Biolase ( BLTI) investors can find a reason to smile again. After a series of painful disappointments, sales of the company's dental lasers have suddenly rocketed under a different management team. Biolase's search for a CEO has come to an end as well; former Cardinal Health ( CAH) executive Jake St. Philip is taking over amidst the turnaround. Shares of Biolase, which had been trading near a multi-year low ahead of the developments, surged 36% to $3.15 on the news Monday. Biolase said it expects to post fourth-quarter sales of more than $20 million -- well ahead of Wall Street's $17.4 million target and a record for the company. Sales were hovering about 35% below that level just one quarter ago. Biolase cited improved relations with its key distributor, Henry Schein ( HSIC), when explaining the rebound. That partnership has been the source of both high hopes and major disappointments in the past. Indeed, Biolase overhauled its management team late last year in an effort to make that deal work, firing CEO Jeffrey Jones. The company said Monday that its CFO, Richard Harrison, has now left the organization as well. It is seeking a replacement. In the meantime, Biolase will rely on St. Philip to steer the company's turnaround. St. Philip spent most of his 25-year health care career at a company now owned by Cardinal, most recently serving as a senior vice president for the multibillion-dollar drug distributor.
St. Philip will take over for Federico Pignatelli, who has been serving as chairman and interim CEO of Biolase since late November. Pignatelli will continue to serve as chairman emeritus and president of the company. "We look forward to Jake helping us make 2008 -- and our long-term future -- very rewarding times for Biolase, its employees and shareholders," Pignatelli stated on Monday. "Our challenge now is to execute."
"I'm long gone," one former short-seller told TheStreet.com on Monday. "But I'm very surprised (by the new developments). I thought this was nearly terminal" last year. Bears raked in huge profits on the company's decline. The stock, once a $20 highflier, has lost more than 85% of its value over the past three years. It has long ranked as a favorite target for short-sellers, although some of them had started covering their positions -- with short interest noticeably slipping -- ahead of this week's gains. Based on Monday's update, at least, the company's management overhaul seems to be paying off. "There is no doubt that some parts of the
Henry Schein relationship weren't working well," Pignatelli admitted during the company's conference call in November. But "we see a significant value in the relationship with Schein, and we're working now together better. "It's all about execution," he continued. "We have a large group of believers in this revolutionary technology, so we are here to stay."