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CST: 12/11/2019 07:46:34   

Sientra Reports Second Quarter 2019 Financial Results

95 Days ago

Record total net sales of $20.5 million in 2Q19, growth of 17% year over year

Breast Products net sales of $11.2 million in 2Q19, growth of 19% year over year

Record miraDry net sales of $9.3 million in 2Q19, growth of 15% year over year

Reiterates 2019 total net sales outlook of $79 to $83 million

SANTA BARBARA, Calif., Aug. 08, 2019 (GLOBE NEWSWIRE) -- Sientra, Inc. (NASDAQ: SIEN), a medical aesthetics company, announced today its financial results for the second quarter ended June 30, 2019.

Jeff Nugent, Chairman and Chief Executive Officer of Sientra, commented, “In the second quarter, we achieved record net sales of $20.5 million, a 17% increase compared to the year-ago period. This quarterly performance was driven by strong growth in both our Breast Products and miraDry segments and represents solid progress towards achieving our 2019 objectives.”

Mr. Nugent added, “Our Breast Products segment grew net sales 19% year over year, strong evidence of market share gains from our targeted new customer conversion programs as well as deeper penetration of existing accounts. We believe the superior safety profile and industry-leading warranty of our OPUS® implants is clearly resonating with board-certified plastic surgeons and their patients.”

Mr. Nugent concluded, “miraDry delivered another strong quarter, achieving record net sales of $9.3 million. Our brand awareness and market activation initiatives have positioned miraDry to be a significant growth driver for Sientra in 2019 and beyond.”

Second Quarter 2019 Financial Review

Total net sales for the second quarter 2019 were $20.5 million, an increase of 17% compared to total net sales of $17.6 million for the same period in 2018.

Net sales for the Breast Products segment totaled $11.2 million in the second quarter 2019, a 19% increase compared to $9.4 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 $9.3 million in the second quarter 2019, a 15% increase compared to $8.1 million for the same period 2018. miraDry sales growth was driven by an increase in sales of consoles and consumables globally, with a particularly strong U.S. performance.

Gross profit for the second quarter 2019 was $12.7 million, or 61.9% of sales, compared to gross profit of $10.9 million, or 62.1% of sales, for the same period 2018.

Operating expenses for the second quarter 2019 were $52.8 million, compared to $27.8 million of expenses for the same period 2018. Excluding a $15.8 million non-cash impairment of certain goodwill and intangibles related to miraDry, operating expenses increased $9.2 million, primarily driven by increased investments in sales and marketing.

Net loss for the second quarter 2019 was ($40.8) million, or ($1.19) per share, compared to a net loss of ($18.0) million, or ($0.73) per share, for the same period 2018.

On a non-GAAP basis, the Company reported a second quarter 2019 adjusted EBITDA loss of ($20.4) million compared to a loss of ($11.8) million for the same period 2018.

Net cash and cash equivalents as of June 30, 2019 were $146 million, compared to $62 million as of March 31, 2019. 

2019 Net Sales Outlook

For 2019, the Company reiterates its outlook for 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 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, August 8, 2019 at 4:30 p.m. ET to discuss second quarter results.

The dial-in numbers are 844-464-3933 for domestic callers and 765-507-2612 for international callers. The conference ID is 8084147. 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 August 8, 2019 at 7:30 p.m. ET through August 15, 2019 at 7:30 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 8084147. The webcast will be available on the Investor Relations section of the Company’s 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 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 to 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 June 30, 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,’’ ‘‘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. 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.

Investor Contact:

Neil Bhalodkar
805-679-8885

   
Sientra, Inc  
Consolidated Statements of Operations  
(In thousands, except per share and share amounts)  
(Unaudited)  
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2019     2018     2019     2018  
Net sales   $ 20,525     $ 17,554     $ 38,077     $ 32,229  
Cost of goods sold     7,813       6,660       14,287       12,756  
Gross profit     12,712       10,894       23,790       19,473  
Operating expenses:                                
Sales and marketing     21,918       15,477       42,319       30,733  
Research and development     3,270       2,301       6,325       5,052  
General and administrative     11,814       10,014       25,289       19,514  
Goodwill and other intangible impairment     15,774             15,774        
Total operating expenses     52,776       27,792       89,707       55,299  
Loss from operations     (40,064 )     (16,898 )     (65,917 )     (35,826 )
Other income (expense), net:                                
Interest income     269       40       573       80  
Interest expense     (982 )     (867 )     (1,932 )     (1,521 )
Other income (expense), net     23       (303 )     38       (184 )
Total other income (expense), net     (690 )     (1,130 )     (1,321 )     (1,625 )
Loss before income taxes     (40,754 )     (18,028 )     (67,238 )     (37,451 )
Income tax (benefit) expense                        
Net loss   $ (40,754 )   $ (18,028 )   $ (67,238 )   $ (37,451 )
Basic and diluted net loss per share attributable to
  common stockholders
  $ (1.19 )   $ (0.73 )   $ (2.12 )   $ (1.69 )
Weighted average outstanding common shares used for
  net loss per share attributable to common stockholders:
                               
Basic and diluted     34,290,073       24,761,117       31,709,067       22,202,565  


   
Sientra, Inc  
Condensed Consolidated Balance Sheets  
(In thousands)  
(Unaudited)  
                 
                 
    June 30,     December 31,  
    2019     2018  
Assets                
Current assets:                
Cash and cash equivalents   $ 146,088     $ 86,899  
Accounts receivable, net     23,887       22,527  
Inventories, net     29,864       24,085  
Prepaid expenses and other current assets     4,017       2,612  
Total current assets     203,856       136,123  
Property and equipment, net     3,686       2,536  
Goodwill     4,878       12,507  
Other intangible assets, net     7,190       16,495  
Other assets     23,235       698  
Total assets   $ 242,845     $ 168,359  
Liabilities and Stockholders’ Equity                
Current liabilities:                
Current portion of long-term debt   $ 18,144     $ 6,866  
Accounts payable     14,600       13,184  
Accrued and other current liabilities     36,280       27,697  
Legal settlement payable           410  
Customer deposits     11,579       9,936  
Sales return liability     7,020       6,048  
Total current liabilities     87,623       64,141  
Long-term debt, net of current portion     20,938       27,883  
Deferred and contingent consideration     364       6,481  
Warranty reserve and other long-term liabilities     21,847       2,976  
Total liabilities     130,772       101,481  
Stockholders’ equity:                
Total stockholders’ equity     112,073       66,878  
Total liabilities and stockholders’ equity   $ 242,845     $ 168,359  



   
Sientra, Inc  
Condensed Consolidated Statements of Cash Flows  
(In thousands)  
(Unaudited)  
                 
                 
                 
    Six Months Ended June 30,  
    2019     2018  
Cash flows from operating activities:                
Net loss   $ (67,238 )   $ (37,451 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Goodwill impairment     7,629        
Intangible asset impairment     8,145        
Depreciation and amortization     1,725       1,700  
Provision for doubtful accounts     845       489  
Provision for warranties     674       572  
Provision for inventory     790       709  
Amortization of acquired inventory step-up           106  
Amortization of right-of-use assets     2,356        
Lease liability accretion     927        
Change in fair value of warrants     (110 )     164  
Change in fair value of deferred consideration     9       18  
Change in fair value of contingent consideration     289       1,708  
Change in deferred revenue     270       (161 )
Amortization of debt discount and issuance costs     99       85  
Stock-based compensation expense     6,611       5,686  
Loss on disposal of property and equipment     20        
Payments of contingent consideration liability in excess of acquisition-date fair value     (630 )      
Changes in assets and liabilities:                
Accounts receivable     (2,206 )     (6,343 )
Inventories     (6,445 )     (2,405 )
Prepaid expenses, other current assets and other assets     (1,435 )     (2,518 )
Insurance recovery receivable           33  
Accounts payable     2,256       4,230  
Accrued and other liabilities     (5,416 )     1,643  
Legal settlement payable     (410 )     (1,000 )
Customer deposits     1,643       602  
Sales return liability     972       976  
Net cash used in operating activities     (48,630 )     (31,157 )
Cash flows from investing activities:                
Purchase of property and equipment     (2,056 )     (160 )
Net cash used in investing activities     (2,056 )     (160 )
Cash flows from financing activities:                
Net proceeds from issuance of common stock     108,028       107,850  
Proceeds from exercise of stock options     106       410  
Proceeds from issuance of common stock under ESPP     683       391  
Tax payments related to shares withheld for vested restricted stock units (RSUs)     (2,825 )     (1,297 )
Gross borrowings under the Term Loan           10,000  
Gross borrowings under the Revolving Loan     8,436       12,109  
Repayment of the Revolving Loan     (4,183 )     (12,109 )
Payments of contingent consideration up to acquisition-date fair value     (370 )      
Deferred financing costs           (6 )
Net cash provided by financing activities     109,875       117,348  
Net increase in cash, cash equivalents and restricted cash     59,189       86,031  
Cash, cash equivalents and restricted cash at:                
Beginning of period     87,242       26,931  
End of period   $ 146,431     $ 112,962  
                 
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets                
Cash and cash equivalents   $ 146,088     $ 112,619  
Restricted cash included in other assets     343       343  
Total cash, cash equivalents and restricted cash   $ 146,431     $ 112,962  


   
Sientra, Inc.  
Reconciliation of Net Loss to Non-GAAP Adjusted EBITDA  
(Unaudited)  
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
Dollars, in thousands   2019     2018     2019     2018  
Net loss, as reported   $ (40,754 )   $ (18,028 )   $ (67,238 )   $ (37,451 )
Adjustments to net loss:                                
Interest (income) expense and other, net     690       1,130       1,321       1,625  
Depreciation and amortization     894       868       1,725       1,806  
Accretion in fair value adjustments to contingent consideration     104       1,087       289       1,708  
Stock-based compensation     2,911       3,138       6,611       5,686  
Goodwill and other intangible impairment     15,774             15,774        
Total adjustments to net loss     20,373       6,223       25,720       10,825  
Adjusted EBITDA   $ (20,381 )   $ (11,805 )   $ (41,518 )   $ (26,626 )
                                 
                                 
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
As a Percentage of Revenue**   2019     2018     2019     2018  
Net loss, as reported     (198.6 %)     (102.7 %)     (176.6 %)     (116.2 %)
Adjustments to net loss:                                
Interest (income) expense and other, net     3.4 %     6.4 %     3.5 %     5.0 %
Depreciation and amortization     4.4 %     4.9 %     4.5 %     5.6 %
Accretion in fair value adjustments to contingent consideration     0.5 %     6.2 %     0.8 %     5.3 %
Stock-based compensation     14.2 %     17.9 %     17.4 %     17.6 %
Goodwill and other intangible impairment     76.9 %     0.0 %     41.4 %     0.0 %
Total adjustments to net loss     99.3 %     35.5 %     67.5 %     33.6 %
Adjusted EBITDA     (99.3 %)     (67.2 %)     (109.0 %)     (82.6 %)
                                 
** Adjustments may not add to the total figure due to rounding  

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