BSML, Inc. Announces Revenue and Net Income for its First Quarter Ended March 31, 2007

WALNUT CREEK, Calif., May 21  /PRNewswire-FirstCall/ -- BSML, Inc., formerly known as BriteSmile, Inc., (BSML.pk) today announced its financial results for its fiscal first quarter ended March 31, 2007.

Revenues from continuing operations increased approximately 19%, to $7.2 million in the first quarter of 2007 compared to $6.0 million in the first quarter of 2006.  Center revenues, primarily related to performance of our whitening procedures, increased by $0.8 million, with sales of our products through other channels, primarily the QVC network, contributing the balance of the increase in revenue. The Company's first quarter 2007 net loss from continuing operations was $0.4 million in 2007, compared with $9.3 million in the first quarter of 2006.  Included in the net loss from continuing operations for 2006 are non-recurring items of $6.5 million, including a $5.0 million loss associated with early extinguishment of debt, $0.5 million in debt discount amortization on now-retired debt and $1.0 million in other non- recurring expenses. The Company does not expect similar non-recurring expenses of this magnitude in 2007 or future periods.

The Company had no income from discontinued operations in the first quarter of 2007.  However, the Company's sale of its Associated Centers business in first quarter of 2006 resulted in income from discontinued operations of $21.0 million.  This figure was subsequently revised to reflect additional legal expenses, net of tax, of $1.7 million, resulting in income from discontinued operations for fiscal 2006, net of tax, of $19.3 million.

The Company's net loss in the first quarter of 2007 was $0.4 million, compared with net income of $11.7 million in 2006.  The Company's loss per common share was $0.04 in the first quarter of 2007, compared with net income per common share of $1.11 in the first quarter of 2006.  The Company's net loss per common share from continuing operations in the first quarter of 2007 was $0.04 compared with a net loss from continuing operations per common share of $0.88 in the first quarter of 2006.

EBITDA (earnings before interest, tax, depreciation, and amortization) for the first quarter ended March 31, 2007 was a loss of $0.1 million, compared to a loss of $2.6 million in the first quarter 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 comparison of first quarter 2007 financial results with the same period last year demonstrates the positive impact on center revenue of the reduced procedure pricing that was introduced in April 2006. In addition, we're also very pleased to see a significant increase in our revenues from distribution of our BriteSmile To Go(TM) product through the QVC network. Our efforts going forward are focused on optimizing marketing and controlling operating expenses in our center business."

The Company finished its 2007 fiscal first quarter with $3.5 million in cash, compared with $4.7 million at December 30, 2006.  The decrease is 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, or earnings before interest, taxes, depreciation and amortization, 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 of: (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, and (iii) the loss on the early extinguishment of debt of $5.0 million reported in the first quarter of 2006. 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; and, Phoenix, AZ. 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.

              Condensed Consolidated Statement of Operations
                                Unaudited
                 (In thousands, except per share amounts)

                                                                 13 Weeks
                                                   13 Weeks        Ended
                                                     Ended     April 1, 2006
                                                 March 31, 2007  (restated)
  Revenues                                           $7,161       $6,035

  Operating costs and expenses:
    Operating and occupancy costs                     3,644        3,338
    Selling, general and administrative expenses      3,666        5,336
    Depreciation and amortization                       362          107
      Total operating costs and expenses              7,672        8,781
  Loss from operations                                (511)      (2,746)

  Amortization of discount on debt                       --        (530)
  Loss on early extinguishment of debt                   --      (5,039)
  Other income / (expense), net                         141        (964)
  Loss from continuing operations before income
   tax provision                                      (370)      (9,279)
  Income tax provision                                   18           35
  Net loss from continuing operations                 (388)      (9,314)

  Discontinued operations
  Income from discontinued operations, net of tax
   (thirteen weeks ended April 1, 2006, includes
   gain from sale of business of $15,794, net of
   tax, and gain on settlement of litigation of
   $5,202, net of tax)                                   --       20,996
  Net income (loss) attributable to common
   shareholders                                      $(388)      $11,682

  Basic and diluted net loss per common share
   from continuing operations                       $(0.04)      $(0.88)
  Basic net income (loss) per common share
   from discontinued operations                         $--        $1.99
  Diluted net income (loss) per common share
   from discontinued operations                         $--        $1.99
  Basic net income (loss) per common share          $(0.04)        $1.11
  Diluted net income (loss) per common share        $(0.04)        $1.11

  Shares used in computing net loss per common
   share from continuing operations,
   basic and diluted                             10,717,614   10,549,130
  Shares used in computing net income per
   common share from discontinued operations,
   basic                                         10,717,614   10,549,130
  Shares used in computing net income (loss)
   per common share from discontinued operations,
   diluted                                       10,717,614   10,555,130
  Shares used in computing net income (loss)
   per common share, basic                       10,717,614   10,549,130
  Shares used in computing net income (loss)
   per common share, diluted                     10,717,614   10,555,130


                   Condensed Consolidated Balance Sheet
                                Unaudited
                              (In thousands)

                                                   March 31,    December 30,
                                                      2007          2006
                                                  (Unaudited)
  ASSETS
  Current assets
    Cash and cash equivalents                        $3,468       $4,734
    Trade accounts receivable, net                      445          213
    Inventories                                       1,084        1,273
    Investments, restricted as to use                 3,666        3,625
    Prepaid expenses and other current assets           273          243
      Total current assets                            8,936       10,088

  Property and equipment, net                         3,896        4,258
  Investments, restricted as to use                   2,681        2,761
  Other assets                                          969          958
  Total assets                                      $16,482      $18,065

  LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
  Current liabilities:
    Accounts payable                                 $1,287       $1,770
    Accrued liabilities                               6,195        6,776
    Accrual for Center closures                         266          170
    Gift certificate liability                        1,456        1,775
    Deferred revenue                                  2,819        2,590
      Total current liabilities                      12,023       13,081

  Long term liabilities:
    Accrual for Center closures                         134          258
    Deferred revenue                                  1,159        1,352
    Other long term liabilities                         841          892
      Total long term liabilities                     2,134        2,502
  Total liabilities                                  14,157       15,583

  Shareholders' equity (deficit):
  Common stock, $0.001 par value, 50,000,000 shares
   authorized, 10,744,281 and 10,664,281 shares
   issued and outstanding at March 31, 2007 and
   December 30, 2006, respectively                       39           39

  Additional paid-in capital                        174,134      173,903
  Accumulated deficit                             (171,848)    (171,460)
  Total shareholders' equity (deficit)                2,325        2,482
  Total liabilities and shareholders' equity
   (deficit)                                        $16,482      $18,065


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

                                                                 13 Weeks
                                                    13 Weeks       Ended
                                                      Ended    April 1, 2006
                                                 March 31, 2007  (restated)
  Net income (loss)                                  $(388)      $11,682

  Deduct: income from discontinued operations            --     (20,996)
  Add: income tax provision                              18           35
  Add (deduct): other income / (expense), net         (141)          964
  Add: loss on early extinguishment of debt              --        5,039
  Add: amortization of discount on debt                  --          530
  Add: depreciation and amortization                    362          107

  EBITDA                                             $(149)     $(2,639)


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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