BriteSmile Reports Third Quarter 2005 Results

Name	Symbol	Market	Type
Invesco BulletShares 2021 Municipal Bond	NASDAQ:BSML	NASDAQ	Exchange Traded Fund

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	0.00	0.00%	25.195	19.77	27.52				0	00:00:00

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WALNUT CREEK, Calif., Nov. 8 /PRNewswire-FirstCall/ -- BriteSmile, Inc. (NasdaqSC: BSML), a leading international provider of state-of-the-art teeth- whitening systems, today released results for the third quarter ended September 24, 2005. Total revenue for the third quarter was $9.8 million, or 18% below the third quarter of 2004. The net loss was $(4.5) million or $(0.42) per share in the third quarter, compared with $(2.5) million or $(0.24) per share in the third quarter of 2004. Earnings before interest, tax, depreciation, and amortization (EBITDA) was a loss of $(3.1) million in the third quarter 2005. This compares to an EBITDA loss of $(0.6) million in the third quarter of last year. Information regarding a reconciliation of EBITDA, which is a non-GAAP financial measure, to net loss, the most comparable GAAP measure, follows. Other key results for the third quarter were: -- Center whitening fees of $4.2 million were 4% below last year. -- Associated Center whitening fees of $4.2 million were 26% lower than the third quarter of 2004. -- Product sales and other revenue of $1.4 million were 24% below last year. -- A new BriteSmile whitening center opened in August, at Tysons Galleria in McLean, Virginia. -- In October 2005, we closed our Boca Raton center. "Revenue and EBITDA performance continued to be disappointing in the third quarter," said Julian Feneley, BriteSmile's President. "As a result, we are taking additional expense reduction and other working capital actions to help conserve cash, and are continuing to pursue marketing tactics that optimize our advertising spend." Nasdaq Notice: On November 4, 2005, the company received a Nasdaq Staff Deficiency Letter from the Nasdaq Listing Qualifications Department indicating that for the previous 30 days, the bid price for the company's common stock had closed below the minimum $1.00 per share requirement for continued inclusion under Marketplace Rule 4310(c)(4). In accordance with Marketplace Rule 4310(c)(8)(D), the company was provided 180 calendar days, or until May 3, 2006, to regain compliance. In order to regain compliance, the company must demonstrate a closing bid price for its common stock of $1.00 per share or more for a minimum of 10 consecutive business days. The Nasdaq Staff Deficiency Letter further provided that if compliance with the $1.00 minimum bid price requirement cannot be demonstrated by the company by May 3, 2006, the Staff will grant the company an additional 180 calendar days to regain compliance, if at that time, the company meets The Nasdaq SmallCap Market initial listing requirements as set forth in Marketplace Rule 4310(c), except for the $1.00 minimum bid price requirement. BriteSmile has developed and markets 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; McLean, VA; 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 improve its past revenue and EBITDA performance and generate sufficient cash and/or secure sufficient financing to sustain its operations, 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, and the development of new strategic and marketing relationships in the United States and internationally. 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 ($1.7 million in the third quarter of 2005 and $1.7 million in the third quarter of 2004), (ii) the non-cash amortization of the discount on debt of $0.7 million in the third quarter of 2005 and $0.1 million in the third quarter of 2004, and (iii) the mark-to-market gain related to the convertible notes of $1.2 million in the third quarter of 2005. Investors are cautioned that the items excluded from EBITDA are significant components in understanding and assessing BriteSmile's financial performance. BRITESMILE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DATA (unaudited) ($ in thousands, except share data) 13 Weeks 13 Weeks 39 Weeks 39 Weeks Ended Ended Ended Ended Sept 24, Sept 25, Sept 24, Sept 25, 2005 2004 2005 2004 REVENUES: Center whitening fees, net $4,178 $4,346 $12,759 $13,590 Associated Center whitening fees, net 4,168 5,646 12,851 16,608 Product and other revenue 1,440 1,884 4,192 6,179 Total revenues, net 9,786 11,876 29,802 36,377 OPERATING COSTS AND EXPENSES: Operating and occupancy costs 4,492 4,491 13,753 12,665 Selling, general and administrative expenses 8,275 7,845 26,149 22,101 Research and development expenses 72 110 221 425 Total Operating Costs and Expenses, excluding depreciation and amortization 12,839 12,446 40,123 35,191 Operating income (loss) before depreciation and amortization (EBITDA) (3,053) (570) (10,321) 1,186 Depreciation and amortization 1,662 1,692 4,872 5,042 Loss from operations (4,715) (2,262) (15,193) (3,856) Amortization of discount on debt (652) (66) (1,952) (194) Gain (loss) on mark-to-market of convertible note instruments 1,163 -- 3,793 -- Other income/(expense), net (251) (148) (974) (340) Loss before income tax provision (4,455) (2,476) (14,326) (4,390) INCOME TAX 30 32 151 89 Net loss $(4,485) $(2,508) $(14,477) $(4,479) BASIC AND DILUTED NET LOSS PER SHARE $(0.42) $(0.24) $(1.37) $(0.44) WEIGHTED AVERAGE SHARES -- BASIC AND DILUTED 10,549,130 10,329,190 10,529,321 10,275,854 Reconciliation of Non-GAAP financial measures - EBITDA to Net Loss (unaudited) ($ in thousands) 13 Weeks 13 Weeks 39 Weeks 39 Weeks Ended Ended Ended Ended Sept 24, Sept 25, Sept 24, Sept 25, 2005 2004 2005 2004 Net loss $(4,485) $(2,508) $(14,477) $(4,479) Add back: Other income/ (expense), net 251 148 974 340 Add back: Amortization of debt discount 652 66 1,952 194 Add back: Income tax expense 30 32 151 89 Add back: Depreciation and amortization 1,662 1,692 4,872 5,042 (Gain)/loss from mark-to-market of financial instruments related to convertible debt (1,163) -- (3,793) -- EBITDA $(3,053) $(570) $(10,321) $1,186 BRITESMILE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) ($ in thousands, except share data) September 24, December 25, 2005 2004 ASSETS CURRENT ASSETS: Cash and cash equivalents $5,503 $18,880 Trade accounts receivable, net of allowances of $496 and $448, respectively 1,924 2,118 Account receivable from related party 190 -- Inventories 892 1,635 Prepaid expenses and other 563 704 Total current assets 9,072 23,337 PROPERTY AND EQUIPMENT, net 11,793 12,426 OTHER ASSETS 3,302 3,843 INTANGIBLES, net 4,980 5,469 TOTAL ASSETS $29,147 $45,075 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $3,261 $5,182 Accrued liabilities 8,256 6,867 Deferred revenue 1,900 1,049 Current portion of long-term debt and capital lease obligations 2,850 2,137 Total current liabilities 16,267 15,235 LONG-TERM LIABILITIES: Long-term debt and capital lease obligations 10,286 15,650 Other long term liabilities 1,760 1,608 Total long-term liabilities 12,046 17,258 Total liabilities 28,313 32,493 STOCKHOLDERS' EQUITY: Common stock, $.001 par value; 50,000,000 shares authorized; 10,549,130 and 10,345,974 shares issued and outstanding, respectively 38 38 Additional paid-in capital 173,330 170,601 Accumulated deficit (172,534) (158,057) Total shareholders' equity 834 12,582 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $29,147 $45,075 DATASOURCE: BriteSmile, Inc. CONTACT: INVESTORS: Kenneth A. Czaja, CFO, +1-925-941-6260, or MEDIA: Chris Edwards, +1-925-279-2926, both of BriteSmile, Inc. Web site: http://www.britesmile.com/

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BSML Invesco BulletShares 2021 Municipal Bond