Dental laser company Biolase Technology has made additional cost-cutting measures across the organisation, in order to better position the company for future profitability.
The company’s decision has resulted in a cut in medical device jobs. It has eliminated 20 positions.
In connection with the corporate restructuring activities came the departure of Chief Financial Officer Brett L. Scott. Scott’s responsibilities will be taken on, for an interim period, by chairman and chief executive officer David M. Mulder and by Biolase’s corporate controller.
The reduction in headcount along with additional expense reduction activities are expected to reduce corporate expenses by approximately $3 million on an annual basis.
The company is expected to incur approximately $70,000 in charges in the second quarter of 2010 related to severance and other non-recurring expenses related to the restructuring.
“The top-line performance of the company in the first half of the year was expected to be impaired by the challenging economic times and the recent change in our commercial business model. That said, we see many reasons to be positive about the future of the business, and we remain fully committed to ongoing vigilance on our cost-controls and improving our balance sheet,” said Mulder.
The company’s first quarter revenues and operating results were impacted by a fundamental change in the purchasing pattern of its distribution partner Henry Schein.
During the period, the company announced an agreement to switch minimum laser purchase commitments from Henry Schein, which would have been recognized as revenue upon shipment of product in the first quarter, to prepayments for future deliveries, with revenue being recognized in future quarters.
In addition to the impact on revenues, the agreement with Henry Schein preserved cash flows and decreased pipeline inventories.
During the period, the company also announced a significant increase in its direct sales force, introduced a new dental laser, the iLase, and restructured its sales and marketing management team.
Net revenue for this year’s first quarter was $4.4 million, compared to $6.6 million in the prior year quarterly period.
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