Sientra, Inc. (NASDAQ: SIEN) (“Sientra” or the “Company”), a
diversified medical aesthetics company, today announced its
financial results for the second quarter ended June 30, 2020.
Jeff Nugent, Sientra’s Chairman and Chief
Executive Officer, said, “While the COVID-19 pandemic has posed
unprecedented challenges, we are encouraged by our performance
through this stage of the recovery and our competitive position as
we exited Q2. We are particularly encouraged by the durability of
the demand for our OPUS® breast implants and tissue expanders, as
well as the effectiveness of our Drive the Recovery initiatives as
we continued to take share from our competitors through new account
additions and further penetration of our existing customers. We
also successfully transitioned our miraDry business to focus on
high-margin, recurring bioTip sales and have seen utilization rates
return to pre-COVID-19 levels in key geographic markets, including
the United States, as we exited Q2.”
Mr. Nugent concluded, “Overall, these results
exceeded our initial expectations and confirmed our confidence in
the strength of our business segments. While uncertainty around the
future of the recovery persists, we are confident in our ability to
emerge from these uncertain times in a position of strength and
remain steadfast in building on our core advantages by filling an
important real-time need among our customers to help them rebuild
their practices stronger than ever.”
Second Quarter 2020 Financial
Results
- Total net sales for the second
quarter 2020 were $12.4 million, a decrease of 39% compared to
total net sales of $20.5 million for the same period in 2019.
- Net sales for the Breast Products
segment totaled $9.3 million in the second quarter 2020, a decrease
of 17% compared to $11.2 million for the same period in 2019.
- Net sales for the miraDry segment
totaled $3.1 million in the second quarter 2020, a 66% decrease
compared to $9.3 million for the same period in 2019.
- Gross profit for the second quarter
2020 was $6.9 million, or 55.4% of sales, compared to gross profit
of $12.7 million, or 61.9% of sales, for the same period in
2019.
- Excluding non cash impairment
charges and restructuring charges, operating expenses for the
second quarter 2020 were $18.7 million, compared to $37.0 million
for the same period in 2019.
- Net loss for the second quarter
2020 was ($34.3) million, or ($0.68) per share, compared to a net
loss of ($37.7) million, or ($1.10) per share, for the same period
in 2019.
- On a non-GAAP basis, the Company
reported an adjusted EBITDA loss of ($9.2) million for the
second quarter 2020, compared to a loss of ($20.4) million for
the same period in 2019.
- Net cash and cash equivalents as of
June 30, 2020 were $71.8 million, compared to $112.1 million as of
March 31, 2020.
Key 2020 Business
Highlights
- Filed a PMA Supplement for a line
extension to the Company’s portfolio of Sientra OPUS Gel Implants
to include larger sizes up to 850 cc.
- Filed a 510(k) for a next
generation Allox2® Tissue Expander.
- Filed a 510(k) for the Sientra OPUS
Gel Sizer to supplement the OPUS Saline Sizer line of
products.
- Re-launched
the Sientra.com website to provide a refreshed,
up-to-date platform for both augmentation and reconstruction
procedures and generate new patients for our plastic surgeons’
practices.
2020 Financial Outlook
- As previously announced, Sientra is
not providing annual guidance for 2020 due to the uncertain scope
and duration of the COVID-19 pandemic, and unknown timing of global
recovery and economic normalization.
- To maintain financial health in
response to the COVID-19 pandemic and in conjunction with the
Company’s previously announced organization efficiency initiatives,
management took a number of steps over the previous quarters to
simplify operations and reduce spending while ensuring that
resources are prioritized on physician and patient-facing
activities for the core Breast Product segment. Based on current
market conditions the Company is forecasting 2020 annual operating
expenses of approximately $105 million to $110 million, excluding
impairment and restructuring charges compared to $140 million in
2019, excluding impairment and restructuring charges.
Conference Call
Sientra will hold a conference call today,
August 10, 2020 at 4:30 pm 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
1379352. 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 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, comprised of its
miraDry® system, is approved for sale in over 56 international
markets and is the only non-surgical, FDA-cleared device indicated
for the permanent reduction of underarm sweat and hair and may also
reduce odor.
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 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
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 |
|
Consolidated Statements of Operations |
|
(In thousands, except per share and share
amounts) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net sales |
|
$ |
12,448 |
|
|
$ |
20,525 |
|
|
$ |
29,380 |
|
|
$ |
38,077 |
|
Cost of goods sold |
|
|
5,550 |
|
|
|
7,813 |
|
|
|
12,342 |
|
|
|
14,287 |
|
Gross profit |
|
|
6,898 |
|
|
|
12,712 |
|
|
|
17,038 |
|
|
|
23,790 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
7,979 |
|
|
|
21,918 |
|
|
|
24,742 |
|
|
|
42,319 |
|
Research and development |
|
|
2,779 |
|
|
|
3,270 |
|
|
|
5,687 |
|
|
|
6,325 |
|
General and administrative |
|
|
7,958 |
|
|
|
11,814 |
|
|
|
17,262 |
|
|
|
25,289 |
|
Restructuring |
|
|
496 |
|
|
|
— |
|
|
|
2,235 |
|
|
|
— |
|
Impairment |
|
|
— |
|
|
|
12,674 |
|
|
|
6,432 |
|
|
|
12,674 |
|
Total operating expenses |
|
|
19,212 |
|
|
|
49,676 |
|
|
|
56,358 |
|
|
|
86,607 |
|
Loss from operations |
|
|
(12,314 |
) |
|
|
(36,964 |
) |
|
|
(39,320 |
) |
|
|
(62,817 |
) |
Other income (expense),
net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
18 |
|
|
|
269 |
|
|
|
198 |
|
|
|
573 |
|
Interest expense |
|
|
(3,607 |
) |
|
|
(982 |
) |
|
|
(5,230 |
) |
|
|
(1,932 |
) |
Change in fair value of derivative liability |
|
|
(18,380 |
) |
|
|
— |
|
|
|
(18,510 |
) |
|
|
— |
|
Other income (expense), net |
|
|
6 |
|
|
|
23 |
|
|
|
(27 |
) |
|
|
38 |
|
Total other income (expense), net |
|
|
(21,963 |
) |
|
|
(690 |
) |
|
|
(23,569 |
) |
|
|
(1,321 |
) |
Loss before income taxes |
|
|
(34,277 |
) |
|
|
(37,654 |
) |
|
|
(62,889 |
) |
|
|
(64,138 |
) |
Income tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss |
|
$ |
(34,277 |
) |
|
$ |
(37,654 |
) |
|
$ |
(62,889 |
) |
|
$ |
(64,138 |
) |
Basic and diluted net loss per
share attributable to common stockholders |
|
$ |
(0.68 |
) |
|
$ |
(1.10 |
) |
|
$ |
(1.26 |
) |
|
$ |
(2.02 |
) |
Weighted average outstanding
common shares used for net loss per share attributable to
common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
50,145,538 |
|
|
|
34,290,073 |
|
|
|
50,031,105 |
|
|
|
31,709,067 |
|
Sientra, Inc |
|
Condensed Consolidated Balance Sheets |
|
(In thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
71,799 |
|
|
$ |
87,608 |
|
Accounts receivable, net |
|
|
24,435 |
|
|
|
27,548 |
|
Inventories, net |
|
|
45,831 |
|
|
|
39,612 |
|
Prepaid expenses and other current assets |
|
|
2,498 |
|
|
|
2,489 |
|
Total current assets |
|
|
144,563 |
|
|
|
157,257 |
|
Property and equipment,
net |
|
|
12,617 |
|
|
|
12,314 |
|
Goodwill |
|
|
9,202 |
|
|
|
9,202 |
|
Other intangible assets,
net |
|
|
10,051 |
|
|
|
17,390 |
|
Other assets |
|
|
8,743 |
|
|
|
8,241 |
|
Total assets |
|
$ |
185,176 |
|
|
$ |
204,404 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Current portion of long-term debt |
|
$ |
— |
|
|
$ |
6,508 |
|
Accounts payable |
|
|
3,808 |
|
|
|
9,352 |
|
Accrued and other current liabilities |
|
|
23,401 |
|
|
|
32,551 |
|
Customer deposits |
|
|
16,000 |
|
|
|
13,943 |
|
Sales return liability |
|
|
7,518 |
|
|
|
8,116 |
|
Total current liabilities |
|
|
50,727 |
|
|
|
70,470 |
|
Long-term debt, net of current
portion |
|
|
63,339 |
|
|
|
38,248 |
|
Derivative liability |
|
|
34,610 |
|
|
|
— |
|
Deferred and contingent
consideration |
|
|
5,228 |
|
|
|
5,177 |
|
Warranty reserve and other
long-term liabilities |
|
|
9,183 |
|
|
|
8,627 |
|
Total liabilities |
|
|
163,087 |
|
|
|
122,522 |
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
22,089 |
|
|
|
81,882 |
|
Total liabilities and stockholders’ equity |
|
$ |
185,176 |
|
|
$ |
204,404 |
|
Sientra, Inc |
|
Condensed Consolidated Statements of Cash
Flows |
|
(In thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
2020 |
|
|
2019 |
|
Cash flows from operating
activities: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(62,889 |
) |
|
$ |
(64,138 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
Impairment |
|
|
6,432 |
|
|
|
12,674 |
|
Depreciation and amortization |
|
|
1,680 |
|
|
|
1,725 |
|
Provision for doubtful accounts |
|
|
1,257 |
|
|
|
845 |
|
Provision for warranties |
|
|
363 |
|
|
|
674 |
|
Provision for inventory |
|
|
1,631 |
|
|
|
790 |
|
Fair value adjustments to derivative liability |
|
|
18,510 |
|
|
|
— |
|
Fair value adjustments of other liabilities held at fair value |
|
|
(22 |
) |
|
|
179 |
|
Stock-based compensation expense |
|
|
3,891 |
|
|
|
6,611 |
|
Payments of contingent consideration liability in excess of
acquisition-date fair value |
|
|
— |
|
|
|
(630 |
) |
Other non-cash adjustments |
|
|
2,645 |
|
|
|
128 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
1,856 |
|
|
|
(2,206 |
) |
Inventories |
|
|
(8,026 |
) |
|
|
(6,445 |
) |
Prepaid expenses, other current assets and other assets |
|
|
104 |
|
|
|
921 |
|
Accounts payable, accrueds, and other liabilities |
|
|
(15,491 |
) |
|
|
(1,963 |
) |
Customer deposits |
|
|
2,057 |
|
|
|
1,643 |
|
Sales return liability |
|
|
(597 |
) |
|
|
972 |
|
Legal settlement payable |
|
|
— |
|
|
|
(410 |
) |
Net cash used in operating activities |
|
|
(46,599 |
) |
|
|
(48,630 |
) |
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(2,195 |
) |
|
|
(2,056 |
) |
Net cash used in investing activities |
|
|
(2,195 |
) |
|
|
(2,056 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Proceeds from option exercises and employee stock purchase
plan |
|
|
529 |
|
|
|
789 |
|
Net proceeds from issuance of common stock |
|
|
264 |
|
|
|
108,028 |
|
Tax payments related to shares withheld for vested restricted stock units (RSUs) |
|
|
(1,428 |
) |
|
|
(2,825 |
) |
Repayments under the Term Loan |
|
|
(25,000 |
) |
|
|
— |
|
Gross borrowings under the PPP loan |
|
|
6,652 |
|
|
|
— |
|
Gross borrowings under the Revolving Loan |
|
|
— |
|
|
|
8,436 |
|
Repayment of the Revolving Loan |
|
|
(6,508 |
) |
|
|
(4,183 |
) |
Net proceeds from issuance of the Convertible Note |
|
|
60,000 |
|
|
|
— |
|
Payments of contingent consideration up to acquisition-date fair
value |
|
|
— |
|
|
|
(370 |
) |
Deferred financing costs |
|
|
(1,524 |
) |
|
|
— |
|
Net cash provided by financing activities |
|
|
32,985 |
|
|
|
109,875 |
|
Net increase in cash, cash equivalents and restricted cash |
|
|
(15,809 |
) |
|
|
59,189 |
|
Cash, cash equivalents and
restricted cash at: |
|
|
|
|
|
|
|
|
Beginning of period |
|
|
87,951 |
|
|
|
87,242 |
|
End of period |
|
$ |
72,142 |
|
|
$ |
146,431 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of cash, cash
equivalents, and restricted cash to the consolidated balance
sheets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
71,799 |
|
|
$ |
146,088 |
|
Restricted cash included in other assets |
|
|
343 |
|
|
|
343 |
|
Total cash, cash equivalents and restricted cash |
|
$ |
72,142 |
|
|
$ |
146,431 |
|
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 |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net loss, as reported |
|
$ |
(34,277 |
) |
|
$ |
(37,654 |
) |
|
$ |
(62,889 |
) |
|
$ |
(64,138 |
) |
Adjustments to net loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (income) expense and other, net |
|
|
3,583 |
|
|
|
690 |
|
|
|
5,059 |
|
|
|
1,321 |
|
Depreciation and amortization |
|
|
881 |
|
|
|
894 |
|
|
|
1,680 |
|
|
|
1,725 |
|
Fair value adjustments to contingent consideration |
|
|
16 |
|
|
|
104 |
|
|
|
16 |
|
|
|
289 |
|
Fair value adjustments to derivative liability |
|
|
18,380 |
|
|
|
— |
|
|
|
18,510 |
|
|
|
— |
|
Stock-based compensation |
|
|
1,758 |
|
|
|
2,911 |
|
|
|
3,891 |
|
|
|
6,611 |
|
Restructuring |
|
|
496 |
|
|
|
— |
|
|
|
2,235 |
|
|
|
— |
|
Impairment |
|
|
— |
|
|
|
12,674 |
|
|
|
6,432 |
|
|
|
12,674 |
|
Total adjustments to net loss |
|
|
25,114 |
|
|
|
17,273 |
|
|
|
37,823 |
|
|
|
22,620 |
|
Adjusted EBITDA |
|
$ |
(9,163 |
) |
|
$ |
(20,381 |
) |
|
$ |
(25,066 |
) |
|
$ |
(41,518 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
As a Percentage of
Revenue** |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net loss, as reported |
|
|
(275.4 |
%) |
|
|
(183.5 |
%) |
|
|
(214.1 |
%) |
|
|
(168.4 |
%) |
Adjustments to net loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (income) expense and other, net |
|
|
28.8 |
% |
|
|
3.4 |
% |
|
|
17.2 |
% |
|
|
3.5 |
% |
Depreciation and amortization |
|
|
7.1 |
% |
|
|
4.4 |
% |
|
|
5.7 |
% |
|
|
4.5 |
% |
Fair value adjustments to contingent consideration |
|
|
0.1 |
% |
|
|
0.5 |
% |
|
|
0.1 |
% |
|
|
0.8 |
% |
Fair value adjustments to derivative liability |
|
|
147.7 |
% |
|
|
0.0 |
% |
|
|
63.0 |
% |
|
|
0.0 |
% |
Stock-based compensation |
|
|
14.1 |
% |
|
|
14.2 |
% |
|
|
13.2 |
% |
|
|
17.4 |
% |
Restructuring |
|
|
4.0 |
% |
|
|
0.0 |
% |
|
|
7.6 |
% |
|
|
0.0 |
% |
Impairment |
|
|
0.0 |
% |
|
|
61.7 |
% |
|
|
21.9 |
% |
|
|
33.3 |
% |
Total adjustments to net loss |
|
|
201.8 |
% |
|
|
84.2 |
% |
|
|
128.7 |
% |
|
|
59.4 |
% |
Adjusted EBITDA |
|
|
(73.6 |
%) |
|
|
(99.3 |
%) |
|
|
(85.3 |
%) |
|
|
(109.0 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Adjustments
may not add to the total figure due to rounding |
|
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