BriteSmile Corrects Second Quarter 2005 Balance Sheet

WALNUT CREEK, Calif., Aug. 17  /PRNewswire-FirstCall/ -- BriteSmile, Inc. (NASDAQ:BSML), a leading international provider of state-of-the-art teeth- whitening systems, today released corrected balance sheet entries for the second quarter of 2005 ended June 25.

Certain line items on the Company's balance sheet dated as of the end of the second fiscal quarter, June 25, 2005, as previously reported in a press release dated August 15, 2005, have been corrected.  The corrected balance sheet is attached.

Also attached for convenience is a copy of the results of operations of the Company for the 13 and 26 weeks ended June 25, 2005, and the table Reconciling Non-GAAP Financial Measures to Net Loss.  No changes have been made to the previously reported results of operations other than item heading clarifications.  The EBITDA Reconciliation Table previously included in the August 15, 2005 release has been corrected to delete an irrelevant line item.

BriteSmile has developed and manufactures the most advanced teeth whitening technology available, as well as manages state-of-the-art BriteSmile Professional Teeth Whitening Centers. BriteSmile Centers are currently operating in Beverly Hills, Irvine, Palo Alto, Walnut Creek, San Francisco and La Jolla, CA; Houston, TX; Denver, CO; Boston, MA; Boca Raton, FL; Atlanta, GA; New York, NY; Chicago and Schaumburg, IL; and, Phoenix, AZ. In addition to BriteSmile Centers, the Company has established more than 5,000 Associated Centers. Of the BriteSmile Associated Centers, more than 2000 are located outside of the United States, in more than 75 countries.  For more information about BriteSmile's procedure, 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 such as the Company's ability to continue past revenue and EBITDA growth, its ability to establish Associated Centers and Professional Teeth Whitening Centers, the ability of those Centers to attract clients, the development and introduction of new products, acceptance of those new products in the marketplace, development of new strategic and marketing relationships in the United States and internationally, and the Company's continued ability to secure financing to support its operations. Readers are referred to the documents filed by BriteSmile with the Securities and Exchange Commission, specifically the Company's most recent reports on Forms 10-K and 10-Q, that identify important risk factors which could cause actual results to differ from those contained in the forward-looking statements. BriteSmile and its affiliates disclaim any intent or obligation to update these forward-looking statements.

Non-GAAP Financial Information

BriteSmile 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. BriteSmile's management believes this non-GAAP measure is useful to investors because of: (i) the significant amount of non-cash depreciation and amortization incurred by the Company in its operating results ($1.6 million in the second quarter of 2005 and $1.7 million in the second quarter of 2004), (ii) the non-cash amortization of the discount on debt of $0.7 million in the second quarter of 2005 and $0.1 million in the second quarter of 2004, and (iii) the mark-to-market loss related to the convertible notes of $0.1 million in the second quarter of 2005.  Investors are cautioned that the items excluded from EBITDA are significant components in understanding and assessing BriteSmile's financial performance.

                             BRITESMILE, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DATA
                               (unaudited)
                   ($ in thousands, except share data)

  ($ in thousands, except       13 weeks    13 weeks    26 weeks    26 weeks
   share data)                   ended       ended       ended       ended
                                June 25,    June 26,    June 25,    June 26,
                                  2005        2004        2005        2004
  REVENUES:
    Center whitening fees, net   $4,149      $4,903      $8,581      $9,244
    Associated Center
     whitening fees, net          4,521       5,955       8,683      10,962
    Product and other revenue     1,399       1,873       2,752       4,295
      Total revenues, net        10,069      12,731      20,016      24,501

  OPERATING COSTS AND EXPENSES:
    Operating and occupancy
     costs                        5,060       4,068       9,261       8,174
    Selling, general and
     administrative expenses      8,815       7,414      17,874      14,256
    Research and development
     expenses                        74         143         149         315
      Total Operating Costs and
       Expenses, excluding
       depreciation,
       amortization              13,949      11,625      27,284      22,745

    Operating income (loss)
     before depreciation and
     amortization (EBITDA)       (3,880)      1,106      (7,268)      1,756

    Depreciation and
     amortization                 1,618       1,677       3,209       3,350
      Loss from operations       (5,498)       (571)    (10,477)     (1,594)

    Amortization of discount
     on debt                       (663)        (65)     (1,300)       (128)
    Gain (loss) on mark-to-
     market of convertible
     note instruments               (99)         --       2,631          --
    Other income/(expense),
     net                           (517)        (93)       (725)       (192)
      Loss before income tax
       provision                 (6,777)       (729)     (9,871)     (1,914)

  INCOME TAX                         25          --         121          57

  Net loss                      $(6,802)      $(729)    $(9,992)    $(1,971)

  BASIC AND DILUTED NET LOSS
   PER SHARE                     $(0.65)     $(0.07)     $(0.95)     $(0.19)

  WEIGHTED AVERAGE SHARES -
   BASIC AND DILUTED         10,548,621  10,309,478  10,519,416  10,250,885


    Reconciliation of Non-GAAP financial measures - EBITDA to Net Loss
                               (unaudited)
                             ($ in thousands)

                                  13 weeks  13 weeks  26 weeks  26 weeks
                                   ended    ended      ended     ended
                                  June 25, June 26,   June 25,  June 26,
                                    2005     2004       2005      2004

  Net loss                       $(6,802)   $(729)   $(9,992)   $(1,971)
  Add back:  Other income/
   (expense), net                    517       93        725        192
  Add back:  Amortization
   of debt discount                  663       65      1,300        128
  Add back:  Income tax
   expense                            25       --        121         57
  Add back:  Depreciation and
   amortization                    1,618    1,677      3,209      3,350
  (Gain)/loss from
   mark-to-market of
   financial instruments
   related to convertible debt        99       --     (2,631)        --
      EBITDA                      (3,880)   1,106     (7,268)     1,756


                             BRITESMILE, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                               (unaudited)
                   ($ in thousands, except share data)

                                                 June 25,       December 25,
                                                   2005             2004
                                  ASSETS

  CURRENT ASSETS:
    Cash and cash equivalents                     $9,956           $18,880
    Trade accounts receivable, net of
     allowances of $469 and
     $448, respectively                            2,262             2,118
    Inventories                                    1,067             1,635
    Prepaid expenses and other                       674               704
    Total current assets                          13,959            23,337

  PROPERTY AND EQUIPMENT, net                     12,865            12,426

  OTHER ASSETS                                     2,945             3,843

  INTANGIBLES, net                                 5,142             5,469

  TOTAL ASSETS                                   $34,911           $45,075

                   LIABILITIES AND SHAREHOLDERS' EQUITY

  CURRENT LIABILITIES:
    Accounts payable                              $5,638            $5,182
    Accrued liabilities                            6,915             6,867
    Deferred revenue                               1,756             1,049
    Current portion of long-term debt and
     capital lease obligations                     1,816             2,137

       Total current liabilities                  16,125            15,235

  LONG-TERM LIABILITIES:
    Long-term debt and capital lease
     obligations                                  12,265            15,650
    Other long term liabilities                    1,848             1,608

      Total long-term liabilities                 14,113            17,258

      Total liabilities                           30,238            32,493

  STOCKHOLDERS' EQUITY:
    Common stock, $.001 par value;
     50,000,000 shares authorized;
     10,522,646 and 9,525,265
     shares issued and outstanding,
    respectively                                      38                38
    Additional paid-in capital                   172,684           170,601
    Accumulated deficit                         (168,049)         (158,057)
      Total shareholders' equity                   4,673            12,582

  TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY     $34,911           $45,075


DATASOURCE: BriteSmile, Inc.



CONTACT:  investors, Kenneth A. Czaja, CFO, [phone], or media,

Chris Edwards, [phone], both of BriteSmile, Inc.



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

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