Sientra Reports Record Fourth Quarter and Full Year Revenues and Expands Total Addressable Market With New Product Launches
03/30/2023 - 04:02 PM
Continued 2+ year trend of consecutive record quarterly growth; fastest growing brand in the US breast market
Disciplined cash management and enhanced operating leverage for 40% improvement in free cash flow results
Significantly increased total addressable market with the launch of Viality™, a novel, FDA-cleared fat transfer technology, and addition of SimpliDerm®, a leading human Acellular Dermal Matrix (ADM)
IRVINE, Calif., March 30, 2023 (GLOBE NEWSWIRE) -- Sientra, Inc. (NASDAQ: SIEN) (“Sientra” or the “Company”), a medical aesthetics company focused on enhancing lives by advancing the art of plastic surgery, today announced its financial results for the fourth quarter and full year ended December 31, 2022.
Financial and Business Highlights
Record Q4 2022 net sales of $25.1 million , representing growth of 11% over the fourth quarter of 2022. Record full year net sales of $90.5 million , representing growth of 12% over 2021. Free cash flow usage of $3.6 million in Q4 2022 compared to a free cash flow usage of $6.0 million in the same period last year. Record high market shares in augmentation and reconstruction, adding 131 new augmentation accounts and 142 reconstruction accounts. Continued to expand international footprint with approval to market breast implants in the United Arab Emirates. Launched Viality, the first and only enhanced viability fat transfer system, providing high fat retention and predictable patient outcomes. Released preliminary results from Viality clinical study showing over 80% volume retention at the 3- and 6-month time points. Entered into partnership with Azyio Biologics for the promotion of SimpliDerm, an Acellular Dermal Matrix (ADM). “2023 promises to be a pivotal year in the transformation of Sientra,” commented Ron Menezes, Sientra’s President and Chief Executive Officer. “Since I joined Sientra, the Company has been focused on creating a platform to profitably delivery industry-leading products to our plastic surgeon customers and their patients. We are now seeing the results of those efforts.”
“In March of this year, we began commercially shipping our Viality fat transfer system to customers. We are extremely encouraged by the early reception of this product, and believe that Viality, which is the only system to have clinically demonstrated over 80% volume retention in a multi-center study at the preliminary 3- and 6-month time points, will set the new standard for fat transfer. We are also extremely excited to have announced our partnership with Aziyo Biologics to distribute their SimpliDerm Acellular Dermal Matrix (ADM) product, creating what we believe is the most compelling reconstruction portfolio in the industry.”
“The launch of these two products dramatically increases the size of Sientra’s total addressable market to over $1 billion in the United States alone. Importantly, it also does so by utilizing Sientra’s existing commercial infrastructure, without any significant capital investments, which we believe will allow us to exit 2023 with a positive free cash flow run rate,” concluded Mr. Menezes.
Fourth Quarter 2022 Financial Results
Total net sales were $25.1 million , an increase of 11% compared to total net sales of $22.6 million for the same period in 2021. Gross profit for the fourth quarter 2022 was $3.2 million , or 13% of sales, compared to gross profit of $12.3 million , or 54% of sales, for the same period in 2021. The fourth quarter 2022 included non-cash adjustments related to inventory reserve and warranty liability. Excluding these adjustments, fourth quarter 2022 gross profit was $15.0 million , or 60% of sales. GAAP operating expenses for the fourth quarter 2022 of $27.7 million compared to $26.1 million for the same period in 2021. Loss from continuing operations for the fourth quarter 2022 was $22.4 million , or $2.35 per share, compared to a net loss of $15.9 million , or $2.73 per share, for the same period in 2021. Non-GAAP operating expenses for the fourth quarter of 2022 were $22.8 million compared to $22.2 million for the same period in 2021. Adjusted EBITDA loss for the fourth quarter 2022 was $6.9 million as compared to a net loss of $9.3 million for the same period in 2021. Net cash and cash equivalents as of December 31, 2022, were $26.1 million , compared to $51.8 million on December 31, 2021. Full Year 2022 Financial Results
Total net sales for the full year 2022 were $90.5 million , an increase of 12% compared to total net sales of $80.7 million for the same period in 2021. Gross profit for the full year 2022 was $41.6 million , or 46% of sales, compared to gross profit of $44.3 million , or 55% of sales, for the full year 2021. Excluding the adjustments, full year 2022 gross profit was $53.4 million , or 59% of sales. GAAP operating expenses for the full year 2022 increased by 22% to $110.6 million from $90.7 million for the full year 2021, primarily driven by current year investments in commercial activities to support new product launches. Loss from continuing operations for the full year 2022 was $73.7 million , or a net loss of $10.40 per share, compared to a net loss of $62.5 million , or $10.96 per share, for the full year 2021. Non-GAAP operating expenses for the full year 2022 were $91.6 million compared to $76.3 million for the full year 2021. Adjusted EBITDA loss for the full year 2022 of $36.5 million compared to a net loss of $29.8 million for the full year 2021. Full Year 2022 Guidance $104 million to $109 million , representing growth of 15% to 20% compared to net sales of $90.5 million in 2022. Non-GAAP operating expense is expected to be $78 million to $82 million , representing a 10% to 15% decrease compared to non-GAAP operating expenses of $91.6 million in 2022.
Use of Non-GAAP Financial Measures
About Sientra
Headquartered in Irvine, California, Sientra is a medical aesthetics company exclusively focused on plastic surgery. The Company mission is to offer proprietary innovations and unparalleled partnerships that radically advance how plastic surgeons think, work and care for their patients. 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 product portfolio includes its Sientra round and shaped 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, Viality™ fat transfer system, 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.
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 fourth quarter and full year ended December 31, 2022, the Company’s possible or assumed future results of operations, including descriptions of the Company’s revenues, profitability, outlook and overall business strategy, the Company’s ability to successfully launch the Viality fat transfer system, the Company’s ability to successfully integrate the SimpliDerm ADM into its existing operations, the reception of plastic surgeons to the Company’s products, including the Viality fat transfer system and the SimpliDerm ADM, the anticipated future clinical results of the Viality multi-center volume retention study, the Company’s estimates of its total addressable market, 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 product portfolio, including the Viality fat transfer system and the SimpliDerm ADM, the ability to meet consumer demand, the growth of the plastic surgery market and breast procedures, the outcomes of the Company’s clinical studies, and the ability of the Company to execute on its commercial, marketing, research and development and regulatory plans. 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.patel@westwicke.com
Sientra, Inc. Consolidated Statements of Operations (In thousands, except per share and share amounts) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2022 2021 2022 2021 Net sales $ 25,068 $ 22,648 $ 90,549 $ 80,683 Cost of goods sold 21,837 10,321 48,955 36,348 Gross profit 3,231 12,327 41,594 44,335 Operating expenses: Sales and marketing 13,507 14,108 55,049 48,456 Research and development 4,240 3,494 14,063 10,456 General and administrative 9,943 8,452 41,532 31,773 Total operating expenses 27,690 26,054 110,644 90,685 Loss from operations (24,459 ) (13,727 ) (69,050 ) (46,350 ) Other (expense) income, net: Interest income 72 — 130 4 Interest expense (2,941 ) (2,111 ) (9,525 ) (8,254 ) (Loss) gain on extinguishment of debt (4,040 ) — (4,040 ) 6,652 Change in fair value of derivative liability 8,780 — 8,780 (14,460 ) Other income (expense), net 221 (13 ) 12 (89 ) Total other (expense) income, net 2,092 (2,124 ) (4,643 ) (16,147 ) (Loss) income from continuing operations before income taxes (22,367 ) (15,851 ) (73,693 ) (62,497 ) Income tax expense 27 21 27 21 Income (loss) from continuing operations (22,394 ) (15,872 ) (73,720 ) (62,518 ) Income (loss) from discontinued operations, net of income taxes — (196 ) — 37 Net (loss) income $ (22,394 ) $ (16,068 ) $ (73,720 ) $ (62,481 ) Basic and diluted net loss per share attributable to Continuing operations $ (2.35 ) $ (2.73 ) $ (10.40 ) $ (10.96 ) Discontinued operations — (0.03 ) — 0.01 Basic and diluted net loss per share $ (2.35 ) $ (2.76 ) $ (10.40 ) $ (10.95 ) Weighted average outstanding common shares used for net (loss) income per share attributable to common stockholders: Basic and diluted 9,539,971 5,817,028 7,090,014 5,705,711
Sientra, Inc. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) December 31, December 31, 2022 2021 Assets Current assets: Cash and cash equivalents $ 26,071 $ 51,772 Accounts receivable, net 36,892 33,105 Inventories, net 42,692 52,914 Prepaid expenses and other current assets 2,094 2,983 Total current assets 107,749 140,774 Property and equipment, net 14,941 13,998 Goodwill 9,202 9,202 Other intangible assets, net 25,676 28,765 Right of use assets, net 7,004 6,565 Other assets 849 600 Total assets $ 165,421 $ 199,904 Liabilities and Stockholders’ Equity Current liabilities: Current portion of long-term debt $ - $ 2,237 Accounts payable 6,818 7,402 Accrued and other current liabilities 21,957 21,798 Customer deposits 45,161 35,182 Sales return liability 15,773 13,399 Total current liabilities 89,709 80,018 Long-term debt 55,819 62,434 Derivative liability 880 — Deferred and contingent consideration 2,791 5,872 Warranty reserve 8,828 2,505 Lease liabilities 5,518 5,604 Other liabilities 2,698 2,614 Total liabilities 166,243 159,047 Stockholders’ equity: Total stockholders’ equity (822 ) 40,857 Total liabilities and stockholders’ equity $ 165,421 $ 199,904
Sientra, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Year Ended December 31, 2022 2021 Cash flows from operating activities: Net loss $ (73,720 ) $ (62,482 ) Income (loss) from discontinued operations, net of income taxes — 37 Loss from continuing operations, net of income taxes (73,720 ) (62,519 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 6,636 4,360 Provision for doubtful accounts 1,478 1,326 Provision for warranties 6,942 970 Provision for inventory 5,592 82 Fair value adjustments to derivative liability (8,780 ) 14,460 Fair value adjustments of other liabilities held at fair value 218 441 Amortization of debt discount and issuance costs 4,746 3,587 Loss (gain) on extinguishment of debt 4,040 (6,652 ) Stock-based compensation expense 7,933 10,390 Payments of contingent consideration liability in excess of acquisition-date fair value — (2,419 ) Other non-cash adjustments (262 ) 684 Changes in assets and liabilities: Accounts receivable (5,264 ) (14,660 ) Inventories 4,630 (13,775 ) Prepaid expenses, other current assets and other assets 621 (1,501 ) Accounts payable, accrued, and other liabilities (2,450 ) (752 ) Customer deposits 9,979 17,277 Sales return liability 2,374 4,207 Net cash flow used in operating activities - continuing operations (35,287 ) (44,494 ) Net cash flow used in operating activities - discontinued operations — 1,994 Net cash used in operating activities (35,287 ) (42,500 ) Cash flows from investing activities: Purchase of property and equipment (3,591 ) (3,805 ) Net cash flow used in investing activities - continuing operations (3,591 ) (4,805 ) Net cash flow provided by (used in) investing activities - discontinued operations — 8,134 Net cash (used in) provided by investing activities (3,591 ) 3,329 Cash flows from financing activities: Payment of deferred consideration in connection with asset acquisition (3,000 ) — Proceeds from issuance of common stock for employee stock-based plans — 1,970 Net proceeds from issuance of common stock 14,097 39,226 Proceeds from issuance of common stock under ESPP 473 — Tax payments related to shares withheld for vested restricted stock units (RSUs) (461 ) (3,145 ) Gross borrowings under the Term Loan 5,000 1,000 Repayments under the Term Loan (21,000 ) — Gross borrowings under the Revolving Loan 5,666 2,237 Repayment of the Revolving Loan (7,904 ) — Proceeds from issuance of Convertible Notes 23,000 — Payments of contingent consideration up to acquisition-date fair value — (4,550 ) Deferred financing costs (2,694 ) (800 ) Net cash provided by financing activities 13,178 35,938 Net (decrease) increase in cash, cash equivalents and restricted cash (25,701 ) (3,233 ) Cash, cash equivalents and restricted cash at: Beginning of period 52,067 55,300 End of period $ 26,366 $ 52,067 Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets Cash and cash equivalents 26,071 51,772 Restricted cash included in other assets 295 295 Total cash, cash equivalents and restricted cash $ 26,366 $ 52,067
Sientra, Inc. Reconciliation of Loss from Continuing Operations to Non-GAAP Adjusted EBITDA (Unaudited) Three Months Ended Year Ended December 31, December 31, Dollars, in thousands 2022 2021 2022 2021 (Loss) income from continuing operations, as reported $ (22,394 ) $ (15,873 ) $ (73,720 ) $ (62,518 ) Adjustments to (loss) income from continuing operations: Interest (income) expense and other, net 2,809 2,127 9,338 8,338 Provision for income taxes 27 21 27 21 Depreciation and amortization 1,671 1,211 6,618 4,360 Fair value adjustments to contingent consideration (174 ) 392 (262 ) 441 Fair value adjustments to derivative liability (8,780 ) — (8,780 ) 14,460 Loss (gain) on extinguishment of debt 4,040 — 4,040 (6,652 ) Stock-based compensation 1,820 2,317 7,933 10,389 Bad debt expense 391 451 1,478 1,326 Increase in inventory reserve 5,718 — 5,718 — Warranty adjustment 6,090 — 6,090 — Severance 562 — 2,197 — SEC/DOJ related legal fees 1,252 — 1,252 — Legal settlement expense — — 1,600 — Total adjustments to (loss) income from continuing operations 15,426 6,622 37,249 32,683 Adjusted EBITDA $ (6,968 ) $ (9,251 ) $ (36,471 ) $ (29,835 ) Three Months Ended Year Ended December 31, December 31, As a Percentage of Revenue** 2022 2021 2022 2021 (Loss) income from continuing operations, as reported (89.3 %) (70.1 %) (81.4 %) (77.5 %) Adjustments to (loss) income from continuing operations: Interest (income) expense and other, net 11.2 % 9.4 % 10.3 % 10.3 % Provision for income taxes 0.1 % 0.1 % 0.0 % 0.0 % Depreciation and amortization 6.7 % 5.3 % 7.3 % 5.4 % Fair value adjustments to contingent consideration (0.7 %) 1.7 % (0.3 %) 0.5 % Fair value adjustments to derivative liability (35.0 %) 0.0 % (9.7 %) 17.9 % Loss (gain) on extinguishment of debt 16.1 % 0.0 % 4.5 % (8.2 %) Stock-based compensation 7.3 % 10.2 % 8.8 % 12.9 % Bad debt expense 1.6 % 2.0 % 1.6 % 1.6 % Increase in inventory reserve 0.0 % 0.0 % 0.0 % 0.0 % Warranty adjustment 0.0 % 0.0 % 0.0 % 0.0 % Severance 2.2 % 0.0 % 2.4 % 0.0 % SEC/DOJ related legal fees 0.0 % 0.0 % 0.0 % 0.0 % Legal settlement expense 0.0 % 0.0 % 1.8 % 0.0 % Total adjustments to (loss) income from continuing operations 61.5 % 28.8 % 41.1 % 40.5 % Adjusted EBITDA (27.8 %) (41.3 %) (40.3 %) 37.0 % ** Adjustments may not add to the total figure due to rounding
Sientra, Inc. Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (In thousands) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2022 2021 2022 2021 GAAP operating expenses, as reported $ 27,690 $ 26,054 $ 110,644 $ 90,685 Adjustments to GAAP operating expenses: Depreciation and amortization 1,046 709 4,861 2,236 Fair value adjustments to contingent consideration (174 ) 392 (262 ) 441 Stock-based compensation 1,820 2,317 7,933 10,389 Bad debt expense 391 451 1,478 1,326 One-time severance charges 562 — 2,197 — SEC/DOJ related legal fees 1,252 — 1,252 — Legal settlement — — 1,600 — Total adjustments to GAAP operating expenses 4,897 3,869 19,059 14,392 Non-GAAP operating expenses $ 22,793 $ 22,185 $ 91,585 $ 76,293
Sientra, Inc. Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (In thousands) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2022 2021 2022 2021 GAAP operating expenses, as reported Sales and marketing $ 13,507 $ 14,108 $ 55,049 $ 48,456 Research and development 4,240 3,494 14,063 10,456 General and administrative 9,943 8,452 41,532 31,773 Total GAAP operating expenses, as reported $ 27,690 $ 26,054 $ 110,644 $ 90,685 Adjustments to GAAP operating expenses: Sales and marketing 1,005 791 4,070 3,659 Research and development 957 397 2,147 1,619 General and administrative 2,935 2,681 12,842 9,114 Total adjustments to GAAP operating expenses 4,897 3,869 19,059 14,392 Non-GAAP operating expenses Sales and marketing 12,502 13,317 50,979 44,797 Research and development 3,283 3,097 11,916 8,837 General and administrative 7,008 5,771 28,690 22,659 Total Non-GAAP operating expenses $ 22,793 $ 22,185 $ 91,585 $ 76,293 Sientra, Inc. Free Cash Flow (In thousands) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2022 2021 2022 2021 Net cash flow used in operating activities - continuing operations $ (1,837 ) $ (7,112 ) $ (35,287 ) $ (35,227 ) Purchase of property and equipment (1,735 ) 1,077 (3,591 ) (3,805 ) Free cash flow $ (3,573 ) $ (6,035 ) $ (38,879 ) $ (39,032 )
