WALNUT CREEK, Calif., Nov. 13 /PRNewswire-FirstCall/ -- BSML, Inc.,
formerly known as BriteSmile, Inc., (OTC:BSML) (BULLETIN BOARD:
BSML) today announced its financial results for its fiscal third
quarter and first nine months ended September 29, 2007. For the
Company's third quarter ended September 29, 2007, revenues
decreased approximately 15%, to $5.7 million, compared to $6.7
million in the third quarter of 2006. Center revenues, primarily
related to performance of our whitening procedures, decreased by
$1.1 million, while sales of our teeth whitening products through
other channels, primarily the QVC network, remained essentially
flat. The Company's net loss from continuing operations in the
third quarter of 2007 was $0.7 million, or $0.07 per share,
compared to $3.8 million, or $0.36 per share, in the third quarter
of 2006. The Company recorded a net loss from discontinued
operations of $0.9 million for the third quarter ended September
29, 2007. This charge reflects the settlement of a claim involving
Discus Dental, Inc., the purchaser of the Company's Associated
Centers business in March 2006 and Longlife Health, Ltd., the
Company's former distributor in the United Kingdom. The settlement
amount will be paid from funds previously escrowed under the terms
of the 2006 sale of the Company's Associated Centers business to
Discus. For the Company's first nine months ended September 29,
2007, revenues decreased approximately 4%, to $19.6 million,
compared to $20.5 million in the first nine months of 2006. The
Company's net loss from continuing operations in the first nine
months of 2007 was $1.8 million, or $0.17 per share, compared to a
net loss from continuing operations of $13.9 million, or $1.31 per
share, in the first nine months of 2006. Included in the net loss
from continuing operations for the first nine months of 2006 are
non-recurring items totaling $5.2 million. The Company does not
expect similar non-recurring expenses of this magnitude in 2007 or
future periods. For the nine months ended September 29, 2007, the
Company has recorded a loss from discontinued operations of $0.9
million in regards to the settlement with Discus and Longlife
described above. For the corresponding nine months of 2006, the
Company's sale of its Associated Centers business resulted in
income from discontinued operations of $19.3 million, or $1.83 per
share. The Company's net loss in the first nine months of 2007 was
$2.7 million, or $0.25 per share, compared with net income of $5.4
million, or $0.52 per share, in the first nine months of 2006. The
Company's EBITDA (defined as earnings before interest, tax,
depreciation, amortization and large non-recurring gains and losses
including income from discontinued operations) for the third
quarter ended September 29, 2007, was a loss of $0.6 million,
compared to a loss of $3.8 million in the third quarter of 2006.
For the first nine months ended September 29, 2007, the Company's
EBITDA was a loss of $1.3 million, compared to a loss of $7.9
million in the first nine months of 2006. EBITDA is a non-GAAP
financial measure. More information regarding this non-GAAP
financial measure, and a reconciliation of EBITDA to net loss, the
most directly comparable GAAP measure, is provided below. Dr.
Julian Feneley, BSML's President and Chief Executive Officer,
commented on the Company's results as follows: "The year over year
comparison of center whitening revenues reflects the current
difficult trading conditions for professional teeth whitening
products and services. We are focusing our efforts on procedure
revenue optimization and cost control. In addition, during Q3 we
expanded our product offering through the launch of our private
label version of Remedent, Inc.'s GlamSmile(TM) veneer system under
the name BriteVeneers One-Step(TM). We are very excited about this
new opportunity, which will allow us to leverage our BriteSmile
Professional Whitening Centers to deliver uniquely affordable
'perfect smiles' to our customers." The Company finished its 2007
fiscal first nine months with $1.9 million in unrestricted cash,
compared with $4.7 million at December 30, 2006. The decrease is
almost entirely due to operating uses, including payments to
vendors and for income taxes and the redemption of outstanding gift
certificates. Non-GAAP Financial Information BSML provides non-GAAP
EBITDA, defined by the Company as earnings before interest, taxes,
depreciation, amortization and large non-recurring gains and losses
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. BSML's management believes this
non-GAAP measure is useful to investors because it adjusts for
large non-cash or non-recurring items, including: (i) the
significant amount of non-cash depreciation and amortization
historically incurred by the Company in its operating results, (ii)
the non-cash amortization of the discount on debt of $0.5 million
in the first quarter of 2006, (iii) the loss on the early
extinguishment of debt of $5.0 million reported in the first
quarter of 2006, (iv) the non-recurring $1.3 million gain on
settlement of a legal claim we recognized in the second quarter of
2006 and (v) the non-recurring $0.9 million loss on settlement of a
legal claim we recognized in the third quarter of 2007. Our
calculation of EBITDA further excludes results from discontinued
operations. Investors are cautioned that the items excluded from
EBITDA are significant components in understanding and assessing
BSML's financial performance. BSML, Inc., formerly known as
BriteSmile, Inc., markets the most advanced teeth whitening
technology available and manages state-of-the-art BriteSmile
Professional Teeth Whitening Centers. BSML Spa 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. For more information about BSML's procedures, 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. Readers are referred to the documents
filed by BSML with the Securities and Exchange Commission,
specifically the Company's most recent reports on Forms 10-K,
10-K/A and 10-Q, that identify important risk factors which could
cause actual results to differ from those contained in the
forward-looking statements. BSML and its affiliates disclaim any
intent or obligation to update these forward-looking statements.
Summary Unaudited Financial Results Follow 13 Weeks 39 Weeks 13
Weeks Ended 39 Weeks Ended Ended Sept. 30, Ended Sept. 30, Sept.
29, 2006 Sept. 29, 2006 2007 (Restated) 2007 (Restated) Revenues
$5,681 $6,711 $19,620 $20,506 Operating costs and expenses:
Operating and occupancy costs 3,457 3,714 10,686 10,715 Selling,
general and administrative expenses 2,843 6,816 10,202 17,674
Depreciation and amortization 356 415 1,079 1,235 Total operating
costs and expenses 6,656 10,945 21,967 29,624 Loss from operations
(975) (4,234) (2,347) (9,118) Amortization of discount on debt - -
- (530) Loss on early extinguishment of debt - - - (5,039) Gain on
settlement of legal claim - - - 1,257 Other income / (expense), net
279 185 596 (660) Loss from continuing operations before income tax
provision (696) (4,049) (1,751) (14,090) Income tax provision 20
(271) 57 (225) Net loss from continuing operations (716) (3,778)
(1,808) (13,865) Discontinued operations (Note 5): Loss on
settlement of claim (857) - (857) - Income from operation of
discontinued operations - - - 1,130 Gain / (loss) on settlement of
litigation - (1,955) - 3,380 Gain on sale of business - - - 15,105
Income / (loss) from discontinued operations before income tax
provision (857) (1,955) (857) 19,615 Income tax benefit / expense -
267 - (307) Income / (loss) from discontinued operations (857)
(1,688) (857) 19,308 Net income (loss) attributable to common
shareholders $(1,573) $ (5,466) $(2,665) $5,443 Basic and diluted
net loss per common share from continuing operations $(0.07)
$(0.36) $(0.17) $(1.31) Basic net income (loss) per common share
from discontinued operations $(0.08) $(0.16) $(0.08) $1.83 Diluted
net income (loss) per common share from discontinued operations
$(0.08) $(0.16) $(0.08) $1.83 Basic net income (loss) per common
share $(0.15) $(0.52) $(0.25) $0.52 Diluted net income (loss) per
common share $(0.15) $(0.52) $(0.25) $0.52 Shares used in computing
net loss per common share from continuing operations, basic and
diluted 10,840 10,549 10,768 10,549 Shares used in computing net
income (loss) per common share from discontinued operations, basic
10,840 10,549 10,768 10,549 Shares used in computing net income
(loss) per common share from discontinued operations, diluted
10,840 10,549 10,768 10,566 Shares used in computing net income
(loss) per common share, basic 10,840 10,549 10,768 10,549 Shares
used in computing net income (loss) per common share, diluted
10,840 10,549 10,768 10,566 Condensed Consolidated Balance Sheet
Unaudited (In thousands) September 29, 2007 December 30,
(Unaudited) 2006 ASSETS Current assets: Cash and cash equivalents
$1,907 $4,734 Trade accounts receivable, net 260 213 Inventories
1,020 1,273 Investments, restricted as to use - 3,625 Prepaid
expenses and other current assets 621 243 Total current assets
3,808 10,088 Property and equipment, net 3,407 4,258 Investments,
restricted as to use 4,753 2,761 Other assets 937 958 Total assets
$ 12,905 $18,065 LIABILITIES AND SHAREHOLDERS' EQUITY Current
liabilities: Accounts and notes payable $1,109 $1,770 Accrued
liabilities 5,803 6,776 Accrual for Center closures 131 170 Gift
certificate liability 1,118 1,775 Deferred revenue 2,952 2,590
Total current liabilities 11,113 13,081 Long term liablilities:
Accrual for Center closures 220 258 Deferred revenue 713 1,352
Other long term liabilities 716 892 Total long term liabilities
1,649 2,502 Total liabilities 12,762 15,583 Shareholders' equity:
Common stock, $0.001 par value, 50,000,000 shares authorized,
11,203,713 and 10,664,281 shares issued and outstanding at
September 29, 2007 and December 30, 2006, respectively 39 39
Additional paid-in capital 174,229 173,903 Accumulated deficit
(174,125) (171,460) Total shareholders' equity 143 2,482 Total
liabilities and shareholders' equity $ 12,905 $18,065 Reconciation
of Net Income / (Loss) to EBITDA Unaudited (In thousands) Thirteen
Thirteen Thirty-nine Thirty-nine Weeks Weeks Weeks Weeks Ended
Ended Ended Ended September 29, September 30, September 29,
September 30, 2007 2006 2007 2006 Net Income $(1,573) $(5,466)
$(2,665) $5,442 Deduct:Income from discontinued operations - 1,688
- (19,308) Deduct:Gain on settlement of 2006 legal claim - - -
(1,257) Add: Loss on settlement of 2007 legal claim 857 - 857 -
Add:Income tax provision 20 (271) 57 (225) Add / (deduct): Other
(income) / expense, net (279) (185) (596) 660 Add: Loss on early
extinguishment of debt - - - 5,039 Add:Amortization of discount on
debt - - - 530 Add:Depreciation and amortization 356 415 1,079
1,236 EBITDA $(619) $(3,819) $(1,268) $(7,883) DATASOURCE: BSML,
Inc. CONTACT: Investors, Rich De Young, CFO, +1-925-279-2883, or
Media, Dr. Julian Feneley, CEO, +1-925-279-2863, both of BSML, Inc.
Web site: http://www.britesmile.com/
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