Sientra Reports Third Quarter Financial and Operational Results

November 9, 2023

IRVINE, Calif., Nov. 09, 2023 (GLOBE NEWSWIRE) -- Sientra, Inc. (NASDAQ: SIEN) (“Sientra” or the “Company”), a surgical aesthetics company developing the safest and most innovative solutions for the best aesthetic outcomes, today announced its financial results for the third quarter that ended September 30, 2023.

Third Quarter 2023 Financial and Business Highlights

  • Net sales of $19.5 million representing a decrease of 13.7% over the third quarter of 2022. For the first nine months of 2023, net sales totaled $65.2 million, approximately flat from $65.5 million for the same period in 2022.
  • Free cash flow usage of $3.6 million, a slight improvement from $3.7 million in the same period in 2022. For the first nine months of 2023, free cash flow usage totaled $11.2 million, a 68.3% improvement versus free cash usage of $35.3 million for the same period in 2022.
  • Adjusted EBITDA loss of $6.4 million, a 25.6% improvement from a $8.6 million loss for the same period in 2022. For the first nine months of 2023, adjusted EBITDA loss totaled $15.4 million, a 47.4% improvement versus a $29.3 million loss for the same period in 2022.
  • Presented at the American Society of Plastic Surgeons meeting in Austin, Texas, unparalleled 12-month interim clinical data for the Viality™ fat transfer system demonstrating over 80% fat retention at all time points.
  • Obtained approval for Viality from Health Canada, representing the first international expansion for the Company’s novel fat transfer technology.

Ron Menezes, Sientra’s President and Chief Executive Officer, said, "As reported in our October 30 pre-release, Q3 revenues were negatively impacted by more pronounced seasonality resulting in softer procedural volumes as compared to prior periods. We remain enthusiastic on the potential of our portfolio, which we believe is unmatched in the industry. With the early controlled launches of Viality and SimpliDerm® starting to take effect, and the upcoming launch of Allox2 PRO™, which is the first and only dual port, MRI-compatible tissue expander, we believe 2024 will be an inflection point for the Company, driven by both top-line growth and profitability."

“We are extremely excited about the interim 12-month clinical data on our Viality long-term retention study presented at Plastic Surgery: The Meeting,” commented Dr. Denise Dajles, Sientra’s Chief Technology Officer. “This first-of-its-kind study has demonstrated unparalleled fat retention of over 80% at the 3-, 6- and now 12-month time points. This retention rate is also consistent across cohorts, showing predictable, high retention rates for augmentation and reconstruction patients, including patients using fat with implants or just fat alone. This is highly significant, as it represents a truly minimally invasive option for patients who want to add volume without an implant, providing an important new tool for plastic surgeons in their patient care.”

Third Quarter 2023 Financial Results

  • Total net sales were $19.5 million, a decrease of 13.7% compared to total net sales of $22.6 million for the same period in 2022.
  • GAAP gross profit for the third quarter of 2023 was $10.0 million, or 51.3% of sales, compared to gross profit of $12.8 million, or 56.6% of sales, for the same period in 2022. This quarter’s results were negatively affected by a non-cash depreciation and amortization charge of $1.4 million. This charge is primarily due to the inclusion of non-cash amortization of Viality manufacturing know-how and developed technology in cost of sales. Non-GAAP gross margin, excluding this non-cash depreciation and amortization charge, was 58.4% of sales for the current period as compared to 57.9% for the prior year period.
  • Total GAAP loss from continuing operations for the third quarter of 2023 was $14.8 million, compared to $14.9 million for the same period in 2022, a 0.7% improvement from the prior year period.
  • Total GAAP operating expense for the third quarter of 2023 was $19.4 million, compared to $25.3 million for the prior year period, a decrease of $5.9 million or 23.3%.
  • Non-GAAP total operating expenses for the third quarter of 2023 were $17.8 million, compared to $21.7 million for the same period in 2022, an 18.0% reduction from the prior year period.
  • On a non-GAAP basis, adjusted EBITDA for the third quarter of 2023 was a $6.4 million loss, a 25.6% improvement from a loss of $8.6 million for the same period in 2022.
  • Net cash and cash equivalents as of September 30, 2023, were $15 million, compared to $26.1 million on December 31, 2022, and $18.6 million on June 30, 2023.

Conference Call

Sientra will hold a conference call today, November 9, 2023, at 4:30 pm ET to discuss third quarter 2023 results. The dial-in numbers are (844) 735-3763 for domestic callers and (412) 317-5711 for international callers. The webcast link is the following: Sientra Q3 2023 Earnings Call Webcast Registration Link. A live conference call webcast 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 call’s completion.

Use of Non-GAAP Financial Measures

Sientra has supplemented its U.S. GAAP net income (loss) with a non-GAAP measure of adjusted EBITDA, U.S. GAAP gross profit and gross margin with a non-GAAP measure of adjusted gross profit and gross margin, U.S. GAAP operating expenses with a non-GAAP measure of non-GAAP operating expenses, and U.S. GAAP cash flow from operating activities with a non-GAAP measure of free cash flow. Management believes that these non-GAAP financial measures provide useful supplemental information to management and investors regarding the performance of the Company, facilitate a more meaningful comparison of results for current periods with previous operating results, and assist management in analyzing future trends, making strategic and business decisions and establishing internal budgets and forecasts. Reconciliations of non-GAAP adjusted EBITDA, non-GAAP adjusted gross profit and gross margin, non-GAAP operating expenses, and free cash flow to U.S. GAAP net income (loss), U.S. GAAP operating expenses and U.S. GAAP cash flow from operating activities, the most directly comparable U.S. GAAP measures, are provided in the schedules below. There are limitations in using these non-GAAP financial measures because they are not prepared in accordance with U.S. 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 U.S. 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 U.S. GAAP and the reconciliations of the non-GAAP financial measures provided in the schedules below.

About Sientra

Headquartered in Irvine, California, Sientra is a surgical aesthetics company focused on empowering people to change their lives through increased self-confidence and self-respect. Backed by unrivaled clinical and safety data, Sientra’s platform of products includes a comprehensive portfolio of round and shaped breast implants, the first fifth-generation breast implants approved by the FDA for sale in the United States, the ground-breaking AlloX2®breast tissue expander with patented dual-port and integral drain technology, the next-generation AlloX2Pro™, the first and only FDA-cleared MRI-compatible tissue expander, the Viality™ with AuraClens™ enhanced viability fat transfer system, the SimpliDerm® Human Acellular Dermal Matrix, and BIOCORNEUM the #1 performing, preferred and recommended scar gel of plastic surgeons (*).

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. To learn more about Sientra, visit our website and follow Sientra on LinkedIn, Instagram, and Facebook.

(*) 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 third quarter ended September 30, 2023, the Company’s possible or assumed future results of operations, including descriptions of the Company’s revenues, operating expense, profitability, outlook and overall business strategy, the Company’s ability and timing to successfully integrate the Viality™ with AuraClens™ fat transfer system and SimpliDerm® human Acellular Dermal Matrix into its existing operations, the reception of plastic surgeons to the Company’s products, the Company’s ability to expand into aesthetic applications outside of breast procedures, the Company’s ability to add additional products and strategic partnerships, and the Company’s ability to capture additional market share and customer accounts in the plastic surgery market. Such statements are subject to risks and uncertainties, including the audit of the Company’s financial statements which audit is not yet complete and the numbers presented here could differ from the final audited financial statements presented by the Company, the Company’s ability to recapture delayed procedures resulting from the COVID-19 pandemic, the positive reaction from plastic surgeons and their patients to the Company’s products, the ability to meet consumer demand including any potential supply issues resulting from the COVID-19 pandemic or the war in Ukraine, the growth of the plastic surgery market and breast procedures, the ability of the Company to execute on its commercial, operational, marketing, research and development and regulatory plans, and the Company’s ability to comply with the terms of the Facility Agreement, including financial covenants, both during and after any waiver period, and/or obtain any additional waivers of any terms of the Company’s Facility Agreement to the extent required. 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.

Investor Relations Contact

Aman R. Patel, CFA

aman.patel@westwicke.com
                                        

  

Sientra, Inc.  
Condensed Consolidated Statements of Operations  
(In thousands, except per share and share amounts)  
(Unaudited)  
                         
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2023     2022     2023     2022  
Net sales   $ 19,544     $ 22,570     $ 65,231     $ 65,481  
Cost of goods sold     9,515       9,794       30,440       27,118  
Gross profit     10,029       12,776       34,791       38,363  
Operating expenses:                        
Sales and marketing     9,330       12,290       29,487       41,542  
Research and development     2,476       3,720       7,571       9,823  
General and administrative     7,620       9,324       24,805       31,589  
Total operating expenses     19,426       25,334       61,863       82,954  
Loss from operations     (9,397 )     (12,558 )     (27,072 )     (44,591 )
Other (expense) income, net:                        
Interest income     168       41       458       58  
Interest expense     (2,367 )     (2,364 )     (7,250 )     (6,584 )
Change in fair value of derivative liability     (3,153 )           (3,153 )      
Other (expense) income, net     (24 )     (6 )     (125 )     (1 )
Total other (expense) income, net     (5,376 )     (2,329 )     (10,070 )     (6,527 )
Loss from continuing operations before income taxes     (14,773 )     (14,887 )     (37,142 )     (51,118 )
Loss from continuing operations     (14,773 )     (14,887 )     (37,142 )     (51,118 )
Loss from discontinued operations, net of income taxes           (94 )           (208 )
Net loss   $ (14,773 )   $ (14,981 )   $ (37,142 )   $ (51,326 )
Basic and diluted net loss per share attributable to
common stockholders
                       
Continuing operations   $ (1.31 )   $ (2.37 )   $ (3.23 )   $ (8.16 )
Discontinued operations           (0.01 )           (0.03 )
Basic and diluted net loss per share   $ (1.31 )   $ (2.38 )   $ (3.23 )   $ (8.20 )
Weighted average outstanding common shares used for net loss per share attributable to common stockholders:                        
Basic and diluted     11,290,699       6,284,817       11,488,310       6,261,350  


Sientra, Inc.  
Condensed Consolidated Balance Sheets  
(In thousands)  
(Unaudited)  
             
    September 30,     December 31,  
    2023     2022  
Assets            
Current assets:            
Cash and cash equivalents   $ 15,026     $ 26,071  
Accounts receivable, net     29,610       36,892  
Inventories     39,268       42,692  
Prepaid expenses and other current assets     2,604       2,094  
Total current assets     86,508       107,749  
Property and equipment, net     13,289       14,941  
Goodwill     9,202       9,202  
Other intangible assets, net     24,332       25,676  
Right of use assets, net     5,753       7,004  
Other assets     849       849  
Total assets   $ 139,933     $ 165,421  
Liabilities and Stockholders’ Deficit            
Current liabilities:            
Current portion of long-term debt   $ 58,810     $ -  
Accounts payable     5,284       6,818  
Accrued and other current liabilities     20,655       22,599  
Customer deposits     53,598       45,161  
Sales return liability     13,745       15,773  
Total current liabilities     152,092       90,351  
Long-term debt           55,406  
Derivative liability     3,153       880  
Deferred and contingent consideration     1,794       2,791  
Warranty reserve     8,758       8,186  
Lease liabilities     4,129       5,518  
Other liabilities     2,052       2,698  
Total liabilities     171,978       165,830  
Stockholders’ deficit:            
Total stockholders’ deficit     (32,045 )     (409 )
Total liabilities and stockholders’ deficit   $ 139,933     $ 165,421  


Sientra, Inc.  
Condensed Consolidated Statements of Cash Flows  
(In thousands)  
(Unaudited)  
             
             
    Nine Months Ended September 30,  
    2023     2022  
Cash flows from operating activities:            
Net loss   $ (37,142 )   $ (51,326 )
Loss from discontinued operations, net of income taxes           (208 )
Loss from continuing operations, net of income taxes     (37,142 )     (51,118 )
Adjustments to reconcile net loss to net cash used in operating activities:            
Depreciation and amortization     5,546       4,947  
Provision for doubtful accounts     448       1,086  
Provision for warranties     1,510       583  
Provision for inventories     68       607  
Fair value adjustments to derivative liability     3,153        
Fair value adjustments of other liabilities held at fair value     350       (88 )
Amortization of debt discount and issuance costs     3,621       3,029  
Employee stock-based compensation expense     4,293       6,113  
Other non-cash adjustments           135  
Changes in operating assets and liabilities:            
Accounts receivable     6,610       (2,341 )
Inventories     3,357       667  
Prepaid expenses, other current assets and other assets     741       1,997  
Accounts payable, accrued and other liabilities     (9,122 )     (5,514 )
Customer deposits     8,437       7,830  
Sales return liability     (2,029 )     (1,383 )
Net cash flow used in operating activities - continuing operations     (10,159 )     (33,450 )
Net cash flow used in operating activities - discontinued operations           (208 )
Net cash used in operating activities     (10,159 )     (33,658 )
Cash flows from investing activities:            
Purchases of property and equipment     (1,056 )     (1,856 )
Net cash flow used in investing activities - continuing operations     (1,056 )     (1,856 )
Net cash used in investing activities     (1,056 )     (1,856 )
Cash flows from financing activities:            
Proceeds from issuance of common stock for employee stock-based plans     428       475  
Shares repurchased for tax withholding on vesting RSUs     (96 )     (448 )
Gross borrowings under the Term Loan           5,000  
Gross borrowings under the Revolving Loan           5,440  
Repayments of the Revolving Loan           (7,678 )
Deferred financing costs     (162 )     (73 )
Net cash provided by financing activities - continuing operations     170       2,716  
Net cash provided by financing activities     170       2,716  
Net decrease in cash, cash equivalents and restricted cash     (11,045 )     (32,798 )
Cash, cash equivalents and restricted cash at:            
Beginning of period     26,677       52,068  
End of period   $ 15,632     $ 19,270  
             
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets            
Cash and cash equivalents     15,026       18,975  
Restricted cash included in other assets     606       295  
Total cash, cash equivalents and restricted cash   $ 15,632     $ 19,270  


Sientra, Inc.  
Reconciliation of US GAAP Loss from Continuing Operations to Non-GAAP Adjusted EBITDA  
(In thousands)  
(Unaudited)  
                         
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2023     2022     2023     2022  
Loss from continuing operations, as reported   $ (14,773 )   $ (14,887 )   $ (37,142 )   $ (51,118 )
Adjustments to loss from continuing operations:                        
Interest (income) expense and other, net     2,223       2,329       6,917       6,528  
Depreciation and amortization     1,887       1,545       5,546       4,947  
Fair value adjustments to contingent consideration                 90       (88 )
Fair value adjustments to derivative liability     3,153             3,153        
Stock-based compensation     1,233       1,855       4,293       6,113  
Provision for doubtful accounts     (86 )     582       448       1,086  
Severance     280             598       1,635  
SEC/DOJ related legal fees                 1,016        
Legal settlement expense     (265 )           (265 )     1,600  
Total adjustments to loss from continuing operations     8,425       6,311       21,796       21,821  
Adjusted EBITDA   $ (6,348 )   $ (8,576 )   $ (15,346 )   $ (29,297 )
                         
                         
                         
                         
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
As a Percentage of Revenue**   2023     2022     2023     2022  
Loss from continuing operations, as reported     (75.6 %)     (66.0 %)     (56.9 %)     (78.1 %)
Adjustments to loss from continuing operations:                        
Interest (income) expense and other, net     11.4 %     10.3 %     10.6 %     10.0 %
Depreciation and amortization     9.7 %     6.8 %     8.5 %     7.6 %
Fair value adjustments to contingent consideration     0.0 %     0.0 %     0.1 %     (0.1 %)
Fair value adjustments to derivative liability     16.1 %     0.0 %     4.8 %     0.0 %
(Loss) gain on extinguishment of debt     0.0 %     0.0 %     0.0 %     0.0 %
Stock-based compensation     6.3 %     8.2 %     6.6 %     9.3 %
Provision for doubtful accounts     (0.4 %)     2.6 %     0.7 %     1.7 %
Severance     1.4 %     0.0 %     0.9 %     2.5 %
SEC/DOJ related legal fees     0.0 %     0.0 %     1.6 %     0.0 %
Legal settlement expense     (1.4 %)     0.0 %     (0.4 %)     2.4 %
Total adjustments to loss from continuing operations     43.1 %     28.0 %     33.4 %     33.3 %
Adjusted EBITDA     (32.5 %)     (38.0 %)     (23.5 %)     (44.7 %)
                         
** Adjustments may not add to the total figure due to rounding.  


                         
Sientra, Inc.  
Reconciliation of US GAAP Gross Profit to Adjusted Gross Profit and Adjusted Gross Margin  
(In thousands)  
(Unaudited)  
                         
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2023     2022     2023     2022  
Net sales   $ 19,544     $ 22,570     $ 65,231     $ 65,481  
Cost of goods sold     9,515       9,794       30,440       27,118  
Gross profit   $ 10,029     $ 12,776     $ 34,791     $ 38,363  
Gross margin     51.3 %     56.6 %     53.3 %     58.6 %
Adjustments to gross profit                        
Depreciation and amortization     1,386       301       4,087       1,132  
Total adjustments to gross profit     1,386       301       4,087       1,132  
Adjusted gross profit   $ 11,415     $ 13,077     $ 38,878     $ 39,495  
Adjusted gross margin     58.4 %     57.9 %     59.6 %     60.3 %


Sientra, Inc.  
Reconciliation of US GAAP Operating Expenses to Non-GAAP Operating Expenses  
(In thousands)  
(Unaudited)  
                         
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2023     2022     2023     2022  
US GAAP operating expenses, as reported   $ 19,426     $ 25,334     $ 61,863     $ 82,954  
Adjustments to GAAP operating expenses:                        
Depreciation and amortization     501       1,244       1,459       3,815  
Fair value adjustments to contingent consideration                 90       (88 )
Stock-based compensation     1,233       1,855       4,293       6,113  
Provision for doubtful accounts     (86 )     582       448       1,086  
Severance     280             598       1,635  
SEC/DOJ related legal fees                 1,016        
Legal settlement expense     (265 )           (265 )     1,600  
Total adjustments to GAAP operating expenses     1,663       3,681       7,639       14,161  
Non-GAAP operating expenses     17,763       21,653       54,224       68,793  


Sientra, Inc.  
Reconciliation of US GAAP Operating Expenses to Non-GAAP Operating Expenses  
(In thousands)  
(Unaudited)  
                         
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2023     2022     2023     2022  
US GAAP operating expenses, as reported                        
Sales and marketing   $ 9,330     $ 12,290     $ 29,487     $ 41,542  
Research and development     2,476       3,720       7,571       9,823  
General and administrative     7,620       9,324       24,805       31,589  
Total GAAP operating expenses, as reported   $ 19,426     $ 25,334     $ 61,863     $ 82,954  
Adjustments to GAAP operating expenses:                        
Sales and marketing     425       640       1,332       3,065  
Research and development     205       173       528       575  
General and administrative     1,033       2,868       5,779       10,521  
Total adjustments to GAAP operating expenses     1,663       3,681       7,639       14,161  
Non-GAAP operating expenses                        
Sales and marketing     8,905       11,650       28,155       38,477  
Research and development     2,271       3,547       7,043       9,248  
General and administrative     6,587       6,456       19,026       21,068  
Total Non-GAAP operating expenses   $ 17,763     $ 21,653     $ 54,224     $ 68,793  
                         
                         
Sientra, Inc.  
Free Cash Flow  
(In thousands)  
(Unaudited)  
                         
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2023     2022     2023     2022  
                         
Net cash flow used in operating activities - continuing operations   $ (3,367 )   $ (2,605 )   $ (10,159 )   $ (33,450 )
Purchases of property and equipment     (270 )     (1,043 )     (1,056 )     (1,856 )
Free cash flow   $ (3,637 )   $ (3,648 )   $ (11,216 )   $ (35,306 )

 


Primary Logo

Source: Sientra, Inc.

Nasdaq: SIEN

Stock Quote:

$
Volume
Previous Close
Intraday High
Intraday Low
Pricing delayed 20 minutes
Price Change % Change 52 Week High 52 Week Low Today's Open

Investor Contact

Sientra Investor Relations
ir@sientra.com