Sientra, Inc. (NASDAQ: SIEN), a medical aesthetics company
(“Sientra” or the “Company”), announced today its financial results
for the first quarter ended March 31, 2019.
Jeff Nugent, Chairman and Chief Executive
Officer of Sientra, commented, “In the first quarter, we continued
to drive robust growth across both of our segments, achieving net
sales of $17.6 million, a 20% increase compared to the year-ago
period. This quarterly performance represents a solid start towards
our 2019 objectives.”
Mr. Nugent added, “Our Breast Products segment
grew net sales 14% year over year, strong evidence that we continue
to gain market share. I am extremely proud of this accomplishment
considering the media headwinds this category experienced in the
first quarter. We were pleased with the FDA’s announcement last
week confirming that all breast implant options remain safe and
effective and will continue to be available in the United States.
We are also excited about the FDA’s recent approval of our
extra-high profile implants, which we expect to be a key addition
to our breast reconstruction portfolio.”
Mr. Nugent concluded, “miraDry delivered another
strong quarter, in spite of typical capital equipment seasonality,
achieving net sales growth of 27% year over year. We fully scaled
our marketing efforts in the first quarter based on the learnings
from our 2018 pilots and launched our “No Sweat” global campaign.
As our sales and marketing initiatives gain traction and drive
increased brand awareness and market activation, I remain confident
in the miraDry business model and believe the business is
well-positioned to be a significant growth driver for Sientra in
2019 and beyond.”
First Quarter 2019 Financial
Review
Total net sales for the first quarter 2019 were
$17.6 million, an increase of 20% compared to total net sales of
$14.7 million for the same period in 2018.
Net sales for the Breast Products segment
totaled $9.8 million in the first quarter 2019, a 14% increase
compared to $8.5 million for the same period 2018. Breast Products
sales growth was primarily driven by new customer conversion
programs and continued strong performance of the tissue expander
portfolio.
Net sales for the miraDry segment totaled $7.8
million in the first quarter 2019, a 27% increase compared to $6.1
million for the same period 2018. miraDry sales growth was
primarily driven by strong consumables growth internationally.
Gross profit for the first quarter 2019 was
$11.1 million, or 63.1% of sales, compared to gross profit of $8.6
million, or 58.5% of sales, for the same period 2018. Changes in
consolidated gross margin were driven by the overall mix between
Breast Products and miraDry, as well as the geographic and capital
versus consumable mix within miraDry.
Operating expenses for the first quarter 2019
were $36.9 million, compared to $27.5 million of expenses for the
same period 2018. The growth in operating expenses was driven by
increased investments in sales and marketing, higher stock based
compensation, and one-time consulting fees associated with
Sientra’s commercial initiatives.
Net loss for the first quarter 2019 was ($26.5)
million, or ($0.91) per share, compared to a net loss of ($19.4)
million, or ($0.99) per share, for the same period 2018.
On a non-GAAP basis, the Company reported an
adjusted EBITDA loss of ($21.1) million compared to a
loss of ($14.8) million for the same period 2018.
Net cash and cash equivalents as of March 31,
2019 were $62 million, compared to $87 million as of December 31,
2018.
2019 Net Sales Outlook
For 2019, the Company expects net sales in the
range of $79 million to $83 million, representing growth of 16% to
22% year-over-year, compared to net sales of $68.1 million in
2018.
2019 segment net sales outlook:
- Breast Products net sales of $44 to $46 million
- miraDry net sales of $35 to $37 million
Conference Call
Sientra will hold a conference call today, May
8, 2019 at 4:30 p.m. ET to discuss first quarter results.
The dial-in numbers are 844-464-3933 for
domestic callers and 765-507-2612 for international callers. The
conference ID is 4982524. A live webcast of the conference call
will be available on the Investor Relations section of the
Company's website at www.sientra.com.
A replay of the call will be available starting
on May 8, 2019 at 7:30 p.m. ET through May 15, 2019 at 11:59 p.m.
ET. To access the replay, dial 855-859-2056 for domestic
callers and 404-537-3406 for international callers and use the
replay conference ID 4982524. The webcast will be available on the
Investor Relations section of the Company’s website for 30 days
following the completion of the call.
Use of Non-GAAP Financial
Measures
Sientra has supplemented its US GAAP net
income (loss) with a non-GAAP measure of Adjusted EBITDA.
Management believes that this non-GAAP financial measure provides
useful supplemental information to management and investors
regarding the performance of the Company, facilitates a more
meaningful comparison of results for current periods with previous
operating results, and assists management in analyzing future
trends, making strategic and business decisions and establishing
internal budgets and forecasts. A reconciliation of non-GAAP
Adjusted EBITDA to GAAP net income (loss), the most directly
comparable GAAP measure, is provided in the schedule below.
There are limitations in using this non-GAAP
financial measure because it is not prepared in accordance with
GAAP and may be different from non-GAAP financial measures used by
other companies. This non-GAAP financial measure should not be
considered in isolation or as a substitute for 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 GAAP and the
reconciliations of the non-GAAP financial measure provided in the
schedule below.
About Sientra
Headquartered in Santa Barbara, California,
Sientra is a diversified global medical aesthetics company and a
leading partner to aesthetic physicians. The Company offers a suite
of products designed to make a difference in patients' lives by
enhancing their body image, growing their self-esteem, and
restoring their confidence. Sientra has developed a broad portfolio
of products with technologically differentiated characteristics,
supported by independent laboratory testing and strong clinical
trial outcomes. The Company’s Breast Products Segment includes its
OPUS™ breast implants, the first fifth generation breast implants
approved by the FDA for sale in the United States, its
ground-breaking Allox2® breast tissue expander with patented
dual-port and integral drain technology, and BIOCORNEUM® the #1
performing, preferred and recommended scar gel of plastic
surgeons(*). The Company’s miraDry Segment, comprises its miraDry®
system, which is approved for sale in over 40 international
markets, and is the only non-surgical FDA-cleared device for the
permanent reduction of underarm sweat, odor and hair of all
colors.
(*) 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 include, but are
not limited to, statements regarding the Company’s expected net
sales for the year ended December 31, 2019, the expected growth of
the Company’s current customer base and acquisition of new
customers, the Company’s ability to achieve sustainable, long-term
growth across its business segments, and the Company’s ability
drive increased brand awareness and market activation. Such
statements are subject to risks and uncertainties, including the
dependence on conclusion of the review procedures for the quarter
ended March 31, 2019 by the Company’s independent auditors,
positive reaction from plastic surgeons and their patients to
Sientra’s Breast Products, the ability to meet consumer demand, the
acceptance and growth of its miraDry segment. Additional
factors that could cause actual results to differ materially from
those contemplated in this press release can be found in the Risk
Factors section of Sientra’s public filings with the Securities and
Exchange Commission. All statements other than statements of
historical fact are forward-looking statements. The words
‘‘believe,’’ ‘‘may,’’ ‘‘might,’’ ‘‘could,’’ ‘‘will,’’ ‘‘aim,’’
‘‘estimate,’’ ‘‘continue, ‘‘anticipate,’’ ‘‘intend,’’ ‘‘expect,’’
‘‘plan,’’ 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. Estimates, projections and other forward-looking
statements speak only as of the date they were made, and, except to
the extent required by law, the Company undertakes no obligation to
update or review any estimate, projection or forward-looking
statement.
|
|
|
|
Sientra, Inc |
Consolidated Statements of Operations |
(In thousands, except per share and share
amounts) |
(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
March 31, |
|
2019 |
|
2018 |
Net sales |
$ |
17,552 |
|
|
$ |
14,676 |
|
Cost of goods sold |
|
6,474 |
|
|
|
6,097 |
|
Gross profit |
|
11,078 |
|
|
|
8,579 |
|
Operating expenses: |
|
|
|
Sales and marketing |
|
20,401 |
|
|
|
15,256 |
|
Research and development |
|
3,054 |
|
|
|
2,751 |
|
General and administrative |
|
13,474 |
|
|
|
9,499 |
|
Total operating expenses |
|
36,929 |
|
|
|
27,506 |
|
Loss from operations |
|
(25,851 |
) |
|
|
(18,927 |
) |
Other income (expense), net: |
|
|
|
Interest income |
|
304 |
|
|
|
40 |
|
Interest expense |
|
(952 |
) |
|
|
(655 |
) |
Other income (expense), net |
|
15 |
|
|
|
119 |
|
Total other income (expense), net |
|
(633 |
) |
|
|
(496 |
) |
Loss before income taxes |
|
(26,484 |
) |
|
|
(19,423 |
) |
Income tax (benefit) expense |
|
— |
|
|
|
— |
|
Net loss |
$ |
(26,484 |
) |
|
$ |
(19,423 |
) |
Basic and diluted net loss per share attributable to common
stockholders |
$ |
(0.91 |
) |
|
$ |
(0.99 |
) |
Weighted average outstanding common shares used for net loss per
share attributable to common stockholders: |
|
|
|
Basic and diluted |
|
29,099,382 |
|
|
|
19,613,417 |
|
|
|
|
|
|
|
|
|
Sientra, Inc |
Condensed Consolidated Balance Sheets |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
2019 |
|
2018 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
61,955 |
|
$ |
86,899 |
Accounts receivable, net |
|
24,767 |
|
|
22,527 |
Inventories, net |
|
27,242 |
|
|
24,085 |
Prepaid expenses and other current assets |
|
3,411 |
|
|
2,612 |
Total current assets |
|
117,375 |
|
|
136,123 |
Property and equipment, net |
|
3,146 |
|
|
2,536 |
Goodwill |
|
12,507 |
|
|
12,507 |
Other intangible assets, net |
|
15,915 |
|
|
16,495 |
Other assets |
|
22,682 |
|
|
698 |
Total assets |
$ |
171,625 |
|
$ |
168,359 |
Liabilities and Stockholders' Equity |
|
|
|
Current liabilities: |
|
|
|
Current portion of long-term debt |
$ |
12,998 |
|
$ |
6,866 |
Accounts payable |
|
15,109 |
|
|
13,184 |
Accrued and other current liabilities |
|
30,416 |
|
|
27,697 |
Legal settlement payable |
|
— |
|
|
410 |
Customer deposits |
|
10,892 |
|
|
9,936 |
Sales return liability |
|
8,016 |
|
|
6,048 |
Total current liabilities |
|
77,431 |
|
|
64,141 |
Long-term debt, net of current
portion |
|
24,416 |
|
|
27,883 |
Deferred and contingent consideration |
|
6,531 |
|
|
6,481 |
Warranty reserve and other long-term liabilities |
|
21,017 |
|
|
2,976 |
Total liabilities |
|
129,395 |
|
|
101,481 |
Stockholders' equity: |
|
|
|
Total stockholders' equity |
|
42,230 |
|
|
66,878 |
Total liabilities and stockholders' equity |
$ |
171,625 |
|
$ |
168,359 |
|
|
|
|
|
|
|
|
Sientra, Inc |
Condensed Consolidated Statements of Cash
Flows |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
March 31, |
|
2019 |
|
2018 |
Cash flows from operating activities: |
|
|
|
Net loss |
$ |
(26,484 |
) |
|
$ |
(19,423 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
Depreciation and amortization |
|
831 |
|
|
|
880 |
|
Provision for doubtful accounts |
|
342 |
|
|
|
233 |
|
Provision for warranties |
|
273 |
|
|
|
183 |
|
Provision for inventory |
|
289 |
|
|
|
199 |
|
Amortization of acquired inventory step-up |
|
— |
|
|
|
59 |
|
Change in fair value of warrants |
|
(87 |
) |
|
|
(121 |
) |
Change in fair value of contingent consideration |
|
185 |
|
|
|
621 |
|
Change in deferred revenue |
|
384 |
|
|
|
(99 |
) |
Amortization of debt discount and issuance costs |
|
56 |
|
|
|
51 |
|
Stock-based compensation expense |
|
3,700 |
|
|
|
2,548 |
|
Payments of contingent consideration liability in excess of
acquisition-date fair value |
|
(630 |
) |
|
|
— |
|
Changes in assets and liabilities, net of effects from
acquisitions: |
|
|
|
Accounts receivable |
|
(2,583 |
) |
|
|
(5,735 |
) |
Inventories |
|
(3,373 |
) |
|
|
(1,191 |
) |
Prepaid expenses, other current assets and other assets |
|
396 |
|
|
|
(1,009 |
) |
Insurance recovery receivable |
|
— |
|
|
|
(10 |
) |
Accounts payable |
|
1,853 |
|
|
|
4,684 |
|
Accrued and other liabilities |
|
(2,312 |
) |
|
|
948 |
|
Legal settlement payable |
|
(410 |
) |
|
|
— |
|
Customer deposits |
|
956 |
|
|
|
8 |
|
Sales return liability |
|
1,968 |
|
|
|
4,400 |
|
Net cash used in operating activities |
|
(24,646 |
) |
|
|
(12,774 |
) |
Cash flows from investing activities: |
|
|
|
Purchase of property and equipment |
|
(610 |
) |
|
|
(142 |
) |
Net cash used in investing activities |
|
(610 |
) |
|
|
(142 |
) |
Cash flows from financing activities: |
|
|
|
Proceeds from exercise of stock options |
|
106 |
|
|
|
— |
|
Proceeds from issuance of common stock under ESPP |
|
683 |
|
|
|
391 |
|
Tax payments related to shares withheld for vested restricted stock units (RSUs) |
|
(2,725 |
) |
|
|
(1,296 |
) |
Gross borrowings under the Revolving Loan |
|
4,183 |
|
|
|
9,033 |
|
Repayment of the Revolving Loan |
|
(1,565 |
) |
|
|
(5,735 |
) |
Payments of contingent consideration up to acquisition-date fair
value |
|
(370 |
) |
|
|
— |
|
Deferred financing costs |
|
— |
|
|
|
(6 |
) |
Net cash provided by financing activities |
|
312 |
|
|
|
2,387 |
|
Net decrease in cash, cash equivalents and restricted cash |
|
(24,944 |
) |
|
|
(10,529 |
) |
Cash, cash equivalents and restricted cash at: |
|
|
|
Beginning of period |
|
87,242 |
|
|
|
26,931 |
|
End of period |
$ |
62,298 |
|
|
$ |
16,402 |
|
|
|
|
|
Reconciliation of cash, cash equivalents, and restricted cash to
the consolidated balance sheets |
|
|
|
Cash and cash equivalents |
$ |
61,955 |
|
|
$ |
16,059 |
|
Restricted cash included in other assets |
|
343 |
|
|
|
343 |
|
Total cash, cash equivalents and restricted cash |
$ |
62,298 |
|
|
$ |
16,402 |
|
|
|
|
|
|
|
|
|
Sientra, Inc. |
Reconciliation of Net Loss to Non-GAAP Adjusted
EBITDA |
(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
March 31, |
Dollars, in thousands |
2019 |
|
2018 |
Net loss, as reported |
$ |
(26,484 |
) |
|
$ |
(19,423 |
) |
Adjustments to net loss: |
|
|
|
Interest (income) expense and other, net |
|
633 |
|
|
|
496 |
|
Depreciation and amortization |
|
831 |
|
|
|
939 |
|
Accretion in fair value adjustments to contingent
consideration |
|
185 |
|
|
|
621 |
|
Stock-based compensation |
|
3,700 |
|
|
|
2,548 |
|
Total adjustments to net loss |
|
5,349 |
|
|
|
4,604 |
|
Adjusted EBITDA |
$ |
(21,135 |
) |
|
$ |
(14,819 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
March 31, |
As a Percentage of
Revenue** |
2019 |
|
2018 |
Net loss, as reported |
|
(150.9 |
%) |
|
|
(132.3 |
%) |
Adjustments to net loss: |
|
|
|
Interest (income) expense and other, net |
|
3.6 |
% |
|
|
3.4 |
% |
Depreciation and amortization |
|
4.7 |
% |
|
|
6.4 |
% |
Accretion in fair value adjustments to contingent
consideration |
|
1.1 |
% |
|
|
4.2 |
% |
Stock-based compensation |
|
21.1 |
% |
|
|
17.4 |
% |
Total adjustments to net loss |
|
30.5 |
% |
|
|
31.4 |
% |
Adjusted EBITDA |
|
(120.4 |
%) |
|
|
(101.0 |
%) |
|
|
|
|
** Adjustments may not add to the total figure due to rounding |
Investor Contact:
Neil Bhalodkar
805-679-8845
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