First Quarter 2019 Net Sales of $17.6 million, Growth of 20% year over year
Provides 2019 Net Sales Outlook of $79 million to $83 million
SANTA BARBARA, Calif., May 08, 2019 (GLOBE NEWSWIRE) -- Sientra, Inc. (SIEN), a medical aesthetics company (“Sientra” or the “Company”), announced today its financial results for the first quarter ended March 31, 2019.
Jeff Nugent, Chairman and Chief Executive Officer of Sientra, commented, “In the first quarter, we continued to drive robust growth across both of our segments, achieving net sales of $17.6 million, a 20% increase compared to the year-ago period. This quarterly performance represents a solid start towards our 2019 objectives.”
Mr. Nugent added, “Our Breast Products segment grew net sales 14% year over year, strong evidence that we continue to gain market share. I am extremely proud of this accomplishment considering the media headwinds this category experienced in the first quarter. We were pleased with the FDA’s announcement last week confirming that all breast implant options remain safe and effective and will continue to be available in the United States. We are also excited about the FDA’s recent approval of our extra-high profile implants, which we expect to be a key addition to our breast reconstruction portfolio.”
Mr. Nugent concluded, “miraDry delivered another strong quarter, in spite of typical capital equipment seasonality, achieving net sales growth of 27% year over year. We fully scaled our marketing efforts in the first quarter based on the learnings from our 2018 pilots and launched our “No Sweat” global campaign. As our sales and marketing initiatives gain traction and drive increased brand awareness and market activation, I remain confident in the miraDry business model and believe the business is well-positioned to be a significant growth driver for Sientra in 2019 and beyond.”
First Quarter 2019 Financial Review
Total net sales for the first quarter 2019 were $17.6 million, an increase of 20% compared to total net sales of $14.7 million for the same period in 2018.
Net sales for the Breast Products segment totaled $9.8 million in the first quarter 2019, a 14% increase compared to $8.5 million for the same period 2018. Breast Products sales growth was primarily driven by new customer conversion programs and continued strong performance of the tissue expander portfolio.
Net sales for the miraDry segment totaled $7.8 million in the first quarter 2019, a 27% increase compared to $6.1 million for the same period 2018. miraDry sales growth was primarily driven by strong consumables growth internationally.
Gross profit for the first quarter 2019 was $11.1 million, or 63.1% of sales, compared to gross profit of $8.6 million, or 58.5% of sales, for the same period 2018. Changes in consolidated gross margin were driven by the overall mix between Breast Products and miraDry, as well as the geographic and capital versus consumable mix within miraDry.
Operating expenses for the first quarter 2019 were $36.9 million, compared to $27.5 million of expenses for the same period 2018. The growth in operating expenses was driven by increased investments in sales and marketing, higher stock based compensation, and one-time consulting fees associated with Sientra’s commercial initiatives.
Net loss for the first quarter 2019 was ($26.5) million, or ($0.91) per share, compared to a net loss of ($19.4) million, or ($0.99) per share, for the same period 2018.
On a non-GAAP basis, the Company reported an adjusted EBITDA loss of ($21.1) million compared to a loss of ($14.8) million for the same period 2018.
Net cash and cash equivalents as of March 31, 2019 were $62 million, compared to $87 million as of December 31, 2018.
2019 Net Sales Outlook
For 2019, the Company expects net sales in the range of $79 million to $83 million, representing growth of 16% to 22% year-over-year, compared to net sales of $68.1 million in 2018.
2019 segment net sales outlook:
- Breast Products net sales of $44 to $46 million
- miraDry net sales of $35 to $37 million
Sientra will hold a conference call today, May 8, 2019 at 4:30 p.m. ET to discuss first quarter results.
The dial-in numbers are 844-464-3933 for domestic callers and 765-507-2612 for international callers. The conference ID is 4982524. A live webcast of the conference call will be available on the Investor Relations section of the Company's website at www.sientra.com.
A replay of the call will be available starting on May 8, 2019 at 7:30 p.m. ET through May 15, 2019 at 11:59 p.m. ET. To access the replay, dial 855-859-2056 for domestic callers and 404-537-3406 for international callers and use the replay conference ID 4982524. The webcast will be available on the Investor Relations section of the Company’s website for 30 days 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.
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, comprises its miraDry® system, which is approved for sale in over 40 international markets, and is the only non-surgical FDA-cleared device for the permanent reduction of underarm sweat, odor and hair of all colors.
(*) Data on file
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 include, but are not limited to, statements regarding the Company’s expected net sales for the year ended December 31, 2019, the expected growth of the Company’s current customer base and acquisition of new customers, the Company’s ability to achieve sustainable, long-term growth across its business segments, and the Company’s ability drive increased brand awareness and market activation. Such statements are subject to risks and uncertainties, including the dependence on conclusion of the review procedures for the quarter ended March 31, 2019 by the Company’s independent auditors, 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. 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,’’ 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. 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.
|Consolidated Statements of Operations|
|(In thousands, except per share and share amounts)|
|Three Months Ended|
|2019 ||2018 |
|Cost of goods sold||6,474||6,097|
|Sales and marketing||20,401||15,256|
|Research and development||3,054||2,751|
|General and administrative||13,474||9,499|
|Total operating expenses||36,929||27,506|
|Loss from operations||(25,851||)||(18,927||)|
|Other income (expense), net:|
|Other income (expense), net||15||119|
|Total other income (expense), net||(633||)||(496||)|
|Loss before income taxes||(26,484||)||(19,423||)|
|Income tax (benefit) expense||—||—|
|Basic and diluted net loss per share attributable to common stockholders||$||(0.91||)||$||(0.99||)|
|Weighted average outstanding common shares used for net loss per share attributable to common stockholders:|
|Basic and diluted||29,099,382||19,613,417|
|Condensed Consolidated Balance Sheets|
|March 31,||December 31,|
|Cash and cash equivalents||$||61,955||$||86,899|
|Accounts receivable, net||24,767||22,527|
|Prepaid expenses and other current assets||3,411||2,612|
|Total current assets||117,375||136,123|
|Property and equipment, net||3,146||2,536|
|Other intangible assets, net||15,915||16,495|
|Liabilities and Stockholders' Equity|
|Current portion of long-term debt||$||12,998||$||6,866|
|Accrued and other current liabilities||30,416||27,697|
|Legal settlement payable||—||410|
|Sales return liability||8,016||6,048|
|Total current liabilities||77,431||64,141|
|Long-term debt, net of current portion||24,416||27,883|
|Deferred and contingent consideration||6,531||6,481|
|Warranty reserve and other long-term liabilities||21,017||2,976|
|Total stockholders' equity||42,230||66,878|
|Total liabilities and stockholders' equity||$||171,625||$||168,359|
|Condensed Consolidated Statements of Cash Flows|
|Three Months Ended|
|Cash flows from operating activities:|
|Adjustments to reconcile net loss to net cash used in operating activities:|
|Depreciation and amortization||831||880|
|Provision for doubtful accounts||342||233|
|Provision for warranties||273||183|
|Provision for inventory||289||199|
|Amortization of acquired inventory step-up||—||59|
|Change in fair value of warrants||(87||)||(121||)|
|Change in fair value of contingent consideration||185||621|
|Change in deferred revenue||384||(99||)|
|Amortization of debt discount and issuance costs||56||51|
|Stock-based compensation expense||3,700||2,548|
|Payments of contingent consideration liability in excess of acquisition-date fair value||(630||)||—|
|Changes in assets and liabilities, net of effects from acquisitions:|
|Prepaid expenses, other current assets and other assets||396||(1,009||)|
|Insurance recovery receivable||—||(10||)|
|Accrued and other liabilities||(2,312||)||948|
|Legal settlement payable||(410||)||—|
|Sales return liability||1,968||4,400|
|Net cash used in operating activities||(24,646||)||(12,774||)|
|Cash flows from investing activities:|
|Purchase of property and equipment||(610||)||(142||)|
|Net cash used in investing activities||(610||)||(142||)|
|Cash flows from financing activities:|
|Proceeds from exercise of stock options||106||—|
|Proceeds from issuance of common stock under ESPP||683||391|
|Tax payments related to shares withheld for vested restricted stock units (RSUs)||(2,725||)||(1,296||)|
|Gross borrowings under the Revolving Loan||4,183||9,033|
|Repayment of the Revolving Loan||(1,565||)||(5,735||)|
|Payments of contingent consideration up to acquisition-date fair value||(370||)||—|
|Deferred financing costs||—||(6||)|
|Net cash provided by financing activities||312||2,387|
|Net decrease in cash, cash equivalents and restricted cash||(24,944||)||(10,529||)|
|Cash, cash equivalents and restricted cash at:|
|Beginning of period||87,242||26,931|
|End of period||$||62,298||$||16,402|
|Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets|
|Cash and cash equivalents||$||61,955||$||16,059|
|Restricted cash included in other assets||343||343|
|Total cash, cash equivalents and restricted cash||$||62,298||$||16,402|
|Reconciliation of Net Loss to Non-GAAP Adjusted EBITDA|
|Three Months Ended|
|Dollars, in thousands||2019||2018|
|Net loss, as reported||$||(26,484||)||$||(19,423||)|
|Adjustments to net loss:|
|Interest (income) expense and other, net||633||496|
|Depreciation and amortization||831||939|
|Accretion in fair value adjustments to contingent consideration||185||621|
|Total adjustments to net loss||5,349||4,604|
|Three Months Ended|
|As a Percentage of Revenue**||2019||2018|
|Net loss, as reported||(150.9||%)||(132.3||%)|
|Adjustments to net loss:|
|Interest (income) expense and other, net||3.6||%||3.4||%|
|Depreciation and amortization||4.7||%||6.4||%|
|Accretion in fair value adjustments to contingent consideration||1.1||%||4.2||%|
|Total adjustments to net loss||30.5||%||31.4||%|
|** Adjustments may not add to the total figure due to rounding|