Revenue growth of 7.5% driven by continued market share gains in reconstruction and augmentation
Best operational results in company history with 95% and 63% year-over-year improvement in
operating cash flow and adjusted EBITDA respectively
Continued success in advancing products through the FDA regulatory process with clearance
of Allox2 Pro™, the first and only FDA-cleared MRI-compatible tissue expander
Second Quarter 2023 Financial and Business Highlights
- Twelfth consecutive quarter of year-over-year growth, with net sales of
$23.1 million representing growth of 7.5% over the second quarter of 2022. - Continued market share gains, adding 240 new accounts.
- Record free cash flow usage of
$0.7 million , a 95% improvement from$13.2 million in the same period in 2022. - Record adjusted EBITDA loss of
$3.4 million , a 63% improvement from a$9.2 million loss for the same period in 2022. - Obtained FDA 510k clearances for the Company’s novel, patented AlloX2 Pro Tissue Expander and Portfinder™ technologies.
"We experienced our twelfth consecutive quarter of year-over-year revenue growth, driven by continued strong performance in reconstruction. While we also outperformed the overall augmentation segment, we continued to see softness in this channel as patient spending on elective cash pay aesthetics procedures declined.”
“We recently introduced Viality™, the only system designed for enhanced viability fat transfer, and SimpliDerm®, an innovative acellular dermal matrix for soft tissue repair. Those products will leverage our plastic surgery platform, accelerate Sientra’s long-term growth and further our leading position in reconstruction. We are encouraged by the early positive responses we have received from those who have already adopted these products. As we continue to work through the hospital contracting process, we expect to see an increase in sales later this year positioning us well for 2024 and beyond.”
Second Quarter 2023 Financial Results
- Total net sales were
$23.1 million , an increase of 7.5% compared to total net sales of$21.5 million for the same period in 2022. - GAAP gross profit for the second quarter of 2023 was
$12.6 million , or 54.5% of sales, compared to gross profit of$12.7 million , or 59.2% of sales, for the same period in 2022. Non-GAAP gross margin, which excludes non-cash depreciation and amortization expense primarily related to the launch of Viality, was 61.1% of sales for the current period as compared to 60.9% for the prior year period. - Total GAAP loss from continuing operations for the second quarter of 2023 was
$9.5 million , compared to$18.2 million for the same period in 2022, a 48% improvement from the prior year period. - Total GAAP operating expense for the second quarter of 2023 was
$19.7 million , compared to$28.7 million for the prior year period, a decrease of$9 million or 31.2%. - Non-GAAP total operating expenses for the second quarter of 2023 was
$17.5 million , compared to$22.3 million for the same period in 2022, a 21.6% improvement from the prior year period. - On a non-GAAP basis, adjusted EBITDA for the second quarter of 2023 was a
$3.4 million loss, a 63% improvement from a loss of$9.2 million for the same period in 2022. - Net cash and cash equivalents as of
June 30, 2023 , were$18.6 million , compared to$26.1 million onDecember 31, 2022 and$19.4 million atMarch 31, 2023 .
Revised Full Year 2023 Guidance
Due to continued softness in the augmentation market, the Company is revising its full year guidance, expecting total net sales of
With Sientra’s continued improvement in operational efficiencies, the Company is also reducing its GAAP operating spend to a forecasted level of
Conference Call
Use of Non-GAAP Financial Measures
About
Headquartered in
To learn more about
(*) 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 second quarter ended
Investor Relations Contact
aman.patel@westwicke.com
Condensed Consolidated Statements of Operations | ||||||||||||||||
(In thousands, except per share and share amounts) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Net sales | $ | 23,130 | $ | 21,513 | $ | 45,687 | $ | 42,911 | ||||||||
Cost of goods sold | 10,515 | 8,771 | 20,925 | 17,324 | ||||||||||||
Gross profit | 12,615 | 12,742 | 24,762 | 25,587 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 10,005 | 13,664 | 20,157 | 29,252 | ||||||||||||
Research and development | 2,387 | 2,959 | 5,095 | 6,103 | ||||||||||||
General and administrative | 7,334 | 12,057 | 17,185 | 22,265 | ||||||||||||
Total operating expenses | 19,726 | 28,680 | 42,437 | 57,620 | ||||||||||||
Loss from operations | (7,111 | ) | (15,938 | ) | (17,675 | ) | (32,033 | ) | ||||||||
Other (expense) income, net: | ||||||||||||||||
Interest income | 184 | 15 | 290 | 17 | ||||||||||||
Interest expense | (2,506 | ) | (2,323 | ) | (4,883 | ) | (4,220 | ) | ||||||||
Other (expense) income, net | (44 | ) | — | (101 | ) | 5 | ||||||||||
Total other (expense) income, net | (2,366 | ) | (2,308 | ) | (4,694 | ) | (4,198 | ) | ||||||||
Loss from continuing operations before income taxes | (9,477 | ) | (18,246 | ) | (22,369 | ) | (36,231 | ) | ||||||||
Income tax expense | — | — | — | — | ||||||||||||
Loss from continuing operations | (9,477 | ) | (18,246 | ) | (22,369 | ) | (36,231 | ) | ||||||||
Loss from discontinued operations, net of income taxes | — | (58 | ) | — | (114 | ) | ||||||||||
Net loss | $ | (9,477 | ) | $ | (18,304 | ) | $ | (22,369 | ) | $ | (36,345 | ) | ||||
Basic and diluted net loss per share attributable to common stockholders | ||||||||||||||||
Continuing operations | $ | (0.85 | ) | $ | (2.91 | ) | $ | (1.93 | ) | $ | (5.80 | ) | ||||
Discontinued operations | — | (0.01 | ) | — | (0.02 | ) | ||||||||||
Basic and diluted net loss per share | $ | (0.85 | ) | $ | (2.92 | ) | $ | (1.93 | ) | $ | (5.82 | ) | ||||
Weighted average outstanding common shares used for net loss per share attributable to common stockholders: | ||||||||||||||||
Basic and diluted | 11,205,000 | 6,264,954 | 11,589,311 | 6,249,356 |
Condensed Consolidated Balance Sheets | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
2023 | 2022 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 18,637 | $ | 26,071 | ||||
Accounts receivable, net | 31,819 | 36,892 | ||||||
Inventories | 39,408 | 42,692 | ||||||
Prepaid expenses and other current assets | 2,044 | 2,094 | ||||||
Total current assets | 91,908 | 107,749 | ||||||
Property and equipment, net | 13,984 | 14,941 | ||||||
9,202 | 9,202 | |||||||
Other intangible assets, net | 23,881 | 25,676 | ||||||
Right of use assets, net | 6,175 | 7,004 | ||||||
Other assets | 849 | 849 | ||||||
Total assets | $ | 145,999 | $ | 165,421 | ||||
Liabilities and Stockholders’ Deficit | ||||||||
Current liabilities: | ||||||||
Accounts payable | 4,795 | 6,818 | ||||||
Accrued and other current liabilities | 17,209 | 22,599 | ||||||
Customer deposits | 53,718 | 45,161 | ||||||
Sales return liability | 12,756 | 15,773 | ||||||
Total current liabilities | 88,478 | 90,351 | ||||||
Long-term debt | 57,796 | 55,406 | ||||||
Derivative liability | — | 880 | ||||||
Deferred and contingent consideration | 3,073 | 2,791 | ||||||
Warranty reserve | 8,778 | 8,186 | ||||||
Lease liabilities | 4,437 | 5,518 | ||||||
Other liabilities | 2,069 | 2,698 | ||||||
Total liabilities | 164,631 | 165,830 | ||||||
Stockholders’ deficit: | ||||||||
Total stockholders’ deficit | (18,632 | ) | (409 | ) | ||||
Total liabilities and stockholders’ deficit | $ | 145,999 | $ | 165,421 |
Condensed Consolidated Statements of Cash Flows | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Six Months Ended | ||||||||
2023 | 2022 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (22,369 | ) | $ | (36,345 | ) | ||
Loss from discontinued operations, net of income taxes | — | (114 | ) | |||||
Loss from continuing operations, net of income taxes | (22,369 | ) | (36,231 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 3,677 | 3,402 | ||||||
Provision for doubtful accounts | 534 | 505 | ||||||
Provision for warranties | 894 | 525 | ||||||
Provision for inventory | 7 | 404 | ||||||
Fair value adjustments of other liabilities held at fair value | 279 | (88 | ) | |||||
Amortization of debt discount and issuance costs | 2,506 | 1,927 | ||||||
Employee stock-based compensation expense | 3,060 | 4,258 | ||||||
Other non-cash adjustments | — | 70 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 4,539 | (3,698 | ) | |||||
Inventories | 3,277 | (291 | ) | |||||
Prepaid expenses, other current assets and other assets | 50 | 916 | ||||||
Accounts payable, accrued and other liabilities | (8,787 | ) | (4,691 | ) | ||||
Customer deposits | 8,557 | 3,052 | ||||||
Sales return liability | (3,017 | ) | (905 | ) | ||||
Net cash flow used in operating activities - continuing operations | (6,793 | ) | (30,845 | ) | ||||
Net cash flow used in operating activities - discontinued operations | — | (114 | ) | |||||
Net cash used in operating activities | (6,793 | ) | (30,959 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (786 | ) | (813 | ) | ||||
Net cash flow used in investing activities - continuing operations | (786 | ) | (813 | ) | ||||
Net cash used in investing activities | (786 | ) | (813 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock for employee stock-based plans | 253 | 329 | ||||||
Tax payments related to shares withheld for vested RSUs | (47 | ) | (430 | ) | ||||
Gross borrowings under the Term Loan | — | 5,000 | ||||||
Gross borrowings under the Revolving Loan | — | 5,440 | ||||||
Repayments of the Revolving Loan | — | (5,277 | ) | |||||
Deferred financing costs | (61 | ) | (73 | ) | ||||
Net cash provided by financing activities - continuing operations | 145 | 4,989 | ||||||
Net cash provided by financing activities | 145 | 4,989 | ||||||
Net decrease in cash, cash equivalents and restricted cash | (7,434 | ) | (26,783 | ) | ||||
Cash, cash equivalents and restricted cash at: | ||||||||
Beginning of period | 26,677 | 52,068 | ||||||
End of period | $ | 19,243 | $ | 25,285 | ||||
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets | ||||||||
Cash and cash equivalents | 18,637 | 24,990 | ||||||
Restricted cash included in other assets | 606 | 295 | ||||||
Total cash, cash equivalents and restricted cash | $ | 19,243 | $ | 25,285 |
Reconciliation of US GAAP Loss from Continuing Operations to Non-GAAP Adjusted EBITDA | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Loss from continuing operations, as reported | $ | (9,477 | ) | $ | (18,246 | ) | $ | (22,369 | ) | $ | (36,231 | ) | ||||
Adjustments to loss from continuing operations: | ||||||||||||||||
Interest (income) expense and other, net | 2,366 | 2,308 | 4,694 | 4,198 | ||||||||||||
Depreciation and amortization | 1,971 | 1,659 | 3,849 | 3,402 | ||||||||||||
Fair value adjustments to contingent consideration | 90 | (88 | ) | 90 | (88 | ) | ||||||||||
Stock-based compensation | 1,338 | 2,061 | 3,060 | 4,258 | ||||||||||||
Provision for doubtful accounts | (172 | ) | 190 | 534 | 505 | |||||||||||
Severance | 317 | 1,314 | 317 | 1,635 | ||||||||||||
210 | — | 1,016 | — | |||||||||||||
Legal settlement expense | — | 1,600 | — | 1,600 | ||||||||||||
Total adjustments to loss from continuing operations | 6,120 | 9,044 | 13,561 | 15,510 | ||||||||||||
Adjusted EBITDA | $ | (3,357 | ) | $ | (9,202 | ) | $ | (8,808 | ) | $ | (20,721 | ) | ||||
Three Months Ended | Six Months Ended | |||||||||||||||
As a Percentage of Revenue** | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Loss from continuing operations, as reported | (41.0 | %) | (84.8 | %) | (49.0 | %) | (84.4 | %) | ||||||||
Adjustments to loss from continuing operations: | ||||||||||||||||
Interest (income) expense and other, net | 10.2 | % | 10.7 | % | 10.3 | % | 9.8 | % | ||||||||
Depreciation and amortization | 8.5 | % | 7.7 | % | 8.4 | % | 7.9 | % | ||||||||
Fair value adjustments to contingent consideration | 0.4 | % | (0.4 | %) | 0.2 | % | (0.2 | %) | ||||||||
Stock-based compensation | 5.8 | % | 9.6 | % | 6.7 | % | 9.9 | % | ||||||||
Provision for doubtful accounts | (0.7 | %) | 0.9 | % | 1.2 | % | 1.2 | % | ||||||||
Severance | 1.4 | % | 6.1 | % | 0.7 | % | 3.8 | % | ||||||||
0.9 | % | 0.0 | % | 2.2 | % | 0.0 | % | |||||||||
Legal settlement expense | 0.0 | % | 7.4 | % | 0.0 | % | 3.7 | % | ||||||||
Total adjustments to loss from continuing operations | 26.5 | % | 42.0 | % | 29.7 | % | 36.1 | % | ||||||||
Adjusted EBITDA | (14.5 | %) | (42.8 | %) | (19.3 | %) | (48.3 | %) | ||||||||
** 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 | Six Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Net sales | $ | 23,130 | $ | 21,513 | $ | 45,687 | $ | 42,911 | ||||||||
Cost of goods sold | 10,515 | 8,771 | 20,925 | 17,324 | ||||||||||||
Gross profit | $ | 12,615 | $ | 12,742 | $ | 24,762 | $ | 25,587 | ||||||||
Gross margin | 54.5 | % | 59.2 | % | 54.2 | % | 59.6 | % | ||||||||
Adjustments to gross profit | ||||||||||||||||
Depreciation and amortization | 1,523 | 370 | 2,868 | 831 | ||||||||||||
Total adjustments to gross profit | 1,523 | 370 | 2,868 | 831 | ||||||||||||
Adjusted gross profit | $ | 14,138 | $ | 13,112 | $ | 27,630 | $ | 26,418 | ||||||||
Adjusted gross margin | 61.1 | % | 60.9 | % | 60.5 | % | 61.6 | % |
Reconciliation of US GAAP Operating Expenses to Non-GAAP Operating Expenses | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
US GAAP operating expenses, as reported | $ | 19,726 | $ | 28,680 | $ | 42,437 | $ | 57,620 | ||||||||
Adjustments to GAAP operating expenses: | ||||||||||||||||
Depreciation and amortization | 448 | 1,289 | 982 | 2,571 | ||||||||||||
Fair value adjustments to contingent consideration | 90 | (88 | ) | 90 | (88 | ) | ||||||||||
Stock-based compensation | 1,338 | 2,061 | 3,060 | 4,258 | ||||||||||||
Provision for doubtful accounts | (172 | ) | 190 | 534 | 505 | |||||||||||
Severance | 317 | 1,314 | 317 | 1,635 | ||||||||||||
210 | — | 1,016 | — | |||||||||||||
Legal settlement | — | 1,600 | — | 1,600 | ||||||||||||
Total adjustments to GAAP operating expenses | 2,231 | 6,366 | 5,999 | 10,481 | ||||||||||||
Non-GAAP operating expenses | 17,495 | 22,314 | 36,438 | 47,139 |
Reconciliation of US GAAP Operating Expenses to Non-GAAP Operating Expenses | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
US GAAP operating expenses, as reported | ||||||||||||||||
Sales and marketing | $ | 10,005 | $ | 13,664 | $ | 20,157 | $ | 29,252 | ||||||||
Research and development | 2,387 | 2,959 | 5,095 | 6,103 | ||||||||||||
General and administrative | 7,334 | 12,057 | 17,185 | 22,265 | ||||||||||||
Total GAAP operating expenses, as reported | $ | 19,726 | $ | 28,680 | $ | 42,437 | $ | 57,620 | ||||||||
Adjustments to GAAP operating expenses: | ||||||||||||||||
Sales and marketing | 298 | 1,681 | 912 | 2,425 | ||||||||||||
Research and development | 158 | 97 | 323 | 402 | ||||||||||||
General and administrative | 1,775 | 4,588 | 4,764 | 7,654 | ||||||||||||
Total adjustments to GAAP operating expenses | 2,231 | 6,366 | 5,999 | 10,481 | ||||||||||||
Non-GAAP operating expenses | ||||||||||||||||
Sales and marketing | 9,707 | 11,983 | 19,245 | 26,827 | ||||||||||||
Research and development | 2,229 | 2,862 | 4,772 | 5,701 | ||||||||||||
General and administrative | 5,559 | 7,469 | 12,421 | 14,611 | ||||||||||||
Total Non-GAAP operating expenses | $ | 17,495 | $ | 22,314 | $ | 36,438 | $ | 47,139 | ||||||||
Free Cash Flow | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Net cash flow used in operating activities - continuing operations | $ | (525 | ) | $ | (12,986 | ) | $ | (6,793 | ) | $ | (30,845 | ) | ||||
Purchases of property and equipment | (168 | ) | (246 | ) | (786 | ) | (813 | ) | ||||||||
Free cash flow | $ | (693 | ) | $ | (13,232 | ) | $ | (7,579 | ) | $ | (31,658 | ) |
Source:
2023 GlobeNewswire, Inc., source