Continued improvement in non-GAAP OPEX, adjusted EBITDA, and free cash flow performance demonstrating clear pathway to profitability
Doubled total addressable market in
First Quarter 2023 Financial and Business Highlights
- Net sales of
$22.6 million , representing growth of 5.4% over the first quarter of 2022, driven by strong growth in reconstruction. - Improved key operational metrics for non-GAAP OPEX (+25%), adjusted EBITDA (+54%) and free cash flow (+62%) compared to first quarter of 2022.
- Continued market share gains, adding approximately 270 new accounts, comprised of approximately 150 augmentation and 120 reconstruction accounts.
- Began commercial launch of Viality™, the first and only enhanced viability fat transfer system with over 80% fat retention clinically demonstrated at 6-months.1
- Entered distribution agreement with Aziyo Biologics to promote SimpliDerm®, an Acellular Dermal Matrix (ADM), creating the industry’s most compelling reconstruction portfolio.
- Released interim 6-year data of our breast implant post-approval study, providing further clinical evidence of the compelling safety profile of Sientra’s implants.2
“The Aesthetics Society meeting in
“As we expand our portfolio of products and strategic partnerships, we remain committed to delivering the highest quality solutions to our customers. Looking ahead to the remainder of the year, we are looking forward to sharing our plans for the pace of
“We are excited about the opportunities that lie ahead. We believe that Sientra’s plastic surgery platform has the momentum to drive positive change in the market,” concluded
________________________
1 Shridharani, S.M., Calobrace, M.B., Dajles, D. and
2 Calobrace, M.B., Schwartz, M.R., Kaufman, D.L., Gordon, A.E., Cohen, R, Harrington, J., Dajles, D., Zeidler, K., “Safety and Efficacy of the Sientra Round and Shaped Breast Implants with Cohesive Silicone Gel: Results of the US Post-Approval Study at 6 Years” [Manuscript submitted for publication]
First Quarter 2023 Financial Results
- Total net sales were
$22.6 million , an increase of 5.4% compared to total net sales of$21.4 million for the same period in 2022. - Gross profit for the first quarter 2023 was
$12.1 million , or 54% of sales, compared to gross profit of$12.8 million , or 60% of sales, for the same period in 2022. Excluding non-cash adjustments of depreciation and amortization, first quarter 2023 gross profit was$13.5 million , or 60% of sales, compared to gross profit of$13.3 million , or 62% of sales, for the same period in 2022. - Operating expenses for the first quarter 2023 of
$22.7 million compared to$28.9 million for the same period in 2022. - Loss from continuing operations for the first quarter 2023 was
$12.9 million , or$(1.06) per share, compared to$18.0 million , or$(2.89) per share, for the same period in 2022. - On a non-GAAP basis, adjusted EBITDA loss for the first quarter 2023 was
$5.4 million as compared to an adjusted EBITDA loss of$11.8 million for the same period in 2022. - Net cash and cash equivalents as of
March 31, 2023 , were$19.4 million , compared to$26.1 million atDecember 31, 2022 .
Full Year 2023 Guidance
For full year 2023, the Company continues to expect to achieve total net sales of
Conference Call
Use of Non-GAAP Financial Measures
There are limitations in using these non-GAAP financial measures because they are not prepared in accordance with US GAAP and may be different from non-GAAP financial measures used by other companies. These non-GAAP financial measures should not be considered in isolation or as a substitute for US GAAP financial measures. Investors and potential investors should consider non-GAAP financial measures only in conjunction with Sientra’s financial statements prepared in accordance with US GAAP and the reconciliations of the non-GAAP financial measures provided in the schedules below.
About
Headquartered in
(*) Data on file
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, based on management’s current assumptions and expectations of future events and trends, which affect or may affect the Company’s business, strategy, operations or financial performance, and actual results may differ materially from those expressed or implied in such statements due to numerous risks and uncertainties. Forward-looking statements are made only as of the date of this release. The words ‘‘believe,’’ ‘‘may,’’ ‘‘might,’’ ‘‘could,’’ ‘‘will,’’ ‘‘aim,’’ ‘‘estimate,’’ ‘‘continue, ‘‘anticipate,’’ ‘‘intend,’’ ‘‘expect,’’ ‘‘plan,’’ ‘‘position,” or the negative of those terms, and similar expressions that convey uncertainty of future events or outcomes are intended to identify estimates, projections and other forward-looking statements. Forward-looking statements may include information concerning the Company’s unaudited financial information for the first quarter ended
Investor Relations Contact
aman.patel@westwicke.com
Consolidated Statements of Operations | ||||||||
(In thousands, except per share and share amounts) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
2023 | 2022 | |||||||
Net sales | $ | 22,557 | $ | 21,398 | ||||
Cost of goods sold | 10,410 | 8,553 | ||||||
Gross profit | 12,147 | 12,845 | ||||||
Operating expenses: | ||||||||
Sales and marketing | 10,152 | 15,588 | ||||||
Research and development | 2,708 | 3,144 | ||||||
General and administrative | 9,851 | 10,208 | ||||||
Total operating expenses | 22,711 | 28,940 | ||||||
Loss from operations | (10,564 | ) | (16,095 | ) | ||||
Other (expense) income, net: | ||||||||
Interest income | 106 | 2 | ||||||
Interest expense | (2,377 | ) | (1,897 | ) | ||||
Other (expense) income, net | (57 | ) | 5 | |||||
Total other (expense) income, net | (2,328 | ) | (1,890 | ) | ||||
Loss from continuing operations before income taxes | (12,892 | ) | (17,985 | ) | ||||
Income tax expense | — | — | ||||||
Loss from continuing operations | (12,892 | ) | (17,985 | ) | ||||
Loss from discontinued operations, net of income taxes | — | (56 | ) | |||||
Net loss | $ | (12,892 | ) | $ | (18,041 | ) | ||
Basic and diluted net loss per share attributable to common stockholders | ||||||||
Continuing operations | $ | (1.06 | ) | $ | (2.89 | ) | ||
Discontinued operations | — | (0.00 | ) | |||||
Basic and diluted net loss per share | $ | (1.06 | ) | $ | (2.89 | ) | ||
Weighted average outstanding common shares used for net loss per share attributable to common stockholders: | ||||||||
Basic and diluted | 12,197,294 | 6,233,407 |
Condensed Consolidated Balance Sheets | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
2023 | 2022 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 19,356 | $ | 26,071 | ||||
Accounts receivable, net | 35,546 | 36,892 | ||||||
Inventories, net | 40,641 | 42,692 | ||||||
Prepaid expenses and other current assets | 1,389 | 2,094 | ||||||
Total current assets | 96,932 | 107,749 | ||||||
Property and equipment, net | 14,658 | 14,941 | ||||||
9,202 | 9,202 | |||||||
Other intangible assets, net | 24,813 | 25,676 | ||||||
Right of use assets, net | 6,590 | 7,004 | ||||||
Other assets | 849 | 849 | ||||||
Total assets | $ | 153,044 | $ | 165,421 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | 5,480 | 6,818 | ||||||
Accrued and other current liabilities | 17,710 | 22,599 | ||||||
Customer deposits | 49,846 | 45,161 | ||||||
Sales return liability | 15,458 | 15,773 | ||||||
Total current liabilities | 88,494 | 90,351 | ||||||
Long-term debt | 56,583 | 55,406 | ||||||
Derivative liability | - | 880 | ||||||
Deferred and contingent consideration | 2,851 | 2,791 | ||||||
Warranty reserve | 8,266 | 8,186 | ||||||
Lease liabilities | 4,987 | 5,518 | ||||||
Other liabilities | 2,346 | 2,698 | ||||||
Total liabilities | 163,527 | 165,830 | ||||||
Stockholders’ deficit: | ||||||||
Total stockholders’ deficit | (10,483 | ) | (409 | ) | ||||
Total liabilities and stockholders’ deficit | $ | 153,044 | $ | 165,421 |
Condensed Consolidated Statements of Cash Flows | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
2023 | 2022 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (12,892 | ) | $ | (18,041 | ) | ||
Loss from discontinued operations, net of income taxes | — | (56 | ) | |||||
Loss from continuing operations, net of income taxes | (12,892 | ) | (17,985 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 1,842 | 1,744 | ||||||
Provision for doubtful accounts | 707 | 315 | ||||||
Provision for warranties | 248 | 291 | ||||||
Provision for inventory | 213 | (56 | ) | |||||
Fair value adjustments of other liabilities held at fair value | 66 | — | ||||||
Amortization of debt discount and issuance costs | 1,285 | 938 | ||||||
Stock-based compensation expense | 1,722 | 2,196 | ||||||
Other non-cash adjustments | — | 60 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 639 | (6,474 | ) | |||||
Inventories | 1,838 | (1,253 | ) | |||||
Prepaid expenses, other current assets and other assets | 705 | 907 | ||||||
Accounts payable, accrued and other liabilities | (7,011 | ) | (1,754 | ) | ||||
Customer deposits | 4,685 | 118 | ||||||
Sales return liability | (315 | ) | 3,094 | |||||
Net cash flow used in operating activities - continuing operations | (6,268 | ) | (17,859 | ) | ||||
Net cash flow used in operating activities - discontinued operations | — | (56 | ) | |||||
Net cash used in operating activities | (6,268 | ) | (17,915 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (618 | ) | (246 | ) | ||||
Net cash flow used in investing activities - continuing operations | (618 | ) | (246 | ) | ||||
Net cash used in investing activities | (618 | ) | (246 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock for employee stock-based plans | — | 329 | ||||||
Proceeds from issuance of common stock under ESPP | 256 | — | ||||||
Tax payments related to shares withheld for vested RSUs | (40 | ) | (255 | ) | ||||
Gross borrowings under the Term Loan | — | 5,000 | ||||||
Gross borrowings under the Revolving Loan | — | 2,774 | ||||||
Repayments of the Revolving Loan | — | (2,552 | ) | |||||
Deferred financing costs | (45 | ) | (25 | ) | ||||
Net cash provided by financing activities | 171 | 5,271 | ||||||
Net decrease in cash, cash equivalents and restricted cash | (6,715 | ) | (12,890 | ) | ||||
Cash, cash equivalents and restricted cash at: | ||||||||
Beginning of period | 26,677 | 52,068 | ||||||
End of period | $ | 19,962 | $ | 39,178 | ||||
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets | ||||||||
Cash and cash equivalents | 19,356 | 38,883 | ||||||
Restricted cash included in other assets | 606 | 295 | ||||||
Total cash, cash equivalents and restricted cash | $ | 19,962 | $ | 39,178 |
Reconciliation of US GAAP Loss from Continuing Operations to Non-GAAP Adjusted EBITDA | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
Dollars, in thousands | 2023 | 2022 | ||||||
Loss from continuing operations, as reported | $ | (12,892 | ) | $ | (17,985 | ) | ||
Adjustments to loss from continuing operations: | ||||||||
Interest (income) expense and other, net | 2,328 | 1,890 | ||||||
Depreciation and amortization | 1,879 | 1,744 | ||||||
Stock-based compensation | 1,722 | 2,196 | ||||||
Provision for doubtful accounts | 707 | 314 | ||||||
807 | — | |||||||
Total adjustments to loss from continuing operations | 7,443 | 6,144 | ||||||
Adjusted EBITDA | $ | (5,449 | ) | $ | (11,841 | ) | ||
Three Months Ended | ||||||||
As a Percentage of Revenue** | 2023 | 2022 | ||||||
Loss from continuing operations, as reported | (57.2 | %) | (84.0 | %) | ||||
Adjustments to loss from continuing operations: | ||||||||
Interest (income) expense and other, net | 10.3 | % | 8.8 | % | ||||
Depreciation and amortization | 8.3 | % | 8.2 | % | ||||
Stock-based compensation | 7.6 | % | 10.3 | % | ||||
Provision for doubtful accounts | 3.1 | % | 1.5 | % | ||||
3.6 | % | 0.0 | % | |||||
Total adjustments to loss from continuing operations | 33.0 | % | 28.7 | % | ||||
Adjusted EBITDA | (24.2 | %) | (55.3 | %) | ||||
** Adjustments may not add to the total figure due to rounding. |
Reconciliation of US GAAP Gross Profit to Adjusted Gross Profit and Adjusted Gross Margin | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
Dollars, in thousands | 2023 | 2022 | ||||||
Net sales | $ | 22,557 | $ | 21,398 | ||||
Cost of goods sold | 10,410 | 8,553 | ||||||
Gross profit | $ | 12,147 | $ | 12,845 | ||||
Gross margin | 53.85 | % | 60.03 | % | ||||
Adjustments to gross profit: | ||||||||
Depreciation and amortization | 1,345 | 461 | ||||||
Total adjustments to gross profit | 1,345 | 461 | ||||||
Adjusted gross profit | $ | 13,492 | $ | 13,306 | ||||
Adjusted gross margin | 59.8 | % | 62.2 | % |
Reconciliation of US GAAP Operating Expenses to Non-GAAP Operating Expenses | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
2023 | 2022 | |||||||
US GAAP operating expenses, as reported | $ | 22,711 | $ | 28,940 | ||||
Adjustments to US GAAP operating expenses: | ||||||||
Depreciation and amortization | 534 | 1,283 | ||||||
Stock-based compensation | 1,722 | 2,196 | ||||||
Provision for doubtful accounts | 707 | 314 | ||||||
807 | — | |||||||
Total adjustments to US GAAP operating expenses | 3,770 | 3,793 | ||||||
Non-GAAP operating expenses | 18,941 | 25,147 |
Reconciliation of US GAAP Operating Expenses to Non-GAAP Operating Expenses | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
2023 | 2022 | |||||||
US GAAP operating expenses, as reported | ||||||||
Sales and marketing | $ | 10,152 | $ | 15,588 | ||||
Research and development | 2,708 | 3,144 | ||||||
General and administrative | 9,851 | 10,208 | ||||||
Total US GAAP operating expenses, as reported | $ | 22,711 | $ | 28,940 | ||||
Adjustments to US GAAP operating expenses: | ||||||||
Sales and marketing | 614 | 744 | ||||||
Research and development | 165 | 305 | ||||||
General and administrative | 2,991 | 2,744 | ||||||
Total adjustments to US GAAP operating expenses | 3,770 | 3,793 | ||||||
Non-GAAP operating expenses | ||||||||
Sales and marketing | 9,538 | 14,844 | ||||||
Research and development | 2,543 | 2,839 | ||||||
General and administrative | 6,860 | 7,464 | ||||||
Total Non-GAAP operating expenses | $ | 18,941 | $ | 25,147 | ||||
Free Cash Flow | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
2023 | 2022 | |||||||
Net cash flow used in operating activities - continuing operations | $ | (6,268 | ) | $ | (17,859 | ) | ||
Purchases of property and equipment | (618 | ) | (246 | ) | ||||
Free cash flow | $ | (6,886 | ) | $ | (18,105 | ) |
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