Sientra, Inc. (NASDAQ: SIEN) (“Sientra” or the “Company”), a
diversified medical aesthetics company, today announced its
financial results for the first quarter ended March 31, 2020.
Jeff Nugent, Sientra’s Chairman and Chief
Executive Officer, said, “Despite the challenging environment
brought on by the COVID-19 pandemic, we were able maintain robust
breast products sales throughout the quarter, with the impact of
COVID-19 being felt most strongly in the final weeks. Our
miraDry segment, with its distinct geographical mix and heavy
end-of-quarter capital sales category model, was more significantly
impacted as the COVID-19 pandemic first began to be felt earlier in
the quarter in the Asia Pacific region followed by the United
States at the critical end of quarter period.”
”While moratoriums on elective procedures have
continued to impact sales into the second quarter, Sientra remains
open for business. We have continued to ship product and have
enacted a field support strategy which leverages the flexible
nature of our commercial infrastructure, our virtual capabilities,
and our ability to quickly adapt to changing market conditions to
assist our customers to accelerate individual practice recovery. We
have also acted to best position Sientra for long term success by
prioritizing our core breast products business, while refocusing
our miraDry business on high-margin bioTip utilization. These
strategic decisions were made in addition to steps taken to
carefully manage our operating expenses and our cash balance,
ensuring that we are well-positioned as elective procedures begin
to resume.”
Mr. Nugent continued, “I am also pleased to
announce that we have reached agreement with certain of our lenders
to restructure our existing debt facilities. Under the
agreement we will have paid down $25 million of our term loan,
gained access to up to $30 million in term loans, and reduced our
revenue and cash covenants. This new debt structure, combined with
our other debt facilities and well-capitalized balance sheet,
provide us with enhanced latitude to invest in our business for
continued growth.”
Mr. Nugent concluded, “Despite these uncertain
times, I remain confident in Sientra’s ability to continue to drive
significant market share gains in the breast products segment and
to emerge in a position of increased strength. As an organization,
Sientra has been committed to providing a unique portfolio of safe
and effective products that help our medical professionals deliver
life changing benefits to their patients around the world and
despite these difficult times, we are unwavering in this
commitment.”
First Quarter 2020 Financial
Review
Total net sales for the first quarter 2020 were
$16.9 million, a decrease of 4% compared to total net sales of
$17.6 million for the same period in 2019.
Net sales for the Breast Products segment
totaled $12.5 million in the first quarter 2020, a 28% increase
compared to $9.8 million for the same period in 2019.
Net sales for the miraDry segment totaled $4.5
million in the first quarter 2020, a 43% decrease compared to $7.8
million for the same period in 2019.
Gross profit for the first quarter 2020 was
$10.1 million, or 59.9% of sales, compared to gross profit of $11.1
million, or 63.1% of sales, for the same period in 2019.
Operating expenses for the first quarter 2020
were $37.1 million, compared to $36.9 million of operating expenses
for the same period in 2019. Excluding a $6.4 million non-cash
impairment of certain intangibles related to miraDry and
restructuring charges totaling $1.7 million, operating expenses in
the first quarter of 2020 decreased $8.0 million, or 22%, compared
to the same period in 2019.
Net loss for the first quarter 2020 was ($28.6)
million, or ($0.57) per share, compared to a net loss of ($26.5)
million, or ($0.91) per share, for the same period in 2019.
On a non-GAAP basis, the Company reported an
adjusted EBITDA loss of ($15.5) million for the first quarter
2020, compared to a loss of ($21.1) million for the same
period in 2019.
Net cash and cash equivalents as of March 31,
2020 were $112 million, compared to $88 million as of December 31,
2019.
2020 Net Sales Outlook
Sientra withdrew its previously announced annual guidance for
2020 on April 7, 2020. Due to the uncertain scope and duration of
the COVID-19 pandemic, and unknown timing of global recovery and
economic normalization, the company remains unable to accurately
estimate the impact on its operations and financial results.
Conference Call
Sientra will hold a conference call today, May
11, 2020 at 5:00 pm 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
3594402. A live webcast of the conference call will be available on
the Investor Relations section of the Company's website at
www.sientra.com. The webcast will be archived on the website
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 SientraHeadquartered 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.
Sientra uses its investor relations website
to publish important information about the Company, including
information that may be deemed material to investors. Financial and
other information about Sientra is routinely posted and
is accessible on the Company’s investor relations website
at www.sientra.com.
(*) Data on file
Forward-Looking StatementsThis
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 impact of the
COVID-19 pandemic on the Company and its operations, the Company’s
possible or assumed future results of operations, including
descriptions of the Company’s revenues, profitability, outlook and
overall business strategy. Such statements are subject to risks and
uncertainties, including the scope and duration of the COVID-19
pandemic, the Company’s ability to recapture delayed procedures
resulting from the COVID-19 pandemic, the 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, and the Company’s ability to manage its
operating expenses and cash balance. 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,’’ ‘‘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. You
are cautioned not to place undue reliance on these forward-looking
statements, and such 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. Actual results may differ
from those set forth in this press release due to the risks and
uncertainties inherent in the Company’s business.
ContactInvestor Relations805-679-8885
|
|
Sientra, Inc |
Condensed Consolidated Statements of
Operations |
(In thousands, except per share and share
amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2020 |
|
|
2019 |
|
Net sales |
$ |
16,932 |
|
|
$ |
17,552 |
|
Cost of goods sold |
|
6,792 |
|
|
|
6,474 |
|
Gross profit |
|
10,140 |
|
|
|
11,078 |
|
Operating expenses: |
|
|
|
|
|
|
|
Sales and marketing |
|
16,763 |
|
|
|
20,401 |
|
Research and development |
|
2,908 |
|
|
|
3,054 |
|
General and administrative |
|
9,304 |
|
|
|
13,474 |
|
Restructuring |
|
1,739 |
|
|
|
— |
|
Impairment |
|
6,432 |
|
|
|
— |
|
Total operating expenses |
|
37,146 |
|
|
|
36,929 |
|
Loss from operations |
|
(27,006 |
) |
|
|
(25,851 |
) |
Other income (expense), net: |
|
|
|
|
|
|
|
Interest income |
|
180 |
|
|
|
304 |
|
Interest expense |
|
(1,623 |
) |
|
|
(952 |
) |
Other income (expense), net |
|
(163 |
) |
|
|
15 |
|
Total other income (expense), net |
|
(1,606 |
) |
|
|
(633 |
) |
Loss before income taxes |
|
(28,612 |
) |
|
|
(26,484 |
) |
Income tax |
|
— |
|
|
|
— |
|
Net loss |
$ |
(28,612 |
) |
|
$ |
(26,484 |
) |
Basic and diluted net loss per
share attributable to common stockholders |
$ |
(0.57 |
) |
|
$ |
(0.91 |
) |
Weighted average outstanding
common shares used for net loss per share attributable to common
stockholders: |
|
|
|
|
|
|
|
Basic and diluted |
|
49,916,412 |
|
|
|
29,099,382 |
|
|
|
|
|
|
|
|
|
Sientra, Inc |
Condensed Consolidated Balance Sheets |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
2020 |
|
|
2019 |
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
112,062 |
|
|
$ |
87,608 |
|
Accounts receivable, net |
|
25,425 |
|
|
|
27,548 |
|
Inventories, net |
|
42,118 |
|
|
|
39,612 |
|
Prepaid expenses and other current assets |
|
2,264 |
|
|
|
2,489 |
|
Total current assets |
|
181,869 |
|
|
|
157,257 |
|
Property and equipment, net |
|
12,344 |
|
|
|
12,314 |
|
Goodwill |
|
9,202 |
|
|
|
9,202 |
|
Other intangible assets, net |
|
10,383 |
|
|
|
17,390 |
|
Other assets |
|
9,048 |
|
|
|
8,241 |
|
Total assets |
$ |
222,846 |
|
|
$ |
204,404 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Current portion of long-term debt |
$ |
25,000 |
|
|
$ |
6,508 |
|
Accounts payable |
|
5,835 |
|
|
|
9,352 |
|
Accrued and other current liabilities |
|
26,402 |
|
|
|
32,551 |
|
Customer deposits |
|
15,227 |
|
|
|
13,943 |
|
Sales return liability |
|
8,707 |
|
|
|
8,116 |
|
Total current liabilities |
|
81,171 |
|
|
|
70,470 |
|
Long-term debt, net of current portion |
|
55,918 |
|
|
|
38,248 |
|
Derivative liability |
|
16,230 |
|
|
|
— |
|
Deferred and contingent consideration |
|
5,285 |
|
|
|
5,177 |
|
Warranty reserve and other long-term liabilities |
|
9,375 |
|
|
|
8,627 |
|
Total liabilities |
|
167,979 |
|
|
|
122,522 |
|
Stockholders’ equity: |
|
|
|
|
|
|
|
Total stockholders’ equity |
|
54,867 |
|
|
|
81,882 |
|
Total liabilities and stockholders’ equity |
$ |
222,846 |
|
|
$ |
204,404 |
|
|
|
|
|
|
|
|
|
Sientra, Inc |
|
Condensed Consolidated Statements of Cash
Flows |
|
(In thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2020 |
|
|
2019 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
Net loss |
$ |
(28,612 |
) |
|
$ |
(26,484 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
Impairment |
|
6,432 |
|
|
|
— |
|
Depreciation and amortization |
|
1,228 |
|
|
|
831 |
|
Provision for doubtful accounts |
|
357 |
|
|
|
342 |
|
Provision for warranties |
|
236 |
|
|
|
273 |
|
Provision for inventory |
|
1,081 |
|
|
|
289 |
|
Fair value adjustments of liabilities held at fair value |
|
91 |
|
|
|
98 |
|
Stock-based compensation expense |
|
2,133 |
|
|
|
3,700 |
|
Payments of contingent consideration liability in excess of
acquisition-date fair value |
|
— |
|
|
|
(630 |
) |
Other non-cash adjustments |
|
397 |
|
|
|
56 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
|
1,766 |
|
|
|
(2,583 |
) |
Inventories |
|
(3,720 |
) |
|
|
(3,373 |
) |
Prepaid expenses, other current assets and other assets |
|
(587 |
) |
|
|
396 |
|
Accounts payable, accrueds, and other liabilities |
|
(9,867 |
) |
|
|
(75 |
) |
Customer deposits |
|
1,284 |
|
|
|
956 |
|
Sales return liability |
|
592 |
|
|
|
1,968 |
|
Legal settlement payable |
|
— |
|
|
|
(410 |
) |
Net cash used in operating activities |
|
(27,189 |
) |
|
|
(24,646 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
|
Purchase of property and equipment |
|
(1,206 |
) |
|
|
(610 |
) |
Net cash used in investing activities |
|
(1,206 |
) |
|
|
(610 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
Proceeds from option exercises and employee stock purchase
plan |
|
534 |
|
|
|
789 |
|
Net proceeds from issuance of common stock |
|
264 |
|
|
|
— |
|
Tax payments related to shares withheld for vested restricted stock units (RSUs) |
|
(1,201 |
) |
|
|
(2,725 |
) |
Gross borrowings under the Revolving Loan |
|
— |
|
|
|
4,183 |
|
Repayment of the Revolving Loan |
|
(6,508 |
) |
|
|
(1,565 |
) |
Net proceeds from issuance of the Convertible Note |
|
60,000 |
|
|
|
— |
|
Payments of contingent consideration up to acquisition-date fair
value |
|
— |
|
|
|
(370 |
) |
Deferred financing costs |
|
(240 |
) |
|
|
— |
|
Net cash provided by financing activities |
|
52,849 |
|
|
|
312 |
|
Net increase in cash, cash equivalents and restricted cash |
|
24,454 |
|
|
|
(24,944 |
) |
Cash, cash equivalents and restricted cash at: |
|
|
|
|
|
|
|
Beginning of period |
|
87,951 |
|
|
|
87,242 |
|
End of period |
$ |
112,405 |
|
|
$ |
62,298 |
|
|
|
|
|
|
|
|
|
Reconciliation of cash, cash equivalents, and restricted cash to
the consolidated balance sheets |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
112,062 |
|
|
$ |
61,955 |
|
Restricted cash included in other assets |
|
343 |
|
|
|
343 |
|
Total cash, cash equivalents and restricted cash |
$ |
112,405 |
|
|
$ |
62,298 |
|
|
|
|
|
|
|
|
|
Sientra, Inc. |
|
Reconciliation of Net Loss to Non-GAAP Adjusted
EBITDA |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
Dollars, in thousands |
2020 |
|
|
2019 |
|
Net loss, as reported |
$ |
(28,612 |
) |
|
$ |
(26,484 |
) |
Adjustments to net loss: |
|
|
|
|
|
|
|
Interest (income) expense and other, net |
|
1,606 |
|
|
|
633 |
|
Depreciation and amortization |
|
1,228 |
|
|
|
831 |
|
Accretion in fair value adjustments to contingent
consideration |
|
— |
|
|
|
185 |
|
Stock-based compensation |
|
2,133 |
|
|
|
3,700 |
|
Restructuring |
|
1,739 |
|
|
|
— |
|
Impairment |
|
6,432 |
|
|
|
— |
|
Total adjustments to net loss |
|
13,138 |
|
|
|
5,349 |
|
Adjusted EBITDA |
$ |
(15,474 |
) |
|
$ |
(21,135 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
As a Percentage of Revenue** |
2020 |
|
|
2019 |
|
Net loss, as reported |
|
(169.0 |
%) |
|
|
(150.9 |
%) |
Adjustments to net loss: |
|
|
|
|
|
|
|
Interest (income) expense and other, net |
|
9.5 |
% |
|
|
3.6 |
% |
Depreciation and amortization |
|
7.3 |
% |
|
|
4.7 |
% |
Accretion in fair value adjustments to contingent
consideration |
|
0 |
% |
|
|
1.1 |
% |
Stock-based compensation |
|
12.6 |
% |
|
|
21.1 |
% |
Restructuring |
|
10.3 |
% |
|
|
0 |
% |
Impairment |
|
38 |
% |
|
|
0 |
% |
Total adjustments to net loss |
|
77.6 |
% |
|
|
30.5 |
% |
Adjusted EBITDA |
|
(91.4 |
%) |
|
|
(120.4 |
%) |
|
|
|
|
|
|
|
|
** Adjustments may not add to the total figure due to rounding |
|
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