BSML, Inc. Announces Revenue and Net Income for Its Third Quarter and First Nine Months Ended September 29, 2007

WALNUT CREEK, Calif., Nov. 13  /PRNewswire-FirstCall/ -- BSML, Inc., formerly known as BriteSmile, Inc., (OTC:BSML) (BULLETIN BOARD: BSML)  today announced its financial results for its fiscal third quarter and first nine months ended September 29, 2007.

For the Company's third quarter ended September 29, 2007, revenues decreased approximately 15%, to $5.7 million, compared to $6.7 million in the third quarter of 2006.  Center revenues, primarily related to performance of our whitening procedures, decreased by $1.1 million, while sales of our teeth whitening products through other channels, primarily the QVC network, remained essentially flat. The Company's net loss from continuing operations in the third quarter of 2007 was $0.7 million, or $0.07 per share, compared to $3.8 million, or $0.36 per share, in the third quarter of 2006.

The Company recorded a net loss from discontinued operations of $0.9 million for the third quarter ended September 29, 2007. This charge reflects the settlement of a claim involving Discus Dental, Inc., the purchaser of the Company's Associated Centers business in March 2006 and Longlife Health, Ltd., the Company's former distributor in the United Kingdom. The settlement amount will be paid from funds previously escrowed under the terms of the 2006 sale of the Company's Associated Centers business to Discus.

For the Company's first nine months ended September 29, 2007, revenues decreased approximately 4%, to $19.6 million, compared to $20.5 million in the first nine months of 2006.  The Company's net loss from continuing operations in the first nine months of 2007 was $1.8 million, or $0.17 per share, compared to a net loss from continuing operations of $13.9 million, or $1.31 per share, in the first nine months of 2006.  Included in the net loss from continuing operations for the first nine months of 2006 are non-recurring items totaling $5.2 million. The Company does not expect similar non-recurring expenses of this magnitude in 2007 or future periods.

For the nine months ended September 29, 2007, the Company has recorded a loss from discontinued operations of $0.9 million in regards to the settlement with Discus and Longlife described above.  For the corresponding nine months of 2006, the Company's sale of its Associated Centers business resulted in income from discontinued operations of $19.3 million, or $1.83 per share.

The Company's net loss in the first nine months of 2007 was $2.7 million, or $0.25 per share, compared with net income of $5.4 million, or $0.52 per share, in the first nine months of 2006.

The Company's EBITDA (defined as earnings before interest, tax, depreciation, amortization and large non-recurring gains and losses including income from discontinued operations) for the third quarter ended September 29, 2007, was a loss of $0.6 million, compared to a loss of $3.8 million in the third quarter of 2006. For the first nine months ended September 29, 2007, the Company's EBITDA was a loss of $1.3 million, compared to a loss of $7.9 million in the first nine months of 2006.  EBITDA is a non-GAAP financial measure. More information regarding this non-GAAP financial measure, and a reconciliation of EBITDA to net loss, the most directly comparable GAAP measure, is provided below.

Dr. Julian Feneley, BSML's President and Chief Executive Officer, commented on the Company's results as follows:  "The year over year comparison of center whitening revenues reflects the current difficult trading conditions for professional teeth whitening products and services.  We are focusing our efforts on procedure revenue optimization and cost control. In addition, during Q3 we expanded our product offering through the launch of our private label version of Remedent, Inc.'s GlamSmile(TM) veneer system under the name BriteVeneers One-Step(TM).  We are very excited about this new opportunity, which will allow us to leverage our BriteSmile Professional Whitening Centers to deliver uniquely affordable 'perfect smiles' to our customers."

The Company finished its 2007 fiscal first nine months with $1.9 million in unrestricted cash, compared with $4.7 million at December 30, 2006.  The decrease is almost entirely due to operating uses, including payments to vendors and for income taxes and the redemption of outstanding gift certificates.

Non-GAAP Financial Information

BSML provides non-GAAP EBITDA, defined by the Company as earnings before interest, taxes, depreciation, amortization and large non-recurring gains and losses as additional information for its operating results. These measures are not in accordance with or an alternative for financial measures calculated in accordance with generally accepted accounting principles, including net income or loss, the most directly comparable GAAP measure, and may be different from non-GAAP measures used by other companies. BSML's management believes this non-GAAP measure is useful to investors because it adjusts for large non-cash or non-recurring items, including: (i) the significant amount of non-cash depreciation and amortization historically incurred by the Company in its operating results, (ii) the non-cash amortization of the discount on debt of $0.5 million in the first quarter of 2006, (iii) the loss on the early extinguishment of debt of $5.0 million reported in the first quarter of 2006, (iv) the non-recurring $1.3 million gain on settlement of a legal claim we recognized in the second quarter of 2006 and (v) the non-recurring $0.9 million loss on settlement of a legal claim we recognized in the third quarter of 2007. Our calculation of EBITDA further excludes results from discontinued operations.  Investors are cautioned that the items excluded from EBITDA are significant components in understanding and assessing BSML's financial performance.

BSML, Inc., formerly known as BriteSmile, Inc., markets the most advanced teeth whitening technology available and manages state-of-the-art BriteSmile Professional Teeth Whitening Centers. BSML Spa Centers are currently operating in Beverly Hills, Irvine, Palo Alto, Walnut Creek, San Francisco and La Jolla, CA; Houston, TX; Denver, CO; Boston, MA; McLean, VA; Atlanta, GA; New York, NY; Chicago and Schaumburg, IL.  For more information about BSML's procedures, call 1-800-BRITESMILE or visit the Company's Website at http://www.britesmile.com/.

This release, other than historical information, consists of forward-looking statements that involve risks and uncertainties.  Readers are referred to the documents filed by BSML with the Securities and Exchange Commission, specifically the Company's most recent reports on Forms 10-K, 10-K/A and 10-Q, that identify important risk factors which could cause actual results to differ from those contained in the forward-looking statements. BSML and its affiliates disclaim any intent or obligation to update these forward-looking statements.

  Summary Unaudited Financial Results Follow



                                         13 Weeks               39 Weeks
                             13 Weeks     Ended     39 Weeks     Ended
                               Ended     Sept. 30,    Ended     Sept. 30,
                             Sept. 29,     2006     Sept. 29,      2006
                               2007     (Restated)    2007     (Restated)
  Revenues                     $5,681     $6,711     $19,620     $20,506

  Operating costs
   and expenses:
    Operating and
     occupancy costs            3,457      3,714      10,686      10,715
    Selling, general
     and administrative
     expenses                   2,843      6,816      10,202      17,674
    Depreciation and
     amortization                 356        415       1,079       1,235
      Total operating
       costs and
       expenses                 6,656     10,945      21,967      29,624
  Loss from operations           (975)    (4,234)     (2,347)     (9,118)

  Amortization of
   discount on debt                 -          -           -        (530)
  Loss on early
   extinguishment of
   debt                             -          -           -      (5,039)
  Gain on settlement
   of legal claim                   -          -           -       1,257
  Other income /
   (expense), net                 279        185         596        (660)
  Loss from continuing
   operations before
   income tax provision          (696)    (4,049)     (1,751)    (14,090)
  Income tax provision             20       (271)         57        (225)
  Net loss from
   continuing operations         (716)    (3,778)     (1,808)    (13,865)

  Discontinued
   operations (Note 5):
    Loss on settlement
   of claim                      (857)         -        (857)          -

    Income from
     operation of
     discontinued
     operations                     -          -           -       1,130
    Gain / (loss) on
     settlement of
     litigation                     -     (1,955)          -       3,380
    Gain on sale of
     business                       -          -           -      15,105
    Income / (loss) from
     discontinued
     operations before
     income tax provision        (857)    (1,955)       (857)     19,615
    Income tax benefit
     / expense                      -        267           -        (307)
    Income / (loss) from
     discontinued
     operations                  (857)    (1,688)       (857)     19,308
  Net income (loss)
   attributable to common
   shareholders               $(1,573)  $ (5,466)    $(2,665)     $5,443

  Basic and diluted net
   loss per common share
   from continuing
   operations                  $(0.07)    $(0.36)     $(0.17)     $(1.31)
  Basic net income (loss)
   per common share from
   discontinued
   operations                  $(0.08)    $(0.16)     $(0.08)      $1.83
  Diluted net income
   (loss) per common share
   from discontinued
   operations                  $(0.08)    $(0.16)     $(0.08)      $1.83
  Basic net income (loss)
   per common share            $(0.15)    $(0.52)     $(0.25)      $0.52
  Diluted net income
   (loss) per common share     $(0.15)    $(0.52)     $(0.25)      $0.52

  Shares used in computing
   net loss per common
   share from continuing
   operations, basic
   and diluted                 10,840     10,549      10,768      10,549
  Shares used in computing
   net income (loss) per
   common share from
   discontinued operations,
   basic                       10,840     10,549      10,768      10,549
  Shares used in computing
   net income (loss) per
   common share from
   discontinued operations,
   diluted                     10,840     10,549      10,768      10,566
  Shares used in computing
   net income (loss) per
   common share, basic         10,840     10,549      10,768      10,549
  Shares used in computing
   net income (loss) per
   common share, diluted       10,840     10,549      10,768      10,566



                   Condensed Consolidated Balance Sheet
                                Unaudited
                              (In thousands)

                                                September 29,
                                                     2007       December 30,
                                                 (Unaudited)        2006
  ASSETS
  Current assets:
    Cash and cash equivalents                       $1,907         $4,734
    Trade accounts receivable, net                     260            213
    Inventories                                      1,020          1,273
    Investments, restricted as to use                    -          3,625
    Prepaid expenses and other current assets          621            243
      Total current assets                           3,808         10,088

  Property and equipment, net                        3,407          4,258
  Investments, restricted as to use                  4,753          2,761
  Other assets                                         937            958
  Total assets                                    $ 12,905        $18,065

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
    Accounts and notes payable                      $1,109         $1,770
    Accrued liabilities                              5,803          6,776
    Accrual for Center closures                        131            170
    Gift certificate liability                       1,118          1,775
    Deferred revenue                                 2,952          2,590
      Total current liabilities                     11,113         13,081

  Long term liablilities:
    Accrual for Center closures                        220            258
    Deferred revenue                                   713          1,352
    Other long term liabilities                        716            892
      Total long term liabilities                    1,649          2,502
  Total liabilities                                 12,762         15,583

  Shareholders' equity:
  Common stock, $0.001 par value, 50,000,000
   shares authorized, 11,203,713 and 10,664,281
   shares issued and outstanding at September 29,
   2007 and December 30, 2006, respectively             39             39
  Additional paid-in capital                       174,229        173,903
  Accumulated deficit                             (174,125)      (171,460)
  Total shareholders' equity                           143          2,482
  Total liabilities and shareholders' equity      $ 12,905        $18,065



              Reconciation of Net Income / (Loss) to EBITDA
                                Unaudited
                              (In thousands)

                        Thirteen    Thirteen    Thirty-nine   Thirty-nine
                          Weeks       Weeks        Weeks         Weeks
                          Ended       Ended        Ended         Ended
                     September 29, September 30, September 29, September 30,
                          2007        2006         2007          2006
  Net Income             $(1,573)     $(5,466)     $(2,665)      $5,442

  Deduct:Income
   from discontinued
   operations                  -        1,688            -      (19,308)
  Deduct:Gain on
   settlement of 2006
   legal claim                 -            -            -       (1,257)
  Add: Loss on
   settlement of 2007
   legal claim               857            -          857            -

  Add:Income tax
   provision                  20         (271)          57         (225)
  Add / (deduct):
   Other (income) /
   expense, net             (279)        (185)        (596)         660
  Add: Loss on early
   extinguishment of
   debt                        -            -            -        5,039
  Add:Amortization
   of discount on debt         -            -            -          530
  Add:Depreciation
   and amortization          356          415        1,079        1,236

  EBITDA                   $(619)     $(3,819)     $(1,268)     $(7,883)


DATASOURCE: BSML, Inc.



CONTACT:  Investors, Rich De Young, CFO, [phone], or Media, Dr.

Julian Feneley, CEO, [phone], both of BSML, Inc.



Web site:  http://www.britesmile.com/ 

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