STOCK TITAN

Sientra Reports Third Quarter Financial and Operational Results

Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Neutral)
Tags
earnings
Rhea-AI Summary
Sientra, Inc. (NASDAQ: SIEN) announced its financial results for Q3 2023, reporting a 13.7% decrease in net sales compared to Q3 2022. The company also highlighted positive improvements in free cash flow usage and adjusted EBITDA loss. Additionally, Sientra presented clinical data for its Viality™ fat transfer system and obtained approval for Viality from Health Canada. The company's CEO expressed enthusiasm for the potential of their portfolio and anticipated an inflection point in 2024 driven by top-line growth and profitability.
Positive
  • Sientra reported a slight improvement in free cash flow usage and a 25.6% improvement in adjusted EBITDA loss compared to the same period in 2022.
  • The company presented 12-month interim clinical data for the Viality™ fat transfer system demonstrating over 80% fat retention at all time points, and obtained approval for Viality from Health Canada, representing the first international expansion for the Company’s novel fat transfer technology.
Negative
  • Net sales for the third quarter of 2023 decreased by 13.7% compared to the same period in 2022.

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)

 


Sientra reported net sales of $19.5 million, representing a 13.7% decrease compared to Q3 2022. The company also reported slight improvements in free cash flow usage and adjusted EBITDA loss.

Sientra presented 12-month interim clinical data for the Viality™ fat transfer system demonstrating over 80% fat retention at all time points.

Sientra mentioned the upcoming launch of Allox2 PRO™, which is the first and only dual port, MRI-compatible tissue expander.
Sientra Inc

NASDAQ:SIEN

SIEN Rankings

SIEN Latest News

SIEN Stock Data

Surgical and Medical Instrument Manufacturing
Manufacturing
Link
Health Technology, Medical Specialties, Manufacturing, Surgical and Medical Instrument Manufacturing
United States
Santa Barbara

About SIEN

medical devices- plastic surgery: aesthetic and reconstructive, urology