Biolase (NSDQ:BIOL) shares plunged today after the medical device company said it’s headed for the auction block, having seen its 3rd-quarter losses widen by a whopping 639% and sacked its sales and marketing heads after badly missing Wall Street’s earnings expectations for the quarter.
Biolase said it’s interviewing investment banks to lead the search for potential acquirers "to explore possible M&A transactions with the goal of maximizing shareholder value," according to a press release.
"The company is currently valued at approximately 1x revenue, and we believe that certain of its assets could be worth significantly more. With developmental pre-launch business opportunities in ophthalmology, otolaryngology, orthopedics, podiatry, pain management, and veterinary therapeutic laser products, Biolase has more opportunities than we can pursue on our own. Selling 1 or more of them could generate the funds that could give us the working capital we need for our core businesses," chairman & CEO Federico Pignatelli said in prepared remarks.
Biolase reported losses of $4.0 million, or -13¢ per share, on sales of $12.3 million for the 3 months ended Sept. 30, for a 638.9% increase in losses on a 10.4% sales decline. Pignatelli blamed the poor results in part on the sales and marketing team.
"We believe that the company’s results were primarily due to inadequate execution within our sales force and subpar marketing efforts," he said. "On the management side, 1 of the key changes that we have made was to replace our vice presidents of both sales and marketing with an industry veteran with significant experience and a successful track record in sales and marketing for both dental lasers and digital imaging systems, Brian Jaffe."
Jaffe, who replaces sales VP William Brown and marketing VP Orlando Rodrigues, was recruited from Biolase rival Millennium Dental Technologies, where he was vice president of global sales, Pignatelli said.
Pignatelli said he’ll decline any options offered as compensation, taking only his $1 annual salary.
"Lastly, given the current unsatisfactory performance of the business and stock valuation, I have decided to refuse any board-proposed option compensation this year. The board has traditionally awarded me equity compensation and, if offered, I will not accept it and remain at my symbolic $1 annual salary," he said.
BIOL shares were trading at $1.59 apiece today as of about 12:10 p.m., down 14.6%.
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