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BIOLASE, Inc. Message Board

  • lookingforatenbagger lookingforatenbagger Jan 9, 2013 5:24 PM Flag

    Biolase sold the last of the 159 WaterLase MDs they bought back from Schein's

    "...the Company has sold the last of the 159 WaterLase® MD Turbo™ laser systems it repurchased earlier this year from Henry Schein, Inc. ( NASDAQ : HSIC ) ("Schein").

    The Company had initially planned to use a portion of the purchased Schein inventory as a source of parts to service its large installed base of MD Turbo laser systems. However, due to the high demand for the equipment, all of the re-purchased laser systems were ultimately sold. BIOLASE repurchased the units from Schein at a very advantageous price under a February 2012 agreement and sold them throughout the last three quarters at margins consistent with its other laser products."

    As I recall they bought ~440 units from Schein in April 2012.for ~$6M or ~$14K per unit. And now sold them with margins "consistent with its other laser products." Call it $25K per unit.Let's guess they sold 200 in 4Q12. That's $5M of their sales right there. Of course they no longer have old units to sell at 50% off. Will this hurt or help their volume?

    Put the Kool Aid down and step away from the glass.

    Sentiment: Sell

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    • On further reading I find the original analysis was incorrect. Biolase gave the number of Shein units as 440, but actually only purchased 159 of them. The purchase price was correct. Revising the per unit cost to $6M/159 ~ $37K/unit. Adding margin they are at least $50K per unit. If they sold 1/2 of them (80) in 4Q12, $4M was added to their gross or 25% of their 4Q12 sales. Of course they no longer have these "old units" to sell at discount.

      Sentiment: Strong Sell

    • Hi LFTB,
      Note that every system they sell generates ongoing sales in the form of consumables and warranty services and gets them a new customer for possible future sales. Pignatelli is doing a good job building a customer base. I like his actions.

      Best Regards,

      Simon

 
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