BIOLASE, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Supplementary Balance Sheet Information

Supplementary Balance Sheet Information

12 Months Ended

Dec. 31, 2014

NOTE 3 — SUPPLEMENTARY BALANCE SHEET INFORMATION

	December 31,
ACCOUNTS RECEIVABLE (in thousands):	2014		2013
Components of accounts receivable, net of allowances, are as follows:
Trade	$	8,887	$	10,960
Royalties		88		82
Other		29		85
Total receivables, net	$	9,004	$	11,127

Accounts receivable is net of allowances for doubtful accounts of approximately $1.7 million and $573,000 and sales returns of approximately $110,000 and $110,000 at December 31, 2014 and 2013, respectively.

	December 31,
INVENTORY, NET (in thousands):	2014		2013
Components of inventory, net of allowances, are as follows:
Raw materials	$	2,857	$	3,094
Work-in-process		1,348		1,727
Finished goods		8,303		6,557
Inventory, net	$	12,508	$	11,378

Inventory is net of a provision for excess and obsolete inventory totaling approximately $2.4 million and $2.8 million at December 31, 2014 and 2013, respectively.

	December 31,
PROPERTY, PLANT, AND EQUIPMENT, NET (in thousands):	2014			2013
Components of property, plant, and equipment, net of depreciation, are as follows:
Building	$	226		$	256
Leasehold improvements		1,197			1,207
Equipment and computers		4,948			6,078
Furniture and fixtures		413			1,049
Construction in progress		4			8
		6,788			8,598
Accumulated depreciation and amortization		(5,669	)		(6,971	)
		1,119			1,627
Land		176			199
Property, plant, and equipment, net	$	1,295		$	1,826

Accrued liabilities are comprised of the following:

	December 31,
ACCRUED LIABILITIES (in thousands):	2014		2013
Components of accrued liabilities are as follows:
Payroll and benefits	$	1,905	$	1,898
Warranty accrual, current portion		930		1,096
Taxes		139		338
Accrued professional services		1,581		911
Accrued insurance premium		450		428
Other		183		326
Accrued liabilities	$	5,188	$	4,997

Deferred revenue is comprised of the following:

	December 31,
DEFERRED REVENUE (in thousands):	2014		2013
Components of deferred revenue are as follows:
Undelivered elements (training, installation, product and support services)	$	952	$	1,823
Extended warranty contracts		1,542		1,642
Total Deferred Revenue		2,494		3,465
Less Long-Term amounts:
Extended warranty contracts		—		1
Total Deferred Revenue - Long Term		—		1
Total Deferred Revenue - Current	$	2,494	$	3,464

In connection with its initiative to measure and improve customer satisfaction, which was initiated during the Third Quarter 2014, the Company performed a review of its training service policies and procedures and determined that substantially all of the training service for new customers was used within nine months of the related sale transaction. Accordingly, the Company changed the period over which deferred training service revenue was being recognized from an estimated period of 24 months to nine months.

The Company accounted for this change as a change in accounting estimate which, pursuant to U.S. GAAP, was accounted for on a prospective basis effective July 1, 2014. The change resulted in a reduction of deferred revenue and a corresponding recognition of revenue totaling approximately $708,000 for quarter ended September 30, 2014. Revenue recognized for training is included in product and services revenue in the accompanying consolidated statements of operations.