WALNUT CREEK, Calif., Nov. 8 /PRNewswire-FirstCall/ -- BriteSmile,
Inc. (NasdaqSC: BSML), a leading international provider of
state-of-the-art teeth- whitening systems, today released results
for the third quarter ended September 24, 2005. Total revenue for
the third quarter was $9.8 million, or 18% below the third quarter
of 2004. The net loss was $(4.5) million or $(0.42) per share in
the third quarter, compared with $(2.5) million or $(0.24) per
share in the third quarter of 2004. Earnings before interest, tax,
depreciation, and amortization (EBITDA) was a loss of $(3.1)
million in the third quarter 2005. This compares to an EBITDA loss
of $(0.6) million in the third quarter of last year. Information
regarding a reconciliation of EBITDA, which is a non-GAAP financial
measure, to net loss, the most comparable GAAP measure, follows.
Other key results for the third quarter were: -- Center whitening
fees of $4.2 million were 4% below last year. -- Associated Center
whitening fees of $4.2 million were 26% lower than the third
quarter of 2004. -- Product sales and other revenue of $1.4 million
were 24% below last year. -- A new BriteSmile whitening center
opened in August, at Tysons Galleria in McLean, Virginia. -- In
October 2005, we closed our Boca Raton center. "Revenue and EBITDA
performance continued to be disappointing in the third quarter,"
said Julian Feneley, BriteSmile's President. "As a result, we are
taking additional expense reduction and other working capital
actions to help conserve cash, and are continuing to pursue
marketing tactics that optimize our advertising spend." Nasdaq
Notice: On November 4, 2005, the company received a Nasdaq Staff
Deficiency Letter from the Nasdaq Listing Qualifications Department
indicating that for the previous 30 days, the bid price for the
company's common stock had closed below the minimum $1.00 per share
requirement for continued inclusion under Marketplace Rule
4310(c)(4). In accordance with Marketplace Rule 4310(c)(8)(D), the
company was provided 180 calendar days, or until May 3, 2006, to
regain compliance. In order to regain compliance, the company must
demonstrate a closing bid price for its common stock of $1.00 per
share or more for a minimum of 10 consecutive business days. The
Nasdaq Staff Deficiency Letter further provided that if compliance
with the $1.00 minimum bid price requirement cannot be demonstrated
by the company by May 3, 2006, the Staff will grant the company an
additional 180 calendar days to regain compliance, if at that time,
the company meets The Nasdaq SmallCap Market initial listing
requirements as set forth in Marketplace Rule 4310(c), except for
the $1.00 minimum bid price requirement. BriteSmile has developed
and markets the most advanced teeth whitening technology available,
as well as manages state-of-the-art BriteSmile Professional Teeth
Whitening Centers. BriteSmile Centers are currently operating in
Beverly Hills, Irvine, Palo Alto, Walnut Creek, San Francisco and
La Jolla, CA; Houston, TX; Denver, CO; Boston, MA; McLean, VA;
Atlanta, GA; New York, NY; Chicago and Schaumburg, IL; and,
Phoenix, AZ. In addition to BriteSmile Centers, the Company has
established more than 5,000 Associated Centers. Of the BriteSmile
Associated Centers, more than 2000 are located outside of the
United States, in more than 75 countries. For more information
about BriteSmile's procedure, call 1-800-BRITESMILE or visit the
Company's Website at http://www.britesmile.com/ . This release,
other than historical information, consists of forward- looking
statements that involve risks and uncertainties such as the
Company's ability to improve its past revenue and EBITDA
performance and generate sufficient cash and/or secure sufficient
financing to sustain its operations, its ability to establish
Associated Centers and Professional Teeth Whitening Centers, the
ability of those Centers to attract clients, the development and
introduction of new products, acceptance of those new products in
the marketplace, and the development of new strategic and marketing
relationships in the United States and internationally. Readers are
referred to the documents filed by BriteSmile with the Securities
and Exchange Commission, specifically the Company's most recent
reports on Forms 10-K and 10-Q, that identify important risk
factors which could cause actual results to differ from those
contained in the forward-looking statements. BriteSmile and its
affiliates disclaim any intent or obligation to update these
forward-looking statements. Non-GAAP Financial Information
BriteSmile provides non-GAAP EBITDA or earnings before interest,
taxes, depreciation and amortization as additional information for
its operating results. These measures are not in accordance with,
or an alternative for, financial measures calculated in accordance
with generally accepted accounting principles, including net income
or loss, the most directly comparable GAAP measure, and may be
different from non-GAAP measures used by other companies.
BriteSmile's management believes this non-GAAP measure is useful to
investors because of: (i) the significant amount of non-cash
depreciation and amortization incurred by the Company in its
operating results ($1.7 million in the third quarter of 2005 and
$1.7 million in the third quarter of 2004), (ii) the non-cash
amortization of the discount on debt of $0.7 million in the third
quarter of 2005 and $0.1 million in the third quarter of 2004, and
(iii) the mark-to-market gain related to the convertible notes of
$1.2 million in the third quarter of 2005. Investors are cautioned
that the items excluded from EBITDA are significant components in
understanding and assessing BriteSmile's financial performance.
BRITESMILE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
DATA (unaudited) ($ in thousands, except share data) 13 Weeks 13
Weeks 39 Weeks 39 Weeks Ended Ended Ended Ended Sept 24, Sept 25,
Sept 24, Sept 25, 2005 2004 2005 2004 REVENUES: Center whitening
fees, net $4,178 $4,346 $12,759 $13,590 Associated Center whitening
fees, net 4,168 5,646 12,851 16,608 Product and other revenue 1,440
1,884 4,192 6,179 Total revenues, net 9,786 11,876 29,802 36,377
OPERATING COSTS AND EXPENSES: Operating and occupancy costs 4,492
4,491 13,753 12,665 Selling, general and administrative expenses
8,275 7,845 26,149 22,101 Research and development expenses 72 110
221 425 Total Operating Costs and Expenses, excluding depreciation
and amortization 12,839 12,446 40,123 35,191 Operating income
(loss) before depreciation and amortization (EBITDA) (3,053) (570)
(10,321) 1,186 Depreciation and amortization 1,662 1,692 4,872
5,042 Loss from operations (4,715) (2,262) (15,193) (3,856)
Amortization of discount on debt (652) (66) (1,952) (194) Gain
(loss) on mark-to-market of convertible note instruments 1,163 --
3,793 -- Other income/(expense), net (251) (148) (974) (340) Loss
before income tax provision (4,455) (2,476) (14,326) (4,390) INCOME
TAX 30 32 151 89 Net loss $(4,485) $(2,508) $(14,477) $(4,479)
BASIC AND DILUTED NET LOSS PER SHARE $(0.42) $(0.24) $(1.37)
$(0.44) WEIGHTED AVERAGE SHARES -- BASIC AND DILUTED 10,549,130
10,329,190 10,529,321 10,275,854 Reconciliation of Non-GAAP
financial measures - EBITDA to Net Loss (unaudited) ($ in
thousands) 13 Weeks 13 Weeks 39 Weeks 39 Weeks Ended Ended Ended
Ended Sept 24, Sept 25, Sept 24, Sept 25, 2005 2004 2005 2004 Net
loss $(4,485) $(2,508) $(14,477) $(4,479) Add back: Other income/
(expense), net 251 148 974 340 Add back: Amortization of debt
discount 652 66 1,952 194 Add back: Income tax expense 30 32 151 89
Add back: Depreciation and amortization 1,662 1,692 4,872 5,042
(Gain)/loss from mark-to-market of financial instruments related to
convertible debt (1,163) -- (3,793) -- EBITDA $(3,053) $(570)
$(10,321) $1,186 BRITESMILE, INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited) ($ in thousands, except share data) September
24, December 25, 2005 2004 ASSETS CURRENT ASSETS: Cash and cash
equivalents $5,503 $18,880 Trade accounts receivable, net of
allowances of $496 and $448, respectively 1,924 2,118 Account
receivable from related party 190 -- Inventories 892 1,635 Prepaid
expenses and other 563 704 Total current assets 9,072 23,337
PROPERTY AND EQUIPMENT, net 11,793 12,426 OTHER ASSETS 3,302 3,843
INTANGIBLES, net 4,980 5,469 TOTAL ASSETS $29,147 $45,075
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts
payable $3,261 $5,182 Accrued liabilities 8,256 6,867 Deferred
revenue 1,900 1,049 Current portion of long-term debt and capital
lease obligations 2,850 2,137 Total current liabilities 16,267
15,235 LONG-TERM LIABILITIES: Long-term debt and capital lease
obligations 10,286 15,650 Other long term liabilities 1,760 1,608
Total long-term liabilities 12,046 17,258 Total liabilities 28,313
32,493 STOCKHOLDERS' EQUITY: Common stock, $.001 par value;
50,000,000 shares authorized; 10,549,130 and 10,345,974 shares
issued and outstanding, respectively 38 38 Additional paid-in
capital 173,330 170,601 Accumulated deficit (172,534) (158,057)
Total shareholders' equity 834 12,582 TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $29,147 $45,075 DATASOURCE: BriteSmile, Inc.
CONTACT: INVESTORS: Kenneth A. Czaja, CFO, +1-925-941-6260, or
MEDIA: Chris Edwards, +1-925-279-2926, both of BriteSmile, Inc. Web
site: http://www.britesmile.com/
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