Biolase restructuring has positive effect

Biolase has completed a corporate-wide reorganization that has achieved the goal of reducing by approximately 30% its total current sales break-even level, the company announced.

On August 27, the company announced that its CEO, David Mulder, and five members of the board of directors had resigned and that Federico Pignatelli, Biolase chairman of the board and one its largest shareholders, had been appointed interim CEO. These moves followed the resignation of Chief Financial Officer Brett Scott in July and the elimination of approximately 20 positions across the company.

"This restructuring was performed rapidly, but also with great care," Pignatelli said in a press release. "In essence, what we eliminated was unnecessary and nonessential for Biolase to perform successfully and with efficiency. At the same time, we are continuing our new product development activities."

As a result of these changes, Pignatelli said he expects the company to be profitable in the fourth quarter of 2010 and beyond.

In related news, Biolase announced a "significant change" in its relationship with Henry Schein. The two companies have entered into a definitive agreement by which Henry Schein will now be a non-exclusive distributor of Biolase dental laser systems and consumables in North America. From August 2006 through August 2010, Henry Schein was Biolase's exclusive North American distributor.

Biolase will now sell through other North American distributors and will sell on a direct basis through its existing and expanding 22 person sales force, the company noted. Henry Schein will retain exclusivity in certain, well-performing, international markets and remain non-exclusive in others.

In a separate development, Biolase announced that Henry Schein has placed an "irrevocable" $9 million open purchase order for Biolase products, $6 million of which will be for the purchase of the iLase personal laser, with an option for an additional $3 million of iLase or for other laser systems. This purchase order is expected to be fulfilled by June 2011.

As part of the distribution agreement, Henry Schein has agreed to engage in a substantial marketing campaign to launch the iLase product line throughout North America.

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