SIEN
$3.43
Sientra
$.11
3.31%
Earnings Details
2nd Quarter June 2020
Monday, August 10, 2020 4:01:00 PM
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Summary

Sientra (SIEN) Recent Earnings

Sientra (SIEN) reported a 2nd Quarter June 2020 loss of $0.38 per share on revenue of $12.4 million. The consensus estimate was a loss of $0.45 per share on revenue of $12.2 million. Revenue fell 39.4% compared to the same quarter a year ago.

Sientra Inc is a medical aesthetics company. The Company serves board-certified plastic surgeons and offers a portfolio of silicone shaped and round breast implants, tissue expanders, and body contouring products.

Results
Reported Earnings
($0.38)
Earnings Whisper
-
Consensus Estimate
($0.45)
Reported Revenue
$12.4 Mil
Revenue Estimate
$12.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Sientra Reports Second Quarter 2020 Financial Results

Continued Strength in Core Breast Products Business Despite COVID-19 Headwinds

Demonstrated Results Through “Drive the Recovery” Practice Initiatives

High-Margin miraDry bioTip® Consumable Model Implemented

SANTA BARBARA, Calif., Aug. 10, 2020 (GLOBE NEWSWIRE) -- 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.

Contact
Investor Relations
805-679-8885


Sientra, Inc 
Consolidated Statements of Operations 
(In thousands, except per share and share amounts) 
(Unaudited) 
                 
  Three Months Ended  Six Months Ended 
  June 30,  June 30, 
  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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Source: Sientra, Inc.