOLASE, Inc.
 BIOLASE, Inc. is a biomedical company that
develops, manufactures and markets dental lasers and also distributes
and markets dental imaging equipment; products that are focused on
technologies that advance the practice of dentistry and medicine. The
Company's laser products incorporate approximately 290 patented and
patent-pending technologies designed to provide biologically
clinically superior performance with less pain and faster recovery
times. Its imaging products provide cutting-edge technology at
competitive prices to deliver the best results for dentists and
patients. BIOLASE's principal products are dental laser systems that
perform a broad range of dental procedures, including cosmetic and
complex surgical applications, and a full line of dental imaging
equipment. BIOLASE has sold more than 20,600 lasers. Other products
under development address ophthalmology and other medical and
consumer markets. 
WaterLase(R), iPlus(R), WaterLase MD Turbo(TM), WaterLase MD(TM), and
EPIC(TM) are trademarks of BIOLASE, Inc. 
TRIOS(R) is a registered trademark of 3Shape A/S. 
For updates and information on WaterLase and laser dentistry, find
BIOLASE online at www.biolase.com, Facebook at
www.facebook.com/biolaseinc, Twitter at twitter.com/biolaseinc, and
YouTube at www.youtube.com/biolasevideos.  
Non-GAAP Financial Measures
 The non-GAAP financial measures
contained herein are a supplement to the corresponding financial
measures prepared in accordance with generally accepted accounting
principles ("GAAP"). The non-GAAP financial measures presented
exclude the items summarized in the table on page 10 of this press
release. Management believes that adjustments for these items assist
investors in making comparisons of period-to-period operating results
and that these items are not indicative of the Company's on-going
core operating performance.  
Management uses non-GAAP net income (loss) and non-GAAP net income
(loss) per basic and diluted share in its evaluation of the Company's
core after-tax results of operations and trends between fiscal
periods and believes that these measures are important components of
its internal performance measurement process. Management believes
that providing these non-GAAP financial measures allows investors to
view the Company's financial results in the way that management views
the financial results.  
The non-GAAP financial measures presented herein have certain
limitations in that they do not reflect all of the costs associated
with the operations of the Company's business as determined in
accordance with GAAP. Therefore, investors should consider non-GAAP
financial measures in addition to, and not as a substitute for, or as
superior to, measures of financial performance prepared in accordance
with GAAP. The non-GAAP financial measures presented by the Company
may be different from the non-GAAP financial measures used by other
companies.  
Safe Harbor Statement Under the Private Securities Litigation Reform
Act of 1995
 Statements contained in this press release that refer to
BIOLASE's estimated or anticipated future results or other
non-historical facts are forward-looking statements, as are any
statements in this press release concerning prospects related to
BIOLASE's strategic initiatives, product introductions and
anticipated financial performance. Forward-looking statements can
also be identified through the use of words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates,"
"may," "will," and variations of these words or similar expressions.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect BIOLASE's current
perspective of existing trends and information and speak only as of
the date of this release. Actual results may differ materially from
BIOLASE's current expectations depending upon a number of factors
affecting BIOLASE's business. These factors include, among others,
adverse changes in general economic and market conditions,
competitive factors including but not limited to pricing pressures
and new product introductions, uncertainty of customer acceptance of
new product offerings and market changes, risks associated with
managing the growth of the business, and those other risks and
uncertainties that may be detailed, from time-to-time, in BIOLASE's
reports filed with the SEC. BIOLASE does not undertake any
responsibility to revise or update any forward-looking statements
contained herein.  
(financial tables follow) 


 
                                                                            
                               BIOLASE, INC.                                
         CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)          
                   (in thousands, except per share data)                    
                                                                            
                                  Three Months Ended    Nine Months Ended   
                                     September 30,         September 30,    
                                 --------------------  -------------------- 
                                    2012       2011       2012       2011   
                                 ---------  ---------  ---------  --------- 
Products and services revenue    $  13,710  $  13,047  $  39,288  $  35,282 
Non-recurring event                     --         --     (1,141)        -- 
License fees and royalty revenue        71         14        129        419 
                                 ---------  ---------  ---------  --------- 
Net revenue                         13,781     13,061     38,276     35,701 
Cost of revenue                      7,500      7,743     21,829     19,931 
Non-recurring event                     --         --     (1,141)        -- 
                                 ---------  ---------  ---------  --------- 
Net cost of revenue                  7,500      7,743     20,688     19,931 
                                 ---------  ---------  ---------  --------- 
Gross profit                         6,281      5,318     17,588     15,770 
                                 ---------  ---------  ---------  --------- 
Operating expenses:                                                         
  Sales and marketing                3,635      3,217     11,383      8,680 
  General and administrative         1,839      1,987      6,271      5,913 
  Engineering and development        1,195      1,052      3,657      3,238 
                                 ---------  ---------  ---------  --------- 
    Total operating expenses         6,669      6,256     21,311     17,831 
                                 ---------  ---------  ---------  --------- 
Loss from operations                  (388)      (938)    (3,723)    (2,061)
                                 ---------  ---------  ---------  --------- 
(Loss) gain on foreign cu
rrency                                             
 transactions                          (28)        44       (137)       (10)
Interest expense                       (98)        (2)      (140)      (306)
                                 ---------  ---------  ---------  --------- 
Non-operating (loss) gain, net        (126)        42       (277)      (316)
                                 ---------  ---------  ---------  --------- 
Loss before income tax provision      (514)      (896)    (4,000)    (2,377)
Income tax provision                    34         57         97         79 
                                 ---------  ---------  ---------  --------- 
Net loss                              (548)      (953)    (4,097)    (2,456)
Other comprehensive income                                                  
 (loss) items:                                                              
Foreign currency translation                                                
 adjustments                            38       (120)       (14)        41 
                                 ---------  ---------  ---------  --------- 
Comprehensive loss               $    (510) $  (1,073) $  (4,111) $  (2,415)
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
Net loss per share:                                                         
  Basic                          $   (0.02) $   (0.03) $   (0.13) $   (0.08)
                                 =========  =========  =========  ========= 
  Diluted                        $   (0.02) $   (0.03) $   (0.13) $   (0.08)
                                 =========  =========  =========  ========= 
Shares used in the calculation                                              
 of net loss per share:                                                     
  Basic                             31,243     31,009     31,156     29,296 
                                 =========  =========  =========  ========= 
  Diluted                           31,243     31,009     31,156     29,296 
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
                                                                            
                               BIOLASE, INC.                                
                  CONSOLIDATED BALANCE SHEETS (Unaudited)                   
                   (in thousands, except per share data)                    
                                                                            
                                               September 30,   December 31, 
                                                    2012           2011     
                                               -------------  ------------- 
                    ASSETS                                                  
Current assets:                                                             
    Cash and cash equivalents                  $       1,295  $       3,307 
    Accounts receivable, less allowance of                                  
     $257 and $289 in 2012 and 2011,                                        
     respectively                                     10,309          8,899 
    Inventory, net                                    11,200         11,312 
    Prepaid expenses and other current assets          1,055          1,808 
                                               -------------  ------------- 
      Total current assets                            23,859         25,326 
                                                                            
Property, plant and equipment, net                     1,501          1,148 
Intangible assets, net                                   114            212 
Goodwill                                               2,926          2,926 
Deferred tax asset                                         8              8 
Other assets                                             356            187 
                                               -------------  ------------- 
      Total assets                             $      28,764  $      29,807 
                                               =============  ============= 
                                                                            
     LIABILITIES AND STOCKHOLDERS' EQUITY                                   
Current liabilities:                                                        
    Lines of credit                            $       2,189  $          -- 
    Accounts payable                                   7,183          7,804 
    Accrued liabilities                                5,041          6,177 
    Customer deposits                                    252            165 
    Deferred revenue, current portion                  2,990          2,136 
                                               -------------  ------------- 
      Total current liabilities                       17,655         16,282 
Deferred tax liabilities                                 647            594 
Deferred revenue, long-term                                5             25 
Other liabilities, long-term                             142            337 
                                               -------------  ------------- 
      Total liabilities                               18,449         17,238 
                                               -------------  ------------- 
                                                                            
Stockholders' equity (deficit):                                             
    Preferred stock, par value $0.001                     --             -- 
    Common stock, par value $0.001                        33             33 
    Additional paid-in capital                       140,364        138,507 
    Accumulated other comprehensive loss                (374)          (360)
    Accumulated deficit                             (113,309)      (109,212)
                                               -------------  ------------- 
                                                      26,714         28,968 
    Treasury stock (cost of 1,964 shares                                    
     repurchased)                                    (16,399)       (16,399)
                                               -------------  ------------- 
      Total stockholders' equity                      10,315         12,569 
                                               -------------  ------------- 
      Total liabilities and stockholders'                                   
       equity                                  $      28,764  $      29,807 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                               BIOLASE, INC.                                
  Reconciliation of GAAP Financial Results to Non-GAAP Financial Measures   
                                 (Unaudited)                                
                   (in thousands, except per share data)                    
                                                                            
                                  Three months ended     Nine months ended  
                                     September 30,         September 30,    
                                 --------------------  -------------------- 
                                    2012       2011       2012       2011   
                                 ---------  ---------  ---------  --------- 
                           
                                                 
GAAP net revenue                 $  13,781  $  13,061  $  38,276  $  35,701 
Add: inventory re-purchase in                                               
 connection with Schein                                                     
 Termination Agreement                  --         --      1,141         -- 
Less: equipment sales to Schein                                             
 for irrevocable purchase orders        --       (908)        --     (5,877)
                                 ---------  ---------  ---------  --------- 
Non-GAAP adjusted net revenue    $  13,781  $  12,153  $  39,417  $  29,824 
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
                                                                            
GAAP net loss                    $    (548) $    (953) $  (4,097) $  (2,456)
Adjustments:                                                                
  Interest expense                      98          2        140        306 
  Depreciation and amortization                                             
   expense                             126        151        373        562 
  Stock based, other equity                                                 
   instruments, and other non-                                              
   cash compensation expense           420        403      1,490      1,413 
                                 ---------  ---------  ---------  --------- 
Non-GAAP net income (loss)       $      96  $    (397) $  (2,094) $    (175)
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
                                                                            
GAAP net loss per share:                                                    
  Basic and diluted              $   (0.02) $   (0.03) $   (0.13) $   (0.08)
Adjustments:                                                                
  Interest expense                    0.00       0.00       0.00       0.01 
  Depreciation and amortization                                             
   expense                            0.01       0.01       0.01       0.02 
  Stock-based, other equity                                                 
   instruments, and other non-                                              
   cash compensation expense          0.01       0.01       0.05       0.04 
                                 ---------  ---------  ---------  --------- 
Non-GAAP net (loss) income per                                              
 share:                                                                     
  Basic and Diluted              $    0.00  $   (0.01) $   (0.07) $   (0.01)
                                 =========  =========  =========  ========= 

  
For further information, please contact: 
Lisa Wilson 
In-Site Communications, Inc. 
212-759-3929 
 
 
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