Q4 2022 BIOLASE Inc Earnings Call
Yeah.
Greetings and welcome to the BIOLASE 2022 fourth quarter and full year financial results call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. Please note. This conference is.
Being recorded I will now turn the conference over to your host Todd currently of E V C.
Begin.
Thank you operator, good afternoon, everyone and thank you for joining us today to discuss BIOLASE financial results for the fourth quarter and full year 2022 ended December 31 2022.
On the call today from BIOLASE are John Beaver, President and Chief Executive Officer, and Jennifer Bright Chief Financial Officer John .
John will review the company's operating performance and then turn the call over to Jennifer Jennifer to review the financials in more detail before opening the call for questions.
Before we begin I'd like to remind everyone that a number of forward looking statements, which are any statements that are not historical facts will be made during this presentation and subsequent Q&A session, including forward looking statements regarding the company's strategic initiatives and anticipated financial performance.
These statements are forward looking statements as defined under the private Securities Litigation Reform Act of 1995 and are based on BIOLASE as current expectations and assumptions and are subject to a variety of risks and uncertainties that could cause the company's actual results to differ materially from the statements made.
Such forward looking statements only represent the company's view as of today March 28 2023.
These risks are discussed in the risk factors section of the company's most recent Form 10-K filed with the scares and Exchange Commission.
A replay of this conference call will be available on the BIOLASE website. Shortly after the completion of today's call when listening to this call. Please refer to the news release issued earlier today announcing the companies.
2022 fourth quarter and full year financial results. If you do not have a copy of the news release. It is available on the Investor Relations section of the company's website at BIOLASE Dot com.
<unk> financial results can also be found in the company's report on Form 10-K, which will be filed with the SEC.
The tables, we provided in today's news release offer additional financial information. So we encourage you to review them. The tables include a reconciliation of unaudited GAAP net loss and net loss per share to non-GAAP adjusted EBITDA loss and adjusted EBITDA loss per share as well as more information regarding the company's non <unk>.
GAAP disclosures.
With that said I'll now turn the call over to BIOLASE, President and Chief Executive Officer, John Beaver John .
Thanks, Todd and thank you.
One for joining us. This afternoon. We appreciate your continued interest in BIOLASE two.
2022 was a great year for BIOLASE as we strengthen our business and position the company for continued growth.
And achieved our goals and achieve our goal of improving profitability in 2023.
Looking quickly at some of our results total revenue for the year was $48 $5 million, representing a 24% increase year over year, our U S. Laser sales for 2022 increased 39% year over year and our U S consumable sales increased 25% for the full year.
Our strong performance. This past year reflects continued positive momentum on several fronts, including continued progress with our innovative more laser exclusive trial program, which puts a BIOLASE laser in the dentist office for 45 days supported by mentor and two days of in person training when.
When we started the WTP initiative pre COVID-19, our success rate the percentage of dentists, who purchase after the trial was about 30%.
Our success rate in 2021 improved almost 40% and our success rate in 2022 was nearly 50% from the 32 WTP events, we hosted.
Sold well over 100 Waterlase lasers through this program since the start of 2021 and in 2023, and we expect to host about 35, WTP events and achieve a 60% success rate.
Additionally, we will be hosting our first WTP events internationally with four expected to be scheduled throughout the year.
This initiative and our continued emphasis on dental specialists, including the Endodontist Paradise and pediatric dentists continue to generate increase adoption of our laser technology by new customers with a record 84% of our U S. Waterlase sales during the year coming from new customers and 47% of U S. Waterlase sales for the full year.
Coming from dental specialists, it's important to note that our focus on dental specialists really didn't exist two years ago. So this momentum is quite encouraging and gives us confidence that we can attain even greater success in the future.
Lastly, as a testament to the entire BIOLASE team that we have no open sales territories and had no sales turnover during 2022, because our team is enthusiastic about our products programs and initiatives and the excitement they are creating in the dental community.
As many of you already know BIOLASE is approximately 60% share of the worldwide all tissue laser dental market represented by our Waterlase brand.
Less than 10% of dentists in the U S and less than 2% of deaths outside the U S. Currently use down lasers today, we plan to leverage our brand and grow the overall market by engaging with the other 90% Dennis while ensuring we continue to protect our position as a market leader to reach this large addressable market opportunity. We are focused on increase in education.
<unk> and training to build awareness of our industry, leading laser benefits to Dennis and their patients. For example in 2022, we held over 600 educational and training events in the U S alone and because of these increased efforts dental practitioners are now proactively approach in BIOLASE as they look to upgrade the dental practices improve their patient.
Gums.
Last year, the number of marketing qualified leads our <unk> increased by 400% in the U S market compared to 2018.
Put this into better perspective, the number of inbound leads a couple of years ago was less than 1000, a year and in 2022. They grew to 4000. This is a phenomenal achievement.
We converted half of these new lead to Waterlase sales it would represent a $150 million in new laser sales.
We believe each 1% increase in adoption of our all tissue laser technology in the U S will equal approximately $50 million of additional revenue for BIOLASE, assuming we keep our same 60% market share.
This doesn't include potential increased adoption outside the U S, where historically approximately 40% of our revenue has been generated or the consumable revenue that is generated from the procedure is done with our laser systems. We have a well established three pronged strategy to grow market adoption of our lasers, which has created the growth momentum we are experiencing today the first.
Are these is to get more dental specialists to use our lasers in 2021, BIOLASE foreign specialists academies to expand awareness of the benefits of dental lasers until specialist communities.
Specifically, we launched specialist academies fair Periodontist, Endodontist, pediatric dentists, and dental hygienist to drive further adoption of our lasers and obtain superior patient outcomes. Our plan in 2023 is to combine all of these specialists academies into two academies one for each of our product families of Waterlase Academy and the Epic Academy.
We believe that this not only further improve and simplify training for the specialists, but also give the general practitioner, who is interested in adding more specialty procedures to the practice an avenue to pursue further training we believe the opportunity that exists for BIOLASE within each of these specialist communities is very meaningful imagine a pediatric dentist, who doesn't need given kids shot.
To fill the cavity oriented onset can remove 99, 5% of the bacteria from a root canal instead of just 50% led by key opinion leaders or kols in each of these specialties BIOLASE is increase in education and training to drive expanded awareness and adoption.
Our focus on increased education and training for these dental specialists is translating into higher demand for our products as they look for safer more advanced alternatives to improve patient outcomes and their practices combine these dental specialist markets represents hundreds of millions of dollars of potential laser systems revenue each year, not including the potential for recurring revenue.
From the sale of our consumables.
The second of these is focus on the significant opportunity we have with over 150000 general practitioner dentists in the U S alone. We believe that if an additional 5% of the U S. GPS adopt our lasers, it would generate $225 million of laser revenue not including the follow on consumables. The success, we're seeing with our award laser exclusive trial program is driving our continued.
Penetration of this key target market.
We believe it's a win win for GPS because a big part of the Waterlase exclusive trial program is teaching them additional procedures. They can do in house with our laser so to keep more procedures and more revenue in the practice and achieve superior patient outcomes.
Just two extra procedures, a week could potentially generate a 200% return on the investment our laser.
We believe that along with a better patient experience is motivating Dennis to incorporate waterlase technology into their practices to more training education, we do through our Waterlase exclusive trial program. The more success. We believe we will have in driving laser adoption.
Our waterlase laser as over 80, FDA cleared indications where procedures that Dennis can perform using our laser we recently announced a new hand piece for the wire laser will allow desk to perform skin resurfacing procedures.
Just you know Dennis administer more botox shots in the U S and dermatologists.
A new Waterlase fractional hand piece is FDA cleared and can deliver both ablative and non ablative fractional treatments and provide the user with control over the penetration depth with different parameters and treatment techniques. It can create a uniform one dimensional pattern of micro perforations on the tissue surface for maximum efficacy offering patients comfortable.
<unk> and effective skin resurfacing treatments with faster healing and quicker recovery time.
Just one example of the multiple use cases that exist for Dennis to increase our revenue use our laser technology I believe this launch will further accelerate the adoption of our Waterlase technology in the dental industry is consistent with our commitment to providing less invasive patient friendly technology for both patients and clinicians while at the same time expanding our AG.
<unk> to the skin resurfacing market worldwide, which is projected to reach two $650 million by 2031.
More we can do to raise awareness of the many procedures Dennis can use our laser for and the benefits of doing these procedures with a laser the faster we can drive increased adoption of volatility lasers, while less than 10% of deaths in the U S. Using all tissue today, a recent survey indicated that almost 80% of the recent purchases of Waterlase laser.
Use it daily.
The <unk> is just one way we are looking to drive increased awareness as I mentioned before we hosted over 600 Webinar study clubs and training events in the U S. During 2022, including our BIOLASE advancing dentistry podcast launch.
Due to the overwhelmingly positive response from the dental community and the rise in interest in popular demand, we recently announced our plans to launch a second season in 2023 season. Two we will continue to provide world class education in a readily accessible and visually appealing format focusing on trending topics for dental clinicians new episodes will feature.
We're engaging stories from clinicians about the benefits of laser technology. The podcast will continue to be available on Spotify and Apple podcast platforms.
Speaking of increase education.
During the fourth quarter, we began constructing our new training facility and first ever modeled dental office named laser smiles and we expect both to open in April . These new spaces are conveniently located next to our corporate headquarters and will expand our ability to drive revenue laser adoption by training practitioners in a hands on Dell environment.
This is a novel opportunity to educate train produce marketing materials create content perform studies and test new equipment.
Also about a leading international dentists to spend time at our facility. This year to work with US as we help ensure that our customers international voices heard as well.
We also recently announced that we are further advancing our market awareness and educational initiatives with the launch of our new education Web portal education Dot <unk> Dot com, which allows us to offer tailored education pathways through our Waterlase Academy and Epic Diode Academy, which are design, which are designed to offer don't cutting it clinicians and easy.
To navigate solution for laser education.
Finally, the third prong of our growth strategy is giving corporate Dennis and universities to adopt our lasers.
We continued to develop stronger relationships with key dental schools across the country and we have lasers and about one third of the dental schools now we've also integrated our waterlase lasers into several post graduate programs and plan to expand into many more programs over the next few years. We believe there is a large appetite among dental residents to utilize state of the art technique.
Allergy and treating patients and the introduction of reinforcement of technology. During training are key to the adoption of laser dentistry with this new generation of Dennis also today, most new dentists are employed by our corporate Dennis or Dsos brought our dental school, we have ongoing trials with for the five largest dsos in the U S. Our goal is for these new dentists.
Again, using our lasers, one pointed the DSO and for them to make our laser saying central part of their practices moving forward, becoming new dental laser and consumable customers when they go out on their own.
We just completed the second phase of our trial with Heartland and the results were again very positive we continue to make solid inroads with the Dsos and we believe the dsos can lead to far greater revenue for BIOLASE in the coming years.
In summary, our growth plan is generating positive results as evidenced by our strong revenue. This year further we have a very large opportunity of well develop roadmap for future growth. Our sales team success and continued performance gives us continued confidence that we can achieve our operating objectives by 24 2023 and beyond as we set our site.
Even higher.
I have one final comment before I hand, the call over to Jennifer I would like to congratulate the entire BIOLASE team for their two top.
Top workplace awards for 2022.
The awards announced earlier this year and based solely on employee feedback reaffirm the cultural tone that runs throughout the organization our team general cares about our customers and each other and they are incredibly passionate about their role in advancing our objectives.
Truly grateful for our exceptional team and their daily efforts.
With that I'll turn the call over to Jennifer to provide further details regarding our fourth quarter and full year financial results.
Thank you John and good afternoon, everyone.
Also I want to congratulate the team the top workplaces award were well known.
Now I'm going to provide more context around some of the numbers and highlight some of the operational improvements we achieved during the full year 2002. Thank you.
Strong full year financial performance demonstrates continued business momentum.
Higher demand for our industry, leading dental laser.
As John mentioned during his prepared remarks, we believe our success is directly related to our increased education and training initiatives and we look forward to building on that success in 2023.
Now diving into the results we delivered net.
Net revenue was $48 5 million for the full year, an increase of 24% year over year.
Some additional full year highlights include U S laser system sales increased 39% year over year.
24 million.
And U S consumable sales increased 25% year over year to $7 5 million and increased over $11 million on a consolidated baseball.
This record breaking year in consumable sales driven by an increase in procedures using BIOLASE laser.
We continued momentum with new customer adoption in 2020, Q with 84% of our U S. Waterlase sales coming from new customers and 47% of U S. Waterlase sales come from Donald Special.
Lastly, as John mentioned, the success rate of our Waterlase exclusive trial program.
At least 50% sort of full year highlighting the success of this program.
These are all positive indicators and the increased demand we are experiencing for our industry, leading dental lasers in the U S and abroad.
Gross margin for the year was 33% versus 42% a year ago.
<unk> gross margin reflects mainly the impact of supply chain issues, we encountered during the year that required us to source neutral fiber vendors, resulting in significantly higher cost for inventory and related warranty expenses.
At the end of 2022, we completed an acquisition of a chunk fiber supplier that will allow us to supplement certain third party component with our own in house manufacturer coupons.
We expect this will reduce our backlog for these materials as well as reduce the overall cost of goods and improve cash flow. When production is operating at full capacity beginning in the first half of 2023.
In addition, largely due to the supply chain issues I mentioned.
So our sweet placements for other vendors.
Belting and some end of life designated parts and inventory.
An analysis of our inventory resulted in expense of $2 8 million to write down inventory and increased our reserve for obsolescence during 2022.
On the expense line total operating expenses were $41 2 million for the year compared to $33 million a year ago.
Increase was due to compensation expenses, all territories were sold in 2022 commissions and bonus incentives for achieving higher sales target.
And increased travel related expenses.
GAAP net loss for the full year 2022, with $28 6 million compared to a net loss of $16 2 million for the full year 2021.
GAAP net loss per share for the year 2022 with $4 13.
Year to $2 73 in 2021 as adjusted for the reverse stock split.
Our adjusted EBITDA loss for the full year 2022 was $20 1 million compared to an adjusted EBITDA loss of $14 7 million for 2021.
Adjusted EBITDA loss per share for the year 2020 Q.
$2 91, compared to $2 49 for 2021.
Adjusted for the reverse stock split.
Now, let's turn to the balance sheet, we finished the fourth quarter with cash and cash equivalents of <unk> 2 million.
Following our January 2023 equity raise of an additional $9 million in net proceeds we believe we have sufficient liquidity to execute our near term growth strategy and greatly increased profitability.
How do we get there.
First in addition to projected sales volume increases.
Certain price increases contributing to top line growth.
We expect to have lower cost of goods due to the trunk fiber acquisition completed in 2022.
As a result of this acquisition we are on schedule to have our in house chunk fiber make up approximately 50% of the fiber we will be shipping beginning in the second quarter of 2023.
We expect these cost savings will drive increased gross margin getting us close to that 50% needed to reach profitability.
We also expect to lower our <unk> expenses this year.
By opening our own centralized training facility.
Now have for Dennis John staff between perspective customers and we are also working to partner with educational facilities around the country to host W. ETP events at their location for little to no cost.
We expect to host about 35 W. ETP this year.
The expense savings will be quite meaningful as well as the continued improvement in our clothing success rate that we anticipate for 2023.
With higher gross margin.
Expected W. ETP savings and continued revenue growth.
We believe we will have the potential to improve profitability and achieve positive adjusted EBITDA for the full year.
Now moving on to guidance for 2023, we are forecasting continued strong revenue growth of at least 25% year over year.
And as I just mentioned, we also expect to achieve positive adjusted EBITDA for the full year.
For the first quarter. However, we expect net revenue to exceed $10 million, representing relatively flat revenue compared to the year ago quarter.
Believe the recent banking environment has created some uncertainty around the overall economic outlook for some Dennis looking to invest in our technology.
Do you believe the situation will be short lived and expect to begin trending toward the 25% forecasted growth rates in the second quarter of 2023.
In summary, we had another strong year with significant revenue growth and solid sales execution and are confident that our strategy.
And our actions to strengthen BIOLASE are working.
With that I'll return the call to the operator to open the call for questions operator.
Thank you at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset.
Before pressing the star keys, one moment, please while we poll for questions.
And the first question is coming from Bruce Jackson with the benchmark company. Please proceed.
Good afternoon, and thank you for taking my questions.
The first one is about.
The gross margin progression throughout the year so.
How do you think that the gross margins build off of the fourth quarter, and where do you think that could exit the year in 2023.
Yes, Bruce good questions how are you doing.
I would expect that.
We had a couple of.
I'd say, one time items in Q4 that adversely affected gross margins Jen mentioned, the inventory write down by a noncash and still had an impact on gross margins we expect to.
To approach, 50% gross margins and exceed that in the fourth quarter of next year.
To get there there are a few things that have to happen and I think we're well on our way to that.
Jim mentioned the trunk fiber in house production, that's going to significantly improve not only our cost of goods sold.
From a manufacturing standpoint, but also our service and warranty as well. In addition, some of the things that we're doing on the training side to reduce cost like opening up the training facility here and having wtp's at various I would say static locations as opposed to hotels and so forth are greatly.
To reduce the cost of training, which also shows up in the cost of goods sold line.
Okay, Okay and then.
One question on the.
Heartland study can you give us a sense of what they were looking at and.
Some of the data points that they were using to evaluate the waterlase system.
Sure. The first trial that we had with Heartland a few years ago.
We were working with some of their most experienced Dennis I would say.
Not laser dentist.
Very.
Very experience.
And there and we've shown this in our.
Videos before investor presentation, and so forth they each paid for their lasers and four to seven months and additional procedures. The second phase of this.
Trial was looking at.
Kind of the next tier of Dennis if you will.
And how much they would bring in an additional revenue during this period.
And for them each of them.
Trial is complete.
And they each paid for their laser.
Estimated.
I think it was 17 months so long it took them longer but is still beat the heartland I think kind of <unk>.
Incremental or internal hurdle rate of two years for a payback on equipment. So we were really encouraged by that.
We expect those units to be sold in Q2.
<unk> continued.
Continued to to try to roll out these.
Additional units at Heartland.
The year.
Okay great.
Very helpful. So congratulations again on all the progress and then I'll hop back in queue.
Thanks Bruce.
Okay. The next question comes from Frank <unk> with Lake Street Capital markets. Please proceed.
Great. Thanks for taking the questions wanted to start with one on the growth guidance I. Appreciate the color on Q1 I was hoping you could provide a little further color on the expected ramp of revenues for Q2 to Q3, and how you expect that to trend throughout the year to hit the 25% growth number and then as a second part to that any.
Could provide any color related to contribution from systems versus consumables.
That would also be great color. Thanks sure. Thanks, Brian .
As Jen mentioned, we still expect Q excuse me 2023 to have a lease of 25% increase in revenue over full year 2022.
We are off to a little bit slower start than we had wanted.
But it will ramp up but we believe in Q2 and Q3 I would expect Q2 and Q3 to have similar revenue to each other.
And then Q4 to be our strongest quarter.
If you were to line all of that stuff out and assume a at least a 25% increase over the $48 5 million that we had in 'twenty three excuse me in 'twenty. Two I think you can model that out.
<unk>.
<unk>.
Second question was in terms of.
Revenue split between systems and service and consumables.
I still expect a similar.
As a percentage of revenue split among those three items.
We continue to grow on an absolute basis, our consumable sales we had record consumable sales.
In 2022, and I expect to break that record in 2023, However, we're selling a lot of laser systems as well and so I would expect.
Each of those as a percentage of revenue to remain fairly constant next year or this year in 2023.
Okay. That's helpful and I wanted to follow up on the comment related to some customers having challenges with SBB. My assumption is that this is that's implying this is related to system sales in Q1 and consumables continued to be positive through Q1 or is there any other color you can.
Can provide on that.
Your assumption is correct.
Many of our customers that obviously did not have accounts that SCB I think the general.
Market.
Feeling from that banking crisis heart, some some cells that were eminent and they put the brakes on.
Pulling the trigger on those laser cells is reason, we're confident that they'll pick back up in the second quarter.
Okay, and then last one for me you wanted to follow up on the comment about the four DSO is currently evaluating the technology could you maybe speak to when we could hear back from.
Those DSO is validating the technology and what kind of impact we could see from them.
Frank that's a multi million dollar question and one that I would be.
Very reticent to answer because we do not control. Unfortunately, the timing of how fast the dsos move.
I am surprised that we're sitting here in 2023 for instance, with Heartland.
Where we are at that would be further along to be to be Frank with you and so it's one of those things add.
In our in our internal forecast and our guidance, we expect gradual growth someday, we're going to wake up and get a big order I, just cant ever predict when thats going to be and so I don't try to.
Okay Fair enough that's good color thanks for taking the questions. Thanks, Brian .
Okay up next we have Anthony Vendetti with Maxim Group Anthony. Please proceed.
Thanks, Hey, John Hey, Jennifer how are you doing.
Doing well.
Good.
Yes so.
That's the first question I have is on the.
The quarterly exclusive.
Trial program. So you did a lot of those.
I guess back in quarter.
I think it was around 150 educational events.
How many did you do in fourth quarter and it seems like thats going to slow down in 'twenty. Three is that is that because you've you've covered all the territories you need to cover.
Or is there another reason for that.
No. We did about 35 of those last year in 2022, and we will have the same amount this year in 2023.
The difference between those two.
Two years really as we should and we're planning on getting more participants and to the pro into each one.
We average about five participants.
In 2023 and to each program and this year, we're expecting to have six or seven and we're seeing that early on this year.
In addition.
We had almost 50% success rate last year, we anticipate 60% success rate this year and we've already so far it's early in the year or exceeding that.
That batting average if you will.
What we talked about.
Earlier was how were.
And where we were having these programs.
So when we first started this initiative, we basically had these programs all over the country in hotel rooms.
We have now identified not only our own training facility that will be opened next next month, but also training facilities across the country that we can actually provide a better experience for the for the dentists, who are attending but just as importantly, more cost effective experience.
And the other big changeover when we started the program is when we started we had to go out to our our trainers are key opinion leaders and pay them on a one off basis. They werent in BIOLASE employees.
To try and during those two days in the mentoring over 45 days.
By adding.
A number of Dennis onto our staff over the last year and a half. We now have four dentists that are full time BIOLASE employees and the.
The ability to reduce cost around the training is very significant there and so this will be 2023 will be our first year.
Full year with having all four onboard so I'm excited about that.
Okay.
And you said that the conversion rate.
Has increased.
Did you say, 60% yes.
Yes, so just going back in history, a little bit when we started this back in 2019 it was around 30%.
And 2021, 40% 2022, we almost got to 50% and in 2023, we're projecting 60% and what I said was so far this year, we're above that.
Okay, Great and then.
Since I have been following aesthetic laser for a long time.
I think it's interesting that you are looking at fractional skin resurfacing.
What has been the reception so far.
The hand piece how much extra.
Extra does that cost above and beyond youre awarded lease.
System.
Maybe just talk a little bit about the reception the pricing behind that in for the dentists that have purchased it how are they how are they pricing at.
So the the.
The reception has been good we've had a lot of our U S. Dentist really asking for this fractional hand piece, which has been available in Europe for a number of years.
For quite a while we werent going to introduces into the U S market until we received FDA clearance and really rolled it out in the right way with the right training and so forth and that started in March. So this month literally we began shipping the hand pieces.
We're developing the training program now or came in up with American Academy of facial aesthetics to help train we have a large training for.
Kind of a train the trainer scheduled for early May.
And then our first nationally that scheduled in August so all thats going extremely well.
In terms of the pricing I never want to get too much into pricing, but it is.
The hand pieces are from a revenue standpoint, as opposed to the cost of a waterlase.
Not insignificant I would say meaningful.
I don't want to give you the price.
Just from a competitive standpoint.
I see for the for now for the most part it's.
Dennis that had been looking to do this they already have a waterlase that are purchased in the hand piece, but I will tell you that we are starting to get some inquiries from non water laser owners.
The hand piece and obviously they would have to buy a waterlase with it to make it work and so that's very interesting is I think a tremendous amount of upside there as well in terms of.
How much it.
Cost I mean anywhere from FERC 500.
And in terms of what the.
What the Dennis is charging or even more than that.
I think from a dentist standpoint, the nice thing is that while this provides great.
Clinical efficacy and resolved to the patient and does it in a really noninvasive.
Almost pain free way.
It's it doesn't last forever. So it's a recurring revenue stream for them as well just like botox. They may have patients coming in on a three months six months or one year.
Type schedule and.
Kind of like an annuity for them, which is really nice.
Okay, Great and then last question is on.
John Edge Endo.
How is that going how is that business going with them.
Yes, still going well.
We were off to a great start in 2022, we expect to sell more units to them in 2023, and so I would say so far so good.
Proceeding as planned.
Okay. Thanks, I'll hop back in the queue I appreciate it.
Thanks Anthony.
Once again, if you have a question or comment. Please press star one on your Touchtone phone. The next question is coming from Ed Woo with <unk> capital. Please proceed.
Yes, congratulations on the quarter. My question is do you have any idea of how much.
The percentage of sales of Waterlase is finance have you seen any issues with.
Getting financing in the wake of what happened with Silicon Valley Bank and all of these midsize and smaller banks.
So in the U S, where we sell directly to Dennis first is international and what we go through distributors in the U S. Well over 90% of Waterlase purchases are financed through a third party and for the dentists as either a credit union their bank or third party financing company.
We have not seen any from a financing standpoint really any pullback there.
It really is dependent on the individual Dennis.
Credit.
Credit rating credit score credit history, and so forth than it is.
Macro banking I think when I mentioned SPD is really more market sentiment around the dentists, whether or not they wanted to pull the trigger yet or not.
That.
Some negative impact in Q1, but I haven't seen any.
Any reduction in the amount of Dennis who can get qualified for the credits.
Great and then tying to that obviously with the higher interest rates, which is probably going to factor into higher.
Payment costs, our leasing costs have you seen any pullback from dentist, saying, hey, wait a minute.
The lease rates are much higher because we're no longer in a zero interest rate environment. So the monthly cost of the higher than expected have you seen any of any pullback from that.
Not really because.
There is so much benefit from a revenue enhancement standpoint, when you purchase a waterlase for most Dennis.
Before the interest rate hikes of let's go back year year, and a half ago.
The.
Dennis was.
On average pain.
1000, $1100 a month for their waterlase, if they financed it because most of them finance it over 84 month period.
Waterlase last for long time, so that's easily done.
Now that number is closer to 13% $2500. So is two to $300 extra month, which is less than one procedure. So the calculus that we show and what we're showing in the trial program and instead, we're well over 50%. So far this year is that two procedures a week that you are.
That you're doing that you weren't doing before and getting a 200% ROI. The fact that the payments went from 1000 <unk> hundred because the interest rate spike hasnt impacted that calculation.
<unk>.
Great. Thanks for answering my questions and I wish you guys. Good luck. Thank you. Thank you.
Yet.
We've reached the end of the question and answer session and I will now turn the call over to management for closing remarks.
I want to thank everyone for being on today's call also I want to thank the BIOLASE team for their continued commitment and dedication to delivering an elevated standard of care and safety through laser dentistry, Jennifer and I look forward to reviewing our first quarter results. Our next call in May. Thank you operator, and thank you everyone for your interest in BIOLASE. This concludes.
Our call have a great day. Thank you.
Thank you. This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.